Working in partnership with Wally Dean, Riley plundered at least three Sydney clubs and established several club service companies to do contract work for South Sydney Juniors. Through his work in the N.S.W. police and the club movement Murray Riley acquired contacts in the Sydney milieu, most importantly with Leonard McPherson. According to the Moffitt Royal Commission into Organized Crime, Riley met McPherson while a police officer in the 1950s, and his business partner in the club trade, Wally Dean, had known McPherson for many years through the Labor Party. After media reporting of the Moffitt Royal Commission effectively stigmatized him as the man to avoid in club circles, Riley’s club custom soon evaporated and he began looking for a new line of work.
Seeking new investment opportunities, Riley began travelling regularly to the U.S. West Coast to meet with American Mafia contact men in 1976-7. According to police intelligence, Riley and another Sydney entrepreneur named Bela Csidei made regular trips to San Francisco to meet with known U.S. Mafia figures ‘sometimes twice a month over a period of at least two years’. Their West Coast Mafia contacts were involved in a range of illegal activities described by the California Crime Commission as ‘loan sharking, extortion, theft, fraud, narcotics and drugs’. They seemed to have played a key role, to judge by the timing, in the decision by certain Australian corporate and criminal interests to move into the drug trade.
Almost all of the middle-level mafiosi contacted by Australians in San Francisco were personally involved in drug trafficking, and several were linked to leading Mafia figures well connected to international drug dealers in Asia and Europe. On 5 November 1976 Murray Riley was seen in the company of one James ‘The Weasel’ Fratianno, a middle-level Mafia figure, driving through San Francisco and conversing at Sal’s Pizza Palace, a known Mafia rendezvous. In addition to his frequent meetings with Fratianno, Murray Riley and other Australians made regular contact with Salvatore Amarena, an admitted member of the Santos Trafficante, Jr, organized crime ‘family’ based at Tampa, Florida. The last of an earlier generation of the old Mafia Dons, Trafficante had long been identified as one of Meyer Lansky’s chief retainers in Cuba and the Caribbean and a man heavily involved in various Mafia enterprises, including the international heroin traffic.
The first fruits of this second round of Australian-American criminal contacts came in mid-1977 when the prominent Sydney businessman Bela Csidei established a 4 acre marijuana plantation on his property in the Northern Territory. After meetings with several San Francisco mafioso in 1976-7, Csidei, bankrupted and some $2 million in debt through a series of bad business ventures, borrowed $10,000 cash from James Fratianno and acquired some exotic cannabis seeds whose produce was guaranteed, in Csidei’s words, to ‘blow your head off’. Csidei established his marijuana plantation some time in May or June 1977 after recruiting a local German migrant landscape gardener and an American bottle merchant to manage the operation. The plants grew rather slowly and after four months many were only five centimetres tall.
Desperately in need of $30,000 to help sort out his tangled financial affairs, Csidei called for a harvest in November. On 7 December Queensland police arrested a Sydney-bound courier at Mt Isa in possession of 140 kilograms of cannabis. Allegedly beaten, the courier revealed the source of the marijuana. The following day Northern Territory police raided the Csidei property and discovered the cannabis some thirty kilometres from the station’s homestead. Under interrogation the station manager revealed that Csidei was both financier and organizer. Csidei surrendered himself at Sydney’s CIB headquarters shortly after a warrant for his arrest was issued in late January 1978. He was later extradited to Darwin to stand trial.
Beginning in September 1978, Csidei’s trial was relatively routine and ended in his conviction with a sentence of fifteen months’ imprisonment. Making regular appearances at the ongoing corporate fraud proceedings against leading Sydney financiers Thomas and Alexander Barton, Csidei kept himself in the headlines with testimony about dealings between the Bartons and Sir Peter Abeles, president of the giant trucking conglomerate Thomas Nationwide Transport (TNT). During his trial, Csidei’s defence counsel had tried to link the cases by introducing evidence alleging that a Sydney solicitor retained by Alexander Barton had paid $4,500 for a tape recording of a conversation between Csidei and another businessman about the cannabis venture made in November 1977.
While Csidei tried to tap the Sydney cannabis market with a strong domestic product, Murray Riley sought his cannabis supplies abroad. In August 1977, only six months after his last known contact with James Fratianno, Riley made the first of several trips to Singapore and other Southeast Asian cities to arrange the largest illicit drug shipment in Australian history. Involving 4.1 tonnes of cannabis in the form of ‘Buddha sticks’ with a Sydney street value of $46.8 million, Riley’s drug import scheme was also the first major organized crime operation of any description ever brought before the Australian courts. The case not only reveals a good deal about the organization of the Australasian drug traffic, but also demonstrates the modus operandi of Australian organized crime.
Unlike the American Mafia, Sydney syndicates operate on a subcontracting principle. Australian organized crime enterprises centre on a ‘manager’ like Murray Riley who draws his core operatives from reliable personnel in the milieu and retains legitimate professionals — solicitors, police, judges or others — only as they are needed.
As syndicate ‘manager’, Murray Riley moved frequently between Australia, the United States and Southeast Asia in 1976-7. Travelling on a false Australian passport under the name ‘David Alan Crawford’ and carrying a letter of identification from Wings Travel Service, a company directed by his former associate William Sinclair, Riley made eleven trips abroad between August 1977 and February 1978, mainly to Singapore and Bangkok. Meeting in Bangkok with an anonymous ‘client’ some time in August 1977, Riley began making arrangements to procure 4,684 kilograms of high grade cannabis and smuggle it into Australia. Riley later claimed he was little more than a ‘transportation agent’ who had been promised only $500,000 for his services, equivalent to little more than 2 per cent commission on the retail value of the cargo. In sentencing Riley in October 1978, however, Judge Torrington dismissed his exculpatory job description and stated that ‘he was actively involved in the initial arrangement in Bangkok and in the planning and preparation of the enterprise in Southeast Asia’. The judge noted that in a recorded interview with police made on 29 June, Riley stated that he had met a man in Bangkok in 1977 who was seeking a cannabis supplier and ‘told him I would make enquiries and also discuss monetary benefits’.
Riley then began drawing upon Sydney milieu networks to organize an import and distribution team to handle the massive shipment. Working through networks based in the Sydney suburb Balmain and the Associated Motor Club, Riley formed a core group of six men, several of whom were involved in car theft operations in the Sydney area. The senior among the six was Reginald C. Parkin, fifty-two, a Melbourne native with nine arrests to his record in Melbourne between 1941 and 1952. Parkin moved to Sydney in 1953 where he worked as a ‘car salesman’ and served as General Manager of the Associated Motor Club in the early 1970s. For his share of the operation, Parkin was to receive $40,000, less than a tenth of Riley’s stated fee. Riley’s offsider throughout the operation was Kenneth R. Derley, twenty-eight, a Balmain ‘car salesman’ with thirteen arrests to his record between 1963 and 1978. Another member of the core group was John Lawrence, thirty-seven, a Rugby player with Bondi United who had been employed as a labourer at Patrick Stevedoring since 1961.* The remaining three of the core group seemed to have played a secondary role. A ‘freelance motor trader’, Sterling B. McCallum, forty-six, was evidently a success at his trade and living in a Mosman luxury flat. Operating as a team within the syndicate, Wayne R. Thelander, twenty-six, whose mother was licensee at Balmain’s Dry Dock Hotel, and Warren C. Porteus, thirty-four, a Narraween furniture importer, made three trips to Bangkok in the latter months of 1977. For his services Porteus was to be paid $20,000, one-half of Parkin’s fee.
A complex nautical operation played out along a 9,500 kilometre arc embracing the whole of the Southwest Pacific area from New Zealand to the Gulf of Siam, Murray Riley’s cannabis smuggling effort began on 16 February 1978 when a chartered fishing vessel left New Zealand waters for Southeast Asia with a skeleton crew. Arriving in Singapore in mid-March, the Choryo Maru was soon joined by Lawrence, Parkin and Derley, all travelling under false passports and heavily armed. Departing Singapore on 25 March with a local Customs clearance for Port Moresby, the ageing Choryo Maru chugged deceptively eastward into the South China Sea and then turned north. Cruising off the coast of Sattahip, Thailand several days later, the Choryo Maru was met at night by a convoy of Thai motorboats carrying 1.5 tonnes of top-grade cannabis. Several days later, on 2 April, the Choryo Maru picked up another three tonnes of cannabis from Thai vessels off the coast of Pattaya and set sail for Australia. Heading into the Sulu Sea, the ship was stopped by a Philippine Navy gunboat but was allowed to proceed without a search.
The Choryo Maru reached the Solomon Sea after four weeks. Riley had originally intended that the ship would head due south for New South Wales, but a number of factors forced a change in plans. The Choryo Maru’s engine had developed problems and the ship was moving at a ponderously slow pace under its excessive cargo. With cannabis packed into every available crevice below decks, the crew had no place to sleep and tensions had mounted between the armed Sydney contingent and the New Zealand crew. Despite offers of thousands of dollars if they agreed to sail to Australia, the original ship’s company, kept in ignorance of the intended cargo until the cannabis was loaded, refused to take the risk of entering Australian waters and demanded that they be let off.
The crew decided to unload the cargo in the wreck of a Japanese mother ship, the Amagi Maru, aground on Pocklington Reef. A forty-kilometre-long coral formation located some 480 kilometres due east of New Guinea’s southeastern tip, the reef is a notorious shipping hazard. The Choryo Maru reached the reef’s southeastern corner on 22 April and anchored opposite the hull of the Amagi Maru. Apparently in contact with Riley by radio, the crew communicated its position and two days later the Choryo Maru’s owner, who had come up from New Zealand, flew over on a charter aircraft and dropped a message. After off-loading all the cannabis by life raft at low tide, the crew, burnt by the sun and scarred by the coral, limped into the Solomon Islands’ main port Honiara on 1 May.
Travelling under the name David Crawford, Riley flew to Honiara in the Solomon Islands. Arriving on 30 April, Riley began meeting with the crew. Suspicious of the gatherings, Senior Superintendent of the island’s police, Harry Brown, called on Riley at his hotel. Identifying himself as Mr Crawford of Sydney, Riley explained he was in the scrap metal business and was seeking ways to salvage the Amagi Maru. Finding it impossible to charter an adequate craft locally, Riley returned to Sydney on 3 May and the rest of his team followed a few days later. Crippled by mechanical problems and lacking a crew, the Choryo Maru’s role in the operation came to an end.
By the time Riley and his core conspirators reached Sydney, N.S.W. police had confirmed earlier reports about the operation and began to place everyone involved under tight surveillance. After ten months of planning and high seas adventure, rumours of the $46 million drug coup were rife in the underworld and an informant had passed the word along to a contact in the N.S.W. Police Crime Intelligence Unit (CIU). Established in 1974-5 upon recommendation of Mr Justice Moffitt, the CIU had long targeted Murray Riley for special attention and now mounted a task-force operation involving the Australian Bureau of Narcotics, Commonwealth Police and the Australian armed forces.
As Riley and his associates moved about New South Wales and Queensland in search of a boat to smuggle the cannabis into Australia, the CIU, CIB and Narcotics Bureau observation teams dogged their every footfall clicking away with tele-photo lens cameras. At 8 a.m. on 7 May, only four days after Riley returned from Honiara, Detective Senior Constable Alan Champion of the CIB followed Reginald Parkin in his Ford Fairlane to Roseville Bridge Marina where he and co-conspirator Sterling McCallum met Noel Edward Searle, a publishing executive. Click went the CIB camera. The party left for a sail about Sydney harbour on a cruiser and returned to the dock at 11.20 a.m. Click.
On 17 May Constable Champion flew north to Cairns. At 2.10 p.m. he observed Sterling McCallum and an associate leaving Cairns Motor Inn driving a green Ford Fairlane, and followed them to the town’s main shipping wharf. Click. Arriving at the wharf at 3 p.m. he watched as the two men loaded gear into the Anoa, a white, ten metre twin-masted motor vessel. Click. Three days later Constable Champion was at Cairns Airport when a Cessna twin engine charter aircraft landed and disgorged Kenneth Derley, John Lawrence and two others. Click. Tuesday, 23 May at 5.50 a.m. the cabin lights were turned on aboard the Anoa. At 6.57 a.m. the crew left the Cairns Motor Inn in a Ford Falcon. Click. And at 7.17 a.m. the Anoa, purchased only ten days earlier by Noel Searle with a $45,000 loan from Custom Credit, chugged out of the main channel and headed northeast. Click.
Two weeks later as the Anoa sailed southward along the north Queensland coast loaded with 2.7 tonnes of compressed cannabis, a motorcade left Sydney for the town of Bermagui on New South Wales’ south coast. At 8.55 a.m., 5 June Constable Champion was parked on the Princes Highway when he observed Murray Riley and Carol Dean driving south in a Buick Sedan with others following close behind.
The following day two CIU constables observed Murray Riley and three co-conspirators leaving the Beachview Motel and boarding the trawler Agnes James carrying sport fishing gear. Click. At 6.30 p.m. the Agnes James returned to port and the four men drove back to their motel. Click. The entire ritual was repeated for another three days and was photographed with great precision.
Monitored by the Australian armed forces, the Anoa reached the New South Wales coast on 9 June. Driving slowly down the coast from headland to headland, Australian narcotics agents observed the Anoa, sailing south at 10 knots, at 3.10 p.m. from Flagstaff Point near Port Macquarie, at 4 p.m. from Tacking Point, and 8.15 p.m. from Perpendicular Point near Laurieton. Instead of continuing south to Bermagui, the Anoa turned into the Camden River inlet at 8.40 a.m. and tied up at the North Haven wharf. While agents watched through a nightscope from the opposite bank of the river, two trucks later pulled up and loaded cannabis from the yacht.
Apparently concerned about the tortuously slow progress of the Anoa and the risk of detection, its crew, exhausted by three weeks at sea, decided to unload on the New South Wales north coast to spare themselves another two or three days sailing. One of the Anoa’s crew, Dominic Brokenshire, called a friend who lived in nearby Lake Cathie and offered him $11,000 cash to shift the cannabis cargo into his garage. As the 106 sacks containing 2,730 kilograms of compressed cannabis were being off-loaded, the young motor trader Kenney Derley placed an STD telephone call to Murray Riley at the Beachview Motel in Bermagui. Apparently acting on Riley’s instructions, Derley took 39 pounds of cannabis and flew south to Sydney in a chartered aircraft. Simultaneously, Murray Riley drove out of Bermagui in his blue Buick and headed north for Sydney. Arriving at Derley’s Balmoral residence after driving much of the night, Riley picked up the 39 pounds of cannabis and headed off to meet an unknown buyer. Within a matter of hours he returned to Derley’s house with $39,000 cash. Together the two went to Homebush in Sydney’s west, purchased a truck for $6,000 cash and headed north on the Pacific Highway to pick up the bulk of the shipment. The newly-purchased truck broke down near Buladelah. As Derley and Riley were waiting for repairs, a news bulletin came over the radio announcing that an early morning raid by police and narcotics agents in the Port Macquarie area had netted $40 million in cannabis and a yacht used by the smugglers. Riley abandoned the truck immediately, rented a car and returned with Derley to Sydney.
A text-book model of police efficiency during its initial phase, the task force operation began to suffer a series of serious blunders which allowed Murray Riley to escape and remain at large for three weeks. The subject of considerable controversy, Riley’s arrest and subsequent trial were handled in a way that raised serious questions about the capacity of the N.S.W. government to counter organized crime. After Riley’s remarkable escape several Sydney journalists wrote critically of police actions stating that the ‘attempts to detain Riley were unusually slack’. When Riley, a former police detective, was finally brought before the courts police treated him with an undue courtesy.
After receiving the telephone call from Derley advising him that the Anoa had landed on the north coast, Riley had driven out of Bermagui on the night of Friday, 9 June in his distinct Buick sedan with a loaded shotgun, a pistol and with a radio tuned to police frequencies. Although stopped by N.S.W. police just outside the town only hours before the raids began, Riley was allowed to proceed for reasons that have never been explained. While the Narcotics Bureau made its arrests along the north coast at 2 and 7 a.m., the police decided to simply keep Riley’s command post at Bermagui under observation for most or the day and did not raid it until 6.30 p.m. If this decision can be explained in terms of logistical priorities, it is far more difficult to understand why N.S.W. police, who held hundreds of close-up photos and detailed documents establishing Riley’s complicity, waited fifty-one hours before issuing an ‘alert’ for him at all ports and airports at 11 p.m. on Sunday, 10 June. More questionable still, N.S.W. police did not issue a standard identification for the fugitive Riley until 22 June, nearly two weeks after the initial arrests.
The hundreds of State and Commonwealth police thrown into the search for Riley were useless since they had no idea what he looked like. According to one story, two Commonwealth agents who had never seen Riley before visited his Double Bay flat at the height of the manhunt to interview his de facto wife. Admitted to the flat, agents were surprised to find an unidentified man present. When they asked him ‘What are you doing here?’ he answered with the same question. Irritated the agents said ‘Don’t get cheeky with us’, and the man left. A few minutes later, the agents, by way of conversation, asked Riley’s de facto the name of her rude visitor. Much to the agents’ surprise, she answered: ‘Murray Stewart Riley’.
Another murky, rather untidy detail is the matter of Murray Riley’s black book, supposedly seized in the Bermagui raid, which was alleged to contain the private telephone numbers of ‘a key N.S.W. policeman, an airline security officer and some businessmen who have been named in the N.S.W. Royal Commission on drugs’.
Three weeks after the initial arrests along the New South Wales coast South Australian police discovered Murray Riley hiding in Adelaide. Arrested on 29 June by a joint N.S.W.-South Australian police squad, he was extradited to Sydney to face charges. Riley knew a defence was hopeless and apparently decided within hours after his arrest to plead guilty and offer the appearance of ‘cooperation’. Appearing before Judge Torrington on 15 September, Riley entered a plea of guilty and was treated with remarkable kindness by the courts and police. The police officer assigned to present his antecedents to the court stated that Riley had been awarded a Queen’s Commendation for bravery in 1956 and won several international athletic medals for Australia. Omitting the less praiseworthy and emphasizing the admirable, the sergeant stated that the ‘prisoner is very health conscious. He has been a keen jogger for many years, and is fastidious about his diet’. And in his analysis of the present drug case, the police sergeant supported Riley’s uncorroborated statements that he was only a ‘transport agent’ for the cannabis shipment.
In his sentencing Judge Torrington rejected much of the police effort to reduce the degree of Riley’s guilt but was apparently unaware of his organized crime background which the police had failed to mention. ‘Weighing these matters’, said the Judge, ‘particularly the plea of guilty, together with his earlier achievements in life, including the sporting achievements, I have come to the conclusion that I should order a minimum period of imprisonment’. Riley was sentenced to hard labour for ten years with parole possible after five, a light sentence compared to the fourteen years awarded to two American grandmothers for a lesser amount of cannabis smuggling by another New South Wales court.
Although Riley was subsequently convicted of other major offences such as possession of an unlicensed pistol, forging a passport application and conspiracy to defraud the American Express Company of $274,000, he was treated as an honoured guest by the authorities at Long Bay Gaol. Evidently not without friends, Riley was allowed to remain in the more comfortable Remand Section nine months after his conviction warranted sterner quarters. Awarded choice prison duties which allowed him the run of the gaol, Riley was nominated for transfer to a minimum security centre on the scenic Hawkesbury River until a protest by the Prison Officers Association forced cancellation of the assignment.
from Drug Traffic by Alfred McCoy