Operation Reverse 'classic' example of organised crime cells 'setting up shop' in New Zealand

Specialist "cells" of transnational organised crime syndicates have entered New Zealand, sold huge amounts of methamphetamine, then immediately shifted the profits offshore.

Police say 20 of these operational cells from Asia, North and South America, and Europe have been "dismantled" since January 2017.

While foreign criminals have smuggled methamphetamine - or the ingredients to make meth - into New Zealand for local criminals or gangs to sell for nearly 20 years, this is a new trend where they operate independently.

"Traditionally, most of this process has occurred offshore," said Detective Superintendent Greg Williams, in an affidavit to the Court of Appeal.

"Recently we have identified a trend of these transnational groups choosing to 'set up shop', as it were, in New Zealand to make use of their own supply lines, pricing structures, personnel and connections to international services."

This is because New Zealand has one of the most lucrative methamphetamine markets in the world.

A kilogram of the Class-A drug can cost US$1000 in Mexico but fetch anywhere from $180,000 to $350,000 in New Zealand.

One of these transnational groups that set up in New Zealand was targeted in Operation Reverse, Williams said in an interview for the Herald's documentary project Fighting the Demon.

Cargo ship MOL Destiny arrived in Auckland from Hong Kong in January 2017 carrying 160 litres of "dishwashing liquid".

In another first for New Zealand law enforcement, ESR testing showed the "dishwashing liquid" was t-boc methamphetamine.

The 160 litres of t-boc methamphetamine was disguised as dishwashing liquid. Photo / Police

The 160 litres of t-boc methamphetamine was disguised as dishwashing liquid. Photo / Police

The chemical t-boc is added to mask the methamphetamine and is removed later in an evaporation process.

Around 46kg of pure methamphetamine could be extracted from 160 litres of t-boc methamphetamine.

Most of the t-boc methamphetamine was switched with a placebo and police watched as two men, Thammanoun Mingsisouphanh and Shui Tong Wong, picked up the packages.

The pair put the boxes into a storage unit in New Lynn, then Mingsisouphanh flew to Sydney.

A third man, Yuen Chan, flew from Hong Kong to Auckland on a Canadian passport.

A covert camera put inside the storage unit caught Chan and Wong picking up the t-boc methamphetamine.

Mingsisouphanh came back from Australia, then Chan returned to Hong Kong.

Customs intercepted three courier packages destined for a house on Great North Rd in Auckland which had been mislabelled.

The parcels contained a rotary evaporator, an agitator, glassware and other items needed to build a portable lab and the t-boc from the methamphetamine.

Chan returned to New Zealand, this time from Kuala Lumpur.

A hidden camera placed inside the storage unit captured the men picking up the t-boc methamphetamine. Photo / Police

In March, Operation Reverse was terminated and police found $250,000 in Wong's home.

Wong was sentenced to 9 years 9 months in prison for conspiring to import methamphetamine, while Mingsisouphanh and Chan received 14 years and 10 years 11 month sentences respectively.

Williams said Operation Reverse was a "classic example" of transnational organised crime operating in New Zealand.

A hidden camera placed inside the storage unit captured the men picking up the t-boc methamphetamine. Photo / Police

"This shows the professionalism of some of these organised crime groups. They've chemically changed the structure of the methamphetamine, so in essence it's not meth, then shipped it in.

"Then they've imported a lab and sent a chemist to come down and convert it back to meth. The intent is to sell meth here, take the money and leave."

Williams was interviewed as part of a Herald documentary project, Fighting the Demon, published this week.

The investigation found New Zealand is still gripped by meth addiction more than 20 years after the drug became popular.

Ten years ago, 100kg was a record bust for law enforcement. Now, it's almost routine.

But the price of a point - around $100 for a 0.1g - is unchanged from a decade ago.

Some addicts reported spending up to $1000 a week. Tests on wastewater suggest we spend $1.4m on meth every day.

But where P was once a party drug for the middle classes, in this second wave, its victims are most likely to be the poor.

At the same time, demand for treatment has soared. Three quarters of those in rehab have issues related to meth.

Yet funding for treatment has lagged.

In 10 years, the number of people seeking help from the health system has risen 70 per cent, but the increase in funding has been little more than half that.

Detective Superintendent Greg Williams is the head of the National Organised Crime Group. Photo / Mike Scott

Around $150m is spent on treating addiction each year, 10 per cent of the mental health budget. In contrast, the bill for prisons is $1 billion. Last year police were awarded $300m for new officers - half of them earmarked for fighting organised crime.

In December, the landmark Government Inquiry into Mental Health and Addiction report recommended more investment into treatment, urgently. Rehab centres were swamped. One estimate said 100,000 more people a year could benefit from therapeutic help.

"The criminalisation of drug use has failed to reduce harm around the world," the report said. It recommended criminal sanctions for possession should be replaced with treatment instead.

The Government is yet to respond.

Late last year, it introduced an amendment to the Misuse of Drugs Act, underwriting in law the police ability to send users for treatment rather than prosecution. It says it wants to treat drugs as a health issue.

However, the discretionary policy had just $16m attached, half for an emergency fund that can be accessed only after a crisis.

Health Minister David Clark said there was no doubt methamphetamine and other drugs were causing serious harm in communities.

"The approach we have taken to drugs in New Zealand up until now has not worked," he said.

While Clark acknowledged addiction services had been underfunded, and the Government was committed to a better and more sustainably-funded health service, he refused to say if more money would be allocated in this year's Budget.