Chief's Friend Accused of Extortion
By Avis Thomas-Lester and Toni Locy
The D.C. police lieutenant in charge of investigating extortion plots was arrested yesterday and charged with carrying out his own extortion plot against men who frequented a gay bar and then using subordinates to track the FBI's investigation of his activities.
The official, Lt. Jeffery Scott Stowe, 42, was charged in U.S. District Court with extortion and embezzlement less than two hours after Larry D. Soulsby -- his recent roommate in a luxury downtown apartment -- resigned as D.C. police chief. Soulsby said he didn't want his relationship with Stowe, who is the subject of a continuing investigation, to blight the department.
Stowe also was charged with making a false statement -- using a bogus identity -- to rent a postal box that allegedly was used in the extortion attempt.
An FBI affidavit made public yesterday in court identified Stowe as the person who had attempted to extort $10,000 from a married man after the man visited the Follies Theater, a gay bar in Southeast Washington, in September.
The affidavit also alleges that Stowe used a law enforcement computer system to identify the man and at least two others who visited the club through their automobile license plates. He allegedly used another computer in his office to gather background information on them on the Internet.
Stowe allegedly contacted the married man, identified himself as David Smith and threatened to send photographs of the man at the bar to the man's wife and employer if he did not pay $10,000. The affidavit said the name David Smith was used by a detective in an undercover prostitution and money-laundering investigation in 1996.
Then, according to the affidavit, when FBI agents showed up at the designated payoff location, a Mail Boxes Etc. office at 1718 M St. NW, Stowe directed an officer he supervised to find out why the FBI was there. The payoff was never picked up.
The affidavit alleges that Stowe later used a police computer to write an anonymous letter that detailed a similar extortion scheme involving a fictitious patron at another gay bar, then assigned a detective to investigate the trumped-up scheme as a way to keep tabs on the FBI's investigation of him.
Stowe was placed on administrative leave with pay three weeks ago. As commander of the special investigations section, he supervised about 30 sergeants and detectives who investigated such crimes as extortion, kidnapping, bank robbery and fraud. The unit also handled witness protection.
Stowe also is charged with embezzling more than $5,000 from police accounts only he controlled, including the witness protection fund. Stowe made no statements about the charges during his appearance yesterday before U.S. Magistrate Judge Alan Kay.
The FBI affidavit details Stowe's deepening financial problems over the last two years, culminating with the threat of foreclosure on his expensive Lorton home if he could not pay $6,000 a month to make up arrearages. At the time, Stowe and his now-estranged wife had a combined monthly income of about $6,700, according to the affidavit.
Stowe was released yesterday on his personal recognizance pending a preliminary hearing Dec. 10 and ordered to turn in his passport -- he said he does not have one -- and to turn over any firearms in his possession to the FBI within 24 hours. "Excuse me, your honor, that's for safekeeping?" Stowe inquired. Kay replied that the purpose was for safekeeping.
The FBI's investigation of Stowe became public after agents searched Stowe's office at downtown police headquarters in October -- while Soulsby and Stowe were in Florida at a convention for police officials.
Documents filed yesterday do not implicate Soulsby in any of Stowe's alleged illegal activities. Acting U.S. Attorney Mary Lou Leary said the investigation is continuing.
Stowe's attorney, G. Allen Dale, said after the hearing that Stowe "has maintained his innocence from the moment this investigation began, and he maintains his innocence today." Dale vowed to fight the charges in court but declined to say anything else.
In previous interviews, Stowe said that he was innocent and that he was targeted by people who were jealous of his close relationship with Soulsby. "I think someone's trying to set me up, and I think it's because of my close association with the chief," he said in a previous interview. "Someone is trying to get at the chief through me."
Soulsby's friendship with Stowe was well known in the department. Shortly after Soulsby was named interim chief two years ago, Stowe, who has been Soulsby's golf partner and confidant for many years, headed the effort to organize a party for Soulsby. The night of the party, Stowe presented Soulsby with a $2,000 set of golf clubs, a gift that Stowe had largely financed.
Sources said yesterday that investigators are reviewing Soulsby's role in delaying an in-house audit of one of the accounts Stowe is accused of bilking. "Soulsby called me up and told me to delay the audit until the beginning of the year, at least a couple of months," said former deputy chief Wyndell C. Watkins, who then commanded the division that included the audit and compliance bureau and internal affairs. "So I did what he said." Watkins resigned from the department in February.
The FBI affidavit, by agent Diane E. Maurice, gave the following account of the investigation into funds that Stowe controlled:
At a time when Stowe was having financial problems, he was in charge of three funds maintained by the criminal investigations unit: the witness protection fund, the "Back-Up Confidential Fund" and the "Back-Up Reserve Fund," which had balances of about $2,500, $25,000 and $4,800, respectively.
When funds ran low, he sought additional money from the department's Office of Finance and Budget. Beginning in June 1995, Stowe made requests for funds totaling more than $14,000 for cases in which the detectives directly involved said no such amounts were spent.
On Oct. 29, the day that the FBI searched his police office, agents found $2,000 in cash related to the witness protection fund. There was no cash related to the two other accounts.
Five days later, on Nov. 3, Stowe showed up unannounced at the department's Office of Finance and Budget with a bag filled with $25,000 in cash, much of it in new $50 bills. When asked by an unidentified police official where he got the money, Stowe said he had kept it in a safe. When the official pressed him on whether the money had been in a police safe, Stowe said he got it from "a safe place." Stowe was not authorized to keep money outside the safe at headquarters.
As part of the investigation, FBI agents searched Stowe's office seven times, taking a computer, files and computer discs the first time and other computer equipment and records on subsequent searches. Ten days ago, they also searched Stowe's $400,000 Lorton home and his car. Last week, they searched the apartment he had shared with Soulsby in the Lansburgh building in Northwest Washington.
In an interview with WUSA-TV (Channel 9) last week, Soulsby denied having any financial dealings with his close friend.
In May 1995, Stowe and his wife filed for Chapter 13 bankruptcy protection in federal court in Alexandria. They were delinquent on their mortgage and related payments for their home in Lorton. The outstanding mortgage was $345,000.
A payment plan was arranged, and Stowe kept up with it until October 1996. Then foreclosure proceedings were launched. On Aug. 26, Stowe agreed to pay the mortgage company more than $6,000 a month. The affidavit notes that from Aug. 1 through Aug. 26, the Stowes had at most $2,750 in their known bank accounts.
An analysis of the Stowes' finances from May 1995 until August 1997 showed that they "consistently expended more money each month than their combined net salaries," according to the FBI affidavit. The affidavit said, "Stowe's account was maintained in a positive balance largely due to unexplained deposits of money."
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