A federal judge in Washington last week threw out the narco-terrorism conviction of an Afghan man whom U.S. authorities had touted as an example of the dangerous alliances between terrorists and drug traffickers. Haji Bagcho, in his mid–70s, was one of the first people prosecuted under a little-known section of the Patriot Act that made narco-terrorism a crime, even when none of the alleged activities occurred on American soil.

According to court documents, Bagcho had been under investigation by the Drug Enforcement Administration since 2006 and was eventually arrested in Pakistan in 2009. The DEA said an analysis of ledgers and other records seized from money exchange houses that did business with Bagcho suggested that the elderly heroin dealer was responsible for some 19 percent of the world’s supply of opium. And based almost entirely on the testimony of a single paid informant, who was identified during trial only as Qari, the agency alleged that Bagcho used the proceeds from his illegal narcotics business to support the Taliban.

“It is clear that the defendant’s illegal activities as a drug trafficker and supporter of terrorists constituted an extremely serious form of criminal conduct, particularly when, as in this case, the two activities were combined,” prosecutors argued. “His conduct directly threatened the lives of American service members, their NATO coalition partners and the Afghan public.”

It turns out, however, that Qari had previously been deemed a liar. According to court records, a different U.S. government agency had designated Qari a “fabricator and/or information peddler.” That agency, which was not identified publicly, had paid Qari $10,000 for information about terrorist activities, but then decided to cut off contact with him once it determined his information “seemed unrealistic and sensational.”

Court records indicate that in 2010, the unidentified agency conveyed its concerns about Qari to an agent in the DEA’s office in Kabul. But the DEA kept up its ties to Qari and paid him some $45,000 for his work as a confidential informant, at a time when the annual gross per capita income in Afghanistan was less than $600. Prosecutors in the Bagcho case said their check into Qari’s background failed to come up with the derogatory information “due to discrepancies in the spelling of Qari’s name.”

The first trial against Bagcho ended in a mistrial when jurors could not agree on a verdict. After a second trial, Bagcho was convicted on two counts of drug trafficking and one count of narco-terrorism. In a 24-page ruling, issued last Friday, Judge Ellen Segal Huvelle vacated the narco-terrorism count against Bagcho, saying “the government violated the defendant’s right to due process by failing to turn over favorable impeachment evidence.” She wrote, “Evidence that the DEA’s Kabul office was told that Qari had been deemed a liar by another government agency, yet it still elected to use him as a witness would serve to undermine the reliability of the government’s investigation and its sources.”

Earlier this month, a story by ProPublica and The New Yorker examined some 37 narco-terrorism cases highlighted by the DEA and found that a disturbing number of them also unraveled. In most of the cases, the only evidence of a link between drugs and terrorism entered into evidence was provided by the DEA, which used paid informants to lure targets into staged narco-terrorism conspiracies.

Shelli Peterson, a federal public defender who represented Bagcho at trial, said the ruling “vindicates our belief that Mr. Bagcho did not receive a fair trial.” She said, “This result should serve as a warning to prosecutors handling other cases involving national security to ensure that they follow the rules.”

Still, it remains unclear what affect the ruling will have on the life sentence Bagcho received as a result of the drug charges alone. A hearing is scheduled for the first week in January on whether Bagcho will get either a new trial or a new sentence.