First Confidential Source Testifies Against Bout

MANHATTAN (CN) - An informant for the Drug Enforcement Agency on Tuesday described his journey from Guatemalan soldier to Mexican prisoner to one of the U.S. agents who snared Viktor Bout in an arms deal with phony Columbian guerrillas at a hotel in Thailand.

Bout, a Russian national, allegedly armed dictators, despots and warring factions through arms trades around the world. His exploits are said to be the inspiration for the Hollywood movie "Lord of War," and the subject of investigative journalist Douglas Farah's book, "Merchant of Death." The DEA corralled him in a sting operation using undercover informants posing as members of the Fuerzas Armadas Revolucionarias de Colombia (FARC), a left-wing guerrilla group.

The United States calls the FARC a foreign terrorist organization, giving federal prosecutors jurisdiction for criminal proceedings in the Southern District of New York.

Carlos Sagastume, one of the DEA informants, entered the courtroom with a Spanish interpreter.

Sagastume testified that he got involved with the drug trade while working in military intelligence with the Guatemalan army, where he made about $370,000 selling 3,000 kilograms of cocaine. He said he made an additional $75,000 by forging documents and laundering money.

After his dealer was arrested, Sagastume said, Mexican police took him into their country, but released him after he paid a $60,000 "ransom."

Sagastume said he then contacted the U.S. Embassy to cooperate with the DEA, and relocated to the U.S. in 1998.

Since then, he says, he worked about 150 cases for the DEA, and the U.S. government has been his best-paying employer by far.

He testified that he has been paid $1.6 million by the DEA and $7.5 million by the State Department.

He said he raked in $250,000 from the Bout case alone, and hopes to earn more money from the case.

DEA Agent William Brown, the lead investigator, bought him a plane ticket to Miami, and another for Curacao, to start the operation, Sagastume said.

At Curacao, Brown prepared Sagastume and two other informants for a taped meeting with Andrew Smulian, who they believed would set up a deal with Bout. Sagastume was to play a "negotiator" for the FARC. Another informant, "Ricardo," would be his "comandante."

Mike Snow, the third agent, would initiate contact with Smulian and introduce him to the other undercover informants.

On Jan. 10, 2008, they met at a restaurant at the Hilton Hotel, where Smulian said on tape, "Here is fine because nobody's watching us."

Bout was not mentioned by name; Sagastume testified that Smulian referred to Bout throughout the conversation with pronouns.

"He'll do it if I ask him to do it," Smulian said on the tapes. "He's a very good guy, a top, top dog. He can't travel a lot, unfortunately, because of circumstances."

In 2004, the United Nations issued sanctions against Bout, requiring member nations to seize his assets and restrict his movements.

Sagastume returns to the stand today (Wednesday).

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