How cops, border force busted a Chinese syndicate’s biggest ever Victorian haul of illicit cargo

A Chinese organised crime syndicate thought they were going to make $600m in profit by disguising a precursor used to make meth in tile glue. But then the authorities came calling.

Rick Chan, left, and Hong Chen caught on camera in Box Hill.

Twenty-six-year-old identical twins are unloading pallets of tiles into a bungalow in Victoria’s eastern suburbs in the dead of night on February 25, 2019.

Police are watching. Junlong and Junju Shen are actually hauling what they believe is 1052.7kg of ephedrine, which would have been worth $691m had it been synthesised into crystal meth.

“It was overnight. It was a really hot day. I remember we were watching, and there they are unloading at 3am with torches,” AFP Detective Sergeant Sid ­Steger says in the first comments about the drug bust since the key players ­either fled or were jailed.

On February 19, the twins’ mother, Shumin “Mandy” Zeng, fled Australia for Guangzhou – a port city northwest of Hong Kong – presumably when she caught wind that authorities were privy to her plans and knew she was in on the act.

“She has departed, knowing her … two sons have been given a task to unload over a tonne of ephedrine and store it at their house,” AFP Detective Inspector Rick Briggs says.

Her partner and partner in crime, Hong Chen – a Chinese-Canadian citizen – also boarded a flight to Hong Kong on February 8, never to return to Australia.

But it’s not the twins – who each served a little over two years in jail after they were charged with ­attempting to possess a drug of ­dependence (and who have now been released) – who have suffered the most severe consequences of this epic police bust. Or their mother, or her boyfriend.

It’s two Victorian real estate agents. Rick Chan, 59, and Kwun Chen, 57, were in September jailed for a combined 35 years over the foiled crime – the biggest ever ­importation of ephedrine into ­Victoria – orchestrated by a Chinese organised crime syndicate. They were charged with jointly committing to import a border controlled precursor.

The tip-off

Detective Inspector Briggs, the man heading up the AFP and Border Force operation dubbed Kungur-Ash, says authorities received intelligence in October 2018 that an Asian crime group was seeking to import commercial amounts of ephedrine into Australia.

“We identified Hong Chen. We started monitoring (his) activities in Australia and then from that we discovered it was a bit of a family affair,” he says.

“Hong had his partner, Shumin Zeng … and through that Hong ­recruited his brother Kwun.

“(Then) we identified the twins. Investigation wise, we identified Rick Chan as a key player.”

Chan formerly worked for Kwun – also an immigration agent – in the real estate business, Detective Inspector Briggs says.

Police move in to make an arrest. Picture: Australian Federal Police

“While Hong recruited his brother Kwun, it certainly became apparent he had a bit more faith in (Chan) to be the man on the ground,” he said.

Hong, now 63 years old, has regularly visited Australia since at least 2006, while Shumin, 58, visited at least five times since 2017. The twins most recently arrived in the country in 2018, according to court documents.

It wasn’t until a meeting took place between Hong and Chan at a shopping centre in Box Hill, Melbourne, on ­December 3, 2018, that authorities connected Chan with the operation, Detective Sergeant Steger says.

“And the twins, for a while we didn’t know who they were. We just had these two guys that kept meeting with Hong and Kwun and they’re always wearing the same clothes,” he says.

Two legitimate companies, Tiles Galore Pty Ltd and AU Tile Company Pty Ltd, were registered so the ephedrine could be cleared through customs and any profits could be laundered through the businesses. As well, the two real ­estate agents duped established Melbourne businesses to store and sell the tiles they planned to import in a “deal that was too good to be true”, Detective Inspector Briggs says.

According to court documents, “the prosecution says they did so for the purpose of establishing a means for smuggling a large ­quantity of illegal cargo into the country”.

But the syndicate’s plans began to fall apart as the owners of legitimate tile businesses noticed their lack of business acumen and poor-quality tiles that arrived amid four separate dummy deliveries ­between December 2, 2018, and January 10, 2019.

The big switch

By February 2019 police knew the syndicate wanted to import the ephedrine through shipments of tiles, but they still had to identify the exact company they would piggy back off, Detective Sergeant Steger says.

Chinese New Year resulted in shipping delays, but shortly after the “freight gates opened” the manifest of every container ship that arrived at the Port of Melbourne with tiles or ceramics on board had to be reviewed by an ­officer.

Ultimately they narrowed it down to container APZU3573197 addressed to PPM Enterprises. On February 16 the ephedrine landed at the Port of Melbourne, disguised in tile glue.

The syndicate grew concerned when officers from Australian Border Force quarantined the container for two days. The officers discovered 257 bags of white crystals that tested positive for ephedrine. They then replaced the ephedrine with a harmless substance.

ABF Acting Assistant Commissioner James Watson said the drugs were taken to a container examination facility, where officers worked through a “pretty physical process” to identify, unpack and replace the illicit cargo.

The facility has an X-ray ­machine with the capability to examine 40-foot containers. Highly skilled – or, as Assistant Commissioner Watson puts it, “smart people” – review the ­images for anomalies.

The ephedrine seized at the Port of Melbourne. Picture: Australian Federal Police,

“In this case, what they saw on their X-ray screen didn’t match with the description of the goods,” he says.

“Using some pretty sophisticated technology – it’s a kind of laser-based technology that allows you to look at the compound at a molecular level – we detected the importation of ephedrine.”

It was the largest detection he had seen in Victoria, Commander Watson says.

“I have been kicking around Victoria now, in and out, for quite a number of years … and in terms of harm to the community this is just another significant (multi-hundred) kilo kind of process that we see,” he says.

Assistant Commissioner Watson’s team worked with the AFP to swap out the ephedrine, but they were under pressure to do so quickly and safely as the delay was spooking Chan and Hong.

“The clock certainly ticks,” he says.

The hold up prompted Hong to call Kwun to warn him.

“This morning … detained. That friend got detained,” Hong said, according to court documents.

“There is going to be some trouble now. See how it goes … will let you know.”

Professional players

Kwun attempted to board a flight to Guangzhou from Melbourne on February 26, 2019, but was arrested at the airport.

Chan was led away in handcuffs after being arrested on the same day at Box Hill Shopping Centre.

After they were detained, Kwun denied he was involved in the scheme and Chan gave a no-comment interview.

Detective Inspector Briggs says the syndicate, which until then was not known to authorities, had appeared professional.

“They were very diligent in the way that the whole syndicate ­attempted to effectively silo themselves,” he says.

Detective Sergeant Steger says: “Contrary to a normal business … where you know what most others are doing, you have your specific role. Syndicates do this on ­purpose.

“If one falters, there is no (link) to the others.”

While the key players on the Australian side of the operation have been jailed, as long as Hong and Shumin remain on the run the investigation is open. There are warrants out for their arrest.