Two men believed to be key to operation denied bail after seizure of more than 330kg of pseudoephedrine

A man "entrenched in the top tier" of an organised criminal syndicate was among those arrested in a record-breaking $120 million drugs bust and denied bail, a court has heard.

More than 330kg of the Class-B drug pseudoephedrine was seized in Operation Ghost which police say is enough to produce $100 million of methamphetamine.

The haul is the largest of its kind in New Zealand and the drugs, a cold and flu medicine known as Contac NT, which is legal in China, are believed to have been smuggled through the borders in a shipping container.

Homes, cars and cash worth up to $20 million were also seized as the Organised and Financial Crime Agency of New Zealand (Ofcanz) led raids on 40 properties in Auckland and the Waikato.


Most of the 24 people arrested yesterday as a result of the 18-month investigation appeared in the Manukau District Court at the same time as the police held a press conference at the nearby Ofcanz headquarters.

Interpreters for the Mandarin, Cantonese and Korean languages were needed, although all of the accused are permanent residents or citizens of New Zealand.

The Herald was the only media representative in court as most of the 17 defendants were released on strict bail conditions which included surrendering passports, night-time curfews, not having contact with fellow accused or not using cellphones.

Judge Jane Lovell-Smith declined to grant bail for the two men whom the police asked to be kept in custody.

Che Eng Tan, a 43-year-old from Takapuna, denied the charges and said nothing was found when police searched his house, according to his lawyer John Anderson.

He is facing 16 charges of possession to supply pseudoephedrine and another 16 charges of supplying the Class-B drug, which carries a maximum sentence of 14 years in prison.

Mr Anderson said the Operation Ghost evidence relied almost exclusively on intercepted phone conversations and messages and surveillance, so his client would not be able to interfere with witnesses.

But Judge Lovell-Smith declined bail on the basis of police allegations that he was "entrenched in the top tier of an organised criminal group", as a conduit between international connections smuggling pseudoephedrine into New Zealand and the local "cooks" of methamphetamine.


She also declined bail for Guo Pei Chen, 42, who lives in the Duxton Hotel in Auckland.

He was also charged with 16 counts of supplying pseudoephedrine, including 23kg of the methamphetamine precursor in one alleged case.

Judge Lovell-Smith noted the police allegations that he was supplying "significant volumes" of the drug and "vast sums of cash" as a key figure in the distribution network.

Seven other defendants will appear in the Manukau District Court today to apply for bail.

Four other individuals were arrested in October as part of the investigation when 267kg of Contac NT was seized.

Another 64kg was discovered yesterday, as well as 425g of methamphetamine, and further arrests were likely.

"Operation Ghost sends a powerful message to the criminal community that we will use every legal avenue at our disposal to target organised crime in New Zealand," said Assistant Commissioner Malcolm Burgess.

Operation Ghost

• 18-month investigation involving law enforcement agencies in China and Hong Kong

• 330kg of pseudoephedrine - enough to make $100 million of methamphetamine

• 28 arrests have been made and still more likely

• $20m of homes, cars and cash seized - including $1.5 million in cash.