AUSTRALIAN MYSTERY - FALL OF A BANKING FIRM SPOTLIGHTS THE ROLES OF HIGH U.S. OFFICIALS

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Document Number (FOIA) /ESDN (CREST): 
CIA-RDP84B00049R001102610022-2
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RIFPUB
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K
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4
Document Creation Date: 
December 20, 2016
Document Release Date: 
August 21, 2006
Sequence Number: 
22
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Publication Date: 
August 24, 1982
Content Type: 
MISC
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Approved For Release 2006/08/2: OPERATIONS CENTER/CURRENT SUPPORT GROUP News Bulletin WALL STREET Australian Mystery Fall of a Banking Firm Spotlights the Roles Of High U.S. Officials Frank Nugan's Violent Death Opens Lid on Odd Traffic In Dope, Foreign Funds Politicians Charge Cover-Up By JONATHAN KwrrNY S1affReporter oJ Tae WALL STREET JOURNAL SYDNEY, Australia-At 4 a.m. Sunday, Jan. 27, 1980, a police sergeant and a consta- ble, according to their testimony, were pa- trolling a lonely stretch of highway 90 miles from We when they spotted the parking lights of a Mercedes on an old road off in the woods. Inside the car, slumped across the front seat in a puddle of blood, was the body of a 37-year-old man with a new rifle in his hands. They searched his pockets and found the business card of William Colby, the former This (s the first of a series of articles. JOURNAL, 24 August, page 1. . This has convinced many Australians that the company was involved in secret work for the U.S. government. Despite offi- cial denials from Washington, the issue has refused.to die and has become one of the central debating points, in Australian poli- tics. The issue of U.S. investment may be hard to resolve because many of the essen- tial records were destroyed. Within hours af- ter the discovery of Frank Nugan's body, telephones began ringing urgently all over the world. One was on the desk in Manila of three-star U.S. Gen. LeRoy J. Manor, the re- cently retired chief of staff for all U.S. forces in Asia and the Pacific. After his re- tirement, Gen. Manor had been on secret -duty for the Air Force and at the time of Mr. Nugan's death he was helping run Nu- gan Hand's Philippine office. - Ransacking the Files According to Nugan Hand's public-rela- tions man, Tony Zorilla, Gen. Manor called him and told him to stop the wire services from reporting Mr. Nugan's death. Mr. Zorilla says he replied that this would be un- ethical and impossible, and he refused. (Gen. Manor would describe his activities with Nugan Hand only in general terms, and he wouldn't discuss this incident.) Halfway around the world, Rear Adm. Earl P. "Buddy" Yates, the recently retired chief of staff for strategic planning for U.S. forces in Asia and the Pacific, heard the news and immediately jetted to Sydney, Nu- gan Hand's main office. Adm. Yates was the president of Nugan Hand, though he lived in Virginia Beach, Va. En route to Sydney, he met Nugan Hand's vice" chairman, Michael Hand, a highly decorated Green Beret dur- ing the Vietnam War and a former U.S. in- telligence operative, coming from London. They raced to the Nugan Hand office and with a few other insiders began ransacking the files. According to witnesses, enough records to fill a small room were fed to a shredder. Others were packed in cartons, with every- one helping, and carried at night to the back room of a butcher shop owned by Robert W. Gehring, a former Army sergeant in Viet- nam. Mr. Gehring worked for Maurice Ber- nard Houghton, a mysterious Texan who has owned. several bar-restaurants in Sydney and who had played an active role in Nugan Hand's affairs since its inception in 1973. A Lawyer's Advice ` Mr. Houghton not only joined the rape of the files, but also brought his lawyer, Mi- chael Moloney, to direct it. According to the testimony of Stephen K. A. Hill, a Nugan Hand director who joined the record-rifling that week, Mr. Moloney urged the group on by warning, "I am fully aware of what has been going on. You all face jail terms of up to 16 years." According to Mr. Hill's testimony, the burly Mr. Hand then broke in to say that if Mr. Moloney's orders to sanitize the files be- fore the law arrived weren't followed, "ter- rible things" would happen-"Your wives will be cut up and returned to you in bits and pieces." - 24 August 1982 Item No. 1 Mr. Moloney in a recent interview said, "Sure, I advised Hand to take documents out of the office. I was told there were seri- ous deficiencies In the accounts. Everything I did I talked about with Yates first." (Adm. 7l4tes refuses to discuss any part of his ac- tivities with Nugan Hand.) A few months later, on April 11, 1980, Nu- gap Hand went into liquidation. And the se- crets that were so frantically being de- stroyed after Frank Nugan's death began to to reconstructed. Exposed to view, like m'ggots, were dozens of affiliated corpora- dons, with little or no real assets, that Nu- gan Hand had set up to help its clients avoid taxes and move money overseas secretly acid often illegally. Mr. Nugan had boasted that $1 billion a year passed through these companies. 4Still unanswered is the question of why so many high-ranking U.S. military and intelli- gehce officials were working for the com- pany. The CIA has denied involvement, and the State Department says that Nugan Hand wasn't in any way a U.S. government opera- tion. But liquidators of the company and various Australian law-enforcement officers express anger and bewilderment that the CIA, the FBI and the U.S. Customs Service, all of which have information on Nugan Hand, have refused to release it to help in the current criminal and civil investiga- tions. "It has obvious overtones that somebody is covering something up," says the court- appointed Australian liquidator, John W. O'Brien. From its base in Sydney, Nugan Hand had opened at least 22 offices around the world, including four in the U.S. After the company failed, anguished messages poured in from individuals who had invested money at above-market interest rates in securities sold by Nugan Hand and who now stood to lose everything. Liquidators say the official shortfall could reach $50 million. The vic- tims include many Americans, not only on the U.S. mainland but also at construction sites in Saudi Arabia and at military bases and legations throughout the Far East, Ha- waii and the Philippines. Nugan Hand carried out its operations with intense secrecy. Cables and interoffice messages were in code and often were marked "Destroy After Perusal." Company employees and customers were referred to by coded serial numbers rather than by name, and even references to foreign cur- rencies were disguised: "Oats" stood for Swiss francs, "grains" for U.S. dollars and so forth down to "berries" for Portuguese escuedos. An -Impossible Job This, plus the obvious phoniness of many c~f the transactions carried on between com- panies within the Nugan Hand galaxy, crakes the job of settling claims by creditors almost impossible. "We wouldn't be able to gay 1%" on outstanding claims, says a liqui- dator. Many creditors aren't even bothering Approved For Release 2006/08/21: CIA-RDP84B00049RO01102610027 2 U.S. director of central intelligence. On the back of the card was the itinerary of a trip Mr. Colby planned to make to Asia in the next month. The two policemen also found a Bible with a meat-pie wrapper interleaved at page 252; on the wrapper were scribbled the names of Mr. Colby and U.S. Rep. Bob Wilson of California, then the ranking Re- publican on the House Armed Services Com- mittee. All this might sound like the beginning of a. Hollywood spy movie, but the studios would have to assign their most imaginative scriptwriters to produce a tale as startling as the real-life events that have followed that grisly discovery more than two years ago. The body was quickly identified as that. of Frank Nugan, the chairman of a group of companies affiliated with the private Aus- tralian banking concern of Nugan Hand Ltd. Since then, investigations have pieced to- gether a picti .?e t?-' :r amazing swindle fiat spanned six continents and bilked investors out of millions of dollars. A Political Issue More perplexing yet, evidence has turned up that Nugan Hand bank was deeply in- volved in moving funds about the world for big international heroin dealers and also might have been involved in the shady world of international arms traffic. To cap it off, the offices of Nugan Hand and its affiliates were loaded with former high-ranking U.S. military and intelligence officials Approved For Release 2006/08/21: CIA, -R DP84B00049R001102610022-2 to file claims, apparently fearful that to do >~e would expose them to prosecution for iile- aalndeals carried out with the aid of Nugan d. Currently, liquidators in Sydney, Hong 4ong and the Cayman Islands are investi- ting the company, and often working at purposes; seeking to recover assets. Criminal investigations are being conducted Uy the New South Wales attorney general's office and by a joint task force of the New South Wales police and the Commonwealth police. The Royal Commission on Drugs ran into Nugan Hand so much that it has recom- ended a separate Royal Commission be *)pointed just for Nugan. Hand. ,In June 1980, Mr. Hand, disguised and us- i>jg a phony passport, flew to the U.S., ap- p rently y via Fiji and Vancouver. He hasn't been seen since. Leaving. Australia about the same time 4?s Mr. Hand was his closest friend and ad- 4iser, Bernie Houghton. Mr. Houghton has a broad acquaintanceship with many high- ranking U.S. officials. As a civilian, he dar- 4gly traded goods all over the Southeast 4sian war zone in the 1960s. Though his res- taurant is in a sleazy district of Sydney that warms with prostitutes and sex shows, he has frequently welcomed congressmen, CIA officials and military brass there. A few weeks before Mr. Nugan died, Mr. Houghton played host, at a luncheon and later a din- ner, to five members of the House Armed Services Committee who were in Australia tp inspect defense and intelligence-gathering facilities. He arranged for Rep. Wilson and another congressman and their wives to dine with Mr. Hand. Last year, Mr. Houghton returned to Australia. Authorities have questioned him at length, but he avoids reporters. Eithttming a Body ':'With the scandal refusing to the down in Australia, reports began to circulate that the body in Frank Nugan's grave wasn't his aVd that he was still alive and hiding out in the U.S. Once he was reported having been seen in a bar in Atlanta. Finally, in Febru- ary 1981, officials ordered the body ex- biimed. With gruesome diligence, Australian TV covered the event by interviewing prac- tically everyone in the area. ("Some are dr y, some are wet," one gravedigger told in- terviewers, complaining that Mr. Nugan was "wet" and therefore "very messy.") A dentist definitely identified the remains as those of Mr. Nugan. Stymied by the lack of progress in the in- vestigation of the company's affairs, the Na- tional Times, an Australian newspaper, peti- itioned the FBI under the U.S. Freedom of ;Information Act for information it had on Nugan Hand. The newspaper was told that Hof some 151 pages of material in FBI files, it +eould see 71. But when the papers arrived, they resembled a collection of Rorschach tests, with page after page blacked out in heavy ink and bearing the notation "B-1," indicating that disclosure would endanger U.S. "national defense or foreign policy." What was left was a few pages of more or less routine information, such as a copy of a Nugan Hand subsidiary's petition for incor- poration in Hawaii. In response to more-official Australian demands, the State Department sent a two- man FBI delegation to Sydney in April, 1982. But the two men stonewalled, telling law-en- forcement officials that the FBI had already given its information to an appropriate Aus- tralian agency; they wouldn't say which agency or re-release the material. Austra- lian state and national police investigating Nugan Hand say that they have never re- ceived the information. The only other likely recipient would appear to be the Australian ai 1 Security Intelligence Organization (ASIO), a secret counterspy group that long has worked closely with the CIA. By law, ASIO can give information only to Prime Minister Malcolm Fraser or his at- torney general. Mr. Fraser says the U.S. has assured him that it had no connections with Nugan Hand, and he has rejected opposition- party demands for a top-level probe. But the continuing parliamentary debate could re- kindle the once-hot political controversy over vital CIA bases here. These bases mon- itor U.S. satellites watching the U.S.S.R. and China and direct the U.S.'s nuclear sub- marines. The opposition Labor Party-which now leads Mr. Eraser's liberal Party in some polls-has openly questioned whether the CIA, through ASIO, helped topple Aus- tralia's last Labor government, led by Prime Minister Gough Whitlam. The CIA has denied this. Now suspicions have been raised that Nugan Hand, which handled en- ormous amounts of money, may have been used to channel funds to favored Australian political candidates. When Vice President George Bush visited Australia this April, Labor Party leader Bill Hayden-a strong possibility to become prime minister-used his 30-minute meeting with Mr. Bush mostly to press for the re- lease of details on the Nugan Hand and Whitlam affairs. Mr. Bush only gave his as- surances that the CIA wasn't involved in ei- { ther matter. Mr. Bush was the CIA director i in 1976, succeeding Mr. Colby, who later was to become a lawyer for Nugan Hand. A Secret Wiretap Suspicions of a government cover-up could be heightened by a disclosure by Aus- tralian liquidator O'Brien. He says that he has learned from the government-run tele- phone company that Frank Nugan's phone conversations were secretly recorded the last two years of his life on a device in- stalled at the phone company, apparently by a government agency. Mr. O'Brien says phone-company officials have told him that the tapes-which might solve the mystery of who was behind Nugan Hand-aren't at the company anymore. Wiretap authority is tightly restricted in Australia, being allowed only in cases in- volving national security or narcotics inves- tigations, according to the Commonwealth attorney general's office. State and national police have reported that they don't know anything about a wiretap on Mr. Nugan. Again, this points the finger at ASIO. Australian immigration records show that a senior ASIO official, Leo Carter, vouched for Nugan Hand's ubiquitous Mr. Houghton when he entered Australia in Feb- ruary 1972 with an expired visa. On ASIO's word, Mr. Houghton received a visa allow- ing him to come and go from Australia at will. Mr. Carter has died, and ASIO won't comment on this. Presumably the most sensitive of Nugan Hand's records were shredded right after Mr. Nugan died. But the remaining records hold many suggestions that the company may have been much more than a banking venture. Notes on Troop Movements The records contain long, periodically filed reports about military and political ac- tivities, mostly in Kampuchea (Cambodia), but also in Laos, Vietnam and Thailand. There is no concrete evidence that Nugan Hand was an active participant in U.S. co- vert operations. However, these detailed re- ports of troop movements appear unconnec- ted to any banking or business activity. They were prepared by Nugan Hand's Bang- kok representative, John Owen, a former ca- reer British navy officer, and bear notations that they were to be shown to Mr. Hand. The flies also show that Nugan Hand worked on big international arms deals, though it isn't clear what, If anything, was shipped. For example, there were proposed trans- actions in 1979 for a partnership with Prince Panya Souvanna Phouma, the son of the for- mer Laotian leader Souvanna Phouma. In Approved For Release 2006/08/21: CIA-RDP84B00049R001102610022-2 Approved For Release 2006/08/2,1 : CIA RDP84B00049R001102610022-2 A U T'V L / 4-k) AfYS i ~k y Admirals, Generals, Ex-CIA Men Took Prominent Roles in'N an Hand Bank SYDNEY, Australia-Enough top-rank- ing U.S. military and intelligence officers worked for Nugan Hand to run a small- sized war. The list includes: ADM. EARL "BUDDY" YATES, a 1943 graduate of the U.S. Naval Academy, Le- gion of Honor winner in Vietnam, and com- mander of the aircraft carrier USS John F. Kennedy. Then he was the chief of staff for plans and policy of the U.S. Pacific Com- mand, in charge of all strategic planning from California to the Persian Gulf, until his retirement in July 1974. He became the president of Nugan Hand bank early in 1977, recruited by Maurice Bernard Houghton, who apparently is an old friend. GEN. LEROY J. MANOR, the chief of staff for the entire Pacific Command until he retired in July 1978 to undertake new duties that the Air Force says are so secret that it can't talk about them. These duties are generally known to have included ne- gotiating the 1979 agreement with the Phil- ippine government for continuance of the U.S. military bases there (which Gen. Manor used to command) and investigat- ing the failed hostage rescue raid in Iran in 1980 (an assignment that apparently stemmed from his having designed and commanded the 1970 raid on a North Viet- namese prison camp that failed to find any U.S. prisoners). A much-decorated Air Force three-star general, he also had been the special assistant to the Joint Chiefs of Staff at the Pentagon for "counterinsur- gency and special activities." He joined Nugan Hand's Manila office, allegedly to run It (which he denies), in 1979. GEN. EDWIN F. BLACK a 1940 gradu- ate of West Point. He entered the Office of Strategic Services (OSS), which later be- came the CIA, and was the OSS com- mander in Berlin. He was the chief admin- istrative aide to and frequent chess oppo- nent of Allen Dulles, who became the head of the CIA. He was the wartime boss and then tennis partner of Richard Helms, who also became the head of the CIA. He was on the National Security Council staff un- der President Eisenhower and later the commander of all U.S. troops in Thailand during the Vietnam war, before becoming assistant Army chief of staff for the Pa- cific. He retired in 1970 to become execu- tive vice president of the Freedoms Foun- dation in Valley Forge, Pa., a group pro- moting conservative politics. He also worked for LTV Corp., an important CIA contractor. In 1977, he became the presi- dent of Nugan Hand Inc., Hawaii, and spe- cial representative of the overall organiza- tion, making frequent trips to Asia. He says he was recruited by Adm. Yates and another admiral. GEN. ERLE COCKE JR., whose entry in Who's Who in America says that during World War II he was "prisoner of war three times, actually 'executed' by a Ger- man firing squad and delivered the coup de grace but survived 1945." He held vari- ous posts with the Defense Department and as an executive with Delta'and then Peruvian airlines. He is a former national commander of the American Legion, hon- orary commander of the Nationalist Chi- nese Air Force and holder of the French Legion of Honor and top medals from Spain, the Philippines and Italy. Now listed as a retired Penes] with the U.S. National Guard and a consultant. His consulting of- fice served as Nugan Hand's Washington office. WILLIAM COLBY, the U.S. director of central intelligence, 1973-76. He ran intelli- gence programs in Vietnam during the war. In 1979 and 1980, as a lawyer with the Wall Street firm of Reid & Priest, he worked for Nugan Hand on a variety of matters-tax problems; the Foreign Cor- rupt Practices Act; an abortive project to relocate Indochinese refugees on an island in either the Caribbean or the Pacific; an attempt to take over a Florida bank; the operations of Nugan Hand's mysterious Panama branch, and the problems sur- rounding Mr. Nugan's death. Mr. Colby submitted $46,000 in bills, which weren't paid. A $10,000 check for his retainer was issued but never cashed. WALTER McDONALD, a career CIA officer since 1975 and deputy director in charge of economic research from 1972 to 77. Then, while still in 'the CIA, he helped his former boss, onetime CIA Director James Schlesinger, set up and run the U.S. Energy Department. He served on the National Foreign Intelligence Board, the senior advisory group in the intelligence community. He announced his retirement in 1979, went into consulting and almost immediately by his own account began spending most of his time with Nugan Hand, traveling In the U.S. and Europe with Mr. Nugan and talking with him daily. GUY PAUKER, a Rand Corp. staff member who has advised the CIA and other government agencies since the 1950s, although he denies reports that he is a ca- reer employee of the CIA. Mr. McDonald, whom he calls his "good friend," once said that Mr. Pauker has long had frequent per- sonal access to White House national secu- rity advisers, including Henry Kissinger and Zbigniew Brzezinski. Mr. Pauker went to work as a consultant to Nugan Hand af- ter Adm. Yates introduced him to Messrs. Nugan and Hand. He;, in.'turn, introduced them to Mr. McDonald. ? Mr. Pauker says be wasn't involved in any-completed deals ,for the bank. DALE HOLMGREN, a former U.S. Army officer in Taiwan who became man- ager of flight services for Civil Air Trans- port, a CIA-run airline in the Far East. He then went into business in Taiwan. He opened the Nugan Hand branch in Taipei in 1978 as a one-man representative. Adm. Yates once said that Mr. Holmgren had long worked with the U.S. military in Tai- wan to develop "within the social structure of the Chinese in Taipei a close relation- ship with the U.S. military forces and the business and government community." Adm. Yates also said that Mr. Holmgren had worked for Nugan Hand without pay at least for a while because he had an inde- pendent income. ROBERT "RED" JANSEN, a former CIA station chief in Bangkok who advised Thai governments through almost daily meetings with the prime minister in the early 1970s, according to persons close to them. He worked for Nugan Hand there in 1978, although he apparently severed his relationship that year (according to a col- league, because he was warned by the U.S. embassy that his presence at the bank had aroused suspicion). Mr. Jansen apparently has an unlisted number and couldn't be reached for comment. Approved For Release 2006/08/21: CIA-RDP84B00049R001102610022-2 Approved For Release 2006/08/21 : CIA-RDP84B00049R001102610022-2 rR LIAA) / `Y5ro1Y one letter, Prince Panya took three pages to list available weapons, including missiles, light and heavy armor, tanks, combat heli- copters and F-104 fighter planes and naval patrol planes. Nugan Hand memos indicate that the weapons were intended for delivery to Indonesia and Thailand. They also discuss creation of a private, freight-oriented airline in Southeast Asia (to be called "Sky of Siam") and other deals with Prince Panya. Memos show that in 1975 Mr. Hand was arranging the sale to Rhodesia of recoilless rifles, mortars, grenade launchers and ma- chine gems, and was negotiating for ship- ments of Rhodesian ivory. Mr. Houghton has acknowleged in testi- mony that in 1979 he met in Switzerland with Edwin Wilson, the former CIA officer who is now in U.S. custody, who is charged with selling explosives in Libya and who is al- leged to have supplied trained men, arms and technology to Libya and other military buyers. A former Nugan Hand representa- tive in Thailand, Neil Evans, has testified that Mr. Wilson went to Bangkok to discuss arms deals with Mr. Hand. Other Nugan Hand officials, however, deny Mr. Evans's story. There seems no denying, however, that Nugan Hand was heavily involved with drug dealers. Murray Stewart Riley, a former Sydney policeman now serving time in Aus- tralia for attempting to import a boatload of marijuana from Thailand, was a regular customer of the firm. So were Riley's asso- ciates, who deposited drug money in Sydney and withdrew it in Asia. Riley's business was brought to the bank, according to extensive testimony, by Harry Wainwright, a former San Francisco crimi- nal lawyer who fled to Australia in 1973 after being indicted in the U.S. for income-tax evasion. Testifying from prison two years ago for an Australian Royal Commission looking into drug trafficking, Riley said his heroin and marijuana imports were intended for the U.S. market. In the words of the com- mission, he said "that he had been informed that Nugan Hand offered a facility to trans- fer funds from Hong Kong to the United States." Over $1 Million of Drugs Investigators say that they have traced about $250,000 that Riley moved to Asia via Nugan Hand and that they believe the final figure will exceed $1 million. They say they believe that much of the heroin was trans- shipped to the U.S. in containers that were repaired by a dockside welding firm in Aus- tralia that was closely tied to the dope deal- ers. They believe that another heroin ring tied to Nugan Hand used a similar sys- tem. Apart from their connection with the bank, Michael Hand and Frank Nugan had been viewed suspiciously by narcotics agents for some time. As early as 1973, the Australian Narcotics Bureau began a file on Mr. Hand based on reports that he and K.L. "Bud" King, a former pilot for Air America airline had been flying dope in from Asia to an Australian airstrip. Air America was a Vietnam war-era airline, with close connec- tions with the CIA. U.S. drug-enforcement officials now acknowledge that the airline also occasionally ran heroin out of Southeast Asia's famed "Golden Triangle" poppy- growing area. The landing strip involved in the 1973 Australian Narcotics Bureau report was on a real-estate development promoted by American singer Pat Boone and financed by millionaire shipping magnate D.K. Ludwig. Mr. Hand had worked as a salesman for the project for several years after he came to Australia In 1967 and later asserted that he had made a fortune from his land sales. The report of the illegal drug flights came from a lawyer representing Mr. King's housekeeper. Mr. King, who also worked for the Boone-Ludwig project, has since died in a fall. The report was released recently among many files turned over to the Australian parliament by three former narcotics officers who contend that the nar- cotics bureau covered up information on Nu- gan Hand drug dealings. Meeting an Opium Overlord Other released files include information on alleged Nugan Hand drug deals supplied by Andrew Lowe, formerly Sydney's biggest heroin dealer (by his own assessment), who recently completed a prison sentence for his dope deals. Mr. Lowe has testified that he arranged a meeting between Mr. Hand and Khun Sa, the Golden Triangle's biggest opium overlord, though there is no way to verify that. Through meticulous police work, how- ever, Australian officials have documented in a still unreleased report a series of trans- actions tying Nugan Hand not only to drug dealing but also possibly to a series of con- tract murders in which the so-called Mr. Asia heroin syndicate eliminated at least three persons who were informing Austra- lian police about drug activities. Authorities say the "Mr. Asia" group's heroin circu- lated in the U.S. and elsewhere and brought at least $100 million cash to the syndicate's operators. According to testimony from dope ring and bank insiders, corroborated by tele- phone logs and other evidence, the syndicate was linked to the bank through a two-man Sydney law firm that represented both Mr. Nugan and various members of the heroin syndicate. The firm's senior partner, John Aston, used Nugan Hand for personal finan- cial dealings and helped bring in other cli- ents. And the law office was used as a drop- , off point for bank clients who wished to re- main secret; they left parcels of cash or other Items at the law office for pick-up by bank representatives. One parcel that bank director George Shaw, a major operational figure at Nugan Hand, says he picked up at the law office March 26, 1979, contained $285,000 in small bills. This money has been traced through a laundering process involving a soft-drink firm that Nugan Hand had acquired (appar- ently because it dealt in big quantities of cash) and through accounts at different banks in Hong Kong, New York, Boston and Singapore. Eventually the $285,000 was paid out in checks from Nugan Hand's Singapore office to a man identified by British police as the Singapore leader of the heroin syndicate. The payout was personally arranged by Mr. Hand in Singapore as instructed in a coded telex from Mr. Nugan in Sydney. This com- plicated money movement was a standard procedure Nugan Hand used for clients wishing to evade Australia's strict currency control laws, designed to keep capital at home. j7 Approved For Release 2006/08/21 : CIA-RDP84B00049RO01102610022-2