U.S. Challenges Ruling on Paid Informants in His Final Order

Judge Criticized Tactics In Case

Ann W. O’Neill Staff Writer, South Florida Sun – Sentinel, Sep 17, 2003. pg. 1.B

In the final days of his life, U.S. District Judge Wilkie D. Ferguson Jr. held on to one last criminal case, working on it in the hospital as leukemia and chemotherapy sapped his strength.

This case was special.

And so, as his last official act, Ferguson ordered the federal government to pay a hefty financial sanction and warned against the perils of building criminal cases around unreliable paid informants. The government’s lawyers and agents, he said, had acted in “bad faith” by not keeping close enough tabs on a “treacherous” informant with a bad track record.

The signature on Ferguson’s May 28 order is shaky, but his message is firm: “The only people who can protect the system against the `rogue actions’ of confidential informants are those who use them: the government.”

Three months after his death, the government is trying to overturn Ferguson’s last order. Mick Mickelsen, the Dallas defense lawyer whose arguments swayed Ferguson, is hoping his ruling will stand up, serving as a warning against using shady informants.

If his last act survives scrutiny, it can only add to Ferguson’s legacy as a social crusader with a fierce sense of justice for the underdog. He was credited, for example, with taking on the state and improving the quality of life for thousands of disabled Floridians. At the time of Ferguson’s death, friend and colleague H.T. Smith hailed him as “the judge for the least, the last, the lost, the looked over and the left out.”

The informant in this case was the since-discredited Helmut Groebe; the target was Wolfgang Von Schleiffen, a German count who once was a well-heeled Miami real estate broker with a collection of exotic cars. As a result of Groebe’s work for the Drug Enforcement Administration, Von Schleiffen was tried twice and spent seven years in a U.S. prison before Ferguson dismissed the case and freed him in 2000. By then the count was destitute, his lawyer said.

Von Schleiffen, 70ish, died in Munich over the weekend, but his death does not end the case, Mickelsen said. The count’s heirs, including a wife, Heidi, still have a claim to the sanctions that Ferguson ordered against the government. It was only after Von Schleiffen’s 1994 conviction that the judge learned Groebe had “an international reputation for lying to governments about the criminal activities of others,” Ferguson wrote. Groebe was the subject of a 1997 German documentary called King Rat and his work as an informant subsequently was disavowed by the BKA, West Germany’s equivalent of the FBI.

Following Ferguson’s death in June at age 65, the case was reassigned to U.S. District Judge Alan S. Gold in Miami. The government’s request that Gold reconsider Ferguson’s decision rankled Von Schleiffen’s attorneys.

“I find that unconscionable,” Mickelsen said. “Judge Ferguson, who lived this case, who heard the witnesses, who sat through two trials, thought it was important enough to get out this order before he died. Now they’re looking for some judge to undo it.”

Mickelsen said he was in frequent contact with Ferguson’s staff, but wasn’t told he was dying. “They kept saying, `He’s in the hospital. He’s working on it.’”

The order was entered into the court docket June 2; Ferguson died June 9.

“I see him being ill and on chemotherapy,” Mickelsen said, “shakily trying to sign the order and get it out before he passes on because he knows there’s not going to be any other judge who has the moral courage to do it.”

Ferguson ordered the government to pay Von Schleiffen’s attorney fees and costs. They could be calculated in the high six figures at a future hearing.

The government’s position is laid out in a 21-page response, saying in essence that Ferguson misinterpreted the facts and the law. And, Assistant U.S. Attorneys Laura Thomas Rivero and Lois Foster-Steers argue, “prosecutorial mistakes” should not be confused with “prosecutorial misconduct.”

Von Schleiffen’s lawyers requested the sanctions under the Hyde Amendment, a 5-year-old law that allows exonerated defendants to recoup their losses when a case against them proves to be “vexatious, frivolous or in bad faith.” Ferguson found that Groebe was “handsomely paid” for his work as an informant for the Drug Enforcement Administration; the government’s own court papers reveal he received $25,300 for the Von Schleiffen case, and a total of $433,564 for his work. Yet, according to court records, all the DEA reaped from it were a hung jury in a separate case and the failed Von Schleiffen prosecution.

DEA spokesman Joe Kilmer said he couldn’t comment because the case was under internal review.

Von Schleiffen was accused in April 1993 of possessing and conspiring to distribute $90,000 worth of cocaine. He was arrested when he picked up $10,000 Groebe promised him for using his Jockey Club offices for the coke deal. He could be heard on tape joking about his title. “You can count on the Count,” he said, and “Count, Count,” as he ran his fingers through the money.

He was convicted of conspiracy but acquitted of possession after a trial in 1994. Ferguson sentenced him to 10 years in federal prison.

The following year, Von Schleiffen filed an appeal, claiming a co- conspirator swore he’d been deported to Germany when he refused to go along with Groebe’s story.

And, German television producer Peter Meuller signed an affidavit saying Groebe told him he’d entrapped Von Schleiffen. Meuller interviewed Groebe for the King Rat documentary.

The 11th U.S. Circuit Court of Appeals ordered a new trial. Ferguson dismissed the remaining charge after Von Schleiffen produced Meuller but prosecutors failed to produce Groebe — after Ferguson ordered them to.

“There’s no question he was disturbed by the government’s conduct,” Mickelsen said. “It takes courage to tell the government, you are wrong, wrong, wrong.”

Ann W. O’Neill can be reached at awoneill@sun-sentinel.com or 954- 356-4531.