Police unravel massive drug operation

Police have carved open the Gold Coast’s underbelly, unravelling an alleged organised crime syndicate headed by an elusive ‘Mr Big’ of the Australian drug trade.

The multi-million dollar empire allegedly syphoned its party drugs into the glitter strip’s nightclubs through an elaborate network of DJs, bikie gangs and venue managers.

Gold Coast detectives have succeeded where many law agencies have repeatedly failed – confirming long held suspicions criminals are bankrolling some of the Surfers Paradise nightclubs.

Police will allege the syndicate’s kingpin, Ivan Tesic, was the silent partner in Club Liv on Orchid Avenue – one of four Surfers Paradise nightclubs under investigation.

Today Gold Coast police from Operation Kilo-Fraction said they had obtained enough evidence to prosecute Tesic who was listed as a priority offender on the National Criminal Targeting Database.

Detective Superintendent David Hutchison said Club Liv was allegedly central to the distribution of drugs to Gold Coast nightclubs.

“Tesic has been listed as extreme risk on the National Criminal Target List,’’ Det-Supt Hutchison said.

"It has prevented tens of kilos of dangerous drugs hitting the streets of the Gold Coast and removed from the community a number of high-profile drug traffickers who have been basically living the high life at the expense of our youth," he said.

The investigation has netted High profile Gold Coast identities including Jamie Pickering owner of Sin City and Vanity nightclubs. Pickering has been charged with supplying cocaine to female patrons.

Kilo-Fraction seized more than $26 million in illicit drugs, stopping it from hitting Gold Coast streets.

Police have also frozen $5 million in assets believed to be proceeds of crime as well as $500,000 cash.

Tesic’s alleged unexplainable wealth is under investigation by the Australian Crime Commission and Queensland’s Crime and Misconduct Commission.

Police allege Tesic owns a luxury apartment in the Gold Coast Hilton complex and is the suspected “illegitimate owner” of a waterfront home at Amalfi Drive on the Isle of Capri as well as a house in Sydney. His alleged financial stake in Club Liv is also being investigated.

Operation Kilo-Fraction culminated in a series of raids in Queensland and NSW. More than 150 offenders, including 37 bikies, were arrested on more than 400 charges.

Tesic was arrested at Sydney Airport on Friday with $43,000 cash after fleeing his home.

With the alleged kingpin in a jail cell, Gold Coast police launched a pre-emptive strike in the heart of Surfers Paradise - raiding Club Liv and Shuffle nightclubs on Friday night. Staff and patrons were detained and searched. A member of management from each club was arrested and charged with drug trafficking.

Police spoke with Craig Missen, the director and licensee of Club Liv. He was not charged.

Det-Supt Hutchison said a core group of detectives working with specialist squads targeted high level criminal syndicates involved in drug trafficking including some people who had been previously investigated but never charged.

The irony was not lost on police that the operation had started and run for 14-months under the leadership of Assistant Commissioner Graham Rynders, who was removed from his post last year as the Coast’s top cop amid criticism he was not tough enough on bikies.

Responding to a question from 7News about Mr Rynders, Det-Supt Hutchison said the former assistant commissioner had instigated the investigation and that Gold Coast Police had long targeted bikie gangs on every level.

"He certainly was a driving force," he said.

7News can reveal details of the 20-month police investigation, the biggest covert drug operation undertaken on the Gold Coast.

The investigation had humble beginnings when it kicked off in August 2012 with the goal of quelling street violence in the Surfers Paradise entertainment precinct.

Members of the Gold Coast Bandidos were involved with assaults, standovers, and drug dealing.

One of those allegedly involved was Bandidos Sergeant at Arms Joshua Leigh Downey, 31.

Detectives from the Gold Coast District CIB set their sights on Downey who also worked as a personal trainer and was a finalist in Cleo magazines Bachelor of the year.

With the use of electronic and physical surveillance, police allegedly found Downey was supplying cocaine to several people.

One of his alleged suppliers was Gold Coast chef, Braden Quan, 26, who would become a key target in the investigation.

Quan allegedly sold cocaine in grams for between $3000 to $5,000 for an ounce. He also allegedly used members of the Bandidos to collect his drug debts and hired a driver to deliver the cocaine to some customers.

Police will allege Quan had a private booth at Club Liv where he peddled drugs to patrons.

Further investigation of Quan’s alleged drug source led police to the events manager of Liv Nightclub, 35-year-old Sureshen “Sesh” Reddy. Reddy allegedly supplied cocaine, sourced from Sydney, to a DJ who worked at Sin City.

Detectives allegedly discovered Reddy, 35, was an associate of Ivan Tesic – a 40-year-old Serbian drag racer who calls himself Ivan Lawless on Facebook. He splits his time between Sydney and the Gold Coast.

For around a decade, Tesic has been under suspicion from several Australian law enforcement agencies – partly because of his unexplained extravagant lifestyle with no obvious means of income.

Police allege Tesic is unemployed but claims to be a self-employed businessman. Documents from the Australian Securities Commission show he is a director and shareholder of Moonshiners Pty Ltd. The company is listed to his Sydney address.

Almost a year after the launch of Kilo-Fraction, police widened their net to include Tesic. In July last year, they placed his waterfront home on the Isle of Capri under surveillance.

In the following months, police stashed hidden cameras and listening devices in his home to monitor his every move. The Australian Crime Commission and the Australian Federal Police also joined the investigation.

In the meantime, “tactical and strategic takeouts” of players down the chain helped fill in the bigger picture for investigators.

Investigations also uncovered alleged drug connections between Tesic and members of five bikie gangs – Lone Wolves, Rebels, Bandidos, Highway 61s and Mongols.

Members of one Sydney based bikie gang are suspected of torturing a long-time associate and the alleged driver of Tesic in October last year.

The man’s ears were severed and he was burnt and tortured during the attack at his Sydney workshop. The incident was originally reported as an industrial accident.

Other Gold Coast nightclubs came under scrutiny when police allegedly found Quan was supplying drugs to at least three other DJs - Joseph Sandagon and Christopher Cuthbert, who regularly appeared at Shuffle nightclub. Sandagon is now the manager of Shuffle nightclub. Police allege patrons would phone Sandagon to check he had a supply of drugs before arriving at the club.

The DJs were all arrested this weekend and charged with drug trafficking. A fourth DJ allegedly fled to the US with a substantial drug debt.

Police will allege Tesic was smuggling commercial quantities of methylamphetamine oil systematically every month in a specially modified Holden utes driven from Sydney to the Gold Coast.
The utes would be driven to Tesic’s Gold Coast home on Almalfi Drive and the drugs allegedly unpacked in the carport.

He allegedly sold the oil to a select number of “customers”. Some of the people involved in his network were allegedly indebted to him for several hundred thousand dollars.

Surveillance of Tesic’s operation revealed customers would allegedly deliver the money to his house. A member of the Finks and the Mongols were allegedly seen to do this several times.

Detectives allegedly intercepted two men in a Holden sedan after they left Tesic’s Gold Coast home. They found $139,000 cash hidden in the door trimmings. Police suspect the money was destined for Sydney.

On another occasion, six litres of methylamphetamine oil was allegedly discovered inside a secret compartment of a Holden ute.

Police estimated the oil’s ultimate street value at $12 million. The oil could allegedly produce around six kilograms of “crystal meth” of high purity and could be cut again to make a further 12 kilograms of the drug.

When police pulled apart the car they allegedly found the passenger side airbag had been hollowed out and it contained a switch which activated a trap door behind the passenger seat.
This led them to a steel safe which was welded to the fuel tank.

Police were unable to identify the sequence or combination to open the safes and called in Queensland Fire and Rescue Service.

Investigators from Operation Kilo-Fraction will allege Tesic was the head of the drug syndicate and the one who made the most profits from selling the methylamphetamine oil.

Last Friday Tesic was arrested at Sydney Airport.

Police suspect he was trying to flee. He allegedly told them he was there to pick up a friend. Police found $43,000 in cash on him.

His arrest followed an earlier raid by armed police on his West Hoxton home. Tesic was charged with drug trafficking and was remanded in custody.

Gold Coast police will apply to a Sydney Magistrate to extradite him to Queensland.

Several people will front court in coming days with more charges expected to be laid.