The ‘Chinese’, the Shop and the Drug Dealer: Inside Operation Ellerslie

An investigation into the suspected supply of synthetic cannabis in Christchurch revealed how an employee of the Black Power gang ran an astute small business he called “the store” – with daily sales of as much as $6,000, Sam Sherwood reports.

Jacob Edward Keelan had a thriving business.

People from all over Christchurch visited a Kāinga Ora housing unit in Sydenham which he called ‘the shop’.

The customers could pay only $10 per visit to buy his goods, and with daily sales as high as $6000, there were plenty of customers.

Given the money at stake, Keelan made sure he was aware and always made sure there was enough inventory to meet the demand and that the money was secured.

There was only one problem with Keelan’s business and the goods he marketed: they were actually synthetic cannabis.

But unbeknownst to Keelan, the police listened and watched. The game was almost over.

Twelve months after his arrest last September, Keelan pleaded guilty to his involvement in the supply of synthetic cannabis in the city. He will be sentenced in December.

Jacob Keelan's customers could pay just $10 per visit for a bag of synthetic cannabis.  (File photo)

CHRIS SKELTON/STUFF

Jacob Keelan’s customers could pay just $10 per visit for a bag of synthetic cannabis. (File photo)

With his confession stuff can report the summary of the facts from the case – which reveals how his operation worked, including clandestine encounters in parking garages.

“He is a street dealer who supplies and makes financial profit from buyers who are addicted users of synthetic drugs,” the summary of the facts reads.

Several others who have also been charged in connection with the investigation, who allegedly supplied synthetic drugs to Keelan, have pleaded not guilty and have misappropriated their names.

Operation Ellerslie

In August 2021, the Canterbury Organized Crime Unit began an investigation into the suspected supply of synthetic drugs in Christchurch, dubbed Operation Ellerslie. Their first target was Keelan, a 61-year-old Black Power gang.

From August 30 to September 10, the police intercepted his private communications and secretly monitored him.

The investigation confirmed that Keelan was heavily involved in the supply of synthetic drugs in southern Christchurch.

Keelan would buy synthetic drugs for his “store” and for his own personal distribution line from a person he called “The Chinaman”.

He and The Chinaman met in various public locations, such as supermarket parking garages or shopping malls, to resupply, as many as three times a day.

JOHN KIRK ANDERSON/STUFF

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Keelan is said to communicate with The Chinaman through the secretive online social media platform Telegram.

But police allege that the Chinese were actually two men – dealers who were the face of the synthetic drug wholesale business, which was operated by a third person.

Operation Ellerslie determined that the supply of synthetic drugs was carried out by an organized criminal group involving Keelan, The Chinaman and others.

The Chinese, led by their boss, would meet and supply several Canterbury-based buyers of synthetic drugs, including Keelan.

The two men who formed “The Chinaman” shared a job ensuring that business could be conducted seven days a week, in their Toyota Prius, which they shared, meeting buyers and distributing their product from 9 a.m. to 9 p.m. .

Jacob Keelan's company had a daily turnover of a whopping $6000

Canterbury Police

Jacob Keelan’s company had a daily turnover of a whopping $6000

‘The store’

Keelan ran “the shop” from the Kāinga Ora unit – which was not where he lived – as his main supply center.

Close contacts and buyers often called him to ascertain his location, and when he was home, he told them to “come home” or referred them to the store.

Keelan sold 0.7 gram bags of synthetic drugs for $10. The summary of the facts says that a “severely addicted user” of synthetic drugs could consume up to 30 bags of synthetic drugs daily.

Police say he was responsible for the daily supply of between 100 and 500 grams of synthetic drugs, enough to supply more than 700 people a day.

It was estimated that the store’s daily financial turnover ranged from $1000 to $6000.

A woman associated with Keelan manned the store — where she lived — and ran it seven days a week. She would report back to him regularly when either stocks went low or cash positions got high, and he would sort it out.

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Shortly before noon on September 9, last year, Keelan told the woman that he would drop off 38 packages.

About half an hour later, the police searched the store. The woman was inside and the police found 37 bags of synthetic cannabis in a plastic bag.

By 5:46 p.m., the store had reopened and sold to customers from a vehicle parked outside the address and manned by two Keelan employees. It stayed open until 11pm that night.

It wasn’t just money that Keelan would take as payment for synthetic drugs. A user organized to trade his son’s taiaha (a traditional Māori weapon) for a five-pack.

The operation was not without risk. Once, on the morning of September 1, last year, the store was robbed.

Police describe synthetic cannabinoids as 'highly addictive and dangerous'.

Canterbury Police

Police describe synthetic cannabinoids as ‘highly addictive and dangerous’.

Keelan arranged for one of his associates to “sort out” the two men involved, telling him that he would pay him “what has to be paid to be sorted”.

In the summary of the facts, the police say that Keelan has shown that he is “an astute owner/operator of a small business”.

“He is able to effectively manage the human resources side of his business to ensure his store is always staffed by relying on various friends and associates to assist him.”

Preliminary analysis of the plant material seized from the store on Sept. 10 by Crown’s scientific research firm ESR revealed that the plant material was a synthetic cannabinoid.

When the police spoke to him, Keelan said he was a user of synthetic cannabis but was no longer involved in its supply.

Explaining a phone call referring to The Chinaman, he said he was actually referring to his son whom they called by that name because of his facial features.

‘Highly addictive and dangerous’

More than 50 New Zealanders died in 2017/18 after using synthetic cannabinoids.

“The risk associated with using synthetic drugs is significant because the user does not know what type of synthetic cannabinoid they are consuming or how strong the dose is,” says the summary of the facts.

“A significant number of people in New Zealand experience extreme reactions, severe psychological distress or loss of consciousness necessitating hospitalization, with a risk of death.”

Synthetic cannabinoids are described as “highly addictive and dangerous”.

Emily Hughes, chief scientific adviser to the New Zealand Drug Foundation, said the drugs are “constantly changing,” making them unpredictable and often dangerous.

Hughes said the country was going through an “overdose crisis” between 2017/18.

“Many of those who died were people who were homeless and with mental illness, and the Māori were disproportionately affected.”

Although deaths have since declined, synthetic cannabinoids continue to wreak havoc across the country, especially among the most vulnerable, Hughes said.

“In mid-2021, the production of synthetic cannabinoids was banned in China, which had a significant impact on the global market for these substances.

“This reduced the availability of synthetic cannabinoids. However, new synthetic cannabinoids have emerged that circumvent these bans, and some have made their way onto the New Zealand market.”

Hughes said it was important that what happened in 2017/18 served as a lesson and harm reduction services continued to be provided to people using synthetic cannabinoids.

“People who use synthetic cannabinoids often do so to get out of it as much as possible, or to escape trauma or difficult living conditions. As a result, it can be difficult to send harm reduction messages to this community.”

Information about synthetic cannabinoids and how to use them safely can be found at the Drugs Foundation.

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