Source: ATF Gunwalker case to be transferred out of Arizona

Congress grilled the Bureau of Alcohol, Tobacco and Firearms as well as the Department of Justice about the controversial gunwalking program that intentionally let guns into Mexico. Sharyl Attkisson reports.

In a move that signals more trouble for the US Attorney's office in Arizona, sources tells CBS News the Department of Justice is transferring two controversial weapons cases and a murder case to other districts. The cases are the Fast and Furious "gunwalker" case, a major grenade case, and the murder of Border Patrol Agent Brian Terry. "The Department of Justice is giving a no-confidence vote to the US Attorney's office in Arizona," says one law enforcement source.

Both weapons cases involve the trafficking to drug cartels in Mexico. In both instances, ATF agents accuse  the lead prosecutor in Phoenix of wrongfully allowing suspects to remain on the street as they continued to traffic weapons without interdiction. The Justice Department did not confirm the case transfers, and provided no immediate comment.

A law enforcement source says Fast and Furious will now be prosecuted in San Diego instead of Phoenix. In that case, 20 suspects were charged last January with conspiracy, gun running and other charges. One suspect allegedly trafficked assault rifles found at the murder of Border Patrol Agent Brian Terry. ATF allegedly let the suspect and weapons "walk" onto the street without interdiction a year before Terry was killed. ATF whistleblowers and Congressional investigators say the Arizona US Attorney's office attempted to conceal the connection between Fast and Furious and Terry's death, because people might fault them for letting the weapons "walk" and the suspect remain on the street until Terry was shot. Terry's murder case, under the FBI, will also be moved from Phoenix to San Diego, sources told CBS News.

In the grenade case, suspect Jean Baptise Kingery was arrested last week in Mexico. Mexican authorities said he had enough components to make 500 grenades, and allegedly transported materials from the US. Kingery was arrested in Arizona more than a year ago but let back on the street without being charged. That's despite that he allegedly confessed to operating a factory that produced explosive devices made from US supplies for drug cartels.

The lead ATF agent in the investigation, Pete Forcelli, told Congressional investigators he objected vehemently to Kingery's release last year, but was overruled by the US Attorney's office. Forcelli was a whistleblower to Congress in the Fast and Furious gunwalking investigation. He had no comment today except to say he'll "gladly discuss it under oath before a Congressional committee." Officials say they don't know how many grenades Kingery allegedly could have made in the year since his US release, before his arrest in Mexico last week. The Kingery case has been moved from Phoenix to the US Attorney's office in Los Angeles.

According to the Wall Street Journal, the Arizona US Attorney's office acknowledged Kingery was freed in 2010, but said prosecutors planned to follow the case and possibly bring charges later. The Journal says prosecutors claimed some inside ATF also wanted Kingery freed at the time to make him an informant, but that Kingery disappeared.

For months, Sen. Charles Grassley (R-Iowa) argued it's a conflict of interest for the US Attorney's office in Arizona to prosecute Fast and Furious, because whistleblowers implicated the US Attorney Dennis Burke and his lead prosecutor on Fast and Furious, Emory Hurley, in alleged poor judgment and possible misconduct

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.