U.S. Judge Refuses to Deport Former Top Mexican Official : Law: Jurist says there is insufficient evidence to prove that ex-deputy attorney general embezzled funds. Ruiz Massieu is also accused of covering up probe of his brother’s assassination.

U.S. officials have again been thwarted in their bid to deport a former high-ranking Mexican law enforcement officer charged in his country with embezzlement and covering up a political assassination case.

U.S. Magistrate Ronald Hedges in Newark, N.J., ruled on Monday that U.S. and Mexican authorities had failed to produce sufficient evidence that Mario Ruiz Massieu, 44, stole more than $200,000 in funds seized by his office from drug dealers or that he embezzled other money from the Mexican government.

Earlier, Hedges said that there was insufficient evidence to deport Ruiz Massieu, the former Mexican deputy attorney general, in connection with an alleged assassination cover-up. The rulings put more strain on U.S.-Mexican relations and increase the chance that Ruiz Massieu might go free.

Ruiz Massieu’s case has taken on large proportions because Mexico--often criticized in the past by U.S. officials for lacking aggressiveness in pursuit of drug crimes--is now seeking to move against an allegedly corrupt former official and is encountering obstacles in the United States.

The U.S. government, acting at Mexico’s behest, has refiled the assassination cover-up case with some additional testimony and has asked for another ruling from Hedges, which is expected soon.

The Mexican attorney general’s office reacted with indignation to Hedges’ latest decision, calling it “unacceptable.” In a statement issued late Monday, it indicated that both countries will continue to work together on new strategies to win the extradition.

Justice Department officials had no comment on the ruling.

But Cathy Fleming, Ruiz Massieu’s attorney, said she was “very pleased” and hopes her client will be freed from federal custody if Hedges again rejects the government’s case.

Mexico has been seeking the return of Ruiz Massieu on charges that he embezzled $750,000 while he was Mexico’s No. 2 law enforcement official from April to November of last year. Ruiz Massieu also was accused of engaging in a cover-up while investigating the assassination last year of his brother, a top official in Mexico’s ruling party.

However, during four days of hearings last month, prosecutors did not show a clear connection between unaccounted-for Mexican funds and much larger sums that Ruiz Massieu deposited in his personal bank accounts, Hedges said.

In June, the magistrate found that Mexican evidence against the defendant in the political assassination case had been obtained by torturing other suspects, and he rejected his extradition on those grounds.

If the rulings on Ruiz Massieu are not reversed, the United States could institute new deportation proceedings against him based on U.S. currency violations, a government source said. Ruiz Massieu was arrested at Newark International Airport in March after failing to declare most of $40,000 in currency he was carrying. He was preparing to board a flight for Madrid.

Mexico charged Ruiz Massieu with obstruction of justice for allegedly hiding the role of former President Carlos Salinas de Gortari’s brother Raul in last September’s assassination of Ruiz Massieu’s brother, Francisco.

Ruiz Massieu enjoyed a reputation as a crusading reformer until he abruptly resigned in November. The U.S. Customs Service, in cooperation with Mexican investigators, subsequently discovered more than $9 million stashed in Texas bank accounts in his name, which Mexican officials have said may represent payoffs to him from police officials. The police, in turn, received payoffs from drug lords to protect cocaine trafficking, officials said.

In Monday’s ruling, Hedges acknowledged that Ruiz Massieu “did not account for any funds in the proper manner” before he resigned.

But he added: “I am not satisfied that there is a reasonable correlation” between deposits in Ruiz Massieu’s personal accounts and money missing from his office.

Times staff writer Mark Fineman in Mexico City contributed to this report.