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Kingpin guilty
By Keith Moor
Herald Sun

September 22, 2005

Dealer's downfall
Drug boss trapped by his own greed
By Keith Moor
Herald Sun

September 22, 2005

David Steven McCulloch

Described as an "underworld boss," McCulloch had long been considered a big player in the Australian illegal drug scene.

He was busted for heroin trafficking in 1985 and jailed for 11 years in 1987.

McCulloch was a known associate of many drug syndicate bosses and other criminals, including convicted amphetamine dealer John Higgs and murdered "Mr Bigs'' Lewis Moran and Graham `The Munster' Kinniburgh.

Higgs, a former Black Uhlans bikie gang founding member, and McCulloch were two of Australia's biggest drug barons.

Higgs ran the nation's biggest amphetamine gang for years until Victoria Police caught him in 1994 with seven tonnes of chemicals capable of making 226kg of amphetamines worth more than $400 million.

McCulloch was very close to Lewis Moran, but had a falling out after Lewis's son Jason demanded $290,000 from McCulloch to help pay Lewis's legal fees after Lewis was arrested on drug charges in October 2002.

The demand for cash by Jason Moran prompted McCulloch to jump camps and switch his allegiance to a rival drug gang.

David McCulloch once held a gun to the head of undercover officer Steve Francis.

Francis went on to become a top homicide squad detective.

McCulloch was the prime suspect in the notorious St Kilda Rd drug squad break-in in 1996.

McCulloch was secretly caught on tape talking to an associate about the burglary.

He said police files relating to a friend had been stolen during the break-in at the police operations centre.

"I'm the prime suspect for organising the break-in,'' McCulloch admitted.

The only documents stolen during the St Kilda Rd burglary related to secret witness E2/92 and McCulloch's partner in crime, John Higgs.

The burglary happened before E2/92 was called to give evidence against Higgs.

Police believe the drug squad was burgled so E2/92 could be identified, tracked down and killed before he could testify.

E2/92, whose identity is still suppressed, was overseas in witness protection at the time of the burglary.

He fled to another European country after the break-in and eventually gave evidence against Higgs by video from a secret location.

McCulloch was taken to the St Kilda Rd drug squad office for questioning after he was arrested in 2001.

"We were taking him through the office to an interview room when he began acting very strangely,'' Sen-Det Victor Anastasiadis said.

"He was full of attitude and all of a sudden he shouts `Oh no, don't take me in that room, not that room' while pointing at a particular door.''

Sen-Det Anastasiadis mentioned the outburst to a long-serving drug squad detective.

"I took the detective and showed him which room McCulloch had pointed out,'' he said.

"Turns out it was the room that was burgled during the 1996 drug squad break-in.

"Very few people knew which room had been burgled, I certainly didn't know.

"Makes you wonder how McCulloch knew.''

The drug squad burglary remains unsolved.

Undercover police surveillance teams saw McCulloch associating with various crime chiefs over the years, but he was careful not to say or do anything to implicate himself.

"He seemed to have learned a lesson from being busted in 1985 over his heroin dealing," Sen-Det Anastasiadis said.

"Since getting out of jail on the heroin conviction he became careful to the point of paranoia about meeting and dealing with people he didn't know.

"McCulloch was equally paranoid about talking on the telephone, being under surveillance and having his gang infiltrated by undercover police.

"He made a point of not getting his hands dirty by actually handling the drugs himself -- all of which made him very difficult to gather evidence on.

"Then he made the mistake of offering to deal drugs with a bloke he thought he knew well enough that he wouldn't dob him in. Big mistake.''

Already a major manufacturer and dealer of illegal drugs, he just could not resist trying to recruit one more customer.

That potential customer -- who McCulloch had known for years -- had such a hatred of drugs that he reported McCulloch's approach to Victoria Police.

And so began Operation Ski, which gathered enough evidence to convince a County Court jury to find McCulloch guilty of commercial drug trafficking.

The anti-drug associate agreed to buy drugs from McCulloch and his gang while wired-up and under the watchful ears and eyes of police.

"That was an incredibly brave thing to do,'' Operation Ski member Sen-Det Anastasiadis said.

"He had many meetings with McCulloch and McCulloch gang members, some of them very violent men.

"He went into those meetings wired up to secretly record conversations.

"If he had been caught I dread to think what would have happened to him.

"This was a classic example of a community-minded informer. He was opposed to drugs and was in a position to help police catch a major drug dealer and decided to do so.''

McCulloch first tried to recruit the informer to sell drugs after meeting him at a Hardware St cafe in Melbourne on December 12, 2000.

Ever wary of being bugged, McCulloch suggested the pair go for a walk.

"He asked me what could I sell,'' the informer said.

"I then asked him to explain himself as I still wasn't 100 per cent sure what he was talking about. He then said `speed, smoke, smack, what's your contacts'.''

"By these terms that he used I understand speed to be amphetamines, smoke to be marijuana or hashish and smack to be heroin.

"He then said that speed seems to be the go at the moment, that he had plenty of it and that he could give me as much as I wanted on credit.

"He then said that he could set me up in my own business whereby he could supply me with the drugs and that I wouldn't be under any pressure to pay him until I had sold what I was supplied with.''

McCulloch later told the informer he would not personally deliver the drugs as "you know very well that I sit at the executive end of the table''.

The informer took delivery of a 1kg block of hashish on January 25, 2001, from McCulloch gang member Mario Stumpo.

An undercover police officer was later introduced to McCulloch gang members by the informer as the person who was helping him distribute the drugs.

During the next few weeks the undercover officer spent $132,000 buying 14.8kg of hashish, 5155 methylamphetamine tablets and 28 grams of amphetamine powder during 11 drug deals.

Each deal was secretly recorded and watched by Operation Ski officers.

The last deal was at 10.54am on March 28, 2001, when the undercover officer gave Stumpo $59,000 in cash packed inside a Nokia mobile telephone box and received 2000 amphetamine-based ecstasy tablets and 4kg of hashish in return.

Police watched as Stumpo then went back to his Altona North home and listened as he telephoned McCulloch at 11.25am and arranged to meet at McCulloch's house.

Stumpo arrived at McCulloch's home in Beach St, Port Melbourne, at 11.44am and police were still watching three minutes later when McCulloch, Stumpo, 56, and fellow gang member Allan John Cotter, 51, left the luxury apartment and got into McCulloch's silver Jaguar.

With ample evidence McCulloch and his gang were dealing in commercial quantities of hashish and amphetamines, police moved to the arrest phase of Operation Ski.

They intercepted McCulloch's Jaguar as he was driving along Beaconsfield Pde in Albert Park with Stumpo and Cotter at 11.51am and arrested all three.

McCulloch had $340 on him that police later identified as having come from the batch of $59,000 given to Stumpo that day to buy drugs.

Stumpo had $200 on him from the same batch.

Police then took McCulloch back to his Port Melbourne home to search it.

The handcuffed McCulloch was not too happy and as police opened the door he headbutted Det-Sgt Marty Allison.

Police found $51,460 in cash hidden inside McCulloch's shredding machine.

The serial numbers proved it was part of the $59,000 used by the police undercover officer to buy hashish and amphetamine-based ecstasy tablets earlier that day.

They also found a piece of paper bearing the name Mario and various monetary figures.

Police then went to search Mario Stumpo's home and found the Nokia mobile telephone box the undercover officer had used to store the $59,000.

The top of the box contained impressions of handwriting which were identical to the piece of writing on the piece of paper bearing calculations found in the possession of McCulloch.

Evidence suggests Stumpo rested a piece of paper on top of the Nokia box while he wrote down his calculations of who was owed what from the drug dealing.

Stumpo took his share of $7200 before delivering the remaining $51,800 to McCulloch -- also providing McCulloch with the slip of paper containing his handwritten calculations.

This corroborating evidence of Stumpo and McCulloch's connection to the cash paid for the drugs helped get them both convicted.

McCulloch was named in a document that led to the murder of police informer Terrence Hodson.

Hodson and his wife Christine were shot dead in May 2004 after a secret report detailing allegations he made to police was leaked to the underworld.

The Hodson report identified McCulloch as a drug dealer who was prepared to have people killed.

Hodson told police McCulloch confessed that he was the leader in the St Kilda Rd break-in.

McCulloch is mentioned several times in the leaked police report blamed for causing the murder of the Hodsons.

The Hodsons were murdered soon after the police report fell into the hands of underworld figures.

In the report, Hodson is recorded as having told police he discussed the drug squad burglary with McCulloch.

"It appears McCulloch still has files from St Kilda Rd,'' the Hodson police report says.

Hodson also accused McCulloch of ordering the death of a fellow criminal.

"Apparently when McCulloch had a stroke, Mr X thought he was going to die so he went to one of his stooks (hiding places) to locate drugs but they had already been moved,'' the leaked Hodson police report says.

"He wants Mr X put off (killed).''

McCulloch, 52, was freed on bail in May 2002 pending the outcome of the ESD investigation.

He had made allegations against three former drug squad detectives.

Det-Insp Paul De Santo, of the Ethical Standards Division, said in court in March 2002, that one of the accused officers, a detective-sergeant who McCulloch alleged fabricated evidence, had requested an immediate investigation.

Terrence Hodson told police he met McCulloch only days after McCulloch was bailed.

He told police that McCulloch indicated he would soon be drug dealing again.

"When they finished the meeting and as they were walking away McCulloch gestured with his fingers (referring to amphetamine) and stated `don't worry, mate, in four to five weeks we will be back in business','' the Hodson police report says.

In September 2005 McCulloch faced the County Court.

He was found guilty on two charges of trafficking commercial quantities of hashish and amphetamines and faced up to 25 years in jail.

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