Where there are smokes there are fires: Inside Victoria’s tobacco war

The world wide web has changed the way we do business. In days long forgotten Zoom was what you did when you were driving to a meeting, Marketplace was a destination you visited to purchase vegetables and a jam donut, while Spam was a preserved meat product often fried with pineapple.

While the web has changed the way we work and socialise, it has also altered the way organised crime goes about its business.

Detective Inspector Graham Banks, head of Taskforce Lunar.Credit: Eddie Jim

In the old days, if you wanted to take out a contract, you would meet the hitman at a discreet location, slip him the target’s address, photo and private details, along with an envelope containing a substantial cash deposit.

According to Detective Inspector Graham Banks, who has spent years investigating the state’s most dangerous crime gangs, crooks for hire are now often recruited online through secure apps.

In some cases crimes are put out to tender – a new version of wild west bounty hunters (Wanted, Dead or Dead). He says a person taking out a million-dollar murder contract can use a handle (alias) and it may pass through several chains of command. “The person who takes the contract may not know the name of the person who has ordered the hit,” Banks says.

The payoff can be done remotely. “They may post a picture of a park bench with a location with instructions that the money is buried in the flower bed three metres behind or in a car boot with the car left unlocked or in a storage box with a pass number,” he says.

This means, he says, crime novices with little or no police records may be persuaded to “have a crack”.

At the bottom end young men are stealing cars, driving into tobacco shops and setting them on fire for as little as $500.

Banks is a man with a sharp sense of humour, but there is nothing remotely funny about Victoria’s tobacco war. He has spent several years investigating bikie and Middle Eastern crime gangs. Since October, he has headed Taskforce Lunar, set up to investigate the illicit tobacco war.

Taskforce Lunar was supposed to be Luna, but someone slipped an “r” on the end.

Banks’ strategy is contrary to usual police policies. Traditionally police try to draw out a problem to stamp it out, whereas Banks wants to force illicit tobacco back into the shadows.

The trade may be the perfect business model. There is a high demand, you have access to unlimited cheap stock, there are about 1300 retail outlets and you don’t pay tax. “Every one of the shops is a money spinner.”

But there is more. The syndicates go to the retail outlets and force them to sell their businesses, or they must pay protection and stock only the syndicate’s under-the-counter product.

Banks estimates protection alone is making the syndicates more than $100,000 a month, the big shops are moving up to $50,000 in stock a week and the “industry” is making millions a month.

The money is laundered through cryptocurrency, buying retail food outlets and purchasing property in Australia and the Middle East.

A tobacco shop firebombed in Epping in May.Credit: Nine News

And so everyone should be happy, right?

Wrong.

This is where smart crooks get seriously stupid.

These syndicates aren’t happy making lots of money. They want to make all the money. Which is why we wake most mornings to hear of another arson attack on a tobacco shop.

“We (police) have enough on our plate with drugs, juvenile crime and domestic violence, and so the selling of illicit tobacco was not a big priority,” says Banks. “Well, it is now.

“What they are doing is not good for business. They are asking to be looked at. They (many of the tobacco shops selling illicit cigarettes and vapes) won’t be there in 12 months.”

First off, let’s take a step back and look at how these gangs work.

Police say there are four serious groups. Each group is led by an alpha male. The exception for a time was Meshilin Marrogi, who was the brains behind the Notorious Crime Family gang run from behind bars by her brother George.

Meshilin, 30, died of COVID-19 in 2021, and enemies of her family robbed her grave in 2023.

Jailed crime boss George Marrogi.

Banks shakes his head as he talks of how George Marrogi has been able to make millions of dollars while in custody, having been able to have his hundreds of calls, supposedly made to his legal team, diverted so that he could run his syndicate.

Pictures found on his computer via a smuggled dongle showed up to $15 million in cash, bricks of cocaine and multiple weapons.

Banks says the gang leaders rise to the top when they have the support of the core group that are usually related (siblings and cousins) with the remaining members having shared Middle Eastern origins.

The crimes are organised, but the structure is not. There may be up to 100 associates called upon to commit specific crimes, ranging from arson to assault, drug distribution, theft and standover work.

Kazem “Kaz” Hamad in about 2015.

Kazem “Kaz” Hamad controls his syndicate remotely. Having been deported from Australia, he is now based in Dubai, although he regularly flies key members to meet him for friendly catch-ups and to discuss business strategies. He can order a shop in Brunswick torched from his home 11,658 kilometres away.

Hamad is determined to dominate the illicit tobacco industry, which means he has gone to war with the Haddara crime family, who live in a fortified compound.

The Age reported earlier this year there had been at least 60 violent incidents suspected of being related to Hamad’s underworld campaign, including at least 52 arson attacks, two murders, two non-fatal shootings and numerous standover extortion attempts.

Some of these syndicates did co-operate when it came to large drug shipments, but when it comes to illicit tobacco, it is a fight to the death.

Boxer Sam “The Punisher” Abdulrahim has taken more shots in the street than the ring.

“The brutality hasn’t gone away. The violence used to be personal, and now it is a struggle over the business,” says Banks.

Take the case of Sam “The Punisher” Abdulrahim. He was shot eight times outside his cousin’s funeral, escaped unharmed after 17 shots were fired at him outside his house and wasn’t home when it was shot up again. Rather than invest in more security, Sam would do well to engage a career adviser, as a change of occupation could turn out to be a wise investment.

And it is not just crooks versus crooks. The organised gang expert says that in at least one in three cases the business next door to the tobacco shop firebombed is damaged.

People have been living above many of the shops, and Banks says it is just luck someone has not been trapped and burned to death.

Police alone rarely defeat organised crime, because the crooks have identified a market they can supply. Smokers, sick of massive government taxes on what remains a legal pastime, see nothing wrong in going to the backyard suppliers to buy smuggled cigarettes.

Any moves by the cops must be supported by elements of the community, which is why police are dealing directly with the landlords who own the shops that are selling the smokes.

They have sent two sorts of letters. One is to tell the landlords their shops have been raided and have been found to be selling illegal tobacco, and the other is to say they have intelligence that the shop is part of the blackmarket trade.

The letters advise landlords their insurance may be voided if they have been warned by authorities the properties are likely to be the target of arson.

“I think if I owned a business next door to one of these outlets and the landlord did nothing I would be very unhappy if my property was damaged,” says Banks.

The police letters to landlords are, for the moment, just friendly advice. The next step may be a little bit sterner. If a property owner is knowingly making money from an illicit source, that income and perhaps even the property could be subject to asset seizure.

The plan is simple. Close as many of the shops as possible so that smokers do not have immediate access to the product. Banks knows this won’t kill the market, but will push it online and underground.

Most Melbourne people are just minutes by car from an outlet. Making access more difficult is a start.

“We want to force the industry back underground so mum and dad smokers can’t just walk down the road to buy the illegal products,” says Banks.

“As we dry up the open illicit tobacco retail business they will try to control legitimate tobacco shops.

“But we won’t let mugs like them stand over legitimate people.”

The Middle Eastern crime gangs have been a force in Victoria for 20 years. The violence was usually targeted. “I don’t like you, so I’ll go and shoot you. They were crimes of hate,” Banks says.

Now the ruthlessness means the gangs don’t care who gets in the way.

“A group on one side might book a function room for an event and another side will burn it down. They target innocent people just because it serves their purpose.

“There is no playbook any more. There are no boundaries.”

John Silvester lifts the lid on Australia’s criminal underworld. Subscribers can sign up to receive his Naked City newsletter every Thursday.