Alleged drug trafficker caught in one of ACT's largest busts denied bail

The man alleged to have stored tens of thousands of drugs used by a major criminal network will spend Christmas in custody after he was refused bail.

Thomas Eric Kelleher is one of three men arrested over what police allege is the largest illegal controlled and prescription drug distribution network ever identified in the ACT and Victoria.

It is alleged the group’s “boss” was Michael Adam Kustic and it operated an illegal business under the name of “OzPharmLabs” which was similar to an online pharmacy.

Customers allegedly paid in cryptocurrency and the group, which allegedly operated from at least August to December 2023, posted illicit items to locations across Australia.

Mr Kelleher is alleged to have stored the business’s stock at his home in O’Connor and packaged the orders for distribution.

The 38-year-old was handed seven fresh charges – including trafficking a large commercial quantity of a controlled drug, which carries a maximum penalty of life imprisonment – before he applied for bail in the ACT Magistrates Court on Thursday (21 December).

A senior constable alleged that 68,000 substances had been seized from the man’s garage, along with a price list showing the items would be sold for $200 to $400 each.

“Every wall of the garage had drug items on them,” she alleged.

It is alleged there was a table in the middle of the garage that was used as a packing station and $66,000 cash was also found at the house.

The senior constable claimed Mr Kelleher had refused to unlock an electronic device for police. However, they had been able to access it in the last couple of days and after looking at its contents, she alleged he was “more involved than what we initially thought he was”.

It is alleged he had talked to another person about how police seized two tonnes of steroids in NSW in mid-2023, after which he moved to the ACT.

He allegedly told this person “it’s too soon to start the business again”, but it was up and running three weeks later.

The senior constable said the investigation was ongoing and police were aware of other persons of interest. Police were also trying to unlock seven more devices.

Under cross-examination from Mr Kelleher’s barrister Jack Pappas, the senior constable accepted it was possible some of these devices may not function, but said the three she found herself were fully operational.

As part of the allegations, Mr Kelleher is accused of trafficking 70 chocolate bars with labels stating they contained four grams of psilocybin each. The court heard this means the drugs would weigh a total of 280 grams, but he had been charged over the whole weight of the bars.

Mr Pappas said it was clear on the prosecution’s case that his client was somehow involved in the alleged illegal activity, but the level of his involvement remained a matter of “great conjecture”.

Magistrate Glenn Theakston still refused bail, saying the scale of the alleged offending was significant, it was only the very early days of the investigation and there was a risk of interfering with the evidence if he was released.

Mr Kelleher now faces 31 charges, including five counts of drug trafficking, one count of participating in a criminal group, 10 counts of supplying anabolic steroids and 13 counts of supplying a declared substance.

The qualified carpenter has pleaded not guilty and will next face court on 29 February.

Mr Kustic, a 39-year-old from Googong, has also been refused bail.

His case was mentioned in the Magistrates Court on Thursday as well and his lawyer, Rachel Fisher from Kamy Saeedi Law, said he would enter not guilty pleas to all of his 46 charges. His matter was adjourned to 1 February.

A 27-year-old man who was arrested at a home in Gordon has already faced court.