From: [doctor 1] at [pofbbs.chi.il.us] (Patrick B. Hailey)
Subject: Part Four: The informants
Date: Sun, 21 Nov 93 21:28:43 CST


Wednesday, Aug 14, 1991, Pittsburgh Press. 

               P R E S U M E D     G U I L T Y
               The law's victims in  the war on drugs 

   Crime pays big for informants in forfeitures

By Andrew Schneider and Mary Pat Flaherty
The Pittsburgh Press

Part Four: The informants

     They snitch at all levels, from the Hell's Angel whose
testimony across the country has made him into a millionaire, the Kirksville,
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 informants 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 have likely 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 Quick Pak, open "suspicious" packages and alert
police to what they find. To do the same thing, police would need a
search warrant. 

     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% 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 it's 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 that they will use it legally and judiciously. The
public can't get those same assurances from 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 travellers. 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 airports 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 the 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
McDonalds 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 employees as informants. 

     "They're so fearful a promise of a reward will prompt their
people to concentrate on looking for drugs 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."

     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 Furtner.
The checks, 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 Trait'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 officers 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.
Marshall Service and was promised a 25% cut of any forfeited goods. 

     Vaughn had run a multi-million 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 Vaught would get his
pre-arranged 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. 

     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 the
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
G-men," 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, says 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 it now
catches people who have never been accused of 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 turn over
a crack house -- which may be destroying an inner city neighborhood --
when he can turn 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 ARRESTS 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 corner
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 Kirksville,
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 later say 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 that he used tractors outfitted with special night lights
to harvest fields of dope.
     He "whipped up quite a 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 government
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 put down on
reports.  And I couldn't go out on the street without someone stopping
to tell me a Mudd bad-check story.  I decided my only witness was not
worth a great deal, especially if he was having trouble with his
recall."
     The case crumbled to 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 prosector doesn't feel Mudd "scammed us 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
tell us 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 probably 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."
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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 in 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
dealer's 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 mst 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, NJ.  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 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 penney 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 six 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 punishment
at this stage.  The motivation is really to use the proceeds from the
sale of the property to prevent other drug offenses," says Robyn
Hermann, assistant chief of the civil section for the U.S. attorney's
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 supposed 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, and then
build a case."
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