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: FEDERAL STING OFTEN PUT MORE DRUGS ON THE STREETS

Rodney Matthews noticed lawmen waiting as he veered his airplane loaded
with 700 kilograms of cocaine toward a remote Houston airstrip on New
Year’s Eve in 1989. He landed anyway.

Police sirens blared, and officers drew their guns, thinking they had made
a major bust

Matthews didn’t flinch. He handed over the high-quality Colombian cocaine
with a street value of more than $50 million, and before the new year was
even a few hours old, Matthews -- who could have been imprisoned for life
based on the weight of his load -- was at home in Texas with his family,
with the blessing of the U.S. Customs Service.

All it took, Matthews said, was a phone call to a key federal agent. For
not only did he have the government’s blessing to bring in the drug; he had
permission to sell it, too.

That might seem like a strange way to fight the war on drugs, but it’s a
common tactic used in government sting operations, the Post-Gazette found.
The object is to snare key leaders in drug smuggling operations. In this
case, it succeeded only in putting more drugs onto America’s streets.

When Feds Deal In Drugs

It is against the law for federal agents to distribute illegal drugs, just
as it is for ordinary citizens, but there are exceptions.

Under "extraordinary" circumstances -- to nab big-time dealers or
smugglers, for example -- top Drug Enforcement Administration, FBI or
Custom’s officials may issue an order to allow it.

It is that kind of order that Matthews said he was given, but two years
after his close encounter near Houston, Matthews was arrested with a
boatload of cocaine in Florida and eventually sentenced to three life terms
in prison. He insisted that he was double-crossed, that he was busted for
an operation that the government had approved.

Two U.S. Customs agents corroborated his story in court, but top officials
at the U.S. Justice Department denied that. They even brought perjury
charges against the two agents who vouched for Matthews, saying they
wouldn’t go along with what Matthews calls a "high-level coverup." A jury
acquitted the agents.

The only certainty in this mess is that Matthews is doing life in prison at
the U.S. Penitentiary at Leavenworth, one of the toughest in the country.

From his cell, he has staged a one-man assault against the government,
which, he says, tried to cover up its deals with him by asking him to
perjure himself and then condemned him to life in prison because he refused.

A Criminal’s Initiative

Often, it’s the criminals who suggest this country’s drug stings -- even
when those suggestions seem far-fetched.

Mustaq Malik knew the only way he’d be freed early from his 24-year
sentence at the federal prison in Petersburg, Va., for drug trafficking was
to help federal agents set up a sting that would snare other big-time drug
dealers.

The native of Pakistan would do anything to ensure the sting’s success,
even lie in court, he later told a defense attorney.

Malik testified in 1993 that he had lied in court before and that he was
willing to testify against people he didn’t even know, so long as
prosecutors agreed to shave years off his prison sentence.

Defense Attorney: "What you would do is . . . use the government in any way
that you possibly could [in] . . . getting your sentence reduced from 24
years and five months to something lesser, wouldn’t you?"

Malik: "Well, that’s the system."

The deal that Malik offered federal agents in 1990 seemed especially odd.
The guy he set up, 63-year-old New Yorker Raphael Santana, was already
serving a life sentence in prison. As part of the sting, Malik persuaded
Santana to arrange from prison for the distribution of a shipment of heroin
that Malik would bring into the country. Then the federal government would
bust everyone involved.

But in its zeal to grab a few small-time colleagues of this lifer, the
federal government turned over a package of almost pure heroin from its own
drug lockers to Frank Fuentes, a small-time criminal with a bad drug habit.

Agents could have arrested Fuentes, Santana and the other conspirators
before Fuentes took possession of the heroin. For reasons not clear, they
did not. So Fuentes promptly got the heroin into the hands of street
dealers in New York City.

Experts testified that it would have been cut into 8,500 individual packets
and sold on the street for $170,000.

Federal agents arrested Santana; Fuentes, a down-on-his-luck former dealer
who was so broke that he once missed a meeting with federal agents because
he didn’t have money to get his car out of a tow pound; Santana’s wife, who
was dying of cancer; and four street-level dealers.

A Senior U.S. District Judge eventually ordered that the conspiracy charges
against the defendants be dropped, saying the amount of heroin given to
Fuentes "boggles the mind" and constituted outrageous government misconduct.

His ruling was overturned on appeal, and Fuentes is again appealing his
life sentence.

Most of Malik’s court records are sealed, so his fate isn’t clear, but the
Post-Gazette found a few records that show he continued to buy down his
prison term as an informant in New York and Chicago. One court paper also
shows the government paid him $50,000 for his efforts. At last report, he
was in the federal witness protection program.

A Little Help From His Friends

There’s another problem with government drug stings: They sometimes create
a drug problem where none existed.

Ben Kalka had been a bit player in the San Francisco drug world off and on
for most of his life -- mostly scoring small hits of cocaine -- but at the
time of his arrest in 1982, he’d become a major supplier of methamphetamine
on those same San Francisco streets.

Cheaper than cocaine and heroin, it induced many of the same sensations,
including quick addiction.

Federal agents had set Kalka up in a sting. But by the time Kalka began
manufacturing the drug, the Drug Enforcement Administration insists the
sting had ended, an argument Kalka finds bizarre.

By the time the government caught up with him, Kalka figures he’d produced
8,000 pounds of drugs worth $10 million, using ingredients federal agents
had arranged for him to buy.

Kalka should have been suspicious of his good fortune in 1980.

A chemist friend had asked him to find a barrel of phenyl acetic acid, a
key precursor for the manufacture of methamphetamine. Kalka had a contact
at a chemical company who said there was no way he could get him the
chemical. While it wasn’t illegal, the government scrutinized who bought
and sold the chemical.

A week later, this contact called to say he could get Kalka a semi-truck
load of the chemical precursor weighing 25,000 pounds. All Kalka needed was
the money -- $250,000.

What Kalka didn’t know was that in the interim, the contact, Paul Palmer,
had become an informant for the government after being busted for selling
the very precursors Kalka had bought.

By now, Kalka was hooked. He set up a partnership with another drug dealer,
Paul Morasco, to get the money, then began his search for the last
ingredient he’d need for the speed -- monomethylamine. Palmer put him in
touch with Michael Riconosciuto, whose past included shadowy connections
with various U.S. intelligence agencies, unbeknownst to Kalka.

Riconosciuto greeted Kalka like a long, lost brother. He claimed Kalka had
once talked him out of suicide when they were imprisoned in the 1970s at
Lompoc federal prison. Kalka vaguely remembered Riconosciuto.

Riconosciuto said in a recent interview that he was working for the FBI
when he connected with Kalka and the agency told him to find the
monomethylamine for Kalka as part of the sting operation. When the chemical
was delivered, the FBI planned to bust Kalka and various subordinates.

The plan failed miserably, an array of court documents show. Kalka,
naturally mistrustful of almost everyone, managed to divert the
tractor-trailer truck carrying the chemicals away from federal agents who
were tailing it.

Even so, Kalka wonders today why the FBI didn’t track him down once the
methamphetamine began hitting the streets. The agency maintains it
eventually stumbled across Kalka’s drug enterprise during another
undercover operation.

Soon, he had produced what might have been the largest batch of
methamphetamine produced in this country.

And it was all with chemicals supplied with the help of federal agents.

When he was finally arrested, Kalka gave the government $1 million and
1,000 pounds of methamphetamine, all that remained of the 8,000 pounds of
the drug he’d produced, in exchange for a promise that he would serve no
more than 10 years in prison.

A judge ignored the prosecutor’s request and slapped Kalka with a 20-year
sentence. In the meantime, Riconosciuto was arrested and convicted on a
methamphetamine manufacturing charge. From his prison cell in Coleman,
Fla., he described the role of federal agents and their authorization for
him to sell Kalka the final ingredient needed to make the methamphetamine.

Kalka says the government’s complicity in supplying the drugs might yet win
him release from prison if he can convince a court to hear him.

In the meantime, he has been moved from one prison to another because of
his repeated attempt to sue the government over his case and the conditions
of his incarceration.

A Drug-Related Millionaire

Charles Hill also earned a fortune in illegal drugs, but he did it legally.

He opened Triple Neck Scientific Co. in 1985 near San Diego. Four years
later, he had amassed more than $9 million in profit from the specialty
chemical business, selling the precursors needed to manufacture
methamphetamine, which was becoming popular in Southern California.

Hill didn’t need to hide his operation from the government. He was working
for the U.S. Drug Enforcement Administration, which tracked down more than
100 of his customers, arresting them for using the precursors in illegal
drug-manufacturing operations.

The only problem was that the government didn’t recover all the chemicals
that Hill had sold. Federal officials admit that the precursors they didn’t
recover were likely transformed into thousands of pounds of methamphetamine
that was eventually sold on American streets.

Most of those caught in the government’s web quickly pleaded guilty and
went off to prison.

Those who appealed based on the government’s tactics were rebuffed. The
appeals court said convictions could be overturned only if "government
misconduct has been so outrageous that it results in a violation of due
process," or was "so grossly shocking and so outrageous as to violate the
universal sense of justice."

The court ruled it was not. "Unsavory conduct alone will not cause the
dismissal of an indictment."

Turning The Tables

Rodney Matthews was the centerpiece in the government sting called
"Operation Shanghai," an example of just how little control the U.S.
sometimes has in its drug interdiction efforts.

Matthews agreed to smuggle drugs with the government’s blessing in 1984 to
avoid a three-year prison term for smuggling marijuana.

It wasn’t a bad trade. Government agents said he could keep anything he
earned from the smuggling operations, and he earned millions.

The government sting had two objectives, Matthews said in several letters
responding to questions the Post-Gazette posed:

Snare a South Texan named Vic Stadter, an outspoken government critic who
made his opinions known through his newspaper. Federal agents believed he
was a longtime drug smuggler. Stadter denied the charge and accused the
government of harassment.

Bust Pablo Escobar, the notorious leader of the once-feared Medellin Cartel
in Colombia, which the government said was responsible for 80 percent of
the cocaine that came into this country during the 1980s.

Matthews said he got nowhere with Stadter, managing only to take one of his
secretaries on a few dates.

His pursuit of Escobar was more complicated and ultimately unsuccessful.
Escobar died of multiple gunshot wounds after a shootout with Colombian
police in December 1993, before U.S. agents ever laid a hand on him.

During the years in between, Matthews smuggled more than 50 loads of
cocaine for the U.S. Customs Service. At the direction of federal agents,
he delivered his loads to illegal drug syndicates in the United States,
which then distributed them across the nation. Matthews said he invested
most of his profits in property and aircraft and made sure the operation
never cost the government a cent.

He said the government wasn’t interested in pursuing the people who bought
his drugs. By not busting them, agents hoped to enhance Matthews’
reputation with Escobar and Stadter, creating an image of a super
trafficker who could avoid the government’s web.

That he never got close to Escobar wasn’t for lack of imaginative schemes.

At one point, Matthews tried to sell the cartel leader the coastal
schedules of U.S. AWACS surveillance planes, used to detect smugglers in
boats and planes, for $6 million. It was all a scam, he said. He was hoping
the ploy would get him closer to the Colombian.

He said his encounter with scores of federal agents in 1989 at the airport
near Houston was a wakeup call. His contacts for the smuggling sting were
two Customs Service agents and two Texas Department of Public Safety
narcotics agents, and he no longer believed they had enough support for the
operation to protect him.

"It was glaringly apparent that the people who had given me authorization
had over-reached their authority, so from that point on I made sure that no
cocaine hit the street," he said.

Soon, he was accepting only contract assignments from federal law
enforcement agencies, for a fee of $50,000 a flight. He brought in the
drugs and let the federal agents take it from there.

These flights often included overnight stops at U.S. military bases in the
Carib-bean, including Guantanamo Naval Base in Cuba, "where I would fly in
loaded with Colombian cocaine, using prearranged code names like ‘Dark
Cloud’ and ‘Hot Rod’ for tower clearance."

The final irony: The government still owes him $180,000 for those flights,
which agents corroborated during his trial.

Matthews’ last operation was in 1992 in Fort Lauderdale, Fla. An old friend
set him up to be busted.

Jimmy Norjay Ellard was an ex-police officer from Texas, a pilot and a
longtime associate of Escobar, and he had served as liaison for Matthews
with the cartel leader.

Ellard’s resume was bloody. He had instructed Escobar in how to attach a
bomb to an Avianca Airlines plane, which the drug leader did in the early
1980s to eliminate two informers. More than 100 innocent people died in the
mid-air blast.

Federal agents busted Ellard in 1985 for cocaine smuggling, and he was
sentenced to life in prison. He had been in jail for four years when he cut
a deal with an assistant U.S. attorney in Fort Lauderdale, based on his
promise to deliver Matthews.

From prison, he arranged an illegal drug shipment that Matthews would pick up.

Federal agents had falsely told Ellard that Matthews not only worked for
the government but had been responsible for setting Ellard up in his 1985
arrest, Matthews said.

Federal prosecutors and agents in South Florida told Matthews they didn’t
believe his story about working for the federal government, despite the
drug agents’ corroboration. During pre-trial meetings, when Matthews’
lawyer named the agents he was working with, prosecutors suggested they had
conspired in his crime.

So prosecutors offered Matthews a deal: Implicate the agents in some of his
crimes, and he’d be recommended for a reduced sentence.

Matthews refused; they were honest officers, he said.

Matthews was convicted of drug conspiracy and sentenced to three life terms
in prison, based on the amount of drugs he’d smuggled. Ellard, because of
his help in nailing Matthews, got only five years, but his luck didn’t
last. In September, he and his son were arrested in Fort Lauderdale and
charged with conspiring to import marijuana. He is back in jail.

The agents were charged with conspiracy based on facts that came out of
Matthews case. Both were acquitted.

Matthews thought he would find some relief, because he believed the
government would surely come to its senses -- the government’s agents,
after all, had corroborated his story and been found innocent of trumped up
perjury charges. He sent a package of information to 140 Members of Congress.

He got five responses, most of them "offering good wishes," he said. Last
summer, he did an extensive interview with the ABC show "Prime Time Live"
in which he explained his story.

Shortly before that story aired, he was put into an isolation cell at
Leavenworth, where he is only allowed out for a short walk each day.
- ---
Checked-by: Richard Lake