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ATF Lost Track Of 2 Million Cigarette Cartons In Sting Operation

Alcohol, Tobacco, Firearms and Explosives agents lost track of millions of cigarettes and let an informant keep most of $5 million received during a sting operation, a new audit finds.

Between 2006-2011, the Office of Inspector General investigated 20 undercover operations conducted by ATF agents. The OIG found that agents conducted undercover operations without proper approval. In one case, agents allowed an informant to keep $4.9 million of the $5.2 million in profits that were generated from the sales of cigarettes to a criminal target.

The informant told agents they needed the money to recoup expenses but never outlined where the money was spent.

In addition, the OIG says agents lost 2.1 million cartons of cigarettes worth $127 million at retail. The ATF tells the Washington Post it only lost 447,218 cartons.

"We found a serious lack of oversight by ATF at both the headquarters and field office levels during the period of time covered by the audit," wrote Justice Department Inspector General Michael Horowitz in the report.

Horowitz said agents spent money unncessarily and improperly. An undercover investigation review committee that was supposed to oversee investigations hadn't met for eight years.

The lack of oversight and the losing of contraband bears a striking resemblance to ATF's ill-considered gunwalking program in Phoenix. In Operation Fast and Furious, agents working in Phoenix allowed the purchase of guns they knew were destined for criminals in Mexico.

But many of the guns were lost and two turned up at the December 2010 murder of Border Patrol Agent Brian Terry. The resulting Congressional investigation amounted to a scandal within ATF.

Federal officials aren't saying, but it may be no accident that the beleaguered ATF was snubbed from investigating the Navy Yard shooting two weeks ago. Instead, as CBS News noted, the FBI handled the firearms investigation.

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