San Francisco Chronicle Contact: http://www.sfgate.com/chronicle/ Pubdate: Mon, 16 Feb 1998 Author: Jaxon Van Derbeken, Chronicle Staff Writer Defense in Murder Case May Implicate State DEALER LURED TO HIS DEATH BY INFORMANT Lance Estes was desperate. Facing indictment for running a multimillion-dollar cocaine and methamphetamine ring, the 33- year-old San Francisco man clung to one last hope for freedom: Agent Blue. For $100,000, the purported FBI agent told Estes, he could make the federal case against him disappear. But it was all a ruse -- a fatal trap. Two days after Estes flew to Southern California on Aug. 28, 1995, to make the payoff, his body was found in an Oceanside dumpster, wrapped in black plastic and duct tape and stuffed in a sleeping bag. Later this year in San Francisco, three men will face federal murder conspiracy charges in connection with Estes' slaying. But it may be the state Bureau of Narcotic Enforcement that ends up on trial. The defense is expected to pose a troubling question: Did state drug agents help the suspects lure Estes to his death? Court documents and interviews reveal that two state agents gave Blue -- actually a government informant in league with Estes' enemies -- the confidential information needed to spring the extortion plot. The bureau, which is run out of the attorney general's office, has declined to comment on the state agents' role, as have the agents. But Detective Mike Porretta, who investigated the murder for the Oceanside Police Department, said the bureau initially withheld information from him about the agents' involvement. ``Basically, they provided the names of the suspects,'' he said. ``But that was the only information I got from them.'' It took more than a year before Porretta learned about the roles that the agents -- as well as their underworld informant -- played in the Estes case. ``When I found out how much this informant was involved, I was sitting here at my desk with my mouth open. (The bureau) went over the line. It'll all come out in the trial.'' - ---- -- It all began in Marin County in March 1995, when state agents, following a yearlong probe, arrested Estes, his brother and an old grade-school chum for allegedly running a drug ring. Estes had already served two years in state prison on drug charges. Here, according to federal documents and Chronicle interviews, is how the case took a deadly turn: In exchange for reduced sentences, Estes and the two others agreed to become informants for state and federal authorities. Yet once freed, Estes, who grew up in Marin and attended Redwood High School in Larkspur, thumbed his nose at authorities and resumed his drug operation. As it turns out, his grade-school friend was informing on him. In June 1995, two of Estes' couriers were arrested in Hawaii carrying five pounds of methamphetamine. The couriers identified Estes and Walder Pierre Rausini as the men they were working for. Rausini, 34, was a Southern California drug dealer and ``cook'' who specialized in refining methamphetamine into a more potent form of the drug called ``ice,'' police say. Rausini traveled in a high-living circle in Orange County, holding court at local strip joints and nightclubs. ``(He) was always dropping cash, buying drinks and dinners,'' Porretta said. ``He was the man with the money.'' Rausini manufactured the ice seized in Hawaii, prosecutors say, and he blamed the arrests of the couriers on Estes. For revenge, Rausini and an associate allegedly decided to kill Estes -- but not before they could extort as much money as possible from him. For help in the extortion plot, prosecutors say, Rausini turned to ``Agent Blue'' -- Mark Farchione, an informant for the state Bureau of Narcotic Enforcement. Rausini knew Estes was desperate to avoid going back to prison, so he allegedly asked Farchione to pose as a corrupt FBI agent and approach Estes with an offer to make the case against him disappear for $100,000. But to convince Estes that Agent Blue was legitimate would require specific knowledge about Estes' case -- information possessed only by law enforcement agencies. Farchione approached Special Agent Shawn Barreiro, according to interviews and federal documents, and asked whether he could get him the confidential information. Intrigued, Barreiro ran the request past Special Agent Randolph Blum, who would later say he saw it as an opportunity to ``test his lines'' in the drug underworld. Blum, who had spent more than a year investigating Estes, then took the plan to the U.S. attorney's office, which was seeking indictments of a dozen players in the Estes ring at the time. The U.S. attorney's office rejected the plan. Yet for some reason, the U.S. attorney's office was apparently ignored. By early August 1995, Farchione had the information he needed. - ---- -- The extortion plot worked perfectly. Estes and Farchione arranged to meet in front of a Hollywood hotel. There, Farchione put a gun to Estes' head and showed him what appeared to be FBI credentials, according to Estes' fiancee. He then told him about ``specific things found in a search of his (Estes') house which could only be known by law enforcement,'' according to an affidavit by Estes' brother. Farchione allegedly said he could make the drug indictment against Estes ``go away'' but needed $50,000 to begin the process -- and Estes bit. After coming up with the first $50,000, he flew down to Southern California on August 28, intending to make the final payment. According to court documents, he was met at the Orange County airport by two of Rausini's associates. Estes was driven to a house in Newport Beach, where he was shot once in the head at close range. A third Rausini associate allegedly revved a Harley-Davidson in a side yard to drown out the gunfire. Two days later, a man rummaging for aluminum cans in an Oceanside dumpster discovered Estes' body. ``The ironic thing,'' Porretta said, ``is that (Estes) basically financed his own murder.'' - ---- -- Because Estes had agreed to serve as an informant for state and federal authorities after his arrest in March 1995, the four men charged in connection with his slaying face federal murder charges that allege ``tampering with an informant.'' The charges also specify that the killing was committed to further a drug conspiracy. Rausini and two associates, Wayne Harrison and George Mrozek, have pleaded not guilty, and a trial date may be set in the next few weeks. Frank Nason, the fourth suspect, is still at large. All four could face the death penalty in the first capital federal drug conspiracy case in Northern California. No charges have been filed against Farchione. Instead, the state paid him approximately $40,000 for cooperating with Bureau of Narcotic Enforcement agents over the years, Porretta said. Farchione also wound up with the Harley-Davidson allegedly used to cover the sound of the murder, Porretta said. Farchione could not be reached for comment. The state's role in Estes' death will almost certainly be a central element in the trial. Officials openly worry that it could undermine the entire case. ``The defense is loving it,'' said Porretta. Meanwhile, Estes' loved ones are still angry about the state's actions. ``It's a game to them,'' said Monica Trujillo, who was Estes' fiancee. ``And they were playing it with people's lives. The agents who did this are just as responsible as the person who actually did the crime.'' )1998 San Francisco Chronicle Page A1