DENVER -- The Drug Enforcement Administration suspected that a former strip club owner was a major Ecstasy distributor in Denver since 2001 but stopped the investigation for “political reasons,” a DEA agent testified Monday.

DEA Special Agent Thomas Miller testified that confidential informants told authorities as early as 2001 that Lance Migliaccio smuggled large amounts of Ecstasy into Denver from Amsterdam. Migliaccio was indicted two months ago on four counts of possessing Ecstasy for distribution.

But in 2001, the DEA made arrests of lower-level dealers so that they could get publicity during a top administrator’s visit, Miller said.

“The DEA administrator was coming to town and wanted to do a press release on the operation,” Miller testified.

Migliaccio’s attorney Harvey Steinberg asked Miller later to clarify.

“He wanted to do a press conference and shut (the 2001 investigation) down?” Steinberg asked.

“That was part of it,” Miller said.

Miller testified that federal agents were investigating Migliaccio since 2001, but were unable to make a case because he careful and stayed away from the “hand to hand” distribution of the drug. Miller said Migliaccio and his partner, who owned a furniture store, smuggled the drugs in hollowed out furniture.

DEA Special Agent In Charge Jeffrey Sweetin said Miller must have misspoke, and Miller wasn't involved with the 2001 case so he had no first-hand knowledge of what happened.

"I don't believe it happened," Sweetin, who declined to go on camera, said in a phone interview. "It's not how it happened."

Sweetin said Migliaccio wasn't arrested in 2001 because investigators did not believe they had enough evidence to convict him.

"We had enough to indict him, we had enough to arrest him, but we're not sure we could get a conviction," he said. "You only get so many bites at the apple."

Sweetin said he has not experienced a case where there is pressure to rush an investigation for political reasons, but drug agents must decide when to make arrests to best protect the community.

Migliaccio was arrested Aug. 4 after, court records show, he tried traded nearly 2,000 Ecstasy tablets and a 40 mm high-explosive shell for a machine gun and two silencers. A search of his Highlands Ranch home uncovered a dozen more 40 mm shells, a small amount of C-4 high explosive, detonator cord and other explosives components, court records show.

Federal agents also initially thought they had recovered more than a kilogram of heroin, but further tests found it to be Ecstasy powder, Miller testified. Federal agents said they found additional Ecstasy pills and steroids in Migliaccio’s house. Steinberg said in court that Migliaccio had a prescription for the steroids.

Migliaccio was in court Monday to determine whether he should be released on $50,000 bond, but a federal prosecutor argued that he is a danger to the community.

Assistant U.S. Attorney Colleen Covell said prosecutors are going to the grand jury this week to get an additional 15-count indictment for the explosives and weapons found at Migliaccio’s home. The indictment is also expected to include carrying weapons during commission of a drug crime, she said.

Covell argued that Migliaccio was a flight risk because he had two passports – only one of which authorities found – and he had a mine in Mexico and owned a house and nightclub in South Africa.

“The community will not be safe if the defendant is released,” she said. “There is no sporting purpose (for the explosives). Those are designed to destroy and injure people.”

Covell also tried to tie Migliaccio to an attempted shooting of an informant and a separate attempted shooting of a Migliaccio business partner -- both in 2004. But Steinberg pointed out Migliaccio was never arrested or charged in either incident, and Migliaccio won a civil lawsuit by the former partner who had alleged the attempted shooting.

Steinberg said other than a 1989 misdemeanor conviction for possession of steroids, his client has no history of criminal behavior and there is no evidence that Migliaccio tried to flee while under previous federal investigations.

He also argued that Migliaccio was holding the explosives for the confidential informant.

“Maybe the government was wrong,” Steinberg said. “The gun shop owner owned all this stuff.”

A magistrate judge had ruled that Migliaccio should be released on bond, and U.S. District Court Judge Robert Blackburn is expected to decide whether to uphold that ruling in the next couple of days.