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Feds probe Bal Harbour Police Department over seized millions

For Bal Harbour police, it was a whirlwind: cops jetting to Las Vegas, Chicago, Phoenix, Los Angeles — with the goal of seizing millions from criminals.

Two flew on first-class flights while two others went business class to California, where they stayed in the wine country of Temecula Valley.

In just one month, the village’s police helped reel in $3 million — and by the end of the year, they took more dollars from drug dealers than any police force in Florida.

While small police departments rarely venture beyond their borders, Bal Harbour’s force has become a massive cash generator, infiltrating drug organizations across the country with no connection to the coastal village.

Armed with a team of snitches and undercover cops, the vice unit makes few arrests, but seizes a fortune in cash every year.

Now, the special unit is under federal investigation for its handling of millions in seized dollars, including hundreds of thousands paid to snitches, questionable expenses and missing financial records.

In a rare move, agents have frozen millions that Bal Harbour helped confiscate under a program that allows police to seize the riches of criminals — and keep a cut of the proceeds.

For the past year, the village has been forced to turn over reams of records in a grueling audit that’s now under review by U.S. Department of Justice prosecutors.

Bal Harbour Police Chief Thomas Hunker, who was subpoenaed in March, said his unit has never broken the law.

“Since 1994, I’ve had not one incident where anything is missing,” said Hunker, 61, who has been chief since 2003. “We have a standard operating procedure and a policy and sign-in logs that we have to maintain control.”

Hunker, an unsuccessful candidate for the Miami Beach chief job this year, blamed much of the probe on jealousy by federal agents.

“Sometimes we give them cases. Sometimes we don’t. If we don’t give them a big case, and we get a big hit, they get pissed. It’s competition.”

But even before the investigation, the village’s forfeiture fund came under scrutiny in May by its own auditors, who found questionable expenses, poor accounting and a lack of oversight.

Al Treppeda, the village manager and former police chief, did not return a phone call on Friday, referring all questions to the police.

Now, federal agents are looking at the flow of money into the town — including plainclothes cops toting bags stuffed with cash on airliners and later counting it in a police trailer.

For years, the department of 27 officers, serving a village of 2,574 people, has run its forfeiture program like an ATM machine, tapping into a network of informants who led police to the cash.

And for years, the money rained on Bal Harbour: $100,000 for a 35-foot boat powered by three Mercury outboards, $108,000 for a mobile command truck equipped with satellite and flat-screen TVs, $25,463 for next generation Taser X-2s.

There was $7,000 for a police chiefs’ banquet, $45,839 for a Chevy Tahoe, $26,473 for Apple computers, $15,000 for a laser virtual firing range and $21,000 for an anti-drug beach bash.

The biggest pay — $624,558 — to snitches over the past four years.

Not until the government temporarily banned the village early this year from sharing in forfeiture dollars did the flow of money stop.

“No one’s told me that we’re not in compliance,” said Hunker, who estimated the feds have frozen nearly $30 million.

Hunker insists the audit turned up only accounting errors and violations of “vague” guidelines that govern the use of forfeited dollars, and all expenses were approved by village attorneys and council.

But in fact the probe has shifted from a routine audit to a sweeping investigation, with the findings under scrutiny by the DOJ’s Asset Forfeiture and Money Laundering office.

Matthew McCloskey, a special agent who led the probe for the DOJ’s Office of Inspector General, declined to comment on the probe.

For months, agents have been peeling back layers of the unit’s undercover details, including spending on hotels, car rentals and first-class flights.

In just one month, records show police plunked down $23,704 mostly on trips to Chicago, Las Vegas, Los Angeles, Phoenix, and Tampa — including two first-class flights to California — and rentals of a Cadillac SRX and a Lincoln Town Car.

Hunker declined to talk about investigations, but said he encourages his officers hauling cash to go first class and drive luxury cars on undercover details.

“If you are showing up to pick up a half million and you’re using that as an undercover vehicle, are you going to show up in a Dodge Dart?” he asked.

However, the first-class flights and Cadillac rental were not part of an investigation, but a funeral for a fellow officer’s son and a meeting of law enforcement agents, records and interviews show.

Gun in the toilet

One of the trips caught the attention of California police who investigated a loaded handgun found in a public bathroom of a hotel in Riverside County — the gun later returned to a Bal Harbour cop who had left it in a handicap stall.

The trip took place just four days before the DOJ notified Bal Harbour of the audit.

Bal Harbour is among more than a dozen agencies that have come under scrutiny in the federal program created in 1985 to allow police to partner with the feds in criminal cases — even sharing in the bounties of seized assets.

Though the program gives wide latitude to cops, it also imposes rules on how those monies are seized as well as spent.

Most of the undercover investigations follow a familiar course: Cops or snitches turn up tips about dope traffickers across the country looking to launder money.

In many cases, they share the information with federal agents in places where the money is supposed to change hands.

In the past nine months, auditors have put the village through the most rigorous review it has ever faced, with demands for bank statements, payroll records, ledgers and receipts.

For the first time, agents have demanded explanations for the thousands of dollars doled out to snitches, as well as payroll records for two Bal Harbour cops stationed in Southern California and Charlotte County on Florida’s west coast.

Though the village tapped into forfeiture funds to pay the two salaries, federal law prohibits police from relying on those dollars to cover the payroll of cops who work seizures.

Hunker insists the two cops are “contract” workers who play the critical role of managing snitches.

Two people who spoke to The Miami Herald on the condition of anonymity said agents are looking into whether Bal Harbour cops abused their authority by fronting cash to snitches even before money was seized — breaking federal law.

Hunker said his officers will give dollars to informants, but the money doesn’t come from forfeiture funds. “The confidential informants, if we want to keep them active, every once in a while, we do throw them some money,” he said.

He said the dollars come from drug dealers who pay undercover cops to help them launder money or transport drugs.

“The reason we’re successful is because of that team and because of our informants,” he said.

In all, the team has helped take in $19.3 million from criminals in the past 3 1/2 years in more than a half-dozen states and Puerto Rico, with the village raking in $8.35 million.

Hunker said the squad does more in the war against drugs by hitting the dealers where it hurts the most: their pockets.

However, several experts said the village’s practices raise disturbing questions about cops targeting cash rather than criminals — and operating thousands of miles from Bal Harbour.

In 2010 alone, village cops took part in 23 cases leading to $8.2 million in seizures — all outside of Florida — without law enforcement agents making a single arrest, records show.

“You lose sight of the law enforcement purpose when you’re concentrating on the money,” said Neal Sonnett, a Miami attorney and former president of the National Association of Criminal Defense Lawyers. “The profit purpose is very dangerous.”

More than a decade ago, a South Florida task force got into trouble after authorities said it was laundering as much drug cash as it seized and made no significant arrests. One member was accused of taking kickbacks and commissions from informants — $625,000 his first year.

Hunker, who led that same task force in the years before it ran into trouble, claimed his current problems with the feds stem from politics.

He said he has frequently worked with local DEA offices in New York, New Jersey and Atlanta in big cash seizures, causing trouble with the Miami DEA office.

“The rub is we don’t give it directly to Miami,” he said. “This is a very competitive business just like any other business. If you look at our stats, we’re killing ’em.”

However, Scott Bullock, who litigates forfeiture cases across the country, said the reason the feds are putting pressure on Bal Harbour is to make sure the police are not abusing their authority.

“These monies should not be turned into basically slush funds to be used at their discretion, and it’s broad discretion, whether it’s to buy equipment or host parties,” said Bullock, who co-wrote Policing for Profit for the Institute for Justice, a nonprofit law firm in Virginia.

What is, isn’t legal

What’s not clear is whether Hunker is permitted to use cash from criminals — the funds he says are now paying for his cops to carry out investigations, including travel to cities across the nation. The credit card bills are paid from that pot of money, Hunker said.

Known as trafficker-directed funds, Hunker said the dollars come from bad guys who pay his undercover cops for services.

But several experts say police are not legally allowed to tap into that money — which is evidence — unless they get federal approval.

David Macey, a former Miami-Dade prosecutor who represented the South Florida Money Laundering Strike Force, said cash from suspects has to go through the courts.

“You can’t just stockpile it and then loan it for other purposes,’’ he said. “Usually the police don’t keep dirty money.”

Sgt. Jim Cox, who runs the asset forfeiture unit for the Fairfax County, Va., police, said his unit locks that kind of money away as evidence.

When paying for undercover work, “we use operational funds,” that come from taxpayers, he said.

Federal agents looking into Bal Harbour have yet to release their findings, now under review by Justice Department lawyers in Washington.

Sonnett, who has challenged money seizures in court, said the government is responsible for investigating a program that gives vast powers to police.

“There has to be controls,” he said. “There’s a danger of potential abuses. Law enforcement’s primary purpose is not the financial reward.”