The Justice Department has had to interrupt a multistate investigation into the laundering of illegal drug profits in secret Caribbean bank accounts to pursue allegations of corruption in its own house.
Frank Robin Jr., a 30-year-old former assistant U.S. attorney in Houston, is under investigation for allegedly offering last summer to sell information about the probe to suspects in Atlanta for $200,000.
It is the first time in recent years that a U.S. prosecutor has been the target of such a serious corruption inquiry.
The offer was made in a telephone call to an investigator for a suspect's attorney. Sources said the caller suggested the conversation be taped because the information outlining the government's investigative moves and helping to identify the informants was complicated. The attorney turned the tape over to government officials.
Robin's lawyer, Michael Hinton of Houston, said yesterday that his client says he did not make the call.
"I've been told he's under investigation," said Hinton. "The tape sounds just like him. He says it's not." He said that Robin has cooperated by voluntarily appearing before a federal grand jury in Atlanta and giving prosecutors access to his personal financial records.
Attorney General William French Smith played portions of the tape -- identifying the voice only as that of a government official -- for President Reagan at a Cabinet council meeting Sept. 30 to illustrate the corrupting influence of drug money, sources said.
A few weeks later the president approved starting 12 new task forces to attack narcotics trafficking.
Robin, a former assistant district attorney in Montgomery County, Tex., was hired in mid-July to replace another prosecutor who allegedly had been targeted for assassination by the suspects in a money laundering investigation, known as Operation Lone Star, sources said.
The investigation began three years ago with the Internal Revenue Service and U.S. Customs Service looking into the alleged laundering of oil reselling profits.
Sources said the inquiry has broadened and is now focusing on the financial activities of several other individuals, including suspected drug dealers, tax attorneys and bankers on Caribbean islands. A witness in the case was found murdered last year in Florida.
In early August, sources said, someone identifying himself as "Charlie India" -- the initials for Confidential Informant -- called an investigator for one of the suspect's attorneys in Atlanta and offered to sell important confidential information about the case for $200,000.
Sources gave this account of what followed:
A caller with a different voice, suggesting the possibility of an accomplice, phoned later to arrange for a meeting to pass the money. The defense attorney turned the tapes over to the government instead.
In late August, before the the caller could be identified, officials in the criminal division called attorneys working on the case in Houston, Atlanta, and Miami to Washington and played the tape for them.
It was then that one of the supervising attorneys realized the voice of the first caller sounded like Robin.
Justice officials are reported to be upset that a more cautious approach wasn't made to try to identify the voice on the tape before it was played for the attorneys. But one prosecutor said, "No one ever dreamed that it [could] be a one of our own."
According to sources, acquaintances of Robin's have said the voice on the tape sounds like his and a voiceprint done by the FBI indicates the same. Robin has denied making the call and voiceprints aren't considered reliable evidence in court.
Dan Hedges, the U.S. attorney in Houston, hired Robin on a three-month contract because his FBI background check hadn't been completed.
Robin had received glowing reports from his former employers, including the district attorney and former county attorney in Montgomery County.
His government service ended Sept. 7, a federal prosecutor in Houston said in court papers filed in another matter last week.
The underlying criminal case Robin worked on is described by federal authorities as one of the most significant now under way.
It is indicative of the Justice Department's new strategy in narcotics investigations of attacking the laundering of profits as well trying to seize the drugs themselves.
The investigation has led government officials into the murky legal world of offshore banking and allegations that illegal funds are shipped to secret accounts in the Caribbean, laundered through corporate accounts and then funneled back to the United States as "loans" to the drug smugglers.
A glimpse of the investigation was made public recently in connection with the indictment of the security director for a Texas oil company, who was indicted last month on charges of bugging IRS agents who were auditing the firm's books.
F. Witcher McCullough III, the official's attorney, said in a phone interview from Houston that Robin was part of the prosecutor's team working on his client's case.
In a search warrant affidavit filed in that case last May, the government alleged that the search of the oil company offices was part of an investigation into the "laundering of narcotics money, specifically cocaine, an allegation of the murder of a grand jury witness, an allegation to assassinate a federal prosecutor . . . "
McCullough said he went to court last week in an effort to inspect Robin's files to see if his alleged activities could have harmed his client's rights.
The government responded that McCullough's request was without merit.