Drugs, thugs and mystery flights: Byron Bay's CIA airport

The story of drug smuggling at Ocean Shores reads like a spy novel, with its U.S. Green Beret officer, CIA Air America pilot, billionaire shipping magnate, and media and transportation moguls, writes Dr Norm Sanders.

MOST AUSTRALIAN airports started as paddocks occasionally visited by the odd biplane. Those that escaped being swallowed up by houses then grew in varying degrees, some becoming bloated beyond recognition.

I currently fly out of the Byron Bay airport at Tyagarah, which has a more sordid past. It was apparently built as the Australian base for drug imports from Southeast Asia, with the complicity of the U.S. Central Intelligence Agency (CIA.)

Tyagarah is a 1,200-metre-long grass-surfaced airport located north of Byron Bay, NSW, sandwiched between the freeway and the beach. It is now home to a bunch of motorgliders, recreational aircraft, helicopters and a skydiving operation. The airport is close to the residential community of Ocean Shores.

Those with very long memories may recall that Ocean Shores was involved in the shady dealings of the Nugan Hand Bank in the 1970s. The Ocean Shores story reads like a spy novel, which includes a U.S. Green Beret officer, a CIA Air America pilot, a billionaire shipping magnate, media and transportation moguls, and, of all things, American singer Pat Boone.

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Dr John Jiggins' book investigates criminal behaviour and drug trafficking, particularly marijuana, in Griffith and Sydney in the '60s and '70s.

Nugan Hand Ltd was founded by Frank Nugan, a Griffith vegetable grower and lawyer with Mafia connections and former U.S. Green Beret Mike Hand. After Hand’s involvement in the Vietnam War, he began training guerillas in Northern Laos for the CIA.

This established his ties to the Golden Triangle trade. The two generally split the business, with Nugan supposedly taking care of tax fraud and money laundering for the CIA and others. Hand managed the drug money and the international branches.

Nugan Hand rapidly expanded from a single Sydney office to a global network that included branches in Chiang Mai, Manila, Hawaii, Cape Town, Hong Kong, Taiwan, Cayman Islands and Washington, D.C.

The Nugan Hand Bank obtained respectability by recruiting several retired senior U.S. military and intelligence personnel, such as former Rear Admiral Earl “Buddy” Yates as bank president and ex-CIA head William Colby as legal counsel. Australian trucking magnate Peter Abeles and media moguls Rupert Murdoch and Frank Packer were also allegedly connected.

The Ocean Shores development was a major part of the bank’s money laundering operations. Ocean Shores was originally a project of a mysterious shipping billionaire named Daniel Keith Ludwig and squeaky-clean American evangelical singer Pat Boone. (Ocean Shores was named after Boone’s home in Ocean Shores, Washington.)

Ludvig bought a large, hilly dairy property near the beach and proceeded to construct a high-class development with winding streets designed for view lots. Power lines were installed underground and a few demonstration homes were constructed.

Unfortunately, the sweeping ocean and mountain views weren't enough to overcome the distance from Sydney, where the potential buyers were, and Brisbane buyers tended to look north. Byron residents sneeringly called the sparsely settled development “Open Sores". (All this has changed now — even Melbourne residents are moving in, running their businesses on the internet with only occasional visits to the big smoke.)

Apparently, Nugan Hand saw the advantages of a relatively isolated Australian property which could serve as a base for drug smuggling and had money-laundering potential. For one thing, Ocean Shores is located on the Brunswick River which has one of the few river mouths on the New South Wales coast with reliable access to the sea. Locals still remember talk of fast boats heading out from the harbour and picking up drug packages from freighters offshore.

While arranging drug and armament deals around the world. Nugan Hand had joined up with Peter Abeles, who, it's believed, used his (Thomas Nationwide Transport) TNT trucking network for distribution from Northern Territory airstrips after the drugs had been transported from Asia in larger aircraft.

The bank bought Ocean Shores from Ludvig for an undisclosed sum. Very few lots were actually sold before or after the bank took over. Estimates are that less than $100,000 was actually taken in, far less than was claimed. Eventually, Nugan Hand started importing directly to Ocean Shores by air. A rumour – never substantiated – was that the bank had bribed Australian customs officials with cheap lots.

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Ex-Air America pilot Kermit "Buddy" King did the flying. He lived in Ocean Shores and at first operated from a road near the beach. Nugan Hand then built an airstrip on grazing land near the Tyagarah Swamp in 1973.

Ageing Tyagarah locals remember the flights but don’t recall the aircraft type other than it being a small twin-engined aeroplane with enough range to reach northern Australia.

When not hauling drugs, King flew potential real estate customers up from Sydney. The scenic two-hour fight impressed the punters at first but they put their wallets away when they realised the pre-freeway road trip from Sydney was an all-day expedition.

King had a Thai housekeeper whom he had brought with him from Asia. Apparently, he didn’t treat her too well and she was a bit upset. She went to a lawyer in Sydney over an unrelated traffic accident and took the opportunity to dob King in. She said that he regularly flew planeloads of narcotics to the secluded Tyagarah airstrip. Mike Hand, according to the housekeeper, was part of the operation.

The lawyer contacted narcotics officials but nothing was done with the information at the time, except for the filling out of the first of many drug-smuggling complaints involving Nugan Hand principals.

Nugan Hand Bank eventually became a major public scandal with numerous investigations into its murky operations and was shut down. None of the main characters were ever gaoled.

Frank Nugan was found dead in his Mercedes near Lithgow with a .30 calibre rifle by his side. The official verdict of suicide was not widely accepted.

Mike Hand escaped Australia by way of Fiji using a false passport and sporting a fake beard and moustache. He is believed to have received a new identity from his CIA mates and has since totally disappeared.

Although, in 2015, Fairfax Media published excerpts from a book by Australian author Peter Butt called Merchants of Menace: The True Story Of The Nugan Hand Bank Scandal. It seems Hand has been residing under the name Michael Jon Fuller in the U.S. town of Idaho Falls.

Pilot Buddy King’s last flight ended badly when he “fell” ten floors from a Sydney apartment building.

All very heavy stuff.

At least I got a place to keep my plane near my home in... Ocean Shores.