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Del Varner was an illegal tech-runner.
Varner had a long history of tech running and his nefarious career took him from the Vega System to the Proxima System. He also did a lot of business with the Centauri Republic. He did get caught several times and by 2257, Varner had a criminal record going back five years and had already been indicted three times for tech running. He was also heavily in debt.
In 2257 a lucrative opportunity to settle his debts and get paid was presented to him. Willing to risk it, Del Varner smuggled a changeling net onto Babylon 5 to sell to a Minbari Assassin. Varner was supposed to meet the transport before it arrived at Babylon 5, but they were unable to make the rendezvous.
When the Minbari Assassin arrived at Babylon 5, he killed Varner and assumed his identity. A Babylon 5 technician, Eric, recognized the assassin-as-Varner and was killed to protect the secret. The assassin continued to operate on the station for several days in the guise of Del Varner, carrying out his mission to upset Babylon 5's purpose in creating peace and cooperation between his people and the alien governments.
Station Security - led by Michael Garibaldi - found Varner's body floating in a water tank in his quarters. He had been in the tank for some time, judging from the level of decomposition. Dr. Benjamin Kyle's autopsy reported that Varner had been dead for several days, even though witnesses said they saw him walking around recently. It was while reporting the results to Lyta Alexander - who was actually the assassin in disguise - that the assassin tried a second time to kill the ambassador. However, the real Alexander witnessed the event, and the truth of the set-up was made public.