Empire of Crime

by Tim Newark

  They were originally known as the ‘14’ after the street number of the address of their headquarters in Canton. When they moved to Hong Kong and won a bloody street battle in 1955 with the local Yuet Tong society – over who could levy protection money – they added ‘K’ to their name, meaning ‘karat’ gold, as that gold was considered superior to the local metal. Kot Siu-wong was their leader and continued to organise their establishment in Hong Kong even after he was deported to Taiwan. At one time, he hoped to send a Triad nationalist army back to China when the Kuomintang launched its long-hoped-for counter-invasion, but it never happened. After his death, the sub-branches of the 14K ran their own affairs.

  The Hau gang was the most powerful of the 14K sub-branches. With 15,000 members, it ran extortion and protection rackets, and controlled the drugs and prostitution business throughout Kowloon. The Kin gang, closely allied to the Hau, ran illegal operations within the Walled City slum district. Overall, membership of the many sub-branches and splinter groups that made up the 14K amounted to 40– 80,000 – a criminal army that completely dominated Kowloon. In the event of an external threat, especially from another Triad force, internal rivalries were quickly forgotten. Their main rival was the Wo group of societies, which had dominated Hong Kong before the arrival of the 14K. Their membership also ran into thousands in Singapore, Macao and other Pacific Chinese communities.

  A security intelligence report of 1962 recorded the details of a typical 14K initiation ceremony – one where the recruit didn’t have to swear loyalty to a portrait of the nationalist leader:

  The recruit is made to kneel in front of some makeshift altar behind which may be pasted a few pieces of red paper bearing characters for Kwan Ti and a few other deities. Joss sticks and joss paper are burned and often the ashes are mixed into a bowl of wine. An empty bowl is broken and the head of a small chicken is cut off to show the fate of traitors. Blood from the chicken is mixed into the wine and the middle finger, left hand, of the recruit is pricked and a drop of his blood also mixed into the wine. The recruit then drinks some of this noxious mixture and the ceremony is complete after he has handed over some lucky money to the person conducting the ceremony.

  The trafficking of narcotics was a key business for the Triads in Hong Kong. There were three main factors to it. First, Hong Kong acted as a very well-placed distribution point for illegal drugs to the rest of the world, especially Europe and America. Federal Bureau of Narcotics chief Harry J. Anslinger had already drawn attention to this, but had wrongly blamed communist China as the main source when, in fact, most of it came via Thailand from the Golden Triangle in Burma and Laos. Second, raw opium was also being processed in Hong Kong and turned into heroin for export and local consumption. And finally, there was a large, growing internal market for illegal drugs within Hong Kong, which, in 1957, was estimated to number some 30,000 addicts.

  It wasn’t only the Chinese community that suffered from this addiction. In a drug-rehabilitation centre on Sunshine Island, one anonymous white man told his story. Aged 38, he was born in the colony. At the beginning of the Second World War, he joined the Gloucestershire Regiment and served throughout India and Burma, where his unit were part of the elite Chindit force, fighting the Japanese deep in the jungle.

  It was while on leave in India that the soldier acquired the taste for smoking opium from merchant seamen. At first, it was ‘just fooling around’, as he put it. But then, once he returned to Hong Kong and got a civilian job as a clerk in the War Department, the habit took a grip. Married with two children, he was spending up to $25 on three hits of opium a day. He would travel to the Walled City in Kowloon to buy it.

  ‘The Walled City,’ he told an investigator, ‘is quite definitely the centre of the drug business, both opium and heroin, in Hong Kong, despite frequent raids by the police.’

  Whenever customers first visited its maze of streets, they were given drugs for free, especially heroin. Once it took a hold of them, they were required to pay. Old men came for opium to relieve pain, often stomach trouble. Young men came because they thought it made them look grown-up. Night-shift workers, finding it difficult to get to sleep during the day, took it to keep them going. Triad gangsters encouraged some of their lowly followers to take heroin in order to control them.

  ‘The Walled City provides a virtually secure base for the traffickers’ operations,’ said the Secretary for Chinese Affairs. ‘For although the police do patrol, raid and arrest, the value of their activities is nullified by their inability to prosecute in court and in most cases their only sanction is the seizure and confiscation of such drugs as they find. This is totally inadequate and Kowloon Walled City remains a cancer in the body of Hong Kong. Any plan to deal with drug addiction in the Colony will break down unless this cancer is eliminated or sealed off.’

  Although Kowloon was the centre of the drug trade, it was distributed throughout the colony. Most rickshaw coolies sold heroin, while tailor shops in the Wan Chai district were known as the main outlet for drugs to US sailors and other servicemen. Selling drugs provided an income for the addicts themselves and they became key to the entire operation.

  One middle-aged man explained that his five-year habit of smoking heroin had cost him $12 a day. He earned $3.70 a day working in a factory, but sold a dozen small packets of heroin daily, netting himself just over $12, thus funding his addiction. As his own cravings increased, he was forced to sell more and more heroin to cover his costs. From the point of view of the main Triad distributor, it was a brilliant selfsustaining and expanding business. An ounce of heroin was purchased wholesale at $250; it was then re-sold at between $375 and $465, making him a profit of between 50 per cent and 86 per cent. It was estimated in 1956 that the value of drugs traded in Hong Kong was worth $100 million.

  For the ex-Gloster soldier, he knew he needed help when his habit began to swallow almost all of his $700 monthly income; he confessed all to his commanding officer, who took a sympathetic view of the man’s plight and sent him to Sunshine Island for treatment.

  Named by a Quaker called Gus Borgeest, the island of Chau Kung To was established as a resettlement centre for Chinese refugees in 1952. Borgeest’s method was to get the immigrants farming their own little plot of land, the humble work intending to help addicts get over their opium habit. He was later awarded the Ramon Magsaysay Prize, dubbed Asia’s Nobel Prize, for his work on the island. Sunshine Island served as a model for drug-rehabilitation centres elsewhere in Hong Kong.

  The smuggling of drugs in and out of Hong Kong was in the hands of the major Triad gangs and police seizures of large deliveries were rare. This was partly because whenever the police received useful inside information, it never came twice from the same source.

  ‘This is due to the fact that the “ring” is so highly organised,’ said an investigator. ‘The moment a leak develops in a certain section, that section is immediately cut out of the circuit and a substitute provided. All members of the section are dropped and are not used again … and there is a great deal of nervousness among informers for fear of reprisals.’

  The top traffickers behind each consignment never got involved in the actual smuggling; instead they financed the deals from the background, frequently negotiating payments through the gold market in Macao.

  By the late 1950s, 62 per cent of all seizures of raw opium and 100 per cent of all seizures of morphine in Hong Kong originated on ships or aircraft that had passed through Bangkok. By this stage, the importation of raw opium was being superseded by blocks of morphine, as it was less bulky and more suited to smuggling by air. ‘The traffic via Bangkok flows so smoothly that it is impossible not to suspect a large measure of official connivance,’ said a 1957 official report.

  Arthur Maxwell was Commissioner of Police in Hong Kong during this period and had noticed a significant increase in the number of heroin addicts in the city, so much so that eventually they outnumbered the more traditional opium smokers by three to one. Among the shant
y towns that had grown up to house Chinese refugees, opium dens had been shut down rigorously, but narcotics dealers had brought in the new, more easily concealable habit of heroin. Clandestine factories sprang up in the colony, some of them operating on an industrial scale, producing heroin both for local consumption and export.

  In virtually every one of these factories, the heroin had been manufactured from compressed blocks of morphine imported from Thailand or neighbouring territories, such as Burma via Bangkok. By importing morphine, the Chinese gangster chemists were able to manufacture heroin directly from it, rather than processing morphine from raw opium, which was slow and gave off giveaway fumes. Each block weighed about eight ounces and was easy to smuggle; its purity meant that just one block could produce ten ounces of heroin, the equivalent of 27,500 doses of the drug – an impressive profit margin.

  When it came to re-exporting narcotics from Hong Kong, the primary markets were Europe and America. In 1962, a sensational drugs-bust revealed a surprising mode of transport for these goods: a Royal Navy battleship.

  HMS Belfast was a light-cruiser armed with 12 six-inch guns and 12 four-inch guns. A veteran of the Second World War, she saw action escorting Arctic convoys and providing covering fire on D-Day. Updated for service in the Korean War, she was coming to the end of her useful life when she set sail from Singapore on 26 March 1962. Her destination was Portsmouth, but she would reach the UK via Hong Kong, Guam, Pearl Harbor, San Francisco, Panama and Trinidad. Someone must have considered this an especially useful itinerary.

  On board the Belfast were a number of Chinese seamen. Wong Ah Lee was born in Canton, had joined the Royal Navy in 1945 and had served as a Petty Officer Cook in the Captain’s galley since 1959. A thirty-eight-year-old married man with four children, Wong Ah Lee lived in Hong Kong. He had been awarded three Good Conduct Badges, a Long Service and Good Conduct Medal and was recommended for advancement. Working alongside him was Kan Ping Kwok, 30 years old, formerly of the NAAFI in Hong Kong, before being transferred to work on board ship. A civilian canteen assistant on the Belfast since 1960, he was described as a ‘reliable and hard-working man’. He also had a family in Hong Kong.

  What happened next is best described by the Belfast’s Commander, David Anning Loram:

  Late on the evening of Tuesday, 24th April, 1962, the Master-at-Arms telephoned me and asked me to go to his cabin. There he showed me a suitcase. The case was locked at one end and padlocked that same end but lifting the other corner I saw it contained packages of white powder.

  Having got permission to open the case from the Commander-in-Chief Far East, he opened it the next morning in the presence of the Master-at-Arms.

  ‘The case contained 20 bags of a brown substance, and 25 bags of white powder,’ said Loram. ‘There was also a tin containing ground nuts with eight of the 20 bags packed round the nuts.’

  The brown substance was quickly identified as raw opium and the white powder as heroin. Confronted with such a vast amount of narcotics, it was decided to search all the quarters of the Chinese crew. Kan Ping Kwok was identified as the owner of the case and was detained in the ship’s cells by the Master-at-Arms.

  Later that afternoon, the Commander was called to the ship’s laundry and shown a bundle of clothing, two sacks and eight bags of white powder. Enquiries made of the laundry staff at that time failed to trace the owner of the property and it was locked away. That was just the start – further discoveries revealed that the battleship was a floating warehouse for illicit drugs.

  ‘The next day,’ said Loram, ‘I was called by a search team to the Captain’s Galley where I saw bags of [a] brown substance being withdrawn from above the strip lights in the Galley. I caused the PO Cook, Wong Ah Lee, who is the man in charge of that Galley, to be detained.’

  In the cells, the Commander interviewed the long-serving cook in the presence of the Master-at-Arms and the Chief Petty Officer, who acted as interpreter.

  ‘I told Wong Ah Lee that I knew everything and I wanted him to answer my questions truthfully. I cautioned him before he spoke. I said to him, “I want to know how much opium did you bring on board?” He said, “22¼lbs.” This is exactly the weight of the opium found in the Captain’s Galley.’

  The mystery of the bundle of clothing and bags of heroin in the ship’s laundry was solved a few weeks later when the No 1 Laundry Boy stepped forward and informed on his fellow laundryman.

  ‘Lou Yang Hai has told me that the 3 lbs of heroin was given to him on board in Hong Kong by a friend,’ he said.

  Like the other two Chinese crewmen, forty-three-year-old fatherof-four Lou Yang Hai had worked for the Royal Navy since 1950 and had an exemplary record, being described as ‘keen, cheerful, obliging’ – perhaps too obliging. The No 1 Laundry Boy handed the Commander a piece of paper, ‘coloured on one side, blank on the other, which had clearly been scissored in two’, observed Loram.

  ‘The blank side had severed portions of three red rubber stamp markings and the paper had been cut across some Chinese markings obviously leaving the remainder of the markings on the part of the paper which had been scissored away,’ he continued. ‘Even so the name of Wong Lan Chui was decipherable. I was told by Lou Yang Hai that someone would come on board when the ship was in America with the other part of the paper and that if the markings matched up he was to hand over the sack and contents.’

  Further investigation revealed letters on board belonging to Kan Ping Kwok, which exposed the Chinese seamen’s involvement in a complex trading scheme.

  ‘When I heard that you have decided to put on another package for me without having me pay cash for it, I am very grateful to you,’ wrote a Hong Kong businessman to Kwok. ‘I think it would be best to chip in another piece, if condition permits, and I will pay you when you return to Hong Kong. I leave everything to you.’

  There were cryptic references to colleagues working on other ships travelling between Hong Kong, Singapore and America.

  ‘The itinerary schedule is fine,’ said the letter writer. ‘I wish you would discuss this with Wong Pak [another potential member of the smuggling gang], and find out whether he would like to have him cooperate or not. If he would, let me know so I can write him a letter recommending him to them for co-operation. At the same time, we can make some spending money on the recommendation.’

  Traditionally, would-be dealers had to pay a sum of money to their superiors within the Triad network. ‘You can then give him a small gift,’ said the letter writer, ‘to seal up his friend for what he did.’

  The letters also referred to the way that uniformed Chinese members of the Belfast crew were more useful to the smuggling operation.

  ‘Because you are in civilian clothes, it is difficult for you to come and go,’ Kwok was told. ‘It is better to use him [in a uniform]. You can tell him that half of the stuff belongs to you and half of it belongs to the boss. In this way, your return would not be reduced, and at the same time, the danger of our enemy will be greatly reduced.’

  When HMS Belfast finally arrived at Portsmouth in June 1962, the three Chinese crewmen were escorted to London, where they were charged with being in unlawful possession of opium and heroin. Wong Ah Lee admitted to being in receipt of 22 parcels of opium – 22¼ lb – for which he had paid $4,100 in Hong Kong. Kan Ping Kwok admitted taking on board a suitcase containing 26 packets of heroin – 9¾ lb – and 30 bags of opium – 17½ lb. The laundryman Lou Yang Hai admitted to receiving a sack containing two packets of heroin – 3 lb. The combined illicit value of this cache was estimated at £325,000.

  ‘It is the biggest single haul of illicit drugs that has ever been made,’ said the Crown prosecutor. ‘It is a quantity far in excess of any illicit market which could be found in this country and there is no doubt that the majority of it, if not all, was destined for either South America or North America.’

  For all these men, it meant the end of long and successful careers with the Royal Navy. Whether they were mules, compelled to
smuggle drugs for their Triad masters, or were happily complicit in the entire business, we will never know. Perhaps knowing that their naval careers were coming to an end anyway, they wanted to put some extra money aside for their families in Hong Kong. Clearly, it was a complex operation that involved many other Chinese in Hong Kong and on other warships. How much more opium and heroin had the Royal Navy safely transported around the world for the Triads?

  All three men pleaded guilty. Kan Ping Kwok was sentenced to five years in prison, Wong Ah Lee to four years, and the obliging Lou Yang Hai got 12 months. ‘Quite clearly you were trafficking in this poison and using the cover of one of Her Majesty’s ships in which to do it,’ said the court recorder.

  In August 1963, shortly after its infamous phase as a narcotics transporter, HMS Belfast was decommissioned. She is now a popular museum ship anchored in the River Thames opposite the Tower of London.

  The massive profit margins of smuggling drugs for the Triads were not the only criminal temptations on offer in Hong Kong. Organised crime gangs exerted an enormous appeal for those figures supposed to be opposing them – the Hong Kong Police Force.

  _______

  17

  THE WHISTLE-BLOWING INSPECTOR WALLACE

  ‘I FEEL COMPELLED TO WRITE this letter to you, since I have a very heavy weight on my mind,’ wrote Probationary Police Inspector Christopher St John Wallace. ‘I believe that I can be helped only by a person I can trust completely, and who has the sufficient power to take action – should the case warrant it. The fact is I do not know who to trust in Hong Kong.’

  Wallace’s letter, dated 16 November 1963, was addressed to the British Prime Minister, Sir Alec Douglas-Home.