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A Criminal Enterprise: The Aging Rebel

OFF THE WIRE
agingrebel.com
Operation Black Rain, the three year long, $150 million investigation of the Mongols and other motorcycle clubs, was a crime wave punctuated by at least three deaths, at least two six-figure “drug deals,” countless smaller drug deals, numerous assaults, hate crimes, multiple firearms violations, payoffs, perjury, embezzlement, obstruction of justice, theft and even wildlife poaching. The twist is that most of these crimes were either instigated by or actually committed by employees of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Throughout several cases related to the Black Rain investigation, including racketeering cases against members of the Pagans Motorcycle Club, members of the Outlaws Motorcycle Club and cases against Mongols in Southern California, San Francisco and Colorado, the Department of Justice has maintained that biker clubs are: “Enterprises,” and “gangs” who “employ” their members to engage in, “among other things, murder, conspiracy to commit murder, attempted murder, conspiracy to traffic in narcotics, narcotics-trafficking, robbery, extortion, money laundering, and witness intimidation.”

Those charges should more properly be directed at the ATF agents and contractors who participated in Operation Black Rain and at Christopher Brunwin, the Assistant United States Attorney who supervised the case. This investigation and prosecution was so overtly contemptuous of basic human rights and both the spirit and letter of United States law that the full extent of what the ATF and the Office of the United States Attorney in Los Angeles did is still virtually impossible to grasp even after years of looking. Black Rain was Orwellian. The subsequent prosecutions were and still are Orwellian.
Secret Justice

The government has gotten away with it by making most of these cases secret. The cases are putatively secret to protect cooperating witnesses, the innocent and other, ongoing biker investigations. In truth, most of the alleged evidence in these cases has been hidden to protect employees of the ATF and personnel in the office of the U.S. Attorney in Los Angeles from embarrassment, professional censure and prosecution.

One small, and therefore comprehensible, place to begin examining the corruption that characterized Black rain and its legal aftermath is with an ATF confidential informant named Steven J. Veltus.
Veltus

Veltus is the brown sheep in a family of accountants from Racine, Wisconsin. He was arrested in November 1996 with two accomplices, fifteen pounds of marijuana and a gun. “He did his time in St. Croix,” an old girlfriend explained, “and it was very stressful for him. The man I knew back in the late 90’s would never have turned.”

Veltus changed. In 2003 he picked up five criminal charges stemming from his possession of about an ounce of crack cocaine and a pound of marijuana. Two days after he picked up the cocaine charges, in November 2003, he agreed to work for the ATF and all his legal problems went away.

Beginning in 2004, the ATF gave Veltus a paid job. A standard deal with ATF informers is $2,500 a month and immunity from prosecution. So as long as Veltus worked for the government, besides the $2,500 a month he could keep what he stole and he could continue to sell drugs. The ATF continues to protect Veltus from prosecution to this day. The ATF, according to one informed source, also employed Veltus wife, who multiple sources call “Anna Veltus” but who may be calling herself anything.
William Lazara

Alias’s abound among domestic spies. Veltus has also carried ATF supplied identification documents in the name of “William Lazara.” His wife has called herself “Anna Lazara.”

Veltus, has also bragged about bonuses he would receive based on the number of Mongols convicted on the basis of information he supplied. The shadowy nature of Veltus employment for the ATF is evident in how ATF agents have testified about that employment. Veltus went to work for the ATF in December 2003, for example. But, according to ATF Special Agent John Ciccone, he did not become a “documented ATF informant,” for another two years.
Kaos

Ciccone, who was the Case Agent on Operation Black Rain and a previous Mongols investigation called Operation Ivan, pointed Steve Veltus at the Las Vegas Mongols. At the time the chapter had three members and the President and founder of that chapter was a man named Harry “Face” Reynolds. Veltus introduced himself as “Kaos” and asked to hang around the Vegas club.

The ATF’s repeated efforts to turn Reynolds into a criminal was a multi-year, often absurd entrapment that a federal prosecutor named Reema El Amamy later called “guerilla street theater.” Veltus wore a recording device, enclosed inside a key fob, His Vegas apartment contained at least three surveillance cameras. He spent years trying to get Reynolds or other Mongols to say something incriminating. One of those loaded conversations was recorded in Reynolds’ living room on September 26, 2006. In that conversation Reynolds tried to convince Veltus to go straight. The conversation lasted for almost two hours and Reynolds clearly could not conceive that Kaos was an agent provocateur. Reynolds began by reprimanding Veltus for trying to force a prospective member of the club to break the law.
On Face Reynolds’ Couch

A representative excerpt from that 2006 conversation follows.

Kaos: What’d I do bro?

Reynolds: (Inaudible) um….

Kaos: That thing with Milo?

Reynolds: Yeah, you hurt my feelings, you both. You…you were treated shitty as a prospect, and he, last week he asked me if this club…if he would ever be asked to do anything illegal. And, I told him no, dude. The club would never make you do anything And then what happens? You take him to do something illegal….

Reynolds then told Kaos to stop trying to give him money from the crimes he was supposedly committing.

Reynolds: You don’t make money off of them, what you do, you turn around and hand it back to them….

Kaos: Yep, yep, yep.

Reynolds: . . .okay. What did you do that day you came here with an envelope for me? You hand me an envelope?

Kaos: Oh?

Reynolds: What’d I do? It ain’t mine.

Kaos: Yeah.

Reynolds: I don’t make money off you.

Kaos: Yeah.

Reynolds: You know. If we do something together fine. I…I think that’s wrong. That hurts. That really fucking hurts. Because I think brotherhood and helping each other is first. Not to mention…okay…I might be taking it a little personal, maybe I’m not, I don’t know, but uh…I need a bike. Milo needs a bike. Your bike ain’t tuned too good…

Kaos: Yeah.

Reynolds: …why is he so, you know what I mean? Hello!

Kaos: Yeah.

Reynolds: That… I don’t understand that. You know. Nothing can…here first. You’re thinking me, me, me. That’s all you think about! Me, me, me.

Kaos: Yeah.

Reynolds then told Kaos that the least he could do was not implicate the Mongols in his crimes.

Reynolds: You know what? Mongol no! Mongol no. Not to mention…and this is the other thing I’m bothered with you about…you went to do something that was illegal with your shirt on! You were wearing a support shirt. That makes it a Mongol issue. I’m just pointing it out. I won’t tell them that. But, I’m telling you that. I’m not doing nothing about it. I’m telling you….

Kaos: Alright.

Reynolds: So you can think next time. I don’t want to see that shit like that again. Because I…think about it.

Kaos: Yeah.

Reynolds: (inaudible.) You got a shirt, they ever pull you over…whatever…and they find out? Bam! Okay? They can run your name (inaudible). Oh, you were (inaudible) Mongols. (You say) I don’t know what you, you are talking about. (Cop says) Well you’re wearing that. I know you got that. Now…you fucking…. Now all the house is gonna be ready cause… now you put all of us, and not just you…. Him too! Because you know what? He seen you wearing the shirt! He’s fucking three year fucking member. Should be telling you. You shouldn’t be wearing that! What we’re doing, ‘cause I don’t check (inaudible.) When I seen you out here I knew where you were going.

Kaos: Yeah.

Reynolds: So I can’t say nothing about your shirt, right?

Kaos: Yeah, yeah.

Near the end of the conversation Reynolds tried to explain to Kaos for about the hundredth time what is important and what is not in an outlaw motorcycle club.

Kaos: Yeah, basically that was my worry. Because I need the money you know?

Reynolds: And I understand that, but you know what Kaos? And, I don’t mean to be disrespectful. Brotherhood is first. Money second.

Kaos: Yeah.

Reynolds: I could give a fuck about money. Because you know what? When I’m in…laying in the gutter…my brother’s gonna be there. Not, you know…. Money ain’t gonna float up to me.

Kaos: Yeah.

Reynolds: You know what I mean? And I’m not saying you’re like….

Kaos: But I still gotta pay my bills, bro. You know?

Reynolds: I understand that. But you’d rather (inaudible) with a prospect who was a cool dude and (inaudible)…. I understand bills need to be paid. You know what? I don’t work. She don’t work. But you don’t see me going out there fucking over my brothers, just to make a couple bucks…. Like I said…I…I’m disappointed in you but I don’t blame you because you don’t know your grounds as much. But I’m telling you right now, your grounds are, are a lot, and it’s not me…. I understand you’re worried about losing a deal but you know what? Fuck that deal. Fuck that fucking deal. This is more important, I think. And if you don’t think it’s more important then I can’t teach (inaudible). You know what I mean? This club’s first.

Kaos: Yeah.

Reynolds: This club is fucking first. I don’t care if I could make a million dollars. If it had anything to do…and I swear to God I mean that…and if it had anything to do with putting my brothers in jeopardy or anything like that I wouldn’t do it. I would not do it. Cause, I (don’t) give a fuck about money. I give a fuck about this club. We’re brothers.
Mongols Last To Know

Throughout the investigation Veltus bragged to his (non-ATF) employer, his wife’s employer (she worked for Clinique) and other non-biker friends that he was an “undercover agent.” These sources, fearing retribution by both the ATF and the Mongols Motorcycle Club, spoke to The Aging Rebel on condition that their identities would be protected. When told they probably had nothing to fear from the Mongols the sources expressed their fear of the ATF.

“He bragged the ATF handed him guns,” one source said. He bragged, “the ATF allowed him to break the law and would let him do anything.” He bragged that the ATF would help him “publish a book.” He bragged he would sell, “way more books than (former ATF agent and author) Billy Queen because he was going to have way more busts.” On another occasion he bragged he was, “Gonna have the ATF record for the most busts.”

Veltus also stated that the Mongols investigation began in July 2003. And, he openly and gleefully bragged to sources in both Las Vegas and Montana that the Mongols investigation was “all a setup.”

Most elements of that setup failed because Reynolds is, at worst, cagey or, at best, a heroically admirable man. Veltus stored untaxed cigarettes in Reynolds garage for example, and tried to get Reynolds to move the boxes so they would be covered with Reynolds’ fingerprints. On another occasion, Veltus reported that he had sold Reynolds “a pound of marijuana.” The accusation, which was completely fabricated, was repeated as a truth to the grand jury in the case and was used by Ciccone in testimony to secure wiretaps.

Multiple sources have also stated that throughout the investigation Veltus became addicted to drugs
John Carr

Veltus was directly supervised by ATF Special Agent John Carr. “I never liked that guy,” one Mongol said. “He wasn’t one of us. You know what I mean? He didn’t even like motorcycles very much.”

Carr was assigned to the Los Angeles office of the ATF. He had been involved in trying to entrap motorcycle outlaws, especially the Mongols, for almost a decade. William Queen described the ATF Agents who have spent their careers entrapping bikers like this: “John Ciccone, in his years targeting the growing OMG (for outlaw motorcycle gang) problem in Southern California, had developed a ‘gang’ of his own; ATF Special Agents John Carr, Eric Harden and Darren Kozlowski, fondly referred to as Koz, were the core. They’d all started with the bureau together and, after a decade, remained the hard chargers they’d been at the beginning of their careers.”

These ATF Agents actually do describe themselves as a “gang.”
Hero

Carr also recruited men to rob drug safe houses and then arrested them for that. He won a Federal Bar Association Medal of Valor Award in 2002. According to his commendation “Special Agent Carr earned his award for working undercover to catch violent gang members staging a series of home invasion robberies. Carr transformed his look, acquainted himself with the criminals, and pretended to help them in their operation. Carr gave the criminals false information, which led them to traps planned by the ATF. Thanks to Carr’s work, many dangerous criminals were caught and taken off our streets.” The commendation goes on to portray Carr as a hero. “John Carr risked his life working on this assignment,” the commendation states. “There are not many people who would make such a great sacrifice for others to feel safe in their homes. Through his courage, bravery and steadfast dedication, Carr prevailed in the face of danger.”

Few of his victims would agree that Hollywood Carr is heroic. Immediately before he turned his attention to Harry Reynolds, one of the dangerous criminals Carr took off our streets appealed his conviction on the grounds “that the Government violated his right to due process by supposedly directing the entire criminal enterprise from start to finish and by promoting a crime of violence.” What Carr actually did was recruit five men who were “predisposed” to sticking up a drug safe house. He supplied a drug house for them to rob and talked them into the crime in a series of meetings over more than a month. The men demonstrated their predisposition by meeting with Carr, putting on bullet proof vests and possessing firearms. When they were arrested during their final meting with Carr they were charged with “conspiracy to distribute at least five kilograms of cocaine,” “conspiracy to interfere with interstate commerce by robbery” and “possessing a firearm in furtherance of a drug trafficking crime.”

The Ninth Circuit Court rejected the appeal on the grounds that the one man who was actually convicted should have raised the issue before his trial instead of afterward. “We hold today,” the Court wrote, “as have the Second, Third, and Eighth Circuits, that a defendant waives his claim of outrageous government conduct of which he is aware if he fails to assert it in a pretrial motion to dismiss.”

The ATF had already seized a warehouse in Los Angeles for Carr to use as a cover. Reynolds thought Carr bought and sold surplus goods. For more than a year, Carr’s association with the Mongols was as Steve Veltus’ friend. Carr became Veltus’ source for contraband cigarettes.

Reynolds thought Carr was up to no good and refused to let him formally apply for membership in the club – a process called prospecting. Eventually Veltus was allowed to start another chapter, in nearby Henderson, Nevada, and Carr was allowed to patch into that chapter without going through the process of prospecting. Carr was allowed to “P-Patch” which is what the Mongols called a probationary membership. Carr paid then Mongols National President, Ruben “Doc” Cavazos $750 and Cavazos let him put on a patch.
Kids And Dads

Motorcycle outlaws have their own rigid set of laws. Just as you can get thrown out bad for sleeping with a club brother’s woman or lying or refusing to fight, members are also honor bound to observe an unbreakable paternal relationship between the man who sponsors someone for membership in the club and the man who is sponsored. In the Mongols, for as long as both men remain in the club they call each other “my Dad” and “my Kid.”

Hollywood Carr, Face Reynolds eventually learned, had set up “some sort of deal” in Vegas for September 2007. Reynolds learned that Carr had recruited his “kid” from San Bernardino, a young Mongol named Raphael Vargas “Peligrosa” Lozano, to provide “security” for whatever the deal was. Carr had also recruited a young member of Reynolds’ Vegas chapter named Ismael “Mouth” Padilla. Peligrosa was going because he owed Veltus for two cases of Carr’s discount cigarettes and this was a way to repay the debt. Padilla was offered a thousand dollars. Reynolds, who was mostly concerned about what Carr might be trying to involve his “kid” in, called Veltus and asked him about the deal. Veltus told Reynolds it was “just a deal” and told him if he was worried he could attend and Carr would pay him a thousand, too. So, Reynolds agreed.
Guerilla Street Theater

Since Carr was passing out cash Reynolds even brought his wife’s cousin’s boyfriend because he needed money, too.

The complete “drug deal” was caught on three hidden video cameras. In total, the footage is about six hours long and probably fewer than a 100 people have ever seen it all. It was never intended to be evidence in a trial. It was always meant to be evidence to present to a grand jury to get an indictment. Because in federal criminal cases the war is virtually won by the prosecution as soon as an indictment is returned. At least two things stand out about this video the moment it starts.

First for a case that cost $150 million the quality of the footage is ridiculously bad. One camera was placed right over the television so the only audio on that feed is from the Ultimate Fighting Championship Fight Night 11 which was broadcast live from the Palms Hotel and Casino. Over and over viewers hear about the amorous triumphs of Bob, and the delights of very many women, after Bob discovered Enzyte male enhancement. The footage from other feeds is either very dark or the audio is difficult to understand without listening over and over. The time stamps on the three feeds are unsynched. Events that are captured on one camera occur up to ten minutes earlier or later on the time codes of the other two cameras.
Bad Acting

Secondly, it is impossible not to notice how performative both Carr and Veltus are. Carr turns the air conditioner on and off depending on whether he wants his voice to be recorded or not. Carr, who seems to be a narcissus, takes off his shirt and flexes for the grand jurors. Veltus practically leans against one camera with an automatic pistol shoved in the small of his back. He ties a bandanna around his head and theatrically announces “Change my look a little bit in case I got to pop one of those fools.” The grand jury transcripts in this case will never be released but it seems pretty obvious that the grand jury thought they were indicting Carr and Veltus.

Both Carr and Veltus drop Face Reynolds name as many times as possible. The first Mongols to enter the room are Lozano and Padilla and the depth of their criminality is betrayed by what they talk about. “Is this smoking or non-smoking. As soon as we walked through the door we saw these three gorgeous, like fine ass bitches in skirts, I guess they work over there at that little restaurant.”

Carr replies, “Is it just you guys coming? Or Face.”

Veltus says, “Face is coming. Yeah, Face is down.”

One of the young men asks “what is the deal?”

Carr replies, “I’ll explain when Face gets here.” Then he starts pulling bullet proof vests out of a duffel bag, hands them out and instructs the young men on how to put them on. Among the charges in the Cavazos indictment is that the Mongols must be criminals because they wore bullet proof vests. Carr then tries to establish for his grand jury audience that the Mongols armed themselves for this deal. “Now hey, did somebody need a strap? Who needs one. Yeah I’m covered. You covered? Who needs one? Uh, Face’s boy?”

Lozano tries on his bullet proof vest and says, “Hey, this is nice. It even covers your fucking huevos.”
The Drug Deal

Then Face Reynolds and Caspar, his wife’s cousin’s boyfriend enter the room. Face gives Carr a very pro forma hug. Their bodies never touch. Face puts his left arm briefly around Carr while he holds him away with his right hand, pats him on the back and moves on. Reynolds nervously, immediately lights a cigarette. Carr offers Face a gun and says “You want one? You got one?” Reynolds shakes his head no. Carr asks, “Are you sure?” Reynolds mumbles, “I’m cool.” And turns his back on Carr who he clearly cannot stand. One of the video feeds says the time in Vegas is 8:49:57 and Carr immediately moves close to one of the hidden microphones. “Come here, fellas.” Then Carr tells Veltus, “Tell them what we’re going to do.” He orders the confidential informant to explain the deal in order to weaken the defense of entrapment. It is calculated. Veltus jerks his hand as if he is setting a hook in a fish.

Then Carr, who is clearly nervous, goes ahead and explains anyway. When he talks Face Reynolds has been in the room for exactly 30 seconds. “Here’s basically, the deal. This dude, I’ve dealt with him two prior times. I’ve bought like two or three from him.” It becomes 8:50:17. Reynolds has been in the room for under a minute. “He’s been cool. You know, like we’re on a personal, like friend level but Anthony stepped it up. I’m gonna pick up 33 from the guy today.” In the corner of the screen Face Reynolds cocks his head to the left and crosses his arms. The video is too dark to recognize his expression. “So when I talked to him two days ago he was cool, you know. There was nothing unusual but he was like ‘you know I’m gonna bring my boys, you know,’ which is kind of unusual because usually it’s just me and him. So that kind of gets me thinking because you know because we’re talking 33. I’m paying 16. I mean, we’re talking 500 grand. So that just gets me thinking in my head, you know, that maybe this dude’s, you know, that this dude…I just want…I don’t want too skinny a palm tree with this guy…you know on the outside chance that he wants to get like squirrely with me…I figured, you know…the presence of you dudes is gonna stand up and down. The way I’m gonna play it to him is he’s gonna come here. He’s gonna bring the shit here. We’re gonna look at all of it. We’re gonna cut every one. Make sure its all straight.” Reynolds wipes his face with one big hand then and turns his back to Carr.

Carr continues. “I’ve got the money in another room. I’m gonna take him and me. The only two. I’m not gonna let him bring anybody else. We’re going to the room. I got a counter. We’re going to count our money. The money’s straight. We’ll come back. Adios. He goes. Pack up the shit. Walk me to the car. Cause I have no doubt this dude’s is gonna bring other dudes. I mean, I would. I mean, I can understand that. But he may post them up, you know, outside or something like that. See I just want to make sure that one of two things is gonna happen. (And here Carr become histrionic.) I’m gonna come up out of here with 33 keys or I’m gonna come up out of here with my money.” He says this like bad television. Like he is auditioning for a role. It is 8:51:57. Reynolds has been in the room for about 2 minutes and ten seconds. Caspar has spent most of the time looking at pictures on the wall.

Carr continues, “And there’s nothing other than those two things that are going to happen. I just want to make sure that he’s straight with me on this. I just want to make sure that everything counts out right, you know. Like I’ve said I’ve dealt with him before. I have no issues with the dude. He’s always been straight with me so I’m not anticipating any problems. “

As Carr stood up, Veltus instructed Caspar “go ahead” and handed him a gun. Caspar looks at it like a child with a toy and promptly drops one of the bullets on the floor. Carr continues to prattle on about “I don’t anticipate any problems.”

As one of the Mongols in that room that night later explained, “I’m thinking you are gonna go into another room alone? Then what are we doing here?”
Dope On A Bed

What they were all there for was to appear to incriminate themselves.

At 8:57:50, according to the video feed with both audio and video, Carr got a phone call from his “drug supplier.” The drug supplier, Carr announces, looks “Mexican but he’s like part Sicilian.” So he could be affiliated with at least two of the more well known Mafias. Carr said, “It’s show time.” The drug supplier was actually a Los Angeles County Sheriff’s Deputy named Tino Brancato who had a part time job as a Task Force Officer, which is to say an amateur actor, for the ATF.

While Carr and Veltus bragged to each other about the pending drug deal Padilla and Lozano continued to chatter excitedly to anyone who would listen about the pretty girls they almost talked to downstairs. “…three fine ass girls with skirts and everything! And I was like, fuck! I just died and went to heaven! Out loud, you know, like right in front of them. I go like, I don’t give a fuck. So those girls, they start talking in Spanish and I go like Que chulas (which is a demure and almost old fashioned pickup line in Spanish.) So they go “Oh shit. You speak Spanish.” And Kaos was dragging us back like, no, you gotta go that way.”
Punishment

Reynolds was later arrested and roughed up at his job, lost his job as a result, had his home wrecked, had his daughter’s room maliciously wrecked, had his motorcycle and his father’s motorcycle seized, had two truckloads of his personal possessions seized, was evicted and was eventually prosecuted for racketeering for being in that Vegas hotel room that night. The charges against him carried a penalty of 20 years to life imprisonment. The legal ordeal lasted years and he, and his family, may never recover from it.

Three weeks after the “guerilla theater “ production in the Vegas hotel room, the ATF moved Steve Veltus and his wife to Missoula, Montana. Whenever Veltus needed to make an appearance in Las Vegas or California, the ATF would fly him to Vegas on a private plane. (Private plane flights are one of the ways an investigation and prosecution of the Mongols came to cost $150 million.)
Missoula

While in Missoula, Veltus continued to be a loose cannon. He broke laws with impunity. “The ATF knew it,” a source said.

Multiple sources saw him flash a gun. He pulled a gun on a University of Montana student. He assembled a portfolio of photographs for his pending memoir. At the same time he was introducing himself to the Helena chapter of the Mongols, Veltus seemed to have been on a campaign to tell everybody in Missoula that he was secret agent. He also bragged with alarming openness that he was about to join the witness protection program under the assumed named William Lazara (the similarity to Lazarus who rose from the dead has Ciccone’s fingerprints all over it) and that he was going to retire on his “bonus money” from the Mongols case. At that time, Veltus also had a cell phone with a Boston telephone number.

He used his status as an ATF informant to commit more crimes.

Veltus’ announced retirement plan was to buy a restaurant from an old woman in Sula, Montana. He gained the woman’s trust and moved into but did not operate the establishment. Late in 2008, two months after shaking hands with the restaurant owner on the deal Veltus and his wife disappeared. He attempted to burn the restaurant down when he left but the arson was not successful. Inside, firemen and police found several pounds of marijuana and the carcass of an illegally taken elk. Veltus also stole kitchen equipment and at least $2700 in cash. The total loss to the restaurant owner was $18,000.

The restaurant owner tried to track down Veltus to sue him for the damage he had done. The pursuit quickly led to the ATF. “What do you want us to do,” John Ciccone asked the owner. The owner said she wanted to sue either Veltus or the ATF for the damage Veltus had caused. Ciccone replied, “Well that’s not gonna happen.”

A friend of the owner approached the local ATF office in Missoula and threatened to sabotage the government case against the Mongols by testifying to statements Veltus had made about it “all being a big setup.” The agent threatened the man with “prison” if he tried to publicize what he knew about the informant.

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