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Feds To Bal Harbour: Hand Over Seized Drug Loot

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Bal Harbour was directed to turn over millions that were seized by the village’s vice cops but not properly accounted for.



The boat purchase by Bal Harbour police using proceeds seized from drug organizations.



The U.S. Justice Department shut down Bal Harbour’s celebrated federal forfeiture program and ordered the police to return more than $4 million, slapping the agency with crushing sanctions for tapping into drug money to pay for first-class flights, luxury car rentals, and payments to informants across the country


After years of seizing millions from criminals, Bal Harbour’s vice squad is now banned from the federal program that allowed the village police for years to seize cars, boats, and cash — and to keep a cut of the proceeds.


In a scathing letter to Police Chief Thomas Hunker, federal agents are demanding the prompt surrender of the millions reeled in last year by a team that operates from a police trailer just blocks from the opulent Bal Harbour Shops.


For years, the small coastal town known for speed traps became one of the most successful in Florida, with plainclothes cops jetting across the nation toting bags stuffed with cash from investigations that had no connection to Bal Harbour — and making few arrests.


The findings, released on Tuesday, were also sent to Mayor Jean Rosenfield, who could not be reached for a comment.


The action by the DOJ’s criminal division comes after a lengthy investigation that began last year with an audit and escalated into a deep probe that turned up a host of problems, including questionable expenses, hundreds of thousands paid to snitches, and missing records.


Neither Hunker, 61, who founded the unit after becoming chief in 2003, nor Sgt. Paul Deitado, supervisor of the squad, returned calls on Tuesday for comments.


One former prosecutor who ran the South Florida Money Laundering Strike Force said he was stunned by the development.


“Bal Harbour is going to have to answer for their transgressions,” said David Macey, a former Miami-Dade assistant state attorney who specialized in forfeitures.


“I’ve never read any correspondence to a law enforcement agency threatening the entire agency with penalties and criminal sanctions.”


Former Bal Harbour Chief Alfred Treppeda, now village manager, said the village council will meet for a special session on Thursday to talk about the troubled program, now under criminal investigation.


Treppeda declined to discuss the sanctions — among the toughest against any agency in the country. “We haven’t really had a chance to talk to the Department of Justice yet,’’ he said.


The Miami Herald reported on Sunday that the police department — a small-town force that mostly writes traffic tickets — has doled out hundreds of thousands to snitches, ran up $23,704 in one month for cross-country trips with first-class flights and Cadillac and Lincoln Town Car rentals, and misspent seized funds on police salaries and benefits.


The Herald found that two of the police officers were not even based in the village — but hundreds of miles away in Southern California and Florida’s west coast. Their roles: to manage the snitches.


In less than four years, the unit paid $624,558 to the informants for tipping off cops to lucrative busts in New York, New Jersey, California, and other states, the newspaper found.


On Tuesday, The Herald sued Bal Harbour over the village’s continued refusal to turn over all of the unit’s spending records.


In the DOJ letter, federal agents accuse the village police of repeatedly failing to cooperate with auditors and refusing to turn over key records during the probe.


Bal Harbour, which leads a task force with the Glades County sheriff’s office, helped seize $56 million in just three years — 2008 to 2011 — “without adequate written policies or procedures, prosecutorial oversight, or audits of undercover bank accounts,” said the DOJ.


The DOJ blasted Bal Harbour for tapping into $709,836 to pay employees salaries and benefits, despite strict federal bans on such practices.


Hunker told The Herald last week that all payments were approved by Treppeda and the village’s lawyers, Richard Weiss and Doug Gonzales.


In addition, DOJ cited findings by Bal Harbour’s independent auditor that revealed dubious expenses, poor record-keeping, and a lack of controls.


Because of the findings, the village is now forced to return $3.1 million — the village’s cut of the seized drug money in fiscal 2011 — $407,969 in additional proceeds, and another $709,836 in money that was not supposed to be spent on salaries and benefits.


Treppeda said the village has only about $2 million left in seized cash.


The investigation comes after years of Bal Harbour showcasing the goods it purchased with forfeiture funds, including $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, and $21,000 for an anti-drug beach bash.


In addition to the federal probe, other questions continue to nag the police about secret bank accounts funded with money from an entirely different pot: thousands paid by drug dealers to undercover cops to launder money and transport drugs.


The Miami Herald’s lawsuit is seeking records of how those monies are used, including credit-card expenses for flights and hotels — and cops fronting cash to snitches.


Brian Mulheren, a village resident and director of the Bal Harbour Citizens Coalition, said the group wrote a letter to U.S. Attorney General Eric Holder on Tuesday demanding a federal monitor to review the police department and the vice squad’s forfeiture program.


“This is the most disgusting, disgraceful, despicable thing that could ever happen,’’ Mulheren said. “We want our village to be clean and honest, and the public officials we have obviously allowed this to occur.’’


It is unclear how long Bal Harbour PD’s ban from participating in the federal program will last. Another uncertainty is where Bal Harbour will find the money to return $4.2 million to the feds.



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