The New Zealand Police Operation Ark was the first major case against the importation of Class C analogues and led to the conviction of several people including Christopher Chase. / Mike Scott
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.
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 a complete 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 cat-and-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."
Stripping and science
Chris Chase 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.
Chris Chase pumping iron. Photo/Supplied.
"I became kind of obsessed with it, I guess you could say," D'Aguiar said later.
The business deal was simple, there was 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 to qualify 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 was still bodybuilding, representing New Zealand in international competitions and winning a national championship.
And then stripping gave way to science, of sorts.
Lee Vincent lives in Thailand. Photo/Supplied.
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.
"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.
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 Class-C 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.
From Cambodian jungle, to Chinese laboratory
The pills were popular in the dance party scene.
Around the 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 coloured 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, that Cambodia banned the felling of trees and production of oil.
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 of the compounds was tweaked and tinkered with. A new recreational drug was born to stay ahead of the 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 tabloid 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 United Kingdom, Chang promised British journalists posing as potential buyers he would supply "new legal stuff".
"It falls outside all laws currently regarding research chemicals...sorry we cannot discuss the ingredient now. 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 who London Underground bought mephedrone from. This was the new BZP Chris Chase was looking for.
Eric Chang. Photo/Supplied.
Operation Ark
Except this time, London Underground did not market the new "legal high".
Instead they kept under the radar. They sold pills, 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 itself.
They didn't want competitors to discover the secret ingredient, the media to write negative stories about the latest "legal high", or the government to ban it, as it had BZP.
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, codenamed Operation Ark, which included intercepting phone conversations and planting listening devices.
Conversations were guarded, sales conducted in cash.
This was in 2010. By this point, 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.
Scientist Dr Andrew Lavrent after his first court appearance in November 2011. Photo/Richard Robinson.
Dr Andy Lavrent, who has a doctorate in chemical engineering, was the perfect cover. Like the lead character in the Breaking Bad television show, 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.
Jeremy Hamish Kerr pressed pills in his pest poison factory. He was later convicted of blackmailing Fonterra. Photo/ Jason Oxenham.
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. They were sold, 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.
About $11m cash was stored in the home of Lee Vincent's mother Diane Ashby. Photo/Greg Bowker.
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.
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.
Some of money seized during Operation Ark. Photo/Sarah Ivey.
A legal loophole
This time, the new party pills didn't stay under the radar for long.
In a second police investigation, Operation Greenstone, police arrested Chase, Williams, Stubbington and others in September 2012.
The group had been communicating through encrypted email or Skype - which cannot be intercepted like cell phone conversations - but detectives had planted a listening device in Williams' apartment.
Thousands of pills seized in Operation Ark. Photo/Sarah Ivey.
Thousands of pills seized in Operation Ark. Photo/Sarah Ivey.
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 was called to give evidence.
She said 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 experienced a high similar to banned drugs like Ecstasy
But there was a legal challenge as to whether 4-MMC and 4-MEC were analogues.
The defence team for Chase, led by Ron Mansfield, said the legal definition of analogue was unclear.
In giving 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 of the law.
Whenever Chase was advised by scientists that a compound was likely to be a controlled drug analogue, he dismissed the concerns by raising the advice which 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).
In sentencing Chase to 10 years in prison in 2015, Justice Woodhouse said the street value of pills sold was nearly $50 million.
"This was the largest Class-C drug importation and dealing operation that has come before the New Zealand courts," said Justice Woodhouse, "and the largest by a very long way.
"Your role in this offending was pivotal . . . London Underground, at least in New Zealand, was you."
The jury found 4-MMC and 4-MEC were analogues of methcathinone. Photo/Supplied.
What's in a guilty mind?
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 that 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.
On one end of the mens rea spectrum, is complete guilty knowledge. On the other, is innocent belief.
However, the Supreme Court said this approach did not work so well with drug analogues.
That is because whether a particular compound is illegal is not a matter of law, but of fact for a jury to decide whether it is "substantially similar" to a controlled drug.
Stopping skilled chemists or business people deliberately skirting the boundaries of the law was the intention of the analogue regime.
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 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 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."
Six years of secrecy
Chris Chase outside the Auckland District Court in November 2011. Photo/Richard Robinson.
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 findings from the Supreme Court 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 Lee Vincent - who is still living in Thailand.
One by one they pleaded guilty to various 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 he was first arrested in November 11, 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 Chase on the Operation Greenstone charges laid while he was bail.
The Chief High Court Judge effectively added an extra 2 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."
2011: Chase among 23 arrests from Operation Ark. Police claim 4-MMC and other compounds are not "legal highs" but analogues – or "substantially similar" in structure – to illegal drugs.
2012: Chase arrested, while on bail, for importing new compounds like alpha-PVP in Operation Greenstone.
2015: Jury finds Chase and others guilty of 69 charges of importing and selling Class-C drugs. The verdicts mean 4-MMC and 4-MEC are analogues.
2016: Chase appeals the findings, which puts all connected trials on hold. Court of Appeal upholds convictions.
2017: Chase appeals to Supreme Court but findings are upheld. Supreme Court decision means defendants in connected Operation Ark and Greenstone trials start pleading guilty.
2018: Chase pleads guilty to Operation Greenstone charges and sentenced.
2013 - Operation Greenstone Allen Stubbington - 5 years 10 months (55 per cent discount for early guilty plea and giving evidence for Crown). Michael Hall - Home detention (8 months)
2015 - Operation Ark Chris Chase - 10 years Dr Andrew Lavrent - 8 years 6 months Jamie Cameron - 8 years (later reduced to 5 years and 7 months) Johnny Be Good - 9 years Stanley Leone - 7 years Kevin Challis - 3 years 6 months Kelvin Cress - 5 years 6 months Grant Petersen - 2 years 6 months
Johnny Be Good was Chris Chase's first lieutenant. Photo/Richard Robinson.
Stan Leone was Chris Chase's second lieutenant. Photo/Kenny Rodger.
2016 - Operation Ark Jeremy Hamish Kerr - 1 year 3 months (on top of 8 years 6 months for Fonterra 1080 blackmail charges)
Other Ark and Greenstone cases were put on hold until after Court of Appeal (2016) and Supreme Court (2017) decisions.
2018 - Operation Greenstone Dr Andrew Lavrent - 1 year 2 months (on top of Ark sentence) Simon McKinley - Home detention (10 months) Cameron Broxton - Home detention (8 months) Jeanette Morris - Community detention (6 months) Gerald Hill - Home detention (6 months) and 150 hours community work
2018 - Operation Ark Allen Cho - Home detention (10 months) Shalendra Singh - Home detention (6 months) Alzain Khan - 9 months Brendon Nguyen - Community detention (6 months)
