Confound leaders of notorious offenders nearby? A positive sign (7)
I believe the answer is:
nonplus
'confound' is the definition.
('nonplus' can be a synonym of 'confound')
'leaders of notorious offenders nearby? a positive sign' is the wordplay.
'leaders of' suggests taking the first letters.
'a positive sign' becomes 'plus' (I've seen this before**).
The first letters of 'notorious offenders nearby' is 'non'.
'non'+'plus'='NONPLUS'
(Other definitions for nonplus that I've seen before include "Flummox" , "Disconcert, confound" , "Get flummoxed" , "Put at a loss; confuse" , "Perplex completely with negative and positive" .)