‘FRANK’ was a devoted family man and volunteer firefighter who worked in the Melbourne wholesale fruit and vegetable market when he was asked to deliver a package, no questions asked.
The father of three did as he was told, although he knew the package contained cannabis. He was given $1000 cash for his trouble.
For Frank, it was the start of a decade in which he went from a low level courier, carrying drugs and cash, to become the confidante of the bosses of five drug syndicates.
Frank was also to became one of Victoria’s most important police witnesses. Known by the code name Informer 108, he gave detectives entree to drug syndicates that had proved virtually impenetrable.
Confidential police documents say that 108 provided enough evidence and information to short-circuit the drug rings that provided the majority of the drugs in the western suburbs.
One expert wrote, ‘It is accepted by many that it would have taken up to eight years by conventional policing methods to achieve what this operation has in eleven months.’
According to Detective Sergeant Stephen Cody, Frank became known in drug circles as a man of his word. The major dealers loved him. He wasn’t an unreliable junkie, he didn’t try to rip them off and he kept his mouth shut.
He acted as a human buffer for the syndicate heads. He handled the money and the drugs so that if there were any arrests, they remained a step removed. Informer 108 took the risks, but he was always assured that if things went wrong his family would be looked after.
Eventually he was arrested and sent to jail. As a man of his word he did not implicate any of his superiors. He was prepared to take the rap. But, his family was left to fend for itself, even after his daughter was hit by a car and suffered brain damage.
Late in 1990 police raided Frank’s house and he was arrested again. His wife was furious. She saw the family being dragged into the underworld. A few months later, aged in her late 30s, she suffered a stroke and became paralysed on one side of her body.
Normally police have to pressure low-level criminals into giving evidence against members of a drug syndicate, but this case was unique. Frank approached police and offered to become an informer. ‘He wanted to make sure he didn’t go back to it. He wanted to burn all his bridges so that he would be forced to make a new start,’ Detective Sergeant Cody said.
As a unique go-between, 108 introduced police to five separate drug syndicates. It began as Operation Pipeline in 1991 but expanded into Operations Advance, Exceed, Extra, Overflow and Bluestreak. Even though the operation itself ran for eleven months and resulted in 68 arrests it was not completed until late 1995 when the final court cases ended.
It involved more than 30 police from the Drug Squad and the Altona District Support Group and more than 80 police were called in when the final arrests were made.
Police seized or purchased cocaine, heroin, amphetamines, cannabis and hashish to the value of $6 million and observed drug deals totalling $7.5 million. It resulted in the arrest and conviction of two drug millionaires, solved a previously unknown murder and led to the discovery of an Uzi machine gun.
Police seized assets, including a farm at Laverton valued at $350,000, nine cars, including a Porsche and a new $47,000 four-wheel-drive, two motorbikes, including a Harley-Davidson ‘Fatboy’, and $500,000 cash.
Pipeline provided a snapshot of the real drug world in any big Australian city: a fluid, turbulent mix of individuals and syndicates always on the make. It wasn’t a neat pyramid structure with one Mr Big or a series of criminals who run separate organised crime groups.
Rather, it showed how different gangs dealt with each other when it suited. It also showed how a generation of minor criminals, who in another time would have just been bottom dwellers in the underworld food-chain, were able to make millions from drugs.
The five syndicates were basically broken into ethnic groups — Chinese, Italian, Lebanese, Greek and Anglo-Saxon — but while they were independent, they were all prepared to co-operate on major deals.
‘They were into everything and anything. Greed was the only common interest they had,’ was the pithy judgment of the head of the operation, Detective Inspector David Reid.
An example of the wealth that can be made from drugs was the rapid rise of John Falzon.
In the mid-1980s Falzon lived in a housing commission flat in Sunshine. In 1984-85 he put in his only known tax return and declared an income of $10,000. He has not claimed any social welfare and did not work since yet, according to police, he acquired assets of more than $1 million, including two farms, houses and cars.
Police watched him dig up $230,000 in cash, hidden in a plastic drum under a sleeper in the back yard of a friend’s parent’s house in Sunshine. Days earlier he had loudly criticised his wife for spending $20 too much at the supermarket. ‘She used to have to provide receipts to him after she’d done the shopping,’ a policeman said.
‘He was a miserable, self-centred, selfish, secretive individual,’ he said. ‘Falzon spoke in code when discussing drug transactions within his network and refused to deal with anyone he didn’t know,’ a confidential police report said. He would only deal with informer 108. It was to be his downfall.
Informer 108 introduced undercover policeman David Barlow to the syndicates. The second time he met millionaire amphetamines distributor Atilla Erdei, the drug dealer stuck a gun in his ribs. ‘He nearly broke them,’ Barlow was to recall. ‘He was a violent man with no regard for anyone else,’ he said.
Before Operation Pipeline police were unaware that Erdei, a clothing manufacturer and millionaire property owner, was a major drug distributor. During the investigation they found he had already killed one man and was planning to murder a second.
Erdei was eventually arrested and convicted of murdering Anh Mal Nguyen on Good Friday, 1992, by strangling him with his bare hands and then dumping the body in a concrete-filled 200 litre drum in Pyke’s Creek Reservoir, near Ballarat.
After the arrests police were told that a $100,000 contract had been taken out on David Barlow’s life. He was married during the undercover operation and spent his first anniversary in the witness protection scheme. He eventually was forced to sell his heavily fortified eastern suburbs home at a loss of $24,000.
Some members of the syndicates were not content with making threats. They also offered inducements. Drug Squad detectives were offered $100,000 in cash for the undercover operative’s original secret tapes. They were promised the money in two $50,000 lots, one before and the other after the committal.
It was no idle promise. When Senior Detective David Harley from the drug squad parked his car near the corner of Park and Nicholson Streets, North Fitzroy, to meet syndicate member Frank Dimos, he was ready to gather evidence for the bribery sting.
He didn’t have too wait long. Dimos walked along the road clutching his stomach. When he hopped into the car his shirt was unbuttoned and $40,000 cash was spilling from around his belly. He said that he was ten pair of ‘socks’ short and would pay the rest the next day. He threw the bundles of cash into the driver’s side foot well.
The group also wanted police to raid selected drug dealers, keep a small percentage for evidence and then return the rest to be resold. Police were to be paid a retainer and a share of the profits.
Two of the men were arrested in a Melbourne motel room viewing 40 kilos of cannabis valued at $72,000 they thought they were buying from corrupt drug squad detectives.
Three men involved in the syndicate were later charged with attempted bribery and conspiracy to pervert the course of justice. Two received no effective jail terms as the sentences were made concurrent with drug terms and the third, Dimos, received an effective sentence of only four months.
Police privately say the courts should be tougher on criminals who offer bribes. ‘The crims have nothing to lose. If someone cops a bribe they can get away with it, but if they are arrested for it they don’t do any real jail time anyway,’ comments one investigator.
After appearing in court, a process that took five years, informer 108 moved interstate with his family under a new name. According to Detective Sergeant Cody: ‘He is doing well. He is one of the success stories of the system. He has a full-time job, is looking to buy a house and is supporting his family.’
But while confidential police documents described Operation Pipeline as ‘one of the most significant drug operations undertaken in modern Victoria Police history’ detectives remain convinced they were not backed up by the courts. They believed that light jail sentences and flawed asset seizure laws made it impossible to make serious inroads into the drug racket.
Detectives, who arrested the 68 people in Operation Pipeline, claimed some of the major dealers were back selling drugs even before the five-year operation was completed.
Police in Pipeline said that though they arrested the main dealers in heroin, amphetamines, cocaine, hashish and cannabis, the operation had no long-term effect on the drug industry.
‘As soon as we arrest a major player there is someone else who is prepared to walk in and fill their shoes,’ complained the then acting head of the Drug Squad, Detective Inspector Reid.
Police in the western suburbs reported that there was a slight increase in price and minor supply problems for about four months after the arrests, but then the industry returned to normal.
‘The profits are so great. People can amass more money in a few short years than they could ever acquire in a lifetime of legitimate work,’ Detective Inspector Reid said.
Some of the major drug dealers arrested through Operation Pipeline were fined or given jail terms of two years or less. The longest sentence was for one of the main targets, John Falzon, sentenced to seven years with a minimum of five.
‘I think everyone agrees there is a need for the major dealers in the drug industry to be subjected to severe jail terms but it doesn’t seem to regularly happen,’ Detective Inspector Reid says. ‘I know we are fair-dinkum about doing something. I just wonder if others are.’
The maximum sentence for drug trafficking is 25 years jail and a fine of $250,000.
‘In Operation Pipeline more than 80 police were involved. It involved time, resources and effort and personal risk for a number of people. An undercover officer, an informer and their families were placed at great risk and the maximum sentence for any of the offenders was seven years with a minimum of five,’ Detective Inspector Reid said.
‘I think the only way to make inroads is when people selling drugs at the highest level go to jail for long periods and come out broke.’
Police in Operation Pipeline and associated investigations tapped into a group of drug cartels with links in China, Thailand, Western Australian and South Australia. One gang ran a separate drug syndicate inside Loddon prison.
The operation, which began in 1991 and finished in late 1995, identified hundreds of drug deals worth more than $13 million and resulted in the seizing of assets of more the $1.1 million, although further assets of more than $1 million allegedly acquired with drug money could not be seized.
Police believe at least three Melbourne legal identities help organise removal of assets so they cannot be traced to drug purchases.
In Pipeline, a new four-wheel-drive vehicle bought with $47,000 cash of drug money and with 40 kilometres on the clock was kept in a police compound for nearly three years before it was sold at a heavily discounted price.
FOR most police, it is possible to move on after a major arrest. The brief of evidence has to be completed and there may be several court appearance to come, but largely the hard work is over.
In some ways the detectives are like film directors. They plan and control the whole production, but they are not the stars. It is the witnesses and the hard evidence that ultimately matters. Confessions are recorded, tapes produced and witnesses swear statements.
But when an undercover policeman is used, the stakes become higher. Undercover work is specialised. Recruits have to be gregarious, likeable and able to think on their feet. They can’t make a mistake or freeze under pressure. A slip can be fatal.
Undercovers have to be carefully controlled. In New Zealand and the US some have gone ‘wild’ and crossed the line. They often see a different world, well away from the humdrum life of a wage earner. No mortgage problems, no saving for a holiday or a second hand car. It is cash city. If you want something, then buy it. The restaurants, the bars, the girls, and the partying seems to be all on tap.
Often, when the sting operation is completed the criminals caught in the net are doubly outraged. It is a personal insult that someone they trusted and liked turns out to be a policeman who betrays them. The added concern is that the undercover is the key player in any successful prosecutions. It takes the police-criminal relationship to a different – and dangerous – plane.
In one big Victorian police operation into a Griffith-connected Honoured Society group, the cartel took out a million-dollar contract on the undercover operative.
In Operation Pipeline the undercover, David Barlow, actually had to slip out of his role to get married. At the time he looked more like Frank Zappa then a clean-cut police sergeant.
Barlow was introduced to the syndicate as a major drug dealer and was soon accepted by the main players. In a restaurant in Carlton in May, 1992, he was on the mobile phone to a drug dealer in Hong Kong when Attila Erdei walked in. ‘I said I was talking to my Chinese connection and he said he had a Chinese problem, but it was gone,’ Barlow said.
What Erdei had referred to was the cold-blooded murder of an Asian victim. ‘I always knew he had the capacity to do it. At one meeting at a service station near Westgate bridge he pulled out an Uzi machine gun and started waving it about.’
He said that when he realised Erdei was talking of a recent murder he tried to get him to provide details without appearing to be too pushy, ‘I went into evidence gathering mode.’
‘I put my finger up to indicate pistol. He put his hand up to indicate he had strangled him. He said his thumbs were sore for three days.’
‘He said it took about ten minutes and the victim kept screaming and fighting. He called him a dirty little monkey.’
Barlow said Erdei told him he put the body in a drum and filled it with concrete. The next morning the concrete had shrunk and the head was visible. ‘He said he gave it a pat on the head and filled up the rest of the drum with concrete.’
Erdei told the policeman that when he rolled the drum into the dam it had bounced on rocks before disappearing. Police divers were able to estimate the point of entry and recover the drum with the body.
After the arrest, Barlow’s wife started to get strange telephone calls. The family started to receive letters about pre-paid funerals.
Police installed two security systems, bullet proof glass and a video surveillance system. Armed police moved into their house. His wife was followed by police. Barlow was armed 24 hours a day. Every time he arrived home he would check outside and inside looking for gunmen. ‘It was like living in a fishbowl. Every time I went home I was waiting for someone to jump out of the bushes.’
The couple’s first anniversary was spent in witness protection with armed police. Eventually things began to settle down. They were at a formal ball enjoying themselves when a work call came through for Barlow.
The Coburg police had received a tip. ‘You’ve got an undercover named Dave who lives in Ringwood. There’s a $100,000 contract out on him.’
For the Barlows it was the end. They decided to sell their suburban home with the security systems more in keeping with a city bank than a family house. They sold the house for a loss of $24,000. They were glad to get rid of it.
Meanwhile, the wheel of crime and detection turns on. By the time the Barlows had regained a semblance of normal life, some of the men convicted of dealing drugs had been released from prison and were back in business.
PLACE: Genevieve Cafe, Faraday Street, Carlton.
PRESENT: Informer 108, Police undercover operator, David Barlow and target Attila Erdei.
Edited transcript of Erdei bragging of killing Anh Mal Nguyen on Good Friday, 1992, by strangling him with his bare hands, then dumping the body in a concrete-filled drum.
The three men are sitting at a table and have ordered lunch of soup and chicken parmigiana.
ERDEI: ‘My problem, my problem, gone my little problem.’
BARLOW: ‘Is he? What is he?’
ERDEI: ‘Holiday.’
BARLOW: ‘Where.’
ERDEI: ‘Long tour.’
BARLOW: ‘Did you, did you knock him?’
ERDEI: ‘Good Friday. Yeah.’
He then indicated he strangled the victim.
BARLOW: ‘Yeah.’
ERDEI (a body builder): ‘My hands ....... hurt for three ....... days.’
BARLOW: ‘Do you know what? You’re ....... mad.’
ERDEI: ‘He ....... owe me 60 grand.’
ERDEI: ‘I start squeezing his throat like hell you know. And he going ‘En’ like that and 15 minutes I got him down on the ground.’
He said that he put the body in a drum and filled it with concrete but the following morning the victim’s head was still visible. ‘His head a little bit out.’ He then poured more concrete on top before taking the barrel to Pyke’s Creek and dumping it in about 14 metres of water.
Informer 108: ‘That’s life, murder.’
ERDEI: ‘Yeah, so what.’
108: ‘I’d hate to see if you got upset with me, mate.’
BARLOW: ‘You’d have to get a bigger drum.’
108: ‘Bigger drum all right.’
ERDEI: ‘No, you just chop into four pieces … with a chainsaw.’
ERDEI: ‘Five years ago we go to hunting. And I shoot one horse, not me, one friend of mine. White horse, I like horses and the ....... ….shoot him. And I go to him (the horse) and you know, he not die, so I put five or six bullets in the head. And believe it or not, I never go hunting after because I so sorry for the horse. And after three weeks, four weeks, believe it or not, I start sleeping, always come that horse in my mind. I can’t sleep.’
Then Erdei talks about the difference in killing the horse to murdering Nguyen. ‘I feel nothing, man … Believe me, I feel nothing.’
ERDEI: ‘Now it’s two weeks ago tomorrow morning, exactly, tomorrow morning. And once not he comes into my dreams or something. I got good sleep and everything because he is a piece of shit, not a human being.’
Police recovered the body on the basis of details from the taped conversation, sixteen days after the murder.
Erdei was convicted of murder and sentenced to twenty-two years with a minimum of seventeen.