LAWYERS, GUNS AND MONEY
Ivan Kapetanovic says it happened "just like on TV."
As Kapetanovic and two friends--Marko Belinic and Zeljko Vusir, both Croatian citizens--strode across the parking lot of Scottsdale's Los Arcos Mall on May 31, 1991, a horde of armed federal agents swung into action.
"Down on the ground, now! You're under arrest!" they barked, surrounding the trio with a bristling display of weaponry. As bystanders scattered, unmarked cars and vans bearing more agents screeched to a halt nearby. Badges and gun barrels flashed in the sun; the click-clack of rifle bolts being pulled into firing position provided a menacing soundtrack.
There was only one thing wrong with the scene. The men in handcuffs didn't look dangerous. They just looked amused.
In fact, Kapetanovic was laughing.
"I thought it must be a joke, you know," says Kapetanovic, a naturalized Croatian immigrant who lives in Fountain Hills. He was still waiting for the punch line when police officers at Madison Street Jail in Phoenix snapped his booking photo. It shows him grinning with the kind of unrestrained mirth usually reserved for the lucky souls who match all six numbers in LOTTO.
Kapetanovic didn't have a clue about what was happening, or why. Federal agents held a press conference before they ever explained it to him.
At a nationally televised event in Phoenix following the arrest, U.S. Customs Service officials proudly announced that they had thwarted a diabolical international gunrunning scheme.
Basking in the glow of the television lights, federal agents told how a six-month undercover "sting" operation had revealed a conspiracy by the 58-year-old Kapetanovic to smuggle $500,000 worth of guns, rockets and mortars from the U.S. into war-torn Yugoslavia. The agents solemnly presented reporters with a large map, emblazoned with bold arrows detailing how Kapetanovic, Belinic and Vusir planned to secretly route arms from Phoenix and San Antonio to the Balkan state.
For attempting to violate U.S. export laws, the trio faced up to ten years in federal prison.
It was an exciting story of international intrigue, and from the details provided, it was easy to deduce that Kapetanovic was the smuggling gang's ringleader. The G-men had obviously bagged a big one.
The reality, however, was something far less glamorous.
Court records reveal that rather than capturing a sinister international ne'er-do-well, all Customs had managed to do was lock up a somewhat bewildered older gentleman; a simple, plainspoken immigrant who had never even received a traffic ticket.
The only reason Kapetanovic found himself in the dock at all, his attorney says, is because the undercover operation mounted against him wasn't motivated by a need to stop criminal activity or serve justice, but by a less lofty goal--the production of a cash payoff for the informants and federal agencies involved.
According to the government's own top witness, virtually everyone involved in the case had a stake in seeing Kapetanovic ensnared. One undercover informant was promised $100,000 if Kapetanovic could be convicted, the payoff to be drawn from the funds raised by the sale of Kapetanovic's nearly $1 million in property (which the feds could seize under racketeering laws) and the confiscation of $500,000 brought into the country from Croatia by Belinic and Vusir.
Kapetanovic, who owns a small book-publishing company in Fountain Hills, unwittingly set in motion the events that would lead to his arrest by making a few inquiries on behalf of the Croatian government about the prices of various weapons. He innocently answered a few ads in magazines like Soldier of Fortune, requesting gun catalogues and price lists.
But it was Kapetanovic's bad luck that two of the ads had been placed by government informants who quickly told Customs officials that Kapetanovic was seeking to smuggle vast amounts of weaponry to Croatian rebels, in violation of State Department rules. For a price, the informants would be willing to help capture Kapetanovic for federal agents.
A friendly man who speaks slightly broken English, Kapetanovic thus stumbled into a shadowy world he did not understand, a spy-movie realm replete with characters straight out of Central Casting: real gunrunners, former CIA agents and cloak-and-dagger undercover operatives.
Over the next five months, federal agents would tape hundreds of hours of conversations between Kapetanovic and this motley crew, in which the informants can be heard working overtime to convince him to buy and illegally export weapons.
While U.S. Customs officials and the U.S. Attorney's Office refused to discuss details of the case, transcripts of the taped conversations obtained by New Times suggest that the agents deliberately led Kapetanovic down the primrose path--pushing him toward a crime he did not want to commit.
The term "gunrunner" conjures up an image of a greedy, deceitful merchant of death. In this instance, however, it was the men with badges and their paid informants--not Kapetanovic--who were motivated by a lust for riches, and who were willing to lie and manipulate to achieve their ends. They misled Kapetanovic, played off his emotions and patriotism and, finally, used a thinly veiled threat of violence in an effort to entice him into breaking the law.
But the transcripts also show that despite the feds' best efforts, neither Kapetanovic nor his friends could ever be persuaded to purchase or smuggle a single gun. No money ever changed hands and no formal agreement was made.
The lack of evidence was clearly evident at Kapetanovic's trial, where he was acquitted of all charges.
His battle, however, did not stop with the verdict. Customs officials, having spent what one source close to the investigation says is $1 million on the undercover sting, seem to have been as eager as their paid informants to capture a financial windfall--so eager that they continued to pursue the forfeiture of Kapetanovic's property even after he was acquitted of any crime.
"Plain and simple, you have the profit motive working in this case," says Kapetanovic's attorney, Chicago lawyer Michael Goode. "This is just another example of how policing agencies can get out of hand when there are dollars on the line.
"Ivan actually got lucky. He survived. Most of the time, when the powerful jaws of the federal government come down on one poor individual, there is only one possible outcome: The individual gets eaten."
@body:Ivan Kapetanovic didn't know much about guns. But by late 1990, he knew that friends back in his native Croatia had to have some if they were going to successfully kill "communists." And that was enough to spur him into action.
Kapetanovic is a solid, roughhewn man, yet he possesses jolly eyes that twinkle out from below thick, bushy eyebrows. He has an engaging smile, and is quick to clasp a hand and wink at a joke. Booming laughter punctuates his sentences. It is only when speaking of "the communists" that his mood darkens, his eyes dimming and face knitting into an angry mask.
Communism, and the hatred of it, has been at the locus of Kapetanovic's life. His father was tortured and killed by the Soviets in 1944, and as a 22-year-old, he fled Yugoslavia in 1956, on the eve of the ill-fated Hungarian uprising and the resulting tumult in Eastern Europe. He departed his homeland in the dead of night, leaving his wife and small children behind.
It was the height of the Cold War, and the idealistic young Kapetanovic believed it was his duty to fight the "forces of repression." He soon popped up at an American military base in Italy, begging for weapons to launch anticommunist revolutions.
"They, of course, laughed at me silly," he remembers, shaking his head and speaking with the thick accent of his homeland. "A kid knocking on their door asking for guns . . . they must have thought I was crazy."
He soon gave up his grand revolutionary plans for a goal closer to heart and home. He made his way to Belgium, where, ironically, he obtained the help of that country's socialist government in getting his family out of Yugoslavia. Kapetanovic then applied for a visa to Canada, and moved on to the United States--where he became a citizen and, he says, began living the American dream.
He bought a small Fountain Hills book-publishing company, and it did well--printing a wide range of volumes, from textbooks to slickly packaged surveys of Croatian cooking. Well enough, in fact, that by 1990, when all of Eastern Europe was opening up to the West, Kapetanovic could consider branching out, bringing the "great fruit" of American capitalism to his liberated homeland.
On a November 1990 visit to Croatia, Kapetanovic met Marko Belinic, an importer of military surplus clothing who had ties to the Croatian government. The two bantered about ideas for joint business opportunities, but the discussion soon turned to the coming political and military storm.
Kapetanovic, Belinic and several high-level government ministers spent time talking about how Croatia--then still a semiautonomous region under the control of Yugoslavia--was poised, along with other nascent Balkan states, to begin a bloody breakaway from the Serbian-dominated Yugoslavian government. The dictatorship that had bound Croatia to the rest of Yugoslavia, and the hated Serbs, had disappeared. A complete split, they all agreed, was inevitable.
But there were dangers ahead. The Serbs were massing on the Croatian border, and had raided Croatia's armories--depriving the Croats of nearly their entire arsenal. Since Croatia had virtually no munitions factories, it would have to import arms in the event of war.
According to Kapetanovic, Croatia's interior minister asked him to return to America and inquire about the prices of guns and other supplies, as well as approach rifle and bullet manufacturers about the possibility of setting up a factory in Croatia. Although U.S. law prohibited exportation of weapons to the new Croatian republic (the U.S. recognized the old Yugoslavian government until April 1991), the policy seemed likely to change. When it did, the information gathered by Kapetanovic would be of great value.
In addition, the minister asked, would Kapetanovic look into the cost of bullet-making machines? The machines were legal to export, and could possibly be obtained quickly.
Believing that most of the Serbian army was made up of ex-communists bent on conquering Croatia, Kapetanovic eagerly agreed.
"They asked me to gather prices and things," he recalls. "But they never gave me money or authority to buy anything. They just thought, as a free man living in a free country, I would be able to do the job easy.
"I thought so, too."
Upon his return to Fountain Hills, he began teaching himself about weaponry. "I hunted a bit as a child, but I knew nothing about where to find information on the big weapons Croatia might need," Kapetanovic says. "So I went looking for people who would know."
He found them in the pages of a magazine.
While browsing through a copy of the November 1990 Soldier of Fortune--the magazine for mercenaries real and imagined--in a Fountain Hills convenience mart, Kapetanovic ran across a "bulletin," announcing the availability of a cache of weapons in Nicaragua.
Kapetanovic called Soldier of Fortune and was given the name of a man said to have access to the Nicaraguan arsenal--a mysterious figure named Bill Askins.
Another ad, placed by a man named Allen Lever, offered weapons for sale out of Vancouver, British Columbia, via Southeast Asia.
Kapetanovic thought he had struck gold.
"Perhaps, I thought, this would be a way of getting the information I needed," Kapetanovic says. "I see ads for weapons out of Nicaragua, Singapore, Hong Kong--where U.S. export ban does not apply. There would be nothing illegal about it. It's completely aboveboard.
"I think, maybe even I could put Askins and Lever together with Croatia, and they could do business."
But Askins and Lever had a different kind of business in mind.
@body:In the months after Kapetanovic's May 1991 arrest, his attorney, Mike Goode, spent weeks trying to put together a dossier on Bill Askins. He knew that Askins had played a critical role in gathering evidence against his client, but it was difficult finding out anything further about him.
Mark Aspey, the U.S. attorney prosecuting the triumvirate of accused smugglers, didn't want to reveal Askins' background. He said that doing so would jeopardize "national security."
What did that mean?
An abrasive, fast talker with a reputation as one of the leading pit bulls of the Chicago legal community, Goode wasn't about to guess. Goode--recruited by Kapetanovic after his dazzling defense of a Croatian diplomat in Washington, D.C.--launched an intensive investigation of Askins, and what he says he found could have been torn from the pages of a Tom Clancy novel.
Askins had been a pilot and intelligence officer in Vietnam, where Goode says he was also rumored to have been part of an elite, four-man sniper squad that carried out assassinations of North Vietnamese officers. After the war, he became an operative for the Central Intelligence Agency, where he remained for a decade.
Goode says it was through his CIA involvement that Askins became interested in the lore surrounding the Iran-contra affair. It is part of Central American mythos that one of Oliver North's shipments of U.S. arms, destined for the Middle East, was somehow lost in transit. Goode says Askins had reason to believe that the shipment wasn't just a legend, and spent five months in the jungles of Nicaragua looking for it--hoping to sell what he recovered through the Soldier of Fortune "bulletin."
The weapons, however, never turned up. "When that deal went down the tubes," Goode theorizes, "Askins was looking for a way to recoup the money he spent on the wild-goose chase. Just in time, along comes Ivan."
Repeated efforts to contact Askins at his last known phone number in San Antonio, Texas, failed. Aspey declined to comment on his whereabouts.
Kapetanovic had no inkling of Askins' background, but he sensed that the gun dealer was a "big-time player." So he decided to apply a distinctly American lesson, learned the hard way by an immigrant trying to make it in this image-conscious land: If you act like a high roller, you get treated like one.
Kapetanovic figured, not unreasonably, that if he told this tough-talking arms dealer the whole truth--that he was just a Fountain Hills bookseller looking for prices on guns, and had no authority to make an immediate purchase--Askins wouldn't give him the time of day.
"I thought, if you want a real estate person to show you around a house, do you tell them you don't have any money?" Kapetanovic says. "No, you tell them you are a serious buyer. It's just business, the way things are done.
So during one of his first conversations with Askins, Kapetanovic told him he was inquiring about buying the Nicaraguan weapons for the Croatian National Police, the nation's only armed force at the time. It was a lie that would cause Kapetanovic more trouble than he could possibly have imagined.
@body:Askins realized he couldn't sell Nicaraguan weapons he didn't have. But after talking to Kapetanovic, the resourceful operative soon hit upon another way to make a profit.
Askins contacted Customs agents in San Antonio. He had run undercover operations for the service before, and he would be willing to do so again, pretending to sell Kapetanovic arms from within the United States. In exchange, he would receive an immediate payment of $5,000, along with a $100,000 slice of whatever was raised from the sale of Kapetanovic's personal property, which the federal government could seize under RICO laws after Kapetanovic's conviction on smuggling charges. Customs readily agreed.
Goode charges that the arrangement was tantamount to placing a "bounty hunter" on the federal payroll.
"You've got a 20-year veteran of trickery and chicanery like Askins being embraced by the federal government to bring down a man who hadn't expressed any desire to break the law," Goode says.
At the same time Askins was pitching his "sting" operation plan, the other arms dealer, Vancouver's Allen Lever, was telling Customs agents in Phoenix about Kapetanovic's response to his magazine ad. Lever also offered to help investigate Kapetanovic, but because he lacked Askins' CIA-taught undercover skills, he was paid $10,000 simply to introduce Kapetanovic to his "partner"--in reality, a Customs agent named Thomas McCaffrey.
Soon McCaffrey was also trying to sell weapons to Kapetanovic.
Court records show that federal officials don't deny making the deals with Askins or Lever. What they do deny is Goode's suggestion that the arrangements were improper.
"Based on what Ivan was telling the informants, he was preparing to make a very major arms deal," Aspey says.
But Goode insists that agents misled Kapetanovic, then employed high-pressure tactics that veered dangerously close to entrapment.
@body:First, Goode says, came the bait and switch. Kapetanovic had approached both Askins and Lever with the intention of getting information--and possibly arranging a buy--on weapons from Nicaragua and Hong Kong, as had been advertised. Had such a sale taken place, it would have been perfectly legal under U.S. law.
But almost immediately, both Askins and McCaffrey began the hard sell--trying to broker American weapons on American soil.
"Customs was setting up a snare," Goode says. "[Customs] made it look like they were talking about weapons out of the country and the minute somebody answers [the magazine ads], they start directing them back into this country, doing everything they can to make it look like you're doing something illegal."
Kapetanovic should have broken off his dialogue with the two dealers once he realized that they were proposing an illegal deal. But he says the information they were providing him was a strong incentive to keep the relationship alive.
During the winter and early spring of 1991, Kapetanovic accumulated a vast amount of data from the duo, asking for prices and technical information on an astonishing variety of instruments of mass destruction. He obtained price quotes on M-16 rifles, mortars, M-2 heavy machine guns, antitank rockets and grenade launchers. He threw a stream of weapons-related questions at Askins and McCaffrey, all information requested by the Croatian government.
The undercover agents would reply dutifully, often faxing responses the same day. Kapetanovic was scoring special points with his Croatian friends for supplying the price lists, which the Croats were comparing with prices quoted by other Asian and European gun sellers--thus ensuring that they weren't being cheated.
"The information I was getting was much appreciated [in Croatia]," Kapetanovic says. "I needed to get more."
Besides, he reasoned, there wasn't any harm in just talking. Once he had realized that Askins and McCaffrey were trying to sell him domestic weapons, he had made a point of telling them, time and again, that any purchases would have to wait for permits that could only be obtained after official U.S. recognition of Croatia.
As far as Kapetanovic was concerned, obtaining permits was a vital prerequisite to discussing any possible weapons sale. "Otherwise, [we can] ship nothing out," Kapetanovic forcefully told McCaffrey. According to transcripts of taped conversations released by the U.S. Attorney's Office to New Times, it was a theme Kapetanovic repeated at least a half-dozen times in the first months of conversations with undercover agents.
The agents were undeterred. When Kapetanovic would mention the need for legal permits, Askins and McCaffrey--seemingly upset with his insistence on obeying the law--would often reply with a grunt, or an "uh-huh." They would then quickly change the subject to "alternate" options, such as moving arms illegally by a "fleet of boats" Askins claimed to own that could sneak up next to the Croatian coast.
When Kapetanovic failed to bite on such suggestions, agents took to pushing his emotional hot buttons, probing into sensitive areas that might provoke him to subvert the law.
On one occasion, McCaffrey persuaded Kapetanovic to talk about the massacre of 21 Croatian police officers by Serbian gunmen, mentioning he had seen "something" about it in that day's newspaper. The policemen, in one of the first documented atrocities of the war, had been tortured. A few had been drawn and quartered.
Kapetanovic, whose nephew is in the Croatian National Police, says he could feel the bile rising in his soul. He raved against the brutality of the "socialist Yugoslavian Army." Afterward, agents noticed, he seemed more receptive to their schemes to deliver weapons to Croatia immediately, with or without permits.
He also reacted vehemently when Serbia invaded parts of Croatia. On January 24, 1991, McCaffrey called Kapetanovic, who said he was "broken-hearted" after hearing news reports about fierce fighting and many Croatian dead. "[The Croatians] are just trying to defend themselves barehanded," Kapetanovic cried to McCaffrey.
The agent immediately mentioned that the fighting might further delay permits, and wondered how that might affect Kapetanovic's decision to wait for official okay before buying arms.
Kapetanovic, in a fit of emotion, replied that if things continued to worsen in Croatia, they might have to do something "around" to get weapons into the region.
During Kapetanovic's trial, prosecutors made much of the remark, saying it demonstrated his true intentions--even though in subsequent conversations, he would again mention the need for permits.
Goode mocks the weight given to the comment. "He said several things he now wishes he hadn't," Goode says. "There are certainly embarrassing moments there.
"But saying it is not the same as doing it. The Constitution protects our freedom of speech, so that we can say things in anger."
Kapetanovic explains. "I have closest relations in Croatia. Anybody brings that subject and remind me of that, touches my emotions."
@body:Although agents had some evidence they believed showed Kapetanovic was intent on smuggling arms, by May 1991--four months into their sting operation--they had failed to stir their target to action. Kapetanovic simply refused to place an order for weapons.
At this point, logic might have dictated that the investigation was a dry hole. But agents decided to keep digging, driven on, Goode says, by simple economics. Not only did Askins have a financial interest in catching Kapetanovic in wrongdoing, so did Customs.
"After months of investigating, months of making tapes, Customs didn't have anything," Goode says. "They had sunk hundreds of man-hours and lots of money into the sting, and they needed to justify the expense by arresting someone."
Agents saw their chance to break the case when Kapetanovic told Askins and McCaffrey that his "Croatian contacts" would soon visit, bringing a substantial amount of cash with them. The agents leaped upon the information, asking Kapetanovic if the "contacts" would make a buy.
Kapetanovic couldn't truthfully say yes. But he didn't want to say no, either. His business sense told him not to lose contact with Askins or McCaffrey. There were signs that U.S. recognition of Croatia was closer than ever, and if recognition came, he thought the two arms dealers would give the Croats the best prices on badly needed weapons.
Perhaps, Kapetanovic said, his friends would be willing to make a buy.
The story wasn't a complete lie; there were elements of truth. Belinic, along with a Croatian National Police officer named Zeljko Vusir, were coming to visit Kapetanovic. And they were bringing nearly $500,000 of Croatian government money with them.
The purpose of the visit, however, was not to buy arms, but to meet with Scottsdale gun-shop owner Marty Mandall about the possibility of the legal purchase of a bullet-making machine. In addition, they had plans to journey to the Ruger gun plant in Connecticut for talks with the company's management about constructing a munitions factory in Zagreb, Croatia.
Askins invited Kapetanovic and friends to meet his weapons supplier, a man named Beau. "If your friends come," court transcripts quote Askins telling Kapetanovic, "they can put their hands on [the guns] and play with them if they want. They might even, if they are interested, shoot some of the stuff." Provided, of course, they brought their money.
It was a wonderful offer, Kapetanovic says. Belinic and Vusir would get to examine close-up some of the very state-of-the-art weapons the Serbs were using against their troops. They would be thrilled. And, of course, they could then politely decline to purchase weapons, offering whatever excuse seemed most appropriate.
Would they come to San Antonio, Askins asked? Yes, replied Kapetanovic. They would love to come.
@body:It was a dusty, 20-minute ride outside of San Antonio to the isolated "ranch" where Kapetanovic, Belinic and Vusir would meet Beau. It was a hot, windy day, and as Askins drove his crowded car up the long driveway, overgrown with thick grass, the men began to get nervous.
In a fax a few days earlier, Askins had written Kapetanovic that his "source," Beau Sutherland, was "uneducated and unsophisticated," but very knowledgeable about the kind of military equipment the Croatians might want. But court records show that on the way out to the ranch, Askins dropped a bombshell. Not only was the "source" crude and dimwitted, but also a "crazy man" when drunk, a "drug dealer" who can "get awful unpleasant."
Beau had "12 Mexican wives" in a nearby border town, Askins said, and was a wild character. It would be best to treat him gently and do what he wanted. And what he wanted, Askins reminded them, was cash. Today.
The scene at the ranch, actually a vacant home then being brokered by a real estate company owned by Askins' wife, heightened Kapetanovic's anxiety. A shotgun-toting guard met the car at the property gates, grimly waving it forward. They found Sutherland near a pickup truck loaded with weapons.
A hulking, potbellied man, Sutherland was actually Askins' Customs agent supervisor. But today he was acting as a gunrunner, and he played the role with a dark gusto. He greeted his visitors, introducing a group of men around him (also Customs agents) as former Green Berets and Navy SEALs who "take care of problems for me." He projected a menacing presence.
Sutherland allowed Belinic and Vusir to examine some rifles and a few other weapons, and then got down to business. What guns did they want, and where was their money?
Kapetanovic, who had expected to be taken to a San Antonio gun shop or sporting-goods store, was alarmed. This was more than he had bargained for. Here they were, in the middle of nowhere, surrounded by "bad characters." To make matters worse, one of his daughters, Rosita, had come along for the ride. What would happen to all of them if Beau wasn't given the answer he wanted?
"You can never be sure," Kapetanovic remembers, "if they want your money or your life." Uncertain what to say to Sutherland, he turned and stared at Belinic, who was carrying the checkbook for the account that held the $500,000 he had brought from Croatia.
Belinic was quiet for a moment, and then told Sutherland that they had forgotten their checkbook at the hotel back in town. Could they pay him later, perhaps on a return trip in a few days?
The ruse worked. Sutherland was displeased, but grunted that it would be all right if they agreed to come back in four days and pick up weapons. They could pay then, cash on delivery.
The would-be arms buyers then fled the ranch, intending, Kapetanovic says, never to return.
But they hadn't quite escaped. The next morning, Askins appeared at their San Antonio hotel, looking worried. He told Kapetanovic, Belinic and Vusir that their unwillingness to pay Sutherland the day before had brought them to the brink of disaster.
"Boy, I thought we had a real problem out there," Askins said. Sutherland was prone to "violent rages" and they should "never underestimate" him.
The only thing they could do now, Askins said, was to sign a purchase order confirming the items they wanted to buy. Sutherland, Askins told the men, demanded "to see this in writing." Askins pushed a piece of paper across the table that listed many of the weapons Kapetanovic had inquired about over the previous five months.
The Croats and Kapetanovic exchanged glances, while Askins fixed them with a steely glare.
Belinic and Vusir, the latter of whom doesn't speak or even read English, quickly scrawled their signatures in the margin at the bottom of the page. Kapetanovic refused to sign.
"I didn't want to get involved in that," he says. "I think, two [signatures] is enough to hold them off for now."
Askins left with the paper, and the shaken group quickly boarded a flight back to Phoenix, heading for its meeting with Mandall and the bullet-machine broker.
On the way, the men stopped off at Los Arcos Mall to buy wristwatches--the nice kind you can't get in Croatia," Kapetanovic says--for Belinic and Vusir.
@body:Kapetanovic's other daughter, Iva, was home the night of May 31, helping her mother prepare for the dinner guests. They hadn't been told of the arrests. Suddenly, she noticed the silhouette of a man holding a revolver outside a window by the front door.
"I thought they were coming to kill me no matter what," she says. "So I figured I might as well let them in." She gingerly opened the door, and was met by the barrel of a gun.
Customs agents stormed into the house--and one owned by Kapetanovic next door, for which they had no search warrant--probing every nook and cranny. They said they expected to find a stockpile of weapons already purchased by Kapetanovic, along with detailed, secret exportation plans, a list of Croatian contacts and money men, and other evidence of international subterfuge.
Instead, they found one frightened wife, two equally frightened daughters, two cats, a stack of old gun magazines and two Italian, World War II-era hunting rifles.
For federal prosecutors charged with building a case against Ivan Kapetanovic, it was a bad omen.
@body:Mark Aspey won't say much about his fight to convict Kapetanovic, claiming that he doesn't want "to get into a pissing contest" with Goode over the trial's outcome. But he does admit, quietly and with a slight grin, that he was "unexcited" about the case.
A veteran prosecutor with a reputation as a hard-nosed, unforgiving litigator who had never before lost a courtroom fight, Aspey is to be forgiven for his misgivings. According to a source close to the investigation who asked to remain anonymous, the case was forced on Aspey by then-U.S. attorney Linda Akers, who was hungry for the publicity surrounding a high-visibility bust.
"Anyone could see that this case wasn't going anywhere," the source says. "Customs simply didn't have enough to make it stick. But Linda wanted to say she had convicted some gunrunners."
Akers--whose legacy at the U.S. Attorney's Office is a reputation for grandstanding on high-profile cases, such as her ill-fated decision to shut down casinos on Indian reservations--got her PR fix. The Phoenix Gazette, among other Valley newspapers, ran big-type headlines proclaiming, "$500,000 Seized in Arms Plot, Funds Were to Buy Weapons." But the U.S. attorney was soon to discover that getting a little ink and obtaining a conviction were two very different things.
Akers, now an official with the National Rifle Association--where, ironically, she labors to make it easier for people like Kapetanovic to buy guns--didn't return calls from New Times.
Aspey, perhaps reflecting his concerns about the viability of his case, offered all three men plea bargains in the spring of 1992. After spending nearly a year in jail awaiting trial, Belinic and Vusir, eager to return to their country and avoid the time and expense of a lengthy court appearance, accepted. They each pleaded guilty to one count of attempted illegal exportation. They did so, Belinic's attorney Marty Lieberman says, because "it was very apparent that they could go home right away if they pled."
Federal District Court Judge Roger Strand delivered his opinion on the quality of the evidence against Belinic and Vusir by departing from federal sentencing guidelines--sentencing them both to time served, and suspending their mandatory probation period, thus clearing the way for their immediate trip home.
But Kapetanovic refused to plead. "I am innocent man," he says. "Why should I admit to something I didn't do?"
Aspey's biggest problem was telling the jury that Kapetanovic hadn't actually smuggled anything. The government's case was based solely on his intent to do so. Called a "dry conspiracy," it is difficult to prove under any circumstances.
It was even more difficult in this case because the government could have waited to see if the conspiracy would moisten a little. Agents could have given Kapetanovic a chance to prove his real intent, by allowing him time to return to San Antonio to buy and export Beau Sutherland's weapons. But Goode claims the agents chose not to wait because they already knew what the outcome would be.
"Why didn't they wait to see if Ivan was really a smuggler? They had waited five months, why not wait a few more days?" Goode wonders.
The jury asked the same questions. And, evidently, came to the same conclusion.
"By May 31," Goode says, "Customs knew Kapetanovic and the guys were never going to buy anything. But they needed to have something to show for five months' work. If they had waited, Ivan would have proven his real intentions, and Customs would have been left with no reason to arrest him. So they went with what they had.
"It wasn't much, but it was enough to screw up his life."
Addressing the jury, Goode, a flamboyant orator, exploited other weaknesses in the government's case.
Why, for instance, had Belinic and Vusir openly declared the $500,000 they brought into the country, filling out all the proper Customs forms? Why had they deposited the money in a checking account, leaving a paper trail behind them, if they and Kapetanovic intended to use it for an illegal buy?
Goode also hammered Askins relentlessly on the stand. Didn't Askins have a "profit motive" in seeing Kapetanovic go down?
"I think everybody involved did," the former spook shrugged, calling himself a simple businessman, "like a privateer who seizes ships."
To make matters worse, Customs officials seemed unable or unwilling to support their own case. When Goode asked William O'Neill, the Customs agent who supervised the five-month sting, about tapes which showed Kapetanovic had repeatedly demanded permits prior to shipping weapons, O'Neill replied lamely, "I'm not denying what's on the tape."
So flimsy was the case against Kapetanovic that almost immediately after the "not guilty" verdict was read by the jury last summer, the U.S. Attorney's Office began fretting over the possibility that Kapetanovic might sue for malicious prosecution.
"There was concern that Ivan was going to sue us and Customs," the source within the office says. "We wanted to convince him that was a bad idea."
The method of persuasion chosen by the U.S. attorney was blunt and direct. If Kapetanovic didn't agree to sign a waiver, pledging to refrain from filing suit, the federal government would pursue forfeiture proceedings against his property under RICO laws--a right the government technically retained, even though Kapetanovic had been acquitted.
Although RICO was originally designed to allow prosecutors to strip property from mobsters, it has been used in recent years to take away homes, cars and other valuable items from drug offenders, bad-check writers and even drunken drivers. Now the U.S. attorney was prepared to utilize it in a new and unique way--to confiscate the assets of a man who had been judged innocent of any crime by a court of law.
Although it is unlikely that the RICO action against Kapetanovic would have been successful, defending it would have been time-consuming and expensive. And during the proceedings, Kapetanovic would have been unable to refinance, borrow against or sell any of his property, including his Fountain Hills homes.
But Kapetanovic refused to sign the waiver, viewing the RICO threat as simple blackmail. "No matter what," he says, "I will not give in one inch to them. I do not know if I will sue, but it is my right, and I will not sign it away."
For more than a year, prosecutors and Goode sparred over the waiver. Only last month did the U.S. attorney finally agree to drop all of its legal rights to pursue Kapetanovic's homes--and it did so without receiving any promises from Kapetanovic.
But the affair certainly left an indelible mark on Kapetanovic. He says that his brush with the legal system has stirred up memories of the bad old days, in another country, far away in time and space.
"I love America very much," he says. "It has given me many things. But the government needs to remember that I am free man. They should not try to steal my freedom from me through lies and setups.
"That," he sighs, "is the kind of thing they used to do back home.
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