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Watchdog Reports|A Journal Sentinel Watchdog Report

ATF's Milwaukee 'Fearless' storefront had little to ward off burglars

In the back of the building, guarded by a fence on a driveway leading to a exterior courtyard area, the ATF would load and unload goods and gear sheltered from view of the street.
In the back of the building, guarded by a fence on a driveway leading to a exterior courtyard area, the ATF would load and unload goods and gear sheltered from view of the street. Credit: Michael Sears
Feb. 09, 2013
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By John Diedrich and Raquel Rutledge of the Journal Sentinel

Feb. 09, 2013 0

The door had no deadbolt. The few scratches and marks told police the men had little trouble prying it open. Hard to believe it was all that stood between the burglars and a storefront full of goods belonging to federal agents running an undercover gun sting.

And who would imagine the thieves would have unfettered access to the place for three days, propping open the door with a shoe and returning the next day with a moving truck to finish the job?

But that's what happened as burglars hit the ATF's Fearless Distributing storefront in Milwaukee's Riverwest neighborhood in October, making off with nearly $40,000 worth of merchandise - maybe more, according to interviews with neighbors and police reports newly obtained by the Journal Sentinel.

The burglars knew the place. They had been there before, drawing top dollar selling guns and drugs to undercover agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, according to court records.

Thanks to a neighbor who got the license plate number of the thieves' car, ATF agents quickly found two suspects and some of the stolen loot - shoes, purses, jeans.

And a Mossberg shotgun, stashed alongside.

The reports don't mention if the gun was taken from the store. The Mossberg shotgun is a common weapon on the streets of Milwaukee, and agents had bought one from a felon a few weeks earlier.

The burglary reports taken by police also do not include another fact:

On the same day the burglary was reported, an anonymous person walked into Milwaukee police District 7 station and turned in an ATF ballistic shield, the type used during high-risk raids. Like firearms and body armor, the shields are supposed to be closely controlled items.

Information about the shield was filed in a separate report containing few details, nothing linking it to the Fearless operation.

And while police reports show the two suspects in the burglary quickly confessed, four months later they have not been charged with the crime.

Instead, they are charged with crimes related to selling drugs and guns to agents, including several firearms that had been purchased a short time earlier from stores such as Gander Mountain and sold to the ATF for a quick profit.

As with the rest of the sting, the charges issued focused on the operation's successes, while embarrassing failures - guns stolen from an agent's vehicle, sensitive documents left behind, cases where the wrong person was charged - were kept quiet until exposed by a Journal Sentinel investigation.

The burglary reports, for instance, do not mention the store was an ATF operation. The agent in charge is listed as the store owner. The reports say nothing of sensitive items or government goods, simply listing some stolen property as "misc. items of significant value."

The ATF's machine gun - stolen from an agent's SUV just weeks before the storefront burglary - remains on the street.

"I have never heard of, in my 30 years of doing criminal justice issues, an undercover operation that seemed to be as novice as this," said Laurie L. Levenson, a former federal prosecutor who is now a professor at Loyola Law School in Los Angeles. "From the crooks' point of view, they were the ones in charge, not the ATF. It is just embarrassing."

The police reports and uncharged burglaries raise new questions about failures in the operation and whether steps were taken to cover up mistakes. The documents, along with criminal charges and extensive interviews, shed more light on how an extensive 10-month undercover operation backfired.

While the operation resulted in charges against about 30 people, most were on minor drug and gun counts. However, federal officials note a few of the defendants face long prison terms.

In the wake of the Journal Sentinel's original investigation, a bipartisan group of congressional members is demanding answers from the ATF on what they call a "failed operation." The agency has launched an internal investigation and has sent investigators from Washington, D.C., to question those involved.

ATF spokesman Mike Campbell said the bureau's Office of Professional Responsibility is performing a "top to bottom review" of the operation, following the Journal Sentinel investigation.

The results of the review will be sent to ATF management and Department of Justice leaders, he said. After that, agency officials will discuss publicly what the review found. Campbell said he could provide no timetable for the completion of the review.

"There have always been problems with undercover operations because you're dealing with criminals," said Rory Little, a former federal prosecutor who now is a professor at the University of California Hastings College of the Law. "They don't play by the rules. You can't run it like the Boy Scouts and expect to get results.

"There's great benefit to these operations, and there's great risk," he said. "It all comes down to the details and the supervision."

Targeting big fish

After several months of buying guns and drugs at the undercover store in a former sign company building on E. Meinecke St., agents had what looked like a big fish.

His name was Brandon Gladney.

Gladney had started selling guns to the agents in August, including assault-style rifles and pricey handguns - sometimes still in the box, according to a criminal complaint.

Agents, working with two officers from the Milwaukee Police Department, quickly figured out that Gladney, who could not buy a gun himself because of a juvenile conviction, was having another man buy the guns for him, a process known as straw buying.

In some cases, though, the guns had recently been bought from stores and were being resold to agents for a quick profit. One of the guns Gladney sold was a DPMS A-15 rifle, which retailed for about $1,000 at Gander Mountain at the time. The undercover agents paid $2,000 for the rifle, records show.

 Legal experts say such guns likely weren't the aim of such an extensive undercover operation, one the agency itself has said was meant to get illegal guns off the street.

Gladney, 26, sold at least 16 guns starting Aug. 1 and continuing for six weeks, according to court records. All the transactions were captured on high-quality surveillance cameras. One attorney involved in the case likened the quality of the recordings to that of a TV reality show.

As customers browsed the store, agents encouraged them to fill out slips of paper to enter a raffle to win a television. The entries were kept in a large green skull-shaped bowl.

The operation wasn't all work.

The undercover agents, who pretended they were part of a New York biker gang selling hot merchandise, frequently blasted music and barbecued behind the building, sending smoke wafting into nearby homes. One neighbor complained to them, but said the problems continued.

During that time, a 32-year-old man with a long criminal record also was coming to the store. Dorsey Childs, who had earlier felony convictions for dealing drugs, was selling guns and drugs to the agents, court records say.

And on Sept. 12, according to court records, the agents bought another gun - a Mossberg shotgun - from 31-year-old Taureen Little, a convicted drug dealer.

The next day the operation hit a speed bump, a big one.

Brazen daytime theft

Around 3 p.m. on a Thursday, a car with three men inside pulled up next to a Ford Explorer that was parked in the lot beside Alterra Coffee on N. Humboldt Ave., according to a police report.

The suspects broke into the truck, which belonged to an undercover ATF agent, pried open a metal box and took three guns - two handguns and an automatic Colt M4 rifle, the report says. They also made off with an ATF radio and ammunition.

An employee at Alterra saw it unfold and called 911.

But the police were not the first to arrive. Within minutes, the employee told the Journal Sentinel, two ATF agents showed up, stood coolly at the end of the counter and cited over their radio all the weapons that were missing from the vehicle. The employee asked not to be named because no one is charged in the gun theft.

Later that night, Sept. 13, police found the suspects' vehicle, arrested two men and brought two others in for questioning. But there was no sign of the stolen guns.

The case against the men suspected of stealing the guns was flawed. The Alterra employee told the Journal Sentinel he was asked to identify one of the men and picked him out from a group of mug shots.

"There was no question," the employee said. "I just knew."

But according to the police report, he was wrong. The only other witness had a long rap sheet and may have been involved in the crime himself. With no physical evidence, the prosecutor said there wasn't enough to charge, and police let the two men go.

The next day, one of the guns showed up at the ATF's doorstep.

Marquise Jones, 19, arrived at Fearless Distributing and sold the ATF its own gun, along with a second, for $1,400, according to court documents. But Jones would not be arrested for two months.

The Fearless operation continued running. On Sept. 19 and 20, the agents purchased more guns from Childs and Gladney, as well as four others, records show.

Store left unprotected

On Oct. 3, the agent in charge of the operation locked up, set the alarm and left, not to return for a solid week, according to police reports. The problem was there was no alarm, according to the building's landlord. He told the Journal Sentinel the alarm system ran through the phone line, which he had taken out in February with the approval of those running the store.

On Oct. 7, a Sunday, someone knocked out the power to the building, breaking off the electrical meter outside, according to a We Energies official quoted in a police report. Now there was no alarm and no power, including for the surveillance cameras inside.

The following night, a neighbor saw a person coming out of the store carrying something, which was dropped with the person uttering an obscenity. The neighbor didn't think much of it and went in her house.

The next day, a Tuesday, the neighbor saw something a little odd around noon: The door to the business was propped open with a single shoe. That night, the neighbor noticed the door was closed. Like the night before, she didn't consider any of it suspicious enough to call police.

A little later that evening, a different neighbor spotted three men in a car and another driving a U-Haul truck.

They claimed to be moving into the neighborhood, but the house they said they were moving into was owned by a longtime friend of the man. He took down the license plate of the car and reported it to police.

The report says officers drove through the neighborhood but saw nothing.

Burglary reported

The burglary was reported to police the morning of Oct. 10, three days after the power was knocked out.

The report lists nearly $40,000 in stolen clothing, shoes, drug equipment, wigs, televisions and "misc. items of significant value." It does not say if the ATF's high-end surveillance equipment, any weapons or other law enforcement gear was taken.

The burglary was reported about 11 a.m. Around the same time, an unidentified person, whom sources said was a metal scavenger, walked into the District 7 station and dropped off a ballistic shield emblazoned with the words "ATF." It is unclear if that shield was stolen in the burglary.

The agents said a chain and lock had been cut to get through a fence and into the back area outside the building that housed Fearless Distributing. But the Milwaukee police detective who investigated the break-in could not find the chain or lock.

Detective Robert St. Onge noted in his report entry was made with little effort.

"There was no deadbolt on this door so it didn't take too much prying to open this door and it caused very little damage to the door except scratches," he wrote.

In his report, St. Onge noted the burglars emptied the skull-shaped bowl that had been filled with the names of customers hoping to win the free TV. The report said it was "as if the actor(s) had their name in the skull and didn't want it left in there."

The building's owner, David Salkin, was called. He told the Journal Sentinel he was in shock from the moment he arrived. For the first time, he learned from the ATF that it had been using his store for an undercover operation. But agents wouldn't tell him what it was about. He assumed it had to do with selling counterfeit goods.

According to the police report, the undercover agent checked with the burglar alarm company ADT and was told it had not received an alarm after the break-in. Salkin said he was then blamed by the ATF agents for taking out the phone line.

Security experts say sophisticated systems can operate even without phone lines and electricity and that those who are serious about security will often have multiple systems in place.

"It's all about layers, and having alternative layers is definitely better than one," said Steve Shapiro, vice president of product solutions for ADT.

ADT representatives would not comment on what systems, if any, were in place at the Fearless storefront.

In the hours after the burglary came to light, Salkin was rattled by the fact that no one was in custody. His last name was in big letters on the side of the building, but none of the agents acted as if the incident was a big deal.

"They were all happy go lucky and joking about it," Salkin said.

Break-in admitted

The license plate given to police by the neighbor was traced to a car owned by Gladney. Agents and Milwaukee police knocked on his door two days after the burglary was reported. They found jeans and other clothing that had been stolen.

In an interview with police, Gladney confessed. He "admitted to entering the business after it was closed . . . stated he did this on two occasions," the report says.

Three days later, Gladney was charged in state court with five counts of illegal possession of a firearm - the charges related to him selling the guns from Gander Mountain and elsewhere to the agents. But no burglary charges were filed. The police reports do not say if the case was presented to the district attorney's office. That information is typically included in such reports.

Asked why the burglary hasn't been charged, Milwaukee County District Attorney John Chisholm declined to comment.

Legal experts say prosecutors may withhold charges for a variety of reasons, including as part of a deal for cooperation.

"It may be they are waiting to see how the first round of cases go and then file additional charges," said Levenson, the former federal prosecutor.

Gladney is scheduled to enter a guilty plea in early March and is in jail. His attorney, Jimmy Toran, declined to comment on the burglary.

A few weeks after Gladney confessed, police searched the home of Childs and found stolen goods. Among the goods was a Mossberg shotgun, similar to the one bought in September by ATF agents in the sting. Childs also confessed that he participated in the burglary.

Childs was charged in federal court with selling guns and drugs. He has agreed to plead guilty and is behind bars.

Because of earlier drug-dealing convictions, Childs could be sentenced as an armed career criminal and get a minimum of 15 years in prison. In such cases, prosecutors often bring all possible charges to use as leverage. However, Childs is not charged with the burglary or possessing the Mossberg shotgun.

U.S. Attorney James Santelle, whose office is handling the federal charges, did not return a call for comment.

Childs' attorney, Chris Bailey, said he knows his client admitted to the burglary. He said he has not spoken to prosecutors about that, but given the time that Childs faces, Bailey said he isn't surprised they passed on the burglary or the Mossberg shotgun.

Levenson noted that charging Childs with possessing the Mossberg shotgun also could have required ATF to disclose embarrassing details of the burglary.

"If these guys are this sloppy, this careless, this nonchalant, the jurors might ask, 'Do we really trust the other evidence in this case?' " she said. "These agents have given the defense counsel a lot of ammunition."

***

ATF tries to settle with landlord

Since the Journal Sentinel's original story ran, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives has reached out to its former landlord, David Salkin, who says the agency owes him about $15,000 because of damage to his building, unpaid utility bills and lost rent.

The agency, which maintained the amount was much lower, was criticized by U.S. Sen. Ron Johnson (R-Wis.) and others for the way it handled the situation.

The agency now says it is interested in expediting his claim, according to Salkin.

But he is reserving judgment. When Salkin pressed his claim late last year, an ATF attorney warned him to stop contacting the agency or it may be considered threatening a federal agent.

"I am suspicious," Salkin said of the agency's overture. "They have done this before."

Milwaukee Ald. Nik Kovac, who represents the area, said residents remain concerned the ATF drew in drug dealers and gun sellers. Kovac expects to meet with federal officials for answers this week.

"They (the ATF) need to come as clean as possible so they can be held accountable," Kovac said. "Unless the operation is still active, we have the right to know."

John Diedrich thumbnail
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.

Raquel Rutledge thumbnail
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.

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