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Undercover Informant Got $2 Million for Aiding Drug Probe

January 30, 1999|DAVID ROSENZWEIG | TIMES STAFF WRITER

The government's key undercover witness in Operation Casablanca received more than $2 million for helping authorities mount the biggest drug money laundering investigation in history, it was disclosed Friday.

Most of the money--$1.7 million--consisted of commissions he received for his role in laundering millions of dollars in drug money between the United States and Mexico

The unidentified informant, described in court papers as CW-1, came under attack by defense lawyers Friday during a lengthy pretrial hearing before U.S. District Judge Lourdes Baird.

Three prominent Mexican banks and more than a dozen Mexican bankers, lawyers and businessmen are to go on trial at the end of March on charges of money laundering. It is the first of four trials set in the case.

A Los Angeles federal grand jury indicted more than 100 Mexican, Venezuelan and Colombian citizens in May after a 2 1/2-year investigation by the U.S. Customs Service. About 70 of the suspects are fugitives.

Operating out of a storefront in Sante Fe Springs, undercover Customs Service agents used CW-1 to help them pose as money launderers, taking assignments from drug cartels in Juarez, Mexico, and Cali, Colombia.

The undercover operative, who is believed to be a naturalized U.S. citizen born in Colombia, was involved in Operation Polar Cap, another major money laundering probe, according to previously released government documents.

On Friday, Michael Pancer, attorney for defendant Katy Kissel Belfer, cited the payments as an example of government misconduct.

"The fact that CW-1 received more than $1.7 million in commission from 1995 through 1998 provides perverse incentive for the informant to manufacture crime, and is corroborative of the fact that Ms. Kissel was snared in the informant's scheme as a way to help the informant 'earn' yet more money," Pancer said in a brief filed with the court.

Other attorneys also criticized the payments.

Outside the courtroom, prosecutors defended the payments to the operative.

Assistant U.S. Attys. Joseph A. Brandolino and Julie Shemitz said the payments were not excessive, given the scope of the investigation and the enormous personal risks taken by the operative.

"For the rest of his life, he has to look over his shoulder," Shemitz said.

"He worked full time--he had to be available 24 hours a day--for the entire length of the investigation," Brandolino said. "The defense attack on him is unfair."

In addition to the $1.7 million in commissions, the operative received more than $382,000 for information he gave to the government and $99,000 to cover expenses.

Another undercover operative, identified as CW-2, received about $318,000 from 1993 to 1998, according to court documents.

The government has agreed to disclose the names of the informants to defense lawyers 30 days before the trial starts.

Baird is expected to rule within about a week on the charge of government misconduct and other grounds cited by defense lawyers for dismissing the case.

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