Washington (CNN) -- U.S. authorities are looking for possible links between a grenade found at the scene of a drug cartel shootout in Mexico earlier this month that killed three police officers and an American who allegedly made similar improvised grenades from parts exported from the United States.
A source close to the investigation says the Bureau of Alcohol, Tobacco, Firearms and Explosives wants to examine the device recovered to see if it bears signatures of a grenade-manufacturing operation authorities allege was run by Jean Baptiste Kingery.
The device was found at an October 10 shootout in Jalisco state, between local cartel members and Mexican police, according to an internal ATF report reviewed by CNN.
Kingery was arrested in 2011 and is facing charges in Mexico for allegedly importing grenade hulls and other parts, and making them into improvised explosives sold to drug cartels. ATF agents began investigating him in 2010 and federal prosecutors continue to pursue the case.
An attorney in Mexico couldn't be located.
Mexican authorities have been finding grenade hulls allegedly tied to Kingery for years, sources close to the investigation say.
Following complaints from cartel members that grenades detonated too quickly, he allegedly changed their fusing system over the years, U.S. bomb technicians found.
He also told investigators that he taught cartel members his techniques to manufacture grenades, according to two sources close to the case.
'Fast and Furious' entanglement
The Kingery case briefly became entangled in the ATF scandal over the botched "Fast and Furious" gun sting, in which ATF agents from the Phoenix allowed suspected arms smugglers to buy about 2,000 firearms, many of which have turned up in crime scenes in Mexico and the United States.
ATF agents hoped to use the sales to prosecute major smugglers, but had no way to track the weapons.
The discovery of the grenade in Jalisco earlier this month and the ATF report that called it possibly a "Kingery" grenade, has led to reports that the case may be a new "Fast and Furious"-like scandal for the agency.
But the cases differ in several respects.
In early 2010, ATF agents working with Mexican counterparts attempted a sting operation to nab Kingery as he allegedly transported grenade parts across the border from the United States to Mexico.
Mexican authorities lost track of Kingery and failed to stop the shipment, according to people close to the case.
Unlike "Fast and Furious" where ATF agents didn't alert Mexican authorities to the gun sales they were allowing, the agency worked with Mexican agents throughout in the Kingery case.
The matter is under investigation by the Justice Department inspector general, who is expected to issue a report soon. Members of Congress are also tracking the case.
The ATF agent who led the Kingery investigation, Pete Forcelli, says ATF's efforts were complicated by U.S. laws that treat the grenade hulls as novelty items, easily available at military surplus stores and online.
It is illegal to export them without license, but there are few restrictions otherwise.
Forcelli, who was a whistleblower in the "Fast and Furious" case, says agents working the Kingery case were frustrated that prosecutors wouldn't bring charges against him.
"I want to ensure the public that at no time while under ATF surveillance did Jean Baptiste Kingery possess or transport live hand grenades," Forcelli said in a statement. "Since the items Kingery possessed are not contraband, we were powerless to seize them inside of the United States."
Mexican authorities arrested Kingery in August 2011 in a subsequent Mexican operation with ATF.
Authorities also found his alleged grenade factory where they found parts that could have been used to manufacture about a 1,000 grenades, sources close to the case say.
ATF, prosecutors clash
Both the "Fast and Furious" and the Kingery cases were troubled in part because of bitter fighting between ATF and prosecutors in the U.S. Attorney's Office in Phoenix.
Agents said a lead prosecutor in both cases, Emory Hurley, obstructed attempts to bring charges. Hurley remains in the Phoenix office, but was reassigned to the civil section after an inspector general's probe blamed him for some of the "Fast and Furious" problems.
Hurley didn't return a call seeking comment and a spokesman for the U.S. Attorney's Office declined comment on his behalf.
In the Kingery case, Forcelli and other ATF agents arrested him in June 2010 in Arizona and seized 116 grenade hulls and other parts.
He told investigators that he operated a mill in Mexico to make grenades and sold them to cartels, according to internal ATF documents first reported by The Wall Street Journal.
Hurley declined to bring charges and ATF agents were required to free him, according to sources close to the case. Despite Kingery's statements to the ATF, Hurley said there wasn't enough evidence and that Kingery could easily claim the grenade hulls were novelty items.
Such grenade hulls are commonly sold as desktop trinkets labeled "complaint department, take a number."
Prosecutors in Phoenix told Justice Department officials who investigated the matter a different version of events, according to sources familiar with their account.
They said they wanted investigators to watch Kingery more and charge him later.
They also said ATF agents wanted to make Kingery an informant.
ATF agents disputed that account and told Congressional investigators from the offices of Sen. Chuck Grassley, R-Iowa, and California Rep. Darrell Issa, Chairman of the House Oversight and Government Reform Committee, who investigated "Fast and Furious."
Agents investigating Kingery provided whistleblower testimony to Congress about "Fast and Furious."
Still some mystery
A source close to the Kingery case says if the latest grenade found in Jalisco is deemed similar to those made by Kingery, it still leaves some mystery of their source.
That's because cartel members apparently taught by Kingery may have manufactured it after his arrest.
"He was running a grenade-making school and workshop," one source close to the case says.
Mexican authorities and ATF technicians noticed a new fusing system in grenades allegedly tied to Kingery after they began turning up in late 2010 and early 2011, two sources close to the case say.
The new fuses provided a three-to-four second delay so cartel members could throw the devices and have time to get away unharmed. The devices have been deadly to the Mexican military and police fighting the cartels, and to rival gangs.
Ginger Colbrun, an ATF spokeswoman, said in a statement that "we have not determined the origin of the devices" used in the Jalisco state shooting.
"The description that was used in a document leaked to the press was a term used by law enforcement who recovered and reported the devices. There is no evidence at this time or any indication the device originated from the Jean Baptiste Kingery investigation. Authorities will have to process the devices at the laboratory to determine if there is any forensic connection," Colbrun said.