FEW OF CASE'S TWISTS, SHADY DEALS REVEALED IN COURT

Federal prosecutors say Peter Hidalgo was a master drug smuggler and
deserved the four life sentences that resulted from his conviction in 1994.

Hidalgo says his trial was a farce that conniving federal agents and
prosecutors orchestrated.

The Post-Gazette’s investigation found one certainty: Government misconduct
at Hidalgo’s trial was so rampant and calculated that nothing resembling
the truth could have emerged.

Four years have passed since his trial, yet appeals courts have yet to rule
on his challenge. Here’s what the Post-Gazette found:

Hidalgo was accused of leading a smuggling operation that brought 423
kilograms of cocaine into Miami in 1992. Although discovery rules require
it, prosecutors failed to inform Hidalgo that 23 kilograms of cocaine were
missing after the bust. Prosecutors had in their possession videotapes
showing that individuals who had contact with the smugglers discussed the
missing cocaine and suggested it had been split among informants and
federal agents. Hidalgo believes these informants and agents conspired
against him to hide their misconduct. Prosecutors violated discovery by not
turning the tapes over to Hidalgo’s attorneys.

Prosecutors withheld other audiotapes and videotapes that included
extensive conversations about the smuggling operation. The limited
transcripts prosecutors provided were marked "inaudible" in many places,
although Hidalgo later learned these inaudible conversations were perfectly
clear on the tapes. Hidalgo believes the tapes were withheld and the
transcripts abbreviated because his name came up in none of the
conversations. Prosecutors hid them because they showed he had no part in
the operation, he believes.

Prosecutors failed to inform Hidalgo that a federal agent who played a key
role in the drug bust committed suicide shortly after Hidalgo’s arrest. The
agent was mentioned 31 times at Hidalgo’s trial and had told his sister
just before his death that he feared he would be implicated criminally in
one of his biggest cases.

Prosecutors failed to inform Hidalgo that police reports raised enough
questions about this agent’s death that it could have been argued that he
was murdered.

Hidalgo did not learn until after his trial that some witnesses against him
had perjured themselves in earlier trials, that some of these witnesses
were convicted murderers and that the government paid some of them huge
sums for their services. One man received $500,000.

Prosecutors failed to tell Hidalgo that a key witness against him had
fabricated his testimony and bragged to his cellmates that he expected a
substantial cut in his prison time for his lies.

Prosecutors failed to turn over copies of grand jury transcripts that would
have pointed out many of these discrepancies.

Man Of Modest Means

Hidalgo, 38, made his living selling, racing and repairing boats in Miami
Lakes, Fla.

His skill behind the wheel brought him fame and the attention of drug
runners who needed equipment that could outrun law enforcers.

Hidalgo, his wife and 1-year-old daughter lived in a modest rental house
that he hoped they someday might buy. He considered himself lucky. Hidalgo
escaped from Cuba in 1968, and the life he enjoyed in the United States,
while modest, seemed a paradise by comparison.

That changed on Sept. 8, 1992.

Federal agents arrested Hidalgo and charged him with being the kingpin
behind the drug-smuggling operation that had brought more than 400
kilograms -- 880 pounds -- of cocaine to the United States from Colombia,
via the Bahamas. The cocaine was worth about $6 million wholesale, far more
when it hit the streets.

Agents were familiar with Hidalgo. He had been arrested in a 40,000-pound
marijuana smuggling case, but all charges against him were dropped. He’d
never been convicted of a felony.

The witnesses who would testify against him did not lead Hidalgo’s modest
lifestyle. They were cartel-level millionaire smugglers, armed robbers,
killers and thieves.

The illegal drug trade had treated them well. They wore expensive clothes,
drove expensive cars, lived in beautiful homes.

And while federal agents never captured Hidalgo’s voice on tape, they
recorded these men discussing the drug deal in telephone conversations.
Agents had photographed and videotaped them in the days before the
drug-laden boat arrived and after it reached U.S. soil.

None of the men who would be witnesses against Hidalgo had mentioned his
name in their taped conversations, so Hidalgo figured federal agents and
prosecutors would see through the ruse, that he was being made a scapegoat
so that drug criminals could seek leniency by testifying against him.

Hidalgo was wrong. Federal agents and prosecutors not only ignored the lies
and fabricated evidence that came from these witnesses, they made sure no
one else in the case would know about them.

There was another difference between Hidalgo and the men who testified
against him. Almost all were guilty and eager to cut deals in exchange for
reduced sentences. Hidalgo got the same kind of offer.

If Hidalgo would plead guilty, he’d get a maximum sentence of 11 years in
prison, prosecutors told him. He might be paroled after nine years or so,
and if he would provide "substantial assistance" by testifying against
others, he might qualify for the Justice Department’s biggest prize: an
even quicker release and a payment of tens of thousands of dollars, just
like those who would eventually testify against him.

Hidalgo said he turned down the deal because he was innocent. Had he taken
the government up on its offer, he would soon be a free man.

A Strange Alliance

The shaky foundation of the government’s case against Hidalgo began two
years before the drug smuggling sting.

In 1990, a Miami police officer named Ralph Rodriguez arrested two Cuban
refugees for selling him 2 kilograms of cocaine in Miami.

After their arrest, the two refugees filed a complaint against Rodriguez.
They said that twice in their presence he had sampled the cocaine they were
selling, which, if true, would be cause for his dismissal. They also
complained he had sex with a material witness in their case, also a
violation of department rules.

Lie detector tests supported their charges.

This wouldn’t be the first investigation of the agent’s conduct. Defense
attorneys and defendants had long complained that Rodriguez often broke the
law in his efforts to enforce it.

But in August 1992, the two Cuban refugees withdrew their complaints.
Instead, they signed a plea agreement that freed them from prison time if
they would work undercover for Rodriguez, who by then had taken a job for
the federal Bureau of Alcohol, Tobacco and Firearms.

The undercover work the informants performed paid well. For starters, each
was given $20,000 to relocate their families.

Within a few years, both of the refugees would purchase ranches in South
Florida worth hundreds of thousands of dollars, though they testified that
they mowed lawns for a living.

Soon, Rodriguez and the two informants would work together again, this time
helping to orchestrate the drug bust that would snare Hidalgo.

Infiltrating The Deal

The two informants told Rodriguez they knew of a drug operation that
another man named Rodriguez was planning. The other Rodriguez’s first name
was Luis, and his nickname, "Cejas," was Spanish for thick eyebrows. He
also was a Cuban refugee.

So Agent Rodriguez and his partner in a drug task force, Special Agent Lee
Lucas of the U.S. Drug Enforcement Administration, hooked the two informers
up with Angel "Pepe" Vega, an undercover officer for the Florida Marine
Patrol.

They would soon work their way into the drug deal. Here’s how it worked.

Cejas and another Miami smuggler named Gilberto Morales arranged for the
two government informants and a third man to pick up a boat from Manny’s
Marina in Fort Lauderdale, Fla.

Manny Sanchez, another long-time drug smuggler, who had struck a great deal
with federal agents, owned the marina. In exchange for a cut in his prison
time on one of his six convictions, the agents ran drug stings out of his
business, which they had wired for sight and sound. In addition, agents
paid Sanchez $500,000, although Sanchez would tell the jury at Hidalgo’s
trial that he only got $200,000. He admitted he paid no taxes on the payments.

When the boat reached the Bahamas, Fernando Fernandez and a crew of
Bahamians were waiting. Fernandez was a middle man in smuggling operations
between Colombia and the United States.

There were 11 bales of cocaine to pick up, each weighing 40 kilograms, or
88 pounds. Fernandez opened one of the bales and gave the Bahamian crew 17
kilograms of cocaine as payment for their work. Twice, he carefully counted
the remaining 23 kilograms from the opened bale in front of everyone present.

That opened bale of cocaine -- and just how much eventually arrived in the
U.S. -- would become a key factor in Hidalgo’s case but one that would
never reach the ears of jurors during his trial.

The Deal Goes Bad

On Sept. 4, 1992, the boat left Freeport, the Bahamas, then made a
rendezvous with a vessel that Agent Rodriguez, his partner Lucas, and Vega,
the third task force agent, staffed about a mile off the coast of Florida.

Agents Rodriguez and Lucas would later testify that it was a stormy night
and ocean swells made transferring the drugs from one vessel to the other
difficult. They intimated that the opened bale of cocaine might have fallen
into the water.

It wasn’t until after his trial that a meteorologist researched conditions
and told Hidalgo that the water that night was tranquil.

Agents Rodriguez and Lucas transported the cocaine to a government
warehouse. No one else knew where the drugs were hidden.

The two Cuban informants then called Cejas and Morales on tapped phones to
demand payment in cash, $600,000, before they would make final delivery of
the drugs.

Morales and Cejas didn’t have the money; they had earlier agreed to pay for
the work in drugs. They offered 50 kilograms, but the federal informants
turned them down. Then Morales and Cejas offered 100 kilograms. Still, no
deal.

Morales and Cejas were getting desperate. The Colombians who had set up the
shipment couldn’t understand the delay in getting the drugs delivered.
Morales made as many as 20 phone calls a day over four days to discuss the
423 kilograms of cocaine. While he later would testify that Hidalgo was his
partner, he never mentioned Hidalgo in any of those calls, nor did he
suggest that he had to check with anyone else before making new offers to
get the drugs delivered.

After four days, the Colombians and their Bahamian confederates began to
wonder if Morales and Cejas were stealing from them. They dispatched two
contract killers to kidnap Cejas. He would be held hostage until the drugs
were released, and if they weren’t, Cejas would be killed. Morales knew if
that happened, he would be next.

A Friend In Need

That’s where Hidalgo finally entered the picture.

He had known Morales for years. He said Morales asked him to call the
Bahamians, since they had purchased boat equipment from Hidalgo’s business
and trusted his word. Morales asked Hidalgo to tell the Bahamians that
Morales and Cejas could be trusted. Nothing more was asked of him, Hidalgo
said.

The conversation was never captured on tape, at least prosecutors never
produced it at the trial. While investigators had the entire process wired,
they said the equipment was not turned on the entire time. Prosecutors also
attributed their failure to catch Hidalgo on tape to his careful nature.

Morales would later testify that Hidalgo made the call in an effort to
salvage the deal -- and his profits.

Hidalgo admits he was stupid to make the call, adding he was simply trying
to save the life of someone he knew. "I knew the Bahamians from the boat
business," he said in an interview earlier this year at the Federal
Detention Center in Miami. "They knew I was an honest businessman. If I
don’t do this, Cejas was dead. Morales was dead. I defused the entire
situation."

Shuttled Across Country

Here is Hidalgo’s definition of hell: knowing government witnesses lied;
knowing prosecutors hid evidence favorable to him while allowing fabricated
evidence that would convict him; learning about the deceit only after he
was convicted and sentenced.

Then being shuttled from prison to prison to prison -- diesel therapy,
prisoners call it -- because, he says, he so aggressively has pressed his
contention that federal agents and prosecutors sandbagged him.

In April, he was transferred from Miami to Atlanta; then to Oklahoma City;
then to Leavenworth, a maximum security prison in Kansas, where many
convicts with life sentences begin serving their time. Government rules say
he should be allowed to stay in the prison closest to the court where his
appeal was filed, until that appeal is decided. Hidalgo filed his appeal in
Miami. He is 1,460 miles away.

Hidalgo has little money but was able to hire, briefly, an investigator to
take a closer look at the government’s misconduct, but most of Hidalgo’s
research has been accomplished from his prison cells. Here are some of the
additional things he learned:

Hidden witness: Federal prosecutors gave Fernandez, the man who handled the
drugs in the Bahamas, leniency for his testimony, but they never put him on
the stand after he insisted that 23 kilograms of cocaine was missing from
the amount he had shipped -- the cocaine remaining in the bale used to pay
off the Bahamians. This contradicted the government’s other witnesses and
buttressed Hidalgo’s contention that federal agents knew about the missing
drugs.

Paid liars: Hidalgo learned the government’s witnesses against him received
cash or were not forced to forfeit drug related property that federal
agents had a right to seize. Most of those deals, which totaled more than
$3 million, were never revealed at his trial.

Great deals: Morales, the man whom Hidalgo saved, faced 24 years in prison
for his role in the operation. Federal prosecutors offered to reduce that
to 10 years if he’d identify leaders of the drug smuggling operation.
Morales knew that fingering real drug kingpins would lead to an early
death, so he said nothing that resulted in charges against his contacts in
Colombia. He simply told prosecutors he was working for Hidalgo, even
though the statement made little sense. If Hidalgo were a drug kingpin, why
had he so little money and lived in a rental house? Morales admitted to
making $5 million smuggling drugs during the previous 12 years.

Mystery man: One of the most mysterious witnesses was Jose Luis Goyriena,
who testified he was a distributor for a major drug ring whose leaders
included Hidalgo. Goyriena bragged to cellmates that he’d never heard of
Hidalgo but had obtained information about Hidalgo’s case and fabricated
testimony against him so prosecutors would reduce Goyriena’s 27-year prison
sentence. Even though prosecutors were told of Goyriena’s scheme before and
after Hidalgo’s trial, they said nothing to Hidalgo’s lawyers.

Suicide questions: Angel "Pepe" Vega, the agent whose suicide was hidden
from Hidalgo, suffered from anxiety attacks and depression after the drug
bust. Shortly after telling his sister that he feared he might be arrested
in connection with one of his big cases, he was found dead in his car in
the parking lot of his Fort Lauderdale, Fla., church. His death was ruled a
suicide. He left a note of apology for his wife, but Hidalgo’s investigator
found discrepancies in Broward County police reports:

Vega was left-handed, but he shot himself in the right side of the head.

The downward path of the 9 mm slug that killed him was at an angle that
would have been nearly impossible for someone to accomplish with his Glock
pistol, with its 6-inch barrel.

Vega’s weapon was found pointing forward between his legs. The weapon’s
recoil should have sent the gun falling into a back seat.

No blood from the wound was found on the hand Vega would have used to pull
the trigger.

Despite those findings, police closed the Vega case as a suicide.

‘It’s A Big Price’

Hidalgo has been in Leavenworth since April. He hopes for a new trial, but
the cost of fighting the government is great, he said.

He realizes that if he’d simply joined forces with the government and lied
about others, as they did about him, he might have walked free. He said his
conscience would not allow him to do that.

"I’m not saying I’ve had the best associations, but what they’re saying I’m
involved in, it’s bull," he said. "It’s a big price. I’ve lost my family. I
have a daughter who I haven’t been part of her upbringing since she was 10
months old.

"These people have broke me financially; they broke up my family. The only
thing they won’t be able to break is my dignity and my principles. [If]
they get me a new trial, I’m gonna show what the government has done, that
it’s out of control."

Checked-by: Richard Lake