Drug Informant: Did He Stray Over Law’s Fine Line?

George Melvin Stephens had it all, and he got it quick. At age 26 he had a successful insurance business, the company of beautiful women, houses in Chatsworth and Malibu, expensive cars and a mink coat that stretched from his broad shoulders to the tops of his eel-skin cowboy boots.

Stephens also got to play “Miami Vice” for the Los Angeles Police Department. For almost two years he worked as a police informant, traveling throughout the country and across the border to Mexico City to infiltrate drug conspiracies.

Stephens agreed to become an undercover informant in early 1984, when authorities linked him to cocaine smugglers in Brownsville, Tex. He was offered a deal. If he helped police, his indictment would be delayed and prosecutors would recommend probation instead of prison.

The arrangement suited both sides--at least until this past March, when Stephens was stopped in New Mexico during one of his undercover investigations and 50 pounds of cocaine was found in his luggage.

Up to that time, Los Angeles police credited Stephens with helping them bust 10 drug-smuggling operations, resulting in the seizure of more than 250 pounds of cocaine and almost $1 million in drug profits.

‘Very Productive’

“We had a lot of great informants,” Detective Jerry Marvel said, “but George, . . . with the image he presented as far as having a lot of money, women, things of this nature, the whole scenario made it very productive for law enforcement to utilize him as an informant.”

As for Stephens, he enjoyed playing detective well enough to spend tens of thousands of dollars of his own money on the investigations--on hotel rooms, plane tickets and even an airplane. With characteristic cockiness, he suggested many trips out-of-state to chase drugs dealers, offering to pay his own way.

But all along there was a ground rule. Stephens had to remain on the right side of the law while he convinced drug dealers that he was a partner in crime.

The line was sometimes fine, and authorities said Stephens crossed it March 20, when U.S. Customs agents searched a single-engine plane in Roswell, N.M., and discovered the cocaine in his three suitcases. When the agents called Los Angeles police and learned Stephens was not authorized to carry drugs, they were convinced he was pulling a double-cross and dealing cocaine while working as an informant.

Operation Botched

As a result of Stephens’ getting caught with drugs, an undercover operation aimed at halting the weekly flow of 230 pounds of cocaine into Los Angeles was hopelessly botched, and a once-valuable police informant is behind bars in a Houston jail.

After the New Mexico incident, Stephens’ deal with police was off.

According to his attorney, Stephens plans to plead guilty Tuesday to conspiracy charges in connection with the prior Brownsville case.

Now, instead of probation, the millionaire informant faces up to 15 years in prison.

It is not unusual for law enforcement agencies to use criminal suspects to infiltrate drug-smuggling operations, burglary rings or other organized crime groups that might be suspicious of outsiders. But Stephens’ case illustrates the risk in using such informants.

Testimony and court documents obtained by The Times in the wake of Stephens’ arrest revealed that he was given considerable freedom to travel and meet drug dealers without police supervision.

Stephens, in letters and in telephone interviews, admitted that cocaine was in his luggage, but said he was forced to accept the drugs by a group of Colombian drug smugglers in Miami that he was asked to infiltrate. He was returning from Miami when he was arrested in New Mexico.

Stephens claims Los Angeles police dumped him because they were afraid to admit that they once sent him to Mexico on a case without notifying federal authorities.

“Jerry (Marvel) always told me to do what I had to do to get the job done,” Stephens said. “How do they think I broke all those drug rings, by taking Colombians out to dinner?”

“I worked my butt off for them . . . ,” Stephens said. “I had houses and cars. Know what I got left? Some of my furniture and my clothes. I wouldn’t even have been in Miami if they hadn’t sent me. I risked my life and they want to put me in jail for 15 years. Is that fair?”

In an interview last month, Capt. Bob Blanchard, the head of the Los Angeles police narcotics division, denied that the LAPD sent informants out of the country on assignment. “We have not knowingly sent anybody out of the country to work a case,” he said.

Testimony to Contrary

When told that Marvel testified that he had sent Stephens to Mexico, however, Blanchard said there is nothing to stop informants from traveling outside the United States if they do not violate conditions of parole or probation and “if they obeyed the laws.”

Blanchard declined to elaborate on department policy on the use of informants, except to say that narcotics officers must keep superiors informed on how individual informants are being used.

Cmdr. William Booth, LAPD spokesman, said the department has guidelines on how informants are to be used, but added there are “many different scenarios,” depending on the individual’s legal status and the nature of the criminal activity about which the person is attempting to gather information.

“It is not a written policy as such, but there are controls,” Booth said.

Although he, too, declined to speak specifically about Stephens’ role with the LAPD, Booth said it would be not be improper for an informant, “on his or her own volition,” to travel to Mexico and gather information on suspected drug smugglers.

States General Rule

An informant under police surveillance may be forced to take possession of drugs if his life is threatened or to maintain his cover, Booth said. But he added that in general it would not be proper for informants to “violate any laws,” including the unauthorized possession of drugs or weapons.

“They are not sworn officers,” Booth said.

Investigators with the FBI, U.S. Drug Enforcement Administration and two Los Angeles area police departments said it is improper for local police to send informants outside their jurisdictions without notifying federal agencies. To do so, they said, could jeopardize ongoing investigations.

But, as one DEA agent said, “That kind of thing is done all the time.”

“We do step on each others’ toes. Cases are bungled,” said Kenneth Magidson, a prosecutor with the Houston-based Gulf Coast Drug Task Force. “Look at all the agencies involved. You got the police, the FBI, the DEA, Customs, IRS, ATF (the federal Bureau of Alcohol, Tobacco and Firearms), the Coast Guard, the U.S. marshals, the State Department. It’s gotten very confusing.”

“You can’t tell everybody everything and as a result there are risks involved,” Magidson said. “Cases are screwed up, but I don’t think it’s gotten to the point that it’s seriously hampered law enforcement.”

‘Cut Own Throat’

Larry Finder, another prosecutor with the task force, said Stephens cut his own throat when he failed to tell police before beginning his return flight from Miami to Los Angeles that he had taken cocaine with him.

“A man who’s going to work with law enforcement is going to work with us all the way and is going to be truthful,” Finder said. “And if he’s going to go behind our back and be a crook and be a doper, no deal.

“He had the perfect cover. He successfully participated in cases with the Los Angeles Police Department and was in a position to make a score for himself. Even if he was caught with the dope he could say he was bringing it back to Jerry Marvel.”

“Undercover agents have to act within the scope of their authority,” Finder added. “Once you leave the scope of your authority you’re on what the law calls a frolic. And that’s what Stephens did. He was on a frolic.”

Friends and business associates contend that Stephens’ entire life was a frolic in recent years. His hillside home in Chatsworth had stained-glass windows and a swimming pool running through the living room. Neighbors said Stephens enjoyed entertaining guests, preferably women, and those who occasionally spotted him driving a motorcycle while clad in a white jacket and scarf took to calling Stephens the “White Knight.”

He had a horse called “Nifty” and an exotic parrot named “Felix.” He cruised West Los Angeles nightclubs and at one time or another owned a white Rolls Royce, a blue Cadillac limousine and a Porsche. In court records, he listed his net worth, despite debts of $700,000, at $1.2 million.

Stephens’ work as an undercover agent fit his fast and lavish life style, and only a select few knew that Stephens was up to more than selling insurance.

“He enjoyed playing cops and robbers,” a close friend said. “He even bought Marvel a beeper so he could get ahold of him right away. Marvel said George used to call him 10 times a day.”

A police associate of Marvel said the informant’s wide-eyed enthusiasm often got out of hand. “Quite frankly, Stephens was a bit of a pest,” the officer said.

Stephens was raised in the San Fernando Valley, the son of factory workers. He pumped gas during high school to earn enough money to buy clothes and a van. He was meticulous about his appearance and physique. He was a catcher on the baseball team and a defensive end on the football team at Reseda High School.

Sets Up Own Business

Upon graduation he sold tires and spent six months working for a Woodland Hills mortgage broker. In 1981, at age 23, Stephens set up his own insurance business in Woodland Hills. Farmers Insurance named it Agency-of-the-Year in 1985 and rewarded him with a 2-foot-tall trophy.

Even those building a criminal case against him were impressed by the sales ability of the glib, personable Stephens.

“He not only was a good salesman, but he was able to parlay house purchases . . . one house into the next into the next,” Magidson said. “He probably was one hell of an insurance salesman.”

Police also say Stephens was using cocaine by 1982.

Stephens will not talk about his alleged drug use, but he blames his problems with the law on a Sylmar man who was one of seven people arrested in the February, 1984, seizure of 250 pounds of cocaine in Brownsville. Texas authorities said the defendants told them that they were working with 15 other people in the Los Angeles area, including Stephens.

According to the indictment in that case, Stephens arranged for the Sylmar man to borrow $95,000 to buy a plane to bring Colombian cocaine to Los Angeles. About 500 pounds of the drug was smuggled through Van Nuys and Pomona airports during the 1984 Christmas holiday, authorities said.

Turns Informant

Faced with the prospect of a federal indictment on conspiracy and drug importation charges, Stephens turned informant. The agreement was that federal prosecutors would delay indicting him for 18 months and he then would plead guilty to one count of conspiracy.

“He said that he did not want to go to the penitentiary,” Finder recalled. “We said we wouldn’t promise him anything. But if he would show his good faith and work with the LAPD, in giving them drug trafficking information and helping them out in their investigations, the LAPD would make that known to prosecutors.

“We told him what our responsibilities were, which would be few, and his, which would be great. He said fine, he would do that.”

The supervisors of Marvel, the detective to whom Stephens was assigned, would not permit him to be interviewed. But during a July pretrial hearing for Stephens in Houston, Marvel testified that Stephens fed him information not only about drug deals, but also about firearms and money laundering. Stephens was not paid for most of his expenses.

Marvel confirmed that he once sent Stephens to Mexico City to negotiate with corrupt Mexican customs officials for the safe transport of cocaine through Mexico. He also said he considered arranging for Stephens to marry the niece of a Colombian drug smuggler to further the informant’s connections.

Miami Trip Authorized

The trip to Miami this spring was authorized after Stephens told him Colombians there were planning to smuggle 230 pounds of cocaine a week into Los Angeles, the detective testified.

“The original trip was for . . . a show-and-tell,” Marvel said. “George was going to take the airplane and the pilot to Miami, meet with Colombians, show them that they had the aircraft and they had the capability of transporting a large amount of cocaine from Miami to Los Angeles.”

There were no plans to bring cocaine back from Miami, he said.

Stephens was instructed to take possession of drugs only if an undercover officer was present or if he believed “it is dangerous or is going to completely blow his whole cover” if he refused drugs pushed on him, Marvel said.

“I don’t want him to get himself killed out there,” he testified.

Los Angeles police were to supply the pilot--another informant--but Stephens bought the plane for the trip himself, according to the testimony in Texas.

Stephens gave a suspected Los Angeles drug smuggler $20,000 in cash and a $15,000 bad check to buy a 1979 Aero Commander, scribbling the bill of sale on hotel stationery, according to his attorney, Paul Kennedy.

Transponder on Board

Unknown to Stephens or Los Angeles police, the plane had been used several months earlier to smuggle marijuana into the United States, and Customs agents planted a transponder, or electronic tracking device, on it.

The transponder eventually led to Stephens’ arrest.

Stephens took a commercial flight out of Los Angeles on a Saturday night, March 15, and checked into the Omni Hotel in Miami Beach. The other informant, Clarence Kleinshans, 53, of Woodland Hills, flew the Aero Commander to Florida, authorities said.

Stephens, who does not speak Spanish, was met in Miami by George Bosch Jr., 29, of Los Angeles, who served as an interpreter, police said. (Bosch, a private investigator, was indicted in an unrelated case in Los Angeles last month for allegedly helping launder drug profits.)

During a meeting at a hotel in Miami, Stephens said, the Colombians asked him when his pilot would be ready to begin flying cocaine to Los Angeles.

“I told them, ‘Anytime. We could take them right now,’ ” Stephens said. “I didn’t have any DEA there. I didn’t have LAPD. I didn’t have anybody there . . . I just did what I thought I had to do at that moment.”

Given Loaded Bags

Stephens said the Colombians took his bags and returned them that night, and that they were heavy when he loaded them into his rented BMW.

“I was positive there was cocaine in there,” he said.

Stephens said he made no attempt to call Marvel from the hotel because he feared the telephones were tapped. He said he did not tell Kleinshans that drugs were in the luggage because he had only known the pilot a few days and did not trust him.

He said he later tried to call Marvel when the plane made a refueling stop in Lufkin, Tex., but got no answer. Police said telephone records confirmed that calls were made from a pay phone there.

Customs agents, who had been tracking the plane from Florida, stopped Stephens and Kleinshans when the Aero Commander subsequently rolled to a halt at the Roswell airport, a stop not listed in the flight plan. Stephens’ career as a police informant was nearly finished.

When the agents asked to search the plane, Stephens balked, suggesting instead that they telephone Marvel.

Marvel testified that he laughed when Kleinshans told him over the phone that federal customs agents wanted to search the plane. “I said, ‘Well, tell them to go ahead and search the airplane. You don’t have any dope on it, do you?’ ” Marvel said. “Kleinshans said, ‘No, we don’t have any dope.’ ”

Told ‘I Don’t Know’

But when he asked Stephens the same question, Marvel said, his prize informant replied, “I don’t know.”

Experience told Marvel the real answer was “yes.”

In addition to the cocaine in Stephens’ luggage, customs agents found gram vials of the drug in his purse, according to the Texas records. Such vials are commonly used for personal consumption.

“The first thing I do is call up Marvel and say, ‘What the hell is going on?’ ” recalled prosecutor Magidson. “ ‘Did you authorize this? Was that guy supposed to have drugs on the plane?’

“Marvel says, ‘No, way. No, he wasn’t.’ ”

At the preliminary hearing, U.S. Magistrate Calvin Botley questioned why investigators decided to arrest Stephens for 50 pounds of cocaine, jeopardizing an investigation that could have prevented the importation of 230 pounds of drugs a week into Los Angeles.

“This case troubles me,” Magistrate Botley told prosecutors and drug task force agents at the hearing. “We’re talking about the possibility of getting information on drug trafficking activities up to several hundred pounds a month, which is a huge operation, which is the essence of why your organization exists: to stop those major drug trafficking activities . . .

Expresses Reservations

“I’ll be very candid with you. My concern here now is whether this man has cooperated to an extent, whether he has been used up, his usefulness has been used up, and now he’s being thrown in for the catch, or whether, in all fairness, he went out given a job to do and was having a private deal on the sideline.”

Authorities will not say whether they now suspect that Stephens was dealing in drugs all along.

Faced with the confusion caused by Stephens’ status as a police informant, and lack of proof that Stephens intended to sell the drugs, prosecutors decided to drop the New Mexico case and merely hold Stephens on the Brownsville charges. The case against Kleinshans was dismissed.

Stephens’ half-brother, attorney Thomas Murrow, complained recently that Stephens was “used” by police.

“He wasn’t just an informant for the police,” Murrow said. “He was doing their job for them.”

A woman who dated Stephens speculated that he may have gotten into trouble because he “has a great deal of insecurities” and was too concerned with impressing people, including Marvel.

“He was always trying to impress people, telling them, ‘I got this and I got that,’ ” the woman said. “It was never enough that he was just a nice guy.”

Magidson is less sympathetic.

“He had a way out,” Magidson said, referring to the 1984 deal that could have kept Stephens out of jail. “He had a chance, and he blew it.”