Miles John McKelvy outside the Hamilton District Court in 2001. Photo / NZME
Miles John McKelvy outside the Hamilton District Court in 2001. Photo / NZME
The tables had turned on infamous New Zealand con artist Miles John McKelvy.
He didn't yet know it, but the man once described by a judge as "predatory" and "insidious" for preying on others was the one being duped in 2020 as he tried to convince an American undercover agent that he was up for the task of helping to smuggle a massive haul of cocaine into New Zealand.
Those are the allegations that have been laid out by US prosecutors as they seek New Zealand's help in extraditing McKelvy overseas to face trial there.
McKelvy, 64, has opposed extradition since his arrest in Auckland two years ago at the request of the US Drug Enforcement Administration. He appeared in Auckland District Court today as lawyer Ben Thompson, acting on behalf of the US government, outlined the case against him.
Judge Peter Winter has not yet decided whether McKelvy will be sent to America.
He adjourned today's hearing after several hours, having not yet heard from McKelvy's lawyers, so that US documents can be amended to explicitly state that the undercover officer who McKelvy allegedly confessed to was based in the United States. It's not yet known when the hearing will resume. A new date will be determined next month.
McKelvy is charged in US federal court with conspiracy to import cocaine into the United States, conspiracy to export cocaine out of the United States and conspiracy to manufacture cocaine knowing it was likely to be imported into the United States.
US authorities say the scheme started in May 2020 when a person in New Zealand contacted a man who he believed to be a large-scale drug trafficker operating out of the United States. In reality, authorities say, the trafficker was an undercover agent with the US Drug Enforcement Administration, otherwise known as the DEA.
Communicating via encrypted messaging app Wickr, the two made plans to smuggle 100kg of cocaine into New Zealand and as a result a NZ$50,000 down payment was deposited into a US bank account secretly controlled by the DEA, authorities allege.
New Zealand-based Hells Angels member Michael Murray Matthews was then introduced to the undercover agent and in July 2020 he travelled to Romania - accompanied by another New Zealander, convicted meth cook Marc Patrick Johnson, to meet with the agent in person, according to US court documents.
Miles John McKelvy outside the Hamilton District Court in 2001 while standing trial on mortgage fraud. Photo / Derek Flynn
"The plan was that the drugs would be shipped from Peru to Beaumont in Texas, then from there they would be exported by ship into Romania and New Zealand," Thompson told the judge today as he summarised the US case.
It is alleged the men agreed after the meeting to increase the size of the illicit shipment to 400kg, and three more payments were made into the DEA bank account totalling about US$629,000.
It's around that time that McKelvy became actively involved in the scheme, authorities have alleged.
"His role was to accept the load of cocaine when it arrived in New Zealand by container ship," Thomspon said today.
In communications via Wickr and video call, the undercover agent was able to get McKelvy to confirm his identity and his role within the group, authorities allege. At one point the agent asked McKelvy directly if he was aware the plan involved importing 400kg of cocaine, US law enforcement says.
"Yes, I'm very clear but this will work if we get the paperwork bang on," he is alleged to have replied.
Co-defendants Matthews and Johnson were arrested in Romania, where they remain as they, too, fight extradition to the United States for trial.
McKelvy's lawyer, Ron Mansfield QC, has suggested in court documents that the US doesn't have jurisdiction over the case. An alleged cocaine shipment originating in Peru and ending up in New Zealand shouldn't be prosecuted in the United States if the plan was for the drugs to stay onboard the ship while in US territorial waters, never ending up on US soil, he said.
But that's "clearly not what was alleged", Thompson responded on behalf of the United States. He said the money was deposited into a US bank account and the plan, according to a grand jury indictment, was for Texas to be used as a base for collecting money and constructing industrial equipment that the drugs could be hidden in when re-shipped.
McKelvy is no stranger to courtrooms - at least in New Zealand.
In 2006, he was sentenced to eight years' prison after pleading guilty to 27 dishonesty charges for his part in a sophisticated $6.4m mortgage scam involving dodgy lawyers, accountants and property valuers. McKelvy, who at the time was a Hamilton-based mortgage broker, was found to have been individually responsible for $1.4m in losses to myriad victims, including an elderly widow suffering from cancer who lost her home.
"You preyed on the ill, the elderly and the commercially naive," Justice Paul Heath told him at his sentencing, describing the fraud as "predatory", "insidious", "recidivist" and "amoral".
He was chastised by another judge a decade later as he was sentenced to five years and two months' prison for importing 81 litres of GBL, a party drug also known as Fantasy, into New Zealand in 2014 and 2015. He had claimed he only wanted the chemical, estimated to have a street value of $354,000, to be used as a cleaning product for the Auckland waste company where he was then working.
Judge Soana Moala described McKelvy's explanation as both "ludicrous" and "a weak attempt to legitimise what was clearly an illegal importation".
