Secret tobacco war briefings reveal authorities wasted years cracking down on illicit trade

Secret intelligence briefings repeatedly warned state and federal agencies that the illicit tobacco business was undermining border security as it expanded under the control of dangerous organised crime bosses.

The alerts circulated for years before the tobacco wars exploded and included warnings that some of the large-scale tobacco smuggling into Australia may be tacitly supported by Chinese government officials.

Rohan Pike says authorities ignored repeated warnings about the illicit tobacco trade.Credit: Eamon Gallagher

The revelations come as the former head of Border Force’s tobacco taskforce, Rohan Pike, told this masthead and 60 Minutes that he suspected Beijing had been turning a blind eye to the industrial-scale smuggling into Australia of a cigarette brand the Chinese government ostensibly controls, Double Happiness.

Pike also claimed that after he confronted top Chinese border security officials about the problem a decade ago, he was blocked by the Australian Border Force from travelling to Hong Kong to press the issue.

“I can only assume that it was due to political sensitivities,” he said.

Pike’s claims come with confirmation by this masthead that a 2016 joint probe by federal and state police, codenamed Polaris, gathered credible intelligence that a Chinese naval vessel had smuggled tobacco into Australia.

Double Happiness cigarettes intercepted at the border.Credit: ABF

Double Happiness continues to flood the Australian market as authorities look into unverified intelligence that the country’s second major illicit cigarette brand, Manchester, is part-owned by Australian-linked organised crime figures who control a stake in the brand’s Dubai-based headquarters.

The tobacco wars have, over the past two years, involved an unprecedented firebombing campaign across Victoria, highlighted an illicit trade worth $5 billion a year to organised crime and sparked an intervention from the boss of ASIO, who revealed a week ago that the spy agency was targeting criminals suspected of dual involvement in the torching of tobacco shops and antisemitic arson.

But internal police briefings sighted by this masthead and circulated among Australian law enforcement agencies describe in detail how the criminals now causing chaos on the streets began entrenching their operations across the nation years ago including shifting offshore and recruiting federal government licensed customs brokers to penetrate the border with impunity.

One of the longest-standing illicit tobacco gangs, the Haddara syndicate, is described in police intelligence from 2022 as “among the largest tobacco importers and distributors of illicit tobacco” operating “extensively in Victoria with strong links to NSW and has also expanded to operating overseas”.

Victoria’s tobacco stores have been the targets of a firebombing campaign over the past two years. Credit: Nine News

“The syndicate has been running for several years, as evidenced by the December 2014 seizure of $30 million worth of illicit cigarettes through to the interception of $40 million worth of illicit cigarettes in February 2022,” one widely circulated intelligence briefing states.

The briefing also warns the “Haddara syndicate are [suspected of involvement] … in drug trafficking, firearm offending, extortions, arsons, crimes of violence, significant money laundering, frauds, commercial burglaries, and thefts”.

A separate intelligence file, described to this masthead by confidential sources, details how the ABF’s Project BluePeter had over the past decade mapped significant organised crime entities, including the Haddara crew and a major NSW Middle Eastern illicit tobacco syndicate, in partnership with criminally linked customs brokers and freight forwarders involved in a disproportionally high number of illicit tobacco detections.

Project BluePeter described key illicit tobacco targets as a border threat of national significance that could only be disrupted via a co-ordinated “taskforce” approach deploying specialist investigative and intelligence tools.

Kazem “Kaz” Hamad and Fadi Haddara have been locked in a turf war that has led to dozens of firebombings.Credit: The Age

Confidential sources have also confirmed how, in December 2022, a key player in the tobacco wars, offshore crime boss Ahmed Al-Hamza, was secretly designated by the Australian Criminal Intelligence Commission as an “Australian Priority Organisation Target”.

The designation means he is regarded by state and federal agencies as one of just a dozen criminals deemed to pose a grave risk to Australian security.

In a circular shared among state police forces, Al Hamza is described as a business partner of tobacco kingpin Kazem “Kaz” Hamad, with the pair overseeing “a network of associates in Australia”. Hamad is allegedly involved in “drug importations, drug distribution, murders, public shootings and money-laundering activity”.

“Professional facilitators and trusted insiders are an integral part of these activities,” the briefing note warns.

Victoria Police Detective Superintendent Jason Kelly warned that of the 1300 tobacco shops in Victoria police suspect “the vast majority are selling illicit tobacco”.

He also revealed the trade’s kingpins are using an online gig economy of arsonists to burn down tobacco stores that don’t accede to their demands.

“One of the trends in recent times is this ‘Airtasking’ by organised crime,” Kelly said. “People are picking up those tasks and committing crimes for as little as $500 or $1000.”

Kelly said an escalated police taskforce response had led to dozens of recent arrests.

“Some of the people that we’ve apprehended [are] as young as 14 years of age.”

Across the country, Victorian police are at the forefront of a multi-agency attack on an illicit industry that has been relatively impervious to law enforcement and regulatory attention.

State police sources confirmed the federal police are now leading the global hunt for Al-Hamza and Hamad, with the Victoria Police taskforce also welcoming the recent appointment of a new federal illicit tobacco and e-cigarette commissioner.

But confidential state law enforcement sources raise concerns that senior police and state and federal politicians in NSW, Victoria and Queensland wasted years failing to act on mounting intelligence about the illicit trade.

Privately, police sources in NSW and Queensland say their forces are still failing to respond adequately to the problem, a development that is providing Victorian and offshore kingpins easy markets to sell their illicit wares.

“We have a taskforce but we don’t have the resources to act on the illicit trade. If we took it seriously, we would need to move resources from our drug squad, which would create its own problems,” a Queensland senior detective said.

Efforts by Victoria Police have also been hampered by delays launching an effective state tobacco licensing regime, which remains months away from becoming operational.

“There’s a number of factors that have fuelled the current environment,” Kelly said.

“The absence of a licensing scheme here in Victoria is certainly one of those. The absence of an effective enforcement regime [is another].”

Federal and state police in all jurisdictions blame the high federal government excise on lawful tobacco products as a key contributing factor to the tobacco wars – driving smokers to a black market that operates in plain sight from thousands of tobacco and convenience stores around the country.

Serious and organised crime had “leveraged off” the significant price gap between the illicit and legitimate product, Kelly explained.

A black market packet sells for as little as $9 compared to $40 for a legitimate brand.

Pike, who now advises the retail sector, also criticised the federal Health Department for failing to respond to concern the increase in tobacco excise would be a boon for organised crime.

“The federal Health Department’s ideological zealotry in relation to illicit tobacco has caused the problem and continues to fuel it,” he said.

The Health Department said the increase in excise was “designed to encourage smokers to quit” and the government had taken “decisive action to end the trade of illicit tobacco with $188.5 million to the Australian Border Force”.

“Record levels of illicit tobacco are being targeted and seized at our borders and prosecutions are taking place,” the department said.

While federal agencies have ramped up their focus on the tobacco kingpins, sources said the illicit tobacco trade had previously taken a back seat to drug operations because it was seen as an Australian Border Force problem causing relatively minimal community harm, and the penalties for drug trafficking were far greater than that linked to tobacco offending.

Kelly confirmed the relatively minimal penalties for illicit tobacco activity, while gradually changing, weren’t “where they needed to be”.

“The crooks also knew that,” police sources said, describing how crime syndicates realised that they could profit handsomely from tobacco without the risks that drug trafficking attracts.

Kelly said a major national co-ordinated response by policing agencies was critical in halting the expanding black market and accompanying violence.

“I cannot sit here confidently and say there won’t be [more firebombings],” he said.

“We have had a number of homicides now that we can say are linked to the illicit tobacco trade.”

In a statement, the ABF insisted its crackdown on the illicit trade was leading to the agency “seizing record levels of illicit tobacco” and that it worked effectively “with partners offshore to disrupt and dismantle the criminal syndicates behind the illicit tobacco trade”.

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