Chapter 6

Terry Hodson

Terrence Bernard Hodson was born in 1947 in Wombourne in England. He was the youngest of five children, and had two brothers and two sisters. His wife, Christine, was born two years after him in the same town. She too came from a family of five kids. Terry and Christine married in 1967 and had three children of their own. The Hodson family immigrated to Australia in 1974. They lived in Western Australia before moving to Melbourne in 1986. Six years later, Terry and Christine began renting the house in Harp Road, Kew, and lived there until someone murdered them in the back room on 16 May 2004.1

 

As soon as I’d set up my desk at the MDID, Sergeant Graeme Sayce did the official handover. Sayce was an incredible worker – first one at work, last one to leave – and a fair cop to boot. Sayce had given me Dave Miechel to begin my new crew, and he told me that Dave had an informer who’d keep us both busy.

And that was when I first met Terry Hodson.

I met Terry and his wife at a pub with Dave, Sayce and his entire crew. There were about eight or ten of us in a private room. Right from the start, I was a little worried, wondering why Sayce and Dave weren’t keeping Terry more secret. Gossip and the police force go together like steak and chips. Some of the people at the pub dinner were only at the MDID on short secondments, but they’d leave the squad knowing about Terry and his undercover informing.

Over dinner, I got the impression that everyone was very familiar with the informer. Terry Hodson himself was someone who could hold court. He was an amiable guy, and I could see how everyone had become friends with him.

This was a first for me, and I wondered if this was how the MDID operated – by becoming dinner buddies with their informers. A part of me found this really weird, but then another part of me thought, you’re in the big squad now; this is how things are done.

It mostly felt odd because crooks and cops were usually on the opposite sides of the fence. Ordinarily, the only time we got intel from crooks was when they were sitting on the bad side of the interview table and were using knowledge as a bargaining chip. But here was a guy who was open and willing to assist us in the dangerous world of drug dealing.

While Terry held court, I studied him. He certainly didn’t look like any drug dealer I’d met before. For starters, he was much older than the ones I usually dealt with. At 56, Terry had clearly survived the treacherous waters of dealing and buying – and obviously consuming – drugs. He was clearly high on something during the dinner. He also seemed to have a bottomless glass of Scotch. Anyone looking through the doorway to our private dining room would never have guessed that we were a bunch of cops and one crook.

Christine Hodson was at the dinner too. She was a small woman who seemed happy to sit quietly by her husband’s side. When Terry introduced her, he told me she came everywhere with him. His flamboyance was balanced by her quietness. Both of the Hodsons had pronounced English accents.

I left the dinner and went back to the office to find out more about this Terry Hodson and the information he’d provided that warranted such a friendly relationship. And that was when I found out that what Graeme Sayce said was true – Terry Hodson would keep our squad of two busy. Very busy indeed.

But when I read through the files to find out how Terry was assisting us, alarm bells went off. Some of what I read was bumbling Keystone Cops stuff. Terry would dob in drug dealers and then they’d be arrested on the way to his house, or just after they’d been there to sell drugs. I could see that all roads were leading to Terry, and it was only a matter of time before people would realise the common denominator.

I didn’t know whether it was the thrill of the catch or the easy pinch, but the people who were working with Terry seemed blind to the fact that his life was in danger. Coming from the Homicide Squad, I was well aware of the propensity for people in the drug industry to kill each other. As part of the Lorimer Taskforce, we had looked at Nick Ibrahim and Nik Radev and the world of drugs and the dangers to people on the periphery. It wasn’t a pretty sight. I wondered if anyone before me had had serious concerns about Terry Hodson’s safety.

 

Over several months, I watched the situation carefully. I got to know Terry and Christine, and could see the patterns that I’d read about in the files. I approached my senior sergeant, Jim O’Brien, and told him of my concerns. Part of what I was worried about was Terry’s daily phone calls to Dave: he was treating us like his own private detectives. We’d be up the bush staking out a clandestine lab, and Dave’s phone would go off; it would be Terry telling us that he was trying to source bigger and better deals. He’d get wind that we were working on something he wasn’t involved in, and he’d bust his boiler to outdo the other jobs. After a while, it was pretty clear that we were mostly working on his jobs. We’d sit there and shake our heads. Here we were in the country, waiting for some drug dealer to show up, when we could be back in Melbourne catching the sitting ducks that Terry was all too willing to line up for us.

While I realised the attractiveness of this for our arrest rate, I knew that the people he was giving us weren’t going to take this lying down. The more Terry craved the action, the bigger the fish he offered us. Our hauls were huge, and his information was putting some big names behind bars.

In my meeting with Senior Sergeant O’Brien, I told him that even though Terry was an incredible resource to our office, he’d soon be a dead resource because of the way he was being mismanaged. At the same time, we agreed that he could continue to provide us with good intel if he was handled correctly. O’Brien asked for my take on the situation. I told him about dealers being arrested going to and from Terry’s house, and said his informer number kept cropping up on court documents. I told him that when I’d recently been at the court, barrister Nicola Gobbo had been asking who informer 4/390 might be.

Nicola Gobbo was the highest-profile drug lawyer around. If you were dealing with her, you were dealing with the major criminals, because they were the only ones who could afford her. A small-time drug crook would use legal aid or a cheap lawyer. Despite her good qualities, most of the MDID didn’t like her – she was getting bail for all our crooks. And now she was poking around asking questions about informer 4/390 – Terry Hodson.

The first time I met Nicola Gobbo in court, a solicitor representing a crook came over to ask what evidence I’d present to oppose her client’s bail application. Nicola, as the barrister, was standing close by. She let the solicitor dig herself a hole – the woman was feisty and anti-police, which of course made me dig my heels in. Later, Nicola come over politely and asked the same questions. She was savvy enough to know that by being polite, she’d be more likely to get what she wanted. A friendly advance would also give her more opportunities to negotiate deals for her clients. She left the adversarial approach for the hearing.

Another thing about Nicola Gobbo was her appearance. She was an Amazonian figure: her short skirts, exposed cleavage and long blonde hair certainly stood out in a courtroom dominated by men in dark suits. She was confident and professional and easy to talk to. She told you how things were; she laid her cards on the table. Nicola Gobbo came to our MDID offices a lot, speaking to her clients and horse-trading with us. I think she loved the limelight that came with dealing with both the major criminals and the detectives who caught them.

When Nicola came into the St Kilda Road MDID offices, she’d seek out a sergeant, because she knew that she needed to talk to people of rank. She also had contact with detectives at ESD, because some of her clients had given information against corrupt police. And when the detectives from the old Drug Squad had corruption allegations levelled against them, Nicola Gobbo would march her clients off to bail hearings and tell the court that because of allegations of corruption, her clients might not come to trial for years. The courts agreed and the crooks were often granted bail. Carl Williams, Lewis Moran and Tony Mokbel were some of the infamous underworld figures who benefited from this glitch.

While annoying for grass-roots detectives, Tony Mokbel’s bail applications were a masterstroke of legal work. Nicola Gobbo and her colleagues – in a twist of great legal irony – used Inspector Peter De Santo to assist in her case to get Mokbel out of jail. De Santo was subpoenaed by Mokbel’s lawyers because he’d charged two Drug Squad cops in 2001.2 Mokbel’s lawyers used De Santo to show that the arrests might cause unacceptable delays in their client’s court case. Nicola and other lawyers acting for Mokbel had made a number of applications to have him released on bail.

Finally, in September 2002, because of the delays caused by the Drug Squad upheaval, the judge came to this conclusion: ‘The community will not tolerate the indefinite detention of its citizens with no prospect of charges being tried within a reasonable period. Accordingly, despite the nature of the offences with which the applicant is charged, and despite the serious reservations that I have expressed about the granting of bail, the situation facing the applicant cannot be allowed to exist indefinitely. For those reasons I propose to grant bail subject to strict conditions.’3

Mokbel would use his freedom to scarper to the greener pastures and sunny climes of Greece, but that would come later.

At first, crooks and their lawyers merely took advantage of the problems in the Drug Squad, but it quickly morphed into something more sinister – captured crooks would allege police corruption in order to try to get bail. It seemed to us that every couple of weeks, another one would be released on allegations of police corruption.

Terry Hodson was aware of our frustration; it upset him as well. He felt just as let down because he’d helped put some of these crooks away. One crook Terry had helped us arrest was let out, then went round to Terry’s place and threw a bottle at his house. I think he’d made the connection that he’d been caught twice after doing a deal with Terry, and the older man’s denials of any involvement were beginning to sound hollow.

A number of other people were very keen to know who 4/390 was.

Jim O’Brien and I talked about these concerns.

‘They’re gonna find out who he is and he’s going to be killed,’ I told O’Brien.

He agreed.

We both arranged a meeting with Hodson to discuss our concerns. We didn’t want to do it at the office or in any of his favourite restaurants, where I’d seen crooks walk past as we were dining with Terry. One crook had even stopped and given us the evil eye. These kinds of connections were the most dangerous. Despite the plain clothes, most crooks could spot a cop a mile off. Just like we could spot them.

For the meeting, we hired a conference room at a nondescript suburban motel. Terry, O’Brien and I were there – Dave had been invited, but he’d been disgruntled at what he saw as our interference.

‘Mate, there was an original agreement with him,’ Dave snapped.

‘I want you to be a part of this,’ I told him. ‘His safety is the whole issue here. I’m not saying that we’re going to stop working with him, but if we keep going the way we’re going, he’s in danger.’

‘Then I’m not having anything to do with it,’ Dave said abruptly.

I couldn’t understand why he didn’t want to be part of the bigger picture. It wasn’t just about him and Terry. To me, Terry’s safety needed to be the first consideration, but others didn’t seem to feel the same way. I was grateful that at least Jim O’Brien had picked up on my concerns.

Not only did Dave stay away from the meeting, but he immediately went on leave. He seemed to resent the fact that I was stepping in and changing the way things were run. But I think it ran deeper than that; it was as if he felt a certain ownership of Terry.

Inside the conference room, we used a whiteboard to create a comprehensive picture of what Terry was doing for us. The big picture was no surprise to me, but I think the complex web of names and connections opened Jim O’Brien’s eyes to the extent of Terry Hodson’s involvement in the jobs our squad was doing. We told Terry that while we appreciated his help, we didn’t want to put him in any more jeopardy than was absolutely necessary. We also told him that we wanted to keep him a couple of steps away from the action. The buy-bust method was just plain dangerous. We said that we were going to do one job at a time and take it through to the end.

By the close of the meeting, we agreed we’d change his informer number to give him a break from appearing in too many briefs. We assured him that his safety was paramount.

I think Terry was relieved to be pulled back a bit too.

Probably as a direct result of what happened with Terry, informers are handled very differently now. As a rule, they don’t deal directly with detectives; instead, they deal with a team that works out their motives and develops a handling plan. Then, when information is received, the team passes it on to relevant squads. The new rules put distance between the squad and the informer.

If this system had been in place when Terry was jumping up and down to help the police, maybe what happened wouldn’t have. One thing that would have been interesting to know would be the assessment as to why he wanted to help us so badly. Contrary to popular belief, Terry wasn’t paid for what he was doing – except once, when I lobbied to get him a payment after a number of successful busts had sent a few good crooks to jail.

Terry was one out of the box; he informed on everyone – his own kids, friends, colleagues. No-one was off limits, except maybe his wife. Some suggest he was in it to get rid of his opposition. Maybe. But one thing needs to be remembered: Terry Hodson was operating his own drug-dealing business with a green light from Victoria Police. While he was helping us, dining out with detectives and hobnobbing with the police hierarchy, he was in possession of his own get-out-of-jail-free card. He could carry out his business with the police on his side. To a guy who’d been dodging police most of his adult life and had seen the bleak inside of a jail cell, this had to be an attractive proposition.

 

Even with tighter measures to protect him, things didn’t always go to plan. On one job, we got Terry to do a drug buy. Because he didn’t know the address of the house, he’d organised another drug dealer to take him there. We’d equipped Terry with a backpack with a GPS device on it. His brief was to leave the backpack at the house while he went off with the drugs. Meanwhile, we’d track the address via the GPS and organise the warrants. Terry was supposed to go back to the house and retrieve the bag, but because we were delayed, we arrived at the same time he did. As our guys were crashing through the door, I was madly waving at Terry to drive away so that nobody made the connection.

To protect Terry, we ensured that the paperwork for him was kept out of the system. We had a stand-alone computer – not connected to the network – where we’d type up our information reports (IRs). Every time we spoke to Terry or met with him, we duly typed out an IR. Every time we printed the report, the computer automatically printed three copies. We gave one to Jim O’Brien, put one in a blue folder, and shredded the third copy.

I once asked why we were doing it this way and was told that the squad didn’t want the Ethical Standards Department knowing all our business. Some of my bosses had come from ESD and endorsed us using this standalone system, so I figured it was okay.

Graeme Sayce would later explain this in his statement. ‘At some stage, I believe in early 2002, I was advised by Detective Senior Sergeant O’Brien that an analysis of the Intel Manage database was insecure and able to be accessed by many outside persons. Miechel and I were instructed to compile the information reports directly as a Word document and file the information report with Detective Senior Sergeant O’Brien for the inclusion in the informer management file. The informer management file was retained secured within the detective senior sergeant’s office.’4

 

After the proverbial hit the fan, higher-ranking cops documented their concerns about the relationship between Dave Miechel and Terry Hodson, but these concerns were never as big as the concerns for Terry’s safety. Jim O’Brien would say later that he’d warned Dave about forming any inappropriate relationships and reminded him of the need for professionalism, but if this happened, I wasn’t aware of it.5 Once I became his handler too, Terry Hodson rang me as often as he called Dave, and O’Brien wouldn’t have known how often Terry rang anyone.

One thing I had insisted on was that Terry should be paid for his informing. I asked for $25,000 – which was about $5000 for each of the large-scale jobs that had resulted in big hauls and big arrests. The minute I put the paperwork in, things got more official.

On 4 July 2003, Superintendent Anthony Biggin asked Acting Inspector Adrian White to complete a risk assessment of the relationship between Dave and Terry.6 Not knowing all the protocols for assessments of informers, I figured this was part of the procedure in okaying the payment.

Terry was known as a prolific provider of information, which had resulted in significant arrests and the seizure of illicit drugs and cash.7 For this, he’d been paid nothing until the brass finally approved a smaller payment than I’d asked for. On 23 July 2003, Inspector Adrian White and I drove to Albert Park Lake and met Terry in a car park. He jumped into the back seat of our car, and White handed him a thick envelope containing $10,000.8

‘Thanks!’ said Terry, clearly chuffed – not at the amount of cash, which would probably seem like small change to him, but at the official recognition of what he was increasingly seeing as an adrenaline-fuelled vocation. In fact, having barely put the envelope down the front of his overalls, he began talking about another job. He was impressed that Adrian White was an inspector, and off he went.

‘I know you all are really busy and I’ve been trying to get Dave and Paul involved – I know a guy who’s bringing in blocks of cocaine—’

‘Come on, Terry, remember what we agreed,’ I said.

Terry ignored me and talked straight to the inspector. ‘If you can just get the boys organised, we can—’

Adrian White raised his hand. ‘One job at a time, Terry. One job at a time.’

Terry Hodson’s longevity had something to do with his people skills. Terry had the charm to convince everyone that he was their best friend.

Prior to my arrival at the MDID, one of the jobs ran into a snag when the brass wouldn’t authorise payment for a big purchase of ecstasy tablets. The squad had asked for about $25,000 to make a buy of 1000 tablets with a street value of $50,000, but the money wasn’t available. Unwilling to let the deal slide, Terry had offered to pay for the drugs himself, and this had been okayed. I think Terry paid about $22,000 of his own money and bought 1000 ecstasy tablets. He’d then ordered another 3000. As a result, the crook he’d bought them from, Jayson Rodda, had been pinched when the MDID arrested him in possession of the second lot of drugs. Terry was able to convince Rodda that he’d had nothing to do with dobbing him in.

I’d reviewed all the Hodson folders and wondered at the where-abouts of the 1000 tablets – which legally constituted a commercial quantity and carried a life sentence in jail. It was also an amount that far overstepped Terry’s police indemnity. The Drug Squad had let Terry buy a commercial quantity of drugs and he still had them. Whoops.

I wanted to handle this delicately, because I was aware that Terry had outlaid his own money for the drugs to help the squad, and I didn’t want to jeopardise our ongoing relationship.

At our next meeting with Terry, I asked him if he still had the ecstasy tablets.

‘Yeah, sure,’ he said. ‘I’ve got them at home.’

‘Hold on to them,’ I told him.

‘I’ve got a bloke that I can set up with them—’

‘Nah,’ I said, shaking my head. ‘Just hold on to them. It’s a commercial quantity, Terry. Your immunity only gives you the right to buy small amounts. A thousand tablets would put you in jail forever.’

Terry shrugged; he always knew when he was offering something we didn’t want. He’d wheel and deal another day. I told him that I’d find out what we could do about his thousand tablets.

Back at the offices at MDID, Dave and I went in to see a more senior officer. I briefed him about our current operations and then flagged the issue of Terry’s tablets.

‘Go get them off him,’ the senior officer said.

‘Er… but the problem is that he paid for them with his own money.’

The officer hesitated. He was fully aware of the value of Terry’s information, and none of us wanted to lose him as an informer.

‘Can’t we just pay him what he paid for them and destroy the drugs?’ I asked.

‘Hmm,’ the officer said.

We all put forward a number of scenarios where Victoria Police could benefit from the drugs’ sale without having to pay for them. The officer suggested that Terry sell them and we could arrest the people who bought them from him. I strongly disagreed: this was the kind of thing that could get Terry killed. It had happened too often; if we arrested everyone who bought drugs from Terry but he remained free and unarrested, the crooks themselves would put two and two together.

Finally, the officer told us to tell Terry to sell the drugs and get rid of them. We were also instructed to forget that this conversation ever took place, and not to record the meeting in our diaries. But it’s hard to forget a conversation like that.

Terry took it all in his stride. He was happy to sell the drugs, but he was a little disappointed that they wouldn’t be used to make more arrests. Silly bugger. He never showed any concerns for the consequences of what he was doing at all. This may have had something to do with his frequent snorting of cocaine and drinking of Scotch.

To Terry, it was the thrill of the involvement; it was never about the money. You only had to meet him a couple of times to know that he wanted to be in the thick of things. He was an extraordinary man, using his own money and his own drugs to ensure that we got arrests. When we weren’t working with him on a job, he’d constantly call us, and he knew how to press the right buttons. If we weren’t interested in a small ecstasy bust, he’d immediately offer us a bigger bust. It was certainly a gift for the MDID – one that Victoria Police is unlikely to see again.

The bit that I don’t get was that he was willing to give anyone up, including his own kids, his best friends and his favourite associates. Anyone he had dealings with was fair game. He didn’t seem to care. And I had to wonder if his wife, Christine, knew and was okay with it. She seemed like a really caring woman. Did she know and approve? Or did Terry keep her in the dark?

Such was his desire to be in the thick of things, Terry Hodson was happy to talk to any cop. Most informers would only talk to one or two cops because they didn’t want it to be widely known that they were informers. Terry wasn’t like that. When Dave Miechel went on leave, I’d take another member with me to meet Terry, as per protocol, and he’d be as open and friendly with the new cop as he was with Dave and me.

One thing that all in MDID realised was that while there was mostly truth in what Terry told us, things were never quite as grand as he made them out to be. A classic example of this was his frequent promise of cocaine. Large seizures of cocaine were rare at a state police level, and Terry often tempted us with the promise of a big cocaine bust. We always followed his information, but not one lead panned out, and we never made any cocaine arrests. After a while, I began to wonder if he was actually protecting his sources because he was such a prolific cocaine user, and promised us cocaine because he wanted to keep our attention squarely on him.

We rarely met at Terry’s house; it was a no-go zone. We didn’t want to create a situation in which any nefarious characters arriving at his house would see coppers leaving. That’s not to say we never went there. We occasionally went – two or three times that I can think of – to debrief after an operation.

But we usually met at Romeos in Toorak Road, or little coffee shops that we tried to vary so as not to put him in danger. I always tried to keep the meetings to twenty minutes, because the longer we were together, the more dangerous it was for him. Some meetings lasted only ten minutes if Terry was handing over drug samples he’d bought. After we were spotted in Toorak Road by a crook, we began going further afield. A location that I suggested because it was kind of hidden was a cafe called The Boathouse. It was also convenient to both the St Kilda Road police complex and Terry’s place in Kew.

 

One day, I met with Dave Miechel and Jim O’Brien to discuss the possibility of getting Terry to introduce an undercover police officer into some of the operations we were running. The purpose of this was to remove Terry a further step from the action. If there was an undercover operative, the officer could do the deals and be named in the subpoenas rather than Terry. Or one undercover could introduce another so that if links were made, then one cop would be pointing at another rather than at Terry.

While O’Brien agreed, Dave was against the idea because he said Terry’s identity would be disclosed if he had to appear in court. This was an overreaction on Dave’s part, as we never would have allowed Terry to be named in court – that was the purpose of the undercover operatives. But Dave, who had nurtured Terry as a police informer, was upset to think that O’Brien and I wanted to introduce a new element to what he and Terry had previously agreed on. We decided to ask Terry, and he sided with Dave – he didn’t want to disclose his identity by giving evidence in court, even though we told him this would never happen.9

Dave was incredibly protective of Terry. It was bred into cops that if you had a good informer, you looked after them. While it was a little bit frustrating, Dave was only acting on policy. You had an informer, you kept them secret, and you guarded them. And they were yours.

There were always supposed to be two cops when we met with Terry. But Dave Miechel began to break the rules.