The Sinclair Gang

On Thursday, 12 October 1978, Sydney commuters were for once genuinely surprised by the blazing headlines of the city’s afternoon tabloids. Under the bold headline ‘League Star Heroin Charge’, the page one story of the Daily Mirror’s late final edition began: ‘Paul Hayward, the Newtown Rugby League star, has been arrested on heroin charges in Bangkok and faces threat of execution without trial’. The story went on to say that Hayward and two other Australians had been arrested at a hotel in Bangkok’s Patpong vice district in possession of a suitcase containing 8.4 kilograms of No. 4 heroin worth about $3 million retail on the streets of Sydney. The next morning the Sydney Morning Herald published a dramatic page one photo of Paul Hayward and two other Australians, Warren Fellows and William Sinclair, sitting in front of an open suitcase and two dozen plastic bags of heroin displayed in neat rows. The usually-sedate Herald’s headline read: ‘ “I can never go back to Sydney. . .” Paul Hayward, Newtown RL Player, Charged With Possession of Heroin’. Demonstrating his concern, John Singleton, the Newtown Rugby League club’s chief patron, had already dispatched his personal solicitor to Bangkok to intercede on Hayward’s behalf.

As tabloid editors filled their columns with stories of fetid Thai prisons and weeping wives, the N.S.W. police, who had had the group under observation for months, moved to break up what they later alleged was its Sydney distribution network. On 12 October, the morning after the Bangkok arrests, N.S.W. police raided the home of Arthur ‘Neddy’ Smith in Henry Street, Sydenham — a $29,000 house surrounded by eight-foot brick walls and protected by a video-camera security system. A search turned up $39,360 cash in a bedroom wardrobe and a receipt for a ‘locked tin box’ at the Marrickville Branch of the ANZ Bank, later found to contain some interesting items: $90,100 cash, $10,000 worth of diamonds, ‘a short manual setting out how . . . to get a container past customs’, and a coded letter from a Hong Kong Chinese merchant. Police arrested Arthur Smith, thirty-three, and his de facto wife Debra Joy Smith, who was the sister of Paul Hayward’s de facto, charging them both with possession of money unlawfully obtained. Also present at the time of the raid but not arrested were Paul Hayward’s brother and the wife of Warren Fellows, a Manly hairdresser who had been arrested with Hayward in Bangkok on drug charges.

Searching the home of Fellows, Manly police found receipts for two boxes at the CBC Bank under Mrs Fellows’ maiden name. The boxes were later found to contain $185,990 cash and a false passport in the name of Errington bearing Fellow’s photograph. At the Western Suburbs home of Neddy Smith’s stepbrother, Edwin Smith, Drug Squad police found plastic bags containing heroin residue and an Armalite rifle operative as a submachine gun. Two weeks later Edwin Smith was arrested by CIU Detectives in Alexandria in possession of 3.5 pounds of high grade heroin.

The day following the Sydney raids, a Brisbane private detective walked into the office of Queensland’s Police Commissioner, and surrendered $140,000 cash, bringing the total amount seized in the two days to $435,000. The Brisbane detective explained that the wife of Gregory Sinclair, son of the same Sinclair arrested in Bangkok on drug charges, had given him the money. The Sydney tabloids reported that Gregory Sinclair, a Brisbane restaurant proprietor, had surrendered the money with the alleged statement: ‘If I go across the border into New South Wales I will be wasted’.

Discussed in three different courtrooms — Sydney’s Court of Petty Sessions, Bangkok’s Criminal Court, and the N.S.W. Drugs Royal Commission — over a space of two years, the investigation of the Sinclair network constitutes the most detailed documentation of any alleged Australian heroin network ever placed on the public record. Warned by his stepbrother that ‘if I was arrested I would be killed’, Edwin Smith decided to co-operate with police and Royal Commission investigators. Covering some thirty pages of tightly printed text, his testimony before the Royal Commission provides a wealth of detail about the network’s operations. Following leads he provided, N.S.W. police were able to gather additional evidence which has been presented in the Sydney and Bangkok courts. Although only employed by the ring for three months, Smith’s role as a courier brought him into regular contact with all of its operational members in Bangkok and Sydney. Moreover, as a close associate of several of its members, Edwin Smith was well placed to observe operations before joining the network.

At the alleged apex of the network’s visible operatives were William Charles Garfield Sinclair in Bangkok and Arthur ‘Neddy’ Smith in Sydney. Beginning their operations sometime in mid-1977, the network, at its peak, moved over 11.3 kilograms a month from Bangkok into Sydney’s supply system, equivalent to about 15 per cent of the minimum estimate of New South Wales’ 1978 heroin consumption. According to a police CIU report, William Sinclair, residing in Bangkok where he owned a bar, ‘was allegedly involved in obtaining heroin there from Chinese syndicates’. At Bangkok, N.S.W. police testified that Neddy Smith recruited couriers for the trip to Thailand and distributed the heroin in Sydney. Their most active courier was Warren Fellows, twenty-six, allegedly paid $60,000 per trip for carrying suitcases with as much as 30 pounds of Thai heroin through Australian Customs.

Generally and erroneously described as an Australian expatriate who had spent much of the past ten years in Bangkok where he was co-owner of a bar, William Sinclair was, in fact, an influential Sydney businessman who had been residing permanently in Bangkok for less than a year at the time of his arrest. Born in northern New South Wales in 1913, Sinclair later moved to Sydney and became well known in N.S.W. Labor Party circles during the 1950s. According to testimony before the N.S.W. Drugs Royal Commission, Sinclair was a close associate of Mr C.A. ‘Gus’ Kelly, a long-serving Labor MLA and State cabinet minister who died in 1967. Sinclair also knew Mr Jack MacMahon, then State MP for Balmain and Minister for Transport, who allegedly introduced him to an ex-boxer and Balmain Labor Party stalwart named Daniel Patrick Casey in the early 1960s. When conflicts developed in the mid-1970s between new middle-class inner urbanites, the ‘trendies’, and the old Labor-dominated Council in the Municipality of Leichhardt, which includes Balmain, Mayor Les Rodwell and Deputy Mayor Daniel Casey retained Sinclair’s services as a ‘public relations’ consultant at $15,000 per annum in 1975-6. Through his work at Leichhardt Council Sinclair developed a friendship with the State Labor MP for Balmain, Mr Roger Degen, a Casey ally, and maintained the association for several years after leaving the council.As the managing director of Balmain Welding Company, which employed Stanley Smith as a foreman, and a Labor Party influential who reportedly counted the party’s State Secretary as ‘a close friend’, Casey was obviously a useful contact for an aspiring entrepreneur like Sinclair. In October 1978, some three years after he had received his Leichhardt appointment, Sinclair appointed Casey company director of Wings Travel Pty Ltd, a business founded by Sinclair and in which he had served as both director and controlling share holder.

Alderman Casey’s relations with Stanley Smith and Sinclair became a subject of heated public controversy in 1978-9. In the course of its investigations into Smith’s drug dealing, the N.S.W. Drugs Royal Commission made some strongly critical remarks about his employment as a foreman at Casey’s Balmain Welding Company, a firm involved in the repair of shipping containers. In his initial appearance before the Royal Commission in May 1978 Smith had described himself as a ‘supervisor of repair and construction of shipping containers’ at Balmain Welding. During a raid on Smith’s Whale Beach home the following month, N.S.W. police seized tapes and documents prepared by Casey concerning Smith’s work at Balmain Welding. Noting that Smith was absent from work far too often to justify his regular company salary, the Commissioner later concluded that Casey had prepared the documents ‘to adequately prepare Smith for cross-examination in relation to his alleged employment with Balmain Welding’. Deciding that Smith was ‘involved in the trafficking of drugs’ and did not earn his income at Balmain Welding, the Commissioner expressed grave concern about the implications of Smith’s associations with the company: ‘It is reasonable to assume that to some extent drugs are brought into this country . . . in containers. I suppose one means of extracting the drugs from a container . . . is to have the container available for repair. . . When you see a business, with which persons of unsavoury reputation are involved, dabbling in the repair of containers, one wonders whether their interests in containers is quite as legitimate as it would appear to be, particularly when you find the business is doing so well that it can afford the luxury of a gentleman on the staff who does not have to work.’

The controversy reached a crescendo a year later in September 1979 when a Liberal Party frontbencher, Mr John Dowd, MLA, voiced his suspicions that Alderman Casey’s relations with Stanley Smith and William Sinclair, both indicted drug dealers, ‘had something to do with his [Casey’s] mention in the Drugs Royal Commission’. Country Party leader, Mr Leon Punch, also speaking in State Parliament, asked whether it was true that Alderman Casey had channelled $20,000 from drugs and illegal gambling into State Labor Party funds. Called before the Drugs Royal Commission, which remained sitting to deal specifically with these allegations, Alderman Casey flatly denied any involvement in drug trafficking and explained that he tolerated Smith’s absences because of his fondness for the family. The Commission’s counsel also testified that he had been unable to uncover any evidence to substantiate the allegations. After hearing Casey’s explanations of his unorthodox financial dealings with Wings Travel and Balmain Welding, the Commissioner concluded: ‘I can understand children being willing to believe in Father Christmas’.

Sinclair also had well-documented business relationships with some of New South Wales’ organized crime figures. In the course of its 1974 investigations into criminal penetration of the State’s licensed clubs, the Moffitt Royal Commission had found that Sinclair was in partnership with Walter Dean, president of South Sydney Junior Rugby Leagues Club, in no less than three companies which were engaged in questionable contract work for the club. Dean’s most important vehicle for ‘exploitation’ of the club was Aesthetic Arts Pty Ltd which used ‘a number of trade names in its dealings with the club, obviously for concealment’. Together with Dean, Sinclair was a founding director of Aesthetic Arts and through it dealt with Murray Riley, who was in ‘some kind of partnership in aid of . . . Dean’s illicit dealings’.

Three years later the Drugs Royal Commission learned that Riley and Sinclair were again involved in an informal business partnership with criminal overtones — the formation of Wings Travel Pty Ltd. Appearing in corporate reports as the firm’s founder and managing director, William Sinclair served as company director of Wings from the time the company was formed in 1976 until his resignation in August 1978, only two months before his arrest in Bangkok on heroin smuggling charges. In the company’s earliest register of directors filed with the N.S.W. Corporate Affairs Commission on 8 April 1976 Sinclair and Fr Edward Brian O’Dwyer, a Queensland Catholic priest who had abandoned pastoral work, appear as directors each holding 2,000 shares of Wings Travel stock. According to Drugs Royal Commission counsel Mr Roger Gyles, QC, Riley ‘played an active and shadowy part’ in the company’s operations. He brought Wings Travel a considerable amount of police business, and in return Sinclair gave him a letter of identification as a Wings Travel employee and provided him with quarter price tickets available to his employees. Riley was not the only drug trafficker who flew on Wing’s tickets. In his report to the Royal Commission, Gyles stated: ‘The manifest of Wings Travel reads like a who’s who of drug traffickers’. Claiming that Wings was used ‘persistently and consistently’ by drug traffickers, Gyles later reported that every major drug syndicate save one named in the Royal Commission’s 1979 report had used Wings Travel. In most cases, Riley appeared to be the intermediary.

Wings Travel’s finances were the subject of considerable scrutiny by the Drugs Royal Commission. Leichhardt Alderman Daniel Casey loaned a total of $48,000 to Wings beginning in mid-1977 and later accepted a position as director of the company. Alderman Casey also loaned $30,000 to a Balmain identity named Eric Delaney whom Casey described as a friend and fellow Labor Party member. In its 1979 report the Drugs Royal Commission listed Eric Delaney as a member of William Sinclair’s heroin network. Delaney has convictions for ‘stealing, goods in custody and conducting an unlawful game’, and was once acquitted on charges of murder after a knifing in a Balmain hotel. After Sinclair moved to Bangkok in 1977 he left the management of Wings Travel in the hands of the firm’s other founding director, Fr O’Dwyer. When Wings faced a liquidity problem, Fr O’Dwyer borrowed $27,000 from Mr Robert R. Evans, an SP bookmaker and licensee of the Dumbarton Oaks Hotel in Kent Street, City where Fr O’Dwyer habitually placed his bets. According to evidence presented before the Royal Commission, Evans at one point introduced one of his barmen at the hotel, Warren Fellows, to Wings Travel as a client. Fellows allegedly became one of the most active couriers in the Sinclair network.

Even after Sinclair reportedly became involved in heroin dealing in 1977 he continued to use his political contacts to promote the interests of his associates. In testimony before the Drugs Royal Commission, Mr Roger Degen, State Labor MP for Balmain, admitted that Sinclair had asked him for favours on behalf of Robert Evans, Fr O’Dwyer and his son Greg Sinclair. Degen managed to arrange a more secure tenure for Evans at the Dumbarton Oaks Hotel from a government department, but failed to secure the zoning change that Fr O’Dwyer requested. Mr Degen recalled a social outing with William Sinclair and his alleged distributor Arthur ‘Neddy’ Smith. He also admitted that Neddy had once approached him at the Sackville Hotel in Rozelle, the local Labor Party hang-out, to ask his support for a ‘no-bill’ application he had made to courts in connection with criminal charges he was facing. On another occasion Degen accompanied Eric Delaney, a Balmain identity reputedly involved in the Sinclair network, to Neddy Smith’s electronic fortress in Sydenham. Questioned further about his drinking companions, Degen admitted meeting Stanley Smith, Deputy Mayor Casey’s nominal employee at Balmain Welding and a convicted drug dealer, at the Sackville Hotel on two occasions. After hearing this testimony, the Royal Commissioner, Mr Justice Woodward, asked Degen: ‘Did it ever cross your mind that the public may be concerned to see you were consorting with active criminals?’ At the final hearings of the Drugs Royal Commission in April 1980, counsel for Deputy Mayor Casey filed a written submission arguing that the allegations about his client’s involvement in drug trafficking made by Mr Punch in State Parliament were ‘unfounded, irresponsible and mischevious’. Similarly, a barrister representing Roger Degen, MLA argued that ‘it is probable that Mr William Sinclair attempted . . . to use my client . . . in connection with drug trafficking, but this attempt failed or was not continued and my client knew nothing about it’.

If William Sinclair moved through life with a view from the company board room, Neddy Smith was in every way a man of the streets. Born in the Sydney working-class suburb of Redfern in 1944, Smith grew up in that same area, the second of six children in a home without a father and later quit Cleveland Street Boys High School at the age of fourteen. Apparently incapable of accepting the discipline of regular work, Smith launched himself on a criminal career in 1959 that scored twenty-five arrests in less than twenty years, including a conviction for rape in 1968. On this charge Smith was sentenced to twelve years’ imprisonment and was released on bail in 1975. Although nominally employed as a cleaner after his release, N.S.W. police documents allege that he ‘has obtained a reputation as an enforcer with the Criminal element, and is feared among them. It is known that he is employed by bookmakers as a collector for outstanding debts.’

According to Edwin Smith’s recollections, Sinclair and his Sydney distributor, identified only as Mr ‘BL’ in Royal Commission transcripts, began their drug ventures somewhat independently in mid-1977. Mr ‘BL’ first became involved through his associates in Sydney’s shop thief fraternity, most importantly Kenneth Derley, later known for his role as Murray Riley’s offsider in the Anoa yacht smuggling case. Formally employed as a car salesman in Kingsford, southern Sydney, ferrying cars about the city in 1977-8, Derley was simultaneously working for a wealthy criminal and pirate cassette manufacturer, Neville Biber, as ‘a drug courier . . . making local deliveries’. Through Kenneth Derley’s introduction, Mr BL began working with Biber as a local courier around Sydney and served an informal apprenticeship in the city’s drug trade. Some time in late 1977 Derley also offered BL a chance to become involved in Murray Riley’s $46 million cannabis shipment, but he refused and instead continued to develop his own heroin operation.

Moving regularly betweey Sydney and Bangkok in 1977, Sinclair was allegedly building up his drug trade and ‘offered BL a partnership arrangement because of his contacts and strength — he was pretty well-known as a standover man’. Some time after the Drugs Royal Commission began sitting in August 1977, Sinclair became concerned that his company Wings Travel was being investigated and fled to Bangkok where he purchased a bar and married a Thai woman to prevent his extradition to Australia.

From his base in Bangkok, Sinclair allegedly used his contacts with Chinese syndicates to procure relatively large lots of heroin. Travelling widely through the Asia/Pacific region on at least two forged passports, Warren Fellows, an experienced drug smuggler with contacts in Bangkok’s Chinese syndicates, became the network’s main courier and, with assistance from a Customs officer, repeatedly cleared Sydney airport without detection. ‘You hear of fellows in America handling one or two pounds’, he said, ‘but I am handling twenty and thirty pounds at a time’. After his Bangkok flight was unexpectedly diverted from Sydney to Melbourne in May or June 1978 and Fellows came through ‘cool under pressure’ with 30 pounds of heroin, Sinclair and BL allegedly rewarded him with a partnership in the organization. Mr BL also recruited his de facto brother-in-law Paul Hayward, a convicted thief and Newtown rubgy league player, for the Bangkok run in early 1978. Protected by his celebrity status, Hayward made two successful drug runs to Bangkok and just prior to his arrest was in possession of a suitcase containing 8.4 kilograms of heroin concealed only by a blue towel.

Upon arrival in Sydney, the heroin was delivered to Mr BL’s electronic fortress in Sydenham. Using an ordinary household electric mixer to remove lumps, BL adulterated 13 ounces of No. 4 heroin with 3 ounces of glucodin powder to make up one-pound packets which he sealed in plastic sacks. Packaging the three ounce shares removed from each pound into one and two ounce packets, he sold them to friendly dealers without the knowledge of his organization, consistently ‘ripping-off’ his associates. During mid-1978 Mr BL’s associate Edwin made three deliveries a day of half-pound and one-pound packages to automobiles parked in the Eastern suburbs. Driving past the assigned car at a slow speed, the courier came abreast of its right rear window, which had been rolled down four or five inches, and dropped the package inside the buyer’s car.

Through his network, Mr BL moved over eleven kilograms of heroin a month, an estimated 15 per cent of Sydney’s market. BL’s fourteen employees were professional criminals and their personal details are eloquent testimony to increasing dominance of the criminal milieu over the city’s drug traffic:

Edwin Smith, thirty-six, sentenced in 1966 to three-and-a-half years for auto theft; BL’s stepbrother, drug courier.

Paul Hayward, twenty-six, convicted thief; BL’s relative by de facto marriage, drug courier.

Tony Eustace, thirty-five, an English migrant with prior convictions, ‘suspected as a receiver of stolen goods and a major drug distributor’; BL associate, distributor of one-pound heroin lots.

William McLain, thirty-seven, has a long record of criminal convictions most recently sentenced to prison for manslaughter in 1972; a BL associate of fifteen years’ duration, heroin salesman and courier. David Kelleher, twenty-five, criminal sentenced to ten years’ imprisonment on rape charges in 1973; ‘long-time associate’ of BL, heroin bulk distributor.

Victor Spink, thirty-four, ‘professional thief’; BL associate at Silverwater Prison, ounce heroin buyer.

Henry Charles Landini, thirty-six, Italian migrant with theft convictions; BL associate and heroin seller.

Eric Delaney, thirty-five convicted thief; BL associate, heroin distributor.

Neville Biber, forty-five, convictions for stealing, receiving and ‘consorting with habitual criminals’; BL associate, and bulk heroin distributor.

In reviewing the evidence presented about the Sinclair network, Royal Commission counsel William Fisher described it as a ‘major heroin operation’, but pointed out that the Commission’s information came from a source ‘fairly low down in the echelon’. While giving evidence about some rivalries within the ring, star witness Edwin Smith gave strong indication that there was a higher level of managerial control above both William Sinclair and Mr BL. Sometime in mid-1978 Edwin Smith was party to a conversation at Kingsford’s Regent Hotel with Warren Fellows, Mr BL and Sinclair’s son Gregory, allegedly running his own cannabis import operation, about some problems with the current operations. Complaining of William Sinclair’s mismanagement, the group discussed putting him on a ‘pension’ and appointing his son Gregory to succeed him. Some time later Edwin overheard his boss BL saying that the people above Sinclair said he was not to be shifted. On another occasion Warren Fellows told Edwin Smith that while in Hawaii he had spoken to someone about the possibility of putting a contract on Bill Sinclair to have him murdered.

Asked to elaborate on these statements, Edwin Smith stated explicitly that there was some kind of organized crime control at the peak of the Sinclair network: ‘I have always been of the belief that though Sinclair appeared visibly to be the main person in the organization, there were others above him who controlled it. In fact BL said that the people Sinclair answered to were the Mafia’.

While Edwin Smith was personally unaware of who the ‘Mafia’ were, he was convinced that his brother Neddy knew their identity:

Commission: Do you know if BL knows who they [the Mafia] are?

Smith: By his attitude, yes, and I really believe there was someone above Sinclair because BL had no respect, or wasn’t frightened of anyone, but he had that respect or fear for this particular group. Once they said Sinclair couldn’t be moved BL lost a lot of enthusiasm for doing anything about it. Further, the conversation with Greg Sinclair related to people above his father who made the decision as to who was to occupy the controlling positions.

Despite such strong statements, the Drugs Royal Commission chose to dismiss summarily Edwin Smith’s observations. While the Royal Commission’s counsel had leapt to the unsubstantiated conclusion in June 1978 that there was a nationwide Italian Onorata Societa controlling the distribution of drugs in Australia, five months later, perhaps shell-shocked by the sharp criticisms of his earlier ‘Mafia’ statements, he refused to explore the import of Smith’s very serious remarks.


from Drug Traffic by Alfred McCoy