Drug busts and a failing security system
LINTON BESSER AND NICK MCKENZIE
September 30, 2009
An entrenched network of maritime workers is more than willing to help crime syndicates, write Linton Besser and Nick McKenzie.
It was a quintessential Sydney Harbour scene: a 14-metre luxury yacht bobbed in the waters as a group of mostly hulking men clutched cans of beer and occasionally roared with laughter. Mingling among them were two short-skirted blondes who were due to put on a show after the sun had gone down.
It was the early 1990s and Peter Panayi was putting on one of his frequent turns for the waterfront workers and construction industry players who had supported his business interests.
Throughout the 1990s, Panayi’s reputation for hospitality grew with that of the trucking company he owned with his brother, Terry. Much of the company’s trade involved driving containers to and from Port Botany. ‘‘He [Peter] would probably have about five customs brokers on the boat,’’ one passenger says. Another says: ‘‘He always had two girls [on board], and quite often four. They might start stripping about 7pm with the music on. They weren’t naked all the time but they wore very little.’’
Regulars on Panayi’s boat, the South Pacific, say they often rubbed shoulders with two guests. One was Bruce ‘‘Bruiser’’ Clark, a former star front-rower for the Western Suburbs rugby league team and a trusted Panayi associate. The other was a customs official.
‘‘Instead of taking one client to a restaurant and spending $500 on him, we’d take half a dozen different clients out on the boat and spend $500 on the half a dozen of them,’’ Clark told a hearing in the NSW Supreme Court in June, which Panayi launched to prevent the Herald publishing this story.
To the outsider, Panayi appeared to be nothing more than a well-connected entrepreneur, comfortable with officialdom. In the '90s, he secured an Australian customs licence for one of his companies, CDC Packing, to run a bond store - a government-regulated but privately-operated warehouse to which freight could be moved before import duties were paid.
But Panayi was allegedly cultivating other connections as well, which would come to light during a police operation in 2004. A later court case resulting from the police sting would reveal allegations that Panayi was involved in an attempt to get a drug-filled container moved off Port Botany.
The ease with which contacts on the wharf can be cultivated by crime syndicates was shown last year, when federal police were monitoring an alleged drug trafficker, Rob Karam, as he waited on a drug shipment to enter the Port of Melbourne.
Federal police documents allege that ‘‘between July 24, 2008 and July 25, 2008 … Karam [was] actively monitoring the status of the container and reporting its progress [to other syndicate members]’’.
The ability of organised criminals to infiltrate Australian ports and airports has been documented by the national criminal intelligence body, the Australian Crime Commission, in secret reports that also identify serious security weaknesses.
Last week, federal police swooped on two Sydney airport catering workers allegedly involved in a conspiracy to smuggle cocaine from a plane.
But the continuing drug busts at airports and wharves come as no surprise to many experienced police. A senior policing official recently told the Herald that a small but entrenched network of maritime and airport workers, often related to one another, were more than willing to help crime syndicates to import drugs. These networks are often known to police but operate in ways that evade detection. They help to explain why drugs are so readily available on Australia’s streets and in its nightclubs.
Clark, Peter Panayi’s good mate and business associate, hates drugs. He insists he is now ‘‘as clean as a whisker’’ but acknowledges brushes with the law. He told a Sydney court in 2002 that in the late 1980s he helped one waterfront contact smuggle perfume through customs, pocketing $1000 for his trouble.
He was carving out what has become a formidable reputation on the waterfront. In 2001 it emerged Clark was paid $17,000 - and later given a suspended sentence - for smuggling more than $460,000 worth of whisky and a consignment of cigarettes through Port Botany.
Clark entered the transport industry with his own freight storage company in the late 1980s but it hit the wall and was bought out by Panayi, who renamed it CDC Packing. Clark stuck by the older entrepreneur as he opened and shut a string of companies to dodge mounting debts and angry creditors.
Between 1993 and 2000, the Panayi brothers opened and then shut seven companies in a manner the corporate regulator later said might have been ‘‘phoenix-type transactions’’. By 2007 one of his companies had been fined more than $77,000 for transporting dangerous loads.
Clark and Peter Panayi’s bond would endure even after Clark became a person of interest to organised crime investigators.
By the late 1990s the NSW Crime Commission had linked Clark to a network of waterfront criminals that had ‘‘corrupt relations with police, waterfront workers and government employees’’. Named after its leader, Michael Hurley, who was described in the Wood royal commission as the ‘‘head honcho’’ of Sydney’s underworld, the Hurley gang ran a ‘‘wide range of criminal activities including the importation of prohibited drugs, manufacture and distribution of prohibited drugs, armed robberies, large-scale thefts and money laundering’’.
Clark had already met a key Hurley gang member, Les Mara, a former Tigers rugby league five-eighth, during his playing days. The two used to lift weights together at a gym at Coogee. Then, midway through 1999, Clark met Malcolm Field, the gang’s main conduit to drug suppliers overseas. In 2001, Clark agreed to a request from Field to move some cargo at Port Botany to a freight depot (not connected to Panayi) where Clark was then working. In return for a promised $10,000, Clark had the pallet that Field had asked about shifted off the docks without telling the depot company’s owners what was happening.
The container contained 100,000 ecstasy tablets worth $7 million. It was being monitored by police, who arrested Clark and Field three days later. Clark insisted he never knew what was hidden inside the cargo, saying he thought he was turning a blind eye to the customs duties the freight would attract.
After agreeing to testify against Field, Clark was granted indemnity from the prosecution on the drugs charge. Panayi welcomed him back to the fold and, before long, Clark was again organising container trucks in and out of Port Botany.
Panayi’s interest to police peaked in October 2004 when one of his special clients, Antonio Maureci, began making arrangements for a container of antique furniture to be brought to Sydney from Belgium. It landed at Port Botany on November 4. And it, too, was filled with an illicit cargo. The next night, Steven Lambley, a long-time waterfront worker and one of Peter Panayi’s friends, went to Panayi’s Strathfield home. According to evidence Lambley later gave a NSW court, Panayi asked him to check ‘‘if my container is off the ship’’.
When he asked Panayi what was so special about the container, Lambley told the court Panayi replied: ‘‘Don’t worry about it, Cockroach … We have known each other for a long time. Everything is all right’’.
The court also heard that Panayi became furious when, while sitting in a hired van near the port, Lambley called him to say the container had gone missing. After accusing Lambley of stealing the container, he urged the wharfie to resume his search. Secretly recorded phone calls reveal Panayi telling Lambley: ‘‘The other bloke is still hanging in … you know, if anything suss, just ring me back in half an hour.’’
The container was, in fact, being secretly examined by customs officials. They discovered $40 million worth of ecstasy stashed in coffee bags. Maureci and Panayi were later charged over their alleged roles in the conspiracy.
Maureci was sentenced to 16 years in jail. Prosecutors withdrew criminal charges against Panayi, who has maintained his innocence. There is no suggestion he was more extensively involved. Like his mate and employee Bruce Clark, it was back to business for Panayi, albeit with a fresh set of corporate headaches. In 2005 the Office of State Revenue applied to have his trucking company, Aamac Warehousing and Transport, wound up.
Later that year, the Australian Securities and Investments Commission banned him from running a company for four years, citing a ‘‘repeated pattern of misconduct’’ and a $9.5 million trail of unpaid debts. But with his 28-year-old son replacing him as director, and Clark by his side, Panayi ploughed on.
Panayi did not return calls from the Herald. Despite his past association with Clark and Maureci, Panayi is not required to undergo security vetting to oversee a business that moves 100 trucks a day in and out of Port Botany.
His employees carry maritime security identification cards but, at least until recently, Panayi did not. The cards are given to maritime industry workers unless they are sent to jail for a criminal offence deemed a threat to maritime security. One problem with the system, says one source, is that it does not recognise credible police intelligence or evidence. This problem was spelt out recently in a Federal Government-commissioned report. The report says the scheme is failure and must be overhauled.
Under the present rules, Panayi may be eligible for a card, regardless of the allegations made about him in 2006. Still, he does not need a card to do business on the waterfront.
Among his shifting business interests is a freight storage and logistics company, Warehouse Solutions International, which is a significant player on the waterfront, moving 100,000 containers a year. Panayi’s trucking company has exclusive rights to move all WSI containers and, crucially, WSI has approval for automatic goods entry and storage of freight on behalf of customs.
Panayi’s boat is believed to be no longer in the water. But whether it is dry-docked or afloat, its owner remains an active part of Australia’s thriving waterfront.