Millions missing from DEA money-laundering operation

[David Guyatt]

Corruption in the DEA --- nothing new then?

Millions Missing From DEA Money-Laundering Operation

Posted by Bill Conroy - October 6, 2014 at 11:25 amBut No One With the Power to Investigate Seems to Care
At least $20 million went missing from money seizures by law enforcers, critical evidence was destroyed by a federal agency, a key informant was outed by a US prosecutor contributing to her being kidnapped and nearly killed and at the end of the day not a single narco-trafficker was prosecuted in this four-year-long DEA undercover operation gone awry.
Those revelations surfaced in a recently decided court case filed in the US Court of Federal Claims in Washington, DC.
"Throughout this protracted litigation, the agency [DEA] delayed producing documents until the 11th hour and destroyed potentially relevant evidence," states Judge Mary Ellen Coster Williams in an Aug. 30 ruling awarding the informant in the case, with the code name "Princes," more than $1.1 million. "…The conclusion that there were missing trafficker funds is supported by … DEA documents, including a statement by [a] DEA confidential informant."
The Princess, a former airline stewardess and mother of two, lived in the US but hailed from an upper-crust Colombian family. Though her two former husbands had ties to the drug trade, she had a clean record and was essentially "scammed" into working as an informant by the threat of prosecution, court records reveal. Consequently, she was completely out of her league in taking on an extremely dangerous undercover role in the world of transnational crime, where she was charged with posing as a money launder to rope in high-level Colombian narco-traffickers for the DEA.
During the course of her undercover assignment, which played out in the early to mid-1990s, she was the target of death threats and even a foiled plot on her life after her cover was compromised. It was blown both by DEA negligence in money-seizing operations and as a result of an Assistant United States Attorney in Chicago disclosing her "status as a confidential informant to a criminal defendant whom the Princess had lured to the United States to be arrested," the judge's ruling reveals.
Even after all that, her DEA handlers still sent the Princess back into Colombia to meet with narco-traffickers, with her cover blown, leading to her being kidnapped and held for ransom for some three months "in a windowless, dirt-floor room where she slept on a straw mattress," court records indicate.
She narrowly averted death due to the intervention of a "criminal associate of many high-level Cali mafia members" who also was a DEA cooperating source in Colombia. The source negotiated her release with a payment of $350,000 from his own funds, because DEA refused to negotiate officially with "terrorists."
But the subtext to this story goes far deeper than a tale of a botched DEA operation one that allegedly laundered in excess of $60 million for the narco-traffickers, with more than $20 million still missing, and which, in the end, produced no prosecutions (other than that of a Florida DEA agent, who was convicted of skimming some $700,000 from a money pick-up location in Houston and received a two-year sentence.)
Mike Levine, a former deep undercover DEA agent and supervisor who examined copious DEA documents related to this case as an expert witness for Princess' lawyers, goes as far as to say in his report to the court that the law enforcers involved with the operation were likely stealing millions from the narco-trafficker funds seized in the operation and may well have been complicit in Princess' kidnapping.

Princess' [the informant's] undercover role posing as a money launderer made her the responsible party for money shortages, of which a large number were noted in reporting, including the 
theft of … trafficker funds by a corrupt DEA agent, Rene De La Cova, and likely
 other corrupt agents whom, due to an absence of DEA oversight, have managed to thus far elude identification. Each of these [money] shortages placed Princess, the one whom the traffickers would blame for the missing money, in clear and present danger of homicide and/or kidnapping, unless resolved.
… The Princess Operation, as a result of lax and/or non-existent oversight by DEA Headquarters, was utilized by corrupt [US law] officers to steal trafficker funds, pad expense accounts, indulge in heavy drinking and the taking of high-expense boondoggle trips, while the safety and security of Princess went entirely ignored, resulting with her predictable kidnapping.

Levine, when asked about the case by Narco News, also provided the following details concerning his testimony before the court:

At one point, the prosecutor cross-examined me by asking if I thought the agents handling Princess were plotting to kill Princess by exposing her to one deadly situation after the other until she was killed. I testified (paraphrased according to my memory) that with more than $20 million missing and unaccounted for, and in consideration of the way they were handling her, it was a reasonable possibility.
The judge later that day ordered that the case be investigated by the US Attorney General's office. …As you can see, the secrecy surrounding this thing is astonishing. I mean it is certainly not to protect Princess.

Fox Guarding the Chicken Coop

The so-called Operation Princess was overseen by the assistant special agent in charge of DEA's Fort Lauderdale, Fla., office and was a US Attorney General-sanctioned money-laundering sting. The DEA agents, operating in conjunction with local law enforcers via a task force, used Princess to convince Colombian narco-traffickers to provide her money to launder through her accounts. Princess would charge a fee (a percentage) for the service, and after taking that cut would deliver the laundered cash to accounts controlled by the narco-traffickers.
That was the pretense. In reality, the cash was being picked up at numerous points in the US by the DEA task-force agents and deposited in undercover bank accounts controlled by DEA and then sent to the narco-traffickers after extracting the fees, which were used to fund the DEA operation. Essentially, DEA was in the money-laundering business. The ostensible goal was to follow the money and build evidence to prosecute key figures in the narco-trafficking network.
The way it played out, though, according to Levine and court records, is despite the four years that the money-laundering operation was in play, from late 1991 to 1995, no prosecutions resulted and at least $20 million went missing, unaccounted for in DEA documents which were either destroyed or nonexistent. Yet only one DEA agent was prosecuted allegedly for skimming a tiny fraction of the missing cash, $700,000.
To date, DEA has failed to account for that missing money, Levine stresses, hence the judge's request for an inquiry by the US Attorney General's office, which oversees the Department of Justice under which DEA operates.
Princess' lawsuit sought damages from DEA for the long-term serious consequences that her kidnapping had on her health. She claims the ordeal sparked a serious nervous-system disorder that has left her debilitated. The judge's August ruling found in her favor, ordering DEA to pay out in excess of $1.1 million to cover the cost of the now-former informant's future health-care costs.
One former federal agent explains that money-laundering operations, such as Operation Princess, are supposed to be under strict controls to prevent skimming. He says absent those controls, which include auditing the books regularly and assuring money from pick-ups or seizures is counted promptly and accurately, it's not difficult for a greedy agent to skim money off the top.
"When you're chasing people who are moving cash, and there's two or three bags of money [at a pick-up location], it's real easy to stick a bundle of cash in a brief case," the federal agent explains.
And no one is the wiser other than the narco-traffickers who provided the money in the first place. Once they check their accounts, after the money is laundered (by DEA), and see the amount is light by $1 million or $2 million, who are they going to blame? In this case, Levine says, they blamed the Princess, figuring she was either a thief or a DEA informant, or both.
It's the perfect crime, so long as DEA brass decides to look the other way, for fear of embarrassing the agency or undermining a big-budget operation.

The Kent Memo

This isn't the first time that alleged corruption within DEA has surfaced in relation to Colombian narco-traffickers, informants and money laundering. Similar allegations of DEA corruption were alleged in what is now known as the Kent Memo.
Narco News broke that story in 2006, based on a leaked memo drafted by Department of Justice attorney Thomas M. Kent that referred to DEA operations carried out in Colombia and the US in the late 1990s and early 2000s. In the memo, written in December 2004, Kent alleges that DEA agents in Bogotá, Colombia, assisted narco-traffickers, engaged in money laundering for Colombia's right-wing paramilitary groups, and conspired to murder informants.
Kent's memo also alleges that investigations into the alleged corruption carried out by the Justice Department's Office of Inspector General (OIG) and DEA's Office of Professional Responsibility (OPR) were derailed and whitewashed by officials within those watchdog agencies.
A CIA "foreign-intelligence source" named Baruch Vega, key to DEA operations at the center of the Kent Memo, also says some of his informants, were, in fact, murdered due to leaks inside DEA and the US Embassy in Bogotá.
Vega claims he was used by multiple US law enforcement agencies simultaneously in the late 1990s and early 2000s to infiltrate and flip key narco-trafficking figures in Colombia by convincing them to negotiate favorable plea deals with the US government. Some of those narco-traffickers went on to serve as assets for US agencies.
"I know exactly her [the Princess'] whole case.," Vega claimed, in an interview with Narco News. "It's exactly the same group [of allegedly corrupt US law enforcers involved]. Nothing changed at all. That was beginning of the North Valley Cartel [in Colombia]. The North Valley Cartel became very powerful immediately after the Cali Cartel was jeopardized by the same group [of US agents]."
Vega contends that the North Valley Cartel was a union of corrupt US law enforcers, including DEA agents; corrupt Colombian National Police; paramilitaries known as the AUC; and Colombian narco-traffickers. The NVC rose to dominance in Colombia in the late1990s and beyond with the demise of the Cali Cartel and traces its roots back to Los Pepes.
Colombia's ruthless, right-wing paramilitary force, known as the Autodefensas Unidas de Colombia (AUC) [United Self-Defense Forces of Colombia], grew out of a smaller vigilante death squad called Los Pepes, which was established in the early 1990s with US backing to battle the notorious Colombian narco-baron Pablo Escobar. The AUC death squads were aligned against Colombia's leftist FARC guerillas and also served as tools of oppression against social movements deemed threats to the Colombian power structure.
In yet another twist, DEA documents dug up by Narco News while pursuing its Bogotá Connection series indicate that the CIA was keeping a close eye on the DEA whistleblowers who were the source of the information in the Kent Memo because those agents were "somehow interfering with CIA operations." That prompted speculationthat the CIA may have had an interest in shielding the AUC, which was benefiting from the alleged DEA corruption revealed in the Kent Memo.
Interestingly, the chief suspect in the kidnapping of the Princess is a former Colombian National Police subcommander, court records indicate.
Levine is not willing to speculate on any possible connection between the Princess case and the Kent Memo, however.
In an email to Narco News, he states:

I'm not sure whether or not Mr. Vega has specific evidence, which is basically what I am all about, or his knowledge is general or hearsay. The thing about the Princess case is that I was furnished, via discovery, all the actual reports, depositions and statements, which I spent a considerable amount of time studying….
[Princess] would go to Colombia, with no cover or direction, make the deal, and the dopers would deliver large amounts of cash to people (undercover DEA agents) whom they believed were her "people."
Each delivery was in a different US location. My study indicated that more than $20 million of the money furnished her "people" [DEA agents] in her name was missing and unaccounted for. The names of the people involved, what they said they did and what reports were never filed [by the law enforcers] are now a matter of record. The data is sufficient probable cause to open a major criminal investigation.

But it doesn't appear that the DEA or the Department of Justice are onboard with that idea.
Department of Justice Public Affairs Specialist Nicole Navias, when contacted by Narco News for comment on the Princess case, said the DOJ's Civil Division is still "evaluating the decision to determine the next steps."
However, those next steps, according to a DEA spokesman, "will probably involve an appeal" of the federal judge's decision awarding the Princess $1.1 million as opposed to undertaking an investigation into the still-missing $20 million.
Levine says the bottom line is "that while Princess got upwards of $60 million in narco-trafficker funds, of which more than $20 million is missing, not a single case involving said money was ever brought to prosecution."
"It appears crime does pay," he concludes.