Source: Pittsburgh Post-Gazette (PA) 
Copyright: 1998 PG Publishing. 
Pubdate: Mon, 23 Nov 1998 
Contact:  
Website: http://www.post-gazette.com/ Author: Bill Moushey, Post-Gazette
Staff Writer Note: This is the second of a 10 part series, "Win At All
Costs" being published in the Post-Gazette. The part is composed of several
stories (being posted separately). The series is also being printed in The
Blade, Toledo, OH email:  
The first part of the series (posted in three parts) is at:
http://www.mapinc.org/drugnews/v98.n1068.a04.html
http://www.mapinc.org/drugnews/v98.n1068.a05.html
http://www.mapinc.org/drugnews/v98.n1069.a01.html

FIGHTING TO PROVE INNOCENCE LED 3 TO STIFFER SENTENCES

The three men were all about 60 years old, successful in their careers,
active in their communities.

They were snared in three government stings. Two are serving long prison
terms. The third expects to begin serving his sentence soon.

Their lives are ruined, their assets gone. Two say they have little hope of
leaving prison alive.

The government offered them deals if they would plead guilty to minor
criminal offenses. They would have done little, if any, prison time, but
all steadfastly maintained their innocence, and because they fought for
that innocence, they are paying dearly.

They say they cannot understand how their government could have lured them
into situations that federal prosecutors would then describe as crimes.

They say they have learned one thing from the shadowy world of government
sting operations: The line between guilt and innocence is a shifting one,
and federal law enforcement officers control the strings.

* * * * *

Loren Pogue

Loren Pogue, an Air Force veteran and co-founder of a home for orphans, is
serving 22 years in prison on charges he conspired to smuggle drugs into
the United States and launder drug money.

Pogue never bought drugs, never sold them, never held them, never used
them, never smuggled them. But a government informant with an alcohol and
drug habit, who would later lie at Pogue’s trial, managed to snare Pogue in
a 1990 government sting operation that had little else to show for the
hundreds of thousands of dollars it cost.

A real estate agent and Missouri native who’d made a second home for
himself and his family in Costa Rica, Pogue admits he’d had a previous
scrape with the law. In the 1970s, he served 14 months for tax evasion
related to an ill-fated business venture.

His life since had been free of trouble.

Pogue and his wife, Delores Jean, have 27 children, 15 of them adopted.
Friends, neighbors and preachers have written letters to the federal
government detailing his contributions to their communities and their
outrage at his treatment.

Federal prosecutors said he set up and completed a deal to sell a parcel of
land in Costa Rica to drug dealers who intended to use it as a stopover
airstrip for illegal drug shipments to the United States. He denied the
charges vehemently.

After his conviction, Pogue obtained government documents that showed the
key witness in his case committed perjury at his trial, weaving a web of
lies that convinced jurors of Pogue’s guilt.

The witness, Mitchell Henderson, was a government informant, a disgraced
ex-police officer, an abuser of alcohol and drugs whom the Drug Enforcement
Administration had promised $250,000 to set up a sting operation to try to
snare Latin American drug dealers.

Henderson testified that a high-ranking official of the Cali Cartel in
Colombia had arranged to buy the land for the airstrip. However, DEA
documents that Pogue obtained after his conviction show Henderson never met
the cartel official, and the DEA knew it.

Henderson also testified that Pogue, from the start, knew that the land
sale was connected to Colombian drug runners, a key point in proving
conspiracy charges. But at a later trial, Henderson testified that Pogue
knew nothing about the deal until the day he showed up to close the
agreement on the land.

The DEA documents also make clear that government officials knew Henderson
was lying at Pogue’s trial. Neither Pogue nor the court was informed of
that fact, despite discovery rules that require it.

DEA tapes show Pogue balked at the land deal when the subject was first
raised in the Tampa hotel room where the deal was to be closed. Pogue
admits he finally agreed to sell the land, partly out of fear of what the
supposed drug dealers might do to him if he did not.

Pogue says he knew something else about the property they did not: No one
could build an airstrip on the land. It was a rocky parcel on a steep
hillside with a view of the Pacific Ocean. Building an airstrip there would
be nearly impossible.

Because he listened for a little more than two hours to undercover agents
talk about the thousands of pounds of cocaine that would go through this
airstrip and the thousands of dollars in drug money they would use to pay
for it, the federal charges he faced were major: drug and money laundering
conspiracies. His lawyer says the jury believed the lies of the
government’s key witness because at one point, Pogue told the supposed drug
smugglers he didn’t care where the money came from.

The 11th United States Court of Appeals upheld Pogue’s conviction, not even
issuing an opinion after its judges had peppered attorneys in the case with
questions.

* * * * *

George Pararas-Carayannis

The federal government needed an estimated $4 million and a sexy undercover
police officer to snare Dr. George Pararas-Carayannis in a government sting
operation aimed at drug dealers who were laundering money.

The only person to face charges was Carayannis. There was no evidence he
was involved in drugs.

Carayannis was accused of laundering $4,000 and netting all of $35 for
himself. He faces a 41-month sentence, though he has so many medical
problems that doctors have postponed his trip to prison, fearing it might
kill him.

It was the first time he was charged with a crime.

Carayannis is one of the world’s foremost authorities on tsunami, tidal
waves that earthquakes trigger and that have killed thousands in coastal
communities around the globe. He was named director of the International
Tsunami Information Center in Hawaii in 1974 and was responsible for
assisting more than 28 nations with natural disaster preparedness. He was
fired from the post after he was indicted in 1995 on money laundering charges.

His nightmare began after a friend who was an interior decorator introduced
him to Lauri McEwen in 1992. Carayannis didn’t know that the interior
decorator was an illegal alien whom federal agents had arrested on drug
charges. She agreed to help in the sting in exchange for the right to stay
in the country.

McEwen told Carayannis she was a 26-year-old Canadian who had recently
broken up with her boyfriend. Carayannis said she was beautiful, often
dressing in tight, revealing clothing that highlighted a spectacular
figure. Carayannis, then 56 and divorced, was amazed she found him
interesting. Soon they were meeting for lunch and dinner. They held hands
and kissed tenderly as he courted her, he said. They talked about life and
trips they might take together.

What he didn’t know was that McEwen’s real name was Dana Kresich, an
undercover Honolulu police officer assigned to the government’s sting.

Kresich told Carayannis that she recently had started an escort service, a
euphemism often implying a prostitution ring, but Caray-annis said he never
made that connection. In government tapes of conversations between him and
Kresich, she is never heard to define escort service as being anything
illegal.

He said the undercover agent assured him that the business was not only
legal but that it was registered in the State of Hawaii. Kresich insisted
in court that Caray-annis knew it was an illegal operation.

Since her escort business was new, Kresich told Caray-annis she had not yet
established a credit card account. So several times she asked him if she
could run credit card bills from her business through the machine at a
small jewelry business that Carayannis owned as a sideline to his
government job.

Carayannis gladly agreed. He reimbursed her for the $4,000 or so that the
charges totaled. He earned $35 in fees on the charges, the government said.
Because the credit card companies also charged him that amount as their fee
for the service, the transaction was a wash. Government documents showed
that Carayannis listed the $35 on his tax returns and paid taxes on it.

Federal prosecutors said his actions constituted money laundering because
he ran transactions from a prostitution ring through his credit account.
Carayannis couldn’t believe it.

After his arrest, he next saw Kresich in court. Gone were the low-cut
dresses, short-shorts and bedroom eyes. "She was dressed like a nun," he said.

Prosecutors quickly offered a deal. "They told my lawyer to pick any one of
the charges [to plead guilty to] and this would end," he said. "But I
wasn’t guilty of anything, and I wasn’t going to plead guilty to something
I didn’t do."

Now he’s not sure he did the right thing. Fighting the government has cost
him everything.

Carayannis emigrated to this country from Greece as a young man. He is the
grandson of Lela Carayannis, who led that nation’s largest anti-facist
resistance organization during World War II. She and 71 of her followers
were executed. Other members of Carayannis’ family were tortured in
concentration camps.

"I had faith in this system," he said. "I thought with this kind of
evidence and due process, I would be acquitted." But he wasn’t. He was
convicted and sentenced to 41 months in prison.

Hundreds of supporters have sent testimonials to the offices of federal
judges and congressmen on Carayannis’s behalf along with questions about
the government’s tactics. They have accomplished nothing.

Carayannis is in a legal limbo because doctors have said he is not healthy
enough to travel to prison because of the effects of three heart attacks.
So his seven-year odyssey continues.

He says he’s sure of only one thing: Because of his medical problems, the
41 months in prison he faces amounts to a death sentence.

* * * * *

Beryl L. Johnston

Beryl L. Johnston was a Pappillon, Neb., gentleman farmer, contractor and
finance company owner who thought he was getting a good deal on refinancing
a farm, but his 1993 trip to Florida to seal the deal ended in a 78-month
federal sentence for money laundering.

As often occurs in government stings, Johnston wouldn’t learn until after
his conviction that the key witness against him had lied to him, to the
government and to the court in the sting that would cost him his freedom,
his farm and most of his assets.

Based on the evidence, the government violated its rules when it snared
Johnston in the sting, but because appeals take so long to resolve,
vindication might come after his sentence is completed sometime next year
at the Federal Correctional Institution at Yankton, S.D.

It all started in June 1993 when Jerry Woody, a man Johnston had tossed out
of his office years earlier, met two U.S. Drug Enforcement Administration
agents who were posing as agents for the Cali Drug Cartel. The agents told
Woody and an acquaintance that they needed to launder $10 million from
cocaine proceeds.

People who operate on the fringes of the law usually know that Cali Cartel
members don’t share their affiliation with new acquaintances unless they
plan to kill them, but these agents had no trouble hooking Woody, who had
once been a banker but was as financially unstable in 1993 as he had been
most of his life.

Although he’d never laundered anything more than a load of clothes, Woody
told the smugglers he owned a bank on the Island of Palau, a U.S. Territory
off the coast of the Philippines. He said he’d laundered "billions of
dollars" over the past decade through connections in Lichtenstein.

He didn’t mention that he couldn’t pay his phone bill, had recently run out
on several hotel bills and that his foreign bank was simply a piece of
paper. His bank charter in Palau had been revoked years earlier because
Woody didn’t pay the $50 renewal fee.

Virtually everything he told the agents was a lie.

The clincher came when Woody said he could arrange to launder money already
in the United States through a Nebraska farmer who would be willing to put
up his farm as collateral.

The undercover police officers said they wanted to meet the farmer -- they
had $2 million in small bills ready to launder. That complicated things a
bit. The farmer was Johnston, and Woody hadn’t spoken to him in years.
Johnston simply happened to own a 25 percent interest in a $6 million
Nebraska farm and Woody had added his name to the growing list of lies he
was feeding the feds.

Woody called an old friend, John Velder, in Kansas City, Mo. -- a man who
knew Johnston through business dealings. Velder, who’d helped Johnston with
a loan in 1991, listened as Woody told him that friends he knew had
recently inherited $20 million -- another lie -- and wanted to invest it.
Woody thought that Johnston, a partner in Fleetwood Farms, might be a
candidate for a low-interest loan.

He also asked Velder not to tell Johnston that Woody was behind the deal,
since Johnston had refused to deal with him on financial matters because of
Woody’s tendency to skirt the law. Velder agreed and called Johnston, who
jumped at the offer of a 6 percent loan. The deal would get worked out on
July 7, 1993, in Orlando, Fla.

Johnston was outraged when Woody showed up with Velder, but the good
interest rate kept him talking. At a motel room, the undercover agents
joined them. That’s when Johnston says he first learned of the money
laundering scheme.

"They told me they were going to give me the loan, but you’re going to
launder our money," he said in a recent phone interview from prison.

Velder left the room before they discussed specifics and was acquitted of
charges filed against him.

Johnston’s apprehension with the agents is evident in several conversations
the government recorded, but in the end he agreed to the money-laundering
deal.

Why would he do something so stupid? Fear, Johnston says. Woody took him
aside during the talks, informed him the men were members of the Cali
Cartel and pointed out guards stationed in the hall -- to make sure no one
tried to sneak away. They were actually FBI agents in disguise.

After his arrest, the government offered Johnston a deal if he would plead
to a lesser charge. He refused. "I told [my attorney to tell prosecutors],
‘You know there’s a law against perjury, and if I admit doing this, I’ve
committed perjury.’ "

But based mostly on the videotaped conversations from the room, he was
convicted. After the trial, he began to discover evidence that the
government should have given to his attorneys.

Woody wasn’t interested in laundering money. He was trying to rip off
$25,000 in front money from the supposed Colombian money men, and because
he was broke, there was no way Woody could launder money. In court, the FBI
presented him as an accomplished money launderer of some wealth. Sting
operations aren’t supposed to target people who don’t have the means to
pull off the crime in question.

Johnston’s attorney asked DEA Agent Russell Permaul, "Do you have any
evidence that Woody handled billions of dollars?"

"No, not short of him owning a bank," replied Permaul.

There was no bank. Woody had been living on his girlfriend’s credit cards.

Johnston maintained at the trial that he’d known nothing about the money
laundering deal until the day he walked into the motel room, which the
government disputed.

Johnston’s son would later learn that DEA documents showed no record of
Johnston until the day before the Orlando meeting. Further, Woody was
prepared to verify Johnston’s story on the witness stand, if prosecutors
granted him immunity for those statements, since otherwise he might face
still more charges.

Federal prosecutors refused, Johnston said. So the witness who had lied to
set him up was denied the opportunity to set him free. Woody was sentenced
to 80 months for his role in the deal.

Finally, Johnston wasn’t satisfied with the videotaped conversations from
the sting that prosecutors had played in court. The tape abruptly ended the
moment they announced his arrest. After he was convicted, the jury foreman
told his attorney that he couldn’t understand why Johnston didn’t simply
flee the room.

Had the foreman seen the agents throw him to the ground and handcuff him,
he might have appreciated the fear Johnston says he experienced.

"I was scared; what else can I say," Johnston said. "I’d like to see the
jury foreman in my shoes when they grabbed me."

Johnston’s repeated requests that the government turn over the original
tape have been denied. Johnston figures the DEA’s real interest in him
stemmed from one thing: his substantial interest in a Nebraska farm that
could be seized under federal forfeiture laws.

He was right. The DEA seized Johnston’s $1 million interest in the farm
then sold it for $360,000 to his former partners. 
- ---
Checked-by: Richard Lake