Four federal agents in Arizona have until Tuesday to explain to a judge why they should be dropped from a lawsuit which accuses them of conspiring to fabricate evidence and make maliciously false statements during an investigation of alleged drug trafficking activities by a Cochise County businessman.
The special agents –Kenneth Fletcher of Homeland Security Investigations, and Michael Aponte, Jody Napolitano, and Lori Tomes of the Drug Enforcement Administration- are the remaining individual defendants in a $5.15 million lawsuit filed in September 2019 by Loren Sheldon, longtime owner of L. Sheldon & Trucking Company.
Assistant U.S. Attorney Dennis Bastron is seeking to have the agents and their employer, the United States of America, dismissed from the case. Judge John C. Hinderaker of the U.S. District Court in Tucson has given the defendants until March 9 to supplement a motion to dismiss. In the meantime, a scheduling order signed by the judge has the case on track for a 2022 jury trial.
Court records show Sheldon, now 74, operated his trucking and heavy equipment business for more than 20 years when Fletcher said he received a tip in November 2008 that Sheldon was engaged in drug trafficking. Fletcher shared the tip with his fellow members of the Border Alliance Group (BAG) comprised of several law enforcement agencies in Cochise County.
Sheldon would not face criminal charges in connection to the BAG investigation until 2015, but the case imploded in 2017 and all charges were dismissed. All records of the arrest and failed prosecution were sealed in October 2018 by a Cochise County judge who noted, “it is now apparent there was no realistic probability the State could ever prove the charges beyond a reasonable doubt.”
What transpired between Fletcher’s initial top in 2008 tip and the clearance of Sheldon’s record nearly a decade later is the subject of the federal lawsuit which claims malicious prosecution, judicial deception by fabrication of evidence, and conspiracy to violate Sheldon’s constitutional right of due process and liberty.
A fourth claim asserts the United States of America is liable under the Federal Tort Claims Act for the negligence, wrongful acts, and/or omissions of its employees.
Among the lawsuit’s allegations is that BAG officials made no effort in 2008 to corroborate the information from Fletcher’s informant, particularly a claim of Hispanic males carrying assault rifles on Sheldon’s property or that large bales of marijuana were being loaded and unloaded there.
A search warrant was secured even though BAG members engaged in surveillance of Sheldon’s business and home never noted such activity. No drugs nor direct evidence of Sheldon’s involvement in illegal activities was found during the search.
Over the next few years, local and federal BAG members continued to surveil Sheldon to prove he was a drug trafficking “kingpin.” Then in July 2012, BAG’s investigation ramped up once again when one of Sheldon’s employees was “recruited” as an informant.
The lawsuit contends the new informant mostly provided outdated information to BAG, but Sheldon also came under suspicion of money laundering and having more than 150 guns on his property. No credible evidence was secured to support the new informant’s tip, and “continuing surveillance did not reveal any criminal activity at Plaintiff’s business or home,” the lawsuit states.
Then in February 2014, Fletcher said he received a new tip from an informant that one of Sheldon’s company trucks would have taking bales of marijuana to Tucson. No one connected to Sheldon was charged but two men were arrested when the marijuana-laden truck arrived in Tucson.
One year later, the Arizona Attorney General’s Office turned down a request by the BAG members to prosecute Sheldon. Among the reasons noted for the denial was “the attenuated nature of some of the evidence and the unreliability of the confidential informant.”
Public records show in mid-2015, BAG members were still trying to tie the businessman to drug trafficking in Cochise, Pima, and Santa Cruz counties. It was then, the lawsuit contends, that the defendants “decided to entrap Plaintiff into engaging in trafficking” and on Sept. 24, 2015, Sheldon was arrested when he delivered a dump truck to a client who was working with BAG in exchange for not being arrested for his own criminal activities.
No marijuana was found in the truck Sheldon was delivering at the time, but the arrest was used by BAG officials to request another search warrant for Sheldon’s home and business.
The lawsuit points to several statements in the affidavit attested to by Fletcher and Napolitano in support of the search warrant as half-truths and mischaracterizations of the truth. One example noted in the lawsuit it that the affidavit suggested Sheldon agreed to accept $40,000 to deliver one-half ton of marijuana but the judge is not told no marijuana was delivered.
Other examples of agents purposefully omitting exculpatory evidence is also alleged in the lawsuit, which points out that the search uncovered no cache of assault rifles, no marijuana or other evidence connecting Sheldon to drug trafficking, and no large amounts of cash in his house as an informant reportedly alleged.
The Arizona Attorney General’s Office again declined to prosecute Sheldon. Same with the U.S. Attorney’s Office for Arizona. Then BAG members turned to Cochise County Attorney Brian McIntyre in a process known as prosecutor shopping.
On Oct. 1, 2015, McIntyre’s office had DEA Agent Napolitano testify to a county grand jury about the years of investigation leading to Sheldon’s arrest. She repeated many of the details contained in the search warrant and testified about other alleged facts which were later found to be unsubstantiated or even false.
The result of Napolitano’s testimony was a 20-count felony indictment against Sheldon for offenses dating back to 2008, including conspiracy to transport marijuana, possession of marijuana for sale, and conducting an illegal enterprise through racketeering.
DEA Agent Tomes testified to a new grand jury in January 2016 after a Cochise County judge found problems with the October 2015 proceeding.
“Tomes knew the facts to which she testified were false, and that material omissions were made; or, she was reckless in her disregard of the truth,” the lawsuit contends of the second indictment issued for 16 felonies.
But Sheldon never stood trial. The case which BAG members spent years constructing took only months to fall apart when criminal defense attorney Joseph DiRoberto questioned aspects of the investigation. He also demanded recordings of purported informant conversations and to interview those witnesses.
Contreras, the prosecutor, asked for dismissal of half the charges in August 2017. Then just days before Sheldon was to stand trial the final charges were dropped in October 2017 when Contreras told the judge “the State is unable to sustain its burden of proof at this time.”
Sheldon then sued everyone involved in the BAG operation from 2008 to 2015. By then he testified his trucking business was defunct, in part because his arrest voided his ability to work on local government and military projects.
Judge Hinderaker dismissed DEA supervisory agent Michael Mans from the case last month due to insufficient evidence linking Mans to any alleged constitutional violations. Contreras was dismissed last year, as was BAG member Lt. Curtis Wilkins of the Cochise County Sheriff’s Office.