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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.

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Darrin Hostetler