SWITCHING SIDES

Federal Agents Sometimes Fall Prey To The Lurid Lifestyles Of Their Informants

It was May 22, 1992. FBI agent Christopher Favo was briefing his boss,
Special Agent R. Lindley DeVecchio, who headed the task force trying to end
Brooklyn's Colombo crime family war.

Two men loyal to the Colombo faction led by Victor J. Orena had been gunned
down on a Brooklyn Street the night before, Favo announced.

DeVecchio's reaction was not what Favo expected. The man charged with
stopping the violence cheered for the shootings.

"He slapped his hand on the desk and he said, `We're going to win this
thing,' " Favo would recall two years later. "And he seemed excited about it.

"He seemed like he didn't know we were the FBI. It was like a line had been
blurred . . . over who we were and what this was. . . . He was compromised.
He had lost track of who he was."

The Post-Gazette's two-year investigation found that federal agents are
often placed in positions where they can lose track and end up compromised.

Agents sometimes must make deals with the devil -- criminal informants --
to fight crime. The temptations to become partners with these criminals can
be great. And the safeguards to prevent their defections are few.

Questionable Ally

No one mentioned Gregory Scarpa Sr. by name when Favo and DeVecchio talked
that morning.

Scarpa, a gangster who's lust for murder earned him the nickname "Killing
Machine" in New York's tabloids, had sided with the Carmine Persico faction
against Orena in the bloody Colombo crime family fight.

But Scarpa was also a government informant -- common in federal law
enforcement. Agents use them to get inside information about criminal
conduct. Sometimes these informants are paid money. Sometimes their reward
is leniency if they happen to be facing a prison term.

For three decades, Scarpa had been an informant for the FBI. His
relationship with DeVecchio, which lasted at least a decade, went beyond
any accepted FBI practice, fellow agents have testified.

DeVecchio not only ignored Scarpa's day-to-day criminal activities, he was
accused of assisting in the Mafia killer's success.

Accusations against DeVecchio, made in sworn statements by other FBI
agents, cooperating FBI witnesses, government documents and court
testimony, include:

Giving Scarpa the names of other FBI snitches, so Scarpa could put them in
harm's way while shielding his own illegal operations.

Telling Scarpa where the FBI was placing wiretaps so he could avoid them.

Informing Scarpa of pending indictments against his associates -- in one
instance, allowing Scarpa to help his son disappear before the younger
Scarpa could be arrested.

Handing over the addresses of Scarpa's enemies in the Colombo crime family
war so that he could track them down and kill them.

Fabricating evidence against Orena and other Scarpa adversaries so they
would be sent to prison.

DeVecchio has admitted accepting gifts from Scarpa. But he steadfastly has
denied any other wrongdoing. In several recent court cases, he took the
Fifth Amendment rather than discuss his relationship with Scarpa.

Yet the files and first-hand reports of other agents detailing his actions
have resulted in more than a dozen New York mobsters being acquitted after
juries learned the FBI had conspired with criminals to commit crimes.

Orena wasn't so lucky. He was sentenced to life in prison before the
Scarpa-DeVecchio relationship was uncovered. His attorneys' efforts in
getting him a new trial have so far failed.

And what of the Justice Department's probe into the actions of its rogue
agent? The agency's investigation exonerated DeVecchio.

The Post-Gazette's two-year investigation into misconduct by federal law
enforcement officials found the kid glove treatment of DeVecchio is not
unusual.

The Justice Department did not respond to questions the newspaper posed
about concerns raised in this story.

Making Converts

Informants are supposed to help federal agents arrest criminals. But too
often, these informants create new criminals out of those very agents.

Former Drug Enforcement Administration agent Celerino Castillo III says he
knows why. The government has come to rely on informants to make cases more
and more often, he said. And these informants have power and material
possessions and money -- temptations they gladly use in their efforts to
compromise an agent.

The safeguards that are supposed to help prevent it often are ignored.

"You know, there's an old saying: `Tell me who you hang out with, and I'll
tell you who you are,'" said Castillo, of McAllen, Texas, who worked mostly
undercover for the DEA for 12 years.

Mike Levine agrees. The upstate New York man spent 25 years as a DEA agent,
the final 10 as a supervisor.

"As a street agent and as a supervisor, one of the biggest problems was
agents falling in love with informants," he said. "They literally become
part of the crime. It's just a flat out conspiracy.

"[Agents] tell informants, if you come in with a good case, you get away
with murder ... literally. And [informants] know what's going on. They know
if they dangle a good case in front of a gullible agent or an agent whose
morality is not such that it gets in the way of his ambition, that agent
starts to overlook what the informant does."

Compounding the problem, Castillo said, is a mentality within federal law
enforcement that will forgive almost any conduct as long as agents produce.

Undercover agents especially are often left to their own devices by
supervisors -- "suits," Castillo and Levine call them -- who have little
experience but a driving interest in moving up the career ladder "by not
making waves," Castillo said.

"There's a great disrespect and fear of management at DEA," Levine said.
"Most management don't really know anything about drug cases. They are
bureaucrats with no real-world experience."

Levine said DEA operations manuals order supervisors to review undercover
investigations with agents at least once a month. Other federal agencies
have similar requirements.

That doesn't happen often, especially in deep undercover operations, he said.

"Unrestricted secrecy is unlimited corruption," he said.

Ego also drives misconduct, Levine said.

"The individual agent who gets himself in league with the bad guys, like
DeVecchio, listens to this guy tell him, `I'm going to make you famous.
You're going to have a book deal, a movie deal.' "

It reaches the point that even a murder can be overlooked, Levine said,
since it's rationalized as one bad guy killing another.

The media's fascination with big crimes feeds the process, he said.

"Prosecutors have careers made by media," Levine said. "Early on in the War
on Drugs . . . that manifested itself when literally every Spanish-speaking
person you busted would eventually have a link to the Medellin cartel.
Agents would see . . . the hype, media would gobble it up. Before you knew
it, [agents] started lying or hyping their own cases. What quickly happened
was that if you made a top media case, or made the big guys look good, you
got rewards yourself."

And then there's money.

Castillo fought in Vietnam and began his career in law enforcement as a
Texas cop. In 1980, he joined the DEA and worked in New York, Peru and
Guatemala, where he was in charge of anti-drug operations centered in El
Salvador from 1985 to 1990.

As part of his job, Castillo said, he sometimes handed checks to snitches
for more than $100,000, even as he earned less than $40,000 a year.

Agents often work long hours at low pay in dangerous surroundings for
little appreciation and can rationalize that accepting a gift or a loan
66rom an informant is OK.

"Before you know it, he is compromised," Castillo said.

Castillo said he finally quit his DEA job in disgust in 1992. He now writes
and teaches law enforcement classes to high schoolers.

He believes agents simply become expendable. He's seen case after case
where agents who may have worked for years undercover get little help
readjusting to the real world when they're reassigned.

"Basically, I realized they could care less about me."

Levine said a solution to the problem of keeping agents on the right side
of the law would be for the Justice Department to come down hard on those
caught in an illegal activity.

It won't happen, he said, for one simple reason: "They'd have to go after
themselves. People are going to ask them `How did that happen? How did you
let that happen? You're the supervisor.' "

Unwanted Information

Geovanni Casallas has seen that government reluctance up close.

He is serving 24 years at the Federal Correctional Institution at Bradford,
Pa., and, like most convicted drug smugglers, got the chance to cut his
sentence by snitching on others in the drug trade.

Casallas had good information. When he was arrested in 1991, he was working
for two men on the southern U.S. border whose crimes included arranging for
the theft of an airplane to smuggle drugs; overseeing the transport of
hundreds of pounds of illegal drugs into the United States; and splitting
both drugs and money from those shipments among themselves and others.

The government turned down his information. Not only that, prosecutors
warned his lawyer that if Casallas pursued the charges, they might be
inclined to indict his wife, who was with him when he was arrested, and
eliminate any reduction in sentence that Casallas might otherwise be promised.

For in this case, one of the men Casallas fingered was a government
informant who had lured Casallas into the drug deal. The other was an agent
for the DEA, who also was based in Texas.

Investigating its own in this case would do more than harm the informer and
the agent, the Post-Gazette found. If they were found guilty of the charges
made by Casallas, dozens of cases in which they participated or testified
might face reversals in court.

Casallas finally agreed not to press his charges against the informant and
agent, to spare his wife from indictment. Casallas pleaded guilty and
accepted a federally mandated 24-year prison term.

But once in prison, he found he couldn't -- in good conscience -- allow
what he considers a travesty of justice. He sent a sworn affidavit
detailing what he knew to U.S. Attorney Gaynelle Griffin Jones of Houston
in February 1995.

He got no satisfaction.

Finally, after five years in prison, he asked a federal judge for a writ of
mandamas, which asked that an investigation be undertaken into his
allegations.

The judge granted his request and ordered federal prosecutors to conduct a
grand jury investigation.

They did. But they never called Casallas -- the person who was an
eyewitness to the misconduct -- to testify. The investigation was concluded
in a few months and no action was taken.

Agent Ignored

Such inaction is just as common for those who spot misconduct from the inside.

FBI Special Agent Jerome R. Sullivan pleaded guilty last year to being a
spy for associates of New York's Gambino crime family. Sullivan had been
party to some spectacular successes for the FBI. He said he was driven to
criminal actions by stress, alcohol and gambling addictions caused by
almost 20 years of undercover work.

How Sullivan's actions could have escaped the notice of supervisors and
colleagues for so long has never been made clear.

Sullivan skimmed almost $200,000 that was supposed to fund an undercover
money-laundering investigation directed at members of Colombia's Cali
cartel. He wrote bogus memoranda and fake expense reports to cover the
criminal activity; kept $100,000 from another money-laundering scheme;
stole $100,000 from a raid at a check-cashing business; and pocketed money
66rom the sale of un-stamped cigarettes he seized from a member of
organized crime.

He said he even scammed a judge to win the release from prison of organized
crime figure Daniel "Fat Danny" Laratro. Sullivan told the judge Laratro
had provided "substantial assistance" to the government in cases against
several key figures in New York's Lucchese crime family, which was trying
to gain access to the garbage business in Florida.

U.S. District Judge Stanley Marcus reduced Laratro's five-year sentence to
three years -- time he'd already served.

Of course, Laratro had given the government no help. But he helped Sullivan
in a big way -- arranging for his $100,000 gambling debt with
Lucchese-connected bookmakers to be forgiven. Laratro also promised to
provide Sullivan with more than $200,000 to start up a business after he
retired from his government job.

Sullivan pleaded guilty to a 10-count indictment and will soon be
sentenced. His lawyers have argued that because of job-related stress and
full cooperation, he deserves no more than a few years in prison.

Well-Placed Friends

It's not always just a rogue agent who trades sides.

Several agents in Boston's FBI office seemed beholden to lifelong gangster
James "Whitey" Bulger.

Bulger was known as an untouchable in Massachusetts -- the crime boss who
always managed to avoid federal wiretaps, warrants and racketeering charges
that landed many of his associates in prison.

Massachusetts residents figured Bulger's brother, William, former president
of the Massachusetts Senate and current president of the University of
Massachusetts, was privy to inside information that helped safeguard his
brother.

But it was Whitey Bulger's work as an FBI informant between 1971 and 1990
that helped keep him out of prison.

Unbeknownst to his criminal colleagues, Bulger provided critical
information to FBI agents that led to the indictments of many leading
members of La Cosa Nostra in Boston.

In return, the FBI protected Bulger from arrest while he operated his
illegal loan-sharking and drug distribution businesses in South Boston,
where he protected his enterprise through brutal assaults and murders.

Someone finally pierced Bulger's immunity. In January 1995, Bulger and five
others were indicted on racketeering charges by a federal grand jury. The
indictment suggested Bulger was responsible for the deaths of at least four
people, dating to the 1960s.

Curiously, five days before Bulger's indictment, he disappeared. FBI agents
have denied any connection, but lawyers and judges have publicly questioned
the strange circumstances surrounding the Bulger investigation and his
timely disappearance. Bulger has never been found.

FBI Agent John Morris, who headed the FBI's organized crime unit in the
city, admitted he allowed Bulger and his associate, Stephen Flemmi, to
commit crimes over a period of 20 years. In exchange, they provided the
agency with information that helped set up the arrests of several gangsters.

Morris also admitted on the witness stand that he had accepted gifts 66rom
Bulger and Flemmi, including French wine and almost $6,000, including
$1,000 he used to take his girlfriend with him to a 1992 Drug Enforcement
Administration convention in Georgia.

In return, Morris said, he shielded Bulger and Flemmi from prosecution
because they were his most important secret informers -- he characterized
them as the most prized informants in New England history.

It was part of an FBI policy in Boston -- albeit an unwritten one -- that
protected such high-ranking gangsters in exchange for the information they
could provide on lesser known thugs that agents could then arrest.

Morris denies he tolerated murders by Bulger.

Yet he admitted he and other agents did little when an informant told them
Flemmi and Bulger had offered him money to murder an Oklahoma businessman
who had crossed the pair in a South Florida Jai Alai venture. The
businessman was later murdered. The case has never been solved.

The biggest fallout in the Bulger case may be yet to come.

The FBI kept secret the fact Bulger was the source of information agents
used to get wiretaps from federal judges for the telephones of dozens of
gangsters -- many of whom were then convicted of crimes based on that
evidence.

In one instance, the FBI learned through Bulger that a mafia swearing-in
ceremony was being held outside of Boston, so secret cameras were installed
to record it. Those tapes caused a sensation across the country.

Since federal judges weren't told Bulger was the source of information for
many of the wiretap requests, the evidence obtained from those taps could
be thrown out through appeals.

And since federal agents did not disclose their close relationship with
Bulger when they testified in these trials, that also could be the basis of
successful appeals.

Last summer, the FBI announced a $250,000 reward for Bulger's arrest.

Court records show that at about the same time agents had spotted Bulger's
car in a suburb of New York City. Bulger never returned to the car.

Choosing Sides

It was the first week of December 1991, and Vinnie Fusaro was stringing
Christmas lights outside his home in Brooklyn. Gregory Scarpa Sr. was one
of several passengers in a car that drove slowly by.

In a sworn statement given two years later to the FBI -- when Scarpa was
already in prison and near death -- a government informant named Larry
Mazza gave this account of what happened next:

Scarpa had his window open and his rifle ready as the car approached
Fusaro's Brooklyn home. Scarpa fired three shots, killing Fusaro. A month
later, he gunned down Nicholas Grancio.

Both Fusaro and Grancio were middle-aged, small-time hoodlums whom Scarpa
believed were Orena loyalists in the battle for control of the Colombo
crime family.

During this time -- and throughout the Colombo crime family war --
DeVecchio would call or meet with Scarpa almost every day during the
Colombo crime family war, agents and the documents said.

Based on that, Orena's attorneys believe DeVecchio was aware that Scarpa
committed the murders.

"Despite the knowledge that Greg Scarpa killed Grancio, and was believed to
be actively prosecuting the war, the FBI did nothing to monitor or curtail
Scarpa's irrepressible violence, or otherwise reign him in," Orena's
attorneys would write later. "He was not arrested, or interrogated, for
this crime. At no time did the FBI seek a search warrant for Scarpa's home
to determine if Scarpa possessed the gun that killed Grancio. ... After
Grancio was killed, Scarpa remained utterly free and unfettered to kill
again -- and so he did."

DeVecchio has denied having any knowledge at the time of Scarpa's role in
these murders, but there was no doubt DeVecchio and Scarpa were close. They
even had a code. When DeVecchio had to call Scarpa, he would sometimes
refer to himself as "Mr. Dello" or "Mr. Della." In turn, Scarpa would call
himself "34" and refer to his FBI contact as the "girlfriend."

No one outside the FBI knew about this cozy relationship, though a lot of
people had their suspicions. Attorneys for Victor Orena were certainly
curious.

Orena faced a nine-count racketeering indictment in late 1991, charging him
with murder, murder conspiracy, firearms possession, extortion and loan
sharking -- all stemming from his fight with the Colombo family faction
that included Gregory Scarpa Sr.

Orena's attorneys believed most of the evidence had been fabricated by
Scarpa, with the aid of DeVecchio. Before Orena's trial, they asked the FBI
to turn over everything they had about Scarpa, since it was their belief he
had started the internecine war and caused most of the bloodshed.

Federal prosecutors eventually turned over only 77 pages of documents about
Scarpa's work with DeVecchio, although in subsequent cases, thousands more
would be released. There wasn't a single word about the gunmen who had
tried but failed to kill Scarpa in 1991, precipitating the mob war that
followed.

Orena's attorneys believe they know why. Their theory is the attack was
staged, and Scarpa then used it as an excuse to declare war on Orena and
his loyalists.

When the lawyers tried to find the forensic evidence that should have been
gathered at the scene, they found the shell casings were missing; the
photographs were missing; and there was no report filed on interviews with
Scarpa.

As aspects of the relationship became known, DeVecchio admitted to his
superiors that Scarpa would bring him gifts. When Cabbage Patch Dolls were
popular but scarce, Scarpa gave a few to DeVecchio for his children. He
gave him fine wine, pasta and other homemade Italian dishes during the
holidays.

Orena's attorneys were unable to make their case without the thousands of
pages of information about Scarpa and DeVecchio they suspected were in FBI
files but were unable to obtain. Orena was convicted on the charges in
1992. The 2nd U.S. Court of Appeals turned down his appeal based on
prosecutorial misconduct and other issues -- as has the U.S. Supreme Court.

He still hopes he can persuade a judge through a writ of habeas corpus
petition that the actions of the government have sent him to prison illegally.

While Orena remains in prison, more than a dozen other men involved in the
Colombo crime family war have either been acquitted or had their cases
dismissed because of the Scarpa-DeVecchio connection.

DeVecchio has retired from the FBI. Scarpa died in 1994 of AIDS transmitted
by a blood transfusion during stomach surgery in 1986. He was 65.

The FBI had known for years he was in poor health. Yet no federal official
ever questioned him about the issues raised by his relationship with the
FBI during the Colombo Family crime war.

Last month, his son, Gregory Scarpa Jr., testified in New York during his
own racketeering case that DeVecchio had given his father "carte blanche"
to commit crimes, including five murders, so long as he kept working as a
government informant.

Scarpa Jr., 47, is arguing that he received that same protection from the
government.

DeVecchio, who was granted immunity in the case in exchange for testimony,
disputed that. Scarpa Jr., already doing a 25-year sentence for drug
smuggling, was convicted in October on conspiracy charges. He has not yet
been sentenced.

Checked-by: Richard Lake