ATF's Milwaukee sting operation marred by mistakes, failures

Michael Sears

David Salkin unknowingly rented his building at 1220 E. Meinecke Ave. to the ATF, which ran an undercover sting. Burglars broke into the business, ending the operation. Salkin says the ATF owes him $15,000 for damage and unpaid utility bills. The agency has refused to pay.

A store calling itself Fearless Distributing opened early last year on an out-of-the-way street in Milwaukee's Riverwest neighborhood, offering designer clothes, athletic shoes, jewelry and drug paraphernalia.

Those working behind the counter, however, weren't interested in selling anything.

They were undercover agents from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives running a storefront sting aimed at busting criminal operations in the city by purchasing drugs and guns from felons.

But the effort to date has not snared any major dealers or taken down a gang. Instead, it resulted in a string of mistakes and failures, including an ATF military-style machine gun landing on the streets of Milwaukee and the agency having $35,000 in merchandise stolen from its store, a Journal Sentinel investigation has found.

When the 10-month operation was shut down after the burglary, agents and Milwaukee police officers who participated in the sting cleared out the store but left behind a sensitive document that listed names, vehicles and phone numbers of undercover agents.

And the agency remains locked in a battle with the building's owner, who says he is owed about $15,000 because of utility bills, holes in the walls, broken doors and damage from an overflowing toilet.

The sting resulted in charges being filed against about 30 people, most for low-level drug sales and gun possession counts. But agents had the wrong person in at least three cases. In one, they charged a man who was in prison - as a result of an earlier ATF case - at the time agents said he was selling drugs to them.

Other cases reveal that the agency's operation was paying such high prices that some defendants bought guns from stores such as Gander Mountain and sold them to the agents for a quick profit. The mistakes by agents are troubling and suggest a lack of planning and oversight, according to veterans of the ATF, who learned about the operation from the Journal Sentinel. The newspaper combed through police reports, court documents, social media and materials left behind by the ATF, all of which provide a rare view inside an undercover federal operation.

"I have never heard of those kinds of problems in an operation," said Michael Bouchard, who retired five years ago as assistant director for field operations for the agency. "Sure, small bits and pieces, but that many in one case? I have never heard of anything like that."

The agency has been on the defensive in recent years following the ill-fated Fast and Furious operation, run out of Arizona, where agents allowed sales of more than 2,000 guns to gun traffickers but then failed to keep track of most of them. Many turned up at crime scenes in Mexico, including two at the site where a U.S. border guard was killed.

And now, in the wake of the school shooting in Connecticut, as President Barack Obama considers new restrictions on guns, the agency is poised to take on additional responsibilities.

The ATF has run storefront stings in other cities, holding news conferences trumpeting results and showing off the guns and drugs seized. In Milwaukee, the operation has been kept quiet.

Residents of the area, tucked between N. Humboldt Blvd. and the Milwaukee River, are angry the ATF secretly drew drug dealers and gun-toting felons to their neighborhood, which is rallying to improve.

Federal authorities said they could not say much about the Milwaukee operation because court cases have not been resolved and the ATF is still seeking suspects.

U.S. Attorney James Santelle, whose office was briefed on plans for the sting, declined to comment on problems in the operation, focusing instead on the number of defendants charged and the 145 guns seized, including three sawed-off shotguns, 10 stolen guns and eight guns with obliterated serial numbers.

Santelle said all federal investigations are not the same and noted in this case four of the defendants are facing long prison terms for being career armed criminals.

"They are plainly a threat to the community," he said.

ATF spokesman Special Agent Robert Schmidt said he is convinced the operation didn't bring crime to the neighborhood and instead made the streets of Milwaukee safer.

Schmidt declined to say how much the sting operation cost.

"Our number one responsibility is denying criminal access to firearms and that is what we are trying to do," Schmidt said. "It is our duty to purchase these firearms to protect the American public and citizens of Milwaukee."

Suspicious operation

When David Salkin put his single-story building on E. Meinecke Ave. up for rent on Craigslist, he had a choice: Lease to a church or Fearless Distributing.

He went with the upstart Fearless operation because they were willing to take all 8,000 square feet of the building and pay the $3,200 in monthly rent in cash.

The agent who signed the lease gave Salkin a fake name and home address. Fearless was not registered with the state. The agents told Salkin their operation was new and they would get to that.

The agents, wearing shirts that said "Brew City Hustle," carved out a part of the warehouse for a showroom of jeans, coats, shoes and purses along with bongs and fake urine, for those trying to beat a drug test. They also set up an office with a cash-counting machine.

They installed secret cameras and a command center where the sting would be run.

The operation created a Facebook page and chose a striking logo - a skull with a slew of guns and knives fanned out behind - ripped off from a recent Sylvester Stallone movie, "The Expendables." The store didn't say it was in the gun business but the logo suggested that.

Agents "let it be known" they were willing to buy guns and drugs, according to documents from the circuit court charges. The records don't say how they did that, but agents had business cards with the Fearless logo and the words "Buy, sell, or trade." The cards were found by the landlord after agents left.

Salkin, who previously ran his sign business from the building, was a first-time landlord. He said he saw little of the Fearless operation because they mostly kept him out. What he saw gave him suspicions. It looked to him like they were selling counterfeit goods. But the rent was coming in - a relief after months without a tenant.

As secretive as the ATF was with Salkin, there were hints of what was going on. Workers at the tannery across the street noticed people going into the store carrying packages and guns, then coming out empty-handed. Odd for a place that was supposed to be selling things, they thought.

Mike Zielinski, a UPS driver in the area, said he asked the people running the operation if they needed to get an account for deliveries. What they said puzzled him.

"They said they wouldn't be sending or getting anything. I thought that was odd because 'distributing' is in their name. Fearless Distributing," he said. "I was wondering, what kind of business is that."

They never sent or received anything via UPS in 10 months, Zielinski said.

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