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Can of Worms II [Book extract]


Some Faces in the Crowd

Criminal organisations in their characteristics match legitimate organisations: there are big ones: there are small ones: people float in and out of them. It is remarkable, absolutely remarkable, how often you come across the same people in very diverse activities, all of which are criminal.

– Douglas Meagher, QC, counsel assisting Costigan Royal Commission.

Many names recur in Royal Commissions and other inquiries. Some appear to have interlocking relationships that cover a variety of relationships. Among these milieu personalities are:

Frederick (Paddles) Anderson, 70, is described in TFR3 (Volume 3: The Associates of Murray Riley, report by the Commonwealth-NSW Joint Task Force on Drug Trafficking (October 1982)) as a ‘well-known criminal’.

Until his death in January 1985, Anderson was thought to be first among equals in the Sydney milieu. In Melbourne in 1940, he got into an argument with a Melbourne personality, John C. Abrahams. In the following altercation, Abrahams was killed. Anderson was charged with his murder, found not guilty, and returned to Sydney. In the following months, Anderson made frequent appearances in Sydney magistrates’ courts, where he described himself as a machinist living in Surry Hills. According to McCoy, in one three-day period, he was charged with being in a house ‘frequented by thieves’; with ‘having demanded money with menaces from a bookmaker’ and with ‘having assaulted the bagman’; and with consorting with known criminals at a house in William Street, East Sydney.

Commonwealth Police running sheets indicate that Anderson was among those present at the milieu summit of July 1972. This was a series of meetings held at the home of Karl Bonnette at William Street, Double Bay and ‘alleged to be called to discuss the current activities of organised crime.’ Others present were said to be Leonard Arthur McPherson, George David Freeman, Stanley John Smith, Milan (Iron Bar Miller) Petrecevic, Arthur William (Duke) Delaney, and Leo (The Liar) Callaghan.

Also in attendance was said to be Albert Ross Sloss, 61, of Dowling Street, Potts Point, (Labor) MLA for King since 1956; deputy chairman of the parliamentary Labor Party, and vice-chairman of the Wentworth Park Trust, since 1968; director of the Sydney Hospital 1958-64; member of the Lord Howe Island Board. Sloss denied that he was at the meeting.

Bonnette denied that any of them had been at his home.

Karl Frederick Bonnette, 49, is described in TFR3 as a ‘drug importer and trafficker’, and was named by the Premier, Mr Wran, as a leading member of the Sydney underworld. Bonnette was considered to be most likely to succeed Anderson as the one the milieu ultimately defers to.

He was born in Melbourne, has described himself as self-employed, as dealing in cars, boats, diamonds and gold, and as unemployed. Among other names he has used are Karl Solomon, K. Rogers and Frederick Brock. He changed his name by deed poll in 1977 to Graham John Allemann in order to gain entry to the US.

Among his associates were Barry James Pyne, 41, described in TFR3 as ‘drug-trafficker’ and named as a suspect in the 1975 murder of drug courier Maria Hission. Bonnette also knew John Marcus Muller, alias Miller and Milner, a heavy at The Palace (otherwise the 22 Club), a Kings Cross casino, and named as one of the last three men seen with Juanita Nielsen before she disappeared in July 1975. Muller was killed in the driveway of his home in June 1979 in a shooting police believed could have been connected with an attempt on the life of George Freeman six weeks previously.

Bonnette has been to the US, England, Germany, the Philippines, Hong Kong, Israel, Argentina, Venezuela, Brazil, and Colombia. From 1976, he had business dealings with a number of people arrested in June 1978 in the seizure of $70 million worth of buddha sticks. In a four-year period, Bonnette, using various names, put $771 416 through a number of bank accounts, but was not too proud, in two months prior to June 1978, to collect $1917 in sickness benefits from the Department of Social Security.

Abraham Gilbert Saffron , 65, in 1943, with Hilton Kincaid, opened the Roosevelt Club at 32 Orwell Street, Kings Cross, largely for the benefit of US soldiers, until Justice Maxwell, who later described it as ‘the most notorious and disreputable nightclub in the city,’ closed it late that year. After a period in Newcastle, Saffron reopened the club after the war.

In the following years, using his family and friends as dummies, Saffron acquired, in breach of Licensing Court regulations, an interest in the licences of a number of hotels. A Royal Commission concluded that Saffron used the licences to supply the Roosevelt Club and sly grog shops. The Commission also found that Saffron had ‘engaged in systematic false swearing’. In October 1952 he was indicted for perjury but was acquitted when the court ruled that his testimony before the Royal Commission was not admissible as evidence about that same testimony. The Licensing Court barred Saffron, his relatives and any known associates, from holding liquor licences until 1966 when he successfully appealed against a judgment denying him a liquor licence at his Lodge 44 motel at Edgecliff.

In 1956, Saffron was also charged with having obscene photographs at his premises in Kings Cross. He was convicted and fined £10 but won a reversal on appeal.

Saffron was out of the newspapers until 1973 when he appeared before the Moffitt Royal Commission on Organised Crime in Clubs, where it emerged that Commonwealth Police, investigating jack Rooklyn’s activities in Jakarta, had reported that ‘now Saffron is purchasing or leasing premises to be used as brothels in conjunction with Rooklyn’s casinos.’

In March 1974, a customer at Saffron’s Lodge 44 motel, Ramon Sala, an international smuggler with Sydney convictions on currency and drug charges, had had his passport impounded and faced further proceedings. Morgan Ryan, then a solicitor of the Sydney firm Morgan Ryan and Brock, made representations on Sala’s behalf to Lionel Murphy, then Federal Attorney-General. Murphy directed that Sala’s passport be returned. Sala left the country, and so avoided passport proceedings. Six days later, Interpol said his passport was false.

In 1975 Saffron’s movements were monitored by the FBI, Scotland Yard, and crime intelligence agencies in the Philippines and Fiji; he was invariably searched when he left and re-entered Australia. It has been alleged Morgan Ryan made representations to Attorney-General Murphy and to Federal Police Commissioner Jack Davis about Saffron being subjected to airport searches. Authorities in Canberra ordered that Customs baggage searches of Saffron be abandoned.

This matter was investigated by a Public Services committee. Murphy, Justice Murphy of the High Court, said he had given no direction on the matter. The committee’s report, tabled in September 1984, said the downgrading of surveillance on Saffron was ‘reasonable and appropriate’; continual searching, it said, alerted a suspect and was likely to achieve nothing.

Early in 1978, the South Australian Attorney-General, Peter Duncan, named Saffron in State Parliament as ‘a principal character in organised crime in Australia.’ In July of that year, the NSW Transport Minister, Peter Cox, discovered from media reports that a building in Darlinghurst Road, Kings Cross, housed a gambling club, a brothel and a sex shop. The building was on a prime piece of real estate owned by the Public Transport Commission. Investigation showed that the site was initially leased to Constance Developments, a company owned by Sir Paul Strasser and Robert Ryko. Without the approval of the Public Transport Commission, the Strasser-Ryko company had sub-let the property to two Saffron companies. In 1977, the head lease, with the approval of the PTC, was transferred to Togima Leasing, of which the directors and nominal shareholders were all businessmen associated with Saffron companies.

To put an end to illegal activities on Government property, the Government bought Togima out of the lease for $2.6 million. A spokesman said legal action had not been taken against Togima because this would only remedy matters in the short term and it was difficult to get evidence.

In the 1981 Police Tribunal inquiry into Deputy Commissioner Bill Allen. it emerged that Saffron, described by justice Perrignon, as ‘unsavoury and involved in illicit activities’, had met Allen seven times at Police Headquarters. This was given as a reason to sustain the tribunal finding that Allen had brought discredit on the police force.

The report of the Commonwealth-NSW Joint Task Force on Drug-Trafficking says: ‘There is little doubt that Saffron was involved in at least this one transaction with Nugan Hand. Though its precise nature cannot be defined, the transaction involved in some way Hong Kong and the sum of $50 000… That at least Saffron chose to lie about his association with Hand… only adds to the suspicion that there was something either illegal or improper about it.’

When his name was brought up in 1982 at the Costigan Royal Commission in relation to a tax avoidance scheme, Saffron issued a statement through his lawyers saying he had never had anything to do with Nugan Hand.

George David Freeman , 49, is described in TFR3 as a ‘well-known crime figure involved in illegal gambling activity.’

In a 1978 appearance before the Woodward Royal Commission, Stanley John Smith explained his income on the basis of winning on racehorses, cards and roulette. Smith’s barrister, Mr Cochrane, said that Smith was ‘putting himself up, not as a normal punter, but rather as someone who has taken notice of tips from a man who knows, Mr Freeman, and in a sense Mr Freeman is well regarded… he is well regarded in the racing community and he knows what horses are going to come home.’

Justice Woodward: ‘That would be on the basis it is not a matter of luck; it is a matter of organisation?’

Cochrane: ‘Perhaps, I would not put it that strongly, but perhaps…’

At the 1983 Street Royal Commission, evidence was given by a magistrates’ court clerk, Cam Abood, that Freeman gave the then NSW Chief Stipendiary Magistrate Murray Farquhar race tips and that he (the clerk) placed the bets for Farquhar and collected his winnings. He noted that Freeman’s tips won 98 per cent of the time.

One of the milieu’s greatest mistakes occurred in July 1977. On 27 July, Freeman went into the members’ enclosure at Randwick racecourse as the guest of Farquhar. The error has caused endless trouble.

Freeman made another mistake the following year. On 28 March 1979, Bruce McDonald, deputy leader of the NSW Opposition, asked a question which suggested that Freeman had ‘unusual and undue influence’ over the police squad that was supposed to control gambling, the 21 Division. That night, Freeman was given time on Channel 7’s Michael Willesee Show to deny any involvement in organised crime. The next day, seeking to confront McDonald, he went with a Willesee film crew to Parliament House. That evening in the Upper House, Barrie Unsworth, who had been approached by the television team, said he believed that Freeman and the Willesee team had committed a ‘gross breach of privilege.’

On 3 April, the Independent MLA, John Hatton, moved an urgency motion deploring the action of Freeman, ‘a man designated within the administration of the Minister for Police as an organised crime figure, in bringing a television crew on to the steps of Parliament House…’ Drawing on material in a confidential NSW Police Crime Intelligence Unit report of March 1977, Hatton summarised Freeman’s career thus:

‘It has been recorded that Freeman should be considered one of the leading criminal figures in this State, together with Stanley John Smith, with whom he has been closely associated, and who is said to have replaced the so-called Mr Big, Leonard Arthur McPherson. The links with international organised crime are well established… In April 1978, just a year ago, Freeman was deported from the United States of America after being arrested in Las Vegas in connection with a false passport offence.

‘His last recorded conviction in Australia was for a similar offence, when he used a false passport to enter the United States of America with Stan Smith in 1968, when they were guests of one Joseph Dan Testa, nominated as a member of the Chicago organised crime family… It was largely the investigations prompted by the appearance of Testa in Sydney in subsequent years, and the associations he made here, that led to the Moffitt Royal Commission in 1973-74. As a result of the Moffitt Royal Commission, Mr Freeman was made the number one target of the NSW Police Crime Intelligence Unit, which was established as a direct result of that inquiry.

‘We are talking about a key criminal. Inquiries show that Freeman was also the Australian contact man for one Danny Stein, nominated as an associate of notorious American organised crime figures, including Meyer Lansky, and described by law enforcement authorities as representing hidden interests in Las Vegas casinos, and an illegal betting network raided by the Federal Bureau of Investigation, and shut down by the State of Nevada. No honourable member would need reminding that in July 1977, George Freeman was photographed in company with the Chief Stipendiary Magistrate, Murray Farquhar, at Randwick races, on which occasion Freeman was removed from the members’ enclosure.

‘Of even more relevance to the question of urgency, and to members of this House, particularly when it is remembered that Freeman was on the steps of Parliament House, is the fact that the NSW police have evidence that he was the principal figure in what might be called the Taiping conspiracy. After the Premier announced the Government’s intention to legalise casinos, underworld leaders and illegal casino owners met at the Taiping restaurant in Elizabeth Street, Sydney. It is urgent that it be recognised that, on a tape recording made of that meeting, Stan Smith is heard referring to Freeman as being “with” the casino operators. Smith called upon the assembled gathering to put up hard cash to bribe members of this Parliament to try to secure the control of casino licences for criminal interests…’

The Labor Party voted against Mr Hatton’s motion and it was defeated 60-34.

Three weeks later, at Freeman’s Yowie Bay home, a gunman with a light calibre weapon shot Freeman in the left side of the neck. The bullet passed through his mouth and exited just below the right temple without doing serious harm. Police told The Sun that the weapon indicated an ‘amateur’ gunman, but there was speculation that some other organised crime leader might have taken the view that Freeman’s approach to Parliament House had drawn too much attention to organised crime activities.

Leonard Arthur McPherson , 63. Giving evidence in 1983 at the Juanita Nielsen inquest, McPherson denied having told Federal police that a former NSW police officer, Fred Krahe, had killed Miss Nielsen. He claimed that Federal police had sent false information to Manila in 1977 warning that McPherson was entering the Philippines to assassinate President Marcos. Arrested at gunpoint, McPherson and two other Australians were held for three days in death row in the dreaded Fort Benefacio prison, facing the prospect of a firing squad, before being released.

McPherson’s name has continued to be linked with Manila. In 1980, the Woodward Royal Commission reported that a wanted criminal, Martin Olson, was running a bar in Manila for McPherson, and that he was ‘looking after McPherson’s prostitution business in Manila.’ Woodward also reported that during 1975 a person was ‘alleged to have gone to Manila, at least once a month’ to bring back ‘white powder’ for McPherson.

The Commission said there was reliable evidence that the courier was in the company of George David Freeman and Danny Stein. ‘NSW police received information … that the purpose of Stein’s visit to Australia at that time was to organise importation of drugs from the “Golden Triangle for transhipment to the United States,’ the Commission said. In 1973, during his Royal Commission, Justice Moffitt found it would be ‘wrong to conclude that McPherson is not on the scene of organised crime or connected with persons seeking to make money illicitly from the registered clubs.’

In a front page article in The Sunday Telegraph in 1979, McPherson denied any involvement in organised crime, or that he was in fact Mr Big. His denial included references to newspaper stories suggesting he was responsible for twelve murders. ‘If these accusations are meant to be against me they are false,’ he said. ‘I wouldn’t even know of twelve people who have been murdered.’

Stanley John (The Man) Smith first came to police attention in 1954. In 1966, he and McPherson attracted overseas attention when they were barred from Hong Kong. A senior Hong Kong police officer advised the Sydney CIB that they had boasted of wanting to get in on ‘big time’ smuggling of gold and narcotics.

In 1968, Smith and Freeman used false passports to go to the US to spend six weeks as guests of Joe Testa. Both were convicted on passport charges on their return. In December that year, Smith was described by police in a consorting case as a ‘standover criminal and international shop thief.’ Smith was fined in 1970 in connection with the attempted sale of amphetamines following a robbery at May and Baker’s warehouse at Waterloo, Sydney. He unwittingly frightened politicians out of legalising casinos in New South Wales when a tape recording of his 1976 Taiping speech, in which he recommended bribing politicians to secure legal casino licences, was made public.

He denied before the Woodward Commission that he had anything to do with drugs. He said: ‘I am not involved in drug matters and these allegations are all the more hurtful to my family and myself when the fact is that my eldest son, who is twenty-one years of age, is currently serving a jail sentence for drug-related offences and has been a hopeless heroin addict for some years now. We have tried to face this problem and rehabilitate him, without success, and the allegations now being made are in the circumstances particularly hurtful.’

Justice Woodward found that Smith was involved in drug-trafficking. In 1979, he was convicted and jailed for fifteen months for possession of cannabis. The conviction, however, took place in Victoria, not New South Wales.

Note: Stanley John Smith should not be confused with any of the numerous other Smiths in the milieu: Arthur Stanley (Neddy) Smith, described in TFR3 as ‘drug importer and trafficker’, who was the informer for Sergeant Roger Caleb Rogerson, and the man who arranged the fatal meeting between Rogerson and Warren Lanfranchi in 1981; Neddy’s half-brother Edwin William Smith, jailed for possession of 1.6 kilograms of heroin; Edward James (jockey) Smith; or Raymond Smith, an early acquaintance of Murray Stewart Riley.

Reblogged from source with thanks

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