By Bill Conroy
Special to The Narco News Bulletin
May 10, 2004
Several years ago, in the Arizona border town of San Luis,
a U.S. Customs inspector was convinced by Internal Affairs to
go undercover to sting an alleged narco-trafficker.
The inspector was recruited by Internal Affairs because he
reported that he had been approached by the suspect and
offered an opportunity to “make some money,” according to law
enforcement sources.
It was an extremely dangerous assignment, particularly for
a green Customs inspector with no previous training in
undercover work. He played the role of a crooked inspector,
often wore a wire, and was even required to invite the alleged
trafficker into his own home as part of the sting. The
inspector wasn’t allowed to tell his family about his
undercover activities, creating yet another layer of stress in
his life.
Somehow, the inspector pulled the mission off. The narco-trafficker,
ringleader of a group that was smuggling drugs into the
country via truck, was eventually arrested in 2002. He was
later convicted of conspiracy to bribe a public official and
of attempting to import a controlled substance into the United
States.
That same inspector now works for the U.S. Bureau of
Customs and Border Protection (CBP)—a Department of Homeland
Security agency that replaced the U.S. Customs Service. After
the successful undercover sting in San Luis, the inspector was
transferred to another border town, Nogales, Ariz. Soon after
that, he once again was thrust into another high-stakes
undercover assignment.
Only this time, in the wake of completing the sting in
Nogales, he was allegedly put in harm’s way by the very
government that had enlisted his help, law enforcement sources
contend.
On Monday, May 3, the inspector was transferred back to San
Luis, with his role in the prior undercover sting there by now
completely exposed to the narco-trafficker he helped to bust —
as well as to the convicted smuggler’s circle of family and
friends on both sides of the border. To make matters worse,
the narco-trafficker had allegedly ratted out one of his
accomplices, a federal immigration officer who worked at the
port of entry in San Luis. The immigration officer wound up
getting 30 months in prison for his role in the smuggling
operation.
The convicted narco-trafficker, court records show, was
slated to be released from prison sometime this spring.
Given that backdrop, it is not surprising that the very day
the inspector showed up for work at the San Luis, sources say,
he was warned by another employee at the port that he “better
watch his back.”
Nogales Blues
The inspector’s most recent nightmare journey into the
world of undercover had its genesis in early 2003, while he
was working in the Export Office at the Customs and Border
Protection port of entry in Nogales, Ariz. The Export Office
deals with, among other things, processing the paperwork for
vehicles being exported from the United States into Mexico.
Among the rules in place for such exports is that the
paperwork for the vehicles must arrive in the Export Office at
least 72 hours in advance of the vehicle being moved across
the international border. This gives Customs inspectors at the
port the opportunity to verify they are not dealing with
stolen vehicles.
After the waiting period, assuming everything checks out,
an employee in the export office signs off on the
paperwork—using a government stamp.
However, the inspector noticed something funny going on in
the Nogales Export Office. It appeared that at least one
individual in the office was taking bribes from individuals
who wanted to by-pass the 72-hour hold period on vehicle
exports.
In this case, that individual was a “public official” who
was not a U.S. government employee, but rather a
private-sector employee of an insurance-industry-funded group
called the National Insurance Crime Bureau (NICB).
The NICB is a private
investigative agency that works closely with law enforcement,
often through contracts with government agencies such as the
FBI, in battling insurance fraud and
vehicle theft. The NICB maintains a
major database that can be used to track stolen vehicles.
In this case, the NICB employee
working at the Nogales Export Office was charged with
conducting computer checks to verify that automobiles
presented for export were not stolen. In addition, the
employee, through an agreement between the
NICB and the government, was empowered to sign off on
the paperwork of vehicles in line to be exported. It was that
stamp of approval that the NICB
employee was allegedly selling, for bribes ranging from $100
to $350.
The inspector reported his suspicions about the bribery
scheme to his superiors.
After a number of months had passed, he was approached in
the fall of 2003 by agents from the Department of Homeland
Security’s Office of Inspector General (OIG)—which is charged
with investigating allegations of corruption within the
department. The agents asked the inspector to help out with
their investigation of the alleged bribery
scheme—specifically, they wanted the inspector to go
undercover again.
So for some seven months, the inspector, wearing a wire,
again played the role of a government employee on the take,
attempting to needle his way into the alleged bribery racket
underway at the Nogales port of entry.
In March of this year, the sting paid off. A
total of 18 people were indicted on bribery charges and are
now awaiting trial in federal court in Tucson. The individuals
were business owners or employees of companies that helped
people export used vehicles to Mexico. The maximum penalty for
bribing a public official is up to 15 years in prison, a
$250,000 fine, or both.
The NICB employee, Jesus Alvarez,
also was indicted on three counts of “accepting money in
exchange for stamping the automobile ownership documents with
the … export stamp, allowing those automobiles to circumvent
the mandatory 72-hour waiting period,” according to a
press release issued by the U.S. Attorney’s Office for the
District of Arizona. The maximum penalty for accepting such a
bribe is up to two years in prison, a $250,000 fine, or both.
Shortly after the indictments came down, the inspector who
went undercover to work the sting was transferred to Tucson
temporarily to help the OIG agents
assist with case preparation for pending trial, according to
documents obtained by Narco News.
That’s when his troubles began.
The government informed the inspector that he was to be
sent back to the Nogales port of entry in April, after his
work in Tucson was wrapped up—despite the fact that all 19 of
the individuals he helped to get indicted have been released
on bail. As a result, the inspector wrote a letter to his
supervisor, dated March 18, expressing his concern about the
danger he would be exposed to if he was forced to return to
Nogales.
Narco News obtained a copy of that letter:
I hereby would like to request a transfer out
of the Nogales Port of Entry in Nogales, Arizona. I know it
would be a safer initiative due to my recent undercover
participation in a internal investigation conducted by the
Department of Homeland Security, Office of Inspector
General. This successful operation led to nineteen
indictments and arrests of subjects involved with the
bribery of a Federal Officer. I believe it would be in my
best interest to transfer because many of the subjects
arrested have friends and relatives in the immediate area
that may try to threaten or intimidate me. I’m certain many
of them know of my involvement and may think their family
member or friend may have been falsely accused of
wrongdoing.
I am interested in a transfer to Calexico,
California POE (port of entry) due
to the reason I have listed. The transfer will not require
the Government to pay for moving expenses. … Your help and
assistance with this matter is appreciated.
The inspector apparently was not the only law enforcement
officer involved in the Nogales bribery case who was
confronting transfer issues.
The OIG agents who oversaw the
investigation of the case also were informed that they are to
be transferred out of state, according to several law
enforcement sources. The reason, according to those sources,
is that the OIG agents made the
mistake of messing with the FBI’s
turf by failing to include the bureau in their investigations.
As a result, inter-agency pressure is allegedly being exerted
to move the OIG agents out of
Arizona.
One of those OIG
agents, Phil VanNimwegen, when contacted by Narco News,
declined to comment on the case or the allegation that he was
being threatened with a transfer.
“I can’t say anything,” he said. “But I can direct you to
someone who can.”
That someone was his supervisor, who failed to return a
phone call from Narco News.
Into the Fire
The government responded to the inspector’s plea to be
relocated to another duty station besides Nogales by asking
him to choose between two equal evils, according to law
enforcement sources. The inspector, according to sources,
would get a transfer to the San Luis port of entry, but only
if he agreed to sign a letter stating that he “felt it would
be safer to return there than to go back to Nogales.”
Despite the fact that the inspector knew his undercover
activity in San Luis was now an open book, with great
reluctance, the inspector signed the letter, sources say. The
inspector felt he had little choice but to do so, short of
losing his job, law enforcement sources familiar with his case
contend.
When contacted for comment, Roger Maier, a press
officer for the Bureau of Customs and Border Protection, said
he would look into the inspector’s case, but indicated that he
probably would be precluded from commenting do to “privacy
issues.” Maier never got back to Narco News with a comment.
Although it may be admirable that the government is
concerned about respecting the inspector’s privacy rights, it
is puzzling as to why it does not show the same concern for
the inspector’s life, which now is in jeopardy in San Luis,
according to several law enforcement officials.
The inspector’s assignment to the San Luis port
of entry is considered “temporary,” but sources familiar with
his case indicate he is likely to be stuck there for four to
eight months, maybe longer.
The government’s treatment of the inspector and
OIG agents seems even more bizarre,
given what the U.S. Attorney’s Office has said about their
work in the Nogales bribery case.
Jeffrey Jacobson, the Assistant U.S. Attorney in
Tucson who is handling the Nogales bribery case, confirmed
that the inspector played an important role in the
investigation that led to the indictment of the 19 individuals
involved in the bribery racket.
“I am extremely confident and satisfied with the work the
inspector and the OIG agents did in
this case,” he said.
Jacobson adds that the case is still in the discovery
stage, with trials not slated to begin until this summer –
assuming plea deals aren’t cut with some of the defendants.
So if the inspector and OIG
agents are key to the success of a major federal prosecution,
and the U.S. attorney handling the case is happy with the work
they did on the case, then why are they being retaliated
against, as some law-enforcers claim is the case?
Do-gooders
Despite the mystery behind the source of the retaliation,
if that is indeed what is going on, one thing does appear to
be clear in this case: The inspector and
OIG agents caused more than a bit of embarrassment for
the NICB by snaring one of its
employees in a bribery sting.
NICB’s reputation is built, in no
small way, on its claim to be a major do-gooder in the
international fight against insurance fraud and vehicle theft.
That fight is carried out, the NICB
boasts, through a close working relationship with law
enforcement – particularly the FBI.
In fact, the NICB, in essence,
operates as a private-sector sister organization of the
FBI in many respects. The
NICB even has agreements in place
with the FBI that outline its
relationship with the bureau.
In addition, Michael Kirkpatrick, an assistant director
with the FBI, serves on the
NICB’s board of advisors, according
to NICB’s 2003 annual report.
The president and chief executive officer of
NICB, Robert Bryant, is a former
deputy director of the FBI. As
deputy director, Bryant held the second-highest ranking
position in the bureau and managed the day-to-day operations
of the FBI.
NICB’s chief operating officer, Eugene Glenn, also is a former
FBI employee whose 26-year career
with the bureau included serving as special agent in charge of
the Salt Lake City Division.
The Chicago-area based NICB
operates as a nonprofit, boasts a staff of more than 300 (a
good share of them former law enforcement officials), and
recorded 2003 revenues in excess of $30 million—funds raised
primarily from dues paid by the 1,000 or so insurance
companies NICB counts as its
members.
Some law enforcement sources question whether the alleged
retaliation against the inspector and OIG
agents might be the result of pressure exerted by
NICB through its law-enforcement
connections, specifically through its ties to the
FBI. Such retaliation certainly
would serve to create a chilling effect on future
investigations of NICB employees,
they add.
At least one civil rights organization, the League of
United Latin American Citizens (LULAC), has raised similar
concerns about the NICB’s
relationship with the government, alleging that the privately
funded investigative group has misused its ties to law
enforcement.
Narco News contacted the NICB’s
media spokesperson, Judy Fitzgerald, for comment for this
story, leaving a message on her answering machine. Fitzgerald
did not return the phone call. In addition, phone calls to
NICB employee Alvarez’ attorneys
were not returned.
In the past, NICB officials have
stressed that their relationship with government law
enforcement agencies is guided by high professional and
ethical standards and structured in strict accordance with the
law.
The legislative counsel for the FBI’s
Office of Public and Congressional Affairs, in an Aug. 7,
2000, letter drafted in response to a
congressional inquiry, described the bureau’s relationship
with the NICB as follows:
The NICB is a not-for-profit
organization which is funded by approximately 1,000 property
and casualty insurance companies. The
NICB serves as a conduit between the insurance
companies and law enforcement agencies to “facilitate the
identification, detection and prosecution of insurance
criminals.” The NICB accumulates
and analyzes insurance-claims data from insurance companies
it works with to identify and forecast fraud and theft
activity and trends. This information is shared with the law
enforcement community.
Although the extent of the NICB’s
involvement in the individual FBI
investigations varies, the NICB
has commonly provided personnel, insurance industry
expertise, and liaison contact with the victim insurance
companies. In these cooperative investigations, the
FBI always maintains the
responsibility of leading, directing and administering the
criminal investigation.
….NICB’s degree of involvement in the individual
investigations varies widely from providing data analysis
support to providing investigators to work with the
FBI on the investigation on a
full-time basis. The NICB agents
are commonly used as valuable resources in assisting the
FBI in auto accident
investigations. ….
A. Robert Walsh
Legislative Counsel
Office of Public and
Congressional Affairs
Cozy Relationship
Although the FBI may see its
partnership with the NICB as a
valuable resource, the Hispanic civil rights group
LULAC views NICB’s
cozy relationship with law enforcement as a source of
potential civil rights abuses.
Last month, LULAC held a
press conference in the border town of El Paso, Texas, to
bring its concerns about the operations of the
NICB into sharper focus for the
public. A press release issued by LULAC
spells out some of those concerns:
LULAC has received several
complaints from persons who wish to remain anonymous for
fear of retaliation. They claim that NICB,
with the assistance of law enforcement, has targeted
minority-owned businesses and individuals for investigation
and prosecution. They have also complained that
NICB’s relationship with law
enforcement authorities in El Paso has resulted in an abuse
of that law-enforcement power. The retaliation they fear is
an arrest, even though not supported by evidence.
Among the specific charges raised by
LULAC, according to its press release, are that the
“FBI office in El Paso … has allowed NICB
employees to participate in law enforcement activities”; “an
NICB employee was allowed to
interview suspects in the Police Department, in cases where
NICB had brought the complaints to
the police department”; and “NICB employees have also been
given access to confidential law enforcement information that
is not available to the public.”
For his part, the inspector who went undercover
in the Nogales bribery sting has no clue why he is being
treated so poorly by the government after putting his life on
the line, law enforcement sources indicate. When contacted,
the inspector declined to comment for this story, because he
feared the government would retaliate against him for talking
to the media.
Ironically, the inspector has been placed in harms way in
(CC-Redacted) by the very government that
less than two years ago informed him that he had been selected
for a Commissioner’s Award for his undercover work in that
same border town.
Now, according to law enforcement sources, the inspector
goes to work each day in (CC-Redacted) hoping
that he won’t be recognized by someone who wants to get even
with him because he did his job.
The inspector “is legitimately afraid for his
life,” one law enforcer stresses.