US drug enforcer DEA seeks extradition of fraudster Miles John McKelvy to face drug conspiracy charges in the United States after investigation into Hells Angels gang in Romania
Miles John McKelvy outside the Hamilton District Court in 2001 while standing trial on mortgage fraud. Photo / Derek Flynn
Miles John McKelvy outside the Hamilton District Court in 2001 while standing trial on mortgage fraud. Photo / Derek Flynn
His fraudulent crimes have been described by a judge as 'predatory', 'insidious', 'recidivist' and 'amoral'. Another judge called his evidence on drug smuggling charges 'absurd'. Now the DEA wants to extradite the 62-year-old from Auckland to the United States to face drug trafficking charges alongside one of NZ's first meth cooks, and members of the Hells Angels from Auckland and Romania. Jared Savage reports.
An Auckland man wanted by American drug enforcers for allegedly conspiring to import cocaine, after an investigation into the Hells Angels gang in Romania, has a long criminal history as an "insidious" fraudster and drug smuggler.
The Drug Enforcement Administration (DEA) has sought the extradition of Miles John McKelvy -who is not a member of the motorcycle gang - to face drug trafficking charges in the United States with two other New Zealanders who were arrested in Romania two weeks ago.
Marc Patrick Johnson and Michael Murray Matthews, both New Zealand citizens, were arrested with the president of the Bucharest chapter of the Hells Angels.
Matthews is a patched member of the Hells Angels in New Zealand and Johnson has a long history of methamphetamine manufacture.
After their arrests the DEA asked New Zealand police to arrest the 62-year-old McKelvy as part of the alleged conspiracy to import cocaine into New Zealand.
McKelvy appeared briefly in the Auckland District Court on Friday afternoon, clean-shaven and wearing a black, short-sleeved shirt.
Lawyers representing the United States were in court, where McKelvy was remanded in custody until December 14 for a bail application.
In the usual circumstances, someone's criminal history will not be reported while they face active charges so as to not prejudice their right to a fair trial.
However, if the extradition application is successful McKelvy will stand trial on the drugs charges in the US and not New Zealand. For this reason, the Herald on Sunday has chosen to report McKelvy's lengthy criminal history.
A New Zealand member of the Hells Angels and the president of the Bucharest chapter were arrested in Romania in the raids. Photo / NZME
In 2004, McKelvy was arrested after a long-running investigation codenamed Operation Allsorts that led to more than 25 people being convicted for their parts in scams totalling $6.4 million.
He was the "chief executive" of a group that included crooked lawyers, accountants and property valuers, using his position as a mortgage broker in Hamilton to attract and identify potential victims.
Described as "predatory" by Justice Paul Heath, McKelvy was jailed for eight years in 2006 after admitting 27 dishonesty charges.
He sat then at the pinnacle of a sophisticated mortgage ramping scheme which scammed millions of dollars from vulnerable low-income home buyers.
One was an elderly widow suffering from cancer, one of many who lost their homes because of the "insidious" scheme orchestrated by McKelvy, a Hamilton mortgage broker at the time.
One of McKelvy's schemes involved lending money to lower-income families in return for them signing over their homes into what they believed was a family trust. McKelvy then raised mortgages against the homes without telling the owners.
In total, he was individually responsible for ripping off $1.4m.
Justice Heath described the fraud as "predatory", "insidious", "recidivist" and "amoral".
"You preyed on the ill, the elderly and the commercially naive. In one case you defrauded a widow of her home, notwithstanding the fact that you knew the family and she was ill with cancer at the time," said Justice Heath.
"They are the stories of some, but by no means all, of your victims ... they do provide an insight into the level of amoral conduct to which you were prepared to sink in order to gain financial benefits for yourself."
McKelvy was bankrupted for the second time after Operation Allsorts and Justice Heath denied his application to be discharged in 2010.
In refusing to discharge McKelvy, Justice Heath described his conduct as "predatory" and "primarily designed to relieve truly vulnerable members of society of what little assets they had".
"The appalling and amoral conduct in which Mr McKelvy engaged is, in itself, a good reason not to allow him to be discharged from bankruptcy at this stage."
He was released from prison in 2010 and five years later was discharged from bankruptcy - for the second time - despite a judge finding McKelvy "remains a genuine risk to the community".
By then, McKelvy had moved to Auckland and was "well regarded" by his employer in machine maintenance.
Hundreds of thousands of euros were seized by Romanian police in the alleged drugs bust involving three New Zealanders. Photo / Supplied
However, he became a suspect in Operation Leopard after the Customs Service seized six importations of GBL between October 2014 and January 2015.
Also known as Fantasy, GBL is a Class-B drug popular in the dance party scene in Britain and nicknamed "Coma in a Bottle" overseas because sexual predators slip it into drinks to sedate victims.
The total of 81 litres was worth around $354,000, while a further four shipments of unknown quantity slipped through.
When stopped by Customs at the airport and interviewed, McKelvy explained he imported the product as a cleaning agent and co-operated with investigators.
He maintained this explanation in the disputed facts hearing in front of Judge Soana Moala in 2017, giving evidence the cleaning chemicals used at Envirowaste, where he worked, were toxic and burned skin.
So he searched online to find a safer product and in a trial test successfully cleaned a truck without wearing any protective gear. McKelvy said he didn't realise the "wonder cleaning" product contained GBL.
His innocent explanation was completely rejected by Judge Moala in favour of the other evidence.
"It is a weak attempt to legitimise what was clearly an illegal importation of GBL," she wrote.
Emails and text messages made it clear McKelvy was discussing GBL, without any mention of an industrial cleaning agent.
