Raymond Okudzeto, 57, a Ghanaian political refugee, was acquitted at Southwark Crown Court of importing half a kilo (1.1lb) of heroin, worth pounds 40,000, found at his home in Primrose Hill, north London in 1991. It was his second trial after an Old Bailey jury failed to reach a verdict in September last year.
Mr Okudzeto told Southwark Crown Court he thought he was working with mercenary recruiter John Banks and British law enforcement agencies to capture real drug dealers. Mr Okudzeto said he had previously passed information to Mr Banks.
Instead, Mr Banks, who allegedly owed Mr Okudzeto money, double- crossed him and set the businessman up in a Customs 'sting' operation.
Stuart Stevens, for the defence, said Mr Banks supplemented his income by 'setting-up innocent people for reward'. Mr Banks, of Gainsborough, Lincolnshire, denied this but admitted that he was paid pounds 750 by Customs officials for his information. He said that he was only motivated by his hatred of drugs.
Mr Banks claimed that when approached by Mr Okudzeto to find a buyer for a 2kg consignment of heroin, he went straight to the authorities. Customs and Excise officers then staged an undercover operation, posing as heroin dealers, and arrested Mr Okudzeto in October 1991.
The earlier trial was told how Mr Banks first rose to prominence in 1974 when he recruited British mercenaries to fight in Angola. He described himself in court as a 'military adviser' to Third World countries. He said he first met Mr Okudzeto after the businessman asked him to organise a coup in Ghana.
Mr Banks, who claims that he holds the rank of major after fighting for south Vietnamese forces in the Seventies, admitted convictions for theft and deception. In 1980 he was jailed for two years for blackmailing a Nicaragaun Embassy official. He had denied demanding money with menaces after implying Nicaragua's leader would be killed otherwise. The earlier trial was told Mr Banks joined The Parachute Regiment in 1962 but was discharged as a private in 1969. Mr Banks freely admitted that he was prepared to organise the assassination of political figures. He claimed that he had worked for the Special Branch, British government security agencies, and for the CIA.
In the months leading up to the first trial, Customs officers refused to admit Mr Banks played any role in Mr Okudzeto's arrest and were accused of failing to disclose vital documents to Mr Okudzeto's defence team. The court was told that Customs officers were trying to protect their informant. They also attempted to block publication of any mention of Mr Bank's involvement in the case.