From: rich@pencil.cs.missouri.edu (Rich Winkel)
Subject: Drug Laws: Presumed Guilty (4/6)
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: PACH
Distribution: na
Date: Mon, 14 Dec 1992 09:15:24 GMT

CRIME PAYS BIG FOR INFORMANTS IN FORFEITURE DRUG CASES
PART FOUR - THE INFORMANTS

     They snitch at all levels, from the the Hell's Angel whose testimony
across the country has made him a millionaire, to the Firksville, Mo.,
informant who worked for the equivalent of a fast-food joint's hourly wage.

     They snitch for all reasons, from criminals who do it in return for
lighter sentences to private citizens motivated by civic-mindedness.

     But it's only with the recent boom in forfeiture that paid informants
began snitching for a hefty cut of the take.

     With the spread of forfeiture actions has come a new, and some say,
problematic, practice: guaranteeing police informants that if their tips result
in a forfeiture, the informant will get a percentage of the proceeds.  And that
makes crime pay. Big.

     The Asset Forfeiture Fund of the U.S. Justice Department last year gave
$24 million to informants as their share of forfeited items. It has $22 million
earmarked this year.

     While plenty of those payments go to informants who match the stereotype
of a shady, sinister opportunist, many are average people you could meet on any
given day in an airport, bus terminal or train station.


     In fact, if you travel often, you likely have met them whether you knew it
or not.

     Counter clerks notice how people buy tickets. Cash? A one-way trip?

     Operators of X-ray machines watch for "suspicious" shadows and not only
for outlines of weapons, which is what signs at checkpoints say they're
scanning. They look for money, "suspicious" amounts that can be called to the
attention of law enforcement and maybe net a reward for the operator.

     Police affidavits and court testimony in several cities show clerks for
large package handlers, including United Parcel Service and Continental
Airlines' Quik Pak, open "suspicious" packages and alert police to what they
find. To do the same thing, police would need a search warrant.

---

UNDERGROUND ECONOMY

     At 16 major airports, drug agents, counter and baggage personnel, and
management reveal an underground economy running off seizures and forfeitures.

     All but one of the airports' drug interdiction teams reward private
employees who pass along reports about suspicious activity. Typically, they get
10 percent of the value of whatever is found.

     The Greater Pittsburgh International Airport team does not and questions
the propriety of the practice.  Under federal and most states' laws, forfeiture
proceeds return to the law enforcement agency that builds the case. Those
agencies also control the rewards of informants.

     The arrangement means both police and the informants on whom they rely now
have a financial incentive to seize a person's goods - a mix that may be too
intoxicating, says Lt. Norbert Kowalski.

     He runs Greater Pitt's joint 11-person Allegheny County
Police-Pennsylvania State Police interdiction team.

     "Obviously, we want all the help we can get in stopping these drug
traffickers. But having a publicized program that pays airport or airline
employees to in effect, be whistle-blowers, may be pushing what's proper law
enforcement to the limit," he says.

     He worries that the system might encourage unnecessary random searches.

     His team checked passengers arriving from 4,230 flights last year. Yet
even with its avowed cautious approach, the team stopped 527 people but netted
only 49 arrests.

     At Denver's Stapleton Airport where most of the drug team's cases start
with informant tips - officers also made 49 arrests last year. But they stopped
about 2,000 people for questioning, estimates Capt. Rudy Sandoval, commander
of the city's Vice and Drug Control Bureau.

     As Kowalski sees it, the public vests authority in police with the
expectation they will use it legally and judiciously. The public can't get
those same assurances with police-designees, like counter clerks, says
Kowalski.

     With money as an inducement, "you run the risk of distorting the system,
and that can infringe on the rights of innocent travelers. If someone knows
they can get a good bit of money by turning someone in, then they may imagine
seeing or hearing things that aren't there. What happens when you get to
court?"

     In Nashville, that's not much of an issue. Juries rarely get to hear from
informants.

     Police who work the airport deliberately delay paying informants until a
case has been resolved "because we don't want these tipsters to have to
testify. If we don't pay them until the case is closed they don't have to risk
going to court," says Capt. Judy Bawcum, commander of the vice division for
the Nashville Police Department.

     That means their motivation can't be questioned.

     Bawcum says it may appear that airport informants are working solely for
the money, but she believes there's more to it. "I admit these (X-ray) guards
are getting paid less than burger flippers at McDonald's and the promise of 10
percent of $50,000 or whatever is attractive. But to refuse to help us is not
a progressive way of thinking," says Bawcum. "This is a public service."

     But not all companies share the view that their employees should be public
servants. Package handling companies and Wackenhut, the X-ray checkpoint
security firm, refuse to allow Nashville police to use their workers as
informants.

     "They're so fearful a promise of a reward will prompt their people to
concentrate on looking for drugs and money instead of looking for weapons,"
says Bawcum.

     Far from being uncomfortable with the notion of citizen-cops, Bawcum says
her department relies on them.  "We need airport employees working for us
because we've only got a very small handful of officers" at the airport, she
says.

     For her, the challenge comes in sustaining enthusiasm, especially when
federal agencies like the DEA are "way too slow paying out." Civic duty
carries only so far. "It's hard to keep them watching when they have to wait
for those rewards. We can't lose that incentive."

---

THE DEALS

     Most drug teams hold tight the details of how their system works and how
much individual informants earn, preferring to keep their public service
private.

     But in a Denver court case, attorney Alexander DeSalvo obtained
photocopies of police affidavits about tipsters and copies of three checks
payable to a Continental airline clerk, Melissa Funner. The cheeks, from the
U.S. Treasury and Denver County, total $5,834 for the period from September
1989 to August 1990.

     Ms. Furtner, reached by phone at her home, was flustered by questions
about the checks.

     "What do you want to know about the rewards? I can't talk about any of
it. It's not something I'm supposed to talk about. I don't feel comfortable
with this at all." She then hung up.

     As hefty as the payments to private citizens can be, they are pin money
compared to the paychecks drawn by professional informants.

     Among the best paid of all: convicted drug dealers and self-confessed
users.

     Anthony Tait, a Hell's Angel and admitted drug user who has been a
cooperating witness for the FBI since 1985, earned nearly $1 million for
information he provided between 1985 and 1988, according to a copy of Tait's
payment schedule and FBI contract obtained by The Pittsburgh Press.

     Of his $1 million, $250,000 was his share of the value of assets forfeited
as a result of his cooperation. His money came from four sources. FBI offices
in Anchorage and San Francisco; the state of California and the federal
forfeiture fund.

     Likewise, in a November 1990 case in Pittsburgh, the government paid a
former drug kingpin handsomely.

     Testimony shows that Edward Vaughn of suburban San Francisco earned
$40,000 in salary and expenses between August 1989 and October 1990 working for
DEA, drew an additional $500 a month from the U.S. Marshal Service and was
promised a 25 percent cut of any forfeited goods.

     Vaughn had run a multimillion-dollar, international drug smuggling ring,
been a federal fugitive, and twice served prison time before arranging an early
parole and paid informant deal with the government, he said in court.

     As an informant, he said, he preferred arranging deals for drug agents
that are known as reverse stings: the law enforcement agents pose as sellers
and the targets bring cash for a buy. Those deals take cash, but not dope,
directly off the streets. In those stings, he said, the cash would be forfeited
and Vaughn would get his prearranged quarter-share.

     His testimony in Pittsburgh resulted in one man being found guilty of
conspiracy to distribute marijuana.  The jury acquitted the other defendant
saying they believed Vaughn had entrapped him by pursuing him so aggressively
to make a dope deal.

---

TO PAY OR NOT TO PAY

     The practice of giving informants a share of forfeited proceeds goes on so
discreetly that Richard Wintory, an Oklahoma prosecutor and forfeiture
proponent who until recently headed the National Drug Prosecution Center in
Alexandria, Va., says, "I'm not aware of any agency that pays commissions on
forfeited items to informants."

     Although the federal forfeiture program funnels millions of dollars to
informants, it does not set policy at the top about how - or how much - to pay.

     "Decisions about how to pursue investigations within the guidelines of
appropriate and legal behavior are best left to people in the field," says
George Terwilliger III, the deputy attorney general who heads the Justice
Department's forfeiture program.

     That hands-off approach filters to local offices, such as Pittsburgh,
where U.S. Attorney Thomas Corbett says the discussion of whether to give
informants a cut of any take "is a philosophical argument. I won't put myself
in the middle of it."

     The absence of regulations spawns "privateers and junior Gmen," says
Steven Sherick, a defense attorney in Tucson, Ariz., who recently recovered
$9,000 for John P. Gray of Rutland, Vt., after a UPS employee found it in a
package and called police.

     Gray, says Sherick, is "an eccentric older guy who doesn't use anything
but cash." In March 1990, Gray mailed a friend hand-money for a piece of
Arizona retirement property Gray had scouted during an earlier trip West, say
court records. The court ordered the money returned because the state couldn't
prove the cash was gained illegally.

     Expanding payments to private citizens, particularly on a sliding scale
rather than a fixed fee, raises unsavory possibilities, says Eric E.  Sterling,
head of the Criminal Justice Policy Foundation, a think tank in Washington,
D.C.

     Major racketeers and criminal enterprises were the initial targets of
forfeiture, but its use has steadily expanded until now it catches people who
never have been accused of a crime but lose their property anyway.

     "You can win a forfeiture case without charging someone," says Sterling.
"You can win even after they've been acquitted. And now, on top of that, you
can have informants tailoring their tips to the quality of the thing that
will be seized.

     "What paid informant in their right mind is going to tum over a crack
house - which may be destroying an inner city neighborhood - when he can tum
over information about a nice, suburban spread that will pay off big when it
comes time to get his share?"  asks Sterling.

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35 ARRESTED DESPITE BUMBLING WAYS OF INFORMANT

     The undercover operation was called BAD. The main informant was named
Mudd.

     And the entire affair was ... a bust.

     The prosecutor in Adair County in Missouri's northeast comer chuckles now
about the "bumbled" investigation.

     But Sheri and Matthew Farrell, whose 60-acre farm remains tied up in a
federal forfeiture action due to the bumbling, can't see the humor.

     A paid police informant named Steve R. Mudd, who went undercover for $4.65
an hour in a marijuana investigation near Kirksville, Mo., accused Farrell of
selling and cultivating marijuana on his land. Mudd was the only witness in the
joint city-county drug investigation called Operation BAD - Bust a Dealer.

     For a year starting in November 1989, Mudd worked for city and county
police identifying alleged dealers around Firksville, population 17,000.  He
received "buy money" and would return after his deals - minus the money and
with what he said were drugs.

     Mudd went to supposed traffickers' homes "but didn't wear a wire(tap)
and didn't take any undercover officer with him. He said he was in a rut and
didn't want a lot of supervision," says prosecutor Tom Hensley. When he came
back to the office, Mudd would write reports - but the dates and times often
didn't match what he would say later in depositions.

     Mudd himself had gone through drug rehabilitation, and had drug sales and
possession on his criminal record, says Hensley. Mudd also had a history of
passing bad checks and was always near broke, working odd jobs.

     Nevertheless, Mudd became the linchpin of Operation BAD.

     Based on his word, police arrested 35 people in Adair County, including
Farrell. As Mudd told it, Farrell had sold him marijuana and confided he used
tractors outfitted with special night lights to harvest fields of dope.

     He "whipped up quite the story. He had us out there at night banging
around, renting big trucks to carry dope. There's no receipts, nothing to show
that. And wouldn't someone have seen us?" asks Mrs. Farrell.  Hensley confirms
that Farrell has no criminal record, yet on Mudd's allegation, the county
sheriff first arrested Farrell then ordered his house and farm seized in
November.

     "They came out and searched everything. They took away tea, birdseed, they
vacuumed our ashtrays in the truck and didn't find anything.  Then they told us
the house was seized and in governmental control.  They told us to keep paying
the taxes, but not to do anything else to the land," says Mrs. Farrell, 36, a
U.S.  Postal Service worker in Kirksville.  Her husband, 38, runs a metal
working shop out of his home.

     Of the 35 cases initiated by Mudd, only Farrell's involved seized land.

     Adair County kept the criminal cases in local court.

     But to make the most of the seizure, the county turned the Farrell
forfeiture case over to the federal government. Missouri state law directs
that forfeiture proceeds go to the general fund where they are earmarked for
public school support. Under federal regulations, though, the local police who
bring a forfeiture case get back up to 80 percent of any proceeds.

     "The federal sharing plan is what affected how the case was brought,
sure," says Hensley. "Seizures are kind of like bounties anyway, so why
shouldn't you take it to the feds so it comes back to the local law enforcement
effort? "

     With the forfeiture case firmly lodged in federal court, the county
criminal cases began to be heard and promptly fell apart.

     All 35 cases "went down the tubes," says Hensley. At the first hearing,
which included Farrell's case, Mudd failed to appear due to strep throat. It
took him two months to regain his voice, says Hensley, and then he couldn't
regain his memory.

     "The dates he was saying didn't mesh with what he'd put down on reports.
And I couldn't go out on the street without someone stopping to tell me a Mudd
bad-cheek story. I decided my only witness was not worth a great deal,
especially if he was having trouble with his recall."

     The case crumbled into powder when the powder turned out to be Tylenol 3.
Hensley said lab tests showed Mudd had brought back fake drugs as evidence.

     Hensley withdrew the criminal charges against Farrell and the others.

     Says Hensley of his star witness, "My honest impression is the guy is just
dumb and watched too much 'Miami Vice. 'You never see Miami Vice' guys write
anything down, do you?"

     The prosecutor doesn't feel Mudd "scammed us that bad. He took us once to
a patch of dope growing along a country road across the state line in Iowa. It
was out of the way, so he had to know something. But he couldn't say for sure
who was growing it."

     Although Mudd was less than an ideal informant, local police relied on him
"because there is marijuana use here and we had to get somebody. We don't get
big enough cases to get the state police here to do an investigation up right."

     Hensley says he "couldn't say how" Mudd might have come up with Farrell's
name, but Mrs. Farrell has a theory. Several years ago, Mike Farrell, Matthew's
brother, received probation for a marijuana possession charge - his only
arrest. Hensley confirms that.

     "I think he figured he could say 'Farrell' and it would stick," says Mrs.
Farrell.

     Though the criminal case has faded, the Farrells forfeiture case rolls
on.

     Philosophically, Hensley agrees with the notion "that if you're not
guilty or charges are dismissed then you ought to be off the hook on the
forfeiture since no one could prove the case against you. But that isn't the
way it works with the federal government."

     He is not inclined "to call down to St. Louis and tell the U.S. attorney
to drop it. I've got other things to do with my time. I don't want to sound
malicious but this will all work out."

     So far, it is merely working its way through federal court.

     The prosecutor on the Farrell case verifies that the state case was
adopted by the federal government which means "the facts of their criminal case
are the same facts that underlie the forfeiture action," says Daniel Meuleman,
assistant U.S. attorney.  "But that doesn't mean we can't go ahead because
there are different standards of proof involved."

     Different is lower. To get a criminal conviction, prosecutors need proof'
beyond a reasonable doubt. To pursue a federal forfeiture, they need only
show probable cause.

     Meuleman refuses to say whether he will use Mudd as a witness.

     Meanwhile, the Farrells wait.

     Their attorney's bills already are $5,600 "and that put a crimp in our
style. We were in shock for a good two months. Every day we thought something
else might happen and we were scared in our own home.

     "That's gotten a little better," says Mrs. Farrell, "but in a town this
small there's still a lot of talk, you know."

-------------------------------------------------------------------------------

WITH SKETCHY DATA, GOVERNMENT SEIZES HOUSE FROM MAN'S HEIRS

     In Fort Lauderdale, Fla., last summer, forfeiture reached beyond the
grave, seizing the $250,000 home of a dead man.

     A confidential informant told police that n 1988 the owner, George
Gerhardt, took a $10,000 payment from drug dealers who used a dock at the
house along a canal to unload cocaine.

     The informant can't recall the exact date, the boat's name or the dealers
names, and the government candidly says in its court brief it "does not possess
the facts necessary to be any more specific."

     But its sketchy information convinced a judge to remove the house from
heirs, who now must prove the police wrong.

     "I was flabbergasted. I didn't think something like this could happen in
this country," said Gerhardt's cousin, Jeanne Horgan of Hartsdale, N.J.
She, a friend of Gerhardt's from high school, and a home health aide who cared
for Gerhardt while he was dying of cancer, are his heirs.

     Gerhardt, who died at the age of 49, was an only child who inherited
"substantial amounts" from his parents and lived in a home that had been in his
family for 20 years, says Mare H.  Gold, attorney for the heirs.

     Gerhardt ran a marina until he was 38, then retired and lived off the
estate left him by his parents.

     "I've gone back through his tax returns and every penny is accounted for.
I can't find an indication he ever was arrested or charged with anything in
his life," says Gold.

     The heirs have filed a motion to have the case dismissed.

     While that request is pending, the government is renting the house to
other tenants for roughly $2,200 a month which the government keeps.

     Although the government had its tip six months before Gerhardt's death, it
didn't file a charge against him. It also didn't seize his house until three
months after he died.

     The notice the government was taking the home came with a sharp rap on the
door and a piece of paper handed to Brad Marema, the heir who had cared for
Gerhardt and moved into the house. The notice gave Marema a few days to pack
up before the government changed the locks.

     The point of trying to take the house, "is not so much to punish at this
stage. The motivation really is to use the proceeds from the sale of the
property to prevent other drug offenses," says Robyn Herrnann, assistant
chief of the civil section for the U.S. attorneys office in the Southern
District of Florida.

     The government's case depends on the informant's tip, says Ms. Hermann.
"Even if I knew more about him (Gerhardt) I wouldn't say, but I don't think
we do."

     The answer to how heirs counter allegations against a dead man "is real
easy," she says. "Answers are acquired through discovery," a procedure in which
both sides respond to questions from the other. "We'll take depositions,
they'll take depositions.  That's when they get their answers."

     But that isn't how the law is supposed to work counters Gold.

     "Who am I suppose to subpoena?  Where do I send an investigator? The
government is supposed to have a case, a reason for kicking someone out of
their home. It's not supposed to remove them, then build a case."

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