Fighting the Demon

Drug investigators from the United States will open a branch in New Zealand and work alongside police to target Mexican and South American cartels smuggling methamphetamine and cocaine for the lucrative market here.

The Drug Enforcement Administration has been granted permission by Congress to set up offices in Auckland and Wellington, as the US looks to work closely with Five Eyes allies Australia and New Zealand to combat organised crime.

The DEA is perhaps best known in this part of the world through the Netflix hit Narcos, which delved into the life and crimes of Colombian kingpin Pablo Escobar, and more recently the prosecution of Joaquin "El Chapo" Guzman.

Likely to receive a life sentence on drug trafficking convictions, "El Chapo" was the leader of the Mexican cartel Sinaloa as the organised crime group rose to power globally.

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Sinaloa and rival cartel Jalisco, or CJNG, are behind an upswing in large shipments of methamphetamine and cocaine smuggled into New Zealand and Australia, DEA agent Kevin Merkel told the Herald.

"If you were to ask any significant trafficker what is the best market for meth and coke in the world, they would say Australia and New Zealand," said Merkel, who is based in Canberra as the DEA attache for the region.

"The same people that are pumping drugs out to the United States are the same ones that are pumping out drugs here. If they seen potential to make more money, they're going to do it."

The DEA escort Joaquin 'El Chapo' Guzman, center, from a plane to a waiting SUV after his arrest in 2017. Photo / DEA.
The DEA escort Joaquin 'El Chapo' Guzman, center, from a plane to a waiting SUV after his arrest in 2017. Photo / DEA.
DEA agent Kevin Merkel says Mexican cartels are targeting lucrative methamphetamine market in New Zealand and Australia. Photo / Mike Scott.
DEA agent Kevin Merkel says Mexican cartels are targeting lucrative methamphetamine market in New Zealand and Australia. Photo / Mike Scott.

Merkel was interviewed as part of a Herald documentary, Fighting the Demon, investigating New Zealand's 20-year battle with methamphetamine addiction.

Traditionally, Asia - in particular China - has been the dominant source of methamphetamine, or precursor ingredients, smuggled into New Zealand.

But over the past few years, the high prices for Class-A drugs in Australia and New Zealand have caught the attention of the cartels like Sinaloa and CJNG.

WATCH: Fighting the Demon documentary

READ MORE: Inside New Zealand's meth crisis

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According to intelligence reports, 2018 was the first year in which the most methamphetamine seizures at the New Zealand border had been exported from the United States. Mexico was the most likely original source.

In recent raids on the Comancheros in Auckland - in which luxury Range Rovers, gold-plated motorcycles and a Rolls Royce were seized - police alleged the motorcycle club were working with the Sinaloa cartel.

Police allege methamphetamine seized in Operation Nova was sourced from the Sinaloa cartel. Photo / Supplied.
Police allege methamphetamine seized in Operation Nova was sourced from the Sinaloa cartel. Photo / Supplied.
A gold-plated motorcycle seized from the Comanchero gang, whom police allege is working with the cartels. Photo / Supplied.
A gold-plated motorcycle seized from the Comanchero gang, whom police allege is working with the cartels. Photo / Supplied.
A late model Range Rover seized from the Comanchero gang, whom police allege is working with the Sinaloa cartel. Photo / Supplied.
A late model Range Rover seized from the Comanchero gang, whom police allege is working with the Sinaloa cartel. Photo / Supplied.

Organised crime syndicates see the lucrative markets of Australia and New Zealand as a "two-for-one" deal, because of the close proximity of the two countries.

"It is easy to believe that New Zealand is a little country and organised crime groups don't know who we are and don't really see us as a market. That myth is gone," says Detective Inspector Tom Fitzgerald, the police liaison officer based in Canberra.

"The easiest way to explain it is if it's Australia's problem, it's our problem. Every organised crime syndicate or cartel, if they're targeting Australia, they're targeting us.

"If you were setting up business in Australia and you saw a lucrative market over the ditch, three hours away, you would grab it."

Fitzgerald and Merkel work closely together in the Australian capital, along with other law enforcement agencies from the Five Eyes network.

While New Zealand has long had a presence in Canberra, Fitzgerald and Merkel say the relationship has progressed in the last 18 months from sharing intelligence to actively working on operations together.

This co-operation will only grow stronger with the presence of DEA agents in Auckland and Wellington, says Merkel.

Detective Inspector Tom Fitzgerald is the New Zealand police liaison officer based in Canberra. Photo / Mike Scott.
Detective Inspector Tom Fitzgerald is the New Zealand police liaison officer based in Canberra. Photo / Mike Scott.

"We can't do it by ourselves, Australia can't do it by themselves, New Zealand can't do it by themselves. Trans-national organised crime, by definition, don't do it by themselves.

"They don't see borders, they don't care about the laws. They've got historical connections across the world, that's why they've made literally billions of dollars in the drug trade," says Merkel.

"That's why we have to work together."

New Zealand Customs is also strengthening ties with counterparts in the United States in recognition of the cartel threat, with a new liaison position established recently in Los Angeles.

Jamie Bamford, head of intelligence, investigations and enforcement, says the first methamphetamine shipment linked back to cartels was noticed by Customs in 2015.

Operation Stratus found 80kg of methamphetamine hidden inside car batteries shipped from South America to Fiji, although Bamford said the drugs were destined for Australia and Fiji.

"That's when large shipments from the Americas first kicked off. It's all driven by profit. Methamphetamine and cocaine fetch very high prices here, we're a very attractive market," says Bamford.

A kilogram of methamphetamine might fetch $1000 in Mexico, says Bamford, and be worth $5000 when smuggled into the United States. The same kilogram is worth $200,000 in New Zealand.

"We're in the big leagues now. The cartels are not actually that interested in dealing with 1kg," says Bamford.

"If you want to do business with the big boys, you're buying hundreds of kilograms not one."

A large part of Customs' strategy has been to work with border control in other countries to "keep the harm offshore", which Bamford says has been successful in stopping millions of dollars of drugs from ever getting to New Zealand waters.

Jamie Bamford, head of intelligence, enforcement and investigations for Customs. Photo / Jason Oxenham.
Jamie Bamford, head of intelligence, enforcement and investigations for Customs. Photo / Jason Oxenham.

Bamford, Fitzgerald and Merkel all agree that solely targeting the supply chain won't solve New Zealand's meth problem.

While the DEA has a mandate to target criminal organisations "peddling poison", Merkel said US authorities "realised we weren't going to arrest our way out of the problem" when it came to the opioid epidemic which killed 60,000 people.

Instead, Merkel described a holistic "360 degree" approach where law enforcement worked closely with mental health professionals and addiction specialists to get treatment for drug users.

"Our prisons can only take so many people," says Merkel. "It's something that in hindsight we could have looked at with meth as well."