NSW businessman Rohan Arnold was allegedly trying to recover a lost cocaine haul worth more than $500 million when he was arrested with two other Australians at a Serbian luxury hotel, a Sydney court has heard.
The stockyards director and steel importer has been extradited to Sydney and charged following his January arrest at the Belgrade hotel over his alleged role in an international drug syndicate.
The 44-year-old faces the prospect of life imprisonment if he's found guilty of his charges, his NSW Supreme Court bail hearing heard on Thursday.
"It seems to me this is a strong prosecution case," Justice Natalie Adams said.
The judge refused Arnold's release application after hearing of his alleged involvement in the importation of 1.28 tonnes of cocaine into Sydney in 2017.
The 2576 blocks of cocaine - with an estimated value of more than $500 million - were found hidden within prefabricated steel, according to the Australian Federal Police.
The prosecution alleges it came from an address on the same Chinese street as Arnold's steel company and was en route to a business associated with his co-accused - 49-year-old David Campbell.
The court heard the pair tried to recover the cocaine after it was seized - unbeknownst to them - by authorities in April 2017.
Campbell allegedly spoke with a New Zealand undercover operative who told him he had the blocks of cocaine and would return them for $3 million.
Arnold later met with an undercover operative in Perth and there was some discussion that perhaps the money and drugs could be exchanged in Serbia, the court heard.
His defence lawyer, Jack Pappas, said the case involved meetings which could be innocent, adding that Arnold and Campbell would have met as business associates.
He said the area of China where the shipment was said to have originated was home to a number of steel companies.
In arguing for bail, the lawyer said Arnold had no criminal record, strong community ties, and a potentially lengthy wait before his matter went to trial.
His client had cooperated with his extradition from Serbia and didn't flee when officers accompanied him into Paris without handcuffs during a stopover.
"Clearly the police who had the job of bringing him back to Australia ... did not regard him as a flight risk," he said.
But the judge ultimately found Arnold should remain behind bars.
His bail hearing came a day after Campbell had his first appearance at Parramatta Local Court.
Campbell, who was also arrested at the Serbian hotel with Arnold and fellow Australian Tristan Waters, then 34, was extradited to Sydney this week and charged with offences related to the alleged importation.
Waters, who ran the now-closed Canberra nightclub Minque, is still detained overseas after appealing his extradition.