By Anna Pulley
By Erin Sherbert
By Chris Roberts
By Erin Sherbert
By Rachel Swan
By Joe Eskenazi
By Erin Sherbert
By Erin Sherbert
The first whiff of the Police Department scandal that eventually engulfed Steve Landi reached the public in September 1995, in the form of newspaper reports that a grand jury was looking into possible corruption among a special team from Central Station assigned to crack down on drug trafficking in North Beach. Not surprisingly, Steve Landi was part of that team, but the main target of the probe was Officer Gary Fagundes, a decorated 14-year veteran and sometime partner of Landi's. (Fagundes, since cleared and back on the job, did not return phone calls seeking comment for this story.)
The investigation had actually been under way for more than a year, widely known -- or rumored -- throughout the department long before tidbits of it began trickling out in the press. It supposedly sprung from complaints, made by drug dealers and others who had been arrested, that officers -- specifically Fagundes -- were pocketing cash and valuables taken from suspects.
News of the probe surfaced as then-District Attorney Arlo Smith faced a tight -- and ultimately unsuccessful -- re-election race. Challenger Terence Hallinan began making campaign promises about getting tough on rogue cops. It was no time for the DA, or Police Department, to appear soft on corruption.
But there was a problem. When Smith and then-Police Chief Tony Ribera made their promises to crack down on bad cops, police investigators had already been on the case for more than a year and were hard-pressed to turn up any credible evidence of corruption.
Internal investigators had gone so far as to set up sting operations on the suspect cops. Hidden cameras rolled as the officers were sent to arrest supposed drug dealers -- actually police plants, with wads of cash ripe for the taking. But each time, Fagundes, Landi, or the other targeted officers didn't steal the money. Instead, they handled the arrests by the book, and in one bizarre incident even wound up bursting in on the cops who were watching them.
In the first sting, an undercover Marin County deputy sheriff -- a tall, slender, bearded fellow -- was planted on a North Beach street corner, holding a pouch full of drugs and money given him by SFPD investigators. The deputy was supposed to make like a drug dealer, while a video camera peered down on the scene from a hotel room across the street.
Landi and Fagundes were dispatched to check out the man. Upon discovering the money and drugs, the officers called for a supervising sergeant, arrested the suspect, inventoried the money, and stole nothing. The videotape caught them doing their jobs just as they were supposed to. (Ironically, at around the same time as the sting attempt, Landi got his name in the newspapers again, this time for busting a major North Beach drug dealer who was nabbed with $17,600 in cash and 32 ounces of cocaine. All the money made its way to the evidence room.)
After a while, the two investigators first assigned to the corruption case decided there was nothing to it, and suggested that the probe be dropped. Instead, it was taken over by Sgt. Inspector Stephen Gudelj, a 27-year SFPD veteran, head of the Special Investigations Division, and a powerful force within the department.
When Gudelj took charge of the investigation in May 1994, he later testified before the grand jury, he believed that Fagundes and Landi didn't steal cash from the undercover deputy because the officers were somehow aware that they were being watched. So Gudelj decided to keep trying. Another videotaped sting was set up, this time with a police informant, drugs, and money planted in an apartment. Sent to the scene to execute a search warrant, Landi and another officer searched one room of the apartment, found the drugs and cash, and turned it in. Fagundes and Officer James Acevedo searched a second room, found nothing, and therefore had nothing to turn over. Again, none of the officers stole anything.
In September 1994 Gudelj tried again, and again the cops -- this time Acevedo and Fagundes -- failed to steal any money from a drug dealer planted in another apartment.
"Now we have three cases where you set them up and nothing has happened, right?" Gudelj was later asked before the grand jury.
"That's correct," Gudelj answered.
So Gudelj's team tried yet again. The fourth sting involved drugs, money, and another police informant planted in a hotel room. Landi was not even involved in the fourth operation, when Fagundes and Acevedo were sent to search the hotel rooms. The two officers did find money and drugs, and were in the process of collecting the evidence when the bust turned into a bad parody of a police sitcom.
The hotel manager, eager to be helpful, alerted Fagundes and Acevedo that there were more suspicious characters in the room right next door. When Fagundes and Acevedo checked out the manager's tip, they stumbled upon the cops running the videotape equipment.
At that point, Gudelj later told the grand jury, he and the police chief discussed the case, and decided to suspend the investigation. If Fagundes, or any other cops, had been stealing money, Gudelj and Ribera reasoned, they certainly weren't stupid enough to continue after finding a roomful of surveillance equipment aimed at them.