As much as 35 kilograms of cocaine may have slipped into the country undetected in a sophisticated drug trade between South America and New Zealand, the Herald can reveal.

New Zealand Police claimed the huge quantity of the class-A drug, with an estimated street value of $4.86 million, was imported by Christchurch man Lee Dixon between late 2014 and mid-2015.

Startling details of the operation were outlined in court documents released this week after a disputed facts hearing in the High Court at Christchurch.

Dixon, a 34-year-old air conditioning engineer, admitted importing the drug but disputed the quantity and dates it was smuggled.


However, Justice Nicholas Davidson ruled Dixon had imported at least 6kg of cocaine. He added it was "very probable" Dixon imported vast quantities more.

"Certainty, beyond reasonable doubt, that 6.27kg was the amount of cocaine imported by Mr Dixon.

"This is far below what I conclude is the probable market in which the transactions took place, however, that finding is insufficient to take away the benefit of the doubt which otherwise must be in favour of Mr Dixon."

Justice Nicholas Davidson said the case had "a striking feature".

"Apart from the cocaine identified in the supply charges [laid after his first arrest] none of the cocaine alleged to have been imported by Mr Dixon has been located by the police."

A police summary of facts said the amount of money wired overseas by Dixon "potentially sourced up to 35 kilograms of cocaine".

The retail price in the US for cocaine is up to US$100 ($138) per gram, and for crack cocaine up to US$150 per gram.

Dixon has previously been convicted and sentenced for importing cocaine after he returned from a trip to South America on March 29, 2014, court documents show.

He was searched at Auckland Airport and found to have 97.5g of cocaine packed in a condom inside his boxer shorts.

In April 2015, he was sentenced to seven months' home detention and 150 hours' community work.

However, he was arrested just months later, when the Crown claimed Dixon was involved in a much wider cocaine importation operation in late 2014 to mid-2015.

Dixon has since pleaded guilty to seven new drug charges, including importing cocaine. He is awaiting sentencing in the High Court.

He said while he was in South America he made contacts with people involved in the cocaine trade in Colombia, court documents show.

The Crown, backed with evidence from a former New York Drug Enforcement Administration (DEA) special agent, said Dixon sent about $152,000 in wire transfers from New Zealand to pay for Colombian cocaine.

Dixon admitted the currency transactions, between January 20 and April 23, 2015, mostly through Western Union to Hong Kong and Panama.

The money was sent to people with Colombian passports.

After Dixon was arrested on July 2, 2015 he said he made the transactions because he was investing in US currency, and the money sent via Western Union to South America was for friends travelling there.

Dixon was also caught handing over US$70,000 to an undercover police officer at Christchurch's Hagley Park on March 16, 2015.

Dixon initially denied meeting the undercover cop, but later pleaded guilty.

The Crown alleged it was also to pay for cocaine in Colombia.

Justice Davidson said it was "beyond reasonable doubt" Dixon was involved with cocaine importation and it is a "natural and commonsense inference to link the money transactions".

"All of which have a connection to Colombia, to that importation. Any other conclusion is fanciful. The evidence is, in my view, overwhelming in that regard," he said.

Another suspicious trade involving Dixon was the arrival of a FedEx package sent from Maracaibo in Venezuela, close to Colombia and the nearest Colombian city of Cucuta.

The 10kg package labelled as "a submersible pump" arrived in New Zealand on June 15, 2015 and was delivered to Rakaia in Canterbury on June 30, 2015.

The evidence regarding the FedEx delivery came to light nearly a year after Dixon was arrested for the second time on July 2, 2015.

The Crown alleged various communications associated with the delivery involving Dixon indicated that it contained cocaine. However, police never found the package.

Justice Davidson said there was a "very high level of suspicion" surrounding the package, which was "likely to have involved cocaine".

"I am sure, that the communications and delivery to Rakaia were associated with importation of cocaine, but I cannot conclude beyond reasonable doubt that cocaine was in the package, and I cannot conclusively link that delivery with the monetary transaction(s), if it did contain cocaine."

The delivery of the package was followed shortly afterwards by a police search on Dixon's home and vehicle on July 2, 2015.

Dixon refused to give police a pass code to a lockable cabinet containing cell phones, and US$4000 was found in his car.

A safe containing US$6000 was also found and a set of electronic scales, bearing cocaine residue, was discovered.

The Crown's case was built in part on the evidence of Louis D'Ambrosio, and evidence gathered during Operation Hook, along with records of electronic communications between Dixon and his South American contacts.

D'Ambrosio is an expert in international drug trafficking and money laundering, and worked with New York City Police as a DEA special agent. He is now a supervisory special agent with the DEA in Tokyo.

Operation Hook, was a New Zealand Police investigation into overseas money transactions associated with drug trafficking.

Police declined requests for an interview with Detective Sarah Waugh, who is an investigator for the Organised Financial Crime Agency involved in the operation.