Nugan Hand Bank death unravelled a tangled web of financial deceit

When a businessman was found dead at the wheel of his Mercedes in 1980 a complicated web of deceit was discovered.

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In 1980, when a man was found dead in his car on Forty Bends Rd, Bowenfels near Lithgow, it seemed a simple case of the head of a bank caught fiddling the books who took his own life. But as the events unfolded, the story of the dead man, Frank Nugan, and the bank he had founded became more complex and murky.

Cigar-puffing law graduate Nugan had set up an institution that attracted respectable clients and seemed to be doing well, but that soon unravelled.

Nugan was born Francis John Nugan in Griffith in NSW in 1942, the son of German-born migrant Alfredo Neugarten, who had taken on Spanish nationality before moving to Australia in 1939 where he changed his name and set up a fruit-packing business.

Frank Nugan studied law at Sydney University and University of California at Berkeley before heading to Canada to do his doctorate. He dropped out and found work as a public servant.

He returned to Australia in 1968 and was registered as a solicitor. He worked at a law firm before concluding that his migrant background would prevent his promotion so left and set up his own firm.

Frank Nugan in 1978. Picture: Courtesy of Peter Butt, author of Merchants Of Menace

Nugan met Michael John Hand, an American-born ex-serviceman, at the famous Bourbon and Beefsteak restaurant at Kings Cross in 1968, when Nugan went there to offer his legal services and was introduced to Hand. The two quickly hit it off.

Hand was using the restaurant as his base for selling Australian real estate to GIs on R&R from the Vietnam War. Hand had served in Vietnam as a Green Beret and earned a Distinguished Service Cross, before being recruited by the CIA for a mission in Laos. He later moved to Australia, claiming he was headed to the Northern Territory to look for construction work, but instead landed in Sydney in 1967.

Nugan and Hand joined forces for several ventures that culminated in the establishment of what appeared to be a merchant bank, incorporated in 1973 as Nugan Hand Needham, with businessman and racehorse owner John Needham.

Needham soon became anxious about the disorganised nature of the company’s operations and found some of its activities were concealed from him. He opted out after a year and the bank became Nugan Hand Ltd in 1974.

Michael Hand in disguise posing for a passport photo. Picture: From Merchants Of Menace by Peter Butt

Despite their lack of experience, both men were able to attract millions of dollars of investment in their bank, which wasn’t really a bank since it wasn’t registered as a bank, nor did it offer loans.

The bank was being used to launder money, fund drug trafficking and gun running as well as covert military operations. It had all the appearance of legitimacy, linked to some prominent former military men, including a general and a rear admiral.

William Colby, former head of the CIA, was hired by Hand in 1979 as a legal adviser to the bank.

Questions began to be asked and things began to go wrong. Nugan became increasingly erratic and even turned to God for help, but had effectively lost control of his bank to people involved with the CIA.

With the bank racking up debts it was unable to pay, the threat of the auditors coming in and opening up its illegal operations to public scrutiny became very real.

On Sunday, January 27, 1980, Nugan was found dead at the wheel of his parked Mercedes with a single shot to the head from a military rifle in his left hand.

In his car was a ledger with names of the bank’s clients including drug dealers. There was also a Bible with the name Bill Colby (William Colby) and Bob Wilson, an American congressman and member of the US House of Reps Defence Subcommittee. The question was asked (and continues to be asked): was it suicide or murder?

The Nugan Hand Bank.

Meanwhile Hand assured investors that everything was fine, but by April, 1980, the bank had collapsed. Hand managed to slip through the fingers of authority and fled the country.

In November a rumour emerged that Nugan was still alive.

In February his body was exhumed, the rumours proved false.

A royal commission revealed the extent of the company’s illegal operations but Hand remained unaccounted for and beyond legal repercussions, until he was found recently living in the US under an assumed name but using the same social security number.

Merchants Of Menace by Peter Betts, Blackwattle Press, $29.99

Originally published as Nugan Hand Bank death unravelled a tangled web of financial deceit