Anatomy of a bust: the demise of a drug ring

TWO weeks ago former Versace salesman Michael Chard sat in the witness box in the Sydney District Court. He was explaining how his former client and drug boss Alen Moradian had spent what police say was more than $1 million on the company's furniture and homewares. In cash.

A lawyer asked if Mr Chard suspected Moradian, 37, was in the drug trade.

Arrested ... Ninos Georges leaves Waverley Court in 2007.Credit: Jon Reid

''At Versace we had many clients who paid cash,'' Mr Chard explained. ''We were trained not to ask and not to question clients.''

He said when he first met Moradian in 2005, ''he was very passionate about the brand and what it represents. He loved the Versace furniture and the excess. It was his vision and it was my job to carry his vision through''. Mr Chard later told Moradian he had been born in the wrong era and should have lived in 16th-century Italy.

Executed ... Gemahl Maika was shot dead outside his home in April.

The vision involved the transformation of the Moradian McMansion in West Pennant Hills into a palazzo. Soon trucks were arriving with richly decorated Versace furniture and antiques from Martyn Cook's shop in Queen Street, Woollahra. Mr Chard also handled the landscaping outside the house and arranged for an artist to turn the lounge room into a version of the Sistine Chapel, with a $40,000 ceiling mural showing sky and angels.

Moradian's fiancee and later wife, Natasha Youkhana, wasn't so keen on the vision at first, finding it a little heavy. In fact she found her man's whole attitude a bit over the top and once asked him in an email: ''Why do you just sit there and show off -

'I am the man, I am the man'? Do you see Tony Soprano doing that? … He doesn't care who people think is the boss, [money] is his number one priority. You, on the other hand, want the attention, you want the big head, you love it. People like that won't survive.''

But Moradian remained a strong member of what Mr Chard described as ''a beautiful relationship''. Mr Chard told the court: ''He's got a strength about him, he's got a very authoritative nature, [although] … he's got a very soft side, too.'' Moradian pushed his vision right through the two-storey house, replacing the shower screens Youkhana had installed with Versace screens and even redecorating the kitchen in his preferred black-and-gold colour scheme. Over time she came to appreciate the Versace vision, which Mr Chard said was typical of his clients: ''When they live with it, they come to love it.''

Cash haul ... police examine one of the syndicate's hoards of money found in numerous raids.

But the budget became a worry - even cocaine bosses don't have bottomless pockets, apparently, and all those little extras - such as the $9000 Versace bedspreads and $50,000 dining room chairs - were adding up. ''The budget was blowing out,'' Mr Chard admitted. ''We were decorating each room fully. Natasha was concerned about the cost and expressed this. All clients towards the end, when the budget blows out, a conversation takes place.''

But in July 2007, before the reno could be completed and before Mr Chard could get Moradian to commit to an $850,000 Versace-decorated Lamborghini (''You might like a Versace car to go in your Versace house''), the police pounced. Moradian is now serving a jail sentence of 16 years and nine months. Youkhana will be sentenced soon for her role in dealing with the proceeds of crime to the value of more than $4 million.

The gun found at Matthew Peisley's home.

Eleven other members of the syndicate have also been convicted, making this one of the most successful busts of a drug group by the NSW Police Force and placing many details of their crimes on the record. These include multiple importations of large quantities of cocaine, widespread supply and dealing, and the possession of more than $18 million in cash, many assets and dozens of firearms.

Early this year the police asked The Sun-Herald not to publicise these facts until Moradian's partner Luke Sparos was convicted, which happened recently. We can now provide the most detailed picture of a Sydney cocaine group made public.

THE MOTIVE

Profit, lots of it. The syndicate was paying $30,000 a kilogram for cocaine in Chicago and selling it for $190,000 in Sydney. Police suspect about 700 kilograms were imported, although the quantity for which people were convicted is much less.

THE IMPORTERS

The cocaine was sourced from Chicago, which is a long way from Mexico (and Colombia) but is where the importers had contacts. The one-kilogram blocks had a high level of purity and were stamped with a rearing horses symbol, based on the Ferrari logo, used by one of the drug cartels. They were flown to Sydney via Los Angeles, addressed to business clients of a freight-forwarding company at Botany. A senior employee of the company provided the client names to the syndicate. When the parcels of cocaine arrived, hidden in shipments of saw blades and other items, he would process them through customs and arrange for their delivery, not to the legitimate clients but to the syndicate. For this he was paid about $3 million. We must call him Mr T, because he rolled over and is now in the witness protection program.

The original importers were Marius Rusu, 35, and Zolten Mato, 37. They imported six shipments of between 20 kilograms and 102 kilograms each, starting in February 2005. After 18 months they'd made so much money they stopped to concentrate on their limousine-hire business.

Moradian and Sparos, 30, (known in some circles as ''Fathead'' and ''Fatboy''), were not ready to retire but they had one problem. They did not know the identity of Mr T and it seems Rusu and Mato did not want to tell them. So, in October 2006 Moradian and Sparos hired a private investigator to find out the identity and location of Mr T. They then called on him and gave him $500,000 in a sports bag, persuading him to start working again. They undertook one big importation of between 40 kilograms and 60 kilograms of pure cocaine. Then the police moved in.

THE DEALER

John Youkhana, 35, of Newington, was one of a number of dealers who worked at the retail level for the syndicate. Police believe he made more than 70 sales a day, turning on his phones at 10am and working late into the night. He used coded language to arrange meetings with clients at places such as Krispy Kreme, McDonald's, KFC and Aldi. Transcripts of 734 phone conversations were tendered to the court showing Youkhana going about his business in a professional manner, telling one customer ''it's a bit hot in Miller at the moment'' - there were police there - and assuring another he didn't sell garbage because ''you can't run a business like that''. In fact, quality control became an issue, with Sparos asking why sales were slow and Youkhana explaining that the latest product was ''not as buzzy'' as the last lot.

Youkhana used other criminals to make his deliveries but faced human resource problems, telling one confidant: ''Everyone I put on is a f---wit and I can't trust 'em, and they make people wait one, two, three hours.''

THE GUNS

Like all dealers, John Youkhana was alert to the danger of being ripped off and kept a loaded Glock pistol in his bedside table and an automatic rifle and shotgun beneath the bed. Another syndicate member and dealer, Jason Johnson of Bonnyrigg, had an ArmaLite rifle in his bedroom and a Colt pistol in the garage where he conducted some of his business.

Moradian received a 5 per cent reduction on his sentence for surrendering a large number of firearms, including a machinegun, sub-machineguns and a grenade launcher to police. According to the judgment, these were delivered to his solicitor's office by unknown ''Middle Eastern fellows''. Moradian's lawyer described this in court as ''the most significant handing-over of weapons since the prime minister [John Howard] gave his gun amnesty''.

THE MONEY

Operation Schoale saw the biggest seizures of proceeds of crime in the state's history. Matthew Peisley, 40, was one of the syndicate's ''warehousers'' of money. When police raided his home near Wollongong in February 2007 they found $10,209,060 in heat-sealed plastic bags hidden in the roof. Peisley had the weapons needed to protect such a sum, including the gold-plated .44 Magnum Desert Eagle pistol that was to give the syndicate its name. According to documents tendered in court, Peisley lived a quiet life, his main recreation being greyhound racing.

When police raided the Bilgola house of Natasha Youkhana's sister Tanya, 33, in June 2007, they found $2,730,390 buried in the garden. The previous year Tanya had put $347,207 through bank accounts in her own name and her sister's, each deposit being just under the reportable amount of $10,000.

Clearly the syndicate was making so much money its leaders didn't know what to do with it all. Luke Sparos gave his wife Christine Saliba $861,740, which she variously deposited in the bank, stashed at home and spent on consumables, travel and their wedding. Another $200,250 was stored in shoe boxes in the flat of neighbour Ninos Georges, 32, who had his rent paid in return. When Sparos was arrested in February 2007 he was in a car with old school friend Ahmed Arja, who was helping him bring $821,700 from Brisbane to Sydney. (This seems to have been Arja's only involvement with the syndicate.)

THE TOYS

Rusu and Mato gave Mr T a lot of cash but they also gave him a gift - a Toyota Tarago purchased for $56,000 cash from Terry Hogan Prestige Cars. The men were good customers of the car company, spending $2.3 million there, mostly in cash. Each bought a Hummer for about $350,000 for Five Star Hollywood Limousines, which they owned with Mato's wife Christina, who was Rusu's sister. In Moradian's garage police found a Mercedes ML63 and two collector's GT Ford Falcons.

Police say Moradian spent more than $1 million on jewellery for himself and Natasha and bought his colleagues expensive presents such as Rolex watches.

THE POLICE

In December 2006 Operation Schoale was set up jointly by the NSW Crime Commission and the NSW Police Force. Most of the arrests and raids occurred in March the following year. Mr T rolled and gradually all the members of the syndicate, apart from Mato and Rusu, pleaded guilty. In their case the trial judge noted: ''There is no evidence of their contrition.''

When Moradian was still on bail, police figured he had far more money than they'd seized. They set up a neat sting operation in which some pretended to be corrupt and claimed they could get Moradian out of the country in return for a large amount of money. Moradian called his wife, who produced the bribe money and was arrested with $760,000 in garbage bags in her car.

VIOLENCE

According to a police source, Johnson was sent to America to burn down the house of someone who was causing trouble. He was kidnapped and held hostage in a basement until the syndicate paid $1 million for his release.

In December 2009 at the committal of Marius Rusu and Zolten Mato, the Crown requested that five prosecution witnesses be allowed to give evidence by video link in the forthcoming trials, as their lives were in danger. Mr T had received a letter saying:

''Don't be a f---wit, we kill our own.'' The magistrate refused the application. Mr T now resides at an unknown location and his life remains at risk.

When Moradian and Sparos first called on Mr T in 2006, his wife was worried and called a family friend, Gemahl Maika, to come over in case her husband needed protecting. Mr Maika later gave evidence about this incident. In April he was shot dead at his home in Glen Alpine. No one has been charged in connection with his execution.

THE SENTENCES

Marius Rusu 29 years and ninemonths.
Zolten Mato 30 years and threemonths.
Alen Moradian 16 years and ninemonths.
Luke Sparos 15 years.
John Youkhana nine years.
Matthew Peisley seven years.
Jason Johnson five years.
Tanya Youkhana, Christine Saliba, Ninos Georges and Ahmed Arja good behaviour bonds.
Natasha Youkhana and Louie Pucariello await sentencing.