On the day he entered the federal witness protection program, Steven Kalish turned one of the longest drug sentences in American history into a deal that would let him walk out of prison in eight years a multimillionaire.
Some $20 million of the money he accumulated in a decade of distributing tons of marijuana and cocaine was his to keep, compliments of the U.S. government.When Ronald Raiton, the self-proclaimed King of Methamphetamines, was arrested and turned informant, he cut a deal with the government that not only earned him immediate freedom, but also more than $2 million in drug profits, to help start his new life.
Kalish and Raiton are two of dozens of protected witnesses who trade information to get free and stay rich.
At the same time the U.S. Justice Department is trumpeting its seizure and forfeiture policy which confiscates and keeps the assets of drug dealers, it is making deals through its Witness Security Program to give back the assets.
"When they passed the federal forfeiture law, the Justice Department ran around yelling and lobbying, saying this law hits drug dealers where it hurts, in their pocketbooks, and takes the profit out of crime," said Brenda Grantland, a California lawyer and president of an organization that protests government seizures.
"It seems it (the witness protection program) puts the profit back into crime."
According to court records and confidential federal prison documents, drug dealers, mobsters and scam artists are trading information for freedom and their money.
Phil Leonetti, a member of the Scarfo crime family in Philadelphia, made millions from extortion, bookmaking and shaking down drug dealers. He entered a witness protection and kept his money.
In New York, Salvatore Gravano, a member of the Gambino crime family, left prison for a new life and an old bank account. He bragged to inmates also in protective custody that he had at least $8 million to help him forge a new life.
Barry and Ron Waite of Everglades City, Fla., ran a ship-to-shore drug-shuttling network for Colombian cartels. They kept millions of their drug-dealing profits.
And in Fort Lauderdale, Zaile Bernstein, a former IRS agent who smuggled drugs and laundered more than $100 million for drug dealers, forfeited none of his assets after joining the program.
For these criminals and others in the witness protection program, crime was a lucrative investment that continues to pay off.
In the early days of the witness protection program, the thinking was that if federal officials promised to protect witnesses, shielding their identities and setting them up in new lives, they could entice lower-level criminals to reel in the drug lords, the Godfathers, the big-timers.
In fact, it's often the powerful leaders of crime syndicates - those with the big money - who are making deals to inform about subordinates.
When Steven Kalish was caught in 1984, he faced charges related to a $50 million drug empire. He piloted himself in a Lear jet, hobnobbing with Central and South American political officials and Colombian cocaine barons in a life that would have made James Bond jealous.
His rise was meteoric. He started as a small-time marijuana dealer but soon joined a group smuggling the drug from South America by sending small boats into international waters to meet South American ships.
By the early 1980s, the operation was using full-sized barges and a fleet of aircraft to become one of the largest smuggling organizations in American history. It became so large, Kalish testified, that he contacted Jorge Ochoa, one of the founders of the Medellin cartel, the largest and most violent of the Colombian drug organizations, to set up an alliance.
Just before he was arrested, Kalish had orchestrated two deals that brought more than a million pounds of marijuana into the United States from Colombia.
By that time, he had so much money that even with counting machines, he could not keep track. He testified that an entire room of his Tampa home was piled up with money.
He used it to grow his drug-smuggling business and to pay off police and politicians.
In May 1984, Kalish flew his Lear jet to the United States for the last time. He was arrested at the Tampa airport. As his trial began, he realized if he was convicted in all of the cases against him - and the government had plenty of witnesses - he could get life in prison plus 195 years.
So he became a government informant, testifying against all of his own subordinates. He also put the finishing touches on a long-standing case against Panamanian President Manuel Noriega, although the government's case against Noriega was strong without Kalish.
Kalish's deal: eight years in prison and a government promise not to prosecute his wife. He was required to forfeit some $3 million, a Ferrari, a yacht and some jewelry, but he kept at least $20 million.
An internal document from the Bureau of Prisons confirms that Kalish was "allowed to keep drug funds."
All of the subordinates were convicted and Kalish went off to a protected witness unit of a federal jail to serve his time.
"Kalish was the most involved, got the most money, was the most culpable," said Mina Morgan, a Tampa lawyer who represented one of Kalish's underlings.
Another drug case that the government used Kalish for fell apart for that reason, according to Charles Griffin, a Baton Rouge attorney. Griffin said Kalish's testimony wasn't effective and 18 of 22 defendants were acquitted.
"They didn't accept the shark sitting there devouring the minnows. He's a guy who admits he's a top guy in the organization, the government is letting him keep millions of dollars, and he's snitching on the guys who off-loaded the dope."
Kalish is now free, and supposedly living an anonymous life outside of the witness program, which he quit.
Ronald Raiton earned millions by smuggling the chemical used to make the drug "speed" into the Philadelphia area. When he was caught, the Silver Fox used the same guile by trading information for his freedom and his money, under the witness protection program.
Raiton kept his part of the bargain, becoming one of the best drug witnesses in Philadelphia history. His testimony ravaged the mob, sending two mob underbosses to prison. They eventually became government informants who started the process that brought down the murderous Nicodemo Scarfo.
For his crimes and cooperation, Raiton did 26 months in prison, then decided not to stay in the witness program. He took his $2 million, got a new name and a new social security number from the government and went to work again.
He told a reporter that he used the money to open clothing stores, a foreign car repair shop and other businesses and was living a comfortable life on his drug assets. He spent years in Northern California, then moved elsewhere.
(Distributed by Scripps Howard News Service.)