Crime Files Network

Archive for March, 2012


THE Australian government authorised more than $10 million in suspected drug funds to be sent offshore in an extraordinary operation that revealed top Asian political and policing officials are involved in a criminal syndicate, according to an intelligence briefing.

The Australian Crime Commission briefing describes a multibillion-dollar international drug and money laundering network that poses ”a significant threat” to  Australia.

Read an edited extract from The Sting: Australia’s plot to crack a global drug empire

The briefing, seen by The Saturday Age, outlines the findings of Operation Dayu, a four-year intelligence investigation into large-scale money laundering and drug trafficking in the Asia-Pacific region. Operation Dayu included the running of an undercover money-laundering operation, a controversial but legal methodology that involved the ACC sending $10.6 million of suspected drug funds offshore to identify overseas crime bosses and their activities.

Operation Dayu, run in partnership with the Australian Federal Police, state agencies and anti-money-laundering agency Austrac, seized drugs worth an estimated $780 million and exposed a triad-led global criminal entity known as the “grandfather syndicate”.

The briefing says the syndicate is responsible for drug imports worth at least $1.2 billion into Australia annually, with some distributed by outlaw bikie gangs.


According to the briefing, Operation Dayu has uncovered intelligence that the grandfather syndicate has achieved “high-level infiltration of government in both law enforcement agencies and political circles” across much of Asia, including China, Vietnam, Thailand, Burma, Laos and Cambodia.

“There are a number of other countries where this is suspected but not apparent to date,” it says.

One example cited in the briefing involves a “high-placed triad associate” of the grandfather syndicate “attending an Interpol conference in New York”.

The findings highlight the extraordinary challenge facing the Australian government and law enforcement agencies as they seek to combat drug importation via the nation’s porous and, according to some police sources, vulnerable or corrupted border security regime.

The grandfather syndicate has its origins in a “triad conglomerate” formed by formerly warring triad groups in Asia a decade ago.

It works much like a multinational company, with operating hubs around the globe that shift with demand and supply. Australia is a significant market for the syndicate because of the huge demand for drugs and the comparatively high prices Australians pay for them. The briefing says: “The pooling of resources of the main triad groups has allowed them to merge their contacts, assets and holdings, creating a well-established network of contacts across many governments as well as legitimate business and company structures, that enable them to mask and support their criminal activities.”

It consists of “three main heads based in south-east Asia and at least 22 other primary seats [bosses]” based around the globe, and it pours billions of dollars into “high-profile internet gambling facilities, Asian hotel chains and resorts, commercial construction companies, property companies in Hong Kong and Vietnam, casinos and casino ships”.

To move money, the syndicate uses “highly placed government officials, banking staff … and many other means to provide a service that will undercut any other overt or covert money transfer facility”.

Members or associates of the grandfather syndicate are believed by law enforcement officials to be responsible for importations into Australia dating back more than a decade.

These include shipments linked to jailed Sydney crime boss Duncan Lam Sak Cheung and a 105-kilogram heroin shipment in 2005 which led to the jailing of another Asian crime boss, Ly Vi Hung.

Other major seizures linked to Operation Dayu include a $500 million ecstasy bust in 2007, several seizures from Canada in 2008 totalling half a tonne of illicit drugs, and large drug busts in 2009 and 2010 linked to Asian crime figures or bikie gangs supplied by triad-linked importers.

The behind-the-scenes battle in Australian policing agencies and the federal government to confront organised crime – including the work of Operation Dayu – is detailed The Sting, written by Nick McKenzie (Melbourne University Press).


It was said by Fox News Channel commentator Geraldo Rivera on Friday that the hoodie an unarmed black teenager wore when he was killed in Florida is as much responsible for his death as the man who shot him.

The veteran TV personality, speaking on Fox & Friends, waded in with an opinion on the shooting of Trayvon Martin, a story that has attracted attention across America over the past month. He later acknowledged that his comments were “politically incorrect”.

Killed ... Trayvon Martin.Killed … Trayvon Martin.

People wearing hooded sweatshirts are often going to be perceived as a menace, Rivera said.

“I’ll bet you money that if he didn’t have that hoodie on, that nutty neighbourhood watch guy wouldn’t have responded in that violent and aggressive way,” Rivera said.

The unarmed 17-year-old Martin was killed on February 26 in Sanford. He was wearing a hoodie and returning from a trip to a convenience store when neighbourhood watch captain George Zimmerman started following him, telling police dispatchers he looked suspicious. Zimmerman hasn’t been charged and says he shot Martin in self defence.

Supporters of Trayvon Martin rally in Union Square during a Million Hoodie March in Manhattan.Supporters of Trayvon Martin rally in Union Square during a Million Hoodie March in Manhattan. Photo: Getty Images

The case brought hundreds of people together in New York with Martin’s parents for a protest march this week. The BET television network said it would air a special, Shoot First: The Tragedy of Trayvon Martin, on Monday.

Of Martin, Rivera said, “God bless him, he was an innocent kid, a wonderful kid.” But he said the case should be a warning to parents to watch what their children should wear.

“If you dress like a hoodlum eventually some schmuck is going to take you at your word,” he wrote in a commentary posted on Friday on the website Fox News Latino.

Geraldo Rivera ... "If you dress like a hoodlum eventually some schmuck is going to take you at your word."Geraldo Rivera … “If you dress like a hoodlum eventually some schmuck is going to take you at your word.” Photo: Getty Images

Hundreds of people had posted messages on Rivera’s Facebook page by Friday afternoon, the overwhelming majority of them negative about Rivera’s comments.

Rivera compared his own comments to those of fellow Fox analyst Juan Williams, who was fired by National Public Radio in 2010 for saying on Fox that he gets nervous when he sees people on a plane with clothing that identifies them as Muslim.

“No one black, brown or white can honestly tell me that seeing a kid of colour with a hood pulled over his head doesn’t generate a certain reaction – sometimes scorn, often menace,” Rivera wrote in his commentary.



USA Army Staff Sergeant Robert Bales has been charged on 17 counts of premeditated murder of Afghan civilians, the Army stated.

Bales, 38, also faces six charges of assault and attempted murder, the Army said. Under US military law, criminal charges were formally preferred today against Bales.

The charges allege that on March 11, Bales murdered Afghans near Belambey, in the Panjwai district of Afghanistan’s Kandahar province. If convicted, the maximum possible punishment under the Uniform Code of Military Justice is the death penalty with a mandatory minimum sentence of imprisonment for life with eligibility for parole.

Nine children, four women and four men died in the shootings, while four children, one woman and one man were injured.

Marine Corps General John Allen, the commander of US forces in Afghanistan, said “we are under some very trying circumstances” in the country when asked about the aftermath of the killings. He said Afghans “understand these kinds of things happen and are not happy about it”.

Allen said Afghans knew the US would hold those who commit crimes responsible for their actions. He said the Afghan “leadership is confident that we’ll investigate thoroughly, try the case thoroughly and, if required, hold the individual responsible”.

In a murder charge, the term premeditated refers to a “consciously conceived” intent to kill, Army spokesman Lieutenant Colonel Jimmie Cummings said.

The Army released a “charge sheet” about the incident that redacted the names of the victims and provided no details about how the shooting unfolded.

The next step in the process is a so-called special court-martial to be convened at Joint Base Lewis-McChord in Washington state, which is the home base for Bales.

The investigation may determine whether a general court-martial will be convened to try the case.

The soldier’s civilian attorney, John Henry Browne, has questioned how much evidence the military has in the case. Browne has also said his client suffered a traumatic brain injury during one of three tours in Iraq and didn’t want to go to Afghanistan, where he was deployed in December.

Bales, a qualified sniper with the 2nd Battalion, 3rd Regiment of the 3rd Stryker Brigade Combat team, was in Afghanistan in support of US Special Operations forces. He is being held in confinement at a military prison in Fort Leavenworth, Kansas.

The killings exacerbated tensions between the US and Afghanistan, already at a high level after the burning of Korans last month in a trash dump at the largest US base in the country. Protests followed across Afghanistan, and six American military personnel were killed by Afghans.

President Barack Obama called Afghan President Hamid Karzai after the shootings of which Bales is accused, pledging “to hold fully accountable anyone responsible”.

A trial may not begin for at least a year, according to Colby Vokey, a retired Marine Corps officer who tried or supervised hundreds of military cases as chief prosecutor and later chief defence counsel at Camp Pendleton, California.

Questioning the evidence in the case, Browne, the Seattle attorney representing Bales, said this week: “If I was the prosecutor, I’d be concerned about how we prove anything.”

Browne also has indicated he may seek a “diminished capacity” defence for his client. He said this week that Bales was “confused” and did not recall some details of the alleged assault.

A mental-health defence may be difficult to win before military jurors, according to Christopher Swift, a fellow at the University of Virginia Law School’s Centre for National Security Law.

He said that strategy may help avert a death sentence if the military sought it in the case.

“I see this as a defence that’s aimed at mitigating the ultimate penalty,” Swift said.


The trial of Ethel and Julius Rosenberg began in New York Southern District federal court. Judge Irving R. Kaufman presides over the espionage prosecution of the couple accused of selling nuclear secrets to the Russians (treason could not be charged because the United States was not at war with the Soviet Union). The Rosenbergs, and co-defendant, Morton Sobell, were defended by the father and son team of Emanuel and Alexander Bloch. The prosecution includes the infamous Roy Cohn, best known for his association with Senator Joseph McCarthy.

David Greenglass was a machinist at Los Alamos, where America developed the atomic bomb. Julius Rosenberg, his brother-in-law, was a member of the American Communist Party and was fired from his government job during the Red Scare. According to Greenglass, Rosenberg asked him to pass highly confidential instructions on making atomic weapons to the Soviet Union. These materials were transferred to the Russians by Harry Gold, an acquaintance of Greenglass. The Soviets exploded their first atomic bomb (and effectively started the Cold War) in September 1949 based on information, including that from Greenglass, they had obtained from spies.

The only real direct evidence of the Rosenberg’s involvement was the confession of Greenglass. The left-wing community believed that the Rosenbergs were prosecuted because of their membership in the Communist Party. Their case became the cause celebre of leftists throughout the nation.

The trial lasted nearly a month, finally ending on April 4 with convictions for all the defendants. The Rosenbergs were sentenced to death row on April 6. Sobell received a thirty-year sentence. Greenglass got fifteen years for his cooperation. Reportedly, the Rosenbergs were offered a deal in which their death sentences would be commuted to life in return for an admission of their guilt. They refused and were executed.

Police are increasingly focusing on corrupt business identities and public sector workers as they seek to turn up the pressure on organised crime networks.

The Serious Organised Crime Strategy 2011-2014, which is due to be publicly released soon, highlights identity theft, money laundering, technological crime, public sector corruption and weak legislation as the key facilitators of organised crime.

Assistant Commissioner Nick Anticich said police believed the weakest links in hardened organised crime circles were people who have legitimate jobs and businesses but were driven by greed to help criminals.

He said it was those people who police hoped to persuade to co-operate and collaborate in order to bring down organised crime operations in the state.

Police efforts will be helped by new co-operations between different police departments and outside agencies, which are outlined in the strategy.

Already a 12-month operation involving the Australian Taxation Office has targeted legitimate legal, financial and business professionals believed to be helping underworld figures launder money in WA.

The ongoing operation has identified up to $40 million in undeclared income, which police suspect is at the heart of mafia-style operations involving property deals, share trading and superannuation investments.

Aside from the ATO, WA police are now tapped into more national agencies’ networks than ever before, including that of the Australian Federal Police, Australian Securities and Investment Commission, AUSTRAC and eastern states police forces, Mr Anticich said.

He said the strategy was about getting specialists in each field to form “Strike Force” teams to target specific crimes.

This would see teams built to investigate crimes, compared to the previous approach when police would mostly operate on a lone basis and cases would be assigned to a single specialist squad.

Organised crime was considered responsible for the illicit drug trade, counterfeit goods, illegal firearms, extortion/kidnapping, child sex offences, sexual servitude and people trafficking, as well as insurance, welfare, investment and card fraud in WA.

“We want to cause people to think twice before engaging in that type of occupation,” Mr Anticich said.

He said in most cases legitimate operators displayed a “wilful blindness” or were simply driven by the desire for power in complying with such crimes.

However police would now utilise legislation and greater powers provided through the Corruption and Crime Commission to create a “hostile environment” for crime networks.

Already houses have been seized under the Proceeds of Crime Act after they were found to be used for manufacturing drugs, particularly growing cannabis.

Mr Anticich said police were planning to take the approach a step further and were currently working with state prosecutors on legislation surrounding the issue of unexplained wealth.

He said although the legislation had been sparingly used in the past, they were now trying to formulate ways to better utilise it in order to get more convictions.

“You may get rich quickly (through organised crime) but there’s a greater risk of getting locked-up and more chance of losing everything you have,” he said.

The strategy launch coincides with the release of the Australian Crime Commission’s Organised Crime in Australia report in Melbourne today.

“If the North Atrium of Federation Square were filled with $100 notes it would amount to $15 billion – that’s what Australians are losing to organised crime every year. It’s an enormous sum,” Justice Minister Brendan O’Connor said.

“We know that money is the lifeblood of organised crime and if we can stop the money flow we can stop organised criminals in their tracks.

“Organised Crime in Australia covers many different types of offences committed by organised crime but there’s one common factor – greed.

“Whether it’s amphetamine production, money laundering, online scams, corruption, fraud, identity crime or people smuggling – it’s all about the money for these criminal syndicates. If there is an opportunity to make money, organised criminals will try to exploit it.

Organised Crime in Australia provides government, industry and the public with the information they need to better understand and respond to the threat of organised crime – now and into the future.”

The unclassified report is drawn from information gathered from the Australian Crime Commission’s Commonwealth, state and territory partner agencies.

The ACC has produced two other similar reports since 2008, but this edition is the most comprehensive profile of organised crime in Australia to date. It includes the characteristics of those involved, what drives them and the activities they are involved in.

“Revealing these details for the first time is about being open with the Australian people and sharing what we’ve learned about organised crime operations in Australia,” Mr O’Connor said.

Australian Crime Commission CEO John Lawler said it was “essential reading for Australian businesses and communities”.


Anne and Michael Burniston moved to Perth from Britain six years ago to enjoy retirement with their grandchildren, but now they have lost their life savings to an alleged fraudster.

They are among dozens of investors duped by promoters of five get-rich-quick ‘Ponzi’ schemes that have pulled in more than $100 million in Western Australia over the past two years, police say.

WA Police and the state’s consumer protection commissioner issued a joint warning about such sham investment schemes, which often entrap vulnerable elderly people.

The warning follows the recent arrests and charging of two alleged swindlers who police say took nearly $10 million from investors in Perth’s south in separate so-called Ponzi schemes.

A 39-year-old man from Rockingham allegedly received $3.5 million from 13 unsecured investors, while a 50-year-old Canning Vale woman allegedly reaped $6 million from 24 investors, much of it from elderly pensioners.

Consumer Protection Commissioner Anne Driscoll said a hallmark of Ponzi schemes was the unusually high interest offered.

People were attracted to the high returns and felt secure when they received early dividends, and so they invested more and encouraged friends and relatives to invest too, she said.

“But of course it’s a complete sham, and over time it just folds with nothing left, and people have lost hundreds of thousands of dollars.”

Potential investors should always get a second opinion from an accountant, lawyer or licensed financial adviser not involved in the scheme, Ms Driscoll said.

Advice is too late for the Burnistons, who trusted a “financial adviser” with their money and have lost $285,000 and are set to lose their house.

“We came out here six years ago to have a really good life with the family and the grandchildren, and it’s been absolutely devastating. We’ve lost absolutely everything,” Mrs Burniston told reporters.

The former nurse is not only angry with the adviser, who has now been charged, but with a bank for allowing a loan application from the adviser to go through without checking it with them.

The Burnistons found it falsely stated they were “self-employed property consultants” when they are in fact a retired couple in their mid-60s on a combined income of only $29,000 a year.

Mrs Burniston said they had trusted the adviser who had arranged a mortgage for their daughter.

Senior Sergeant Don Heise of the Major Fraud Squad said that despite public warnings, detectives continued to receive new complaints from unwary investors.

“We regularly see victims who have sadly lost their entire life savings as a result of these schemes, and our aim is to prevent it from happening to others.”

Senior Sergeant Heise said the returns promised by such schemes were too good to be true, from 15 per cent into the twenties.

The maximum penalty for Ponzi-style frauds is seven years in WA.


An international scammer has tried to fleece a Perth law firm of hundreds of thousands of dollars, sparking a police warning to the sector.

The firm was emailed in May by a supposed export company in China asking for representation to chase a $900,000 debt from an Australian company.

After exchanging preliminary documents, police said the scammer advised lawyers that the threat of legal action had led the Australian company to promise a payment.

The scammer told the laywers it had asked the debtor to pay the firm, and directed them to deposit the money into a trust account and wait for further instructions.

But the firm became suspicious when a $400,000 cheque arrived by courier two weeks later with the debtor listed as the “remitter”.

Major Fraud Squad detectives confirmed the cheque was sent from Canada and officers were now working with the Canadian Mounted Police’s anti-fraud taskforce.

Detective Sergeant Bernie Iriks said the scammer had not had any further contact with the law firm.

“Invariably, the law firm would have received a request from the scammer to draw against the cheque and remit funds to him resulting in a financial loss to the law firm when the cheque was eventually dishonoured,” Detective Iriks said.

“It is our experience that scammers have a run on a particular industry before moving on to their next scam, so the community needs to be vigilant. If it sounds too good to be true, it usually is.”


A convicted fraudster who served jail time  was the mastermind behind an elaborate gambling scam which authorities say netted him between $6 million and $10 million.

Forged documents purported to be from the International Monetary Fund were part of the elaborate betting scam, a Gold Coast court has been told.

A magistrate today refused bail to Alan Ernest Davenport, 57, from the Gold Coast, who is facing five charges of intent to defraud, four of uttering false documents and one charge of dishonestly obtaining $200,000.

Prosecutor Rosanna Doolan told the Southport Magistrates Court that Davenport was the principal behind a sports arbitrage betting scheme which netted between $6 million and $10 million.

The scheme involved an invitation to put bets on all possible outcomes so a profit was made.

Between 600 and 700 people lost amounts between $10,000 and $400,000, police will allege.

“He used telemarketers to ring all around Australia and convince people to give money,” Ms Doolan said.

Clients were told the money was being bet on sports events all around the world.

“There is no evidence of betting ever taking place,” she said.

Clients were shown forged bank documents, including some purporting to be from the International Monetary Fund in Washington, the court heard.

“Essentially the entire process was a scam, a fraud of the highest, most deceptive nature,” the prosecutor said.

The court was told Davenport had previously served a jail sentence for two counts of fraud in Western Australia.

The latest behaviour showed “a repetitive, blatant and grossly dishonest disregard for the law”, Ms Doolan said.

The court was told Davenport had no income and no financial or family ties to keep him in Australia and might abscond if granted bail.

He also showed a capacity to interfere with witnesses and was at risk of being harmed by victims of the alleged scam.

“There is serious risk of retribution,” the prosecutor said.

Defence solicitor Grant Spedding said his client had been in Australia for 36 years and had shown no inclination to abscond even though he knew an 11-month police investigation could lead to him being charged.

Three co-accused will appear in court this afternoon.



A teenage computer whiz has pleaded guilty to an attempted $300,000 fraud involving an elaborate trail of dummy businesses.

The 15-year-old boy pleaded guilty to 33 counts of fraud and attempted fraud in the Perth Children’s Court today.

Prosecutor Simon Formby told the court the offences dated from March 10 to June 3 this year, when police executed a warrant at the boy’s home.

Mr Formby said the boy had a total of six registered business names which he used to open cheque accounts with various banks.

“He then wrote cheques that he knew would be dishonoured to either obtain property, pay debts or open further cheque accounts,” he said.

“Apparently this fellow was a bit of a computer whiz.”

Most of the cheques were dishonoured, but the teen pocketed $13,032 from the venture. The total figure of the attempted cheque fraud amounted to more than $300,000.

He also copied the credit card details of two customers at a fast food outlet at which he worked, and used the details to make unauthorised telephone transactions in June.

“These transactions were identified as unusual by bank security and the first was cancelled,” Mr Formby said.

“The details of the second credit card were used on July 3, the day the police warrant was executed.”

The boy successfully gained $5592 from the credit card transaction and attempted to use the credit card to gain $7176.

Mr Formby said the boy did not have any other criminal record but a custodial sentence would be appropriate.

The boy’s lawyer surrendered the boy’s passport and asked that he be sentenced by the Children’s Court president.

Magistrate Sue Gordon said the boy needed to realise he may be locked up for his crimes.

“Sometimes young people try these things because they can and they think they will get away with it,” Ms Gordon said.

Ms Gordon ordered a psychological report on the boy before he is sentenced next month.


A single mother selling a Sony PlayStation through eBay for $250 has been fleeced of $8700 by a Nigerian who claimed to represent the WA government’s consumer protection agency.

The scam involved fake emails purportedly sent from the government’s WA ScamNet service, eBay, PayPal and the Nigerian Police, Customs and Central Bank.

The elaborate deception began when the victim advertised on eBay last month, selling a PlayStation with games and movies for $250.

A bogus buyer made an offer, asked that the items be shipped to Nigeria and claimed to have transferred the funds via PayPal.

The seller, who lives south of Perth, then received a fake PayPal email falsely confirming the funds had been deposited.

The scammer then asked the seller to help them by paying shipping charges and customs duty.

The victim received fake Nigerian Customs forms and phony PayPal emails again confirming the additional freight money had been deposited by the buyer.

Suspecting a scam, the woman called Consumer Protection which told her to stop dealing with the fraudsters.

Upon forwarding this email to the scammers, she then received fake emails back from them featuring WA ScamNet and WA government logos, which advised her to co-operate with Nigerian authorities.

Commissioner for Consumer Protection Anne Driscoll said she was alarmed that overseas scammers were becoming more professional and determined.

“It’s a major concern that phony emails purporting to be from Consumer Protection’s WA ScamNet service were used in this scam,” Ms Driscoll said.

“These criminals will stop at nothing to fleece online buyers and sellers of their money, including impersonating government officials in fake emails, and it’s almost impossible for the money to be recovered once transferred.”

The hoax escalated when the woman received a phony eBay email saying the case had been reported to Nigerian Police who then emailed her to say that the fraudster had been arrested.

Later, the fake police email told her that the courts and president of Nigeria had awarded her compensation amounting to $US250,000 ($278,000).

“We are putting in all efforts to erase the bad name given to this great country of ours,” the scammers, posing as Nigerian police, wrote in the email.

“The President is making sure that victims of fraud are compensated.”

A false document supposedly from the Nigerian Central Bank was then received, confirming the money was awaiting transfer to the woman’s bank account.

However, she had to pay a transfer fee of about $US7000 ($7800) before the money could be released.

After losing about $8700 in total, the single mother took her case to Consumer Protection offices in Perth and was told she had been conned.

She told Consumer Protection staff she felt “violated” by the scam.

“If we go on eBay again, I’m not selling anything to overseas,” she said.

“This is our first time and it’s my last time.

“Never again, never again.

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