Courts & Crime

Investigation reveals how Florida man ripped off DEA agents

The late Kenneth Wayne McLeod was a financial schemer who worked his government contacts and ripped off dozens of DEA agents along the way, a new Justice Department investigation concludes.

In a 90-plus page report, the Justice Department’s Office of Inspector General reveals how McLeod snaked his way into law enforcement’s good graces by distributing Super Bowl tickets, charitable donations and more. Until McLeod ended his career by committing suicide in June 2010, officials say he was able to lure into a Ponzi scheme investments totaling more than $30 million from about 130 individuals.

“More than half were current or former DEA employees or individuals with some nexus to the DEA, such as those who learned about McLeod while assigned to a DEA Task Force or through a family member or a friend who attended a DEA-sponsored seminar,” the Inspector General report noted.

The investigators found that the DEA hired McLeod to give “at least 130 seminars, including at its training academy.” McLeod, of Jacksonville, Fla., was given many other advantages as well.

“DEA gave McLeod substantial access to its personnel and facilities, including the use of DEA conference rooms and management offices to meet with prospective clients,” the investigators found.

Operating on a tip, Securities and Exchange Commission investigators in 2010 ultimately confronted the 48-year-old McLeod, who reportedly admitted prior to his death that the FEBG Bond Fund he ran that promised returns of between 8 and 10 percent was really a Ponzi scheme.

In the new report, investigators determined that the DEA failed to properly vet McLeod, who turned out to have lied about his background. He claimed, at times, to have attended the University of Georgia on a baseball scholarship and to have earned an MBA. The Justice Department investigators found “no evidence” to support either claim.

DEA officials failed to respond to red flags when they were raised, and, investigators say, officials appear to have been lured into warm feelings about a man who made substantial contributions to the DEA’s Survivors Benefits Fund.

“Witnesses told us that McLeod’s contributions led agents to view him favorably and ‘gave him an air of credibility,’” investigators noted.

Seven DEA officials received Super Bowl tickets and associated travel and lodging benefits from McLeod, the investigators found. Although failing to find evidence of a conflict of interest, the investigators further concluded that two DEA officials in particular “exercised extremely poor judgment” in accepting the Super Bowl-related gifts at the same time as they were helping arrange for McLeod’s speaking engagements.

In its formal response, the DEA says it cannot comment on personnel matters that are still the subject of adjudication through the agency’s internal disciplinary process. The agency, though, also said it was making changes that include better vetting of financial education instructors.