NZ fraudster Miles McKelvy loses US extradition appeal over 400kg cocaine charge

Miles John McKelvy outside the Hamilton District Court in 2001 while standing trial on mortgage fraud. Photo / Derek Flynn

A well-known convicted fraudster accused of scheming to import 400kg of Peruvian cocaine into New Zealand, with a pit stop in Texas, has lost his latest bid to avoid extradition to the United States.

An Auckland District Court judge in May approved a request by the US to send Miles John McKelvy, 65, overseas to face trial over federal drug trafficking charges.

His lawyers appealed the decision in a hearing held in the High Court at Auckland earlier this month before Justice Christine Gordon.

“I confirm the determination by the District Court judge that Mr McKelvy is eligible for surrender to the United States of America on the charge for which surrender is sought,” Gordon wrote in a judgment issued today. “The appeal is dismissed.”

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 last month found guilty by a Texas jury of the importing scheme and other charges. He awaits sentencing.

In all, US authorities say, the group were 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.

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.

If convicted in the US federal court, he will face a sentence of between 10 years and life in prison.

McKelvy’s lawyers didn’t suggest during the appeal hearing that their client wasn’t involved in the scheme, but argued he should instead face charges in New Zealand.

He had no knowledge the drugs were to be temporarily offloaded inside the United States for repackaging, lawyers Ron Mansfield KC and Hannah Stuart contended. As such, they argued, he couldn’t have been part of a US importation conspiracy.

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 described the district court judgment as “expressed imprecisely” but not enough so to warrant an appeal.

“The judge found the conspiracy included the cocaine coming via the United States (and eventually to New Zealand),” Justice Gordon explained. “Even if the cocaine was only to be in transit, that was an import into the United States. I do not accept Mr Mansfield’s submission that the Judge found there was a prima facie case simply of conspiring to import cocaine into New Zealand.”

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.