|Watchdog Report

ATF agents conducting sting let man leave store with gun

May 16, 2013

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By John Diedrich and Raquel Rutledge of the Journal Sentinel

May 16, 2013 0

ATF agents let a man armed with a gun and threatening to shoot someone walk out of their storefront sting operation in Milwaukee last summer, failing to arrest him or take the weapon, the Journal Sentinel has learned.

The suspect, Bobby Ball - a felon with a violent history - promised to return to the store and sell the agents that gun and others but he never came back, according to sources familiar with the case. Instead he spent four months on the loose, until he was picked up in Minnesota on a drunken-driving arrest.

He is now awaiting sentencing after pleading guilty to selling drugs to the undercover agents.

It's unclear if the gun was later used in any crime or if it has been recovered. Ball has not been charged in any shootings in Wisconsin following the encounter with the ATF.

The "gun-walking" incident is the latest failure to be revealed in the flawed "Operation Fearless" sting, run out of a fake storefront in Milwaukee's Riverwest neighborhood. The sting, aimed at catching criminals selling guns and drugs, was run by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives with help from Milwaukee police.

A congressional letter obtained Thursday by the Journal Sentinel shows the FBI was initially part of the operation but backed out after seeing problems with the way it was being run.

The FBI withdrew from the case in March 2012, after about two months, "due to concerns about the operation's proposed uses of intelligence, operational security and staffing," according to the May 10 letter to ATF acting director B. Todd Jones criticizing the Milwaukee operation.

A spokesman at the FBI's Milwaukee office declined to comment Thursday.

While the FBI apparently did not tell the ATF why it was leaving, "the problems the FBI identified underscore ATF's inadequate policies and procedures for undercover storefront operations," the letter says.

It was written after a congressional staff briefing with ATF officials last month and signed by U.S. Reps. Jim Sensenbrenner (R-Wis.); Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee; Bob Goodlatte (R-Va.), chairman of the House Judiciary Committee; and U.S. Sen. Chuck Grassley (R-Iowa), ranking member of the Senate Judiciary Committee.

The letter declares Operation Fearless "a spectacular failure."

The Journal Sentinel investigation found the operation was beset by a series of problems, from guns - including a fully automatic machine gun - being stolen from an agent's car to thieves ripping off $40,000 of merchandise from the storefront.

ATF officials acknowledged the agency doesn't even have a written manual with procedures for undercover storefront operations, according to the letter.

The letter describes a litany of additional problems, including how the operation jeopardized the safety of police and federal agents.

The operation had no counter-surveillance team to watch suspects as they left the E. Meinecke Ave. store, and the setup created a risk that other Milwaukee police officers might mistake the sting for a criminal operation.

The ATF's internal investigation "found that this officer safety issue could have led to a 'blue-on-blue' scenario," the congressional letter says.

The agency has sent its findings to the Department of Justice and its inspector general, who is considering an independent probe of the operation.

In their letter, the four members of Congress demanded the ATF send them the internal review documents by next Friday. The agency has largely ignored earlier demands for information from congressional members from both parties regarding the Milwaukee operation.

The ATF could not be reached for comment.

U.S. Attorney James Santelle, whose office was involved with the operation, told the Journal Sentinel in January that no guns walked out of the storefront.

The congressional letter, however, says "ATF agents failed to take immediate action to interdict or even surveil an armed target who told ATF undercover agents that he was going to use a firearm in his possession to take retaliatory action against another individual."

Several attempts Thursday by the Journal Sentinel to reach Santelle were unsuccessful.

In addition to the "gun-walking" incident, the letter describes a series of other problems:

Inadequate personnel: The operation did not have sufficient personnel, either in the store or working behind the scenes, even though it had been evaluated by the agency's Undercover Review Committee and approved by the agency's Deputy Assistant for Field Operations, who was briefed on the sting nine times.

Ineffective oversight: The operation was part of a new agency program meant to monitor field efforts after the agency's much-criticized Fast and Furious operation. In that case, agents encouraged the sale of more than 2,000 firearms to traffickers by gun stores but lost track of the weapons, many of which ended up at crime scenes in Mexico.

"Yet somehow oversight of Operation Fearless slipped through the cracks," the letter says.

False information: On Feb. 8, ATF staff told congressional staff the Milwaukee operation was not part of the Monitored Case Program, when in fact it was. And in January, Richard Marianos - a top public affairs official in Washington - told the Dallas Morning News that the agent whose guns were stolen was not part of the operation, disputing a Journal Sentinel report.

ATF officials now admit he was.

Unapproved location: Agents changed the location of the storefront sting from the one that was approved by the Undercover Review Committee. The letter does not indicate where the original location was, but the Journal Sentinel reported last month the ATF previously ran a cigarette-selling warehouse on the city's south side, also called Fearless Distributing. In that operation, agents left behind a pallet of cigarettes and thieves stole two cases with a retail value of nearly $10,000.

Carelessness: The agent in charge of the Riverwest operation, Special Agent Jacqueline Sutton, failed to check out the burglar alarm at the building housing the storefront, which was burglarized over several days in October.

Mistaken arrests: The Journal Sentinel earlier reported that three people were wrongly charged, including a man who was in prison on a separate ATF case. The letter says agents arrested a fourth wrong suspect when they conducted their roundup in November. The suspect apparently was never charged.

In total, about 30 people were charged in state and federal court, but most of those were on low-level drug and gun counts. However, a few defendants with long histories are facing long prison terms. The operation netted 145 guns over 10 months, but some of those came directly from stores such as Gander Mountain. Defendants were able to make a quick profit because ATF agents were paying so much.

The letter does not address other failures and foul-ups identified by the Journal Sentinel, such as agents using a brain-damaged man to promote the business and set up drug and gun deals, and then turning around and arresting him on federal charges. Mental health advocates called their actions "hugely inappropriate" and "exploitation."

Nor does the letter mention how agents lost a ballistic shield; left behind sensitive law enforcement documents after they shut down the operation; failed to capitalize on early leads to find the stolen machine gun; and refused to pay Dave Salkin, the landlord of the building, for damage to the property and unpaid utility bills.

Meanwhile, sources told the Journal Sentinel that agents were growing marijuana inside the storefront, in an apparent effort to bolster their cover. Salkin found a plant when he was cleaning his building in January after the operation was shut down and reported it to Milwaukee police.

Criminal history

When agents let Ball walk out of their storefront, there was good reason to believe he may have followed through on his threat to shoot someone.

Ball, 32, lived in Milwaukee until 1998 when he was convicted of four counts of armed robbery, according to online court records. In 2004, he lived in La Crosse, where he was convicted of aggravated battery. In 2011, he was charged again, this time on allegations he shot at the boyfriend of his ex-girlfriend, according to a criminal complaint. The boyfriend was not struck. Ball was acquitted in a 2011 trial.

The congressional letter does not name Ball as the suspect, however sources told the Journal Sentinel he was the one involved.

On July 11, 2012, Ball sold 5 grams of heroin to undercover ATF agents for $1,000, according to federal court documents. Two days later, Ball was back at Fearless Distributing. This time he sold agents about 2 ounces of marijuana. He also showed agents a Taurus .38-caliber revolver.

Agents offered to buy the gun, but Ball refused, according to sources familiar with the transaction.

Ball told the agents he couldn't sell it to them because his cousin had been shot recently and he "needed it," the sources said. Ball promised agents he would sell them that gun and a cache of other guns from Chicago. Agents allowed him to leave.

Ball never did return to the store. He was arrested in November in Winona, Minn., suspected of drunken driving and fleeing an officer. He was released to the U.S. Marshals Feb. 22 and was returned to Wisconsin.

His attorney, Tom Wilmouth, declined to comment.

Ball pleaded guilty on the two drug counts while the charge of illegal gun possession was dropped. At a minimum, he is facing 12 years in prison when he is sentenced in August.

About John Diedrich

John Diedrich writes about crime, federal issues, ultimate fighting and guns. His investigations have been honored with various national awards including a George Polk Award for reporting on rogue gun stores and an IRE award for exposing botched undercover federal stings.

About Raquel Rutledge

Raquel Rutledge is an investigative reporter. Her work has been recognized with numerous national awards, including a 2010 Pulitzer Prize for exposing rampant fraud in Wisconsin's child-care subsidy program.