Underbelly 4 Read online

  ‘Higgs just kept introducing me to more people and that is why the net kept getting bigger. He kept telling me that when it was over he would give me a million.’

  He said that in many ways he became fond of the number one target. ‘He could be quite charming.’ But he knew underneath it all that Higgs’ rough charm disguised naked greed.

  ‘He was buying these chemicals from me at unrealistically low prices and making a fortune. He feigned friendship to make money. He treated me as a mug from day one.’

  At first Stephens loved the role of the undercover agent. Julie says her husband was always easily bored and looking for a new thrill.

  The original plan was to try and catch Higgs at one of his twenty-two clandestine amphetamine lab sites, but ‘The King’ was either too smart or, more likely, too well-connected to place himself at the scene.

  In 1993 he delayed a planned ‘cook’ because he was aware police were about to launch an orchestrated blitz against five motorcycle gangs suspected of being involved in trafficking the drug.

  Without knowing it, Stephens rose from an informal intelligence gatherer to a pivotal evidence source. He had always been promised that his name would be kept out of it but it would prove to be a promise police could not keep.

  A court decision in another drug case meant police had to hand over certain internal documents, including day books. This meant that Stephens’ name would eventually reach Higgs.

  Secondly, prosecutors said that the man who wanted to stay in the background would have to get in the witness box to corroborate the masses of tapes and documents gathered over the previous three years.

  This meant that Stephens and his family were now in serious danger. Higgs may have been charming but he had been involved in killing a man years earlier and could afford to pay whatever the market dictated for heavy hired help.

  Stephens says he was taken to the Office of Public Prosecutions in Lonsdale Street in March, 1996. The meeting left him angry, disillusioned and with the clear message that his welfare now ran a distant second behind nailing Higgs.

  He said a lawyer at the meeting had implied that if he was not prepared to give evidence he would be left exposed to the criminals he had pursued. The meeting with the team who were supposed to be on his side lasted less than five minutes.

  Several police involved in the case advised him to walk away from the mess but others raised the possibility of witness protection.

  Although retired, Ian Tolson was called back for advice. They believed there was no reason that he had to jump the (witness) box. They talked him into it.’

  Then there was a meeting in early autumn, 1996, that was to remain a sticking point for years. According to Stephens, a solicitor from the prosecutions office met him in a Melbourne hotel and brought up the case of Peter James Cross – the son of a former judge who gave evidence about co-offenders in a cocaine smuggling syndicate. ‘He said Cross was given $500,000 after he gave evidence and that was the minimum I would get if I agreed to testify.’

  Former drug squad senior detective Sharon Stone was present at the meeting. ‘I heard the offer being made,’ she said later. There was all sorts of talk of approaching the government or getting it from drug funds but the offer was definitely made.’

  She says the figure of $500,000 was discussed by senior police. At no point did she hear anyone express concerns over the amount.

  Witness protection in Australia is nothing like the movies. It isn’t designed for honest members of society who stumble upon crime. With few exceptions it is used for minor co-offenders who turn on their former associates to avoid jail.

  It gives them a chance at a new life.

  But Stephens didn’t want a new life. He just wanted his old one back. And there was one other problem. He had been a police agent for three years but he hadn’t told his wife or children.

  He had been living a lie – in more ways than one.

  ‘JULIE Stephens’ is an eloquent, passionate woman in her late forties who didn’t approve of her husband’s new rough friends and was determined to keep her independent lifestyle.

  Having been successful in several areas of business, she returned to study in her early forties and embraced university life with gusto.

  She had met Stephens when she was eighteen, living in Adelaide, and had watched him develop a business pattern of financial boom and bust.

  She was still deeply in love with her husband, but she started to explore her own intellect and broaden her horizons.

  ‘He is actually a brilliant businessman, a fantastic negotiator and has a gift for putting deals together. He would set up a business until it ran well, become bored and then take to all-night card games. He would neglect the business, go back to selling cars and then move back into management.

  She wanted financial stability, so she bought her own house, a cottage in outer Melbourne where she planted roses to watch them grow. ‘I would tell him, “I can imagine myself as a ninety-year-old here”.’

  She threw herself into university life and a new social circle while her husband began to associate with increasingly questionable characters.

  When she queried his new friends – ‘We had terrible rows’ – he would snap that she had some objectionable friends that he had to tolerate. He said it was business and he was selling them cars. There was some truth in that. When Higgs had a car that had a flat tyre he would buy another one.’

  She said she wasn’t going to try and pick her husband’s friends. ‘Just because you are married to a guy doesn’t mean you have the right to try and change him into what you want him to be.’

  Some of the men who would arrive at her little home would frighten her. Of one, she said: ‘He was an animal, I don’t think he had any boundaries. He was capable of anything.’ But she found Higgs always to be polite. ‘Even now I can’t say I dislike him.’

  One day in early 1996 she was driving with her husband when he started to talk about moving to England to start a new business career.

  Julie was horrified. She had lived overseas for years and really wanted to settle in Melbourne. ‘I was having a great time and was more settled than at any other time in my life.’

  But she began to think that she was being selfish if her husband wanted a new start, perhaps she should consider it. ‘He was working six days a week until ten at night. I started to think about where we were going. I didn’t say anything to him and I hoped it would all go away. It didn’t, of course.’

  He had planted the seed. A few weeks later he mentioned that he had been doing some ‘work’ for the police. ‘I thought he must have been selling them cars.’

  He drip fed his wife information over a few weeks, culminating with the admission he had been working on Higgs and the family might have to move. Typically, the salesman sold the move as an opportunity, saying that police would help set them up with enough money to establish a business.

  They met Sharon Stone in a Greensborough hotel. Julie was furious with her husband for having risked the family, and she was hostile to the police who had dragged her into a complex and dangerous investigation without her knowledge.

  ‘We wrote a list of what we wanted. Everything we said we wanted they wrote down. Nothing would be too much trouble. I said I wouldn’t go anywhere without our dog and they said there would be no problems.’

  Julie was to find that despite her strong character, her world standard tertiary qualifications, her links with the state’s intelligentsia and her financial independence, she had been reduced to a chattel. Her future would be decided by police she had not met because of actions her husband had taken without her knowledge or approval.

  She was now a dependent, subordinate to the wishes of her husband and virtually being deported from her own country.

  ‘How could this happen? Do these people just get so caught up in what they are doing, chasing criminals, that they just don’t care? We have been manipulated and I feel betrayed.’

  More than three ye
ars after being unwillingly scooped up into the witness protection scheme she sits in a bad bistro in an outer Melbourne twenty-four hour poker machine barn and picks at a tired chicken salad. Worldly and bright, she still has no understanding of how police investigations work. She finds it hard to grasp that police can be as ruthless as the criminals they chase and that sometimes innocent people get hurt.

  She cannot understand how her life plan has been ripped from her without her permission or knowledge and that, to the authorities, she is merely an attachment to a man with a code name.

  It was late in 1999 when she slipped back to Australia to see some old friends for a few weeks before Christmas.

  Few of them know her story. They are envious that she is able to move overseas. They think I am the luckiest person alive.’ Some see her as churlish not to appear excited. They are hurt she does not offer them the opportunity to visit their new location.

  A friend breaks down and confides that her husband is having an affair. Julie remains unmoved. She can’t help but think that if only her husband had betrayed her with another woman rather than jumping in bed with the detectives investigating Higgs, her life would be much easier.

  Julie says they have made new friends overseas. Ross is charming and affable. She can be cold and remote. She knows that at times she says things to punish her husband for what he has done. They must think I am some sort of spoiled bitch but I can’t tell them the truth of why we are there.

  ‘I need to learn to manage my anger. I feel as though I can no longer trust him. Every time he walks out the door I don’t know what he will bring back.

  ‘We have had some really black times. It has been intolerable. Even now I don’t know how this all could have happened.’

  AT FIRST, Stephens was given top priority. He would meet witness protection police in top-quality hotel rooms and at one stage he was guarded around the clock. A senior policeman told Stephen’s lawyer, Paul Duggan, ‘As long as I am in control here we will not abandon him.’

  Much later, the policeman would not recall the comment, says Duggan bleakly. Stephens says he was promised resident status in the UK and a green card to the US. Now he says that few promises were kept.

  The family, including their two sons, who still don’t know why they had to leave Australia, were to move through seven countries and were never allowed to settle.

  Julie temporarily returned to Australia with Stephens to seek counselling for their problems. ‘I still cannot come to terms with what has happened.’

  Even though promises were made to Stephens in 1996, four years later he was still waiting. He arrived back at the start of March 2000 – police had said they would settle by the end of February.

  It was to take another five weeks to finally settle their claim with the police department. Meeting after meeting was cancelled. The lawyers squabbled over clauses. The promised amount of money didn’t eventuate.

  At least one senior policeman thought Stephens was making outrageous demands. He believed the drug squad had become too close to their informer.

  Police had spent almost $400,000 on him already and now he wanted more. Some police seemed to have forgotten that they had gone to him and asked for his help.

  Meanwhile, Stephens was left in Melbourne – the very place he was most at risk. The day he was supposed to finally settle, the police cancelled three meetings.

  Senior police had more pressing problems that day. He was yesterday’s hero, yesterday’s man and yesterday’s problem.

  Finally, on 4 April, 2000, he was asked to drive into the city to sign the documents. He did not have enough petrol to get home.

  AS they sit in the autumn sun near the Yarra River, watching families rowing in hired boats and a dog splashing in the water, Stephens tells stories of being caught in the middle of Operation Phalanx.

  He has the voice of a smoker, the accent of a man who has lived in many countries with a just a touch on English Midlands to it. Stocky with grey curly hair, he can become angry over his circumstances but, moments later, can laugh at himself. He is always mulling over his circumstances, looking for a way out.

  What if I go public? Ring the Premier? Front at police headquarters to see the Chief Commissioner or walk into a suburban station and try and take hostages? Would Sixty Minutes buy my story?

  But while he sits in the sun he momentarily loses his sense of bitterness at how he believes the authorities have betrayed him. He is back in a world where he is the star and a major police investigation rests on him.

  As he tells his stories he chain smokes, hunches forward and unconsciously plays with his mobile phone. He laughs and shakes his head as he recalls the crazy risks he took and how often he was nearly exposed. He appears not to notice his wife sitting next to him as she stares intently, hanging on every word.

  She goes to interrupt, to ask a question. He doesn’t look at her and continues talking – he wants to finish the story. Her face changes as she narrows her eyes with a mixture of fascination and amazement.

  It is clear that, even now, he has not told her all of what he has done. He believes she would not understand because he does not understand it all himself.

  She snorts with outrage and ask questions that betray her naivete. ‘Why would police let you do that? You could have been killed.’ He doesn’t look at her. ‘It just happened. It was nobody’s fault.’

  She remains angry and sometimes wants to punish him for the way her life has been hijacked. ‘We have met people who see him as really considerate and charming and they see me as a spoiled bitch when I treat him badly. They don’t know why I am furious and I can’t tell them.’

  STEPHENS was secretly flown back to Australia to give evidence at the committal hearings. The fears that he would be killed were so great that the government changed the law to allow him to give evidence via a closed circuit link up from another court.

  Police were considering using an armoured car to bring him to court after they received information that two motorcycle pillion passengers, armed with shotguns, were to kill Stephens as he was to be driven to court.

  In 1997, when he was back in Australia to give evidence, police believe two detectives were followed to Southbank, where a private investigator photographed them meeting the star witness.

  He was cross-examined for a month by seven barristers in 1997 before he flew out of Australia again. Associates of Higgs were still making inquiries in South Australia and the Middle East, trying to find where E2/92 had been relocated.

  But, by 1999, Higgs knew he was likely to be convicted and agreed to plead guilty to conspiracy to traffic methyl amphetamines between 1 January, 1993 and 30 June, 1996. He was sentenced to six years with a minimum of four.

  Stephens now wonders why police and prosecutors devoted so much time and money to catch Higgs, only to accept the guilty plea on a reduced charge.

  ‘He was supposed to be the king-pin. The prosecutors said to me “with your evidence we are going to put him away for thirty years”. In the end they copped a plea because it was all too hard. It was all too much.’

  ‘He ended up getting four years. We got life.’

  As an outsider Stephens was able to watch how the criminal justice system ran, and he didn’t like what he saw.

  He uses the case of former footballer Jimmy Krakouer as an example. The former North Melbourne footballer became an associate of Higgs and was burned badly by him – twice.

  Stephens provided the information that put Krakouer in jail and he now regrets it. ‘He was a very nice, simple man. He had given all his money from football to Higgsy, who lost it all.’

  Krakouer, the former star player who had earned $870,000 on the football field, was broke when Higgs suggested he take some drugs back to Perth.

  Stephens provided a Bluebird sedan to be used to take the drugs across the Nullarbor but the syndicate ended up using another car.

  In January, 1994, police caught Krakouer taking twelve plastic freezer bags out of the door
wells of the car in a Perth garage. The 5.3 kilos of amphetamines was only five percent pure, having already been cut by Higgs’ crew from its original eighty percent.

  While Stephens does not condone what the former footballer did, he points to the case as the way the system is a raffle. Krakouer, the messenger boy, ended up being sentenced to sixteen years – four times the penalty that his boss received.

  ‘It was a disgusting sentence,’ Stephens said. ‘He did a mate a favour and hoped to make a quid on the side. Higgs was the boss and Jimmy was just the little guy.’

  WHEN Stephens was gathering evidence he was vitally important to the drug squad. When he agreed to testify he was the jewel in the crown for the prosecution case. When the drug squad was broken into he was, for a short time, the highest priority in the force.

  Someone wanted to find him so badly they were prepared to break into the drug squad and steal the files. If he was killed as a result it would destroy the credibility of the witness protection program, scuttle the case against Higgs and badly tarnish the reputation of the Victoria Police.

  But, now the case is finished, he is like a fading and difficult pop star who can’t draw a crowd. He is no longer to be indulged and no longer seen as worth any special treatment. People who were once available to him twenty-four hours a day no longer answer his calls. His request for police to pay for his accommodation while in Melbourne was rejected.

  He says he has not been able to establish a new home and has not been paid the $500,000 he still claims he was promised to start a new life.

  He has borrowed from friends and family and has been given $50,000 as a part payment from the police. ‘Even with that they waited to the last possible day until they paid it.’

  Stephens says he has been told that one senior policeman has deliberately slowed any possible settlement. One senior detective confirmed a high ranking officer had made disparaging and racist remarks over E2/92.

  ‘He has never met the man and yet he seems to dislike him.’