Bent Uncensored

by James Morton

  Gudgeon resigned from the police in August that year. He later approached a Detective Keenan to ask him to leave the police and become the manager of Knightvale, telling him what the property was to be used for and that the product would have a ‘quality better than that at Hay’—a reference to a police raid on a marijuana plantation there. Keenan blew the whistle and in November 1982, after a police raid on Knightvale, Gudgeon, senior constable Andrew Swan and three others were arrested. On the property were two lots, each of up to 6000 marijuana plants, valued at up to $6 million. It was clear that there had been an earlier harvest. In 1986 all were sentenced to ten years in prison, and in Gudgeon’s case there was no set pre-parole period.

  Judge Anthony Collins told Gudgeon that he regarded him as the lynchpin and that the law made the gamble worth taking for many criminals, adding that, ‘Ten years is not ten years. Ten years for a first offender who behaves himself is a little over six years. Given a few Royal tours and a few warders’ strikes … five’. He called for ‘urgent legislative action’ to correct a situation that was resulting in some drug users receiving heavier penalties than the dealers themselves. A merciful Court of Appeal reduced Gudgeon’s sentence and he was released on parole in 1991.

  Prison rarely has redemptive qualities. The month after his release Gudgeon set up a conspiracy in Queensland to import cannabis from Thailand. This time when he was caught he received fifteen years.

  By then, however, bent officers such as New South Wales’ Roger Rogerson had entered into the spirit of things, teaming up with career criminal Neddy Smith in the 1980s Sydney drug wars. During this period of free-for-all it was difficult to tell the difference between the criminals and some of the police.

  Down south, drugs were relative latecomers to the vice industry in Victoria. In 1957 the officer in charge of the drug bureau reported that he had yet to find a marijuana smoker, although a few Chinese had been charged with possessing and smoking opium. Cannabis was criminalised in 1963 and, by 1973, 3601 offenders accused of ‘non-medicinal use of drugs’ had been detected across the state. The following year the number of offenders had doubled. As drug busts were made there were increased allegations against police of ‘misdeeds including brutality and corruption’. Drug squad Chief Inspector Roy Kyte-Powell believed that most allegations could not be substantiated but were time consuming and morale sapping.

  It soon became clear, however, that at least some allegations against police had substance. In January 1981, after months of intelligence gathering, Operation Leo resulted in simultaneous raids on fifty properties near Swan Hill, where marijuana was thought to be growing in between grape vines. Nothing was found—a tip-off had prompted an early harvest. The source of the leak was never identified, but it was believed that it could only have come from within the force.

  In the 1990s the force’s drug squad, rather than being enlarged as was probably necessary to try to stem the tide of heroin flooding the markets, was divided into three units. The first was to investigate the Asian heroin syndicates, the second was primarily responsible for investigating manufacturers and traffickers of amphetamines, and the third investigated heroin traffickers as well as cocaine and marijuana crops.

  There were internal problems as well. Drug squad headquarters were still at Russell Street when, in October 1991, 1.3 kilograms of methamphetamine went missing, allegedly stolen from a locked and alarmed storeroom. Poor management and procedural deficiencies were blamed and several officers faced disciplinary measures.

  Relatively easy to produce, amphetamines were being cooked in small laboratories. The profits were many and the dangers were few. A conviction for a major trafficking in heroin could earn twenty years and upwards; for a similar amphetamine conviction the penalty was a quarter or a third of that. By 1990 Melbourne had become the amphetamine capital of Australia. Two years later producers, as opposed to distributors, were to be the main police target.

  The rise of gang violence in Melbourne in the 1990s stemmed, at least in part, from the high-risk police policy of arranging the manufacture of their own amphetamines in an attempt to break into the city’s network of dealers. By the middle of the decade a system had been devised whereby the police would buy precursor chemicals from wholesalers and, using controlled deliveries, they or trustworthy informers—if that is not an oxymoron—would sell on to the producers, which would provide evidence for prosecutions. The drug squad regularly set up buy-bust arrangements using informers and undercover police. The undercovers also occasionally sold, hence the need for supplies around the office. Damian Marrett, a drug squad undercover of the time, explained:

  At that time we were doling out samples of our wares to interested parties … Victoria Police figured that if their covert operatives were out in the community, prepared to sell as well as buy, the targets would be more inclined to take us seriously. That was the thinking then … Granted the perception didn’t look good. A case could be made that we were dealing the stuff ourselves.

  Unit 2 of the drug squad, now at the St Kilda Road police complex, operated what was later quaintly called ‘the chemical diversion desk’. The drugs and precurser chemicals were purchased from chemical companies by drug squad officers and, prior to use in buy-bust operations, were carefully recorded and kept at the out-of-town Attwood storage facility near Tullamarine airport. Unluckily, in 1992 a substantial amount was stolen and cheaper powders substituted. This awkward fact only emerged during the trial of two drug offenders, who insisted that drug exhibits be retested. Again the culprit was ‘management procedures’, found to be non-existent. Keys were left in unlocked drawers, the facility was never inspected and there was no audit trail or responsibility.

  Attwood was ordered to lift its game. Detective Senior Constable Kevin Hicks—a fully fledged graduate of the major crime squad, disbanded for improper dealings with suspects and corrupt activities in the early 1990s—was put in charge to guard and take responsibility for the drugs and chemicals stored there.

  Unfortunately, Hicks soon made friends with a drug-trafficking syndicate. When in August 1996 further thefts of chemicals from Attwood were suspected, the ethical standards department sent in Task Force Guardsman. Hicks was found to have supplied the syndicate with drugs, and a fake drug raid was even staged so that it could get its hands on precursor drugs to manufacture speed. He subsequently pleaded guilty to burglary, bribery and drug trafficking, and received a modest six years with a minimum of 4 ½ years.

  In the mid-1990s documents crucial to Operation Phalanx, a massive investigation into amphetamine manufacturers, were stolen from Level 12 of the St Kilda Road complex. Gone was the brief on the decade-long involvement of the Black Uhlan motorcycle gang and their speed kingpin, John William Samuel Higgs. Gone also were documents identifying informers, only known as numbers, along with those identifying undercover drug cops. Those responsible were never discovered.

  Now heading Unit 2 and so responsible for the chemical diversion program was Detective Inspector Reid. Unfortunately for him, a Beretta 9 mm pistol disappeared from his safe. Its theft was a mystery but did not reflect well on Reid’s leadership and responsibility. Reid was later charged and convicted of disciplinary offences before locating the missing pistol a few months later. Nonetheless he resigned. Even more unfortunately for the force, he was replaced by Detective Sergeant Wayne Strawhorn, described by a former colleague as ‘a true professional cop … set goals and absolutely determined to get the job done … whatever it took’. He had recently returned from overseas study and was brim full of drug crime-busting ideas. Other Unit 2 chemical diversion members were Detective Senior Constable Steve Paton and Detective Senior Sergeant Malcolm Rosenes.

  Among prime targets for the drug squad were the Reading brothers, Lenny, Joe and Jeff, sometimes called the ‘Three Stooges’, who had been relatively unhindered by police raids for some years. ‘If they didn’t have a green light to deal drugs in Victoria, they were flat-out revving the car on amber!’, recalled M
arrett.

  In a classic example of the ability of the police to load members of families whom they consider to be criminals, when Malcolm Rosenes joined the drug squad under Wayne Strawhorn, one of his first missions was to head out to the western suburbs to raid Lenny Reading’s house. Strawhorn suggested to Rosenes that, as Lenny was apparently cooking with an exciting new recipe, Rosenes was likely to find three different precursor chemicals. Rosenes and his team scoured the house and found nothing. He phoned Strawhorn and was told to search in the backyard. Again Rosenes reported back in the negative. No worries: Strawhorn now directed him to hunt under a pile of rocks close to the back fence. And there Rosenes uncovered purple chemicals in a plastic bag. Now Strawhorn, directing things by remote control to keep a distance, told Rosenes to try between the shed and the fence. Again, Rosenes struck lucky. Two chemicals down and one to go. Finally Strawhorn suggested, off the top of his head, another hiding spot and there Rosenes found the third chemical stash. It was then that Rosenes, according to his biographer, the former lawyer and drug dealer Andrew Fraser, started to smell a rat in the upper ranks. ‘He had been used as the bunny to load Lenny.’

  Rosenes wasn’t alone. Strawhorn sent another young recruit out to search Lenny’s house for a drug recipe book, known as ‘Uncle Fester’s Cookbook’. Inside was a one-page typed recipe for speed utilising precisely the three ingredients Rosenes had found in the backyard.

  Reading protested his innocence and claimed that the gear had been planted. When Reading was tried for the three chemicals plus the recipe bust, the judge effectively directed the jury to acquit. The jury disagreed, but the judge had the final say and Reading received an entirely suspended sentence.

  In the three years from 1998 nearly sixty clandestine laboratories were discovered. In 1999 a man regarded as Australia’s biggest amphetamines manufacturer was arrested, and a Melbourne identity was charged with conspiracy involving a shipping container of chemicals. But then the wheels began to fall off. There were allegations that chemicals were being stockpiled by the police. A secret bank account was opened by them and sometimes chemicals went missing. In December 2001 the drug squad was disbanded and replaced with the major drug investigation division. But the damage had already been done.

  Meanwhile, across at Unit 1, the heroin trafficking unit, Detectives Glenn Sadler, Stephen Cox and Ian Ferguson were taking multicultural relations too far. They had as one of their informants Kenneth Lai, whom they supplied with heroin at a bargain price. He then sold it on, and in exchange the officers were to receive 30–40 per cent of his profits. The arrangement also provided for Lai to help them arrest other drug dealers, and the sweetener was that he would be given a portion of the heroin seized in any bust he facilitated. So it was a merry-go-round of heroin: the police could obtain free heroin from busts, they could sell it cheap to trafficker-informers, and the traffickers could on-sell it to dealers and kick back a share of the cash profits to the police. The police, informed by the traffickers, could then bust the dealers and reclaim the heroin. If the new set of dealers could then be persuaded to work with the police and dob in other dealers, it became a beautiful circular enterprise.

  Another dealer, Duy Le, a friend of Lai’s, was arrested in August 1998 for aggravated burglary, and again in April 1999, this time for trafficking heroin. He pleaded guilty to the burglary and received a suspended sentence. He was then persuaded by Lai to get back into the heroin-trafficking game and began buying from the detectives. By mid-2000 Duy Le was buying a block of heroin from Ferguson every few days. The detectives also kept him informed of the efforts of the Asian squad to arrest him. In turn, he gave the drug squad information about dealers. Cox had by then retired from the force with a substantial gratuity.

  It all came undone when Le was finally arrested in New South Wales in 2002 on the 1999 drug charges. He was induced to cooperate with the Ceja Task Force and became a key witness against the detectives on conspiracy charges. Evidence of the hundreds of thousands of dollars they had managed to accumulate was also compiled as corroboration.

  Ferguson was additionally convicted of money laundering and in April 2006 received a twelve-year sentence with a minimum of eight to serve. Sadler and Cox were tried jointly, and in November 2006 Sadler was given ten with a six-year minimum, and Cox received seven with a four-year minimum. All appealed in 2009 without success.

  The full disaster of the 1990s Victoria Police drugs policy became brutally clear on 18 October 2006. After three years on remand, high-flying Detective Senior Sergeant Wayne Strawhorn—dobbed in by drug-dealing lawyer Andrew Fraser—was convicted of trafficking 2 kilograms of pseudoephedrine to the late gangland leader Mark Moran and sentenced to a maximum seven years’ imprisonment. He was acquitted on three of four other charges, including trafficking the chemical to members of the Bandidos motorcycle gang. Strawhorn appealed against conviction and sentence, but in June 2008 these were dismissed. Another officer, Stephen Paton, had entered a guilty plea in June 2003 and was sentenced to six years with a three-year minimum. Rosenes had followed suit in October 2003 and received six with a 3 ½-year minimum.

  Pending the trial and appeal of Strawhorn, the names of Rosenes and Paton were suppressed and a number of other cases were kept on hold. Once Rosenes and Paton entered guilty pleas, appellants came out of the woodwork, claiming that the detectives’ pleas constituted fresh evidence that might have led to the acquittal of those who had been convicted and there was the risk of a miscarriage of justice. Their hopes generally went unrewarded.

  After this spate of cases Detective Sergeant Bill Patten, an original member of the Ceja Task Force, claimed that up to two dozen officers had escaped corruption charges and the only proper investigation would have been a royal commission. Other officers in difficulty at the time included Matthew Bunning, a former member of the drug squad, who was sentenced to a minimum of three years for providing information about intercepts, and former Victorian officer James McCabe, on secondment to the National Crime Authority (NCA), who failed to appear in Sydney to answer charges of robbery and drug dealing. He fled to Cambodia, from where he was expelled. On his return to Australia in 2008 he pleaded guilty to stealing 1 kilogram of drugs and served just over a year. On his release he returned to Cambodia and set up a unit to help abused children. Another officer who fell by the wayside was one-time Detective Senior Constable Paul Hatzakortzian, who was jailed for a year after pleading guilty to dealing in drugs. He had been working at Sexpo while on leave from the sexual offence and child abuse unit.

  In February 2007 the Office of Police Integrity (ORI) had told Victorian Police Commissioner Christine Nixon that it had evidence against dozens of officers who had been involved in drug dealing, theft and associating with criminals. However, the OPI maintained that another royal commission was not necessary and the office was the best placed to deal with corruption.

  Terence Hodson was by no means the first or last Western Australian villain who came to grief in Victoria, and he brought many people down with him. Born in Great Britain in 1947, he started his criminal career by stealing unattended purses at dances before moving to Western Australia in November 1974. On the face of things he was an old-style polite, even charming, crook, but deeper down he was a dobber who came to be regarded as a man who would give up anyone to save himself. In the early 1990s Hodson moved to Melbourne, where his Kew home was well guarded with an array of floodlights, heavy-duty wire grilles, security cameras and a pair of German shepherds.

  On 27 September 2003 Hodson, on bail and lined up to give evidence in drugs trials, together with his handler, Detective Senior Constable David Miechel, were caught in flagrante stealing drugs from another dealer’s house in East Oakleigh. They had hoped to find $700 000 cash but were seen throwing bags over the back fence. In his flight Miechel was badly bitten by a police dog with whom he had a run-in and was bashed by the dog’s handler. Within hours of the burglary Hodson’s file, showing that he was a long-term informer, was stole
n from a police station and released in the underworld. Miechel eventually went down for a minimum of fifteen years, reduced on appeal to twelve, after convictions for burglary, theft and trafficking a commercial quantity of drugs.

  Hodson, as was his game, was preparing to give evidence against Miechel and Detective Sergeant Paul ‘Killer’ Dale—whom he claimed had masterminded the burglary—when, on 16 May 2004 he and his wife, Christine, were found shot dead at their home. There was no sign of a break-in and it is thought that they therefore must have known their killer. After their deaths, charges were dropped against Dale. Dale, who has always maintained his innocence of any wrongdoing whatsoever, was later charged with conspiracy over the death of Hodson, but when, in turn, Melbourne gang leader Carl Williams was killed on 19 April 2010 in the supposedly secure unit in Barwon Prison, that charge was also dropped. In 2013, after he was cleared of lying to the Australian Crime Commission, Dale called for a reinvestigation of the Hodson killings.

  In September 2012 a suppression order was lifted and the Victorian public was at last allowed to know who killed the Hodsons—something they could have worked out for themselves with a little time on the internet. The answer was contract killer Rodney Collins, known as ‘The Duke’, already serving thirty-two years for the 1987 murder of another pair of drug dealers, Raymon and Dorothy Abbey; he will be ninety-eight before he becomes eligible for parole. That, of course, still leaves the all-important question of who took out the contract.