ATF uses fake drugs, big bucks to snare suspects

Brad Heath | USA TODAY

ROMEOVILLE, Ill. — The three men in the back seat were supposed to be ready for battle.

They were waiting for a phone call that would launch a daring and dangerous crime, sending them charging through the front door of a Mexican drug ring's stash house to steal 50 pounds or more of cocaine from three armed guards. Their plan was to disguise themselves as police officers, tie up the guards, and slip away with a half-million dollars worth of drugs. If tying them up didn't work, they'd kill them all.

Only the small army of federal agents watching them knew that it was all a lie.

There was no house. No drugs.

And the only things waiting for them when the call came were a team of camouflaged federal agents with rifles and stun grenades, and the promise of a long prison sentence for a plot to steal and re-sell non-existent cocaine.

The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the agency in charge of enforcing the nation's gun laws, has locked up more than 1,000 people by enticing them to rob drug stash houses that did not exist. The ploy has quietly become a key part of the ATF's crime-fighting arsenal, but also a controversial one: The stings are so aggressive and costly that some prosecutors have refused to allow them. They skirt the boundaries of entrapment, and in the past decade they have left at least seven suspects dead.

The ATF has more than quadrupled its use of such drug house operations since 2003, and officials say it intends to conduct even more as it seeks to lock up the "trigger pullers" who menace some of the most dangerous parts of inner-city America. Yet the vast scale of that effort has so far remained unknown outside the U.S. Justice Department.

To gauge its extent, USA TODAY reviewed thousands of pages of court records and agency files, plus hours of undercover recordings. Those records — many of which had never been made public — tell the story of how an ATF strategy meant to target armed and violent criminals has regularly used risky and expensive undercover stings to ensnare low-level crooks who jump at the bait of a criminal windfall.

In many cases, the records show the ATF accomplished precisely what it set out to do, arresting men outfitted with heavy weapons and body armor, and linked to repeated, and sometimes bloody, crimes. In the process, however, the agency also scooped up small-time drug dealers and even people with no criminal records at all, including Army Rangers. It has offered would-be robbers the chance to score millions of dollars of cocaine for a few hours of work. In at least one case, the ATF had to supply its supposed armed robbers with a gun.

The stings are the latest and perhaps clearest reflection of a broad shift by federal law enforcement away from solving crimes in favor of investigating people the government thinks are criminals. Such tactics are common in law enforcement's efforts to prevent terrorist attacks, but they are also becoming a staple of its fight against everyday street crime.

Critics, among them federal judges, say the ATF's operations are flawed. In an opinion last year, Judge Richard Posner of the Seventh Circuit Court of Appeals in Chicago dismissed the drug-house stings as a "disreputable tactic" that creates "an increased risk of entrapment because of the potential for the extensive use of inducements and unrealistic temptations to encourage the suspects' criminal conduct."

The stings work like this: When agents identify someone they suspect is ripping off drug dealers, they send in an undercover operative posing as a disgruntled courier or security guard to pitch the idea of stealing a shipment from his bosses. The potential score is almost always more than 5 kilograms of cocaine — enough drugs to fetch hundreds of thousands of dollars on the street, or to trigger sentences of 10 years or more in prison.

When the target shows up ready to commit the robbery, he and anyone else he brings with him are arrested and charged with a raft of federal crimes, the most serious of which is conspiring to sell the non-existent cocaine.

The arrests don't come cheap. A single case can go on for months and require dozens of federal agents and local police officers.

Former ATF supervisor David Chipman, who left the agency last year, said the public deserves to know more about how the ATF is using its resources. "There are huge benefits, and there are huge downsides," he said. "Do you want police to solve crimes, or do you want them to go out and prevent crimes that haven't occurred yet? What are the things you're willing to do so that your kid doesn't get shot?"

A CRACK DEALER AND A BIG SCORE

William Alexander boasted that he was exactly the type of armed and dangerous criminal the ATF is after. He was an experienced drug robber, he told an undercover agent, and a chief of Chicago's notorious Four Corner Hustlers, who commanded 17 blocks on the city's west side and had men ready to kill at his command.

Alexander was 32 years old the afternoon in January 2011 when he first slid into the passenger seat of an undercover ATF agent's pickup in a 7-Eleven parking lot in Woodridge, Ill., one of the middle-class suburbs that sprawl out west of Chicago. Alexander, 5 feet tall, introduced himself as "Little." He was, by then, a career crack dealer and recent cosmetology school dropout, though he was also out of jail and off parole for the first time in his adult life.

And while his record was long, it hardly identified him as dangerous.

Most of the people the ATF arrested in drug-house stings last year — about 80% — already had criminal records that included at least two felony convictions before the agency targeted them. But 13% had never before been found guilty of a serious crime, and even some of those with long rap sheets had not been charged with anything that would mark them as violent.

ATF officials reject the idea that they should focus only on people with violent records. "Are we supposed to wait for him to commit a (obscenity) murder before we start to target him as a bad guy?" said Charlie Smith, the head of ATF's Special Operations Division, which is responsible for approving each sting. "Are we going to sit back and say, well, this guy doesn't have a bad record? OK, so you know, throw him back out there, let him kill somebody, then when he gets a bad record, then we're going to put him in jail?"

For all the times Alexander was arrested — court records list dozens — police never found him with a gun, and he was charged with a violent crime only once, after his girlfriend, Demonisha Winters, accused him of domestic battery. The charge was dropped a few weeks later, and Winters said in an interview that Alexander never hit her.

What he did do was sell crack, though seldom more than a gram or two at a time. When Alexander was 18, police in Kokomo, Ind., caught him trying to flush two baggies of crack down an apartment toilet. Four years after that, Chicago police arrested him with a half-gram. The next year, they caught him with 10 baggies of crack. Two years later, they caught him carrying a gram of crack and a half-gram of heroin, worth about $40, according to police reports and court files.

The ATF was about to offer him something much bigger.

The undercover agent, Andrew Karceski, introduced himself as Joe. He pulled his truck around the corner, cut the engine and flipped a switch to show Alexander a hidden compartment, called a "trap," commonly used for running drugs. "They promise you one thing, and they (obscenity), they make all the money, and I take all the (obscenity) risk," he said in an exchange captured on a blurry hidden-camera video.

"They haven't paid me in two months now, and that's (obscenity)," he said. "It's just got to a point where I got to feed my kids, too, you know what I'm saying?"

"You're (obscenity) right," Alexander replied.

Then the agent laid out the basics of his proposal: Once a month, he said, his bosses had him pick up a load of cocaine from a house in the suburbs. They used a different house every time, always with two or three men inside, always armed. But the payoff would be big: "I know there's going to be (obscenity) in there. I know that," he said, a reference to drugs. "How much I can't guarantee, but I know there's going to be big (obscenity) in there. I've never seen cash, but I don't know."

Alexander said it wouldn't be a problem. "I got guys I could just say, 'Go in there and shoot everybody.' I got guys that I'll say they're smart enough to know go in there and lay everybody down without hurting anybody. I know (obscenity) that will get it done," he said.

"We'll plan it right," he promised. "We've got enough time."

'I CALL THIS GOOD LAW ENFORCEMENT'

The ATF's drug-house stings began in Miami in the early 1990s. Drug cartels were moving huge quantities of cocaine through South Florida, creating rich targets for criminals brazen enough to try to poach the shipments. The robberies were turning into shootouts — or, worse, attacks on innocent people when the robbers got the wrong address — and ATF agents wanted a way to stop them. At first, agents actually set up fake drug houses, loaded with fake cocaine. When that led to car chases and shootings in residential neighborhoods, they adopted a fictional approach instead.

The stings proliferated over the past decade. Last year, the ATF said it arrested 208 people in drug-house operations, compared with 41 a decade earlier. Most of the operations took place in Miami, Chicago, Phoenix and a few other cities, though court records show the ATF has conducted them in at least 22 states.

At the same time, the ATF dispatched agents around the country to teach the technique to other local and federal police agencies, including the U.S. Border Patrol.

As drug-house operations became more common, the agency issued a confidential order laying down the ground rules for conducting them. Officials instructed agents to make sure Justice Department lawyers would be willing to prosecute "home invasion" cases, and told them to try other techniques first, including executing search warrants. Most of the rules covered the tactical details of safely arresting the suspects.

The undated manual, a copy of which was obtained by USA TODAY, included no guidelines for selecting appropriate targets. ATF spokesman Mike Campbell said the agency has since updated the rules; ATF would not provide a copy. He said the agency's tactics have been approved by ATF lawyers and federal prosecutors; each operation must also be reviewed by field supervisors and senior officials in Washington who can shut it down if it's clear to them the targets aren't armed robbers.

"We lay out the scenario. So if they're not career robbers, I'm not for that," said Richard Marianos, an assistant ATF director who supervised some of the investigations when he led the agency's Washington field office.

Distinguishing drug robbers from loudmouths isn't easy. Drug dealers seldom report robberies to the police, so few of the robberies are investigated, let alone solved. Agents rely instead on scraps of intelligence gathered from informants (usually other criminals), convicts, 911 calls, neighborhood complaints and local police to identify and target robbery crews.

A year after the ATF arrested Alexander's crew, for example, one of its informants arranged a meeting at a Baltimore train station with two men whom city police believed to be "armed drug traffickers." One of them, Edward Ellis, had been convicted a decade earlier of armed robbery; the other, Corey Barnes, had been convicted only of street-level drug sales. The informant told them they could score up to 15 kilograms of cocaine (easily worth more than $300,000).

"You can't beat free money," Ellis replied, according to court records.

The informant warned them that the guards would be armed, but Ellis said they would be ready. "We got some artillery; it's just making sure you got the right artillery for the job," he said. "We ain't coming with just two handguns when a (obscenity) need more than that." But when it was time for the robbery two weeks later, none of the would-be robbers could find a car. They paid a friend to drive them. Two had pistols; a third man showed up armed with a pellet gun, according to court records.

Ellis was sentenced in April to eight years and four months in federal prison. His lawyer, Tamara Theiss, told the judge that as the case unfolded, it had become clear that the men had to go out and find weapons to use during the robbery, suggesting that if they were robbers, they were not actually armed until after the ATF approached them. "This was simply an overwhelming temptation," she said, involving "a great deal of money … in a relatively easy way." The ATF's stings "are intended to ensnare the worst of the worst, the most dangerous people in society. It's clear that they ensnared someone very different," she said.

U.S. District Court Judge James Bredar cut her off.

"In our society, what we say is the touchstone of culpability is what's in your mind, what did you intend to do," he told Ellis. People who kill by accident generally aren't punished; people who plan to kill but don't are. "No actual crime was committed, nor could it have been," but Ellis nonetheless "demonstrated a propensity to commit a very serious offense," Bredar said.

"This is a city where violence is rampant and the government is bound to undertake operations like this to find and stop those who are predisposed to this," said Bredar. "I call this good law enforcement."

A HALF-MILLION DOLLARS OF COCAINE

Alexander met the undercover agent again in early February 2011, climbing into the passenger seat of the agent's pickup in the parking lot of his apartment complex.

He had a plan: When the agent went inside to pick up his regular shipment of cocaine, Alexander and his crew would follow close behind him, guns drawn. They could tie up the guards, Alexander said. Or they could start shooting. "If you want us to get rid of 'em, (obscenity) get rid of them, too," he said. "It's whatever. … You just said as long as we get in and get out we good, right?"

Right, the agent said — especially if they got to the house early, before other couriers had a chance to pick up their own shipments. "When I get there early, there's a stack. There's 20 — 20, 30 40 (kilos). There's a ton if I'm first," he said.

But to get it, the agent reminded him, they'd have to get past two or three armed men. "You were saying revolver, man," the agent said, turning the conversation back to the guns the robbers would need. "You get on anything else? You were talking you're trying to get something a little better than that. … Find anything?"

Alexander paused. "Tools? Nah," he said, referring to guns. But it wouldn't be a problem. A friend of his would be coming down to meet them in a few minutes, and he had the guns they needed, Alexander said. But he seemed more interested in talking about the money.

Alexander predicted he could unload 1-kilogram bricks of cocaine quickly for $20,000 to $22,000, putting the value of the heist at between $400,000 and $880,000. He said he could make even more by cooking it into crack and selling it on the street.

Alexander looked around and wondered what was taking his friend so long to show up. What happens if the police roll through and see them talking, he asked.

"Nothing against the law about talking," the agent said.

DOES IT GO TOO FAR?

Federal courts have largely approved of the ATF stings, though some have also expressed unease.

A little more than three months after agents first approached Alexander, for example, a federal appeals court in Chicago called the stings "tawdry," saying the ploy "seems to be directed at unsophisticated, and perhaps desperate, defendants who easily snap at the bait." The judges faulted agents for violating their own rules about recording meetings, but ultimately rejected the idea that the stings amount to entrapment.

Entrapment is a narrow concept. The government can't pressure an innocent person to commit a crime. But it can — and routinely does — offer people who are predisposed to crime the opportunity to commit one. Police agencies have been conducting sting operations for decades to ensnare child abusers, drug dealers, even congressmen, though the drug-house stings rely more heavily on fiction than most.

"It wears me out when you hear people sit there and say, 'Well, you created the dope,' " Smith, ATF's special operations chief, said. "Yeah, you know what? In this scenario, we did. And thank God we did. Because you know what? Now because of the fact that we did create this, my home, the home next door to me … isn't going to get their door kicked in looking for drugs that may have existed or maybe didn't exist because they had the wrong address. So when are we going to start sitting back and realizing, hey, if these guys have an opportunity and we can knock that off before it gets to that, it's better for us."

Still, the combination of the fictional nature of the crimes and the government's reliance on confidential informants to help entice prospective robbers has caused problems.

In one case, an ATF informant named David Villamonte testified that he targeted a Florida man named Cassio Slowden for a drug-house sting after parking next to him at a gas station and chatting about prison tattoos. "By his demeanor, I could tell he was young, and that he was involved in the elements," Villamonte said. When Slowden told him he had some marijuana to sell, Villamonte concluded he must have stolen it. Slowden's lawyer argued that he had been entrapped; a jury acquitted him of federal drug and weapons charges last year.

Another informant, Victor Bugarin, testified that he spoke to a suspected San Diego drug robber named Thomas Johnson only a few times before enticing him to participate in a 30-kilogram cocaine heist. Confronted with phone records showing he'd been making repeated phone calls to Johnson over more than four months, the informant admitted that his story was "apparently not" true. Johnson said he went through with the robbery plan only because Bugarin said he needed the money to keep from being evicted. A jury last year acquitted him of all but one charge; the remaining count is on appeal.

The ATF's Marianos said such conduct is not allowed. "We have many of these cases where we've stood down and said we're not going to do this because this informant is way off the playbook here," he said. Other cases were abandoned because supervisors thought the targets were inappropriate, he said.

Acquittals are uncommon. USA TODAY was able to track 512 completed prosecutions; among those, juries acquitted 22 people, because jurors either thought that they had been entrapped or weren't convinced that they had been involved enough to be part of the conspiracy. At least 89 other prosecutions are still pending in federal court.

'I WAS SUPPOSED TO BE PREPARED, MAN'

The day before Alexander was to commit the robbery, the ATF agent pulled into the parking lot of his apartment building to go over the plan one more time.

Alexander asked him to come upstairs while he and a friend smoked marijuana. The agent declined. Then Alexander asked for a ride to a store so they could pick up some police costumes. Later, the agent said. Did they have the pistols all lined up, he asked? "Ah, yeah," Alexander replied and bit at his fingernails. "I'm gonna get on top of that today, though."

"I'm saying, man, if it's gonna be half-assed, let's just blow it off and not (obscenity) do it and wait," the agent said. "This is a one-time deal, dude."

Another man, Hugh Midderhoff, 18, sat in the back seat, wrapped in a checkered jacket and big black hat. Like Alexander, he had a criminal record, including an arrest for possessing his neighbor's stolen television, but none of the charges were related to guns. "Hey, we can get another banger," he said to the agent. "That ain't going to be (obscenity)."

The agent told them he would know the next day where to pick up his drug shipment. They would meet again at lunchtime so they could be ready when the call came.

Nine minutes before noon the next day, Alexander called to say he still did not have enough guns. He was going to meet a friend to "grab the extra utensils," he said.

A half-hour later, Alexander called again. He couldn't get any more guns. "I was supposed to be prepared, man. I been waiting for this day all this time," he said. But he was undeterred. "I'm willing to go, man. I'll do it."

The agent was quiet for a minute. "Let me call you right back, man, and see what I can come up with," he said.

He called back a few minutes later. His cousin had another pistol they could borrow, the agent said. "He got one of those things," the agent said. "He could give it to you guys, and he'll just be in the car as you guys do your thing."

The robbery was on.

'POLICE. POLICE.'

The agent and another officer posing as his cousin picked Alexander up outside his apartment. Midderhoff and another accomplice, Devin Saunders, joined him. Saunders packed a revolver into a locked compartment in the back of the agents' pickup truck, next to the pistol that the ATF supplied, and the suspects piled into the back seat. Saunders pulled on a mask and gloves.

The agents drove them 6 miles to a parking lot in a tiny forest preserve sandwiched between warehouses and trucking companies where they said they could wait for the call that would tell them the location of the stash house. On the way, they went over the plan one last time; the agents confirmed that everyone knew what they were getting into, exchanges captured by a camera hidden on the dashboard.

When they got to the preserve, one of the agents said he needed to make sure his car was locked and disappeared. A minute later, the other answered his phone and climbed out into the parking lot to take the call.

Alexander sat in the back seat, talking on a cellphone with a girlfriend who was trying to follow them in a taxi. A few seconds later, he saw something and lowered the phone. "Police," he said softly and pointed out the window. "Police." Then came the boom of a pair of stun grenades that shook the truck as a team of agents in camouflage and olive body armor rushed toward them, rifles raised. "Out of the car," one yelled, as agents yanked the three men one at a time onto the asphalt. The process took less than 30 seconds.

Those seconds are the most dangerous and costly step of a drug-house sting.

They are dangerous because, if everything goes the way agents expect, they will be confronting a crew of heavily armed men amped up to commit an especially violent crime. To deal with that risk, the ATF steers the takedowns to remote places such as forest preserves or warehouses where it's easier to take suspects by surprise and where stray bullets won't endanger the public. Then it assembles a small army of federal agents and local police officers. Smith said he recalled one pre-arrest briefing with 170 officers.

Court records show ATF agents and local police officers working with them have shot at least 13 people during takedowns in drug-house stings since 2004, killing at least seven of them. Six were killed by local police officers conducting sting operations as part of an ATF task force. Most came after suspects fired at police or tried to run them down with cars.

Four months after Alexander was arrested, a Miami-Dade Police Department SWAT team shot and killed four members of a robbery crew after they showed up at a house they thought was packed with marijuana. One of the dead was the police informant who arranged the phony robbery. "He did it out of his own good, and he got killed for it," his brother, Rudy Betancourt, said. "He planned his funeral."

THE 15-YEAR MARK

By the time agents had Alexander in handcuffs, the ATF had spent more than a month investigating him. It was clear by then the agents weren't the only ones who had been lying.

Despite his promises of a police-style raid, Alexander and the others had brought no police uniforms or handcuffs. And despite his boasts that he was a gang chief who had men ready to kill at his command, he and his accomplices had managed to come up with only a single gun, a rusted five-shot revolver with a broken handle, old enough that an ATF report concluded it had been made sometime before World War I. The report confirmed the gun could have been lethal with the right kind of ammunition, but the men didn't have that, either. The six bullets they brought were the wrong size and, when loaded, would slide harmlessly out the front.

In court, though, none of that matters.

The drug-house stings are engineered to produce long prison sentences, and they typically do precisely that.

Using court records, USA TODAY identified 484 people convicted as a result of the stings, though there are almost certainly others. Two-thirds were sent to prison for more than a decade, a sentence longer than some states impose for shootings or robberies. At least 106 are serving 20-year sentences, and nine are serving life.

It's the drugs — though non-existent — that make that possible because federal law usually imposes tougher mandatory sentences for drugs than for guns. The more drugs the agents say are likely to be in the stash house, the longer the targets' sentence is likely to be. Conspiring to distribute 5 kilograms of cocaine usually carries a mandatory 10-year sentence — or 20 years if the target has already been convicted of a drug crime.

That fact has not escaped judges' notice. The ATF's stings give agents "virtually unfettered ability to inflate the amount of drugs supposedly in the house and thereby obtain a greater sentence," a federal appeals court in California said in 2010. "The ease with which the government can manipulate these factors makes us wary." Still, most courts have said tough federal sentencing laws leave them powerless to grant shorter prison terms.

To the ATF, long sentences are the point. Fifteen years "is the mark," Smith said.

"You get the guy, you get him with a gun, and you can lock him up for 18 months for the gun. All you did was give this guy street creds," Smith said. "When you go in there and you stamp him out with a 15-to-life sentence, you make an impact in that community."

That emphasis has led to another significant shift for ATF. Over the past decade, the total number of people prosecuted in weapons cases as a result of its investigations has dropped by about 28%, according to records compiled by Syracuse University's Transactional Records Access Clearinghouse. The number of people charged by the agency with drug offenses jumped 26%. Prosecutors typically classify cases based on the charges likely to produce the longest sentence.

The ATF and federal prosecutors declined to comment on Alexander's case.

Unless he strikes a deal with prosecutors, Alexander is facing a minimum of 25 years in federal prison — and maybe more, based on the quantity of drugs he planned to steal and his long rap sheet. Saunders, whose participation in the plot lasted only a few hours, was sentenced to seven years and nine months in prison. He signed on, he said in an e-mail to USA TODAY, because "the money was tempting." Midderhoff has agreed to plead guilty and cooperate with the government; he won't be sentenced until Alexander's case is resolved. His lawyer, James Young, declined to comment.

Alexander's lawyer, Michael Falconer, said he wouldn't be opposed to the drug-house stings if he thought the ATF could make sure they were aimed only at people who were already ripping off drug dealers. "But on some level," he said, "it's Orwellian that they have to create crime to prevent crime."

Undercover ATF 'stings' nab 1,000 suspects In a controversial and aggressive program, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives has sent hundreds of people to prison for plotting to rob drug stash houses.

Contributing: Lisa Tucker in McLean, Va.

Follow @bradheath on Twitter.