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FBI shift affecting BR cases

Terrorism emphasis shorting white-collar, corruption effort

Author(s): PENNY BROWN ROBERTS Date: September 7, 2003 Section: News

Sharonda Gillard admits she made two mistakes in May 2002.

One, she told law enforcement authorities, was taking a piece of crack cocaine from a man named Pancho in exchange for the promise of sexual favors. The other was putting Pancho in touch with another man she knew - Marcus Stallion - allegedly so he could buy more of the drug.

"Jig" - as she is known to acquaintances - knew at least one of those acts was illegal, but she didn't expect anyone to make a federal case out of it.

As luck would have it, Pancho was wearing a radio transmitter - a "wire" - and U.S. Drug Enforcement Administration agents were hiding in the shadows, tape recorders rolling. More than a year later, a federal grand jury indicted her and Stallion on drug-trafficking charges for distributing crack.

Two years ago, no one would have expected to see someone like Ciillard hauled into federal court.

But in the days since terrorists struck on American soil, federal criminal prosecutions in Baton Rouge and other communities nationwide have shifted from the traditional purviews of white-collar crime and public corruption to firearms and drug cases - many of which might have been pursued by local authorities in the past.

The reason, federal officials and other observers say, is that their primary investigative agency - the FRF - is now focused on anti-terrorism efforts. That leaves federal prosecutors with cases made by other agencies not so preoccupied with that new task: the DEA, the Secret Service and Alcohol, Tobacco, Firearms and Explosives and local authorities.

While no one disputes the necessity of eradicating terrorism, there is growing concern that the local federal docket is being clogged with easily made weapons and drug cases that might be more aptly handled in state court.

A batch of indictments in January involving undocumented workers for Basic Industries in Baton Rouge, one defense attorney says, "nearly ground the Middle District to a halt and accomplished nothing for national security."

At the same time, there are those who worry that no one is keeping an eye out for white-collar criminals and corrupt public officials.

"To paraphrase a judge, it's a good time to be a white-collar criminal in Louisiana," said Richard M. Upton, a defense attorney who has represented clients in federal court. "If the feds aren't going to get you, then no one is."

More drugs and gun cases

Statistics seem to lend credence to those concerns.

The U.S. Attorney's Office already has set a record pace in the Middle District of Louisiana this year with 258 indictments as of Sept. I. The office predicts a total of 270 when the fiscal year ends in three weeks.

But some of the biggest growth has been in drug cases, which have more than doubled pre-9/1 1 levels, and firearms prosecutions, which have increased by nearly a fourth during that period.

Prosecution of other government regulatory offenses such as fake Social Security numbers, suddenly popped up. Where there were no cases in 2001, the roundup of undocumented workers at Basic Industries and others has resulted in 85 such prosecutions so far this year.

At the same time, the white-collar crime indictments are down to nearly a fourth of what they were two years ago. And now there are half the number of public corruption cases that there were in the year before the terrorist attacks.

"This administration has been very aggressive in its caseload," said Thomus Damico, a defense attorney who handles cases in federal court. "But you and I both know white-collar and political corruption hasn't been solved and hasn't stopped. That's a concern."

While U.S. Attorney David Dugas vigorously defends the cases his office has chosen to pursue, he's also among the first to express a frustration with the reduction in white-collar and public corruption cases.

"The combination of anti-terrorism and the considerable expenditure of resources on the serial killer task force forced a shift in priorities last year, and I don't regret that shift," Dugas said, referring to the Multi-Agency Homicide Task Force that investigated the killings of area women by a single man,

"But now I'm trying to persuade the FBI and other agencies to re foe us on white-collar crime and public corruption in this district. I think a federal presence in those areas is essential."

New priorities

White-collar crime - once ranked at the top of the FBI's list of 10 priorities

- is now at No. 7. Public corruption ranks fourth, behind counter-terrorism, counter-foreign intelligence and so-called cyber crimes.

Meanwhile, the FBI recently raised the minimum dollar amount in financial fraud cases it will take on to reduce the caseload. Cases below the threshold are referred to local authorities.

The U.S. Attorney's Office also instituted a policy of referring unemployment compensation fraud eases to stale investigators to lower its volume of white-collar crime and concentrate on more-significant cases.

In Louisiana, a third of the FBI agents are assigned to investigate white-collar crimes and public corruption - although FBI Resident Agent in Charge Louis Reigle 111 says he doesn't hesitate to move them to a counter-terrorism investigation if needed.

About 20 agents are assigned to public corruption cases, according to Reigle. But 16 of them are focused in New Orleans, where U.S. Attorney Jim Letten has indicated there are as many as 18 such cases currently under investigation. Just two agents are assigned to Baton Rouge to investigate local and state corruption.

"There's really no other agency that has the expertise or the jurisdiction to handle the white-collar crime problem," Reigle said. "We have to do it, and if we don't, you're going to see tremendous growth in the white-collar field. As for public corruption, we do have quite a few cases we're investigating."

Local federal authorities say they plan to renew their emphasis on white-collar crime and public corruption in the coming year. Reigle - who has requested that 15 more agents be assigned to the region - said one of his top priorities is establishing a public corruption squad in Baton Rouge.

Dugas said that if that doesn't happen, another option is for the U.S. Attorney's Office to establish a multi-agency task force to tackle such cases.

"The plan for next year is to keep the gun and drug prosecutions about where they are; regulatory offenses will probably go down unless we have more Social Security number fraud cases," Dugas said.

"Our focus for the coming year will be more on significant white-collar and corruption cases. But those will be more of a challenge because of the FBI diversion to anti-terrorism. We'll do as much as we can with the resources we have."

In years past, the U.S. Attorney's Office has been criticized for not tackling the drug problem in Baton Rouge more aggressively. Since Dugas look office, cases have risen steadily - federal prosecutors tried just 14 drug cases in 1996, for example, compared to 49 this year. About half of those are Organized Crime Drug Enforcement Task Force cases, a multi-

state effort.

Baton Rouge prosecutors have had their share of high-profile cases alleging an international conspiracy, such as the recent conviction of Lawrence Bringier Jr. and the upcoming trial of his accused co-conspirator, former funeral home operator Robert Desselle.

In July, prosecutors unsealed the indictments of 15 people charged with 37 counts that include drug trafficking, money laundering, bank fraud and attempted bribery of a public official. Those charged -among them local concert promoter Michael Germany - are suspected of having ties to two of Baton Rouge's largest cocaine rings, with more than $5 million in total profits since 1998.

"Every ounce of cocaine you see is all brought here via an international distribution network," Dugas said, "Only the federal government has the resources to identify and dismantle those networks."

But the U.S. Attorney's Office also had its share of seemingly smaller crimes, including a few cases involving methamphetamine laboratories that originated in rural Livingston Parish. Dugas made the crackdown one of his first priorities after taking office in October 2001 "to try to get a handle on it before it gets as bad as crack cocaine."

Critics say the pursuit of meth cases and small-time crack dealers conflicts with a stated goal of using resources to pursue those cases in which only federal authorities have jurisdiction. Meth producers generally work independently to produce the drug for a small circle of acquaintances and are not connected to any national or international organization.

"How money should be spent"

Stuart Green, a professor at the Paul M. Hebert Law Center at LSD who specializes in federal criminal law, said he believes the emphasis may also have something to do with the allocation of resources.

"Fraud and white-collar are very expensive in terms of resources and lake years and years to build," Green said. "Drug cases are high-volume and quick-moving, and therefore attractive to prosecutorial offices."

But easy or not, there are those who question whether federal resources are wisely spent pursuing such prosecutions.

Consider the case of Gillard and Stallion. A U.S. magistrate tossed (Ciillard in the Rast Baton Rouge Parish Prison until trial, forcing the federal government to pay for her imprisonment. Because she's too poor to afford her own attorney, federal coffers also are being tapped to pay her court-appointed attorney, Joseph Scott.

Three DBA agents and an assistant U.S. Attorney are working to compile

the evidence against her. And by the time she goes to trial, two federal judges and a few clerks will have had a hand in the case.

It isn't yet clear whether Gillard or Stallion has direct connections to any international distribution network.

The firearms prosecutions are subject to the same sorts of criticisms.

Project Sate Neighborhoods - a gun eradication program that began in 1999 as Project Rxile - takes felons arrested with firearms and puts in them in federal prisons removed from the neighborhoods where they committed their crimes.

So far, prosecutors have opened 59 firearms cases - a number Dugas attributes to the recent expansion of the project to other parishes in the district. By comparison, there were just four firearms prosecutions in 1996.

Rebecca Iludsmith, the federal public defender, said her office and the prosecutors spend a lot of time on those cases.

"We're all just doing our job, but the question is, 'Is this how federal money should really be spent?'" Iludsmith said. "In my view, the federal government should be investigating and prosecuting the kinds of cases to which it is best suited, and the state should be doing the same, and the two ought not to overlap very much."

"Worrisome trend"

The other problem with emphasizing such drug and firearms prosecutions, Green noted, is that they are inconsistent with a renewed emphasis on terrorism that federal authorities say pulls resources from white-collar and public corruption cases.

Said Green: "This worrisome trend is hard to square post-9/11. There's not a clear, strong link between drug crimes and terrorism."

Meanwhile, those who in the wake of Sept. 11 watched the parade of corporate criminals who have raided the profits of companies like Enron, Arthur Anderson, Global Crossing, TmClone and WorldCom, just to name a few, say federal prosecutors in genera! have let the public down when it comes to white-collar crime.

The white-collar cases that have been prosecuted in federal court in Baton Rouge in recent years indicate the area does have its share of health care, financial, computer and tax fraud.

This year, the U.S. Attorney's Office in Baton Rouge has tried 23 cases -one more than last year. By comparison, there were 77 indictments in 2001 - 36 of them involving financial institution fraud.

"These cases take years to investigate," Hudsmith said. "If the FBI is

focusing on other things, we could be a few years behind in bringing these sorts of crimes to light - if they ever do come to light. The impact on our community could be tremendous."

In a state with a former governor in prison and three straight insurance commissioners having served time, public corruption cases are equally important.

Upton and others contend it's even more crucial for federal authorities to mind the store given that the Louisiana Legislature has been slow to make a permanent appointment to head up the Legislative Auditor's Office. Dan Kyle resigned earlier this year and now is running for insurance commissioner.

Said Dugas: "Historically, reports from the legislative auditor... have pointed out potential corruption that we've considered for prosecution."

Green contends there's a genera! feeling in the public that federal officials historically have been the ones to "step in and protect the people from their own elected representatives."

"It's awkward sometimes for state prosecutors to prosecute state officials," he said, "so federal law traditionally has focused on corruption offenses."

Nationwide, the U.S. Department of Justice contends, white-collar and public corruption cases have not declined. However, officials would not produce any statistics on indictments to prove the point.

"I haven't seen any down tick because of Sept. 11. We haven't talked about lessening our focus on white-collar crime and public corruption because of the war on terrorism. That's just not the case at all," said Bryan Sierra, a U.S. Department of Justice spokesman. "We have invigorated our effort and devoted lots of resources toward looking at these issues."

But national FBI spokesman Scott Jensen said the decline in white-collar and public corruption cases "has been an issue all over the country. U.S. attorneys just aren't getting cases from the FBI like they used to."

For all the talk of resources being diverted to counter-terrorism, such investigations have produced no local criminal cases.

There have been 14 immigration violations prosecuted since the attack in 2001, although none have been publicly linked to any terrorist effort.

The most significant effort was the January indictments of 72 undocumented workers at Basic Industries who had bought fake Social Security numbers to get jobs.

The roundup has been criticized by defense attorneys and most of those arrested were Mexican nationals who had lived in the area for years with

no evidence of links to any terrorist organizations.

Dugas has said the investigation and resulting arrests were crucial to shut down illegal access to area petrochemical plants and send a message that federal authorities are watching.

But Upton, a defense attorney who represented some of the workers, called the prosecutions "absurd."

"It was a tremendous waste of time, waste of federal resources, and waste of court resources," he said. "It almost ground the Middle District to a halt because there was such a large number that had to be tunneled through the system, and it accomplished nothing as far as making the country more secure."

Copyright 2003 Capital City Press, Baton Rouge, La.

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