In October, the Miami Herald reported that the village police department — a small town force heretofore known for writing traffic tickets — conducts undercover operations all over the country, and was under federal investigation for allegedly doling out hundreds of thousands in payments to informants, running up $23,704 in one month for cross-country trips with first-class flights and Cadillac and Lincoln Town Car rentals, and misspending seized funds on salaries and benefits for contract officers who work on the money laundering unit.

In a rare move, federal officials froze more than $8 million that Bal Harbour helped confiscate under the program, and the Justice Department now wants the village to hand over more than $4 million.

‘Jealous’ feds

The village police chief since 2003, Hunker, 61, is about to complete the third year of a four-year employment contract that pays him a base salary of $141,959.80 a year, and provides him with a car, health insurance and pension plan.

He has hired a criminal defense attorney, Richard Sharpstein, who denied the allegations and lambasted the Justice Department for airing unproven accusations in public.

“It’s doing nothing other than slurring and smearing Tom’s reputation unnecessarily and wrongfully,’’ said Sharpstein, who vowed that the chief would be vindicated.

Sharpstein said the Justice Department’s investigation was motivated by professional jealousy — and the federal government’s refusal to share millions seized by village police from drug dealers and money launderers.

“What this is about is they’re holding about $8 or $9 million that’s due and owning to Bal Harbour that they don’t want to pay. This has a lot to do with that,’’ he said. “They’re jealous because he got this money and they want it.’’

Indeed, Bal Harbour’s force became a massive cash generator after Hunker broke from the federally sponsored South Florida Money Laundering Strike Force and partnered with the Glades County Sheriff’s Office in Central Florida to form the independent Tri-County Task Force, which included police officers contracted out of retirement and based in New York, Southern California and Florida’s West Coast.

In the first year of the task force’s operations, Bal Harbour increased its share of federal payouts from drug seizures fourfold over the previous year: from $240,689 in 2008 to more than $1 million in 2009.

By 2011, Bal Harbour police helped reel in $5.1 million — more any other law enforcement agency in Florida.

But according to the Justice Department’s findings, the task force operated like a rogue unit.

Unlike other multi-agency task forces that investigate money laundering and drug trafficking, Bal Harbour police had no federal sponsor looking over its shoulder.

Its detectives made no arrests related to money laundering, and never presented a case for prosecution for money laundering, according to the Justice Department. The unit produced no investigative reports.

Instead, the Justice Department said, task force officers spent their time managing informants and picking up cash from drug dealers — with no limits on how much money an undercover cop could collect, and no standard operating manual for handling the large sums that sometimes exceeded $1 million.