TalkLeft picked up on this story about a Secret Service informant who, while assisting the government, launched one of the largest identity theft operations in U.S. history. Back in 2003, Albert Gonzalez avoided indictment for identity fraud by becoming a snitch; his cooperation resulted in the dismantling of a significant identity theft ring of which he appeared to be the ringleader. He kept on with his criminal activities, however, apparently even using his government connections to warn other hackers.
This is simply one of the biggest problems with informant use: the fact that offenders can use active cooperation not only to avoid punishment but to continue offending. It is a problem inherent in snitching: the most useful informants are typically the most active criminals, so the government has to tolerate some amount of criminality in exchange for information about and access to criminal activities. The scale of the phenomenon ranges: from the small (addicts who stay on the street by providing information to police) to the large (drug dealers who remain in operation by informing on colleagues and competitors) to the mind-boggling (terrorists who provide information to the U.S. government while participating in new terrorist activities). In my book I write extensively about the harm that this practice can cause in high-crime urban communities in particular. When law enforcement tolerates crimes committed by cooperating offenders, whether it is drug use, property crimes, or violence, the neighborhoods in which those offenders live have to put up with it.