James T. Hoffman, the paid informant and convicted cocaine importer crucial to the government's case against former sports car manufacturer John Z. De Lorean, has failed in two previous efforts to help federal prosecutors convict suspected drug traffickers, according to attorneys and investigators.
De Lorean is accused of turning over stock in his failing automobile company to an FBI undercover agent in return for profits from an alleged multimillion-dollar cocaine deal.
"Hoffman is the mainspring of the case, and all the wheels could not be connected without him," said one investigator. A federal investigator says De Lorean met with Hoffman last July, asking how he could get into the cocaine business. The government charges do not specify who initiated the conversation. Attorneys for De Lorean, indicted on nine drug-related counts including conspiracy to possess and distribute $24 million worth of cocaine, have said they intend to show federal agents illegally lured their client into the drug deal.
The investigator said that Hoffman will almost certainly have to be called to testify that De Lorean approached Hoffman with a drug proposal, and not vice versa, for the charges to stand.
Attorneys and investigators familiar with Hoffman say the former aircraft salesman has had only mixed success as an informer and court witness. He has been instrumental in obtaining convictions in one case, but failed in two other major ones.
In one instance, the same cast of undercover agents and the same San Carlos, Calif., bank involved in De Lorean's arrest were used to implicate a Lebanese arms dealer in a hashish case, but after a lengthy cross-examination of Hoffman and a review of his record, a Baltimore federal jury in September declared the defendant not guilty.
San Francisco attorney Stephen J. Perelson said Hoffman was unable to convince a jury of the charges against his client, Lebanese arms dealer Faez Boukaram.
Perelson said he was stunned when De Lorean was arrested and news accounts mentioned "the same cast of characters as the Baltimore case."
According to court records, investigators, and attorneys close to Hoffman and his work for the government, the one-time aircraft dealer agreed to become a federal informant about three months after his September, 1981, arrest at his San Diego county home on charges of conspiracy to import cocaine from Ecuador.
In a Jan. 12 letter to Hoffman's attorney, assistant U.S. attorney Eric Dobberteen promised Hoffman leniency if he helped the Drug Enforcement Agency investigate drug smuggling.
Hoffman served as a middleman under government supervision in a cocaine deal that led to the January arrest, and later conviction, of a pilot and a real estate developer. In February, Hoffman pleaded guilty to one count of importation of cocaine in federal court here and was placed on probation. He established operations with an undercover DEA agent in a "safe house" in San Diego and soon was involved in three investigations. One of them, according to a federal investigator, included an attempt to trip up alleged cocaine transporter William Morgan Hetrick. Later, an assistant U.S. attorney decided to put Hetrick in contact with De Lorean, according to government officials.
Two of these investigations, however, ended in failure. Six months ago, Hoffman told federal agents he had seen 11 pounds of cocaine in the home of a Miami man under DEA investigation. Agents launched a complex operation to surround the house and obtain a search warrant, which ended with the discovery of some quaaludes, a controlled drug used as a depressant, but no cocaine. All the charges were dropped.
The second investigation, involving Boukaram, took Hoffman throughout the country and even to Athens, Greece. Perelson said Hoffman had known Boukaram, who lives in Beirut, before turning informer and renewed the acquaintanceship because federal investigators thought Boukaram was connected with an attempt to smuggle 18 tons of hashish into Maryland in 1980.
It was a "sting" operation, similar to the De Lorean investigation, in which a federal agent promised Boukaram $2 million in cash, no questions asked, to finance the purchase of more drugs if Boukaram could prove he was experienced in such matters. The DEA agent, to impress Boukaram, had personalized towels in the private plane he used to ferry him around.
Boukaram, Perelson said, needed money at the time and "planned to con the con men." In the Maryland case, Perelson said, Hoffman admitted on the stand that he schooled Boukaram in details of the 1980 smuggling.
One source close to the case said that some federal probers began to have doubts about Hoffman's worth to them, and dropped the Miami cocaine case because they felt his failure there, if exposed in court, would hurt the other investigations.
Hoffman had once worked for Hetrick, a Mojave, Calif., aircraft service company owner who now faces charges with De Lorean of conspiring to distribute cocaine. Hetrick was arrested Oct. 18 after allegedly arranging for $6.5 million in cocaine to arrive in Los Angeles. De Lorean was arrested the next day. With him in the hotel room, watching attentively, was James T. Hoffman.