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Ponzi Scheme Strikes Drug Enforcement Agents

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Ponzi Scheme Strikes Drug Enforcement Agents

First Posted: 08-27-10 04:00 PM




Michele Leonhart's nomination to head the Drug Enforcement Administration has been complicated by a ponzi scheme that has ensnared DEA agents and officials. Leonhart's nomination is vigorously opposed by drug policy reform groups, which charge that she is stuck in a Drug War-era mindset, focusing too heavily on medical marijuana and small-time crack cocaine violations.


Despite Obama's pledge during the campaign to cease raids on medical marijuana clubs in states where the drug was legal, Leonhart, as acting director, staged raids after his inauguration. The raids were seen as a signal from the DEA that it didn't plan to change the way it operated, but a subsequent directive from Attorney General Eric Holder has reduced the frequency of such raids.


But it may not be Leonhart's policies or leadership that doom her nomination, Amanda J. Crawford, a reporter in Arizona who covers border security issues and drug isses, reported Thursday. Her nomination is stalled in the Senate Judiciary Committee, where no hearing has yet been scheduled more than a year after her nomination. Judiciary Committee Chairman Pat Leahy (D-Vt.) is a strong believer that states should be given the authority to craft their own medical marijuana laws free from federal interference. A Leahy spokeswoman said that the chairman has yet to take a public position on her nomination. Asked about Leonhart earlier this year by HuffPost, Leahy declined to support or oppose her, but reiterated his support for medical marijuana.


In June, the Securities and Exchange Commission filed a complaint against the estate of Kenneth Wayne McLeod, who had recently taken his own life as authorities closed in on what they say was a long-running ponzi scheme that ensnared 260 investors, many of them law enforcement officers, and stole at least $34 million.


"McLeod victimized law enforcement agents and other government employees who dedicated their lives to the service of this country," said Eric I. Bustillo, head of the SEC Miami regional office.


A DEA spokesman confirmed that some agents had been caught in the scheme, but referred comment to the Federal Bureau of Investigation. The Florida Times-Union has been investigating the scandal and uncovering DEA connections.

Leonhart is a career DEA official, meaning that it will be difficult for her to avoid becoming entangled in the affair, which the SEC began in the 1980s. Crawford reported Thursday at CrawfordOnDrugs.comthat a Justice Department official had deemed her a "dead woman walking." She has been acting director since 2007. A DoJ spokeswoman didn't immediately return a call.


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