Peter Pilarinos

Pilarinos was gun-carrying gangster-figure well known to police.

His brother Jerry owned the Palace, a St Kilda nightclub.

Peter Pilarinos was a police "groupie" who ensured that the Palace was always used for detective functions and fund-raisers.

Off-duty policemen had worked on the door as security over the years.

The relationship between some police and the nightclub appeared to flourish until the club was deliberately burnt down on July 11, 2007.

Two serving police sergeants are behind a lucrative hot dog business, Shot Dogs, which operated outside the Palace and other nightclubs.

One of the sergeants was transferred from St Kilda after adverse publicity about the business, but the hot dog vans were still seen around the Palace until the fire.

Peter Pilarinos was seen by police as a dangerous criminal with ambitions to be a crime boss.

Many detectives knew the Pilarinos family well.

But most detectives had a harsh view of Pilarinos. "He is an arrogant bastard who believed he was invincible," said one.

In 1974 Pilarinos began a relationship with a woman named Valerie.

She would later become his wife.

In 1977 the couple had a son.

This was followed by another in 1980.

In December 1983, Valerie began living with Pilarinos.

The pair married on May 19, 1989.

January 21, 1992, saw the first of the alleged meetings between Pilarinos and his associate, corrupt detective Kevin John Hicks.

These meetings were mostly at a Greek restaurant in Fitzroy and continued until May 15, 1993.

Hicks was the officer in charge of the keys to the Attwood drug compound where police exhibits and seized items were stored.

The keys were passed on to Pilarinos and his cartel.

At 1.22pm. on April 8, 1992, Detective Lachlan McCulloch received a message to ring the Selby Medical and Scientific Supplies in Melbourne's east.

A man named James Sweetin had made some questionable purchases, he was told.

The next day, he went to the company's Mulgrave office and was given a list of chemicals and lab gear the man had bought.

Sweetin was clearly intending to produce speed.

McCulloch was able to trace him to Pilarinos.

At 4.35am on June 13, McCulloch went to Pilarinos' home (left), spread over three big blocks on a hill in St Clems Road, East Doncaster.

He sifted through his suspect's wheelie bin and found two recipes for speed that had been ripped up and stuffed in a tin of dog food.

Next to the chemical methylamine was marked $0.00.

McCulloch didn't know that the nil amount meant it had already been stolen from the drug squad compound in Attwood in a conspiracy authorised by a corrupt police officer.

Nor did he know that he was being sold out.

Sweetin's telephone was being tapped and on September 29 police monitored a phone call he made to drug associate Ken Milton.

Milton said he was about to find out if the phone was bugged.

When he rang back he was in no doubt.

"Don't say my name, treat your rear vision mirrors like guardian angels, treat this thing like everybody is listening."

The next day, police broke into a house in Ferntree Gully which was being used as a speed lab.

All the equipment had been re-boxed.

The gang had been tipped off and had cancelled their cook.

McCulloch was disappointed.

There were more crims to catch and he wasn't going to dwell on the one that got away.

But what sometimes kept him awake at night was the belief that Pilarinos and his gang had at least one detective on his payroll.

McCulloch had two Polaroid photographs taken from a surveillance video and stuck one of Sweetin on his grey locker to the left of his desk.

It mysteriously went missing.

A few months earlier, Senior-Detective Kevin Hicks, then 37, had arrived at the drug squad.

He had been sacked from the major crime squad for laziness.

The majors were about to be disbanded.

Hicks was now the assistant property steward in charge of drug exhibits.

It was a humiliating fall, but he still had a wealth of experience and McCulloch liked to talk to him.

Hicks would chat virtually every day to the operational detectives, asking them what was going on.

Most thought he was just missing the action.

What Hicks was really doing was selling them out for envelopes of cash ranging from $500 to $2500 - usually hand-delivered to him while sitting in a Greek restaurant in Fitzroy.

McCulloch started to investigation Pilarinos more thoroughly, but he decided to keep some of the information to himself.

It was three years before it started to come together. 

In April 1995, McCulloch was upgraded to acting detective sergeant and was able to start his own investigations.

He immediately targeted Pilarinos in Operation Austin.

By May 1995, he had enough information to have a tap put on his home phone.

A man named Steve started to ring regularly.

He was close to the target, but his identity was a mystery.

They would talk in code but were clearly discussing drug deals.

McCulloch was driven, but says he was not obsessed with the case.

Early one Thursday morning he arrived at work with a hangover.

He had been to a drug squad party at what was the final night of the old Police Club in Mackenzie Street.

McCulloch sat in the Special Projects Unit at St Kilda Road to listen to Pilarinos's bugged phone.

Steve was talking.

He, too, was hung-over and was telling Pilarinos what a big night it had been.

It slowly dawned on McCulloch that Steve had been to the same party and was probably a copper.

McCulloch identified a pager number that belonged to Steve and rang it.

The polite woman at the paging service said she could not pass on the name of the client as he was a detective sergeant of police.

That man is still in the force.

McCulloch listened to many calls where Steve and Pilarinos discussed the man they called "K" or "The Fat Boy from up North".

It was Hicks who had moved from the drug squad and was stationed at Benalla.

Within two days of McCulloch identifying Steve and Hicks as dealing with Pilarinos his drug squad office was burgled.

If he needed any confirmation that he was being sold out it came when he heard Pilarinos planning a drug drop-off in St Kilda in one hour.

This was the break he wanted and McCulloch raced to Wellington Street for the triumphant arrest.

As McCulloch moved in to make the grab, Pilarinos turned, smiled and said, "So you're Lachlan.''

There were no drugs.

He just wanted to see who was after him.

"Pilarinos was very affable and charming, the sort who would use you up then drop you like a hot cake.

But he hated Lachlan like you wouldn't believe,'' one detective recalled.

On August 9, 1995, a cache of weapons was seized during a raid on the Pilarinos home.

Peter Pilarinos Senior and Junior were charged with possessing illegal firearms.

Police found a slingshot, a dagger, knuckle-dusters, a butterfly knife and nunchukkas in Pilarinos Jr's bedroom.

Pilarinos Sr was also convicted of attempting to gain property by deception.

His son was convicted of trafficking and possession of cannabis.

Police found copies of the documents relating to drug squad target and associate of detective Inspector John McCoy, Joe Reading on the kitchen table.

Pilarinos said that Reading had paid a senior policeman in the drug squad $70,000 for the material.

The documents had been stamped with court numbers, proving they had been released officially.

Pilarinos named John McCoy as the corrupt Drug Squad officer.

He said the Readings had a very large file implicating McCoy in taking bribes.

In 1996, McCulloch had formed another investigative team, codenamed Redalen and, in August, arrested James Sweetin at an amphetamines lab in Bayswater.

Sweetin finally admitted that it was Hicks who was the corrupt policeman supplying information and drugs to Pilarinos.

He said that Hicks had supplied the keys to the drug squad lock-up and they had burgled the containers to steal back chemicals seized in earlier raids.

If McCulloch thought the admission was a breakthrough he didn't know how hard it was to catch a bent cop.

An ethical standards department taskforce, codenamed Guardsman was formed.

McCulloch was seconded to work for it.

The elusive Jerry Pilarinos came under police notice during the surveillance operation.

He was overheard discussing a plan with his nephew, Peter Pilarinos jnr, to commit perjury over a 1994 road crash to make a false insurance claim of $35,000 against AAMI.

On May 19, 1997, Pilarinos and Hicks were arrested.

Hicks knew it was coming.

He said nothing to the investigators but he said plenty to others.

He told any policeman who would listen that he was innocent.

It was a frame-up and he would fight it.

One detective who is probably lucky he didn't end up in the dock with Hicks said the case was a "souffle" - a hard crust with nothing in the middle.

It came as a surprise when Hicks pleaded guilty.

He thought Pilarinos would roll over and give evidence against him.

If that happened, he would do 10 years.

Jerry  Pilarinos, Peter Adrian Pilarinos and (Peter Adrian's mother) Valerie Pilarinos were all found guilty of perverting the course of justice in the County Court in 1997.

Jerry Pilarinos pleaded guilty in return for several other charges being dropped.

That the various Pilarinos family members were prosecuted at all testified to the work of a group of dedicated detectives, as the family had for years cultivated crime squad and St Kilda police contacts.

On March 23, 1998, Magistrate Robert Langton warned Peter Pilarinos and his son Peter Adrian Pilarinos, 21, that "the roof would fall in on them if they stepped out of line again".

The two men pleaded guilty in Heidelberg Magistrates' Court to possessing illegal firearms, including a .44 Uberti revolver with a laser sight, a .22 pen pistol and a .22 Winchester rifle.

Mr Langton sentenced Pilarinos Sr to six months' prison to be served by intensive corrections order.

His son was sentenced to six months jail suspended for two years.

On May 6, 1998, the Melbourne Magistrates' Court heard a drug squad detective took his policewoman girlfriend to meetings with an alleged drug boss.

Constable Maree Davies told the court Sen-Det. Kevin Hicks took her to meetings at the East Doncaster mansion of alleged drug boss Peter Pilarinos on his motorcycle.

In a statement tendered to court, Constable Davies said she and Sen-Det. Hicks regularly met Mr Pilarinos and other members of the drug squad at a Bourke St bar.

Constable Davies said she knew another police officer named David Waters who "seemed to have a similar relationship with Mr Pilarinos to Kevin".

Constable Davies, who said she now had no relationship with Sen-Det. Hicks, told the court in a statement:

SHE twice found packets of white powder with Sen-Det. Hicks' cigarettes which he told her were exhibits.

ON one visit to Mr Pilarinos's house, Sen-Det. Hicks pointed out police surveillance cameras but told her: "It's all right, they have been cut off".

SEN-Det. Hicks and Mr Pilarinos met two men at Barfly's in Bourke St who were shot dead a week later after a suspected drug deal.

On July 5, 1999, Valerie Pilarinos, pleaded guilty to three counts of social security fraud.

Peter's wife had accepted numerous government pension payments whilst living with Pilarinos in de-facto and married relationships.

Valerie was sentenced to jail but appealed the penalty.

During September 1999, Valerie Pilarinos appeared before the Supreme Court to appeal against her sentence of imprisonment after she had pled guilty to deceptively receiving welfare payments.

The court had heard that between December 1986 and January 1986 Valerie had received some $125,000 by way of pension payments to which she was not entitled.

The application was dismissed.

Early in 2000, Peter  Pilarinos pleaded guilty to bribing Kevin Hicks between January 1992 and May 1993.

Pilarinos also pleaded guilty to trafficking in methylamphetamine, theft and burglary.

At the same time Hicks, 45, of Lima East, near Ballarat, who had been a policeman for 23 years and a long-term member of the major crime squad, admitted accepting bribes and also pleaded guilty to theft and burglary.

He was sentenced to 7 1/2 years' jail and ordered to serve at least five.

The court heard Hicks received thousands of dollars in bribes from Pilarinos mostly at the Greek restaurant meetings between 1992 and 1993.

He was also suspected of selling out an amphetamines operation ('Mint') in the late 1980's.

In sentencing the pair, Justice George Hampel said theirs was high-level corruption.

On April 11, 2000, in pre-defence submissions, the defence counsel, Mr Brian Cash, said Peter Pilarinos would say that Kevin Hicks, a "pitiful" former drug squad detective he bribed to obtain keys to a police drug compound, was "but a minnow" and subservient to other corrupt officers.

Mr Cash, before Justice George Hampel, said Pilarinos made a statement to the Victoria Police to tell its ethical standards division about the alarming extent of corruption in the force.

Pilarinos would say a drug cartel operated within the Victoria police drug squad and among other officers, and he had been involved with corrupt police officers on a weekly basis for 10 to 15 years, Mr Cash said.

He said Pilarinos would now be seen as an informer of some description.

Pilarinos was in fear of his life, had received death threats and invited the holding of a royal commission.

"He is doubtless a key candidate to be killed in or out of prison," Mr Cash said.

Cash said Hicks held the whip hand over Pilarinos, who was compelled by profit, but could have been arrested at any time.

He said the security arrangements at Attwood regarding drug storage were so inept as to be unbelievable.

He said no one was permanently stationed at the compound, visitors' records were not kept, locks and keys were not sophisticated.

Mr Cash said Pilarinos was put up to public ridicule by newspaper reports wrongly describing him as a drug baron.

Pilarinos accepted he had been a petty criminal, but the amount of the bribe money paid and quantity of drugs produced and sold was unknown.

There was no evidence that Pilarinos had sold a trafficable quantity of drugs.

Mr Cash said it was alleged Pilarinos was pressured by others not to plead guilty to the charges or give evidence against Hicks and he would be looked after.

Pilarinos' son, Mr Christopher Pilarinos, said family members had been bashed and handcuffed at the family home.

The assistant secretary of the Police Association, Senior Sergeant Paul Mullet, described the claims as an exaggeration.

He said there was "absolutely no need" for a royal commission into police corruption.

"There are, as has been evidenced, individual cases of corruption within our membership. It's only the real minority that unfortunately, as bad apples from time to time, bring into question this issue," he said.

Michael Tinney, for the Office of Public Prosecutions, said allegations about police drug cartels and the alarming extent of corruption in the force were "just words".

He told Justice George Hampel: "Nowhere in this case has there been one word to support this preposterous claim."

Cash said Pilarinos was available to help police in inquiries and would give evidence in court.

He said material was led in closed court that indicated matters in which Pilarinos was able to give support.

Proceedings took place in closed court for about two hours before public hearing resumed.

Cash said on Monday April 10, 2000, in open court that witnesses might be sought for cross-examination and evidence might be called in closed proceedings.

Cash asked Justice Hampel to consider a suspended jail term for Pilarinos.

But Mr Tinney said a suspended sentence would be manifestly inadequate and the prosecution would argue Pilarinos should receive a substantial jail sentence.

Justice Hampel said he did not agree it was an appropriate case for a wholly suspended sentence.

Earlier Mr Tinney said Pilarinos might have been upset about newspaper reports calling him a drug baron, but media interest would be almost inevitable when he involved himself in crimes with a police officer.

He said Pilarinos was the head of a group that set out to manufacture amphetamines, and Pilarinos had mentioned knowing someone in the police force who might be able to help when the group had difficulties with the supply of one drug.

Pilarinos was then jailed for 8 1/2 years.

On February 15, 2001, three Court of Appeal judges agreed with Peter Pilarinos's original sentence of 8 1/2 years with a minimum of six, but said his bladder cancer would make jail especially tough for him.

They reduced Pilarinos's minimum sentence to four years and set a maximum of 7 1/2 years.

Justice Alex Chernov said Pilarinos's cancer had been diagnosed after he was sentenced last year.

He said an attempt to kill the cancer had failed partly because of the stress the 46-year-old felt in jail.

Justice Chernov said Pilarinos's cancer meant that prison would be more burdensome to him and would probably be detrimental to his chances of beating the disease.

The Palace nightclub was destroyed in a suspected arson attack on July 11, 2007.

As arson investigators combed the ruins of the Palace nightclub after the fire, plans to bulldoze the wreckage were postponed.

Jerry Pilarinos, a director of lessee company Bradto, had been a prime mover behind the nightclub, but has lain low while other spokesmen fronted a big-spending campaign to block development of the so-called St Kilda "triangle".

The 1960s nightclub — on prime Crown land next to the heritage-listed Palais Theatre — has been portrayed by its supporters as a victim of government bullying and corporate greed.

But the Palace's backers had spent millions of dollars on high-powered lawyers and publicity and political campaigns in the two years before the fire.

This fuelled speculation about their means, motives and identity — specifically that they were attempting to extract a hefty payout from the State Government and Port Phillip Council, heavily committed to the project going ahead.

Although the Palace had featured strongly in the St Kilda development controversy, Mr Pilarinos kept a low profile until he broke cover the month before the fire, when he was named as the buyer of the Metro nightclub in the city for $9.8 million.

Andrew Rule of the Age wrote that one reason for Mr Pilarinos' pointed silence in the campaign to "save" the Palace could be his brother Peter's criminal history.