🦄 Investigative

Icebreaker Pt 11 – Bush/Clinton Era Customs Investigators Manuals

By Unicorn Riot

United States – Unicorn Riot obtained more than two dozen Homeland Security policy manuals including several from the 1980s and 1990s – 195 pages in all. This is the last release in our Icebreaker series.

While some of these documents have appeared elsewhere in various forms, they are helpful to give perspective on the way federal investigators break down cases.

Due to the origins of these manuals from inside the investigative section of the U.S. Treasury Department, they shed particular light on the little-understood inner workings of the U.S. financial infrastructure, such as the wire transfer systems administered by the Federal Reserve System, and money laundering investigations conducted therein.

The U.S. Customs Service, inside the Treasury Department, was one of the oldest agencies of the federal government, created by the fifth act of Congress in July 1789. USCS was split up into various components within the Department of Homeland Security in 2003. The USCS Office of Investigations, including its policy manuals, became a main component of ICE/HSI at that point.

ICE/HSI produced an informants manual in 2012, seemingly after the leaked material Unicorn Riot obtained was created, according to a FOIA obtained by GovernmentAttic.org. There are a number of references to the 1997 USCS informant manual in other Icebreaker releases, which indicates that the file was functioning as the main policy document for special agents long after USCS was disbanded.

In Icebreaker Pt 6, Unicorn Riot looked at the internal tensions within ICE and HSI. Many of the ICE HSI Special Agents in Charge (SAC) previously served in USCS. This has led anti-immigration hardliner organizations to claim that HSI is not aggressively oriented enough against immigration, due to its composition.

Icebreaker Part 11 includes the following manuals:

  • Controlled Delivery – 1997
  • Money Laundering – 1988
  • Smuggling – 1990
  • Evidence – 1997
  • Informants – 1997
  • Methods – 1990
  • Tracing Funds – 1991
  • Technical Surveillance – 1990
  • Fraud (date unknown)
  • Victims – Witnesses Assistance (date unknown)

These manuals should be helpful in charting the overall organizational trajectory and evolution of methods in a broad scope of law enforcement activity. There are many references to superseded manuals and policy directives in this collection which could likely be procured by FOIA.

Notably, these type of manuals are generally not provided to defense attorneys or put on public court dockets. Nonetheless the manuals show how sensitive affairs like informant payoffs are managed and tracked behind the scenes.

Little-known technical platforms for federal law enforcement operations like TECS (formerly Treasury Enforcement Communications System, see Icebreaker Pt 7) can be traced in their evolution by comparing the information here with the later manuals in other parts of the Icebreaker series.

#Icebreaker Series - Unicorn Riot series on ICE policy manuals

US Customs Service agent manuals

Download the full set of manuals here.

us-customs-service-agent-manuals

 

USCS OI Controlled Deliveries (1997)

17 page manual for controlled deliveries, which are for stings against smuggling organizations and expanding investigations.

p1-2: Overview.

p8-9: “Pass Throughs” are facilitated operations moving contraband around in a controlled fashion. Coordinated with the USCS Domestic Air Interdiction Coordination Center (DAICC).

p10-14: Controlled deliveries using packages like US Postal Service and FedEx.

p15: Techniques including fake materials, tracker devices and fluorescent powder.

USCS OI Evidence (1997)

p19: Overview of how to collect and log evidence.

p21-22: Logging in SEACATS and TECS (this system continued into ICE/HSI)

p31-32: Managing bulk drug evidence and destroying extra drugs before trials.

p44-52: Seized cash manangement policy (1996) covers “the Treasury Forfeiture Fund” and “the U.S. Customs Suspense Account” at the Federal Reserve Bank of New York. Includes such methods as ‘Direct Deposits at Federal Reserve Banks’ and ‘Fed Wire (Wire Transfers) Deposits’.

USCS OI Informants (1997)

For more ICE policies related to managing informants, see Icebreaker Part 5, Undercover Operations Handbook, which references this USCS document directly.

p56: Overview including ‘cooperating individuals’ and ‘confidential informants’.

p57: Characteristics of successful informants.

p58: Sources of informants: “Valuable information can be obtained by establishing personal contacts in certain fields of employment (e.g., marine and airport operators, vessel and aircraft dealers and rental agents, employees of customs brokerage firms, workers in high technology businesses and financial institutions, security officers, hotel and motel employees. Guidance in obtaining informants can be acquired through the EXODUS Command Center for Project GEMINI and the Fraud Investigations Division for Project CICERO.” These are industry liason programs. Motivations include “Money. Revenge against co-workers, business competitors, romantic interests, etc. Desire to be a law enforcement officer (LEO), to feel important, or to establish a bond with LEOs for personal gain. Desire for prosecutorial or judicial leniency-a strong motivator (i.e., “Rule 35″). Desire to perform a public service by assisting law enforcement agencies (LEAs).”

p59: Possible characteristics include “Membership in a group advocating the overthrow of the US Government or any local government. ”

p59: “Computerized criminal records queries will be conducted by the controlling agent initially and annually thereafter during the month of February in NCIC (i.e., criminal history, wants and warrants), TECS, state and local records, etc. NADDIS queries should be completed for all informants involved in narcotics investigations. ”

p59-60: The special approval categories include protected witnesses, and the ‘seven sensitive’ areas include “Members of Congress, Federal judges, members of the Executive Branch at Executive Level IV or above,” diplomats, law enforcement officials, public officials involving bribery, conflict of interest and other investigations.

p61: Undesirable or unreliable informants

p62: Managing informants who are ‘managed by controlling agents’ and ‘alternate agents’. The National Law Enforcement Communications Center (NLECC) is supposed to connect informants after hours to home phone lines of agents.

p62: How to assess abilities of informants

p63: Personal assistance agreements (see appendix D). This can include authorizing brokerage fees for money laundering: “If the informant is to retain profits, commissions, and bonuses while acting under Government direction, such an arrangement must be included in the agreement. Consideration should be given to limiting the amount of these funds by estimating the potential income an informant might legally earn by providing the same services without Government involvement. The receipt of these funds, which must be documented in Source files, ROIs, and in UC accounting records, is considered a fee to the informant (e.g., a predetermined brokerage fee or a percentage charged to launder a specific amount of currency during a certified UC operation).”

p63: Avoiding situations that “embarass the Service”: “Controlling agents are expected to interact with informants in a professional manner at all times and to refrain from behavior that might give the appearance of impropriety and thereby discredit themselves and embarrass the Service. Controlling agents will not meet or debrief informants without another LEO in attendance unless they obtain supervisory approval. ”

p64: Supervisory and IA (internal affairs) debriefings

p65: “Unsolicited, Illegally Obtained, Tainted Information”. USCS was allowed to pay informants for illegally obtained information: “The USCS may receive unsolicited evidence or information, that was illegally obtained or tainted, from an informant who is contacting Customs for the first time. When that contact is made, the ‘Instructions to Confidential Source’ checklist (see Appendix G) will be reviewed with the informant who will also be instructed not to obtain information illegally. While payments for such information are discouraged by the USCS, they are not prohibited. Before proceeding with an investigation using illegally obtained or tainted information or evidence purchased from an informant, the AUSA and the local Associate Chief Counsel must be so advised. ”

p65: “informants are not authorized access to information they did not provide. Examples of restricted information include, but are not limited to, ROIs, DEA-6s, FBI/FD 302s, Criminal Organization Charts, printouts from TECS, NADDIS, NCIC, NLETS, or any other law enforcement or intelligence retrieval system.”

p65-66: Violations of law by informants should be reviewed by senior field manager.

p66: Discovery of informants in court proceedings: “the investigative agency should protect [informants’] identities by removing them from investigations as soon as possible. If it is not practical to exclude confidential informants from the start of the investigation, then ensure that they are not alone when meeting with the violators. This will allow for a corroborative witness and may negate the need to have confidential informants testify–thereby protecting their identities. Under the Brady rule, the prosecution is often required to furnish the defense with a summary of payments to informants concerning the prosecution in which the informant will testify. However, the defense will usually attempt to obtain other information about the informant under the Federal Rules of Criminal Procedure, Rule 16. In response to such attempts, the prosecution may attempt to demonstrate to the court that such information is not relevant to the case. The Government may request the court to review any information directly related to the informant in camera,ex parte. Usually, the court will agree. If not, the case agent, the Assistant United States Attorney (AUSA) and the Associate/Assistant Chief Counsel should seek the necessary protective orders to limit access and dissemination. In rare instances, the USAO may decline prosecution rather than reveal an informant’s identity.”

p67: Outside agencies: “Special agents are authorized to work cases jointly with outside agencies who are managing their own informants. However, agents may not participate when these informants are engaged in illegal activities that have not been authorized by the outside agencies and the USAO.”

p67-68: Drug investigations with the DEA under a Memorandum of Understanding dated August 8, 1994.

p69: ‘Silent waivers’ to let informants cross into the U.S. illegally in a coordinated fashion.

p69: Managing “S” visas for non-Americans who are helping with investigations of criminal or terrorist organizations.

p69-73: Documenting informants including source numbers and source cards. “For example, a Source Number for the IA, SAC New York, would read: SA-36 NY IA.”

p72: “Documents disclosing the true name of the informant (e.g., correspondence to parole boards, judges, courts, etc.) must be mailed in a double-sealed envelope. TECS I.D.#s, FBI#s, NCIC#s, and DL#s, etc., which identify the informant must be stored in sealed envelopes in the Source file. These printouts should not be sent to HQ. ”

p72: Source file contents including payment summaries and information like witness security program.

p73: Deactivated sources should be recorded for 10 years and eventually transferred to a regional Federal Records Center for 50 years and then destroyed.

p74: Instructions to informants, see also Appendix G.

p74-75: Entrapment. “The entrapment defense is based on proving that defendants were not predisposed to commit the crimes with which they are charged but rather that they were induced to do so through trickery, persuasion, or fraud by the Government. In addition, some courts have held that predisposition involves both the desire as well as the ability (through Government involvement) to commit the crime charged. Therefore, prior to an informant’s engaging in cooperative activity with the Government, the controlling agent will explain to the informant how to elicit statements from the suspect establishing a predisposition to unlawful activity and what prohibited actions might give rise to an entrapment defense. ”

p75: Compensation of informants: “The USCS compensates its informants through: Purchases of information (POI). Purchases of Evidence (POE) for related travel expenses. Payments from the Confidential Fund. Awards of compensation (moiety). The expeditious payment of informants is critical. ”

p76-81: Authorities for compensation, and purchase of information / purchase of evidence (POI/POE). Includes a 14-point memo about the types of seizures. Also Approval levels depend on the size of the payments. Commissioners or deputy commissioners can approve payments larger than $100,000. Many different types of payments and arrangements are in this section.

p78: “After an informant reaches a cumulative ‘lifetime’ payment total of $200,000, all subsequent requests for payment must be forwarded to the Senior HQ Manager for processing.”

p81: The Confidential Fund “The Confidential Fund may be used by OI and IA and consists of monies maintained outside usual agency accounting systems and is not subject to external audit. It is a sub-allotment appropriated and administered by the Secretary of the Treasury to cover expenses for unforeseen confidential emergencies, which cannot be reimbursed through normal USCS fiscal channels (see Appendix N: Treasury Directive 33-02, Expenses for Unforeseen Confidential Emergencies, June 13, 1995) […] Confidential expenditures are authorized for: The purchase of information or evidence from individuals whose identities must remain confidential–including the development of undocumented informants. Meeting emergencies threatening the personal safety of Government employees and informants–as well as the safety of their respective families.”

p82: The fiscal year annual fund allotment is $200,000.

p82-84: Moiety claims involving forfeiture awards. “It is the policy of the USCS to pay informants either Purchase of Information, (POI), or moiety, but not both.”

p84: Funding and reimbursement for developing informants.

p86: Electronic funds transfer

p86-89: Flashroll: “A substantial sum of money used only for display in gaining the confidence of criminal suspects in connection with the specific UC activity for which it was requested. (Funds used for money laundering and paying points for services are not flashrolls.) ”

USCS OI Investigative Methods (1990)

p91: Overview: methods for obtaining evidence.

p91: Verbal evidence.

p92: Interviews and interrogations; customs polygraph.

p93: Physical evidence and searches.

p94: Administrative procedures such as smuggling subpoenas, customs export enforcement subpoenas, bank secrecy act symmons, and customs summons.

p95: Court procedures for obtaining evidence including grand juries, subpoena duces tecum via U.S. District Court, and seizures.

p96: Controlled deliveries and trash runs.

p97: Fax and telex intercepts. “Crooked exporters use the machines in their illegal exports of high technology and munitions type items, and money launderers use facsimile machines to communicate to narcotics dealers regarding currency movements and bank transactions. ”

p97-98: Questioned documents and handwriting analysis.

p98-99: Compute evidence (email, “digitalized video”)

p99-100: Physical, photographic, technical or video surveillance.

p100-103: Mail covers: anything on the outside of mail via postal inspectors. “The U.S. Postal Service maintains rigid controls and supervision with respect to the use of this important investigative technique. This is done to assure that the technique is not used indiscriminately and not as the initial or sole investigative effort in an investigation.”

p103-106: Profiles used to generate “reasonable suspicion” for example various attributes of airport travel, car rental, travel agency, courier service, hotels, financial institutions and illegal exports.

p106-110: Link analysis/charting including link association and telephone toll charting. “The TECS II TELAN system is used to process telephone call information”.

p110: Letters of rogatory, from a U.S. court to a foreign one, requesting testimony of a witness in that jurisdiction.

p111: U.S. Customs Service: ” The Treasury Enforcement Communications System (TECS) is a database system that is composed of enforcement/inspection/intelligence records and reports. TECS II users process, update, and maintain data in the system. Subject records, case data, source documentation, investigative reports, SASs, MOIRs, and many administrative tasks can all be completed using TECS II. The data can be used to meet operational requirements, enforcement research, subject identifications, and for statistical reports. TECS II has access to various other law enforcement databases, which ultimately assist Customs employees to track and identify, subject and source data.”

p111: “The Automated Commercial System (ACS) is the comprehensive commodity system of the Customs Service. Anyone who moves or releases cargo, makes entries, files protests, incurs penalties, faces a seizure, pays or obtains refunds on duties, or conducts any other international business may be of record with ACS. Proper ACS queries and analysis can result in the linking and/or association of individuals, companies, and merchandise through name similarities, addresses, importing methods, etc.”

p111: “The Regional Intelligence Division (RID), under the ARC(E), provides direction, guidance, and management to the Customs intelligence function at the Region and subordinate levels. The Division provides technical advice on all aspects of the Customs intelligence system and serves as a point of coordination and contact with the Office of Intelligence at Headquarters.”

p112: “The District I&C offices maintain vessel and private aircraft arrival/departure logs, baggage declarations, informal entries, and cargo discharge records. Some Districts have Manifest Review Units (MRU) and/or Document Analysis Units (DAU) that review manifest and/or entry documents and apply selectivity criteria and profile information to target shipments for further document review or intensive cargo examination for fraud or narcotics interdiction purposes. The Operational Analysis Staff (OAS) creates and maintains the ACS cargo selectivity database. Designated Intelligence Officers-Operations (DIO-O) inspectors and Contraband Enforcement Teams (CET) also function at many ports and are primarily concerned with narcotics interdiction.”

Other sources include customs inspectors, foreign offices located overseas, international enforcement operations, and the Customs Library in Washington, DC, which had access to LEXIS, NEXIS, Dunn and Bradstreet reports, and DIALOG. (In Icebreaker Pt 5, Unicorn Riot found that ICE can create “backstopped” false registrations in Dun & Bradstreet systems.)

p113: Customs Issuance System

p114: Customs Laboratories – six labs that can provide technical information, generally for items that are not controlled substances.

p114-115: Interpol and its National Central Bureau (NCB) entities.

p116-118: Other law enforcement agencies and public records.

p119-121: Business records and banking records.

USCS OI Methods of Tracing Funds (1991)

p123: Overview: “It is known that the large amounts of money generated by smuggling organizations, organized crime, and other illegal organizations will leave a trail of financial and business records. If this paper trail is followed, it can tell a complete story, revealing the identity of major violators, and provide the principal or corroborative evidence of a criminal offense. It also forms the basis for civil proceedings to seize and forfeit bank accounts or property purchased with the proceeds of or assets associated to illegal activities. When tracing funds or proving income, it will be difficult to find concealed money or hidden assets. Organizations and individuals will try to disguise the money and make it appear to be legitimate. The methods of exchanging wealth take many complex forms. As an investigator you will be challenged to uncover their hidden assets. If assistance is needed in tracing these hidden assets, FINCEN, and special agents from other agencies with financial investigation jurisdiction, such as the Internal Revenue Service or auditors with Customs or other agencies can be a valuable resource. This chapter presents various investigative methods and techniques for tracing funds. In addition, this chapter places more emphasis on how and where to obtain financial information and less emphasis on conducting a complex audit of an individual or business.”

p124: “In the post-Watergate era, Congress became aware that financial records were routinely obtained by the government for investigatory purposes. Often the records were simply given to agents by the financial institutions, not allowing the individual any opportunity to object to the use of the records by the government. There was nothing to prevent agents from conducting broad fishing expeditions in the financial arena, or from having unabridged access to a person’s financial records.”

p128-133: Methods of tracing funds and establishing net worth.

p134-144: Types of bank records, loans and credit systems to investigate.

p145: Other services and functions like collections, trusts, and electronic funds transfers.

p147-149: International banks operating in the U.S., Clearing House Interbank Payment System (CHIPS), Society of Worldwide Interbank Financial Telecommunications (SWIFT).

p149: “Many nations and areas of the world have a legal climate that is optimal for the laundering of ‘dirty’ money. Places such as the Cayman Islands, the Bahamas, the Netherlands Antilles, Panama, Liechtenstein and Switzerland have been used to hide currency and assets because of those nations’ strict bank secrecy laws. These laws generally prohibit banks from disclosing any information about their customers’ bank accounts.” For more about the global network of corporate shell companies, offshore banks and money laundering, See Unicorn Riot’s reports on the hacked Cayman National Isle of Man bank and the ’29 Leaks’ Formations House leak.

p149-150: “Illustration of a haven money laundering process.” Step by step review of the process.

p151: Foreign Bank Account (FBA) System, Office of Foreign Assets Control.

p151-153: Securities and commodities.

p153-154: Securities and Exchange Commission (SEC).

p155-158: US Customs Service monitoring mechanisms. “The Automated Currency Reader/Comparator (ACR/C)” which “counts and reads currency, while storing the information by denomination, serial number and series year. […] One of the most powerful capabilities of the ACR/C system is the ability to access a central database or currency databases located at other Federal Agencies to determine if seized currency has been involved in prior criminal activities.” This could also talk to FINCEN (Financial Crimes Enforcement Network) computers.

p155: “Financial Database (FDB) using TECS II” can do a lot of queries like “Currency and Monetary Instrument Reports”. See Icebreaker Pt 7 for more on TECS, an overarching system that was used by many agencies. Also “Business subject query (SQ16)” and other queries in this section.

p156: FINCEN capabilities include: “A centralized database that will allow agencies (local, state and Federal) to determine if funds seized during a money laundering investigation came from a drug ‘buy’. This screening for drug ‘buy’ money could also be accomplished through the cooperation of the banking industry, by analyzing currency being deposited into an account suspected of being used for money laundering purposes. Another way to identify drug ‘buy’ currency will be through a random screening of U.S. dollars coming back into the United States through Federal Reserve Banks. The government will be able to gain better intelligence on particular organizations that are smuggling currency out of the country, rather than placing it in the domestic financial system as part of the laundering process. ”

p156: Currency tracking: “Paper currency contains a seal showing the Federal Reserve Bank (FRB) city where the bill was originally issued. The FRB can trace paper currency to the first bank consignee if you have the serial numbers. Office of the Comptroller of the Currency (OCC): The OCC examines national banks to determine their financial condition and to determine whether the banks are in compliance with all applicable laws, rules, and regulations”

p157: “Federal Deposit Insurance Corporation (FDIC): supervises, regulates, and examines all member banks of the Federal Reserve System (FRS)” which includes “Into the safety and soundness of bank operations; For compliance with Treasury’s Currency Reporting Regulations; For bank compliance with consumer protection and civil rights laws; Of bank trust departments and electronic data processing operations; Special investigations.”

p157: Federal Home Loan Bank Board (FHLBB)

p158: National Credit Union Administration (NCUA)

p158-159: Credit reporting bureaus with different types of data.

p160: Real estate transactions, accounting, regulatory agencies and working with the IRS.

p161-162: Examining accounting records. “You will rarely reconstruct a set of records. You may be working with books and records or possibly fragments of books and records. From these you will attempt to tie the financial transactions to various kinds of criminal activity. ”

p163: Fraud investigations handbook: “Unlike other investigations which concern themselves with one individual who commits a specific violation of the immigration and naturalization laws, fraud investigations may run the gamut from an alien who single-handedly devises and executes his or her own scheme to circumvent these laws to large scale conspiracies formed for the purpose of defrauding the INS and other U.S. government agencies or departments. Increasingly, investigations of parties involved in immigration fraud develop into investigations involving other criminal activity. One major area of fraud activity is that of unscrupulous persons who assist in the preparation and submission of visa petitions, applications, and other documentation to the Service and to U.S. Consuls. They are persons who generally earn their livelihood by preying on people who want to immigrate to the U.S. or who desire to aid in the immigration of friends and relatives. In furtherance of their objectives, these individuals frequently resort to fraud, misrepresentation and other irregularities in the preparation of petitions, applications and documents, and may often be guilty of suborning witnesses to commit perjury.” For an updated version of this subject area see Icebreaker Pt 3 – Confidential Homeland Security Fugitive and Compliance Enforcement Handbooks.

p165-166: Marriage fraud and other types of relationship fraud.

p166-167: Employment, investor and asylum fraud.

p171: Origins of fraud investigations.

p172-177: How to structure the investigation for marriage and employment frauds.

p177-178: Employment and investigation frauds.

p179-180: How to report the investigations.

p180: “A Service officer may, in order to collect sufficient evidence for prosecution, wish to personally participate in a fraudulent marriage or may wish to direct that a Service informant do so.” See Icebreaker Part 5 for updated versions of ICE operations participating in fraudulent marriage stings.

p181-195: Victim Witness Assistance manual. See Icebreaker Part 8 for updated info on T and U visas that address this policy area.

This concludes Unicorn Riot’s Icebreaker series of releases of confidential federal law enforcement policy manuals. We appreciate the support of our audience in bringing these little-understood and confidential aspects of U.S. law enforcement to a broader audience. If you can support our work it will help us pursue investigations of otherwise unknown materials.

Cover image: Public domain via Archives.gov: “A view of electronic displays at the Joint Task Force 4 (JTF-4) Command Control Center, where radar data from ships, aircraft and aerostats are used to monitor traffic entering the United States. JTF-4 combines the drug interdiction efforts of the Armed Services, Customs, Drug Enforcement Administration and FBI.”

#Icebreaker Series - Unicorn Riot series on ICE policy manuals

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Published February 13, 2020
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