Underbelly

by John Silvester

  On one side was Tom Domican, who arrived in Sydney from the United Kingdom where he had served time in jail on two occasions for ten months and then eighteen months for offences ranging from theft of motor cars, burglaries, break and enters, driving without a licence, having an unlicensed pistol and being in breach of a probation order. He also did time for theft of a motor vehicle.

  In Australia he was convicted of minor breaches before being jailed for fourteen years for crimes of violence. The conviction was overturned on appeal.

  Then chief superintendent Ken Moroney told the ICAC that Domican had been of considerable interest to police in relation to serious matters for a number of years.

  ‘It is my understanding, and I’m sure the understanding of my senior colleagues, that his associations extended to and within the criminal underworld, particularly within the Sydney metropolitan area.’ Moroney said.

  The drug dealing, intimidation and general race to get the next dollar eventually became so intense at the Cross that egos and ambitions of various people collided and things became threatening.

  It started with the emergence of a new drug dealer on the scene, Robert Daher, who rose suddenly from being a doorman at the Love Machine nightclub to running the Pink Panther and its drug distribution network with a few known Kings Cross faces.

  Haken says he was approached by another officer, Malcolm Bigg, with an offer to share $300 a week from Daher as protection money for his new operation. Already being paid by Billy Bayeh to overlook his drug-selling operations, Haken accepted the new deal after assurances the two deals were mutually exclusive.

  Assurances are a fragile currency at the Cross. Daher’s people took over the Budget Inn above the Pink Panther nightclub and started their racket. The supposedly harmonious blending of two drug selling outlets did not last long.

  Despite Daher’s agreement with corrupt Kings Cross police, his premises were raided by officers from a drug unit outside the Kings Cross region – a drug unit that allegedly had a close relationship with Billie Bayeh.

  The payback came when Daher had a man plant drugs in Bayeh’s nightclub, Lasers, on a night when co-incidentally Haken and Bigg were both off duty. With the drugs planted, Daher arranged a phone call to Kings Cross station with a tip about where the stash could be found. With Haken and Bigg not around to run interference and no chance of diverting the hastily-arranged raid, the drugs were discovered.

  Reactions were predictable. Louie Bayeh, as the principal standover man in the Cross, was responsible for the protection of his little brother Billy’s nightclubs and drug centres and was incensed by Daher’s audacity. So he gave Daher the mother of all hidings outside the Majestic Coffee Lounge to publicly avenge the loss of face the drug raid had caused him. Commission witness KX11, who went on to serve a jail sentence on a drug charge, would give evidence that Louie pulled a gun at one stage.

  The fracas resulted from increasing tension as weekly turnover from Daher’s drug-selling outlet at the Budget Hotel grew to $40,000, rivalling the figures Billy Bayeh was generating at his nearby outlet.

  KX11 said that before the shooting Billy Bayeh’s guard dog Sam Ibrahim had warned him that the Budget Hotel turnover was getting too big. ‘He said Billy’s getting a bit upset,’ KX11 testified.

  ‘I was up at the Pink Pussy Cat (another drug selling nightclub which KX11 also ran) and he (Ibrahim) said: “You and your boys fuck off from the Cross. You’re not wanted here no more.”

  ‘I said: “I’m not going anywhere.”

  ‘Then all of the people started crowding around us and Assif Dib started swearing at Louie and Louie pulled a gun out on him. Assif took off through the back door.’

  Gunplay in the Cross raised the stakes dramatically. The same day, Louie’s home in peaceful Ermington in western Sydney was sprayed with bullets in a drive-by shooting. Louie’s wife and children were in the house at the time. Bullets tore through the walls and windows but no one was hurt.

  The attack was poorly received by police and other gangsters as it broke the previously observed tradition of families being sacrosanct no matter how fierce battles between criminals became. Strangely, Bayeh went public with the dispute, claiming police had done the shooting. But the police already had their suspects and the Royal Commission was told the men responsible were Daher’s men, Norman Korbage and Assif Dib.

  Peace talks were arranged as both sides started to worry about what might happen next. Dib and Korbage, who is now dead, refused a suggestion to meet with Louie Bayeh at his house for fear they would be shot dead by either henchmen or by police, who had the house under surveillance. Daher finally approached Haken and Bigg, offering $5000 to have his men Korbage and Dib arrested to ensure they stayed alive and were not loaded up with false evidence.

  The two officers carried out their part of the bargain, arresting the two shooters at Bankstown Police station to avoid any prying police inquiries. Haken and Bigg then set about the next stage of the job with gusto. Pockets full of bribe money, they concocted a far-fetched story to explain how Dib and Korbage could be on the scene of the shooting but not be involved.

  The manufactured story was that a third person was with them in the car when the bullets started flying. The mystery ‘third man’ had fired the gun, of course. And even though the shooter had been sitting with them at the time, neither Dib nor Korbage could recall his name or identify him. They got off.

  Haken told KX11 that ‘all your dreams have come true – the boys are going to be no-billed.’ A no-bill is an instruction not to continue a case because there is insufficient evidence to proceed to trial.

  The Daily Telegraph said KX11 expressed the general sense of gratitude that the problems had been bribed out of existence by taking a key detective to a Sydney massage parlour for an all expenses-paid night.

  The epilogue to the saga came when the Royal Commission was told Korbage had called Bayeh and begged forgiveness for shooting up his home and endangering his wife and children. Bayeh accepted the apology – provided Daher also coughed up $50,000 in cash to underline his contrition. Proof of the power Kings Cross police could exert without consulting higher authorities or worrying about legalities, Haken sent word to Daher to get out of the Cross and not come back. He went, and a fragile peace was reestablished.

  Drug dealers and criminals generally thought they were paying for police protection. Corrupt police said that wasn’t correct, but they were splitting hairs. The criminals were actually paying to be left alone while police concentrated on prosecuting other criminals who did not pay. That way arrest figures stayed healthy, senior command had no reason to complain and money continued to flow into the pockets of corrupt police.

  The shooting up of his home and the lingering threat from corrupt police whose careers he had ruined would not be the first time Louie’s life was endangered by would-be assassins. First, though, there were gang wars in which police and criminals did not know who to trust or how to stop the carnage. For Louie it was a rare chance to play a role as peacemaker.

  Meanwhile, business continued as usual at the Cross. Louie acted as a bagman for payments between a Chinese brothel owner and corrupt police – a senior sergeant called Kim Thompson and a sergeant, Neville Scullion. Both later admitted taking bribes and were sacked from the force.

  Thompson and Scullion had approached Bayeh saying they wanted $20,000 to quash a murder charge against a man named Steve Sui or ‘Karate Steve’ after a man named Kato Mo had been killed in a fight between Chinese gangs outside Sui’s brothel in Kellett Street.

  After interviewing Sui several times, Scullion and Thompson allegedly told Bayeh: ‘We have enough evidence to charge Steve with murder but if he gives us $20,000 he will not be charged.’

  At first, Sui refused to pay the money but changed his mind when Bayeh emphasised the seriousness of the situation. Bayeh then told the detective that Sui would pay but in instalments because he was broke. Sui made a down payment of $5000 which, Bayeh says, he passe
d on to the two policemen. He also passed on another $5000 but Sui refused to pay any more, saying he had no money.

  When the police persisted, Bayeh says he walked away. ‘I said: “You’ve got his address and phone number. You see him yourself. I don’t want to get involved any more”.’

  Intriguingly, Bayeh played his unlikely role as a peacemaker in a notionally unlikely venue: Sydney police headquarters. There, the leaders of the warring factions, hard man Tom Domican and the equally aggressive Lennie McPherson, met for an uneasy conference.

  It was a desperate and hasty strategy to calm an explosive situation that had the potential for bloodshed and bodies in the streets.

  Battle lines were drawn over the ownership and distribution of illegal poker machines after McPherson thought he had been dudded by gaming club boss Fayez (Frank) Hakim, who had come a long way in Australia after migrating in 1952. Starting as the owner of a delicatessen in Cleveland Street, Redfern, and supplying rissoles to the canteen of the old New South Wales Police Academy nearby, gave Hakim a chance to make friends with police of all ranks. He also befriended illegal gambling identities like Graham ‘Croc’ Palmer and Louie Bayeh.

  Respected investigative journalist Bob Bottom wrote in 1991 that Hakim had been recorded telling Lennie McPherson: ‘You are a flag and should be obeyed and should be respected.’ Sydney Morning Herald crime reporter Malcolm Brown wrote that Hakim became an unofficial ‘godfather’ in the Lebanese community until the twists and turns in his personal dealings caught up with him. Hakim was a Mr Fixit who moved in a shadowy world between crooks, police and politicians, he wrote.

  ‘Hakim’s office was raided in 1985 and he was found to be in possession of 11.1 grams of heroin and with money suspected of being illegally obtained. He was fined $1000. That year Hakim became involved with a solicitor, Howard Hilton, and two other people over a conspiracy to bribe the New South Wales Minister for Corrective Services, Rex Jackson, over the early-release scheme. His job was to procure prisoners who were willing to pay for getting out of jail early.

  ‘For that, Hilton, Jackson and Hakim all received jail sentences. A trembling Hakim was given a six-year sentence. He was released from jail in 1989 but his career was in tatters.’ He died in 2005.

  But that was later. In late 1984 Hakim was alive and kicking goals. He created a deep division in criminal ranks by allowing Domican and Bill El Azzi to set up illegal poker machines in a Marrickville club.

  McPherson was enraged by the decision and arranged a meeting with Domican at the club to vent his displeasure. Domican didn’t turn up, which inflamed McPherson’s explosive rage.

  Bayeh said McPherson then rang Domican to say: ‘If you don’t come back here, I’m going to come to your place and fuck you, fuck your wife up, blow all of you away.’

  Bayeh added that McPherson then sent Snowy Rayner to pump bullets into Domican’s house. Although no one was hurt, it was an insult that could not be overlooked.

  On 27 January 1985, Domican sent a gunman to shoot up Christopher Dale Flannery’s house, mistakenly blaming him for the McPherson-ordered shooting. Flannery, psychotic with a need for revenge, went looking for a gun to shoot Domican. He found one and claimed to have shot at Domican outside Kingsgrove Police Station on 12 April 1985 – but missed, adding to the theory that for a gunman he was a lousy shot.

  A poor workman blames his tools, which was a fatal mistake on Flannery’s part. He blamed the gun and was on his way to Freeman’s house to get a machine gun to have another go when he reportedly took his fateful lift in a police car and disappeared.

  Significantly, Domican was pondering the fact he had been at Kingsgrove police station following a request from Arnie Tees to come in and make a statement. Meanwhile, rumours flew like bullets. Sydney’s underworld figures trod nervously and looked over their shoulders, fearful of being a target or becoming collateral damage. It was no time to be making new enemies.

  Bayeh said he was told by Detective Keith Conwell to stay away from Lennie McPherson. ‘Tom Domican’s going to shoot Lennie McPherson,’ Conwell allegedly said.

  This was the background of the secret peace meeting convened by police, Bayeh claims, on the top floor of their building in College Street. Bayeh says he wanted the meeting to go ahead and that Inspector David Leach arranged it.

  Watching each other as carefully as a mongoose and a cobra would, McPherson and Domican sat and talked in a glass office for more than an hour with Bayeh, Leach and Conwell watching anxiously, out of earshot.

  McPherson seemed to be optimistic about peace being restored but it was a fantasy. Bayeh admitted making his home available to McPherson for a meeting with disgraced detective Roger Rogerson, Arnie Tees and another detective to work out how to kill Domican.

  ‘They talk about shooting Chris Flannery’s house and all of that,’ Bayeh told the Commission. ‘And Lennie McPherson says tell Arnie Tees if he shoots Tom (Domican) he’ll give him $200,000.’

  McPherson indicated at the meeting that George Freeman, Frank Yates, Les Jones, Greg Melides and ‘Croc’ Palmer had all thrown money into the pot to raise $200,000 for the hit. A similar offer was made at the meeting to the other detective, whose name was never divulged.

  Bayeh said he also hosted another meeting at his home attended by McPherson, Flannery and Neddy Smith. A month later, Flannery was dead. In 1987, another raging hot head, Barry McCann, was shot dead in Marrickville.

  In a sub-plot to the original dispute over illegal poker machines, McCann and Neddy Smith also fell out with fatal consequences in the mid-1980s.

  Sydney Morning Herald journalist Steve Gibbs wrote that the bad blood between the two men came to a head the night Smith knocked out McCann’s eldest son in the family hotel, The Landsdowne, on Broadway.

  ‘Once outside, Smith’s companion lined up five or six of McCann’s bouncers at gunpoint against a wall, while Smith took a baseball bat from his car and flogged each one till he fell,’ Gibbs wrote.

  ‘A fortnight later, Smith was leaving the Quarryman’s Hotel at Pyrmont when one of three men in a parked car opened up on him, Jimmy Traynor and Tex Moran. Traynor was seriously wounded by two blasts.’

  Smith’s associate in carnage, ‘Abo’ Henry, joined in by shooting McCann gang member Terry Ball in the head. Ball survived and in April 1986 ran down Smith outside the Iron Duke Hotel.

  Smith and Henry survived the 1980s but did jail time, a drunken Henry for stabbing police prosecutor Mal Spence, a berserk Smith for stabbing tow-truck driver Ron Flavell to death in a fit of stupid road rage.

  Earlier, drug dealer Tony Eustace had been shot dead in a killing Flannery claimed he did, an event described in detail in Underbelly: A Tale of Two Cities.

  To add to the simmering drama at the Royal Commission over Bayeh’s explosive evidence, who should turn up but McPherson? He was driven in from Cessnock Jail where he was serving time for assault, to deny everything during one of the most bizarre appearances ever recorded in an Australian court.

  In an outburst in which he painted himself as a character with the qualities of Mother Teresa, McPherson unblushingly claimed he had never collected money from illegal gambling clubs or from Louie Bayeh.

  He also denied ever having paid police for anything and certainly had never arranged with police to murder Tom Domican for $200,000. ‘Never once have I got a dollar off a single person in my life and here I am a standover man?’ McPherson roared. ‘Who am I standing over?’

  Bayeh’s links to drug controversy and violence continued well after the Royal Commission. On 12 July 2000, Bayeh was half-way through a meal at the El Bardowny restaurant in Narwee in outer Sydney with a trusted underling named Sam. He was somehow lured outside about 2am – two hours after arriving.

  Witnesses said when Bayeh left the restaurant, Sam was already engaged in pushing and shoving with some Lebanese men who leapt out of a black BMW. Bayeh joined in the scramble when one of the participants shouted at him: ‘You’re not working my …’.
That was when Bayeh’s legs were shot from under him.

  At least seven bullets were fired from as many as three guns during the shooting. No one was killed but a teenage youth taking a cigarette break from a mate’s birthday party inside the restaurant was wounded.

  Bayeh obeyed the code of the west and refused to comment on the incident when interrogated by police. So did Sam, who claimed he was around the corner having a smoke and had missed the fire fight.

  A bloodied 9mm automatic handgun along with 50 bullets and three magazines was found by detectives near a garbage bin. Four bullets had been fired from the gun with another in the chamber ready to go. The pistol belonged to Bayeh.

  Bayeh was struck in the groin and the legs by slugs from high-powered handguns. Detectives called the attack a ‘deliberate hit’. The gunman and his colleagues raced away from the scene in the BMW.

  ‘Obviously this was not over something minor,’ said Crime Agency Detective Superintendent Bob Inkster.

  A month later, widespread and co-ordinated police raids to execute search warrants led to seven arrests, including one of three men wanted over the Bayeh attack.

  Police also found heroin, other drugs, weapons and more than a million dollars in cash during the raids. Police said one of the men arrested had recently lost several hundred thousand dollars at Melbourne’s Crown Casino. He was initially identified as the principal in a heavy cocaine and heroin syndicate in Sydney, operating out of a Kings Cross hotel.

  Security guard Helal Safi, 25, doorman Noureddine ‘Tiger’ Laa Laa, 32, and Elie Geadah were charged with shooting Bayeh with intent to cause grievous bodily harm. But there was a twist. Bayeh, too, was charged with discharging a firearm with intent to inflict grievous bodily harm. He was released on bail. There wasn’t much risk he would abscond, as he was stuck in a wheelchair.

  But he recovered well enough to go back to his old ways. In 1993 he pleaded guilty in the District Court to demanding money with menaces. Police say he collected as much as $180,000 in protection fees from Parramatta brothel keepers between 1988 and 1992. He was also given jail time in 1997 for perverting the course of justice.