The catastrophic consequences of ignoring an underworld tip-off

A failure by senior police to recognise the importance of an underworld tip-off from deep inside an armed-robbery gang resulted in a domino effect that culminated in the ambush murder of two police, the death of three suspects and the killing of a security guard.

Confidential police documents show a pattern of obstruction and inaction began a chain of events leading to the murders of constables Steven Tynan and Damian Eyre, gunned down in an ambush at Walsh Street, South Yarra, in October 1988.

Constables Steven Tynan and Damian Eyre were gunned down in Walsh Street, South Yarra, in 1988.Credit: The Age

For more than a year senior police initially ignored, then obstructed, gold-standard information – and when they finally agreed to an investigation, chronically under-resourced the probe and refused to authorise the use of the Special Operations Group (SOG), with fatal consequences.

It began when an inmate (“Mr Jones”) contacted a respected country copper wanting a deal. He was facing five armed-robbery charges, and while he admitted he was guilty of two, claimed he had been stitched up on the remaining three, with witnesses shown his picture before an identification parade.

“I asked why he was telling this to me and was told he knew I was an honest cop,” Sergeant Russell Anderson said in a scathing report that has been hidden for 36 years.

Jones was a career criminal associated with Victoria’s most prolific armed-robbery gang. He would later provide information on an unsolved murder carried out by a notorious hitman. The information proved accurate, and the hitman was jailed.

Jones first contacted Anderson at the Benalla police station on October 1, 1987. Tynan and Eyre were murdered on October 12, 1988.

Anderson, who would go on to become a trusted member of the internal affairs branch, went to a superior officer who told him to contact the armed robbery squad with the information. “I was told not to see [Mr Jones].”

Not satisfied, he jumped the chain of command and a senior officer gave him permission to visit the inmate in Beechworth prison on June 27, 1988.

“I found [him] to be a person with a wealth of information regarding a number of serious crimes [that] included murder, conspiracy to murder, armed robberies and a plan to use explosives against the Richmond Police Station,” said Anderson.

Jones provided information on six armed robberies that had been carried out by a team of gunmen known as the Flemington Crew, responsible for a series of raids on banks. He provided information that could only be known by an insider, including where they swapped cars, cut holes in cyclone fences, jobs where shots were fired at police, and where guards were injured.

Graeme Jensen, in black, Victor Peirce, in suit jacket, and Jed Houghton, right.Credit: The Age

Jones said the gang was run by a team of four.

Police would later find Jones was accurate, and the crew was led by Victor Peirce, Graeme Jensen, Peter McEvoy and Jedd Houghton. The second-tier soldiers included Victor’s half-brother Trevor Pettingill, Anthony Farrell and car thief Gary Abdallah.

But there was another gang pulling jobs – led by NSW prison escapee Russell Cox – that included Mark Moran, later gunned down in Melbourne’s underworld war, and the little-known Santo Mercuri.

While Anderson was convinced Jones could help crack multiple crimes and destroy a prodigious armed-robbery gang, he was being thwarted from above. He discussed the case with a colleague. “We believed a taskforce should be set up to investigate the matter further.”

Three days later after his first visit, Anderson returned to prison with a senior officer, and despite inside details provided by the informer from handwritten notes, the senior officer “was not impressed by [Jones] and he believed a lot of what [he] had to say could be jail talk”.

At that meeting, Jones identified future targets, including the State Bank in Preston and a raid on the Armaguard van at the Coles store at Barkly Square, Brunswick.

Three weeks later, three armed robbers pulled the Barkly Square job that began the chain of events resulting in Walsh Street.

On July 11, nine months after Jones first offered to inform on the gang, a member of the armed-robbery squad went to Beechworth Prison to interview him. It was too late. It was the day of Barkly Square.

A source inside Armaguard had already – for 10 per cent of the takings – provided information on six robberies worth $500,000.

This time the details were exaggerated. It was supposed to be worth $200,000 and easy pickings. Instead, the July 11 job netted only $33,000 and went horribly wrong when security guard Dominik Hefti refused to give up the cash tin.

During the struggle Hefti, 31, was fatally shot in the chest and leg but managed to return fire, shooting one of the robbers through the hand.

The injured gunman ran to the car park where he dragged a woman from her Nissan Pulsar and drove off leaving a trail of blood. The other two escaped in their own getaway car.

The armed robbery squad concluded (wrongly) that Jensen was the gang member who killed Hefti, and on October 11 they attempted to arrest him at Narre Warren.

Three cars with eight detectives attempted a box intercept at the local shopping strip, but it failed, and when Jensen attempted to drive away he was shot dead.

Police had already killed two associates of the Flemington Crew – Mark Militano in January 1987, and Frank Valastro five months later.

The crew had discussed a “two for one” revenge plot, where they would kill two members of the armed-robbery squad.

The front page after the Walsh St killings.Credit: The Age

But after Jensen’s death, they decided on a random attack on police. They stole a Holden Commodore and planted it in the middle of a quiet South Yarra road – Walsh Street – knowing residents would call the police.

When the night shift Prahran van heard the call, Steven Tynan and Damian Eyre volunteered to attend the scene, where they were ambushed and shot dead. It was 13 hours after Jensen was shot by police.

It would be years later that police – using groundbreaking DNA technology – would establish that Hefti’s killer was Mercuri, a sausage-maker turned gunman. It was Cox’s group, not the Flemington Crew.

Police received credible information that a professional hitman planned to kill Anderson. The SOG began preparing to raid the hitman’s Euroa property and Victor Peirce in Richmond. The date was set for August 25.

On August 23, Anderson was told the raids would not go ahead because a senior officer “would not authorise the SOG for the Euroa property or Peirce’s address in Richmond”.

Peirce was the driving force behind Walsh Street. If he is in custody, it doesn’t happen.

With more insight, perhaps they would have used the SOG for the Jensen arrest, which almost certainly would have avoided the fatal shooting.

Nearly five years after the Hefti murder, when police went to arrest the dangerous Mercuri, the same senior officers stubbornly refused to authorise the use of the SOG, until assistant commissioner Frank Green intervened saying, “That’s what they are there for”. Mercuri was arrested without incident.

Two months after Walsh Street, Anderson wrote a report about the failure to efficiently use Jones, saying he believed it could have thwarted Walsh Street, as the main offenders would have already been in custody.

“I have felt very sad at this great loss and wonder if this tragedy may have been prevented by more effective and expedient handling of this inquiry.

“I felt that from the onset of this inquiry there was a lack of direction. A taskforce would have been efficient and had the support of all officers, who would have allowed the SOG to be used when required. All the offenders would have been arrested (before Walsh Street).”

Two Walsh Street suspects, Jedd Houghton and Gary Abdallah, were shot dead by police in separate incidents.

Victor Peirce, Peter McEvoy, Trevor Pettingill and Anthony Farrell were charged and acquitted of the Walsh Street murders.

Wendy Peirce, Victor’s wife, later told me they were the offenders.

Victor George Peirce in 1991.

“It [Walsh Street] was spur of the moment, we were on the run. Victor was the organiser. He just said, ‘They deserved their whack. It could have been me’.

At the scene itself, “It was more Jedd and Macca (McEvoy) than the others. Jedd was the trigger man, he had the shotgun.” McEvoy has always maintained his innocence.

One Walsh Street weapon was a Japanese KTG shotgun, the same gun used by Houghton in a Flemington Crew armed robbery. The weapon was recovered buried and wrapped in plastic near the Melbourne Zoo.

The then-joint head of the Walsh Street taskforce, John Noonan, said the revelations in the Anderson report was “further evidence of incompetence and just more proof that there needs to be an inquest”.

He said days after the arrest of the four, senior police tried to close the taskforce and boot them out of their office.

“I said, ‘What about preparing the brief of evidence? The work has just begun.’ We just changed the locks and refused to go.”

The families of Tynan and Eyre have previously requested the coroner hold an inquest into Walsh Street.

Noonan has backed the push. “There are many facts that were not revealed at the trial that would be admissible at an inquest. The truth needs to be finally told. Steven and Damian and their families deserve nothing less.”