STING ON CITY DRUG LORD OK'D

An illegal money-laundering scheme run by the RCMP has received the
approval of the province's top court.

The Alberta Court of Appeal's written ruling said Mounties acted in
good faith during a drug sting called Project Mercury. The
three-member court upheld the conviction of Edmonton drug lord Craig
Matthiessen on charges of trafficking, money laundering and possession
of the proceeds of crime.

"It seems to us that the police conduct in this case does not offend
the basic values of the community," the court said.

Matthiessen was arrested in 1992 after a joint operation by the RCMP
and U.S. agents from customs and the Internal Revenue Service. Project
Mercury included a fake money-laundering operation set up by police.

Police operatives offered the services of Aroga Financial to
Matthiessen, who was concerned about Revenue Canada interest in
$92,500 seized by Edmonton police.

Matthiessen agreed to pay Aroga a commission of $6,300 for money
laundering and would receive a "loan back" document in the U.S. RCMP
officers did not issue the loan back document after being warned it
might be illegal, but a U.S. official did.

Over time Aroga laundered more than $125,000 for Matthiessen.

"It must be remembered ... the police did not manufacture crime, nor
did they lure ordinary citizens for the purpose of randomly testing
their virtues," they said.

"The outrageous commission and servicing rates of Aroga ensured that
the investigative scheme was not likely to entrap persons not
previously involved in crime."

Matthiessen was sentenced to 7 1/2 years for laundering $500,000 in
drug proceeds, trafficking cannabis and possession of a kilo of
cocaine. He's also serving a 13-month sentence for evading income tax
on the $500,000.