Crime

Grand jury probes Bal Harbour police undercover sting

Miami

Years after launching one of Florida’s most troubled sting operations, Bal Harbour police officers are at the center of a federal grand jury corruption investigation examining millions taken in by officers who spent lavishly on travel and luxury hotels without making any arrests.

Led by the U.S. attorney’s office in Chicago, the grand jury is probing the Tri-County Task Force officers who turned the sting operation into a cash generator, doling out hundreds of thousands to informants while making dozens of cash withdrawals from the bank with no records to show where the money went.

The Miami Herald learned that the grand jury, one of the first in the country to probe an undercover police sting, is investigating several potential criminal violations, including the spending of hundreds of thousands on four-star hotel bookings, first-class flights and restaurant tabs that cost more than $1,000.

“This is extraordinary,” said Kenneth Rijock, a former Miami attorney and convicted launderer who is now a financial crimes consultant. “They usually want to handle this with internal affairs. In this case, the violations are so egregious, it could be blown wide open.”

The effort by the grand jury in Chicago to probe the police follows a Herald investigation last year that showed the task force officers — operating from an obscure trailer — posed as money launderers while they took in $71.5 million from criminal groups to launder. The goal: infiltrate the organizations.

With the help of the rural Glades County Sheriff’s Office, the task force members took $2.4 million for their share for arranging the deals and returned the rest of the money to the criminal groups — but never pressed a single case in court.

At least 80 times, the officers flew to Chicago, collecting drug money wrapped in gym bags, suitcases and even a Chicago Bears T-shirt. In one case, an undercover officer was handed a black backpack outside an ice cream parlor. In the bag: $245,750.

One source familiar with the probe said the case was part of a larger inquiry that expanded to Bal Harbour police, who frequently picked up drug cash with the help of the Cook County Sheriff’s Office.

Dennis Fitzgerald, a lawyer and former Drug Enforcement Administration agent, said the grand jury is the latest development in an ongoing criminal probe that began last year and is now targeting key officers who served on the unit.

“You don’t see this,” he said. “They are collecting evidence on guys who had no authority to do what they were doing, especially in sending money overseas. They are going to be looking at everything.”

Prosecutors had already asked Bal Harbour police for records of the laundering deals carried out — 332 — from 2010 through 2012 to track the millions raked in at a time drug smugglers were finding new routes into Florida and violent drug crime swept the region.

In addition, agents had requested the files of three confidential informants who were used by the cops to generate deals in exchange for cash rewards.

Just last month, agents traveled to Miami to further examine the task force’s banking records, including the millions wired into other banks — and overseas financial institutions in Panama and China. Joseph Fitzpatrick, an assistant U.S. attorney for the Chicago office, declined to comment.

Bal Harbour Police Chief Mark Overton said he was unaware of the grand jury investigation, but said it was a “step in the right direction.”

“They are the ones to properly vet it. The accounting of the dollars,” said Overton, who was hired after the task force disbanded.

The chief said his department tried to get critical information from the SunTrust bank accounts where the task force deposited millions, but was told the police required a subpoena.

A troubling audit ordered by Bal Harbour last year showed the officers frequently withdrew cash from the bank — thousands at a time — with no supporting documents to show where it was spent. The total: about $800,000.

Michael Levine, a trial consultant and former DEA supervisor, said that in addition to the withdrawals, he expects the grand jury to examine the spending by the task force while the officers were flying across the country to pick up suitcases filled with cash.

Again and again, officers tapped into that money to pay for 40 first-class and business premium flights and dozens of room bookings at luxury resorts like the El San Juan Resort & Casino, which cost $4,536, and the Mandalay Bay Resort & Casino in Las Vegas, charging $9,410. There were expensive dinners at places such as Bal Harbour 101 for $1,150 and Morton’s in North Miami Beach for $959.

They spent $125,000 on Apple computers and submachine guns. “They were drunk with money,” said Levine, who conducted internal affairs investigations for the DEA into undercover sting abuses. “They counted on people not knowing anything about undercover work.”

To this day, police say they have not been able to find thousands of receipts from the spending. Tom Hunker, the police chief who created the task force and resigned in 2013, said he would not comment on any stories.

It’s unclear whether the grand jury has issued subpoenas to SunTrust, which allowed the police to set up part of their operations inside and participated in wiring tens of millions into other banks.

At least one subpoena was issued to a luxury resort in Bal Harbour to turn over its records of the task force’s room bookings, according to one source.

Officers stayed dozens of times at the One Bal Harbour, now a Ritz-Carlton, the St. Regis and the Sea View, where they stayed 88 nights and set up a de facto base, frequently meeting around the pool.

Experts say the police were not allowed to pay for the hotels and travel with the drug money, which is considered evidence and is supposed to be turned over to the courts.

“You can’t use that money. You have to use operations funds,” said Levine, author of the book Deep Cover. The issue becomes more complicated because police didn’t keep receipts or records, he said.

Rijock, the financial crimes consultant, said the task force is one of the first in the country to incur a federal grand jury investigation because of the gravity of the allegations and the fact that money remains unaccounted for.

“Instead of putting the drug traffickers in prison, they were actually sending the drug profits back to the cartels,” he said. “They turned [the investigation] into their own piggy bank.”

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