Caught In The Act

What must rank as Australia’s most sophisticated bugging exercise proved the final undoing of the Australian principals of the Lavender drug syndicate.

It was carried out from a listening post in a public park.

Wary of telephones, always booking plane flights in false names, seldom driving the same cars, and tuning into police frequencies with portable scanners, the drug bosses always went to a park or car park whenever they had deal with any lieutenant

In Melbourne, they always met in Fawkner Park, South Yarra.


The Australian Federal Police’s Operation Lavender team knew that if they could monitor and record what went on there they could get enough evidence to charge the principals — not just arrest the distributors and dealers who did their dirty work.

Fawkner Park happened to be adjacent to the headquarters of the Australian Security Intelligence Organisation.

According to security experts, it was impossible to devise a guaranteed system of bugging a park, and that was why spies invariably met their contacts in parks.

The AFP went ahead and did it.

All available supplies of bugging devices were obtained to transmit from every likely meeting spot.

An elaborate electronic listening post, with stacks of reel-to-reel tape recorders, was set up on the spot in the park.

Viewing holes were drilled for long range video cameras.

A spare room was made available in a building overlooking the park for another camera surveillance centre. For recording in darkness, restricted issue light intensifier cameras were used.

The operation was particularly aimed at catching the three Lavender principals, Nick Paltos, Ross Karp and Graham Palmer.

All three fell into the trap when they flew from Sydney to Melbourne on 30 April 1985 and organised at a meeting in Fawkner Park to themselves handle a drug drop for distribution in Victoria.

Minutes before their expected arrival at the park, a council employee set about mowing the lawns with a large ride-on mower. The activated bugs in the park went wild. The AFP’s Melbourne technical chief, Detective Sergeant Ron Stewart, dashed from his kiosk hideway to persuade the workman to call it a day with only minutes to spare.

Earlier, a man had been pounced on when discovered photographing AFP technicians putting bugs in place. His film confiscated, he was found to be an innocent college student simply trying out his camera in a park setting.

As the drug meet got underway, and Stephen Nittes relayed the fact that syndicate dealers had been complaining about not having been paid all that they were owed, Paltos advised: I don’t want you to tell ’em this . . . see, we’ve got something on the way . . . the thing is, they’re gonna get the balance of what they’re owed.

Pointing out that there was difficulty in getting buyers for the original Lavender product, Palmer says: Nobody wants the stuff. It’s useless to them.

It had been discovered that much of the Lavender delivery was lower in quality than expected. At one stage, abortive attempts had been made to improve samples of it with chemicals.

Nittes: I guarantee I can get rid of twenty kilos.

Paltos: You fair dinkum?

Nittes: Yeah.

Karp: It’s worth a go . . . You’ve gotta be careful Steve, you know, we don’t wanna see you comin’ undone.

Paltos: Will you be ready to accept the stuff in a week’s time?

Nittes: Of course I will. I’ll make it me business to.

Paltos; Next Tuesday?

Nittes: Next Tuesday, same as, yeah.

Karp: Now if you have any problems, once you give it to the bloke, that’s it for you. There’s no come back for you?

Nittes: No, no come back.

Karp: Because if he gets pinched he is going to be looking for you to solve his problem.

Paltos: He can handle it.

Arrangements were made for confirmation of the drug delivery to be made through a coded telephone message to a ‘safe’ phone.

Nittes: Give you the number over the phone, coded and backwards.

Paltos: Coded and backwards, you have got to code it.

Nittes: You add one to each number and code it and read it backwards. If it’s a nought, it becomes a one. If it’s a nine, it becomes a zero.

When mention was made of suspicions that a syndicate member had been tailed on a trip to Sydney, Nittes discounted AFP involvement. Yet in fact he had happened to spot an unmarked car being used by the Operation Lavender’s team.

Nittes: . . . they weren’t Feds. They were on a different fucking wave length.

Paltos: Oh, well, that’s okay . . . well, that’s great.

Six days later in Sydney, Paltos and Karp, accompanied by another syndicate member, again in a vehicle bugged by the AFP, talked of being paranoid over their impending drug drop to Melbourne. Yet they still thought they were safe in Sydney.

Apart from intercepting telephones and planting listening devices in cars, the AFP set up a sophisticated system of transmitter points. Even if a trailing surveillance car lost a target vehicle, its location could be plotted from a central monitoring post.

Confiding to Karp that Palmer had suggested they were making too much of an issue out of the possibility of police watching them, Paltos remarked: He thinks it’s too much trouble . . . I think of the worst.

Unknowingly, Palmer had actually spoken to a member of the AFP team — twice. Palmer happened to walk into the office of his local council to find a man looking at a map showing his farm at Cobbity. The detective told Palmer he was a real estate developer looking at land prospects. Later on, Palmer saw him again, this time walking along a road near the farm boundary. He offered him a lift.

Preparing to go to Melbourne, Paltos remained apprehensive.

Paltos: . . . let me tell you what I’m frightened of, not that the man would do anything wrong . . . He’ll kill for us . . . I’ll tell you this man would kill for us, but he’s not too bright . . . You see, so I’ve gotta protect him as well in this way . . . Just to be on the safe side.

Paltos and Karp contemplated the money flow from the drop.

Paltos: If he has got forty or fifty thousand, we’ll go down, well meet at night.

Karp: No problem.

Paltos: Oh, Jesus . . . we need fuckin’ ten thousand in three weeks just for — — — to go away.

Karp: That’s right. We’ve got to pay the balance of the passports. We haven’t done that yet.

The following afternoon, 7 May 1985, Paltos and Karp flew ahead from Sydney on a TAA flight. Palmer followed on an Ansett flight, bringing 20 kilos of hashish in two blue suitcases.

All were under surveillance all the way. A police bug was planted in the car collected by Paltos and Karp. For what it was worth in the circumstances, they attempted their own counter-surveillance.

Paltos: It’s impossible for ’em to be on to us, Ross. I’ve tried the scanner.

Karp: That’s right . . . I’m a hundred per cent with ya . . . they don’t know what we’re doing.

Paltos: . . . anyway, I’m glad we’ve got Victorian number plates on it . . . might stop ’em looking.

Each time they travelled, they carried their own portable scanner to tune into police frequencies. The units can be bought off the shelf in various electronic outlets. However, AFP surveillance teams operated on a special voice privacy channel only.

Parked in their car at Melbourne Airport, waiting for Palmer’s plane to arrive, tension obviously started to get to Paltos and Karp.

Paltos: Did you just fart?

Karp: Yeah, I farted outside.

Paltos: Fucking Jesus.

Karp: I’ll open the door.

Suddenly Paltos let forth with a loud burp.

Karp: Surely nothing could have gone wrong, could it?

Paltos: How could it go wrong . . . if they pinched them before they got on.

Karp: No, they would have just stopped him going on . . . no, I think there’s no problem about it being late.

When Karp says he is going to the toilet, a nervous Paltos urges: You come back, though.

Karp: Yeah, wait, I’ll come back and sit with you.

Now worried about the delay, Karp agrees to get a taxi and go ahead so that somebody would be on time at the rendezvous to meet Nittes.

After he leaves, the police bug recorded Paltos breathing heavily. Then there was the sound of a door opening, as Palmer hurriedly got in the car.

Palmer: I had some fucking guts . . . go on move, boy!

Paltos: Why?

Palmer: Get out of here, there’s fucking dogs and everything.

Paltos: Yeah, I know. They’re waiting for the Prime Minister.

Palmer: . . . the dogs were there. The puppy dogs on a lead. Oh, followed them right down up to number eight terminal . . . Federal fuckin’ police . . . they were blew-ing with coppers everywhere . . . I had to save myself with that bag . . . the dogs . . . panic going on . . . fucking what’s going on here. They’re following me. They followed me . . .

Then: What stinks? Did you fart?

Paltos: No, no, it’s the area . . . no did fart . . . it’s something to do with cement.

Paltos continued to explain the airport drama on their way to Fawkner Park: They were searching people going out. They said you can’t go past this certain gate. Those dogs are for bombs. They sniff bombs, Croc.

Palmer: As I was coming, I saw all these fucking coppers . . . Lord, mate . . . these bags. That’s got a lot of padding in it.

Paltos: Yeah, a lot of padding in it, make it look like clothes.

Approaching Fawkner Park, Palmer complains about Karp, describing him as a ‘little rich kid’ who was not one of them.

Paltos: No, that’s wrong. You’re out of order there, Croc . . . he’s bored with life. He’s got no kids. He doesn’t give a fuck. He was looking for a high. He’s found his high with me. He’s an intelligent bastard, wants to beat the system. He gets a high out of beating the system.

As they pull alongside the park, Palmer again becomes agitated, exclaiming: These cunts are playing football over there . . .

Indeed, an amateur football team was using the park grounds for a practice session. As darkness fell, the coach had tried to get into the police listening post. A stand up battle threatened when police inside barred him from pushing open the door. A frantic Ron Stewart placated the coach by confiding to him that the kiosk had been commandeered for a special operation. The coach responded by agreeing to keep his players to the far end of the grounds and get them to keep their noise to a minimum. The police offered the club a donation.

Arriving at the park earlier, Karp had been joined five minutes later by Nittes, ready for the handover of the drugs brought from Sydney in suitcases carried by Palmer.

Nittes: Did you bring the lot?

Karp: The suitcases, no problems, is there . . .?

Nittes: No, no.

Karp: You can carry the bags alright, everything suits you, right.

Palmer then appeared out of the darkness for the handover of the two suitcases.

Driving away from the park, Palmer and Karp tell Paltos the drug handover went without a hitch.

Palmer: Yeah, came straight up, came straight up and left.

Karp: Everything’s sweet . . . He’s very confident. He reckons he’s got five sold already..

Paltos: Right, Ross, again I think we’ve proven a point. Do you agree, Ross? I’m talking to ya, Ross. Do ya agree?

Karp: Yeah.

Paltos: Would you agree, Croc, that keeping your mouth shut is the biggest fucking start we can give them?

Karp: Oh, well, we weren’t even worrying about our end. Paltos: No, I was worried about this end here . . . just then, the critical part [was when] I saw Croc drop the bags down and come up to you . . . thanks . . . really appreciate you help, mate. I really fucking do. I really fucking mean it, as little as it may be. I really fucking appreciate it. Now we’ve done all our job, can this cunt do his job?

Karp: Yeah, he said he’s already got five kilos sold.

Paltos: We’ll find out in the next two weeks, Ross, if he’s sold it.

Palmer: We’ll bring him a truck load.

The bug recorded a chuckle all round.

Now in a smug mood, they joked about having a movie made on their activities.

Paltos: Oh, Croc, Frank went through, ah, the actors the other day, who to play you in the movie, right. I said James Caan. right — and he reckons Robert Redford. I said Robert Redford’s too little. James Caan would be ideal. Who else was the bloke?

Karp: Steve McQueen.

Paltos: But he’s dead.

There was laughter when it was suggested that a 300-stone actor could play Paltos. And when Omar Sharif was nominated for another syndicate member, Paltos proclaims he ‘doesn’t look dopey enough’.

Little did they know then they had all been playing out their own roles, on sound and film, for the airtight police case that left them no alternative but to plead guilty and go to jail.


from Connections 2 by Bob Bottom

picture by Michael Fitzjames