12 July 2004. Thanks to A.

'BD' is reportedly PSNI Det Insp Sam Sittlington.

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STATEMENT OF: D/SGT 'Z'

DATED: 27 DECEMBER 2001

TAKEN BY: D/INSP 'BD'

I am an Acting Detective Inspector in the Police Service of Northern Ireland presently attached to Headquarters Economic Crime Bureau, C1(6), Financial Investigation Unit.

I joined the Royal Ulster Constabulary in 1983. In 1985 I went on a three month secondment to the Criminal Investigation Department in Tennent Street and I have been in Crime Department ever since. In 1992 I was promoted and I was appointed D/Sergeant in Woodbourne CID where I stayed until I joined Drugs Squad in 1996.

By then I believe that I was experienced in dealing with informants. In either 1996 or 1997 I completed an informant handling course run by Special Branch.

In June 1996, whilst attached to Drugs Squad based at Antrim Road, I received a telephone call from a man who later received  the pseudonym Fulton. He asked for a meeting with a member of the Drugs Squad so I asked him to come to Antrim Road Police Station. Before he arrived I carried out various checks such as checking him against the Drugs Squad computer.

Having obtained authority for this meeting from my supervisor I met Kevin Fulton in Antrim Road Police station accompanied by D/Sgt 'BH'. I am unable to remember who gave me the authority to meet Fulton.

Fulton started to give information regarding illegal drug activities of a REDACTED from Newry. He also gave information about REDACTED and his brother and their connection to REDACTED and on the Dublin drugs scene. Although Drugs Squad were unable to make REDACTED answerable for any crime, the information supplied by Fulton appeared to be supported by other intelligence.

On June 18 1996 Fulton was recruited as a source and registered with the Informant Handling Branch. I believe that one of the persons that I would have spoken to could have been D/Con 'V' who worked with Special Branch. D/Sergeant 'BH' and myself were joint handlers.

This system changed in around 1998 when informants were registered with the Informant Management Unit (IMU) which is part of the Force Intelligence Bureau (FIB).

Fulton stated that he had previously been working as an informant with the Irish Customs in Dublin. He stated that he received a reward pay out for supplying information regarding a large shipment of drugs for which he was paid £750. He emphasised that he did not want to work with them again because of the small pay out.

I think that Fulton had mentioned that he had previously worked for the Ministry of Defence. I do not recall if Special Branch spoke to me about Fulton at that stage.

After the registration process the informant was given a reference number REDACTED and he was initially referred to as REDACTED, albeit that this was not his official pseudonym REDACTED.

When Fulton was first registered all of the forms would have been submitted to the Drugs Intelligence Unit (DIU) as were all contact sheets. The DIU would disseminate the information as appropriate.

This system changed some time between January and June in 1998. By June 1998 any information received from an informant would have been given to IMU. When IMU were initially formed they were located in Antrim Road Police Station. The Unit is now located in Headquarters and is responsible for the dissemination of intelligence.

In July 1997 Fulton gave information in respect

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of a robbery that was to take place in respect of computer chips. This robbery was believed to be in the sum of £12m and was to be carried out by a number of individuals in the REDACTED area. Although this robbery never took place, the information given by Fulton was corroborated by another line of enquiry.

He also gave information in respect of an REDACTED figure in London REDACTED. This information was connected to the previously mentioned robbery and to the laundering of money for PIRA from cheques stolen from the REDACTED - N.I. Company. The sum of money involved was in the region of £1.25m.

I debriefed this information to D/Inspector 'CW', Serious Crime Squad, located in Knocknagoney. I spoke to him due to the serious nature of the matter being reported on by Fulton. D/Inspector 'CW' spoke to ex D/C/Superintendent C1 about this and a meeting was held in ACC Crime's office in Knocknagoney one Friday afternoon. The meeting involved ACC Crime, ex D/C/Superintendent C1, D/Inspector 'CW' and myself. The matter was discussed and ACC Crime immediately sent D/Inspector 'CW' and myself to London to brief SO6 (Anti-Terrorist Unit), New Scotland Yard, Metropolitan Police.

For this particular enquiry ACC Crime gave Fulton Participating Informant (PI) status. Fulton was friendly with one of the suspects, REDACTED (who was subsequently charged) and it was believed that he was sufficiently placed to obtain information from REDACTED and others associated with him. Fulton was also the introductory between REDACTED  and those involved in REDACTED. During this enquiry Fulton acted in accordance with his PI status.

Whilst in London Fulton introduced to two members of the Anti-Terrorist Unit (SO6). The reason for this was to provide Fulton with a point of contact whilst he was in England.

Having briefed SO6 I returned to Northern Ireland and teh information was debriefed to DIU and subsequently passed to Special Branch. A Participating Informant report was also submitted to ACC 'DK' by D/Inspector 'CW' or myself.

It was at this stage, I believe, that D/Superintendent 'T' contacted D/Superintendent 'DL' and ex D/C/Superintendent C1 in respect of the nuisance value of Fulton. D/Superintendent 'T' was attached to South Region Special Branch and D/Superintendent 'DL' and ex D/C/Superintendent C1 to Headquarters Crime Department. Even though I was attached to Drugs Squad, ex D/C/Superintendent C1 was my supervisor for this enquiry.

I believe that a number of phone calls and meetings took place with D/Superintendent 'T'. Whilst I was not present at any of these meetings, both D/Superintendent 'DL' and ex D/C/Superintendent C1 informed me that Fulton was an intelligence nuisance. I cannot recall whether I was informed at this stage as to why he was a nuisance, but I have since been told by Mr 'T' of Special Branch that Fulton had told lies and had made tape recordings of conversations with officers.

It was agreed that Fulton could continue to supply information but that I would need to remain conscious of their concerns. This did not disrupt the procedure adopted that any information provided by Fulton was to be debriefed to IMU.

Resulting from the information provided by Fulton in respect of REDACTED, surveillance was carried out in London and Northern Ireland. This included a search of three computer companies owned by REDACTED and the commencement of an £18m VAT fraud investigation carried out by Customs in London. REDACTED.

Such was the success of this operation and information provided by Fulton he was

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rewarded. Payments made to him are detailed on documents held at IMU, as are all the contact sheets relating to everything disclosed by him.

Fulton also received a reward from REDACTED - N.I. Financial Institution in respect of £5000 for his work on this case. The potential loss to the REDACTED - N.I. Financial Institution was £1.4m with a real loss of £180k. The bank also received some £200k in compensation. In addition to the REDACTED - N.I. Financial Institution payment, Fulton was paid £12000 by the RUC in three stages.

Money appeared to be the motivation for Fulton. Most of the information that he supplied was accurate and yielded results.

However, there were occasions when the information that he provided did not result in a successful conclusion. An example being that he gave information in respect of stolen artifacts from Kuwait that were being held in the Turkish mountains by the PKK. He set up travel arrangements for himself and another to go to Turkey to arrange for photographing of the items so that an operation could be set up to purchase the items and arrest an antiques dealer in London. Whilst this did not happen the information about the whereabouts of these items was corroborated.

In May 1999 I was involved in the joint handling of Fulton with Customs 'DM'. This was an operation carried out in Belgium and Customs had given Fulton PI status to carry out an operation involving one of their targets. Fulton's information and participation successfully identified a warehouse in Belgium used for the trafficking of contraband cigarettes and possibly drugs. Fulton was rewarded by Customs on this occasion.

In September 1999 Fulton gave details of the hidden workshop at premises in REDACTED. The workshop was used to copy CDs and audio tapes on behalf of Loyalist paramilitaries. During a search of the premises a CD copying machine and CD copies were found and two persons were arrested. In total property in excess of £50k was recovered. Fulton was paid £2,500 for this information and continued to provide information in respect of counterfeit copying and the cloning of mobile phones.

In October 1999, and in order to assist REDACTED  - Company in an operation to combat the cloning of mobile phones, Fulton was paid a retainer of £500 by the IMU to enable him to continue with his enquiries. He did provide further information but he did not get actively involved in the operation.

Prior to 1998 Fulton never discussed his current associations with people from PIRA or RIRA, although I was aware that he had past associations. We had general conversations relating to the peace process and whether it would hold and that was it. As his handler I had never encouraged or tasked him to seek information from any terrorist organisation.

Then on 5 January 1998 he started to give information in respect of PIRA and RIRA members in Dundalk. I either met or received a call from him. If we met I cannot remember where it was. From our conversation I completed an information sheet, a copy of which I have handed to D/Inspector 'BD'. This report was then handed over to a member of the DIU where it was given a reference number REDACTED.

I am unable to remember to whom I gave this report. It was normal practice for me to hand my reports/contact sheets over personally to a member of the DIU and then IMU.

I next met or received a call from Fulton on 7 January 1998. Once again if we met I cannot remember where this was. I made a written record of the information that he gave and I have handed a copy of this to D/Inspector 'BD'. The report, which I would have handed into DIU, is numbered REDACTED. Again I am unable to remember to whom I gave the

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[Document ends.]

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