By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
Finally, in 1992, Catherine called Michael Smith, her husband's FBI supervisor and close friend, and told him Sullivan was an alcoholic and desperately needed help. Sullivan was placed in a rehabilitation program and stopped drinking. His new compulsion was FBI work.
"I went back to work and busted my ass and eventually received exceptional performance ratings," Sullivan told W. Grady L. Ryan, his psychologist. "They told me I was working too hard."
A year after he returned from rehab, an informant told Sullivan about a bookmaking group in Hallandale that also ran rackets involving corrupt police and drug trafficking in Chicago and the Dominican Republic. The informant told Sullivan the group, allegedly led by Gambino crime-family associate Auggie Corrao, was betting with disgraced Illinois Congressman Dan Rostenkowski. (In an unrelated case, Rostenkowski later served seventeen months in prison for mail fraud.)
Sullivan did something he never should have done, something his supervisor, Smith, knew was dangerous and never authorized.
Sullivan went undercover again.
"Following Sullivan's intervention for alcohol abuse in 1992, and the fact that Smith and Sullivan have known each other for quite some time, it was Smith's intent as a supervisor not to allow Jerry to participate in undercover activity," testified agent Alexis Vazquez, who investigated Sullivan after the arrest. "It was my understanding from our interview of Smith that he was basically admonishing Sullivan from participating in undercover activity."
The FBI has a policy that forbids alcoholics from doing undercover work. Yet Sullivan continued unimpeded, playing the part of "Jerry Cunningham," a "two-bit thief." And he was allowed to do so virtually without supervision. He started gambling, and "I knew right away that I was hooked," Sullivan told Ryan. "I wasn't drinking, but I was getting the same type of euphoria from betting sports."
In April 1994 he requested $1000 in FBI funds to gamble with two mob associates. Smith, despite his concerns, approved it. Had someone been monitoring Sullivan's investigation, the fiasco that culminated in Sullivan's arrest might have been avoided entirely. Sullivan was sloppy, his own undercover recordings with bookies show that he was making bets long before he requested official permission to gamble. But nobody at the FBI ever listened to his tapes. Supervisors never made Sullivan transcribe them, although doing so was one of his duties.
"There is a high likelihood that someone would find out that Jerry Sullivan had been gambling before he was authorized to do so, right?" Sullivan attorney Mark Schnapp asked Vazquez in court. Both Schnapp and co-counsel Jane Moscowitz are former federal prosecutors.
"If those tapes had been reviewed, yes."
"Now, wouldn't Mr. Smith, who was so concerned about agent Sullivan being in an undercover capacity at all, wouldn't he have listened to the tapes?"
The FBI's Brian Jerome says Sullivan did most of his undercover work without permission or knowledge of Smith or the FBI. But neither he nor others at the bureau can adequately explain why, then, Smith approved the gambling. Sullivan says that the undercover work he did on the Corrao case was known and approved by his supervisors.
Ryan, the psychologist, wrote in court reports that the FBI should have been monitoring Sullivan much more closely after his alcoholism was discovered. Psychologists who deal with addicts know that they often trade one addiction for another. The lack of followup for Sullivan constituted a "vast deficit in the procedures," Ryan wrote.
The Corrao case was closed in June 1994 after Rostenkowski was indicted. Like Shockwave it ended with no arrest. The drug dealing and police corruption weren't fully investigated. Vazquez said a review of the case showed Sullivan put only "minimal effort" into it. Again, the FBI says, Sullivan had done a lousy job on an investigation. But it didn't keep him from getting another exceptional rating or from getting promoted, on April 16, 1995, to supervisor of the task force called HIDTA, the High-Intensity Drug Trafficking Area. Investigative funds were put under his control, and he got his own safe for the money. Suddenly the rabid gambler had access to hundreds of thousands of federal dollars.
The details of Sullivan's gambling and ensuing crimes are peppered through the court file. One thing is clear: He was betting and stealing at a wild pace.
According to FBI reports, his gambling quickly led him to fall $100,000 in the hole. His life was threatened and, apparently because Sullivan believed the mob would think twice before killing a federal agent, he admitted to his bookie that he was with the bureau. The Lucchese crime family at some point had a meeting about Sullivan in New York, Sullivan told the FBI, and it was decided that Sullivan would pay $400 a week on the debts.
Sullivan installed a separate phone line in his house so he could bet offshore with 900-number lines. He ran up as much as $4000 per month in phone bills. Wagering hundreds of dollars every night, he even bet thousands on the Florida Lottery.
"I knew I was losing. I always thought I could win it back," Sullivan told psychologists. "I didn't feel I did anything wrong because I planned to put the money back."