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Ex-Con Tells of DEA Drug Deals : Corruption: Trafficker testifies about paying agents for cocaine stolen from agency's evidence vault. Two men have pleaded guilty, while a third awaits trial.

October 29, 1990|RONALD L. SOBLE | TIMES STAFF WRITER

"Bunny" is a heavy-set, street-savvy New Yorker who knows his way around Brooklyn. He has made and lost fortunes trafficking in cocaine.

A 60-year-old ex-convict with a criminal record going back four decades, Bunny knows people on both sides of the law. So, when he was convicted eight years ago on drug trafficking charges, he went to work with the U.S. Drug Enforcement Administration in an undercover role to avoid a long prison sentence.

That was how he first met DEA agent John Jackson, the drug dealer recalled. Together, they helped convict a reputed Mafia boss and seven others. By then, Mahlon Joseph Steward--known as Bunny to his associates--had become close friends with Jackson.

Their friendship, prosecutors now contend, led to the biggest corruption scandal in the DEA's 17-year history.

Last August, Bunny surfaced as a key witness against Jackson and two other former DEA agents, all who worked in the agency's downtown Los Angeles office.

Although a federal trial is not scheduled to begin until next month in Los Angeles, Steward was ordered to begin his testimony Aug. 1 because the government feared that he might die before the trial began. Less than a week after appearing before a federal grand jury on Jan. 27, 1988, Steward suffered a massive heart attack that resulted in quintuple bypass surgery.

During his five days of videotaped testimony, which only recently became available, Steward recounted how he trafficked for three years in cocaine and heroin supplied to him by two of the three DEA agents.

He said he mailed the federal agents more than $1 million in drug profits--some of it shipped directly to the DEA's Los Angeles headquarters in the World Trade Center.

Steward also recounted how he and the agents became such close friends that they vacationed together in Hawaii with their wives and shopped on glitzy Rodeo Drive in Beverly Hills.

Steward testified that some of the cocaine that Jackson supplied him was stolen in 1984 from the DEA's evidence vault.

He also said that much of the drug profits the men made were generated by the theft in 1985 of more than 150 kilograms of cocaine from a drug hide-out in Pasadena, which the government called "The Big Rip." That theft accounted for $1 million in profits, Steward said.

Steward, an unindicted co-conspirator, agreed last year to become a prosecution witness. After the agreement, he returned to New York, where he pleaded guilty to violating terms of his probation, which grew out of a 1982 heroin trafficking conviction. He hopes his testimony will win him a sentence reduction.

Under questioning from Assistant U.S. Atty. Joyce Karlin, Steward said Jackson told him he waited until the timing was right before taking the cocaine from the stash house. The agents got two-thirds of the drug profits, Steward said, and he got the rest.

Prosecutors allege that the enormous drug profits financed a luxurious lifestyle for Jackson, 41, of Claremont, and the two other former DEA agents, Darnell Garcia, 43, of Rancho Palos Verdes, and Wayne Countryman, 47, of Walnut.

The government contends that Jackson and Garcia used the profits to buy expensive homes and to open multimillion-dollar bank accounts in Europe.

Jackson and Countryman have pleaded guilty to drug trafficking charges, but Garcia--a bespectacled, black-belt karate expert--has chosen to fight the indictment. His trial is to begin in federal court on Nov. 13 before U.S. District Judge Terry J. Hatter Jr.

During his emotional testimony, Steward locked eyes with "J.J.," as Jackson is called, and broke down and wept on the witness stand. Hatter recessed the hearing until the next day.

Steward recalled that he was such friends with the agents that in 1985 he sent Jackson $70,000 in cash as a Christmas present. The money came from drug profits, he said.

In April of the following year, Steward said he dined with Jackson and Garcia in Beverly Hills and then, accompanied by their wives, went "window shopping" on Rodeo Drive.

Four months later, Steward and the two agents, along with their wives, vacationed for two weeks in Hawaii, staying in the same hotel in Honolulu. Steward said they had made so much money off "The Big Rip" that they were in high spirits. Garcia and Jackson looked into buying some island real estate, he said.

"It was a vacation and to relieve tension," Steward testified, "We didn't need any more money at that point. . . . We all were over the hump, and all had made some money."

Two days after Steward completed his testimony, Jackson pleaded guilty to drug trafficking, including charges that he stole drugs from the DEA's evidence vault and participated in the theft of drugs from the Pasadena stash house.

Shortly after Jackson's plea, Countryman pleaded guilty to participating in the same narcotics trafficking conspiracy.

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