Thanong is charged with smuggling 49 tons of marijuana into the United States.

U.S. AGENT'S INDICTMENT IMPERILS DRUG CASE

Kickback charge mars effort with Thailand; suspect may go free

Thanong Siriprechapong, a wealthy, high-living member of Thailand's
parliament nicknamed ``The Little Duck,'' was one of those targets who make
every U.S. law enforcement agency salivate.

Believed to have managed a far-flung international marijuana smuggling ring
operating throughout the Pacific Rim, Thanong has been identified by U.S.
officials since the late 1980s as an emblem of Thailand's unique blend of
corruption, drug trafficking and politics.

When Thailand overcame a bitter internal debate tinged with nationalism and
agreed to ship Thanong to San Francisco in January 1996, it was a coup for
U.S. drug fighters.

The Bangkok government had never before extradited one of its citizens here
to face U.S. criminal charges. Even Attorney General Janet Reno made a
special point of publicly praising Thailand for cooperating in the capture
of Thanong, a flamboyant peasant-turned-politician at the center of a Thai
corruption scandal.

But for U.S. officials, the euphoria of two years ago has evaporated.

In the end, $4,000 and a pair of Nikes may permit the Little Duck to slip
from the grasp of American justice -- ironically as a result of what could
turn out to be this country's own brand of corruption.

Because of kickback allegations against a federal agent and coverup
accusations against federal prosecutors, what once was hailed as a
promising, precedent-setting partnership with Thailand has deteriorated
into a bizarre, cautionary tale of the risks posed by reaching into
Southeast Asia to pursue criminals.

The Justice Department, which believed it had an airtight case against
Thanong, now finds itself mired in an embarrassing, self-inflicted
misadventure with potential consequences for future overseas law
enforcement operations. In the short term, the government's missteps could
allow Thanong, now in custody, to go free.

The reason?

The San Francisco federal agent responsible for assembling the complex case
against Thanong has recently been indicted on a charge of accepting a
$4,000 kickback from a key informant in the investigation. The informant,
court papers show, was paid more than $100,000 for his tips in the
investigation of Thanong, or ``Thai Tony,'' as federal investigators refer
to him.

At the same time, federal prosecutors are under attack by defense lawyers
and a judge for allegedly hiding the explosive bribery information for
nearly a year. That has prompted the judge to express concern that the
indictment of Thanong, as well as Thailand's historic decision to extradite
him, may be irreparably tainted by possible U.S. government misconduct.

To experts on international law enforcement issues, the case could hinder
future U.S. efforts to extradite foreign nationals from countries already
reluctant to cooperate, particularly in Southeast Asia's so-called Golden
Triangle, a drug-producing haven encompassing parts of Thailand, Laos and
Burma. And without such cooperation, law
enforcement officials would face additional hurdles in prosecuting cases
against elusive foreign drug traffickers.

``From a political point of view, the argument we make when we extradite
somebody is that they will get a fair trial in the U.S.,'' said Washington,
D.C., attorney Ralph Martin, a former official in the Justice and State
departments. ``If we extradite a guy and (another country) finds out about
corruption here, it is going to make future extraditions much harder.''

U.S. Attorney Michael Yamaguchi of San Francisco, whose office has suffered
a black eye from the affair, still hopes to salvage the case by arguing
Thanong should not be rewarded for errors unrelated to the drug smuggling
allegations.

Indictment attacked

But Thanong's lawyers have asked U.S. District Judge Vaughn Walker to
dismiss the smuggling indictment. Among other things, defense attorneys say
Thailand never would have extradited Thanong if officials there had known
they were relying on information supplied by a federal agent now suspected
of corruption.

``A grand jury might indict a ham sandwich, but we don't know that the
government of Thailand would agree to extradite one,'' said Thanong defense
attorney Karen Snell, a member of a large defense team that includes San
Francisco lawyer Tony Serra, famous for his work in drug cases.

Walker is expected to decide by this spring whether to dismiss the charges
against Thanong.

The federal agent, Frank Gervacio, is expected to stand trial on the
bribery charge before that time. Gervacio, a 15-year, decorated veteran of
the U.S. Customs Service, was indicted in September after an investigation
by the Justice Department's public integrity unit.

Gervacio has pleaded not guilty. In court papers, he is depicted by his own
lawyer as a fallen, alcoholic agent who succumbed to the pressures of
undercover drug work to the point of once putting a gun to his own head.
John Jordan, Gervacio's attorney, did not return detailed phone messages
seeking comment.

But Gervacio's predicament could produce a result impossible to foresee two
years ago: The agent goes to jail while Thanong goes free.

Gervacio and other federal law enforcement officials had worked years to
build a case against Thanong. The investigation dates to the Reagan
administration, when the interdiction of Thai marijuana shipments to the
West Coast produced links to ``Thai Tony.''

From 1987 to 1991, documents filed in San Francisco federal court show,
investigators assembled a case identifying Thanong as the financial backer
and organizer of a marijuana smuggling ring that touched down in Hong Kong,
Laos, Vietnam and such U.S. cities as San Francisco, Long Beach, San Diego
and Portland, Ore.

Reliance on informants

Relying in large part on informants, federal prosecutors in 1991 obtained a
secret indictment against Thanong charging him with exporting at least 49
tons of marijuana to the United States from 1973 to 1987.

For U.S. officials, the snag was bringing Thanong to San Francisco to stand
trial. An internal U.S. Customs report, written in late 1995, cited State
Department memos outlining the Thai government's ``adamant refusals to
consider'' extradition because it was viewed ``as an affront to the
sovereignty and national pride of Thailand.''

Federal agents first moved on Thanong in 1992 by seizing a Beverly Hills
mansion he owned, as well as a Mercedes-Benz. But the case did not become
public until 1994, when the sealed indictment was revealed to the Thai
press at a time when the Thai government was in a constitutional crisis.

Thanong was then a member of the opposition party, under attack for its
links to voter fraud and drug trafficking. When the United States moved to
extradite Thanong, political opponents seized on the issue. He became the
target of a probe in Parliament, according to court records and Thai press
accounts.

He resigned shortly after the drug case against him became public. From the
start, he depicted himself as a victim of political foes and a pawn in U.S.
efforts to use economic pressure to win Thai cooperation with its drug war.

``His visibility was important,'' said Herbert Phillips, a leading Thai
expert and retired University of California-Berkeley professor. ``The whole
business of Tony being extradited had to do with political machinations in
Thailand. Tony was viewed as somebody expendable.''

Court papers filed by Thanong's lawyers offer a view of him very different
from the international drug smuggler described by federal investigators.
Thanong, now 46, grew up in the poorest northern Thai provinces and amassed
a personal fortune estimated at $160 million.

Thanong maintains his riches came from a flourishing real estate business
that included one of Thailand's major hotel chains. But U.S. officials
insist the wealth is connected largely to the drug trade. In January 1996,
after losing appeals in the Thai courts, Thanong was placed on a Northwest
Airlines flight to San Francisco to face the federal indictment.

By last spring, Thanong appeared ready to concede defeat and enter a plea
deal with prosecutors. The deal: Plead guilty in exchange for a prison term
ranging from 13 to 20 years.

At the time, Assistant U.S. Attorney John Lyons, the lead prosecutor in the
case, issued a warning letter to Thanong's lawyers. ``Let me make myself
clear,'' he wrote. ``If this matter does go to trial, I intend to seek
mandatory life imprisonment of Thanong after conviction.''

The case looked headed for a satisfactory conclusion for the government.
But Lyons, when he wrote the warning letter, had been keeping a secret
throughout plea negotiations: the Gervacio investigation.

Gervacio had come forward to his bosses in the U.S. Customs Service in
September 1996 and disclosed that he accepted $4,000 from government
informant Michael Woods in 1992. Woods' tips had effectively launched the
Thanong investigation in 1987, according to court records.

Also, Woods put the $4,000 in cash on the seat of Gervacio's car just after
Gervacio had helped arrange a bounty of more than $100,000 for the
informant's work in the probe, court papers show.

Woods and Gervacio had become buddies, apparently crossing the normal
boundaries of an agent-informant relationship. They drank together,
Gervacio attended Woods' wedding, and Woods gave the agent a $100 pair of
running shoes, court documents state.

Gervacio, full of despair and worried the $4,000 he eventually spent on
clothes for his daughter would jeopardize the Thanong case, confessed to
former San Francisco Customs chief Rollin Klink.

``What I received from Mr. Woods was of an innocent nature and not a
bribe,'' Gervacio said in a letter to Klink filed in court. ``I have been
carrying this misjudgment and guilt with me for five years where I am now
at the point having to reach out for help. I am greatly ashamed and
embarrassed to have done something like this.''

Klink declined to comment.

Gervacio's lawyers now maintain the indictment amounts to a government
betrayal because he volunteered the information about the Woods payment out
of concern over its impact on the Thanong case.

Gervacio's downfall has indeed posed a serious threat. Gervacio was the
lead agent in the investigation, making his credibility crucial. He was the
only government witness to testify before the federal grand jury that
indicted Thanong. The Thai courts, court papers show, relied heavily on his
accounts of informant testimony in deciding to extradite Thanong.

Also, Lyons was told in September 1996 about Gervacio's admission but did
not disclose it to Judge Walker until June 1997. During that time, the
veteran prosecutor was not only negotiating the plea deal but also
defending Gervacio's credibility against defense claims the agent had
misrepresented facts in the extradition.

Prosecutor's past reprimands

Lyons has been reprimanded more than once in the past by federal judges for
misconduct. Thanong's lawyers say he hasn't learned his lesson, violating
evidence rules by not disclosing the Gervacio matter promptly. ``I think he
betrayed me and the other lawyers,'' fumed William Osterhoudt, one of
Thanong's attorneys.

Gervacio's admission may have remained secret, but Thanong had second
thoughts about his plea deal. After firing his original defense team in
June 1997, he decided to go to trial. At that point, Lyons came forward and
told all he knew about Gervacio to Judge Walker, who then made the
information public.

The case has fueled mounting criticism of U.S. Attorney Yamaguchi and his
office, which over the past year has encountered numerous problems with
local federal judges over prosecutorial missteps.

And prosecutors picked the wrong judge for foul-ups in the Thanong case.
Walker, an advocate of the legalization of drugs, has a record of punishing
the government for misconduct in drug cases. In fact, he once suppressed
evidence in a major cocaine case because he found Gervacio untruthful.

The judge has sent strong signals that he is troubled by the government's
conduct in the Thanong case. In one order, Walker openly questioned the
government's rationale for withholding information about Gervacio's
situation for so long.

``Only the most cynical assessment of our citizenry could lead to the
belief that a government agent's acceptance of kickbacks from a recipient
of government largess -- whose good fortune the agent arranged -- would be
of no interest to the public,'' Walker wrote last summer.

Defending his actions

Lyons declined to comment, but he has defended his actions in court papers
and in hearings. In particular, he insists he was not required to disclose
the material because he did not intend to use Gervacio as a witness at
trial.

Further, federal prosecutors maintain that Gervacio's problems are
immaterial to the facts of the indictment against Thanong, who allegedly
has been identified as a drug trafficker by more than a dozen government
informants.

``Thanong Siriprechapong was a major importer and smuggler of marijuana
into the United States for many years,'' the government said in a brief
filed last month. ``Nothing that has transpired during the difficult
process of calling him to justice for these offenses could warrant the
windfall for this guilty defendant of dropping the charges and setting him
free on the public.''

Even if Walker decides against dismissing the indictment -- a rare
punishment for government misconduct -- federal prosecutors face major
obstacles in a trial once a jury hears of the Gervacio payout and the
agent's relationship with Woods.

And Thanong has one of the best attorneys, Tony Serra, to handle a trial if
the indictment is not dismissed. ``We brim with optimism,'' Serra said.
``This case shows that (the government) comes to this situation with dirty
hands.''