Pubdate: Wed, 09 Jan 2002
Source: San Antonio Business Journal (TX)
Copyright: 2002 American City Business Journals Inc.
Contact:  http://sanantonio.bcentral.com/sanantonio/
Address: 70 NE Loop 410 Suite 350 San Antonio, TX 78216
Fax: (210)341-3031
Author: Bill Conroy

TORPEDOED G-MAN UNIT RISING LIKE PHOENIX FROM ITS ASHES

A former Internal Affairs agent for the U.S. Customs Service has come 
forward to shine a light on a sordid tale of alleged law-enforcement 
corruption, cover-ups, drug trafficking and suspected murder.

The former agent, Steven Shelly, is going public with his story because, he 
claims, no one in a position of power within law enforcement is listening.

Shelly's story sounds like a bad rerun of history -- a repeat of the 
rampant police corruption that wracked gangland Chicago during the height 
of Prohibition. In fact, Shelly traces his troubles to his involvement in a 
corruption-busting task force whose members were dubbed by its founder as 
modern-day "Untouchables."

In Shelly's version of the story, though, it is the G-men, not the crooks, 
who take it on the chin.

The Customs Internal Affairs Special Agent in Charge (SAC) who spearheaded 
the formation of the task force, John William Juhasz, claims that it was 
shut down abruptly because it got too close to the truth. The task force, 
called Firestorm, included members of the U.S. Customs Service, the 
Department of Justice's Office of Inspector General, the IRS, the FBI and 
the U.S. Attorney's Office.

Firestorm, prior to being dismantled, was actively investigating some 19 
cases of alleged law-enforcement corruption in Arizona, according to public 
records obtained by the Business Journal.

Juhasz asserts in a statement made under oath during a legal proceeding 
that all of the key players in the torpedoed Firestorm task force were 
subsequently targeted by the government for retaliation and had their 
careers ruined -- including Shelly.

Shelly's story begins in early 1990 in Arizona, with the inception of the 
Firestorm task force. Although rooted in history, the tale has an edge to 
it that cuts a direct path into the present. Shelly claims that the 
corruption uncovered by the Tucson, Ariz.-based task force, which he 
asserts has been left unaddressed for years, now poses a real threat to our 
national security in the wake of the 9/11 terror attacks.

Shelly alleges that a former Customs Internal Affairs supervisor committed 
perjury as part of the effort to silence him in the wake of Firestorm's 
demise in late 1990. Shelly was forced to resign involuntarily in 1994, he 
contends, and has been seeking ever since to reclaim his job and to spur 
the government to clean up the corruption.

However, Customs argues that Shelly resigned from his job due to personal 
factors and that there is no evidence that he was subjected to reprisal by 
supervisors for whistleblowing activity. The judge hearing a legal 
challenge Shelly brought against Customs agreed.

Shelly maintains that justice has not been served in his case or in the 
case of the task force, which has led him to step forward as a whistleblower.

Documents provided to the Business Journal by Shelly show that the 
Firestorm task force had unearthed evidence linking two Customs inspectors 
working along the Arizona border to drug traffickers. The documents also 
allege that a supervisor with the Department of Justice's Office of 
Inspector General (OIG) -- who was suspected of having ties to drug 
traffickers -- worked to derail the investigation into the inspectors' 
activities.

Both the Customs inspectors and the OIG supervisor still work for the 
government, according to Shelly and other sources.

Also outlined in the documents obtained by the Business Journal are the 
details of the task force's investigation into the mysterious death of a 
former Customs supervisor in Douglas, Ariz., who Juhasz suspected might 
have been "involved in a circle of corruption in Douglas. ... ," according 
to an affidavit Juhasz submitted to the Department of Treasury's OIG.

The documents obtained by the Business Journal include testimony, notes and 
records provided to the House Commerce, Consumer and Monetary Affairs 
Subcommittee in 1992.

Other documents include workers' compensation hearing testimony, Merit 
Systems Protection Board depositions, internal reports of investigation, 
various legal affidavits, statements and Customs Service memorandums.

The story that follows is based on those documents, which total hundreds of 
pages, as well as interviews with numerous former and current Customs agents.

Border Politics

In the drug trafficking game, death is not a random card, explains one 
Customs agent who did his time on the border. In the wake of one seizure of 
drug-cartel assets in Arizona, the agent recalls, 18 people were murdered; 
13 of the bodies were discovered at the bottom of a well -- some with a 
finger missing.

"They (the drug traffickers) were trying to find the informants," the agent 
explains. A missing finger is a sign of a snitch.

The investigators on the case also received death threats, the agent says. 
"These people play for real," the agent stresses.

In that context, it is not surprising that Juhasz and the Firestorm task 
force in Arizona would cross paths with a case involving a suspicious death.

Douglas, Ariz., is a desert border town of about 15,000 people located some 
120 miles south of Tucson and just north of Agua Prieta in Mexico.

By all accounts, Jake Price was a well-known and well-connected public 
figure who had lived in the small town for more than a decade. He served as 
the resident agent in charge of the U.S. Customs Office of Enforcement in 
Douglas before retiring in the late 1980s to become a city magistrate. 
Among Price's connections was real-estate speculator and Douglas Justice of 
the Peace Ronald J. Borane, according to documents provided to the 
congressional subcommittee.

In February 1990, Price took ill, mysteriously. He was transported to 
Tucson Medical Center after falling into a coma, congressional records state.

James "Breck" Ellis, a Customs Internal Affairs group supervisor and a 
member of the Firestorm task force, was dispatched by Juhasz to investigate 
the situation.

Ellis, who had worked in the Douglas Customs office with Price prior to 
becoming a Customs Internal Affairs agent in Tucson, found Price at the 
hospital under the watch of "two to three Douglas police officers" who 
appeared to be guarding him and who had "apparently traveled with him," 
congressional records state. Price's son, Justin "Clay" Price also was at 
the hospital.

Then, things got stranger.

Price died in the Tucson hospital. At the time, Price's son, Clay, 
allegedly promised Customs agent Ellis access to his father's papers, 
congressional records state.

But instead, Clay Price later hooked up with a Douglas Customs officer and 
together the two burned Jake Price's papers in the furnace at the Douglas 
Port of Entry.

Congressional documents indicate that those papers, "including probable 
bank records, would have helped expose (words blacked out) involvement in 
the drug trafficking and public corruption in Douglas."

When interviewed by DEA Internal Affairs about the destroyed papers, Clay 
Price "reportedly told them that he just destroyed some of his father's 
personal records, like checks, but nothing that was relevant to Customs," 
documents submitted to the congressional subcommittee state.

The records were not the only disappearing act associated with Jake Price's 
death. His body was shipped to Texas, according to congressional documents.

No autopsy was performed.

Borane confirmed that he knew Price, when interviewed by the Business 
Journal by telephone. However, Borane said he had never heard anything 
about Price's death being "mysterious."

The strange circumstances surrounding Jake Price's death, though, led 
Juhasz to a dark conclusion.

"I believe, that the former agent in charge of the Douglas office was 
murdered by -- by political figures in the Douglas area. ... ," stated 
Juhasz when queried about Price's death in a legal deposition related to a 
workers' compensation case filed by Shelly.

Underground Economy

The trail of coincidences didn't end with Price. About three months after 
Price died in February 1990, Customs investigators unearthed an underground 
tunnel stretching from Agua Prieta in Mexico, to Douglas, Ariz. The tunnel, 
it was ultimately discovered, connected a suspected drug trafficker's house 
in Mexico to his warehouse in Douglas.

The land where the warehouse was located, according to Arizona Assistant 
Attorney General John R. Evans, was sold by Borane to the suspected drug 
trafficker, Mexican businessman Francisco Rafael Camarena-Macias. Evans 
adds that Borane is the godfather of one of Camarena's children -- a fact 
Borane confirmed as well.

Borane also rented space to Customs for its Douglas office while Price was 
the resident agent in charge, according to congressional documents.

Borane explained that he owns a lot of real estate in Douglas. He added 
that it was a real estate agency in town that actually handled the sale of 
the land to Camarena.

"I owned the land and leased it to a ready-mix plant, and I think they had 
a trailer on it," Borane said. "Later on the warehouse was built, if I recall."

In addition to the land acquired in Douglas by Camarena, he also owned a 
residence in Agua Prieta. The tunnel connected his home in Mexico to the 
warehouse on his Douglas property. According to a statement released by 
Customs, Camarena is believed to have hired an architect to design the tunnel.

Sources within Customs told the Business Journal that the initial 
investigation into the drug-running tunnel was launched in November 1989. 
The concrete-lined, air-conditioned 200-foot-long tunnel, which was used to 
smuggle tons of cocaine from Mexico into the United States, was finally 
found and shut down in May 1990.

Camarena was indicted in 1995 -- some five years after the tunnel was 
discovered in the spring of 1990 -- but he soon disappeared in Mexico, 
according to the Customs Service. The long arm of the law finally caught up 
with him this past summer, when he was turned over to U.S authorities by 
the Mexican government to face conspiracy and cocaine trafficking charges. 
The Business Journal was unable to determine where Camarena is being held, 
or the status of his case, at deadline.

Although law enforcement officials did investigate the property transaction 
between Borane and Camarena after the tunnel was unearthed, no charges were 
ever brought against Borane, according to Evans and other sources.

However, Borane was arrested years later, in 1999, on drug-running, money 
laundering and traffic-ticket-fixing charges. Evans, who coordinated that 
prosecution, says Borane was ultimately convicted of two felonies related 
to the ticket-fixing charges and served 90 days in jail.

"He (Borane) is still on probation and is no longer a justice of the 
peace," Evans adds.

Borane, for his part, said his three-year probation is nearly completed. 
Although he is no longer the justice of the peace in Douglas, he said he 
still owns a significant amount of real estate in the area.

"When you're in a small community and you're considered politically active, 
which I was, and you own a lot of real-estate holdings, they (the 
authorities) tend to look at you," Borane explained, when asked why he was 
subjected to so much law-enforcement scrutiny.

Looking inward

Not all of the task force's cases revolved around mysterious circumstances 
and missing evidence. Sometimes, the evidence became the problem.

Among the initial cases the Firestorm task force took up centered on one of 
its own: Javier Dibene, special agent in charge of Arizona for the 
Department of Justice's OIG. It is the OIG's job to investigate cases of 
alleged corruption within the Department of Justice's ranks.

However, Dibene, who was based in the Tucson office, was himself being eyed 
for having alleged links to drug trafficking operations.

"I suspect that ... Javier Dibene ... (is) involved in narcotics 
activities," states Juhasz in a 1991 affidavit provided to a Treasury-OIG 
investigator.

The FBI had investigated Javier Dibene in 1990 and cleared him; however, 
the FBI agent on the case admitted, according to congressional records, 
that he had been given such narrow investigative parameters by his 
supervisors that the "investigation had no chance of success."

Further suspicion was drawn to Dibene when tapes surfaced fingering two 
Customs inspectors in Nogales for allegedly allowing loads of dope to pass 
across the border through an arrangement with a drug trafficker.

The tapes, which were in Spanish, were provided to the DEA initially 
through an attorney for a defendant seeking to cut a deal for a client.

Congressional testimony from the assistant U.S. attorney who served as 
coordinator for the Firestorm task force indicates that Dibene -- who 
speaks Spanish -- was provided with copies of the tapes for review in the 
fall of 1990. However, a few days later, DEA agent Alejandro Vasquez was 
told that Dibene had found nothing of value on the tapes.

Vasquez, who also had listened to the tapes, became suspicious as "he 
realized the tapes referred to large-scale narcotics trafficking ... " 
congressional records state. The two tapes were made when one drug smuggler 
kidnapped another drug smuggler and interrogated him at gun point to 
determine how the competition was moving drugs across the border, Juhasz 
states in the Treasury-OIG affidavit.

Several days after turning copies of the tapes over to Dibene's office, 
Vasquez passed the original tapes onto Customs agent Shelly, who also 
speaks Spanish. Shelly then brought the tapes to Juhasz' attention.

"The tapes contained the unequivocal identification and implication of 
Customs border inspectors, by name, in corruption that involved the 
deliberate 'passing' of large (600 pounds) and numerous periodic (alleged 
to be weekly) loads of cocaine by the inspectors ... ," Juhasz states in a 
letter sent to the Commissioner of Customs in 1991.

Dibene's lack of interest in the tapes also led Juhasz to begin to suspect 
that Dibene was obstructing the investigation.

"To fully and properly evaluate Javier Dibene's actions and statements in 
this matter, it is important to know that he was born in Mexico, moved to 
Douglas, Ariz., at age 10, and later moved to Nogales, Ariz., where he grew 
up with the Customs inspectors named in the tapes, and therefore arguably 
knew them intimately," Juhasz writes in the letter. "For him to state that 
there was nothing of value on the tapes was at best ludicrous, and more 
probably criminally obstructive. I feel that Javier Dibene's actions 
concerning the audio tapes serve to confirm my nagging fear that he was 
actively suppressing corruption investigations."

Turf war

Juhasz' efforts to expose the alleged corruption related to the tapes -- as 
well as his pursuit of other cases -- sparked a major turf war among the 
federal agencies cooperating with or participating on the task force, 
according to documents submitted to the congressional subcommittee. Juhasz 
was labeled by the FBI special agent in charge in Phoenix as "a loose 
cannon who was only trying to build an empire," the congressional documents 
state.

Juhasz retired from Customs in 1994; the Business Journal was unable to 
locate him for comment for this story. His statements have been drawn from 
public records.

Former federal agents interviewed by the Business Journal who know Juhasz, 
though, described him as an excellent agent of impeccable integrity who had 
no tolerance for corruption or political games -- kind of like the Eliot 
Ness of Customs.

And it appears the comparison to Eliot Ness is not out of bounds, based on 
statements Juhasz himself made during the workers' compensation deposition:

"As the depth and breadth of corruption within the government agencies, and 
especially within Customs, was becoming in focus, being uncovered... I 
think that there were a lot of people that were very afraid of us -- 
because we, in effect, were the untouchables."

However, Juhasz would soon discover that he and the task force were far 
from "untouchable." The interagency tiff set off by the tapes as well as 
other ongoing case-related tensions among the task force members prompted 
the U.S. Attorney's Office to withdraw from Firestorm in early December 
1990, according to documents submitted to the congressional subcommittee. 
By the end of the month, the task force was dead in the water.

In February 1991, Juhasz was relieved of his duty as special agent in 
charge of the Customs Internal Affairs office in Tucson and subsequently 
transferred out of Arizona without explanation.

"It became quite evident that it was purely political (the task force being 
shut down), that we were too effective, that we were getting too close," 
Juhasz states in the workers' compensation deposition. "We'd already 
toppled the Justice Department's Inspector General's office for covering up 
drug trafficking by Customs Inspectors. And I think that they were 
terrified as to what we were going to find."

In addition to Juhasz, others on the task force also were subjected to 
retaliation by their employers in the wake of Firestorm's demise, according 
to documents submitted to the congressional subcommittee. Those individuals 
included Shelly, his wife (also a Customs agent and task force member), DEA 
agent Vasquez, an unnamed FBI agent, a special agent with the Department of 
Justice's OIG office in Tucson, and the assistant U.S. attorney who served 
as coordinator for the task force.

"The careers of all the people on the task force have been either damaged 
or destroyed," Juhasz states in the workers' compensation deposition.

As for Dibene, he, too, was transferred out of Arizona -- ultimately taking 
a job with the Immigration and Naturalization Service (INS) in California, 
according to congressional records. The Business Journal attempted to 
contact him at the investigations division of the San previously under 
Juhasz as a group supervisor and as a task-force member.

Shelly is now alleging that he has uncovered evidence that shows Ellis 
committed perjury in sworn testimony in a Merit Systems Protection Board 
(MSPB) legal proceeding.

The case

Shelly sought to get his Customs job back by bringing suit in 1995 through 
the MSPB, a quasi-judicial review body set up for federal employees.

In his MSPB proceedings, Shelly alleged that he was the victim of a hostile 
work environment and that he was retaliated against because of his 
whistleblowing activity -- which included cooperating with a congressional 
investigation into the demise of the Firestorm task force.

Shelly claims his supervisor, Ellis, allegedly engaged in a pattern of 
abusive behavior in an effort to drive him out of his job in the wake of 
the task force being busted up.

Shelly's psychologist -- who testified in a workers' compensation hearing 
on Shelly's behalf -- in a letter dated March 2, 1994, stated that Shelly 
was subjected to "constant and unrelenting disparagement and belittlement 
... by his supervisors. The psychologist added that "the criticism appeared 
to be deliberate for the purpose of engendering constant anxiety."

"In short, exposure to these conditions ground down Mr. Shelly's morale and 
coping resources to the point where he became so significantly depressed 
that he could no longer function," the psychologist's letter concludes.

Shelly -- an 11-year veteran of the Customs Service -- ultimately had 
little choice but to resign from his job, due to the psychological duress, 
he says.

Customs, on the other hand, claims Shelly left his job in July 1994 of his 
own free will due to "personal factors," which included concern for the 
health of his parents and other family-related problems. The judge in 
Shelly's 1995 MSPB case agreed with Customs.

Shelly appealed, and in 1996 lost again.

"What the evidence does reveal in this case ... is that at or about the 
time preceding (Shelly's) resignation, he was undergoing significant 
personal stress," states the judge's ruling in Shelly's MSPB appeal. "The 
evidence of record does not support any findings that any agency officials 
engaged in any reprisals against (Shelly) for any whistleblowing."

However, earlier this year, Shelly says he came across evidence that Ellis 
committed perjury during a 1996 MSPB hearing. The alleged perjury, Shelly 
claims, played a critical role in the judge's ruling against him.

Prior to resigning in 1994, Shelly says he attempted to get transferred out 
of the Office of Internal Affairs in Tucson, Ariz., which Ellis oversaw. 
Shelly claims Customs approved that transfer in 1991, agreeing to move him 
to the Office of Enforcement (OE) -- which has since been renamed the 
Office of Investigations.

In testimony from the 1996 MSPB hearing, Ellis denied, under oath, that he 
had knowledge of any such transfer being approved.

"I never knew that OE had ... had accepted," Ellis states in the testimony 
- -- in response to a question about Shelly's transfer. "This sounds like an 
issue that that never occurred."

Shelly counters, though, that he has obtained a signed statement indicating 
that Ellis in fact had a conversation with a senior special agent in 
Customs about that very transfer.

"I recall speaking with ... Ellis regarding ... Shelly's release date (for 
his transfer)," states senior special agent Louie R. Garcia in a signed 
statement dated March 29, 2001. "... Ellis provided me with the release 
date (for the transfer) ... and instructed me to call ... Shelly ... and 
confirm the suggested release date recommended by Ellis."

Ellis stepped down unexpectedly from his Customs post this past spring, 
according to Shelly and other sources within Customs. The Business Journal 
was unable to reach Ellis for comment.

Shelly has sent off a series of letters over the past seven months to the 
U.S. Attorney's Office, the U.S. Office of Special Counsel, the Department 
of Treasury's Office of Inspector General, Customs Internal Affairs as well 
as to members of Congress attempting to get someone to investigate the 
perjury charge.

"Mr. Ashcroft, is perjury by a high level U.S. Customs manager not a 
crime?" states Shelly in a letter dated Aug. 1 that was sent to U.S. 
Attorney General John Ashcroft. "I am not seeking vengeance, nor am I 
trying to retaliate. I am simply seeking justice.

"... However, in order to protect my family and my integrity and my honor, 
I will not cease in my quest to right this wrong."

No one in the government has done anything about his case, Shelly says.

As a result, he has decided to go public with his story.

To read other Business Journal coverage of the U.S. Customs Service, go to 
the following Web link: 
http://sanantonio.bcentral.com/sanantonio/stories/2001/10/08/story1.html.
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MAP posted-by: Terry Liittschwager