Nick Hordern


The Lee Connection

A crime syndicate in 1940s Australia

When I came across this story in the archives it reminded me of the ancient Buddhist parable of the blind men and the elephant. In this parable, each man describes the part of the elephant that they are touching, but they can’t imagine the whole animal those parts make up. The Lee Connection was like the elephant: wartime investigators could grasp at individual members, but they struggled to visualise the whole network.

The Lee Connection - Nick Hordern
The Parable of the Blind Men and the Elephant

The tail: William Lee in Cairns

On 2 January 1944 authorities in Cairns noticed some boxes of belacan or shrimp paste being smuggled ashore by Chinese seamen. Belacan was in demand by the hundreds of Chinese labourers employed by the US military around Cairns, but when investigators of the Commonwealth Security Service (CSS) – the ASIO of the day – discovered the origin and the buyer of the consignment they became seriously alarmed, an alarm reflecting their acute sensitivity to the increased numbers of Chinese in wartime Australia. Overall, China and the Chinese people were the biggest victims of Japanese militarism, but nevertheless Australian authorities worried that some Chinese might be working for the Japanese as spies.

In 1940 there were about 6000 people living in Australia who had been born in China. But the outbreak of the Pacific War had brought an influx of more ethnic Chinese not only from China but from other parts of Asia, like Malaya and Singapore, which had been overrun by the Japanese. Chinese were frequently employed on merchant vessels as seamen, and these found temporary refuge in Australia because their vessels could no longer return to their home ports. By early 1944 there were as many as 7000 of these displaced Chinese living in Australia – many of them employed by the US military. This influx created demands not just for foodstuffs like belacan, but also for opium and venues for Chinese gambling games – demands that criminals were happy to satisfy.

The origin of the belacan smuggled into Cairns was the port of Merauke (Meroc) in the south eastern corner of what was then the Netherlands New Guinea and is now the Indonesian province of Papua. Garrisoned by a small mixed Australian/US/Dutch force, it was militarily significant because it enabled the Allies to contest Japanese control of the Arafura Sea.

The buyer in Cairns was a William Lee, who had arrived in North Queensland from Guangdong as a sixteen year old in 1899. But his long residence doesn’t seem to have endeared Lee to his adopted country, for he was reported to have ‘a poor regard for Australians’. Lee was known to be selling opium to Chinese buyers in and around Cairns, and it was notorious that the Japanese Army in China sold drugs both as a way of raising revenue and of demoralising a hostile population.  So now a CSS analyst in Brisbane put two and two together. If William Lee was selling opium, and if he was importing belacan from Merauke, then it was possible that he was getting his opium from Merauke too. And because Merauke was close to the front line, the ultimate source of the opium was likely to be in Japanese-occupied Asia. This implied Lee had a connection of sorts with the Japanese military and if he was smuggling opium in, then he could well be smuggling military information out.

So the CSS mounted an investigation of William Lee. They borrowed the services of a Chinese American agent from the US Army who, pretending to be a seaman on medical leave, worked his way into Lee’s confidence. But he discovered the exact opposite of what the CSS feared: the opium Lee was selling didn’t come from Merauke but from Melbourne and rather than Japanese occupied China, it came from British occupied India. As the CSS teased out William Lee’s connections, they uncovered not an espionage network stretching north to Japan but a criminal network stretching all the way down the East Coast.

The trunk: Lily Chun in Melbourne

The Melbourne end of the network was the Sen Shir Rest Home in Little Bourke Street. This was a charitable organization set up by businesswoman Mrs Lily Chun to provide cheap accommodation for stranded Chinese seamen, whom she also helped by giving them jobs in her burgeoning chain of Chinese restaurants, and by helping them – for a fee – to obtain the necessary paperwork like residence permits. Nothing if not even-handed, Mrs Chun also helped the police when they were looking for Chinese seamen who didn’t have the right paperwork. Mrs Chun was an important underworld figure, and was said to have more influence in Melbourne than the Chinese Consul himself.

Mrs Chun also sold opium, and in November 1943 she sold 10 pounds weight of opium to William Lee, who was visiting from Cairns. Mrs Chun got her opium from Chinese seamen arriving in Melbourne on British ships from India and she sold it to Lee for £90 per pound. Back in Queensland Lee, known as the ‘Blind Crocodile’ for his indiscriminate rapacity, demanded £280 per pound for the same opium.

Americans in Wartime Australia
The American influx into Brisbane really shook the city up

The foot: Len Lee in Brisbane

The midpoint in the Lee Connection was Brisbane, the territory of kingpin Len Lee. (According to CSS investigators William Lee, Mrs Chun and Len Lee were all distantly related.) Len Lee operated on a very large scale: while William Lee had spent £900 on buying opium from Mrs Chun, a few months later it was reported that Len Lee had just taken delivery of a consignment of opium worth £10000.

Len Lee had been born in Australia, in Emmaville, a tin mining village near Glen Innes. By 1943 he was well established in Brisbane, the proprietor of the Paradise Café on Queen Street and of a ‘herbalist practice’ at Petrie Bight. ‘Herbs’ was a fairly benign description of his stock: besides opium, he was suspected of selling abortificants, and was later fined for selling a ‘magical headache powder’ which was in fact just a combination of asprin, caffeine and phenacetin – the same ingredients as Bex, but in a different proportion.

It was a good time and place to be in business – particularly shady business. Brisbane was the headquarters of General Douglas Macarthur’s South West Pacific Area command, and in Brisbane roughly every fifth person was an American. Moreover, the Americans employed 800 Chinese in a shipbuilding yard at Bulimba on the Brisbane River, and many of these lived nearby in what was called the ‘Chinese camp’. This concentration of well-paid Chinese workers created a commercial opportunity on which Len Lee seized.

The CSS described him as ‘a notorious trafficker in drugs, abortionist, and a fence for the introduction of Chinese into Queensland in order to avoid the priority regulations’. This last allegation meant that he  bribed airline staff to hold back tickets – unobtainable for ordinary people – for him and his henchmen. Lee’s motive in this case was not profit but logistical convenience; he could get one of his opium couriers on a flight down to Sydney at a day’s notice.

But opium was only one of the commodities he traded on the black market. When the CSS traced his phone calls they revealed a network of black market connections that stretched all over southern Queensland and his native northern New South Wales, in towns like Warwick, Glen Innes, Murwillumbah and Tingha. The black market in pork was particularly lucrative, and he stored opium on a farm outside Warwick.

Len Lee was the kingpin, and other bits of the Lee Connection revolved around him.

The tusk: Robert Kwan in Sydney

Robert Kwan was a Chinese citizen. In April 1941 he had arrived in Sydney from the United States with his American wife and their child. He may have been fleeing an underworld threat: the CSS later picked up the rumour that there was a $US4000 price on his head in the United States. Whatever else he was, Kwan was a skilled theatrical artist, an acrobat, and he arrived with ample funds and a contract with the Tivoli Circuit – the entertainment company which staged vaudeville shows in Australian capitals. Over the next four years Kwan moved frequently between Sydney and Brisbane.

In April 1943 Kwan appeared in a variety show in Ipswich Town Hall. One of his tricks ‘involved leaping from three tables mounted on each other, with a tray carrying two glasses of water. He was successful in somersaulting, and landing on the floor without spilling a drop of the liquid.’ The performance was in aid of the Chinese Relief Fund, whose Brisbane President happened to be  the prominent businessman Len Lee.

In July 1944 Kwan arrived back in Brisbane – ostensibly in the  employment of a US military entertainment troupe. He bought an interest in a gambling house near the shipyard at Bulimba, and then  another in gambling house in Commercial Road, just a ferry ride across the Brisbane River. By now Kwan had the reputation of being  a hard man. On 20 July 1944 the body of Tin Yuen, described as a gambling shop attendant and an opium addict, was fished out of the Brisbane River, marked with abrasions to the head. Kwan was a suspect in his death.

Even more tellingly, the CSS noted that Kwan was ‘disliked and feared’ by the Chinese Consul in Brisbane, Mr T. M. Chen. This suggests he was something more than just a mid-level criminal who had struck it lucky in Australia, and he probably was: Kwan himself boasted that he was a member of the Ching Bong, otherwise known as the Green Gang, the most powerful Chinese criminal organization of its day, headquartered in Shanghai. Nevertheless, after just a few months in Brisbane Kwan decided to move back to Sydney; the CSS picked up a rumour that he ‘left Brisbane in a hurry’ because of ‘a large amount of money which he owed to seamen for the sale of opium’. Whatever the reason, he did not leave empty-handed. He was recorded as arriving in Sydney in a car ‘packed full of American cigarettes and cigars’.

Back in Sydney, Kwan re-established himself by opening a gambling den at 75 Campbell Street Surry Hills. By now he was really starting to get up the nose of the powers that be. No less a personage than the Director General of the CSS, William Simpson, took a direct interest in nailing Kwan once and for all. Kwan’s ‘Certificate of Exemption’, which permitted him to live and work in Australia, was about to expire and Simpson instructed his deputy in New South Wales to make that the police had enough evidence against Kwan so that he could detained and deported as soon as his certificate expired.

Now Simpson was a man of very considerable importance, Australia’s senior domestic intelligence officer, and he reported directly to his old school friend the Attorney General, ‘Doc’ Evatt. With Simpson personally gunning for him, one might well imagine that Robert Kwan’s noir career in Australia was about to end.  How galling, then, for Simpson, to receive a few weeks later an apologetic memo telling  him that because of a bureaucratic stuff up, the New South Wales authorities had already renewed Kwan’s certificate.

If Kwan was aware of his narrow escape from deportation, it didn’t cramp his style. On 14 July he flew to Brisbane carrying ‘a large parcel’ of opium for Len Lee.

The end of the Connection

The end of the war, and the subsequent of the refugee Chinese, cut off many of the lucrative criminal opportunities which the Lee Connection had exploited.

William Lee died in Cairns in 1946, presumably still nursing ‘a poor regard for Australians’. In Melbourne, Mrs Chun turned into a serial bankrupt, but this seems to have been a new form of racket; she died in 1984. In Brisbane, Len Lee had a few narrow escapes: in late 1945 one George Bow, described as Len Lee’s ‘No 2’, was murdered in his home – the police charged four Chinese with the crime, alleging that they had killed Bow for his opium hoard. The last reference I have seen to Len Lee comes from in 1951, when he was fined £50 pounds for having opium in his herbalist shop.

After the war Kwan’s wife went back to America and he and his son went to New Zealand for a few years. But by June 1950 he was back in Australia, touring regional Queensland as an entertainer. Now, in a replay of Director General Simpson’s attempt to have Kwan thrown out of the country, the CSS’s successor organization ASIO started to investigate the opium dealing acrobat. ASIO judged Kwan to be a security risk, ‘unscrupulous and without loyalties’, and they wanted him deported. And just like CSS, they failed.

The Lee Connection - Nick Hordern
Robert Kwan, hard man