‘Asia’s El Chapo’ Tse Chi Lop and the fall of The Company man

The AFP’s strike against the alleged boss of a mega-syndicate controlling 70 per cent of Australia’s meth supply has been a long time coming.

Tse Chi Lop has been dubbed Asia's El Chapo.

FBI special agent Mark Calnan had followed a heroin case all the way from a Bronx street corner to Asia. Now he was face-to-face with the ultimate supplier and kingpin, Tse Chi Lop.

The determination of Calnan and co-investigators to follow the trail to the top had led to the discovery Tse was one of the main New York heroin suppliers, funnelling it into the city with the help of the Sicilian mafia in Canada.

Tse was in China and seemingly out of reach, but when Canadian investigators found out he’d called together a secret meeting of associates in Hong Kong, where he could be extradited, Calnan, from the FBI’s Asian squad in New York, jumped on a plane.

Tse was arrested at a Hong Kong restaurant on a US warrant, and for the first time Calnan sat down opposite the man whose name was on everyone’s lips.

“Because we‘d heard about him for so long he was almost like a mythical kind of figure, you know what I mean? Like, he wasn’t real,” Calnan tells Inquirer this week.

In the flesh, Tse was a consummate professional.

“When I interviewed him in Hong Kong, he was so polite, so respectful,” Calnan says. “He understood the situation. Sometimes guys, when you arrest them, they get all mad, trying to act like a tough guy. He didn’t do any of that.

“To me, he’s a businessman, and the commodity that he traded just happened to be drugs. He could have just as easily been selling another commodity.”

It was 1998 and Tse later would be linked in a very big way to another commodity. But back then he did not contest his extradition. Returning to the US to face justice, he pleaded guilty to heroin conspiracy and was sentenced to nine years in prison.

Calnan moved on, not giving Tse another thought until last month, when a former FBI colleague sent a text message: at the request of Australian authorities, Tse, 57, had just been arrested at Amsterdam’s Schiphol Airport getting off a flight from Taiwan, accused of being one of the world’s biggest drug traffickers.

‘Asia’s El Chapo’

Since completing his sentence for heroin trafficking, Tse is suspected to have united five Asian triads in a drug-trafficking mega-syndicate called The Company.

While the syndicate is accused of dealing in cocaine sourced from Latin American cartels, as well as heroin and ketamine, its primary business is alleged to be methamphetamines. Often, the meth is distributed in distinctive Chinese tea packets in a suspected marketing ploy. Meth, specifically the potent crystal form known as ice, has come to dominate Australia’s illicit drug market, filling the country’s courts and hospital wards in the process.

Remarkably, most of it is believed by law enforcement agencies to come from Tse’s syndicate.

The UN Office on Drugs and Crime has estimated The Company is responsible for up to 70 per cent of the region’s meth supply, raking in up to $US17bn ($22.4bn) a year from the drug.

To put it into perspective, that’s almost the gross domestic product of Laos, with its population of seven million. It’s no wonder, then, that the UNODC has been warning so much money is being made in the illicit drug trade that governments or parts of them are at risk of being captured, if they haven’t been already.

Law enforcement agents, speaking to The Weekend Australian before and after Tse’s arrest last month, said the syndicate refined and revolutionised production and distribution of meth, cooking up vast quantities in giant laboratories in and around lawless areas of Myanmar’s Shan State with the assistance of skilled Taiwanese chemists, and dispersing it throughout the region on fishing boats, in trucks and on foot.

Cheap caffeine-laced meth pills known as yaba were pumped by the syndicate into Asia, while Australia could not get enough of the superior-quality ice. Simultaneously, The Company slashed sale prices. It was a recipe for a drug disaster on an epic scale.

A suitcase containing some of the $4 million in cash seized as part of an executed search warrant. Picture: Supplied

Tse is known as Sam Gor, or Brother Number Three in Cantonese. He has been dubbed “Asia’s El Chapo”, a reference to billionaire Mexican drug lord and former Sinaloa Cartel leader Joaquin Guzman, who now is serving a life sentence in a US prison. Similarly, Tse is being mentioned in the same breath as Pablo Escobar, founder of Colombia’s Medellin Cartel.

The chief target of a long-running investigation led by the Australian Federal Police, Tse faces extradition from The Netherlands to Australia, a country he appears never before to have set foot in, while investigations into the syndicate continue.

Natural diplomacy

Born in Guangdong province in southern China, Tse became a member of the Big Circle Gang, a crime group formed by former Red Army guards. In the 1980s he moved to Canada, where he became a citizen and cemented connections with powerful Italian mafia families. His co-accused in the heroin conspiracy included mobster Sabatino Nicolucci from Montreal, the case’s US District Court indictment shows.

Calnan was an FBI agent for 25 years and now works in financial and professional services. His investigations into Tse provide unique insights into the qualities that made him a successful trafficker.

“It was a heroin case that we literally started with arresting the people on the street corner in the Bronx in New York,” Calnan says.

“They co-operated with us about (their suppliers) … And then those people co-operated.

“We realised to really make an impact you really wanted to try to have the arrests to be organisational in scope. If I were to be honest, though, I never thought when we started arresting these people, started going up the chain, that we would go all the way to Tse Chi Lop.”

While Tse’s name was emerging at Calnan’s Asia squad, the trafficker was also coming to the attention of the FBI’s Sicilian squad, where agent Rick Demberger worked.

The two agents started working the case together, and it was Demberger who alerted Calnan to Tse’s recent arrest.

Italian organised crime families were already trafficking cocaine into the US. Tse simply arranged for them to add heroin to their distribution network, Calnan says.

“I think what he was best at was he could deal with different groups to do different things for him.

“He was a Big Circle Boy, but it didn’t matter. He would do business with anybody that was good.”

Tse’s natural diplomacy was no doubt just as effective behind bars, Calnan says.

“That’s always the downside when people go to jail. They network with other people in similar groups, and then they come out bigger and better than they were when they went in.

“When I saw (after his recent arrest) what he had become, that didn’t surprise me at all because he was different. He was definitely a step above the average drug guy.”

Publicly outed

After fading into obscurity following his release for the heroin conspiracy, Tse was publicly outed as Asia’s most wanted man in October 2019 in a scoop by news agency Reuters. The report revealed around 20 agencies from Asia, North America and Europe were working to bust his alleged syndicate in an investigation codenamed Operation Kungur. Tse was the No 1 target on a list of 19 of The Company’s suspected leaders.

Among the jaw-dropping claims from AFP investigators was that Tse was protected by a posse of Thai kickboxers and once lost €60m in one night of gambling in Macau.

Investigators from other agencies viewed Tse’s outing as a bold, deliberate and calculated strike by the AFP. Tse’s days of freedom were numbered.

John Coyne, from the Australian Strategic Policy Institute, praises AFP investigators but says the jury’s out on whether “decapitation” strategies work.

Such approaches have psychological value for the public and hold criminals accountable but can have unintended consequences such as fuelling greater violence, he says.

“And if we look at El Chapo himself, his cartel, it hasn’t fallen apart. In fact, it’s still the No 1 drug dealing organisation in Mexico.”

The UNODC’s regional representative for Southeast Asia and the Pacific, Jeremy Douglas, publicly has been sounding the alarm about the growth of methamphetamine production and supply.

He says Tse’s arrest is “a huge result for the international coalition that went after him, and particularly for the AFP who led the effort”.

But while relationships will undoubtedly be disrupted, with impacts on trafficking in Australia and elsewhere in the near term, “it is unlikely to slow production or the supply circulating in the region”, Douglas says.

“Tse has been or will be replaced by an associate, or another criminal organisation will try to emulate or better what the Sam Gor network has done,” he says.

“Fundamentally, the governments of Southeast Asia need to understand the market and drugs circulating better, prevent continuing growth in use and offer treatment, and make it more difficult to access chemicals, operate in ungoverned parts of the Golden Triangle, porous border regions and economic zones, and launder all the money generated.”

None of it is easy, but all of it is necessary if the region is to slow or reduce the drug trade and power of criminal groups, he says.