32c a pill, $30 a pop: Crims cash in on our hunger for drugs

Andy Kraag – Head of National Criminal Investigations, The Netherlands.
Andy Kraag – Head of National Criminal Investigations, The Netherlands.

Deadly party pills killing young Australians cost international drug traffickers just 32c each to make and are then sold in their thousands for as much as $30 a pop, a special investigation by The Ripple Effect has revealed.

Australia is a worldwide leader in MDMA consumption, pouring hundreds of millions of dollars into the pockets of international drug lords, who have turned The Netherlands into the global capital of party drug manufacturing and smuggling.

On Friday Australian Federal Police announced they had seized a staggering 700kg of MDMA in the Dutch city of Rotterdam which was bound for our streets.

It comes as the 2019 Global Drug Survey, which polled more than 123,000 drug users in 35 countries, found Australian users admitted taking MDMA almost once a month - the highest globally along with four other countries Portugal, Argentina, Turkey and Romania.

Australians pay $198.97 per gram for MDMA powder, the second-highest street price in the world after New Zealand at $305.48 per gram.

Head of the Dutch National Criminal Investigation Division Andy Kraag.
Head of the Dutch National Criminal Investigation Division Andy Kraag.

It is a primary reason why the weight of MDMA seized at the Australian border soared by 60 per cent in the most recent Australian Criminal Intelligence Commission reporting period.

The 10,000 per cent mark-up not only comes at a financial cost but also a potentially deadly one as unscrupulous smugglers, dealers and pushers are known to dilute purity to make the batch go further to make even more money.

Experts say, by and large, dealers in Australia "cut" their MDMA with substances such as caffeine, glucose, paracetamol and bath salts, although horror stories of rat poison being added are also well established around the world.

Head of the Dutch National Criminal Investigation Division Andy Kraag told The Ripple Effect his country was home to a $30 billion (€19 billion) synthetic drugs industry.

He said a sliver of profit went to drug cooks and manufacturers with the rest pocketed by criminal syndicates selling their payload into countries such as Australia.

"€1 billion (is made from) production and around €18 billion for the traffickers and distribution," Assistant Commissioner Kraag said.

And drug runners know the rewards for getting ecstasy into the hands of Australians, versus selling it in an also thriving domestic market such as Amsterdam.

Bags of crystalline MDMA that were part of a 700kg drug seizure in Rotterdam, Netherlands last week, allegedly bound for Australia. Picture: AFP
Bags of crystalline MDMA that were part of a 700kg drug seizure in Rotterdam, Netherlands last week, allegedly bound for Australia. Picture: AFP

"If you compare that to the street price in Holland, it is €2 to €4.

"If you look at it from the commercial side, there's not another commercial industry that has such big revenues on products."

Tonnes of MDMA are smuggled into Australia every year as a brown powder, tablets or in capsules.

"The weight of MDMA detected this reporting period increased 59.6 per cent, from 890.2kg in 2016-17 to 1420.8kg in 2017-18," a report by the Australian Criminal Intelligence Commission revealed.

Overall, the weight of drug seizures in Australia increased from 21 tonnes in 2015-16 to a record 27.4 tonnes in 2016/17, Crime Statistics Australian reported.

This is just a small part of the 496kg of MDMA seized by the Australian Federal Police and Australian Border Force operation in Sydney. Picture: AFP
This is just a small part of the 496kg of MDMA seized by the Australian Federal Police and Australian Border Force operation in Sydney. Picture: AFP

Former NSW Police drug squad boss Nick Bingham said the crooked bargaining war then began between criminal groups such as bikies, Asian and Middle Eastern gangs with established distribution networks.

On occasion it is police making the major cash buy as part of a co-ordinated sting.

"If we were doing a major pill purchase in an undercover operation, say 10,000 pills, we wouldn't want to pay more than $10 dollars a pill," Mr Bingham revealed.

Former NSW Police Superintendent Nick Bingham says the drug economy in Australia is a crooked bargaining war. Picture: Darren Leigh Roberts
Former NSW Police Superintendent Nick Bingham says the drug economy in Australia is a crooked bargaining war. Picture: Darren Leigh Roberts

"If it's more than 10,000 pills you might negotiate a price of $7. If it's 100,000 pills you get them for $5 dollars a pill."

At the bottom of the supply chain is the street dealer - often drug users themselves - absorbing the risk of this monumental illicit supply chain.

"The higher you are in the syndicate the more distance you put between you and the actual drug, so you have people working for you," Mr Bingham said.

This haul of MDMA was seized at the border in April
This haul of MDMA was seized at the border in April

"At the lowest end they might be selling two pills five times, 10 times a day.

"At a music festival they might do 30 or 40 transactions, so the chance of them getting caught is higher for them but obviously the penalty isn't as severe."

Police do catch upstream drug smugglers and dealers from time to time in just about every corner of Australia, and other cases involving huge amounts of drugs are making their way through the courts.

DO THE CRIME

Stuart McKinnon from Bulldog Gym has been sentenced to 11 years for supplying drugs.
Stuart McKinnon from Bulldog Gym has been sentenced to 11 years for supplying drugs.

Sydney-based former world champion kickboxer Stuart McKinnon was jailed this year until at least 2026 after the gym owner used his encrypted BlackBerry device and a codename "Gohard101" to negotiate the sale of 10,000 pills to a woman he knew as Crystal.

Crystal collected 10,000 pills from McKinnon's co-accused Bisesh Giri in Darlinghurst in broad daylight, then later handed $50,000 cash directly to McKinnon for the drugs.

It might have felt like a smooth transaction to McKinnon but Crystal was a police informant.

When he arranged a second 10,000 pill sale to Crystal, detectives swooped on delivery man Giri. A month later McKinnon was arrested at home where police found $230,000 cash under the bottom draw of his built-in wardrobe.
Giri was also sentenced this year to nine years jail with a non-parole period of six years.

An extraordinary 766kg of MDMA was seized in Queensland in August, the third biggest in Australian history and the Sunshine State’s largest in history.
An extraordinary 766kg of MDMA was seized in Queensland in August, the third biggest in Australian history and the Sunshine State’s largest in history.

In one of the biggest drug bust hauls ever in Australia, Queensland police seized 766kg of MDMA in August with a street value of $90 million as part of a large-scale operation targeting an international organised crime syndicate. It was Queensland's largest bust and third-largest in Australian history.

"The MDMA powder is the highest purity recorded by Queensland Health analysts," Detective Superintendent Jon Wacker said at the time.

Flying high: An ecstasy tablet stamped with the Qantas
Flying high: An ecstasy tablet stamped with the Qantas "Flying Kangaroo" logo was seized in Victoria along with $15,000 in cash.

In Victoria, an elaborate drug trafficking enterprise that was processing smuggled MDMA into ecstasy pills stamped with the Qantas logo was smashed by federal police. Investigators seized 200 ecstasy tablets, $15,000 and drug-making equipment, and more than 300 grams of pure MDMA was discovered inside DVD cases in a safe at a Melbourne factory.

Two men were been arrested after more than 5kg of ecstasy – with an estimated street value of more than $2 million was found in a package sent through the post. Picture: SAPOL
Two men were been arrested after more than 5kg of ecstasy – with an estimated street value of more than $2 million was found in a package sent through the post. Picture: SAPOL

Two Adelaide men were also arrested in August after a huge bag of ecstasy - worth more than $2 million - was discovered by Australian Border Force officers in a parcel sent through the post. The 5.28kg package of methylenedioxymethamphetamine, often referred to as MDMA or ecstasy, was seized at the Australian border.

Police allegedly discovered some of the drugs in a child’s pencil case.
Police allegedly discovered some of the drugs in a child’s pencil case.

On the Gold Coast, drugs were allegedly found in a child's pencil case during a raid on a southeast Queensland home in October. Police allege they found 225 MDMA tablets, 160 grams of MDMA powder, 91 grams of cocaine, 38 grams of methylamphetamine, 25 grams of ketamine, 12 vials of testosterone, 6 litres of GHB, 100ml of cannabis oil and three tasers.

Between 2015 and 2017, the volume of illicit drug seizures decreased from a record 115,421 busts to 113,533.

Nine people have been arrested in the Netherlands and a NSW woman was extradited to Brisbane charged with one count of attempt to possess a commercial quantity of border-controlled drugs. Picture: AFP
Nine people have been arrested in the Netherlands and a NSW woman was extradited to Brisbane charged with one count of attempt to possess a commercial quantity of border-controlled drugs. Picture: AFP
Before it even arrives here, drug cooks in The Netherlands are making MDMA and ecstasy by the ton. Here Dutch authorities examine barrels of precursor chemicals illegally dumped in a Brabant forest.
Before it even arrives here, drug cooks in The Netherlands are making MDMA and ecstasy by the ton. Here Dutch authorities examine barrels of precursor chemicals illegally dumped in a Brabant forest.
The pills supplied by McKinnon.
The pills supplied by McKinnon.

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