Hi is it possible that LE passes screening, complete with employer verificaton and verified through another provider ? I'm asking because of a situaton where a fully screened (but new ) client had to be sent away because in person  he acted suspiciously like LE. Is this a known issue? how do you avoid it?

It sounds like you avoided it by trusting your senses.  Of course maybe he wasn't LE, and was just acting weird because he is a newbie or just plain weird, but why take a chance.

 
After all the references and checking, it pays to talk a bit to the person over the phone and get the low-down.  Trust your gut.