FALL OF AN EMPIRE
Inside the $50m designer drug ring
Party pills were born at a K Rd bar called Sinners. Chris Chase and Lee Vincent, two young men on a night out, had a chance 3am encounter at the Auckland nightclub in 2001. Both were bodybuilders; they bonded over where to score steroids.
Within minutes of meeting, the pair were planning how to smuggle “juice” from Thailand to New Zealand in the mail.
The friends became business partners. And business was good until, a few months later, they were charged with selling a prescription medicine without a licence.
They went back to their day jobs; Vincent, an IT consultant, Chase a male stripper.
But it wasn’t long until the young entrepreneurs decided to push the boundaries of law and science. Their research led them to import BZP and TFMPP from overseas and, by fluke, mix the powders together. The combination of dopamine (a stimulant) and serotonin (a sense of euphoria) was a perfect high for those wanting to party into the wee hours of the morning.
It was like Ecstasy, but entirely above board. Chase and Vincent, by accident, had become pioneers in the “legal high” industry.
And it made them rich. Until one day, reacting to public outrage, the government banned BZP.
What happened next is a saga that can only be told now, 10 years on, after myriad suppression orders fell away like dominoes in the High Court this week. This is a story about science experiments and a cast of colourful characters playing a risky game of catand-mouse with New Zealand’s drug laws.
A story of “protection” money, clandestine meetings and bugged Skype conversations. Of boxes of cash stacked in the lounge of a pensioner’s home in the North Shore, later laundered through companies in Hong Kong and Thailand.
Money made from “designer drug” pills. Millions and millions of pills. A saga that started with a police investigation and ended in prison.
“This was the largest Class-C drug importation and dealing operation that has come before the New Zealand courts,” said Justice Peter Woodhouse, “and the largest by a very long way.”
was born Christopher Alan Roger D’Aguiar in November 1973. The eldest son of immigrants from Barbados. He grew up on Auckland’s North Shore.
He left Glenfield College when he was 16 to set up a lunch bar at the local gym where he was training.
An injury stopped D’Aguiar from playing basketball, so he turned his attention to bodybuilding.
“I became kind of obsessed with it, I guess you could say,” D’Aguiar said later.
The business deal was simple, no lease or contract. The gym wasn’t using the space and a lunch bar added value for customers. The teenage D’Aguiar bought the equipment, organised signage, made deals with food suppliers and prepared healthy meals with his mother.
Before long, he went back to school. The lunch bar was hard work and D’Aguiar realised he wanted a profession. An average student before quitting school, D’Aguiar returned to achieve an A bursary.
Physical discipline gave him the academic discipline to achieve the grades he needed for university.
“Bodybuilding essentially teaches you how to set and achieve goals in a very definable and visible way. Your goal is to lift 50 kilos six times, you either achieve that goal or you fail,” D’Aguiar would later say.
“It gave me sort of a system I could use in any part of my life.”
D’Aguiar enrolled at the University of Auckland in 1994, starting a BSc, but dropped out later in the year. Science made way for stripping. “Ladies would have a lingerie type party and if they purchased enough during the course of the party, their prize would be me, essentially.”
At the age of 23, after a few years working for agencies, D’Aguiar and a few strippers banded together. They formed “Men o Men” and D’Aguiar was in charge of bookings.
“They might want a policeman for instance and everybody had a policeman outfit. A fireman would be common, my signature one was Zorro.” D’Aguiar was still bodybuilding, representing New Zealand in international competitions and winning a national championship.
He met Lee Vincent at Sinners, a bar on Auckland’s infamous party strip Karangahape Rd, and they went into business together.
They formed VC Sports Science Ltd in 2001 after a business opportunity, as D’Aguiar described it, presented itself one night in town. And D’Aguiar changed his name to Chase.
“A friend of ours had this white powder with him,” Chase said. “What piqued my interest is he said it was legal, which back then was a very novel concept.
“A drug that got you high, was a stimulant, and it was legal. So I saw a business opportunity there.
“We took it that night, we loved it, we went out and had a good time.” Chase and Lee Vincent contacted the US website that had supplied the white powder to their friend.
It was benzylpiperazine, or BZP. The stimulant was completely unregulated in New Zealand. For an even better high, Vincent’s research found BZP was mixed overseas with trifluoromethylphenylpiperazine, or TFMPP.
The pills gave users a euphoric high similar to MDMA, better known as Ecstasy, but were completely legal.
selling by “word of mouth“to friends and associates; open-minded people, as Chase described them, who were into the party or rave scene.
“I had no doubt that our products would have competed with Ecstasy.” Each pill cost 12 cents to make; Chase and Vincent would sell batches of 1000 for $30,000 on credit. If they weren’t paid, it only cost them $120.
Importantly, they never told their customers the secret ingredients, BZP or TTMPP; only that the pills were legal.
They deliberately kept it underground, fearing the Government would ban BZP, or competitors would start selling rival products.
The first rival to appear on the scene was Matt Bowden, who went on to become the face of the “legal high” industry in the regulation debate.
Chase said Bowden, whose rocker alias is Star Boy, used the same compounds but a different business model. He was producing capsules in smaller quantities, which were packaged, marketed and sold in adult stores.
Then Logan Millar came along. He was a customer of Chase and Vincent and wanted to know whether BZP was the ingredient.
“It was obvious he knew that it was, and he kept asking me where he could get BZP,” Chase said.
While Bowden was selling capsules in sex shops, Chase said Millar became the first person to openly sell BZP and TFMPP “party pills“, around 2004.
His two products were known as Charge and Rapture.
“Logan put them through dairies, he advertised them on the radio, had footpath signs outside the dairies,” said Chase. “I thought it was quite irresponsible really, I thought it would probably bring about a banning of BZP and TFMPP.”
But it didn’t. Instead, more competitors flooded the market and the prices became cheaper and cheaper.
This was hurting sales for Chase and Vincent, who were supplying their pills, unmarketed, in bulk.
The realisation that BZP was not going to be banned anytime soon dawned on Chase and Vincent, and they decided to enter the retail game. London Underground was born.
Instead of competing with their rivals, Bowden, Millar and Matt Wielenga — the man who would later create Kronic — London Underground focused on creating a premium product. One tablet embossed with the Union Jack, and marketed as JAX sold for $30.
At first, Chase was a one-man band. He pressed, packaged and sold the pills himself, going door-to-door to convince retailers.
By the end of the first year, London Underground had a turnover of $1.1 million. They started hiring staff, tweaked the BZP and TFMPP doses to market different pills — Bolts, Devils, Smileys — energy drink Ammo, and created Spice, New Zealand’s first synthetic cannabis. Business kept booming. At its peak, London Underground was selling legal highs in 300 stores across the country.
But unflattering stories about the effects of BZP — which was illegal in the United States and some parts of Australia — started appearing in the media in 2004.
Shortly afterwards, “party pills” became R18. But the age restriction wasn’t enough to placate critics.
Concern from the public, as well as pressure from the liquor industry, led to a complete ban in April 2008.
BZP was classified as a ClassC controlled drug, which carries a maximum sentence of eight years in prison. The party was over.
But not for London Underground. They had already found the new BZP.
same time as BZP became illegal in New Zealand, there was a worldwide shortage of Ecstasy.
The drug was hugely popular in the dance scene; the key ingredient methylenedioxymethamphetamine — MDMA — well known for producing greater empathy and euphoria.
There was no dirty stigma with E, no needles to inject or pipe to smoke; just easy-to-take pills, embossed with trendy symbols — red Nike, blue McDonald’s, green Superman.
But the drug of choice in the nightclubs across the world had humble origins in the jungle of Cambodia.
MDMA is made from safrole oil, distilled by boiling the roots and bark of a rare tree, mreah prov mhnom. For centuries, locals extracted safrole oil for traditional remedies on a small scale. But when the global demand for MDMA peaked, so did safrole oil.
The damage to the environment was so great, Cambodia banned the felling of trees and production of oil.
In turn, clandestine oil distilleries cropped up in the protected forests.
Raids strangled the flow of safrole and suffocated the production of MDMA. But the Ecstasy drought didn’t last long. Clever chemists switched from MDMA to mephedrone, legal in most places around the world at the time.
Technically called 4-methylmethcathinone, or 4-MMC, mephedrone was better known as “meow” and sold openly in Australia and the UK.
It was one of a new generation of “legal highs“, or psychoactive substances, manufactured in laboratories in China and ordered online.
As soon as one was banned, the molecular structure was tweaked and tinkered with. A new recreational drug was born to stay ahead of the
More than six years after Operation Ark targeted a $50m designer drug ring, the Weekend Herald can reveal the story of London Underground. Among the characters were a Breaking Bad-style scientist, a banker and a business partner in Thailand. Jared Savage explains how party pills started in New Zealand.
lawmakers. Then another. And another. In a report by the European Monitoring Centre for Drugs and Drug Addiction, the number of new psychoactive substances discovered each year peaked at 57 in 2012 — more than one a week. Ten years earlier, there were none.
At the height of the mephedrone boom, one of the biggest exporters to Britain was CEC Chemicals in China.
Its website had a long list of designer drug compounds, most explicitly listed as legal alternatives to Class-A drugs such as methamphetamine and cocaine.
In a UK newspaper sting, chief executive Eric Chang was described as a rich young man who wore designer clothes, drove an expensive SUV and lived in a luxury villa.
As soon as a substance became banned, as mephedrone later was in the UK, Chang promised British journalists posing as potential buyers he would supply “new legal stuff ”.
“This is our technical know how.” the Daily Mail quoted Chang as saying. “It can’t possibly be banned yet because it was only invented a few months ago.” Chang was designated a drug kingpin by the US treasury in 2014. And it was Chang that London Underground bought mephedrone from.
This was the new BZP that Chris Chase was looking for.
THIS TIME, London Underground did not market the new “legal high”. Instead they kept under the radar.
They sold millions of pills, discreetly, to trusted clients — what they referred to as “the aftermarket” or “custom manufacturing”.
The clandestine nature of the business, according to Chase, was to stop history repeating. They didn’t want competitors to discover the secret ingredient, media to write negative stories about the latest “legal high”, or the government to ban it.
The clandestine nature of the business, according to the police, was because London Underground was a criminal drug enterprise.
The Auckland drug squad began a covert inquiry, Operation Ark, which included intercepting phone calls and planting listening devices.
Conversations were guarded, sales conducted in cash.
This was in 2010. Vincent had moved to Thailand. He was in charge of placing orders of mephedrone with Chang, through his company Profit Mark. The white powder was sealed in foil packets, marked as “corrosion inhibitor” and later “taurine” to avoid the suspicion of Customs and sent to scientist at a New Zealand cosmetic business.
Dr Andy Lavrent, with a doctorate in chemical engineering, was the perfect cover. Like the lead character in
Breaking Bad, Lavrent gave scientific advice on the merits of the various compounds.
The parcels of mephedrone — or what they thought was 4-MMC — were passed to Grant Petersen, a DJ, who pressed the pills for Chase. Another caught pressing pills in his rat poison factory was Jeremy Hamish Kerr, who went on to blackmail Fonterra with a 1080 threat.
Nearly 255kg of powder was imported over an 18-month period; enough to make almost 1.3 million tablets. The profits were enormous. Each pill cost around $1 to make. Th old, at wholesale, to dealers like bodybuilder Jamie Cameron at prices between $17 and $23 a pill. On behalf of London Underground, Cameron was paying a criminal gang $10,000 a week to be left alone.
ON THE street, the pills sold for between $30 and $40. Cartons of cash were taken by London Underground staff to the Takapuna home of Diane Ashby, Vincent’s mother.
Bundles of $20, $50 and $100 notes filled the cartons, taped shut and stacked behind a chair in the lounge of Ashby’s home. Every so often, “couriers“would arrive to collect the boxes and take the cash to Hong Kong where it was banked into accounts controlled by Vincent.
When the police raided Chase’s $3 million Coatesville home in November 2011, they found a Google spreadsheet labelled “The Village”.
It recorded the quantity of drugs, movement of powder and pills, cash receipts and bank transactions.
About $11m was deposited into the Hong Kong companies controlled by Vincent, according to “The Village”.
Operation Ark made another discovery with the arrest of Chase and 22 others.
ESR testing of the powder London Underground thought was mephedrone, or 4-MMC, was actually methedrone, or 4-MEC.
Like mephedrone, methedrone was a synthetic drug with a molecular structure which mimicked methcathinone, a Class-B drug. Neither 4-MMC or 4-MEC is specifically listed as a controlled drug.
But the police case was they were analogues, or “substantially similar” to a controlled drug, and therefore Class-C drugs.
Chase was adamant his pills were not analogues. While on bail awaiting trial, he went back to work.
One of his customers, Allen Stubbington, had escaped detection during the Ark investigation despite purchasing millions of dollars’ worth of pills. With his business model in tatters, Chase enlisted Stubbington, a fellow bodybuilder, to take charge of pressing the pills in New Zealand.
By encrypted email and Skype, Chase was still talking with Vincent who was free in Thailand. Vincent ordered new powders, including alpha-PVP, to be shipped from China to New Zealand, picked up by Stubbington and pressed into pills.
The money was handled by “The Banker”, Craig Williams, a British citizen living in an apartment in the Metropolis tower in Auckland.
Millions of dollars were shifted back to Vincent in Thailand and, to protect Chase, Williams took over the day-to-day tasks. London Underground was back in business.
the new party pills didn’t stay under the radar for long.
In a second police investigation, Operation Greenstone, Chase, Williams, Stubbington and others were arrested in September 2012.
The group had been communicating through encrypted email or Skype — which cannot be intercepted like cellphone conversations — but detectives had planted a listening device in Williams’ apartment.
They also found Stubbington’s meticulous record-keeping of the drug business.
Stubbington later cut a deal for a lighter prison sentence. He agreed to give evidence and was star witness at the Operation Ark trial in 2015.
Now 60, he told the jury he sold anabolic steroids in the bodybuilding scene and was introduced to party pills.
Through those circles, he met Chase, who agreed to supply him. All their transactions were in cash. “I was led to believe there was nothing banned in them, so you know there’s nothing wrong with them, so they’d be legal,” Stubbington told the jury. “But deep down we knew that they were illegal.”
Legal highs or illicit substances? Clandestine criminals or protecting intellectual property from competitors, or a government that might change the law? The trial was a test case and hinged on the definition of what an analogue was.
ESR scientist Jennifer Sibley gave evidence the chemical structures of 4-MMC and 4-MEC were “substantially similar” to methcathinone.
A structure “substantially similar” made them analogues under the Misuse of Drugs Act, according to Crown prosecutor David Johnstone, and therefore illegal.
There was no argument, pharmacologically speaking; the London Underground customers got a high similar to banned drugs like Ecstasy But there was a legal challenge as to whether 4-MMC and 4-MEC were analogues.
Chase’s defence team, led by Ron Mansfield, said the legal definition of analogue was unclear.
In evidence, Chase said he had pored over the Misuse of Drugs Act and was unable to find a definition of “structure”. Instead, he pointed out a clause that said an analogue “means any substance, such as substances” in a particular list that had a structure substantially similar to an illegal drug. There were six drug families on the list: amphetamine, pethidine, phencyclidine, fentanyl, methaqualone and dimethyltryptamine.
On Chase’s reading of the law, 4-MEC and 4-MMC were not members of those drug families and therefore could not be analogues. He relied on advice from two lawyers — both of whom were later struck off — to back up his interpretation.
When Chase was advised by scientists that a compound was likely to be a controlled drug analogue, he dismissed concerns by raising the advice that suited him. He had found a loophole; or thought he had.
“Get out of jail” cards was how Crown prosecutor David Johnstone described the favourable legal opinions to Chase, in a particularly heated piece of cross-examination.
Chase: “It seems it is your job to read the law a different way.”
Johnstone: “How much money have you made from reading the law your way?” Chase: “Probably about $15 million.”
The High Court trial, in front of Justice Woodhouse, dragged on for four months. At the end of the evidence, dozens of charges linked to some substances London Underground sold were thrown out. But the jury was clear on one thing: 4-MEC was an analogue of methcathinone.
So was 4-MMC (which is what London Underground thought they were selling).
Sentencing
Chase to 10 years in prison, Justice Woodhouse said the street value of pills sold was nearly $50m.
“This was the largest Class-C drug importation and dealing operation that has come before the New Zealand courts,” said Justice Woodhouse, “the largest by a very long way. Your role in this offending was pivotal . . . London Underground, at least in New Zealand, was you.”
THE NEW Zealand pioneer of party pills was now in prison, but Operation Ark was far from over. Chase and his fellow defendants tried to overturn their convictions in the Court of Appeal, then when that failed, the Supreme Court. Their challenge was two-fold. They again argued an analogue could only be a “substance”, such as “the six drug families listed in the drugs law”. This was thrown out by the Supreme Court because of two words. “The phrase ‘such as’ . . . makes it clear that the operation of the definition is not confined to those substances,” said the Supreme Court. “Any belief to the contrary on the part of Mr Chase or the other appellants was wrong.”
But the particular circumstances of Operation
Ark raised an important point of law in regards to mens rea, or a “guilty mind”.
To prove mens rea in most drugs cases, the Crown must show the defendants had knowledge of “identity” or “illegality”. For example, there must be evidence they know the identity of a substance — say methamphetamine or cannabis — even if they didn’t know it was illegal. Or, they do not know the identity of the substance, but know it is illegal.
One end of the mens rea spectrum is complete guilty knowledge. The other is innocent belief.
However, the Supreme Court said this approach did not work well with drug analogues, because whether a compound was illegal was not a matter of law, but of fact for a jury to decide whether it is “substantially similar” to a controlled drug.
The intention of the analogue regime was to stop skilled chemists or business people deliberately skirting the boundaries of the law.
This intention would be defeated, said the Supreme Court, if the Crown had to prove someone had complete “guilty knowledge”. How could someone know a substance was illegal, before a jury had decided that it was an analogue?
Instead, in the unique context of analogues, the Supreme Court established a midway point for mens rea.
This was “recklessness”; where someone was aware a substance might be a controlled drug, and whether they acted like a law-abiding citizen trying their best to comply with the law.
In the case of Operation Ark, Chase knew 4-MMC was “substantially similar” to methcathinone. That’s why Chase asked for legal advice, the Supreme Court said. His belief that 4-MMC was not illegal was based on a mistake in law, which is not a defence.
“A striking feature of the case is the absence of any suggestion from anyone denying the substantial similarity of the chemical structures of methcathinone and 4-MMC,” the Supreme Court wrote. “Rather, the overwhelming impression is that Mr Chase and the others thought that they had identified what might be a loophole in the law (the drug families misinterpretation) and were exploiting it.”
THE SUPREME Court ruling knocked over cases like dominoes. Nearly three years had passed since Chase was convicted and several other Operation Ark and Greenstone trials were on hold.
The Supreme Court findings ended his appeal rights and, essentially, removed the legal defences many would have planned to rely on. More than $11m of assets have been forfeited to the Crown, including property belonging to Vincent — who is still living in Thailand.
One by one they pleaded guilty to Class-C drugs charges and were sentenced this year, until only Craig Williams and Chris Chase were left. Williams, “The Banker”, has been on bail since September 2012. He pleaded guilty to money laundering $1.4m and was sentenced this week to 12 months’ home detention. Beside him in the High Court at Auckland was Chris Chase. He was 38 when first arrested in November 2011, now he’s 44. For more than six years, his identity has been kept secret to protect his business interests, as well as his fair trial rights.
His suppression order fell away as Justice Geoffrey Venning sentenced him on the Operation Greenstone charges laid while he was bail. The Chief High Court Judge effectively added an extra two years and 6 months in prison, on top of the 10 years Chase received for Operation Ark.
“You ran a sophisticated, commercial operation. By dealing in drugs, you took a business risk and now have to pay the price.” Perhaps Chase’s lawyer Mansfield put it best when quoting the The Clash hit in reference to his client: “I fought the law and the law won.”
This is our technical know how . . . It can’t possibly be banned yet because it was only invented a few months ago.
“Drug kingpin” Eric Chang