In a case that feels like it’s out of the 1800s, a detective in Australia’s famed “Gold Squad” gets an anonymous tip that something fishy is going on at a gold mine in remote Western Australia. An investigation turns up a crime ring that’s pocketing tens of thousands of dollars of the precious metal. The hunt turns tragic as a ringleader considers the blow to his reputation for stealing from the only business in town.
Detective Peter retired in 2007 after 25 year’s service in the Western Australian Police Force. He led specialist Crime squads in Covert Operations and the unique Gold Stealing Detection Unit in his home state, which covers almost a third of the Australian continent. Since retiring he has worked as a mining industry consultant and led Global Security operations for a major gold mining corporation.
Peter: [00:00:02] The phone rang and I picked up the phone. The voice on the end of the phone said, “You need to have a look at Alan Smith,” and then the phone hung up. So, this is one of these investigations that starts with a single one-line comment. And then a couple of years later, turns into quite a profound investigation with far ranging effects.[Small Town Dicks theme]
Yeardley: [00:00:23] Hi, I’m Yeardley. This is Detective Dan.
Dan: [00:00:27] Hi, there.
Yeardley: [00:00:27] And his identical twin brother, Detective Dave.
Dave: [00:00:31] Hello.
Yeardley: [00:00:31] And this is Small Town Dicks.
Dave: [00:00:35] You will hear detectives from Small Towns around the world discuss their most memorable cases.
Dan: [00:00:39] We cover the intimate details of what went wrong and what went right.
Yeardley: [00:00:44] As these dedicated men and women search for justice and crack the case.
Dan: [00:00:48] Names and certain details have been changed to protect the privacy of the victims and their families.
Dave: [00:00:53] So, please join us in maintaining their anonymity out of respect for what they’ve been through.
Unison: [00:00:58] Thank you.[music]
Yeardley: [00:01:09] Today, on Small Town Dicks, I’m very excited, we have the usual suspects. We have Detective Dan.
Dan: [00:01:17] Hello there.
Yeardley: [00:01:19] [chuckles] Hello there and we have Detective Dave.
Dave: [00:01:22] I thought for sure you’re going with me first off, but good to be here. I’m excited about this one.
Yeardley: [00:01:29] I know, I didn’t go with you because I sensed that you thought I was going to go with you first. And so, I thought I’m just going to keep him off kilter. That’s my job. And Small Town Fam, I hope you’re sitting down because we are so pleased to welcome a new guest to the podcast, retired Detective Senior Sergeant Peter.
Peter: [00:01:49] Hi, Yeardley. How are you?
Yeardley: [00:01:51] So well. Thank you so much for joining us.
Peter: [00:01:54] My pleasure.
Dave: [00:01:55] That was the right title though, wasn’t it? Retired Detective Senior Sergeant?
Peter: [00:01:59] Yes, that’s correct.
Dave: [00:02:00] Not like a Sergeant in the US, would be more like a lieutenant or a captain.
Peter: [00:02:04] Yeah, that’s probably equivalent in the UK, what theydo at Detective Chief Inspector or Detective Superintendent Level. Detective Senior Sergeants run squads, specialist squads, homicide squads, and in this case, the Gold Stealing Detection Unit.
Yeardley: [00:02:19] Small Town Fam, I don’t know if you can tell, but we have gone all the way down under to find Retired Detective Senior Sergeant Peter. Peter, you spent a great deal of your career policing the gold mines in Western Australia. In fact, today, you’ve brought us a case about a massive gold heist that has all the elements of an old style Western.
Peter: [00:02:44] Absolutely.
Yeardley: [00:02:45] Great. With that, I’m just going to hand it over to you.
Peter: [00:02:49] Right. Well, to start off with, this is essentially a story about gold fever in modern context.
Yeardley: [00:02:58] Would you describe what gold fever is specifically because it sounds like it’s an actual technical term?
Peter: [00:03:05] Gold fever really is a description of people who become obsessed with gold. What you see is people who become absolutely fixated on the yellow metal. And what’s been interesting in the years since I left the police department and been consulting and working inside mining companies, is most people view this heavy yellow metal as just something they have to work with on a day-to-day basis. But people who get gold fever become absolutely obsessed with it, whether they’re in the industry or outside the industry. And it drives them to obsessive and quite often criminal type behaviors. So, people who become unhealthily obsessed with gold, those who are described as having gold fever.
Dan: [00:03:54] I’m picturing the little troll from Lord of the Rings when he finally gets the ring.
Peter: [00:04:00] [laughs] My precious, yes.
Yeardley: [00:04:02] Yes.
Peter: [00:04:03] Having spent about 25 years dealing with the golden industry, both in law enforcement and in the security field, I’ve seen a lot of gold fever around the world and seen how it impacts negatively on many lives. This one is perhaps the most notable case that I’ve seen for the impact that had on the lives, the town concerned, and also mining companies. But I think it’ll be fairly important from the outset for those listening to the podcast, for me to say a little bit of context for Australia. Australia is only slightly smaller than the United States. It’s about 90% of the USA landmass. Its island continent, geographically very old, very flat and very dry in the center. The state that I’m from is Western Australia.
Western Australia is about one-third of the total landmass of Australia. It’s about 975,000 square miles. There’s about 12,900 miles of coastline, and one single border to the eastern states, which is 11,057 miles long. But we only have a population of about two and a half million. So, it’s fairly sparsely populated, and that’s mostly in the southwest corner.
As a state, we go from a moderate south, up to a tropical north, but most of the state is arid and very hot in the summer. In context to the US, it’s equal in size to Washington, Montana, Oregon, California, Utah, Nevada, and Arizona together. It’s bigger than Western Europe. Texans will hate this, it’s four times the size of Texas. [Yeardley laughs] And the UK fits into this state 12 times. I think setting that context about how big the state is, and how sparsely populated is fairly important.
[00:06:03] The other issue is extensive gold fields in Western Australia. But today, despite the fact that gold industry has been going for well over 140 years now, the state is littered with ghost towns that used to have dozens of hotels, rail services, multiple breweries and industries at the turn of the previous century. But now, only some of the major towns still exist and they’re much smaller. The town in question, which we’ll call Dundas is about 450 miles east of Perth, and currently has a population of only about 500 odd people. I mentioned that’s about gold fever, this is some context about the gold industry.
At the time of this particular investigation, Western Australia, in its own right, was the largest gold producer in the world, and we were pumping out about 300 tons of gold a year. So that’ll give you some idea or the context of the gold industry. And mines for gold is spread over about two-thirds of this big state. The agency I was with was the West Australian police, a State Police Service. At the time of the incident there was about 5800 members in the police service. Now there’s over 7000. Unlike the US, there’s only a single state police force. We don’t have city police, we don’t have county police. The only other police agency here is the federal police who deal with federal and international matters. There’s one agency deals with everything to do with law enforcement throughout the state.
[00:07:41] The squad on it was the officer in charge of at the time, is called the Gold Stealing Detection Unit. That was set up in 1907, and it’s the oldest operating specialist policing squad in Australia. It was set up as a result of a Royal Commission into gold theft. A Royal Commission is like a judicial inquiry that makes recommendations for the government to act on. One of the recommendations was that they set up a Gold Stealing Detection Unit. It’s quite unusual in concept in that it’s actually funded by the gold industry through the state’s Chamber of Minerals and Energy. But it’s still a West Australian Police Unit and operates independently of the Chamber who provide reimbursement to the police department for its funding. Operationally, the squad reports to the police, but the funding comes from the industry. At the time, there was around about 50 gold mines operating in Western Australia, and the gold squad was responsible for providing policing services to.
[00:08:45] One of the good things about the gold squad and there was about seven members at the time, is I was able to handpick the staff who came to the squad. And they were all very experienced detectives who came from organized crime, commercial crime squads, armed robbery squads, and had a lot of expertise. So, I was able to pick some really good operators. These were guys that I used to refer to as the set and forget detectives, you give them a task and just check in from time to time and away they would go. Some of these investigations took several years to come to fruition. Very good operators, very consistent in what they achieved and what they’re able to do.
Yeardley: [00:09:24] How much area did the seven of you cover?
Peter: [00:09:28] Yeah, given that the gold fields cover about two-thirds of the state, it’s about two-third of that 975,000 square miles. The longest trip that we did to go from the base in Kalgoorlie, to a goldmine was up north of Newman. Took us two days to drive there.
Yeardley: [00:09:48] Wow. All right. Take us on.
Peter: [00:09:51] Okay. Well, the beginning of this story was fairly simple in that I was in the office one day in Kalgoorlie. The phone rang, and I picked up the phone, and without allowing me time to introduce myself, the voice on the end of the phone said, “You need to have a look at Alan Smith,” and the phone hung up. I thought, “Well, that’s a bit unusual.” I walked out into the main part of the office where the other detectives were and said, “Does anybody know who Alan Smith is?” I got a lot of handshakes and so forth. I then spoke to our office admin assistant, I said, “Can you put that name through the database and see what you come up with?”
[00:10:31] When people apply to work in a high security area on a goldmine, they go through a background check and they’re issued a clearance to go and work in those high security areas. So, we had a look through the database, and there was no Alan Smith in the database. Beyond that, we didn’t actually have much to go on. So, I handed it over to one of the detectives to start looking into. The lead detective, whose name was Jeff. There was no other information about this gold theft beyond that name Alan Smith.
Dan: [00:11:05] It’s just a general rumor that there’s gold theft going on at this mine?
Peter: [00:11:09] Yes. No specifics at that stage.
Dan: [00:11:11] Okay.
Peter: [00:11:13] Over the next 12 months, there was a number of small leads to follow, and lots and lots of dead ends. We did something called a reverse CCR, CCR is a Call Charge Record. From that, it turned up the number that the call originated from was a crib room or a meal room in an underground mine.
Yeardley: [00:11:38] Did you say meal room, like, a place where the miners eat?
Peter: [00:11:43] Exactly.
Yeardley: [00:11:44] Okay.
Peter: [00:11:45] The only problem was, it wasn’t a gold mine, it was a nickel mine. And that was very odd. We weren’t able to work out who it was because it was a general find in an underground meal room and it appeared to be another blank. So, the following meeting was brought up to me here, we found where the call was made from, but we’ve got no idea who made the call. I previously mentioned the Chamber of Minerals and Energy, and through my involvement as part of my administrative function with the chamber, I regularly met with the chamber members who worked and operated in the goldfields area and that included mines other than gold mines, because we’d identified the particular mine it came from, I was able to identify the company. I happen to know one of the directors through the work I’d done with the chamber. So, I approached him and said, “Could you possibly give us the roster who were working underground at this particular time on this particular date.” From that, we got a panel of people and gave it back to the detectives and sent them off again and within a couple of weeks, they actually came up with a name. It was the guy who rang the office over a year earlier and said, “You need to have a look at Alan Smith.” We went door knocking. We arrived at this guy’s house.
Yeardley: [00:13:11] A guy who had called over a year ago?
Peter: [00:13:13] Yes. Knocked on the door, introduced himself, and his response was, “I’ll be waiting for you guys to knock on my door for some time now.” [Yeardley chuckles] He wasn’t surprised that we found him. We finally got to speak to the guy who made the phone call and he gave several names of people who are involved.
Dan: [00:13:32] In this theft ring?
Peter: [00:13:33] Yes. We were able to then from our database confirm that those names worked at this particular goldmine in the town of Dundas for the Lydia Mining Company. It was all scuttlebutt, there was no direct information. He’d heard rumors and he passed the rumors on. But that was enough, after 12 months of various dead ends for my guys to actually start serious investigation and to try and identify people.
Dave: [00:14:03] And your initial caller could have saved you guys a whole year.
Yeardley: [00:14:06] Right.
Peter: [00:14:06] [chuckles] You’re absolutely right, people don’t make it easy. So, now that we had a few names, from that investigation swung into high gear.
Peter: [00:14:28] Now that we had a few names, there’s a number of investigative tools that are available to members of the gold squad. The old adage of “follow the money.” Firstly, we follow the gold, so we’re able to identify that gold was being sold by some of the people who were nominated. What we had indicated through transactions that we’re able to detect was at least $70,000 worth of gold had already been sold. Over the next six to nine months, the gold squad guys went down various times and spoke with the management there. The acting manager that they spoke with was a guy by the name of Neil.
[00:15:09] Neil is described as one of the most loved miners in Dundas. My guys went down to try and ascertain with Neil, “Is there a problem here? Have you heard anything? Is there any information you can give us?” Normally, if you’re a gold squad detective going to a mine to say, “We think you’ve got gold theft going on, you speak to the manager.” You would assume that the manager is honest, representing the best interests of the company, and has a vested interest in finding out whether gold is being stolen from his company. The only problem was, Neil was right at the center of the gold theft ring. He was right in the middle of it. And, of course, at that time, our detectives didn’t know because he wasn’t one of the people named.
Yeardley: [00:15:52] Sorry, wasn’t one of the people named as a potential suspect when you’re all getting the lowdown on this theft ring?
Peter: [00:15:59] Exactly.
Yeardley: [00:16:00] Okay.
Peter: [00:16:02] So what that meant was, was the group that were responsible for stealing gold from this particular mine were given almost 12 months warning that the gold squad were coming because, Neil, the very person that the gold squad spoke to, to commence inquiry at the mine was at the center of the gold theft ring.
Dave: [00:16:25] Some would say, “It was a mistake. Why would they go contact Neil, if he’s in the middle of this?” Well, you don’t know how far it reaches, you got to make an initial contact somewhere in that company. And you wouldn’t think it would be the manager. And then all of a sudden, later on, you find out you’re like, “Shit.” He’s just laughing at us after that meeting.
Peter: [00:16:44] Yeah, well, I don’t think they’re laughing. I think they were very worried. They tried to cover their tracks as much as they could. The gold squad has quite a reputation throughout the industry as being fairly relentless in their pursuit of gold thieves, and they sort of viewed as being worse by gold thieves than normal detectives are, because the guys actually know what they’re doing. They know their way underground, they understand processing, they understand how gold is styled and what forms it appears in. So, to give you a little bit of context about that without going into too much detail, gold can be the clear metal in veins that you commonly see, so how everybody pictures gold to be. It can be invisible in rock, so microscopic amounts of gold in there. It can be buried in sulfides, and has to be removed chemically. In the processing, it can go from solid into liquid when it’s dissolved by cyanide. And then usually extracted by a process called Electrowinning, which gets it back into the yellow metal we’re familiar with, and it can look like red dust, it can be sitting on carbon invisible. Gold can be in many forms, particularly during processing.
[00:18:00] The guys at the gold squad understand all of this. They understand that can be stolen in any form, and they know what they’re actually looking for. The average person would have no idea what they had in front of them is gold or not. For example, bags of carbon are usually one-ton bags. The difference between loaded carbon with gold on it, and barren carbon with no gold on it, visually you can’t tell. So, that’s a fairly complex group of processes that are used for extracting gold. In any event, this particular group, after the gold squad spoke to the acting manager Neil, had almost 12 months warning that the gold squad are coming for them.
Dan: [00:18:40] What’s Neil’s demeanor as this investigation ramps up?
Peter: [00:18:44] Well, from the time that the first approach was made, all gold theft activity ceased. No further gold was sold. We moved towards the arrest phase, Jeff and the team went down there. When they went back down, Neil was the primary liaison point for the series of interviews. The detectives would go in and say, “Hi, Neil, we’re back again. We need to start interviewing people. The first one we want to talk is so and so. Can you arrange for him to come up?” So, Neil would arrange for that guy to go and do it because these are work colleagues of his and people that are involved in this systematic gold theft from underground.
Yeardley: [00:19:22] At this point, do you know that Neil is involved in the gold theft?
Peter: [00:19:27] No.
Dan: [00:19:28] As Detective Jeff and the rest of your team is bringing these guys up from the depths of this mine, one by one, from my experience, you get differing interactions with suspects. Some are perfectly comfortable lying to you right to your face, some feel the gravity of the situation, and they want to, and will clear their conscience and they’re a little more forthcoming with information. What was this group like?
Peter: [00:19:56] You get the full spectrum every time. You have to bear in mind also, these guys are not career criminals. They’re a group that got together and embarked on a criminal enterprise. But they’re not career criminals. But having said that, I think you guys would be aware too, that sometimes people with no criminal background are the hardest to interview, at the times, they’re quite easy. Neil had arranged for so and so to come up, the guys would interview him, they’d be charged, taken off and locked up. Operation was going to take a couple of days, to get through all the interviews, to get through all of the evidence gathering. Overnight, Neil went underground, wrapped det cord around his neck and he used explosives to commit suicide.
Dave: [00:20:39] Oh, my gosh!
Yeardley: [00:20:39] Holy shit!
Peter: [00:20:41] Yeah. Neil killed himself underground in the middle of the investigation and it wasn’t until his headless body was found the next morning that the gold squad detectives started to question, “Well, why would he do that?”
Yeardley: [00:21:06] After Neil took his own life, your detectives realize, “Okay, that doesn’t make any sense.”
Peter: [00:21:15] Exactly. And then they went further into the investigations work out, I think was part and parcel of the whole deal.
Yeardley: [00:21:22] Did you say det cord, like detonation cord?
Peter: [00:21:26] Yeah. Det cord is a form of fuse that’s almost instantaneous. It doesn’t just burn, it explodes. So, you can use det cord to cut things, like for example, people wanting to remove stumps will sometimes wrap det cord around it, and set it off and it will [unintelligible] the stump out. So, it’s a high explosive, extremely high velocity form of fuse.
Yeardley: [00:21:53] He wrapped that cord around his neck and decapitated himself?
Peter: [00:21:56] Yes.
Dave: [00:21:57] Yeah, he didn’t feel a thing.
Peter: [00:21:58] No, it was instant. So, it was a fairly dramatic development. It had significant ramifications, not just for the investigation, but the small town and its reaction to the death of a guy in the midst of a gold squad investigation.
Yeardley: [00:21:58] Did Neil have a family? Did he have a wife and children?
Peter: [00:22:21] Yeah.
Yeardley: [00:22:23] What became of them after he–?
Peter: [00:22:25] I don’t know. Bearing in mind at this stage until he committed suicide, the detectives had no idea who was involved. And it was only after he committed suicide that they started to look at it saying, “Why the hell would this guy do this?” And then, they started to piece it together and information was a bit more forthcoming.
Yeardley: [00:22:43] What was the value of the gold that the theft ring stole?
Peter: [00:22:47] Ultimately, our estimate was that it was probably in the vicinity of $2 million worth of gold that have been taken out from underground.
Dave: [00:22:55] And you get into Neil’s mind here a bit, as he sees all of his co-conspirators and employees that he supervises get marched through his office and off to jail knowing, “They’re going to end up talking to me at some point at the end of this.”
Peter: [00:23:11] Oh, he knows what’s coming. Western Australia is one of the very few jurisdictions that actually has specialist policing for the gold industry. There’s only a couple of others and most of those have since fallen over. The WA Gold Stealing Detection Unit is still the only one and the longest one in existence. Neil would know that that was the end of his time in the gold industry. As an underground mining manager, he probably would never work in the industry again once he was charged.
Yeardley: [00:23:42] If you lose your job in a mining company and you live in the middle of Australia in this very arid environment, what are your job prospects if you lose it at the mine?
Peter: [00:23:54] Somewhat less than zero.
Yeardley: [00:23:57] Wow!
Peter: [00:23:58] Plus, there’s all the personal aspects to it, the embarrassment to the family, to children, all of his friends getting locked up.
Dave: [00:24:06] It’s like a social execution.
Peter: [00:24:08] Oh, absolutely.
Yeardley: [00:24:11] What was the reaction to Neil’s suicide in his tiny town?
Peter: [00:24:15] Well, the town started having town meetings, they invited the media, they accused the gold squad of acting like Gestapo. They made all sorts of accusations. They blamed the company for not protecting them and looking after them. It became very public, featured in all the state television and national television, news channels and print media and so forth. There was a very, very strong reaction. There was a lot of recriminations against those who are involved in it, because it becomes very embarrassing for their friends and the current employees so forth. When we look at the impacts, we look at a number of things to try and understand just how big the impact was, and it goes beyond the dollar value.
[00:24:59] For example, in respect to the community, it was really the fracturing of a tight knit mining community. It resulted in for many members in the town, changes in employment, people having to move out of their homes, schooling, friendships, lifestyle, and so forth. At the site itself, obviously, the suicide of the mining manager, job lost by all of the employees arrested. And as I indicated, they never work in the gold industry again. Ultimately, a job loss for all employees because this was a primary contributor to suspension of the operations there. The CFO, the managing director, and the operating company was placed under administration and eventually sold.
[00:25:45] I’ve studied gold theft and the social impacts on it in different countries and different cultures. That’s a big social deterrent and impact, it’s a big embarrassment to the family, the kids are going to have to change schools or people are going to have to leave town. It’s a major, major issue for many people, a major form of embarrassment. So that in and of itself in developed countries is a very significant social deterrent.
[00:26:11] In Africa, if somebody got locked up for stealing gold, next Wednesday, he will go in and his name will be drawn in and he will apply for another job. So, depending on the risk profile, the social deterrent is very different. And, of course, the other thing, too, is the pay is much higher in countries like US and Australia. It’s very good pay in a developing country, it’s also much less. The value of an ounce of stolen gold changes significantly depending on those variables, too.
Yeardley: [00:26:42] Right.
Dan: [00:26:43] Going back, how prevalent was gold theft in the goldfields in Western Australia? Does this go on at every mine?
Peter: [00:26:53] Well, I only half-jokingly used to refer to gold theft in Western Australia was original sport, and within the subculture, over the 114 years that the gold squad’s been in operation. In the early days, some of the mine managers used to openly say, “I will tolerate a certain amount of gold theft.” It’s almost like a little bonus for the workers. The problem is in reality, it doesn’t actually work out like that. And it can cause companies to shut down. It can cause mines to think that they’re no longer profitable and so forth. So, tolerating a little bit of theft is a very rocky road.
Yeardley: [00:27:35] How do people smuggle gold out of a mine? Literally, they put handfuls of maybe the red dust in their pockets? Is it they smuggle in their clothes? Are they not patted down as they leave the premises, that sort of thing?
Dave: [00:27:49] Right. I was wondering how the operation works.
Peter: [00:27:52] Very, very good question. It’s largely dictated by the ore body itself.
Yeardley: [00:27:58] Ore body, does that refer to the form the gold is actually in?
Peter: [00:28:03] Yes. This particular operation was an underground mine with high grade visible gold. A lot of mining operations, you can’t actually see the gold. It’s too small, it’s microscopic, is scattered widely through the rock or it’s in the form of sulfur. This particular mine was high-grade visible gold, which means that it’s very easy for people to take rocks with pieces of gold in it. In the old days, there used to be a degree of searching and security. But over time, as the industry waxes and wanes, has often referred to as the boom or bust cycle, the security measures were dropped off, people didn’t feel it was necessary, they trusted their personnel, etc. and gold theft became more prevalent.
[00:28:52] Having worked around the world in about 20 different countries, including the US, Canada, Australia, Middle East, Africa, South America, I can tell you that gold theft is exactly the same the world over. It makes no difference if you’re in a supposed first-world country like the US or Australia or in the middle of deepest Africa, people are people, people steal things exactly the same way. In this case, underground, high grade visible gold, means that it’s relatively easy to steal because there’s only a notional security presence usually at the front gate, with an underground mine like that, they normally have a decline which is used to drive vehicles down in a loop. Vehicles are coming and going, filling up drums on the back of vehicles or sample bags or whatever with big chunks of gold is easy to do, and almost impossible to detect.
Yeardley: [00:29:51] Right. Do people often rat each other out in gold mining, is that usually how you get your information about wrongdoing?
Peter: [00:29:59] Quite often it can be a jilted lover or spouse, who contacts the police about this. I did a case in the US a couple of years ago where it was exactly that. The ex-wife picked up the child, came home from having time with daddy, and was telling all about the gold that daddy had from work. She was straight on the phone and said, “He’s stealing gold, you need to do something about it.” In this case, it was somebody who felt it was wrong, whether he was motivated by altruism or jealousy, which is another very strong motive for people to give information. And then we follow the money, follow the gold, and come in from the other way. So, it’s very rare, sadly, for companies to detect gold theft themselves.
Dave: [00:30:57] Are these guys getting away with several ounces a day? Does it go into a community pot where these guys all divide it up or is it first come first serve?
Peter: [00:31:06] It depends a lot on the nature of the group. Some will operate that way, these guys were apparently operating collectively, and certain people would do certain parts of what was going on. That’s not unusual. Other times, that’s individuals.
Dave: [00:31:24] As far as monetizing this gold, this group sounds like they’re more of a collective effort, everybody has their role, everybody has their piece, but at the end we split the profits. To monetize this gold, are they going local to a gold buyer? Are they trying to cover their tracks and go a few 100 miles away?
Peter: [00:31:41] Well, they went 500 miles away to Perth. But, of course, the refinery down there in the Perth Mint. They also have transparency requirements. And they also have shareholder pressure not to be involved in the laundering of stolen gold. Explaining where you get certain amounts of gold is actually very difficult to do.
Yeardley and Dan: [00:32:01] I bet! [Yeardley chuckles]
Dave: [00:32:04] Just been one of these employees, it was like, “I was out for a hike and I found this huge boulder of gold.”[laughter]
Dave: [00:32:10] Okay, I found it hundreds of feet under the Earth’s crust.
Peter: [00:32:14] This is what I’ll tell the gold squad, they’ll believe me. They had the warning, they knew in advance, and we categorize this as a systematic and organized theft of high-grade ore, and visible gold from an underground mining crew over an extended period. Australia and Western Australia in particular has very strong proceeds of crime legislation. The concept of unexplained wealth is a major element in tackling money laundering. So, if you have unexplained wealth, and the proceeds of crime unit come knocking on your door and seizing your accounts, and you can’t explain it, you lose it. So very, very powerful legislation. The other thing is, if you’re selling a big chunk of gold, and you don’t have a lease to produce gold, then you’ve also got a little bit of a problem in explaining that. So, those sorts of tools are very important in tackling crime. The old adage of, “follow the money,” very important.
Yeardley: [00:33:18] I love that phrase, unexplained wealth. [chuckles] That’s really good.
Peter: [00:33:23] Yeah, normally, when major drug dealers and so forth get hit with that, they don’t even bother defending it, because they know they can’t explain it. So, there’s been million-dollar seizures of houses, vehicles, cash, and so forth. And these guys don’t even bother fronting court because they know they can’t justify it in a court. So, they just let it go.
Yeardley: [00:33:43] That’s incredible. Peter, what became of the mine and Neil’s crew who were stealing from it, did they go to trial, what happened?
Peter: [00:33:56] In November of that year, the first of the miners entered guilty pleas. December of that year, there was a second raft of guilty pleas by charge miner, only one elected to go to trial. But at that stage, the chairman claimed that the company has never been in better shape and its business as usual. But the shares dropped and ultimately the company was placed under administration and the operation was sold. So, it had a massive impact at a corporate level. Obviously, at a site level and also with the community. There was no substance to the allegations directed at the company, or the gold squad or even the media. It was really down to people engaging in a criminal exercise and pressure is just causing that group to implode, and the community to implode when their activities were discovered and actually brought to light and people were held to account for it. All in all, a major impact.
Yeardley: [00:34:52] Do you remember how many people were involved in this gold smuggling ring?
Peter: [00:34:56] There was about half a dozen charged and most of them pleaded guilty.
Yeardley: [00:35:01] Is there actually an Alan Smith or was that just a ruse like a red herring?
Peter: [00:35:06] Yes. Alan Smith was one of the people involved. And, yes, he did work at Lydia Mining in Dundas.
Dave: [00:35:14] What kind of sentence does that carry in Australia, these guys that started pleading guilty in the first and second wave?
Peter: [00:35:22] Some of them got imprisonment, some of them got fines. The terms of imprisonment in Australia don’t typically reach the levels you get in the US, a year and a half or three years or something like that.
Dave: [00:35:35] Given the product that they’re harvesting, I can imagine a goldmine has some pretty large security concerns if they’re dealing with large quantities of this stuff. Do they ever get hit by armed robberies, kind of rogue packs of people are like, “Hey, we’re going to hit this mine tonight?”
Peter: [00:35:54] It’s not that common. Armed robberies involving gold mines isn’t that common and that’s usually because the target of armed robbery is normally a bullion shipment, or bullion being stored at the site overnight. They do occur. They’re rare. Sometimes in countries like the US, Australia, Canada, people will come in at night when there’s very few staff on the backshift, and perhaps steal a front-end loader and try and put it through the side of the Gold Room.
Yeardley: [00:36:27] The Gold Room? I’m assuming that’s where they put the gold before they take it somewhere else to be processed?
Peter: [00:36:34] Yeah, basically, gold mining operations all have a Gold Room and that’s where the final stage of concentration and smelting occurs. But you don’t commonly see armed robberies. I have done a lot of work in Africa, and I’ve seen quite a few armed robberies in Africa because there’s lots of guns, and lots of people willing to use guns. So, kidnappings to facilitate armed robbery of mine managers, security managers is not uncommon. The illegal miners in South Africa, the mines there are very, very deep. They go down about five kilometers. There’re people that live underground for months at end and security in gold mines in South Africa have had gun battles with these guys underground.
[00:37:22] In one particular African country, we profiled 10 years’ worth of armed robberies across mines and we worked out the types of things that typified armed robberies on gold mines, but they would use explosives, hand grenades, AK-47s and from time to time there would be fatalities of security people that as dangerous as they are, they even provide [unintelligible 00:37:48] from time to time too. We saw one of our mines, where these guys came in with AK-47s and explosives and attacked the Gold Room after hours. So, there were no people there for them to attack. But as they came through, there’s a great piece of footage showing a bullet going through a wall just above the clock, and the clock wobbles a little bit and falls down. When the guys eventually get through the front gate and go up to the Gold Room, they pack all of the explosives] up there, and you see they’re preparing and then running away, there’s a big blast, and they run up very excitedly to go in. But there’s a second door there because most Gold Rooms have an airlock, but they used all their explosives on the first door and you see them walking away very detected with AK-47s hanging low. So that provided a bit of mirth amongst a very risky situation.
Dan: [00:38:37] I don’t do well in caves, and tunnels, and heights.
Dave: [00:38:43] You get all three of those with mining.
Peter: [00:38:46] Oh, absolutely.
Dave: [00:38:48] I don’t think I could do it.[laughter]
Peter: [00:38:51] Not for everybody.
Yeardley: [00:38:53] You need your vitamin D, doesn’t seem right to live in a mine for months at a time.
Peter: [00:39:00] Yeah, despite the fact that I’m in the mining industry and have been for a number of years underground is not my favorite place.[laughter]
Yeardley: [00:39:08] Well, this has been fantastic! We are so grateful to you for giving us the time and sharing your experience with us.
Peter: [00:39:17] Sure. Absolute pleasure.
Dave: [00:39:18] Greatly appreciate it, Peter, and thanks for your service.
Dan: [00:39:22] Thank you, Peter. I learned so much today.
Peter: [00:39:25] Thank you very much.[music]
Yeardley: [00:39:32] Small Town Dicks is produced by Gary Scott and Yeardley Smith, and co-produced by Detectives Dan and Dave. This episode was edited by Logan Heftel, Gary Scott, and me, Yeardley Smith. Our associate producers are Erin Gaynor, the Real Nick Smitty, and Alec Cowan. Our music is composed by John Forest. Our editors extraordinaire are Logan Heftel and Soren Begin. Our books are cooked and cats wrangled by Ben Cornwell.
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