EXCLUSIVE: Miles John McKelvy faces a second stint in prison after judge rejects his explanation for importing Fantasy drug.

One of New Zealand's most "insidious" fraudsters said he thought he was importing an industrial cleaning agent, not a dangerous recreational drug worth hundreds of thousands of dollars.

But a district court judge rejected the evidence of Miles John McKelvy as "absurd", "ludicrous", "not credible" and "not worthy of belief".

"He was not an honest witness and there are a number of significant reasons why I did not believe him," wrote Judge Soana Moala in a judgment released to the Herald.

Her findings came after Miles had pleaded guilty to two representative counts of importing GBL, or Gamma Butyrolactone, which carry a maximum penalty of 14 years in prison.


Also known as Fantasy, GBL is a Class-B drug popular in the dance party scene and nicknamed "Coma in a Bottle" overseas because sexual predators slip it into drinks to sedate victims.

The 58-year-old was supposed to be sentenced in the Manukau District Court in February.

But following the decision of Judge Moala, which would have a significant effect on the length of his sentence, McKelvy applied to vacate his guilty plea.

He has already served prison time for fraud.

Described as "predatory" by Justice Paul Heath, McKelvy was jailed for eight years in 2006 after admitting 27 dishonesty charges.

He sat then at the pinnacle of a sophisticated mortgage ramping scheme which scammed millions of dollars from vulnerable low-income home buyers.

One was an elderly widow suffering from cancer, one of many who lost their homes because of the "insidious" scheme orchestrated by McKelvy, a Hamilton mortgage broker at the time.

He was released in 2010 and two years ago he was discharged from bankruptcy - for the second time - despite a judge finding McKelvy "remains a genuine risk to the community".

By then, McKelvy had moved to Auckland and was "well regarded" by his employer in machine maintenance.

However, he became a suspect in Operation Leopard after the Customs Service seized six importations of GBL between October 2014 and January 2015.

The total of 81L was worth around $354,000, while another four shipments of unknown quantity slipped through.

When stopped by Customs at the airport and interviewed, McKelvy explained he imported the product as a cleaning agent and co-operated with investigators.

He maintained this explanation in the disputed facts hearing in front of Judge Moala, giving evidence the cleaning chemicals used at Envirowaste, where he worked, were toxic and burned skin.

So he searched online to find a safer product and in a trial test successfully cleaned a truck without wearing any protective gear. McKelvy said he didn't realise the "wonder cleaning" product contained GBL.

His innocent explanation was completely rejected by Judge Moala in favour of the other evidence.

"It is a weak attempt to legitimise what was clearly an illegal importation of GBL," she wrote.

Emails and text messages made it clear McKelvy was discussing GBL, without any mention of an industrial cleaning agent.

In fact, in some correspondence McKelvy asked for the GBL labels to be removed from the plastic containers.

"There is overwhelming evidence that he knew it was GBL, and that it was illegal to bring it into New Zealand," said the judge.

"He knew he had to disguise it so that it can get through Customs."

Judge Moala also described as "ludicrous" McKelvy's evidence the product he imported was safer than the cleaning agents used at Envirowaste.

"The expert evidence is that GBL is a hazardous and toxic substance that can cause serious harm to anyone who uses it without protective gear.

"It is my view that Mr McKelvy used his employment with Envirowaste as a convenient cover for his illegal importation of GBL.

"The financial gain from GBL is not its use as a cleaning product but from selling as a recreational drug."

On receiving Judge Moala's judgment, McKelvy is applying to vacate his guilty plea.

He is on bail ahead of his next court appearance in September.