One community cradles the rim of Lake Okeechobee, a quiet, rural county with thousands living in poverty.
The other straddles the Gold Coast, a town of fashionable stores and posh oceanfront condominiums with one of the highest per capita incomes in the state.
For three years, law enforcement agencies from Glades County and Bal Harbour were partners in one of the most unique undercover money-laundering task forces in Florida until the joint venture ended in scandal in 2012 after federal agents found both misspent money seized in drug investigations on salaries.
Three years later, the Glades County Sheriff’s Office may be confronting another crisis just as it was digging out of its last.
A first-ever audit of the Tri-County Task Force’s finances has found officers took in millions more during their sting operation than what they reported to the federal government, according to sources. And a Miami Herald investigation shows officers spent hundreds of thousands in evidence money on travel, including first-class flights and luxury hotel stays.
Enduring black eye
For Duane Pottorff, the agency’s chief of law enforcement, the latest revelations serve as a painful reminder of the years the sheriff’s office spent explaining to the community the problems that forced the Tri-County Task Force to dissolve.
“It’s like a black eye that never goes away,” he said.
During the partnership, he said he tried to prod Bal Harbour police to allow him to review expense receipts that would have shown the unit was spending money on first-class flights and expensive dinners. The key decisions of the task force were made by Bal Harbour, he said.
“They controlled everything — the bank accounts, the money,” he said. “We could never get the records from them, and we asked them 100 times. We were little Glades County. We had no experience in money-laundering investigations.”
Former Bal Harbour Chief Tom Hunker disputes the sheriff’s office was left out of the major policy decisions, saying Sheriff Stuart Whiddon was on the task force’s executive committee with Hunker.
“That’s b-------,” said Hunker of the sheriff’s office’s inability to get the receipts from its partner. “The sheriff was part of the task force. It wasn’t just Bal Harbour.” Whiddon declined to be interviewed for this story.
For the sheriff’s office, its reasons for joining the task force began during a bleak economic period: the peak of the mortgage crisis in 2009. The county commission faced a 19 percent budget drop, and hundreds of people in the county of 13,000 residents were losing their homes to foreclosure.
When Bal Harbour invited the sheriff to join the task force, sheriff’s commanders were elated over the prospect of working with Hunker, who once ran the South Florida IMPACT Task Force two decades ago.
“He was the man,” Pottorff recalled. “He knew how to run undercover operations. We thought this was a chance to bring in more revenue.”
The two agencies turned to a program called Equitable Sharing, which allowed police to take cash and other property during investigations, and divide the proceeds with the Justice Department.
Using his authority, Whiddon swore in two retired police officers living in New York, and hired Frank Rubino, a former Florida Department of Law Enforcement agent who was tasked with watching the expenses.
From the start, Bal Harbour took control of the unit as the officers began infiltrating criminal groups while posing as money launderers, passing on tips to federal agents that soon led to cash seizures.
With money rolling in from equitable sharing, Glades was able to buy new cars: Dodge Chargers at $22,000 each, loaded with flashing lights, video cameras, and computers. Deputies also bought nearly three dozen .40-caliber firearms and 40 bulletproof vests. In a county where a quarter of the residents live in poverty, the equipment “was a big deal for us,” Pottorff said.
Pottorff said the sheriff’s office knew the task force was charging the criminal groups for laundering drug cash, but did not share access to those bank accounts. “We didn’t even know how much was in there,” he said.
Pottorff said relations grew strained after the sheriff agreed to sponsor the corporate credit cards given to the members for traveling, partly because Bal Harbour didn’t want to ask the village council to put cards in Bal Harbour’s name. The bills were paid by Bal Harbour commanders from the money they charged the criminal groups for laundering the drug cash.
Because most of the officers were in Bal Harbour, Pottorff said he asked for everyone to send their receipts to the sheriff. “We felt it was our responsibility to review them, since we were holding the cards in our name,” Pottorff said. “But we could never get them to send them to us, It was frustrating. They made up all sorts of excuses for not sending them.”
Other developments took place that caused problems. The DOJ started a routine exam of the forfeiture funds — the money shared with local agencies from seized cash and property. By the time the inquiry turned serious, Bal Harbour police told Glades to stand firm and not give up its records. “They wanted us to fight and to hire attorneys,” Pottorff said.
Ultimately, the sheriff broke with the task force, and turned everything over to federal agents. “We were not going to go along with them,” Pottorff said.
During the DOJ probe, investigators found that task force members were not making their own arrests, instead referring cases to the Drug Enforcement Administration, and they were keeping shoddy records of their investigations. Agents put most of the blame on Bal Harbour, since it was in charge.
In addition, both agencies were using federal sharing dollars to pay for staff positions — a serious breach of federal rules that are created to stop agencies from seizing cash to fill budget gaps. Glades was ordered to return $50,000 that was used to cover part of a staff salary, and to return its portion of equitable sharing dollars: $679,116.
Pottorff said the lesson was difficult for the sheriff’s office. “I used to have to sit there and explain to people at these meetings what happened,” he said.
He said the sheriff’s office didn’t know the task force members were not keeping receipts for spending thousands every month on travel. “When we get a cat down from a tree, we document it. When we get a Coke at a Walmart and expense it, we have to write a report,” he said.
He also said he was unaware that officers — some even deputized by the sheriff — were flying first class and eating at pricey restaurants while they were picking up drug cash across the country.
“A thousand dollars for a dinner? You’ve got to be kidding me?” he said. “Our per diem expenses at the sheriff’s office is $44 a day.”
However, at least one elected official in Glades County puts part of the blame on her own county. Commissioner Donna Storter Long said the sheriff could have made demands for greater oversight, especially since his was the only other member agency. “As long as the money was coming in, they weren’t asking the questions,” she said.
The experience was a lesson to never cast aside basic duties because of money. “I realize that things were not always easy for them,” she said, but added: “Here we are, a little podunk, a small, rural county [government] and yet, we had as much responsibility to provide honest law enforcement.”
One nationally known expert on police forfeiture abuses said the fact that two law enforcement agencies joined forces over the pursuit of money put them both on a road to problems. “You let money become the incentive,” said Scott Bullock, an attorney for the nonprofit Institute for Justice, which published the report Policing for Profit. “It’s no longer about law enforcement.”
Whiddon, who has been sheriff since 2005, is not seeking re-election. Pottorff said he and other members of the sheriff’s office are prepared to defend the agency once again. After years of trying to get the spending receipts from Bal Harbour, he said he’s now thankful the police agency never sent them. “The fact that we didn’t get them,” he said, “that’s probably what will keep us from getting into trouble.”
The Herald’s investigation
The Herald spent eight months investigating the Tri-County Task Force, which carried out the largest state undercover money laundering investigation in decades.
Reporters gained rare access to the confidential files of the unit, which laundered millions for drug cartels to infiltrate their laundering network. The Herald reviewed thousands of documents, including task force reports, internal emails, bank wire records and DEA reports to track every laundering deal — 235 in all — including commissions kept by the officers for laundering $55.6 million in drug cash from 2010 to 2012.
The Herald also examined hundreds of bank statement to trace task force expenses on hotels, airfare, dinners and purchases, including dozens of computers and other electronic equipment. It traced money to 349 export businesses the task force used to launder drug dollars, drawing on state and federal court records and databases to check criminal histories and business affiliations of the owners. Reporters also used task force records to track some cash payments to informants, nearly $500,000, for steering money laundering deals to the task force.