Operation Lavender

On the streets of Melbourne, Sydney and other Australian cities in early 1984, plastic packets of hashish went up for sale bearing a distinctive emblem: a cedar tree. In the trade, it has become known as Lebanese Gold.

The cedar tree is Lebanon’s national symbol. What’s more, its use as a label for drugs denotes its origin, for it is the emblem used for a worldwide drug supply network traced to a splinter group of the Palestine Liberation Organisation operating in the Bekaa Valley in eastern Lebanon.

In an undercover exercise code-named Operation Lavender, Australian Federal Police smashed an Australian syndicate that handled a shipment of seven and a half tonnes, with a street value of $40 million.

It led to the jailing in March 1986 of three principals of the Australian end of the operation, Nicholas George Paltos, Ross John Karp and Graham George Palmer.

Picked up by a mother ship, a 1200-tonne freighter, crewed by at least nine Greek nationals, the drugs arrived off the coast of Australia, about 80 kilometres out from Darwin, on 23 February 1984. The ship had been checked through the Suez Canal the previous month. In rough seas, 1400 bags containing the plastic packets of the drug were off-loaded to a 12-metre trawler, the Moray.

Some bags fell into the sea, damaging the quality of the merchandise, later making it difficult for dealers to sell. The mother ship was then scuttled.

Making its way to an inlet north of Darwin, the Moray was met by a ground party, including Palmer, backed by heavily armed men with two pantechnicon trucks used to transport the consignment to Sydney. One of the drivers, a veteran criminal, Daniel Chubb, was to be murdered nine months later for talking about the operation.

Another boat, an 18-metre yacht originally named Scorpio Lady, was bought to get the mother ship crew out of Australia. It was intended to take the crew to French Noumea. However, on its way, it was challenged over its marine band radio by a Royal Australian Navy patrol vessel before clearing Australian territorial waters. Simply checking a strange vessel, the RAN did not know of its drug involvement — and allowed it to proceed. But the crew panicked and returned to Cairns.

The Greek crewmen were then flown to Darwin, where they spent large sums at Darwin’s legal casino, before linking up again with the Scorpio Lady, which had sailed around from Cairns.

This time, the yacht took them to Indonesia, docking at Benoa Harbor, Bali. The crew then flew from there back to Greece. By then, the yacht’s name had been changed to Trellis, and was changed back to Scorpio Lady on returning to Australian waters. It was renamed yet again, as Sea Wolf, before its eventual seizure by the AFP at Fremantle in Western Australia.

From Sydney, the bulk of the drug shipment was channeled into an Australia-wide distribution chain controlled by entrenched Sydney underworld figures.

It was when Paltos, Karp and Palmer set about organising their own distribution network that they came unstuck. The saga of their undoing will go down in crime annals as probably Australia’s finest police undercover operation.

For the Australian Federal Police, it was a watershed that earned it universal acknowledgement that it had developed into a national force of world standing.

Operation Lavender resulted in the smashing of a major Australian drug syndicate, as well as the tracing of disturbing links with overseas networks controlling billion dollar deals.

How it was done, and what the police learned, represents a textbook example of what police like to call ‘proactive’ policing. Their techniques, especially surveillance expertise and intelligence gathering, equalled anything America’s famed FBI has been able to do.

Throughout 14 months, in an operation that involved selected officers in Canberra, Melbourne, Sydney, Brisbane, Perth and Darwin, not one leak occurred. The police were able not only to penetrate the syndicate hierarchy through cultivating informants (who became ‘supergrasses’) but eventually tracking and bugging the principals at every step.

In all, from authorised telephone intercepts and listening devices, they amassed 3522 hours of tapes and gleaned about 350 hours of tapes for use as evidence in court.

Not surprisingly, the three Australian principals — Nicholas George Paltos, 45, doctor and illegal gambling casino operator; Ross John Karp, 37, solicitor; and Graham George Palmer, 45, farmer and illegal casino proprietor-opted to plead guilty. Paltos received a jail sentence of 20 years while Karp and Palmer each received 14 years.

Excerpts from electronic surveillance explain why they went down. No array of expensive lawyers could have got them off before an open court. Perhaps the best testimonial for the AFP was that at no time and at no level had any overture been made in the belief that any AFP officer could be bribed.

In their bugged conversations, syndicate members exuded respect for the Feds — though naively convincing themselves they were even smarter.

As the net began to close, with the AFP patiently waiting to bridge the usual ‘insulation gap’ and actually pin the principals with their own hands on the drugs, Paltos and Karp in particular still thought they could outwit the police, not only in getting rid of supplies remaining from the Lavender shipment but in bringing in more drugs.

On 5 February 1985 Paltos and Karp, using the names Janis and Metters, flew from Sydney to Melbourne for a meeting with a collector and enforcer in the distribution chain, Stephen Nittes, a painter and docker. As they departed from Sydney Airport, and when they arrived at Melbourne Airport, they were under surveillance. When they picked up their car, the AFP arranged to have it bugged.

With a bug in the car, Paltos nonchalantly chatted to Karp about how syndicate dealers had been arrested through not realising they could have been bugged.

Paltos: You’re right about those fucking phones . . . they knew where they were going, what fucking rooms they were going to, every fucking thing, what planes they were getting off.

Karp: They don’t think anybody knows anything about them. They don’t believe that there are probably people that can inform on them, right?

Paltos: Right.

Karp: Um, I think they think they are smarter.

Paltos: They underestimate the police.

Karp: They talk on the phones. They think they are talking in code, but all codes can be broken. I don’t think they are paranoid enough, Nick, unfortunately. I think that if you are doing this sort of business you got to be paranoid to stay safe. Just slackness, Nick. I mean, why didn’t we come under attention, because a couple of our people got too fucking slack, they have told somebody else, whose told somebody else and that’s it. But at least we were quick enough to act on it, do you know what I mean?

Paltos: Immediately.

Karp: Let’s work it completely backwards and say, alright, say they started looking at Danny, and Danny was still alive, right, and we didn’t know it.

Daniel Chubb was ambushed and gunned down with a .357 magnum and a shotgun as he stepped into his green Jaguar parked in Sydney’s inner harborside suburb of Millers Point on 8 November 1984. Just who shot Chubb was made the subject of a special NSW police task force investigation and later a more wide-ranging inquiry by the National Crime Authority.

Recruited to supervise on-land transportation for the Lavender operation, Chubb himself had driven one of the trucks that had hauled the drug shipment overland from Darwin to Sydney. He had also paid more than $120,000 to buy the yacht Scorpio Lady used to get the Greek crew from the original mother ship out of Australia,

But then Chubb began talking freely about the operation, to the extent of exaggerating that it was ‘his’ importation.

Paltos: Oh, it was my shot that Danny’s dead, you know.

Karp: Yeah, that’s right.

Paltos: Yeah, really Ross, he would have brought us all undone.

Karp: Oh, look at the way he used to talk on the phone.

Paltos: Yeah.

Karp: We’d visit him . . . they’d be looking at his joint watching the cars coming and going, you’d come undone from things that aren’t really, you know, anything vital, um, look how we come under notice . . . Still, they are not here today. They don’t know anything about where we are today.

Paltos: Yeah . . . No one knows where we are going to meet anyway, Ross.

Karp: That’s exactly right . . . like, they are following all those other blokes who are less careful, thank God, and bad luck for them. I’ll sympathise with them.

Paltos: Yeah, I know, mugs.

Karp: You know, but if they are going to be like that, they might as well get caught and not us.

What they could not know was that the AFP had been purposely letting the drug distribution go ahead, under surveillance, plucking out dealers when it suited, sometimes to deliberately precipitate events, all the time aiming to get to the principals.

The AFP by then had been following the drug dealing for more than seven months, having first detected something was afoot from a conversation on an official telephone intercept on another target in mid-July 1984. Over the next six months, AFP officers in Melbourne and Brisbane had been putting the jigsaw together.

A major breakthrough came in January 1985 when Operation Lavender case officer Detective Inspector Bob McDonald, liaising with a member of the Queensland police, turned up a source that could verify and corroborate what was being detected from surveillance operations. In Canberra, a stepped-up command structure was organised by the division’s national boss, Chief Superintendent Peter Lamb, and Assistant Commissioner Brian Bates. Lamb, one of Australia’s top authorities on organised crime, who had spent several years setting up liaison facilities in America for the AFP, urgently initiated techniques gleaned from American agencies. On 16 January 1985 Deputy Commissioner John Johnson made Operation Lavender a national target and the AFP’s number one priority.

Through the AFP’s Commissioner, Major-General Ron Grey, the ministerial head, Mick Young, Special Minister of State, and other government officials, were briefed and special funds were authorised. No expense was to be spared. As the operation swung into full gear, selected officers in the New South Wales, Victoria and other State police forces were also briefed. Not a word leaked out.

Much was at stake.

At the time Paltos and Karp were being bugged in their car on that February mission in Melbourne, a news broadcast over the car radio interrupted their conversation. It was about Bob Trimbole, a principal of the Griffith marijuana trade and key figure in the notorious ‘Mr Asia’ heroin syndicate. As recorded on the now famous Age Tapes, Paltos had tipped off Trimbole to leave Australia in May 1981. When Paltos went overseas in October 1983 to organise the Lavender shipment, he is believed to have diverted to rendezvous with Trimbole. Trimbole was arrested in Ireland later that same month.

Robert Trimbole
Robert Trimbole

The radio news bulletin dealt with extradition proceedings against Trimbole. Seven weeks later, on 26 March; Trimbole was ordered released by the Irish Supreme Court. Eight weeks after that, Paltos, this time accompanied by Karp, again flew to Greece. From Greece, they are believed to have then flown to see Trimbole at a hideaway in Spain.

Paltos: What happens if he beats it, Ross, that’s what I want to know.

Karp: Every crim in Australia will be heading for fucking Ireland.

Paltos: He’s got some people fighting for him over there, hasn’t he, Ross?

Karp: He’s spreading plenty of money around, Nick . . . he has spent a million over there.

The conversation mentions that Paltos had had a call from Ireland the previous Saturday from Trimbole’s son, Craig.

Paltos: Ross, he reckons he will come back. They will never let him go, never let him go out of jail.

Karp: I don’t know, but um, I’m certain that it will go to the highest and the last court before the decision is made.

Continuing to convince themselves that they were a step ahead of the police, Karp says: Even right now we are still presuming they are watching us and we know they are not.

Paltos: Yeah . . . time is on our side, too, Ross.

Karp: It’s nearly a year, Nick [a year since the Lavender drug shipment had been landed near Darwin].

Paltos: I’ll tell you something. Without the actual gear [meaning possession of drugs] I’m telling you it’s very difficult.

Karp: Nick, you’re 99 per cent right . . . but the more accurate you talk on the phone about things you can relate to . . .

Paltos: Of course, of course. Oh, look, I say nothing . . . I’m lucky. When I say is anything wrong I refer to it all, I’m a doctor.

Karp: I can use it to a certain extent, too, you know . . . At the moment I’m telling you I’m doing a very easy divorce for a bloke . . . there is a lot of chatter going on about problems at home and all this sort of thing . . . oh, fuck it, Nick, they have got to catch us and they won’t . . . Do everything right this year. We’ll do everything right. They’ll do everything right over there for us.

Paltos: Yeah.

Karp: Give us more than we can sell.

All was not going well at all. Watching, and listening, the AFP waited patiently, monitoring every significant move by both the principals as well as those in lower ranks. Early arrests were being kept twice and three times removed from the key figures. Often in the past, police operations in Australia had netted only small fry, leaving the real conspirators untouched.

Surveillance stake-outs were maintained round the clock. Overtime restraints were relaxed with government blessing to allow detectives to pursue every lead. Detectives willingly worked on without extra pay anyway. At the AFP’s organised crime unit Melbourne headquarters the traditional Christmas party had been abandoned.

Staff worked into the night, every night, and at weekends, transcribing intelligence from telephone taps and listening devices. One hour of monitored conversation can take three hours to transcribe.

In fact, if one person had to just listen to all the Lavender Operation tapes, let alone transcribe them, it would take 147 days, 24 hours a day — or more than a year and a half listening eight hours a day, five days a week.


from Connections 2 by Bob Bottom