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Can of Worms II EVAN WHITT0N Punters 'The backbone of any mob is gambling.' - Vincent (Big Vinnie) Teresa, 1977 Note: Unless otherwise stated all dates in this chapter are 1985. Justice F. X. Connor, chairman of a Victorian Board of Inquiry into casinos gave his view of our friendly SP bookie at the National Crimes Commission conference in July 1983: '...illegal bookmaking is a multimillion dollar industry run by people who can get up to forty or fifty telephones, and who, if their telephones are closed down, can get them in new premises a week later. 'The profits, it is a fair inference, are used to finance other organised crime or, even more insidious, to enable organised crime figures to go into legitimate business. Illegal bookmakers prosper, making millions of illegal dollars, simply because they do not pay income tax or betting tax.' In his 1983 report, Justice Connor estimated that the annual turnover for SP bookmaking was $1800 million in NSW and $1000 million in Victoria. There are no estimates for the net profit to the SP operators. In 1981 the then head of the Federal Bureau of Criminal Intelligence, Fred (The Cat) Silvester, said he had once informed a former NSW Police Commissioner, Norman Allan, about extensive SP links between Sydney and Melbourne, and provided details. Nothing was done; Silvester got the impression that NSW police warned the SP operators. The 1974 Moffitt report recommended that NSW police set up a Crime Intelligence Unit to target for surveillance selected milieu personalities. George David Freeman was one such targeted. In March 1977, the CIU produced a report on Freeman's record and activities. These included connections with US organised crime figures and twenty illegal betting outlets. Acting on the report, Assistant Commissioner (Crime) Reg Stackpool, had arranged for the 21 Division to examine the illegal betting information. The squad claimed to have come to the conclusion that Freeman was a commission agent and nothing more, an assertion that Freeman has frequently made. In October 1981, the new-broom Police Minister, Peter Anderson, disbanded the 21 Division and appointed Superintendent Merv Beck head of a new Special Gaming Squad. Beck cut a swathe through the SP network and illegal casinos. Beck retired in January 1982 but periodic blitzes have continued. In a weekend in January, 1983, Special Gaming Squad detectives arrested twenty-seven SP betting operators and charged another thirty people with gambling offences. The same month, police moved on Freeman. He denied he was involved in SP bookmaking in a big way, and claimed again that he was a legitimate commission agent. He said that, when he was arrested, he had only just started in SP to fill a localised need. He pleaded guilty and was fined $500. Casinos: In the eleven years, from 1965 to 1976, of the Liberal-Country Party Government, thirteen major illegal casinos operated openly in Sydney. By definition, all persons in an illegal casino were consorting with known criminals. Had the consorting laws not fallen into disuse, it is obvious that the politicians, public personalities, business and professional men, journalists, judges and criminals who frequented these places could have been booked for consorting, and this in itself would have caused the collapse of illegal casinos. The Task Force report of October 1982 gives 1975 as the year the Double Bay Bridge Club casino started, but the author Dr Alfred McCoy quotes Dr Geoffrey Lewis, a lecturer in economics at Sydney University, as making a study of roulette odds there in 1974. He calculated the annual profit at the club at $2.3 million, or $383 333 a year for each of the six partners, assuming they had equal shares. The Forbes Club presumably produced a similar profit. Employees to the Double Bay club told Lewis that the club paid bribes of $5000 a week to 'senior police and politicians.' This was supported in September 1981, when The National Times' David Hickie quoted an 'impeccable' source from the Galea empire as saying that Commissioner of Police Fred Hanson and NSW Premier Askin each got $100 000 a year from the club. Early in June 1976, Premier Wran said his Government intended to legalise casinos to end the long-standing scandal. Stanley John Smith, Balmain identity and associate of Freeman and Leonard McPherson, conceived a plan designed to ensure that current owners would continue to run casinos when they became legal. Smith's suggestion was for casino operators to put up large sums of money to bribe politicians to appoint the 'sweet' people to any board that would grant licences and administer casinos. But, he reasoned, there would be a lot of 'wealth' seeking licences; there could be no penny-pinching on the part of mean casino owners. To outline his plan, Smith arranged a meeting at the Taiping Restaurant, Elizabeth Street, Sydney, on 22 June 1976. His speech, recorded on tape, gives the impression that he had dined well before rising: he seems a little fatigued and emotional. Some extracts: 'Well, there is the greatest lobby that you blokes should be working on now, because I think that f-ing Wran now, eventually, with the amount of money that's going, the amount of wealth that is interested in getting in this thing, will f-ing turn on you. Look, he's a politician; you know, as well as I do, they're the shiftiest bunch of f-ing people that ever, ever lived. 'The reason I say this because now, going from my own personal point of view, of just what type of people you are, Lee and Andrews and so on, and any, all of you who might be listening to this, I've never found you the most generous people I've ever f-ing heard of, you know, so perhaps you might be looking at long pennies... 'Look, we're dealing with politicians and that's hard cash... let's get down to it: to go under a board, well, you've gotta have some control of who the board is and put the men that are sweet, not might be sweet... 'Look, if you talk, listen to the little friend of mine as I'm saying, you'll know what we are talking about and what you are facing here now. Listen, man, we done the same six years ago, the exact same thing you are facing now. We run it because we put the right men, the right business administrators in to f-ing handle it, with our brainpower behind and so on, but collectively, not as individuals. 'Whether I'm smart, or the little bloke with you now is smarter than me, well, that's nothing to do with it...' It is understood that Freeman is the person referred to as 'the little bloke', and a section of the CIU's March 1977 Freeman report mentions the so-called Taiping Conspiracy. On 18 November 1977, some nineteen months after he came to power, Mr Wran directed Commissioner Wood to shut down the casinos 'within the next few weeks' and to ensure 'that they thereafter remain closed'. The closure was achieved, temporarily, but not before some 'comic cuts and a laugh', as Mr Wood called the Taiping tape. Mr Wood said he had three discussions with Mr Wran. 'Last week we decided that 16 December would be the last time casinos would be allowed to operate,' he said. 'The casino proprietors were then told that 16 December was the time to shut down. Later I was told that more than 300 people were employed in casinos in Sydney and other parts of the State. I was rather shocked when it was pointed out to me that these people would be jobless a couple of weeks before Christmas. I had another conference with Mr Wran and he was also equally surprised that so many people were employed at casinos. The Premier agreed that at least these people should have a happy Christmas.' Mr Wran said Mr Wood's remarks were 'laughable.' Mr Dick Healey, Liberal MLA, asked: 'If he (Wood) finds a marijuana crop on a farmer's property, he will allow him to harvest and sell it before 31 December so that he will have a happy Christmas?' Mr Healey claimed that the casino operators had 'been given notice to store the equipment safely until the Premier moves to license gambling casinos.' The casinos continued operating until 31 December 1977. After that the major ones closed for a time. They were again closed in 1979 in a blitz by Superintendent Beck, but they remained shut for only about nine months. By September, 1981, there were some twenty-six illegal casinos operating in the metropolitan area. As noted above, Beck was put in charge of the Special Gaming Squad in October 1981. In the previous month, the 21 Division had made a total of five arrests for illegal gambling. In November, Beck's Special Gaming Squad made 158 arrests; the number in December was 403. In the three months before Beck's retirement on 13 February 1982, his squad made 1026 arrests. TFR3 listed casino owners, without specifying the particular periods at which they were owners, as follows: Forbes Club, Forbes Street, Kings Cross: Percival Galea (deceased); Bruce Galea; Eric O'Farrell; Ronald Lee, Reginald Andrews (alias Reginald Norman Hall), Steven Reves. Double Bay Bridge Club, New South Head Road (later the Telford Club, Spring Street, Bondi Junction): As per Forbes Club. In addition, George Pierce (Duke) Countis 'owned' one card table at the club. Goulburn Club, Goulburn Street: George Ziziros Walker. Rozelle, Victoria Road: George (Judda) Wise (owner in partnership with others). Strathfield, Albert Street: Graham George (Billy Crocodile) Palmer. The 33 Club, Oxford Street, Darlinghurst: Michael (Jnr) and Patricia Moylan. 88 Kembla Street, Wollongong: Daniel Dunn, Barry Raymond McCann. The Palace, Orwell Street, Kings Cross (after Wollongong): Daniel Dunn and Barry McCann (managers). The Task Force Report gives some history: 'The three casinos known as the Forbes Club, Double Bay Bridge Club, and Telford Club, which operated in Sydney from the 1960s were controlled by the same group of individuals, namely Eric O'Farrell, born 19 July 1910; Percival Galea, born 26 October 1910; Reginald Andrews, alias Reginald Norman Hall, born 1 November 1915; and Ronald Lee, born 13 March 193 1. O'Farrell and Perc Galea commenced their joint gambling enterprises in the mid-1950s when they opened and operated the Victoria Club, in Victoria Street, Kings Cross, at which baccarat was played. 'Meantime, Lee and Andrews operated the Kellett Club in Kellett Street, Kings Cross, but following the fatal shooting in June 1967 of Richard Gabriel Reilly, one of the partners of the club, it closed. Lee and Andrews then joined O'Farrell and Galea and opened the Fountain Club in Kings Cross, together with George Walker (later of the Goulburn Club), and Eli Rose, born 13 August 1908 (deceased). 'Around the same time (1967), O'Farrell and Galea purchased a property at 155 Forbes Street, Kings Cross, and opened the Forbes Club. They were joined in this venture by Andrews and Lee. Much later another partner joined the group - Steven Reves, born 17 March 1919. 'The Double Bay Bridge Club, which operated on two floors at 255 New South Head Road, Double Bay, opened in 1975 with the same five holding a financial interest in its operation. 'About Christmas 1976 the same group opened yet another casino, the Telford Club, which operated from the first floor of Telford Towers, Spring Street, Bondi junction. Around that same time their operations at Double Bay stopped. 'Following the death of Perc Galea in 1978, his son Bruce, gained partnership status, though he had been involved in the operation of the casinos on behalf of his father for some years prior. The Forbes and Telford casinos operated until 1979 when they closed. Since that time they have operated sporadically.' On 29 May 1987, the Police Minister named in Parliament what he called 'hard-core' illegal casinos in Sydney. He gave the following list of the illegal casino premises, their operators and owners: 77 Darlinghurst Road , Kings Cross. Operated by Bruce Galea, South Coogee, and Frank Amante, Condell Park. Premises owned by Eabona Pty Ltd, Gordon Grey, Watsons Bay; Kimesia Abberton, Tamarama; and Frederick Richards, Surry Hills. 17 Bayswater Road, Kings Cross. Operated by Albert Deen of the Barclay Hotel, Kings Cross. Premises owned by Lehebo Pty Ltd; directors: Warwick Rooklyn, Vaucluse; John Garde, Springhill; and Timothy Schofield, Terrey Hills. 26 Bayswater Road, Kings Cross. Police believed this was not then operating so the owner was not named. 92 John Street, Cabramatta. Apparently not then operating. 455 New South Head Road. Former operators Tony Torok and Michael Samir had been evicted by the owners. 28 Kellett Street, Kings Cross. Operated by John Cudek, Bondi. Premises owned by Bometo Pty Ltd c/- J. Salvetti, Edgecliff. 132B Oxford Street, Darlinghurst. Operated by Joseph Haddad, West Guildford. The owner of the premises appeared to police to be genuinely unaware premises were being used for illegal gaming and said he would take up matter with lessee. 70 Ramsay Road, Haberfield. Owned and operated by Thomas Magnifico, Abbotsford. 294 Marrickville Road , Marrickville. Operated by Hoai Niem Luu, Cabramatta. Premises owned by Deemgrove Pty Ltd - directors Peter Deligiannis, Campsie; and George Gotsis, Belmore. 55 Goulburn Street, Sydney. Operated by Frank Hing. Premises owned by Hynest Pty Ltd; directors: Frank and Shirley Hing, Arncliffe. 71 Dixon Street, Sydney. Operated by John Chi. Owned by A. W. Seeto, Castle Cove. 20 Bayswater Road, Kings Cross. Operated by Kim Ng, Drummoyne. Owned by Herselt Holdings; directors: Leslie and Gloria Jones, Kellyville. 680 Darling Street, Rozelle. Owned and operated by Bruce Hardin, Strathfield. 31 Norton Street, Leichhardt, operated by Mark Madigan, Castlecrag, premises owned by Madigan and Kenneth Carstens, Bellevue Hill. 217 Thomas Street, Haymarket. Operated by John Mang of Redfern. Premises owned by Yucare Pty Ltd. Police had been unable to establish the directors. It was also reported that day that a complaint had been made to the Ombudsman by the Goulburn Club - named in Parliament as Sydney's biggest illegal casino - over damage caused during police raids. Paciullo said the complaints followed two police raids on the club, one in April and in the previous week. The raids resulted in more than 100 people being arrested and over $100,000 in cash and gaming equipment being seized from the club, in Goulburn Street. He said: 'As a result of the raids by the police, the Goulburn Club made complaints about damages caused by the police and about an over-use of powers.' Footnote: In 1974, the Moffitt Royal Commission found that there was a real and very material risk of organised crime infiltrating operations of licensed clubs in New South Wales through a poker machine company, Bally Australia Pty Ltd. The then head of Bally Australia, Mr Jack Rooklyn, said the report by Justice Moffitt was based on 'rumour and innuendo', and that 'any fair-minded Australian' would agree there were no grounds for the conclusion that Justice Moffitt had reached. In the event, no action was taken against Bally Australia as a result of the Moffitt report, and some years later Bally was advertising in the NSW Police Journal. As a mark of his displeasure at the Commission's finding, Rooklyn, who later severed his connection with Bally, named his new yacht, Ballyhoo. 'As sure as night meets day, gambling in casinos will be legalised in New South Wales.'- Neville Wran, 2 September 1976. Eight years after Wran's accurate prediction, there were more gambling clubs in Sydney than in Askin's heyday, according to a report in The Sydney Morning Herald on 8 January 1985. A spokesman for Police Minister Anderson said a Cabinet committee was examining the operation of the clubs. About the same time, two milieu figures began manoeuvring to sew up casinos against the day they were legalised, according to a later report. Both were said to have been involved in gambling and protection rackets for years, and at least one had been involved in the milieu's contingency planning in 1976. Their activities indicated that they believed the Government was likely to close a large number of clubs by tightening loopholes in the Act; to allow selected ethnic coffee bars to continue, and to allow selected upmarket casinos to continue operating. The two began leaning on operating clubs. Most accepted their terms; others did not. A series of fire-bombings of clubs, shootings and assaults followed in the early part of 1985. Anderson received a report in August from John Lloyd-Jones, QC, 58, chairman of the Government's special committee on gambling. The report recommended a legal system of both casino and ethnic card clubs. Remarkably, the Lloyd-Jones report stated: 'Gaming establishments require expertise to succeed; therefore a blanket ban on the licensing of any person now associated with illegal or "loophole" gaming would present problems in finding suitable personnel. Each individual case should be a matter for the licensing tribunal'. In short, criminals should be in the running to obtain a licence to run a legal casino. However, Wran later announced that the Government would legislate to allow only one legal casino, as part of his Darling Harbour re-development scheme. In the week preceding the legislation, a Tweed Heads magistrate upheld a. prosecution, based on existing legislation, against a casino operator. This decision raised questions about assertions that police had been unable to prosecute 'loophole' casinos. Race-fixing: The race track is a great meeting point for criminals of all kinds, but the authorities seem to have great difficulty in coming to grips with race crime. In 1981, the Australian Bureau of Criminal Intelligence (ABCI) reported there was 'a massive conspiracy among the horse-racing fraternity, who are said to be involved in the fixing of horse races for huge financial gain'. Following this report, NSW BCI initiated in late 1981 a ten-month inquiry. They interviewed 100 people and reported in four volumes in 1982, but the Police Prosecuting Branch is understood to have concluded that there was insufficient evidence for charges to be laid. In 1984, a Victorian BCI report identified jockeys, trainers, bookmakers, organised crime figures said to be involved in large-scale race-fixing in all States. It recommended that the NCA undertake a major inquiry. The NCA was considering this, it was reported on 2 February 1985. Fine Cotton: Bold Personality was rung in for Fine Cotton at Eagle Farm, Brisbane, on 18 August 1984. In Sydney on 30 November 1984, the AJC committee 'warned off' all race tracks under the AJC's control eight persons in connection with the Fine Cotton ring-in. It was understood that the warning-off effectively banned them from attending any race meeting in the world. Judge Alf Goran, sitting as the Racing. Appeals Tribunal, on 12 December 1984 began hearing appeals by warned-off Sydney bookmakers Bill and Robbie Waterhouse, bookmaker's clerk Robert Hines, Canberra bookmaker Peter McCoy, professional punter Gary Clarke, and John Gough. Goran said he had noted eleven things on a video of the race, including the fact that some other jockeys appeared to be 'standing in the stirrups'. He said: 'This is something more than a ring-in, as it deals with the issue of insurance of the success of Fine Cotton.' Except for Gough's appeal, which he upheld, Goran dismissed the appeals on 24 January 1985. On 1 February, he refused to alter the AJC's ruling that the Waterhouses and three others be warned off for an indefinite period. Goran said the conduct of the appellants amounted to participation, in their own way, in a 'fraud of great magnitude. The actual links between what I might call the “Waterhouse organisation" and the ring-in itself have not been established. That there is some indirect link is beyond question'. He went on: 'While I have found that the present appellants were not the main perpetrators of the (Fine Cotton) substitution, nevertheless their participation in the fruits of the fraud, with the knowledge of the fraud... carries a deep taint of fraudulent conduct with it. Each appellant remains marked as a cheat.' The NSW Harness Racing Authority later allowed Bill Waterhouse to enter trotting venues. Queried on this in October, Sport Minister Michael Cleary said he had no power to overrule the Trotting Authority's decision. Opposition Leader Greiner, claiming the Government had ultimate control of racing in New South Wales, said this was 'one of the most lily-livered weak-kneed answers' he could recall. Police charges of conspiracy to defraud were instituted in August against Robbie Waterhouse, McCoy, Clarke and his wife Glynis, merchant banker Ian Murray and the Rev Fr Edward Brian O'Dwyer. In Brisbane, five were charged with conspiring between 1 May 1984 and 19 August 1984 to defraud in connection with the ring-in: Gold Coast con man John Patrick Gillespie, 44; Hayden Haitana, horse trainer, of Elizabeth Fields, South Australia; Tomasso Di Luzio, 36, electronic technician, of Sunnybank, Brisbane; Robert Roy North, 33, company director, of Wellers Hill, Brisbane; and John David Fraser Dixon, 39, salesman, of Moorooka, Brisbane. Detective Senior Sergeant Kenneth Scanlan, head of the Brisbane Consorting Squad, produced a tape and transcripts of an interview with Haitana, in which Haitana said Gillespie had approached him about the ring-in. Gillespie had told him that police and Queensland Turf Club stewards, specifically the then QTC chief steward, Andy Tindall, were 'on side'. Haitana said he estimated that Gillespie had $30 000 to pay off police. Gillespie disappeared on 31 May. At the trial in October, the court was told that the race was watched by Gillespie in the company of former Deputy Police Commissioner Les Duffy, Detective Sergeant Graham (Mick) McMullen and Detective Mike Sparkes. McMullen told the court that Gillespie and Sparkes had bets on Fine Cotton. Asked how they came to be watching the race together, McMullen said: 'Well, just one of those accidents of fate, I think.' The Crown withdrew its charge against Dixon, and De Luzio was found not guilty. Haitana and North were found guilty. On 13 November, Judge Lowenthal sentenced them to twelve months. It was later reported that the Queensland Government would lodge an appeal over the sentences. Gillespie, the alleged mastermind, was arrested at Cobram, in Victoria, on 26 November. He pleaded guilty and appeared for sentence on 10 February 1986. His counsel, Phil Hardcastle, said that SP bookmaker Michael Sayers, shot dead in February 1985, had instigated the ring-in because he had lost $3 million by taking bets on races that were fixed. He said that Robbie Waterhouse was not aware of the ring-in. Judge Lowenthal, describing Gillespie as the main conspirator in the Fine Cotton ring-in from beginning to end, gave him four years. SP: The Age reported on 19 August that in a twenty-two-month period from 21 January 1980 to 26 October 1981, Kerry Packer paid SP bookmaker John James Rogan $4.04 million. In the slightly longer period to 13 November 1981, Rogan paid Packer $1.19 million. This suggests that Rogan won $2.85 million from Packer over the period. In one week of December 1980, Rogan received $685 000 from Packer, and paid him nothing. On 29 January 1986, Magistrate Kevin Maugham found George Freeman guilty of using his Yowie Bay house on 8 April for illegal SP betting, and fined him the maximum of $5000. Freeman said he would appeal. Two nights later, Freeman stood in as guest horse-racing tipster on Kerry Packer's Channel 9. Lotto: Total revenues from the Lotto franchise, awarded by the NSW Government to media magnates Kerry Packer and Rupert Murdoch and racehorse owner Robert Sangster in 1979, were just over $1 billion: $600.4 million to prize money, $336.2 million to the Government, and $64 million to the Packer-Murdoch-Sangster consortium, it was reported on 3 November 1984. Top of Page The materials on this site are the copyright of Networked Knowledge. Copyright Notice The Networked Knowledge web site is hosted and maintained by Howstat Computing Services as a community service. Enquiries to webmaster@howstat.com