Drug syndicate lieutenant jailed for role in $20m cannabis racket

The court heard the syndicate operated by ordering large amounts of cannabis from suppliers in Adelaide, headed by an individual known as ‘the Russian’, codenamed ‘MilkMan’.

Cannabis seized by NT Police as part of the bust that snared drug syndicate lieutenant Shannon Wagner. Photograph: Che Chorley

A CHIEF lieutenant in the drug syndicate allegedly overseen by Darwin businessman Peter Wellman James has been jailed for 12 years for his role in the highly sophisticated racket.

Shannon Frank Wagner, 43, pleaded guilty in the Supreme Court to conspiring to supply a commercial quantity of cannabis as well as supplying the drug directly himself.

The court heard Wagner and James were childhood friends who were reunited when James offered Wagner a job counting money from his legitimate ATM business in 2018.

Eventually James offered Wagner rental accommodation at a house he owned in Rosebery where he would count the money before the court heard his “initially legitimate employment became entwined with Mr James’ criminal activities”.

In sentencing, Justice Peter Barr said the criminal enterprise operated by ordering large amounts of cannabis from his suppliers in Adelaide, headed by an individual known as “the Russian” who was codenamed “MilkMan”.

Justice Barr said the role of collecting money owed by customers in Darwin was delegated to Wagner, whose syndicate codename was “Burn”, some of which would then be remitted back to MilkMan.

He said members of the gang used encrypted CIPHR phones, face-to-face meetings and “safe houses” in an attempt to avoid the scrutiny of law enforcement.

“This measure compartmentalised the syndicate and minimised risk to the syndicate overall in the event that a member or some aspect of the syndicate’s operations were compromised,” he said.

“Your role included keeping digital ledgers on a CIPHR phone provided to you by Mr James. By way of example, the ledger maintained by you contained an entry under the heading ‘Outgoing Paper Work’ as follows: ‘06/11/2019 paid Russians $700,000’.”

But Justice Barr said Wagner’s role in the racket “was much more significant than that of the bookkeeper/manager”, as demonstrated by a conversation captured by covert listening devices.

“That conversation illustrated two important aspects of your role,” he said.

“First, that you had direct contact with the Russian, which is confirmed by a significant number of text exchanges between you and MilkMan on your CIPHR phone,” he said.

“Second, that Mr James relied on you to resolve the problem within the syndicate.”

In setting a non-parole period of six years and four months, Justice Barr said Wagner had helped police obtain “extremely detailed and valuable evidence” by giving up the passwords to his CIPHR phones.

“As the police acknowledge, the extent of the information provided by you is such as to expose you to a serious risk of personal harm for a considerable period of time,” he said.

“As far as I can assess, the risk includes being the victim of violent acts of retribution for the fact that you have co-operated with police.”