NZ fraudster Miles McKelvy fights extradition to US on 400kg cocaine smuggling charge

Miles John McKelvy outside the Hamilton District Court in 2001.

A well-known convicted fraudster accused of scheming with an imprisoned double murderer, a trailblazing meth cook and two high-ranking Hells Angels members to import a huge haul of cocaine into the United States has argued the authorities have it wrong — he only intended to bring the drugs to New Zealand.

That was one of the arguments in the High Court at Auckland today as Miles John McKelvy, 65, appealed a district court judge’s decision in May paving the way for extradition to the US.

US federal prosecutors in Texas want to put McKelvy on trial alongside two currently at-large New Zealanders: Auckland Hells Angels member Murray Michael Matthews and chemist Marc Patrick Johnson, who has earned the criminal distinction of being one of New Zealand’s first meth cooks.

Authorities say the trio — with Romanian Hells Angels chapter president Marius Lazar and convicted double murderer Wen Hui Cui — were duped in 2020 by an undercover officer with the US Drug Enforcement Administration posing as a large-scale drug trafficker.

Cui, who was allegedly making arrangements from a phone smuggled into his Wiri prison cell, died in custody in 2021. Lazar, 50, has already been extradited from Romania and was two weeks ago found guilty by a Texas jury of the importing scheme and other charges. He awaits sentencing.

In all, US authorities say, the group was caught in the act of discussing and making nearly US$1 million ($1.62m) in payments for a 400kg cocaine shipment that was to originate in Peru then make its way to Beaumont, Texas, where it would be concealed inside machinery. The cocaine-laden machinery was then to be shipped to Romania before ending up in the Hells Angels’ distribution network in New Zealand, authorities said.

Romanian authorities arrested two New Zealanders on charges of cocaine trafficking. Photo / Politia Romana

In communications with the undercover agent, authorities allege McKelvy confirmed his identity and his role within the tight-knit group: To help arrange transport documents and receive the cocaine when it arrived in New Zealand. At one point the agent asked McKelvy directly if he was aware the plan involved importing 400kg of cocaine, US law enforcement says.

“Yes, I’m very clear but this will work if we get the paperwork bang on,” he is alleged to have replied, also allegedly insisting at one point that he had “brought in lots” of drugs to New Zealand in the past.

He has been charged with conspiracy to import and export cocaine into and out of the US, as well as conspiracy to manufacture cocaine knowing it was likely to be imported into the US. If convicted in the US federal court, he will face a sentence of between 10 years and life in prison.

But the US should not have jurisdiction over the case, defence lawyers Hannah Stuart and Ron Mansfield, KC, argued today as they appealed the district court extradition decision to High Court Justice Christine Gordon.

That’s because there’s no evidence McKelvy knew the drugs were to be offloaded in Texas and repackaged, they argued, explaining that if he believed the drugs were to remain in international waters until they reached New Zealand then he couldn’t have been part of a US importation conspiracy.

A Hells Angels "Death Head" patch.

Lawyer Ben Thompson, acting on behalf of the US Government, responded that it could be inferred McKelvy knew about the US plans based on his “deeply embedded role in the conspiracy”, which included getting the shipping paperwork in order.

Justice Gordon seemed to agree on the point, but the defence suggested she might be falling into the same trap that they suggested had tripped up District Court Judge Peter Winter.

While McKelvy might have known from shipping documents that the illegal load would be going from Peru “to” Beaumont, Texas, that’s not the same as knowing it was going “into” Beaumont, Mansfield argued, explaining that his client might have believed the drugs were to stay on the ship as it docked for other business.

While the US indictment makes note of an alleged plan to hide the drugs inside machinery while in Texas, that’s not part of the formal “record of case” the United States submitted to New Zealand for purposes of the extradition hearing and so can’t be considered, Mansfield also suggested.

Justice Gordon reserved her decision. However, she said she expects to release a judgment by the end of the month.

McKelvy, on bail while awaiting the outcome of the already lengthy extradition process and his appeal, sat in the courtroom gallery today as the case was discussed.

Craig Kapitan is an Auckland-based journalist covering courts and justice. He joined the Herald in 2021 and has reported on courts since 2002 in three newsrooms in the US and New Zealand.