Billy started small, competing with a dozen or more dealers of equal status. But he had an entrepreneurial flair for using modern corporate methods and violence to get ahead of the pack.
‘What Bayeh did down the track was to try and do what Woolworths did – that is put people out of business,’ notes self-confessed crooked cop Trevor Haken in his biography, Sympathy for the Devil. ‘Not by cutting the prices or anything, just cutting their legs off.’
The Bayeh brothers arrived at the Cross at a pivotal moment in Sydney’s drug-dealing scene, where nothing is constant except change. The population, the dealers, the nationalities and police attitudes revolve as predictably as a carousel.
‘One mob moves out and another moves in within minutes, like blow flies to a dead carcass,’ Haken explains.
The Lebanese took over from the Romanians, but then an attempted invasion by Vietnamese criminals hoping to replicate their dominance at Cabramatta in Sydney’s outer west was quickly squashed by police. A Russian group also pushed into the scene for a while.
The Cross was a no man’s land for any sensible member of the public wanting the protection of law and order. The area’s shabby chic status as a bohemian hangout for the artistic, literary and musical had long crumbled – invaded by the godless and lawless as drugs and vice took over the ‘night time’ economy. A raffish young lady had degenerated into a seedy, broken-down whore.
Senior police had given up and there were no resources to fight crime. While stationed at the Cross, Haken once took $200 out of petty cash to buy a beaten-up Datsun 180B. It needed two milk crates to prop up a broken driver’s seat, reducing its capacity to just three people.
For a while, he claimed, the Datsun provided the only transport police had to take arrested people to Kings Cross Station to be charged. It was bizarre that a jalopy was being used as a de facto cop car but it fitted in with the madness of the red light district on the edge of one of the world’s great western cities.
‘You got off the train (at Kings Cross Station) and it was wall-to-wall junkies and crooks from all over the place. If someone got out of jail anywhere you knew they’d end up here,’ Haken says. By the 1980s, the bohemian days when the Cross featured characters like the white witch Roslyn Norton were long gone.
In their place, accelerated by the arrival of US troops in the 1960s on R & R from Vietnam wanting drugs and sex, came the heavy drug dealers and flesh peddlers. They got a tight grip on Kings Cross that hasn’t been loosened in almost 50 years.
Mostly, things were good for the drug sellers. Addicts are permanent customers and corrupt police are compliant. But sometimes, even at the Cross, the black market in sex and drugs got a little tight when the economy dived.
Neil Chenoweth wrote in his book about the 1992 recession, Packer’s Lunch: ‘The Cross was doing it tough as well, though on the surface little seemed to have changed.
‘As the Wood Royal Commission would reveal, the area was dominated by four major heroin and cocaine distributors, eight major drug outlets, seven strip clubs running prostitution and a solid phalanx of standover men.
‘Victims disappeared, killers beat murder changes, police officers stole drugs and money from dealers, ran protection rackets, made up evidence and threatened witnesses. Business as usual, it seemed.
‘At one point in the early 1990s an axe murderer was thinning out the tourist population at the Cross on a random basis but it rated barely more than a mention in the Press. But behind the happy facade even the Cross was feeling the recession.
‘Bill Bayeh, brother of that well-known friend of the City, Louie, who would feature prominently in the Wood Royal Commission, was said to be so down on his luck in 1991 that his onetime protégé Danny Karam lent him $50.’
Karam was obviously travelling a little better than Bayeh but the money drought hurt everyone, even the sensitive souls who ran protection rackets. Standover man Anton Skoro would later testify that the drug dealer who paid him $2500 a week to operate in the Cosmopolitan cafe regularly resorted to paying him with caps of heroin rather than the folding stuff, Chenoweth wrote.
‘They were always running out of money,’ the standover man complained. ‘They were the poorest drug dealers I’ve ever known.’
Two years after having to snip $50 from Karam to keep body and soul together, Billy Bayeh was back and making a fortune running four heroin and cocaine outlets at the Cross – Laser’s fun parlour (reportedly turning over $20,000 a night), the Penthouse billiard room, the Down Under Hostel and the Cosmo.
When Bayeh eventually copped fifteen years jail for drug offences in 1996, Danny Karam was one of the princes in waiting to take over the drug throne. Unfortunately for the callous Karam, he was gunned down by his own gang – called Danny’s Boys – before he could steal the crown.
It is not known if Bayeh ever repaid Karam the $50 loan.
MOST people are insulted when they are called an idiot. Not Billy Bayeh, he was delighted. In fact, he went to extraordinary lengths to have sessions with a forensic psychologist to get official endorsement of his simplicity – and not just verbally. He needed it in writing. He wanted an official diploma ‘proving’ his supposed feeble mindedness to hang on his wall, the way graduates hang their degrees.
It was, of course, a ruse to attempt to escape drug charges. It exposed the extent to which the New South Wales legal system could be exploited and manipulated in imaginative and daring ways by various criminals and their associates.
Bayeh was arrested in a Bondi motel room in November 1990, a week after Kingston Rule won the Melbourne Cup for Bart Cummings at 7/1. He was charged with being knowingly involved in the supply of cocaine. At first, he claimed that police stole $2000 of the cash and cocaine they found under his pillow in his room before ‘booking’ him for $4640.
He said the money had come from backing Kingston Rule but later he dropped his claim to the missing cash. Police said Bayeh had known cocaine was in the room and that it belonged to Thierry Boetel, who’d been mentioned in evidence as a drug dealer and who had access to the room.
It was a tough situation for Bayeh, one that required great finesse to keep him out of prison. So, with considerable help from unidentified friends, he constructed an elaborate ruse that involved forged letters saying he was of good character but virtually moronic. He manipulated a forensic psychologist into classifying him as ‘borderline intellectually handicapped’ with an IQ of 75.
Meanwhile, Boetel conveniently provided a written confession to Bayeh’s legal team saying the cocaine was his and went to the Gold Coast to evade a police hunt. If there was one.
It worked. Billy got off with 300 hours of community service on a charge that would usually bring time in jail. The aftermath came two years later when the Wood inquiry started turning over the mulch that had hidden much of the real story.
It turned out Bayeh’s solicitors had arranged for him to be psychologically tested before his drug trial in the District Court in March 1994. The report from a forensic psychologist assessed Bayeh as barely smart enough to tie his own shoe laces, stating that his IQ of 75 put him in the lowest five percent of the population.
There were no encouraging points for Billy in the report but that didn’t matter: according to it, he was hardly smart enough to read it.
He was assessed as immature – and illiterate in both English and Arabic. Two years later, in the Commission witness box, the psychological expert for hire said he was stunned to hear of Billy’s extensive business interests and his criminal history involving drugs and violence dating back to 1975. In fact, the boffin raised a vital question: could he be certain that the man he had examined was the real Billy Bayeh? Accusations were made that the man he examined might well have been a slow-thinking ‘stooge’ pretending to be Bayeh.
Asked to identify Bayeh from a photograph and asked if he had met him before, the ‘trick cyclist’ was undecided.
‘I don’t believe I have but I can’t state categorically that I h
aven’t,’ he replied. ‘That person (indicating the photograph of Bayeh) doesn’t look familiar to me. I have a shocking memory for names but not usually faces.’
Unfortunately, his assessment had been unchallenged as evidence used to support Bayeh’s legal battle. The same applied to three references from people attesting to Bayeh’s good character. Former detective Charlie Staunton – Bayeh’s right hand man – would later go to jail for contempt for refusing to answer questions about corruption, including what he knew about the source of the references.
They were later proved to be forgeries. After a lifetime of working within a judiciary system he strongly supported, Royal Commissioner Justice Wood was visibly shaken by any suggestion it could be manipulated so easily to help criminals dodge jail. As the evidence mounted, he threatened to track down not just corrupt police but also lawyers, expert witnesses and private investigators operating on the shady side of the law.
Wood ended up admitting he had changed his mind and realised systemic corruption could occur in many ways, such as by weakening a prosecution case by withholding evidence or witnesses – or by shrinking the amount of drugs or money allegedly involved.
Both defence and prosecution teams could also be involved with presenting untrue or slanted evidence and withholding criminal antecedents.
None of that especially worried Bayeh, who was free to continue a spending spree that would make most millionaires envious. But trying to follow his mental state was a trial in itself. On any given day, a little like Alan Bond, he apparently veered from being a village idiot to a financial wizard in control of three profitable businesses. Amazing.
Billy’s petite and pretty young wife Tanya told the Royal Commission her husband was so mentally defective, he initially confused the IQ test with contraception. This caused great hilarity among reporters covering the Commission.
Ray Chesterton wrote in the Daily Telegraph: ‘Wouldn’t that have been a honeymoon from hell until order was restored? “No Billy. It’s not a balloon. Try again”.’
Tanya held a Bachelor of Arts with a major in psychology. She said she had taken Billy for the test in which her husband’s IQ was rated at 75. Presumably, she stayed around to lead him home otherwise he might have had trouble crossing the road.
Despite her own qualifications, Tanya robustly denied that her own knowledge of psychology had led to a few trial runs at home to acquaint Billy with what questions might be asked.
Tanya told the Commission that despite the psychologist’s misgivings, she was certain the man she took for the test was her husband. She spent a total of six hours in the Commission witness box but she didn’t win many fans. She was repeatedly told she was a liar, a perjurer and had signed legal documents she knew to be false.
‘You’ve come here today looking as sweet as a picture and told every lie in the world,’ said the Police Service’s legal representative. ‘Who told you to come here with your cock and bull story, your husband?’
She answered quietly: ‘No’.
Tanya was compromised by application forms she had filled out for bank housing loans listing their annual income as $400,000 plus. Like so much of the paperwork in Billy’s life, the income on the application and its sources were false.
Meanwhile, Billy had other big problems of his own. Acknowledged as the drug czar of Kings Cross and turning over an estimated $20,000 a week from just one outlet, he was trying to find an identity that would cover all of his ‘personalities.’
He was acknowledged as smart enough to run a drug empire and launder money through horse racing but stupid enough to be classified as having an IQ of 75. Third, and most importantly, he was also a police informer like his brother Louie. So he was an idiot savant – and a dirty rotten rat.
Billy had rolled under pressure and changed sides to help the Royal Commission by dobbing in every bent copper he could remember bribing. But Slick Willy soon became Silly Billy as he struggled to stay in touch with reality as all his crude cover-ups and masquerades to avoid detection fell apart.
The evidence was overwhelming and included tape recordings made by confessed corrupt detective Haken exposing Bayeh’s payoffs to police, often at Birkenhead Point, a retail shopping complex at inner-suburban Drum-moyne. But there were dozens of other places where money changed hands as well.
During one three-day period Haken collected more than $8000 from Bayeh to split with other corrupt police, then another $8000 a month or so later. Bayeh also gave a former Kings Cross detective called Stephen Pentland $150 towards the cost of his 30th birthday party at The Tunnel nightclub, which happened to be a notorious drug selling outlet.
A former employee of Billy’s who turned police informer (codename KX1) during the Royal Commission, organised the party. Pentland said that during the festivities Bayeh shook his hand and gave him $150, saying put it ‘on the bar for your friends.’
Pentland said he understood that Bayeh and one of his employees – soon-to-be famous John Ibrahim – had paid for the food and drink. Billy also provided finance when Pentland went broke at the races trying to raise money to pay back a student loan.
‘I spent a lot of time at Canterbury race track,’ Pentland admitted later. ‘If Bill ever had a good win out there and he was quite happy, he would slip me $200 and tell me to have a bet on him in the next race. I just lost the plot and took the money.’
Pentland left the police service after eight years on medical grounds but he didn’t go quietly. His farewell party at the West End Hotel in the Sydney CBD was memorable.
His police mates, with Constable Gary Leach in the vanguard, inflicted serious injuries on a drinker at the hotel before throwing him into the street and kicking him unconscious. The man allegedly provoked the fracas by laughing at a policeman’s moustache. Or possibly it was a police-woman’s moustache. Steroid abuse was not unknown.
Unfortunately for the police involved, the entire episode was caught on film by the Professional Integrity Branch who, co-incidentally, was investigating several officers at the party.
After police predictably denied any involvement in the fracas they were forced to watch tape of the incident showing the victim exploding out of the hotel doors and Leach and a Constable Peter Kelly kicking him as he lay on the footpath.
But such high jinks were trifles compared with the main game: Billy Bayeh was trying to hammer round blocks into square holes to explain his millions of dollars in unaccounted wealth. He was struggling with arithmetic.
The Commission showed him spending $278,300 from a salary of $35,000 in 1993-94. Outgoings included $120,000 towards buying a $500,000 luxury home, $18,000 to service a $400,000 mortgage, $50,000 in cash to a barrister who represented him in March 1994 in the District Court over cocaine charges, $32,000 to lease the Penthouse pool room at Kings Cross, $20,000 to Diners Club, $17,000 to establish a shoe shop at Bankstown, $16,000 cash to honeymoon in Lebanon and $6400 to a TAB phone account.
There were also spontaneous trips twice a month to Gold Coast luxury hotels and restaurants with his wife and friends and $10,000 gambling losses at Jupiter’s Casino.
In desperation, Bayeh claimed the balance of the money had come from successful betting on racehorses. This brought guffaws from the crowd, as he had already been established as the world’s worst punter. Counsel assisting, John Agius, said Billy owed more than $784,000 to book-maker Jeff Pendlebury.
In nine months Bayeh had turned over $3.6 million with Pendlebury – and lost most of it. Betting transaction sheets obtained by the inquiry showed he rarely had a winning day.
‘You must think you have won the lottery today if you think we will believe that (the success at punting)’ said Agius.
Bayeh’s betting exploits and Pendlebury’s reaction to the non-payment of such a massive debt were the subject of much perusal. Agius suggested Pendlebury was involved in a money-laundering scheme with Bayeh. Or that Pendlebury, because of the debt, could lay claim to Bayeh’s estate and hold it for him until any jail s
entence was completed.
The bookmaker denied both suggestions, saying he had thought Bayeh was a coffee shop owner and became ‘frightened when told he was a big noise at the Cross.’
There is no doubt Bayeh was using one of the oldest dodges of all to launder black money. A criminal would wait at the races or at a TAB outlet until he saw a punter with a big winning ticket lining up to collect.
If the winning ticket was for $10,000, the criminal would offer the punter $11,000 for it and everyone was happy. The punter is $1000 better off and the criminal gets a TAB cheque for $10,000 of freshly laundered money.
The Daily Telegraph’s Ray Chesterton found Pendlebury’s patience in waiting for repayment of such a big debt extraordinarily heart-warming.
‘Remarkable? Well, astonishing really for those who never suspected the flinty hearts of bookies overflowed with such a passionate need to do deeds for needy punters,’ he wrote.
‘There was no push for settlement, which should ensure Pendlebury is knocked off his stand at the next meeting by punters anxious to share the experience of such generosity.
‘Pendlebury thought Billy owned a coffee shop. Billy would have needed to be the sole outlet for Brazil’s entire coffee crop to bet the way he did.’
Asked why he had a reputation as a drug dealer, Bayeh stumbled for an answer.
‘I just … people are jealous,’ he muttered.
Three taped telephone calls added to intriguing evidence about Bayeh. He says in Arabic to one caller: ‘There is nothing good for cooking; it is only good for smoking or injections. If you bear with me for a few days I will get something for you.’
Bayeh conceded he was talking about cocaine but continued to deny he was a dealer. His stupidity and arrogance in believing he could live so lavishly without any visible legal means of support would be his undoing.
For all the amusement provided by squirming under questioning and offering bizarre explanations for his wealth, at times Bayeh showed himself as ruthless as any dealer on the streets.
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