The ‘Chinaman’, the shop and the drug dealer: Inside Operation Ellerslie


An investigation into the suspected supply of synthetic cannabis in Christchurch revealed how a Black Power gang associate was running an astute small business he called “the shop” – with a daily turnover as high as $6000. Sam Sherwood reports.

Jacob Edward Keelan had a thriving business.

People from across Christchurch would visit a Kāinga Ora residential unit in Sydenham that he referred to as “the shop”.

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

Given the money at stake, Keelan made sure he was on top of his game, always ensuring there was enough stock to meet demand and that the cash was secured.

There was only one issue with Keelan’s enterprise and the goods he was hawking – they were actually synthetic cannabis.

But unbeknown to Keelan, the police were listening and watching. The game was nearly up.

Twelve months on from 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 as little as $10 per visit for a bag of synthetic cannabis. (File photo)

CHRIS SKELTON/STUFF

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

With his guilty plea Stuff can report the summary of facts from the case – which reveals how his operation worked, including clandestine meetings in car parks.

“He is a street-level dealer, supplying and making a financial profit from buyers who are addicted users of synthetic drugs,” the summary of facts says.

Several others also charged in relation to the investigation, who police allege were supplying synthetic drugs to Keelan, have pleaded not guilty and have name suppression.

Operation Ellerslie

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

From August 30 to September 10 police intercepted his private communications and watched him covertly.

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

Keelan would buy synthetic drugs for his “shop” and for his own personal distribution line from a person he referred to as “The Chinaman”.

He and The Chinaman would meet in various public locations such as supermarket or mall car parks to re-supply, as often as three times a day.

JOHN KIRK-ANDERSON/STUFF

Gordon Smith thought he wouldn’t get addicted to synthetic cannabis. He was wrong. (Video first published on April 26, 2019)

Keelan would communicate with The Chinaman through the secretive online social media platform Telegram.

But police allege The Chinaman was actually two men – dealers who were the face of the wholesale synthetic drug supply business, which was managed by a third person.

Operation Ellerslie established that the supply of synthetic drugs was being conducted by an organised criminal group involving Keelan, The Chinaman and others.

The Chinaman, under direction from their boss, would allegedly meet with and supply various Canterbury-based buyers of synthetic drugs, including Keelan.

The two men who made up “The Chinaman” job-shared to ensure business could be conducted seven days a week, driving their Toyota Prius, which they shared, to meet with buyers and distribute their product from 9am to 9pm.

Jacob Keelan’s business had a daily turnover as high as $6000

Canterbury Police

Jacob Keelan’s business had a daily turnover as high as $6000

‘The Shop’

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

Close contacts and buyers would often phone him to establish his location, and if he was home he would tell them to “come home”, or direct them to the shop.

Keelan was selling 0.7gram bags of synthetic drugs for $10. The summary of facts says a “heavily 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 100g to 500g of synthetic drugs – quantities that were enough to supply more than 700 people a day.

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

A woman associated with Keelan staffed the shop – where she lived – and ran it seven days a week. She would regularly report back to him when either stock was getting low or cash holdings were getting high, and he would deal with it.

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On September 9 last year, shortly before midday, Keelan told the woman he would drop 38 packs off to her.

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

By 5.46pm the shop was back open for business, selling to customers from a vehicle parked outside the address and staffed by two of Keelan’s associates. It stayed open until 11pm that night.

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

The operation didn’t come without risk. On one occasion, on the morning of September 1 last year, the shop 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 he will pay him “what needs to be paid to be sorted”.

In the summary of facts, police say Keelan had shown himself to be “an astute small business owner/operator”.

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

Preliminary analysis of the plant material seized from the shop on September 10 by Crown science research agency ESR indicated the plant material was a synthetic cannabinoid.

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

Explaining a call when he referred to The Chinaman, he said he was actually referring to his son who 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 synthetic drug use is substantial, as the user will not know which type of synthetic cannabinoid they are consuming or how strong the dose is,” the summary of facts says.

“A significant number of people in New Zealand experience extreme reactions, serious psychological distress or loss of consciousness requiring hospitalisation, with risk of death.”

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

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

Hughes said the country experienced an “overdose crisis” between 2017/18.

“Many of those who died were people experiencing homelessness and mental illness, and Māori were disproportionately affected.”

While deaths have decreased since then, synthetic cannabinoids have continued to cause harm throughout the country, particularly among the most vulnerable, Hughes said.

“In mid-2021, the production of synthetic cannabinoids was banned in China, which significantly impacted the global market for these substances.

“This decreased the availability of synthetic cannabinoids. However, new synthetic cannabinoids have emerged that get around these bans, and some have made their way into the New Zealand market.”

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

“People who use synthetic cannabinoids often do so to get as ‘out of it’ as possible, or to escape from trauma or difficult life circumstances. As a result, it can be difficult to get harm reduction messaging to this community.”

Information on synthetic cannabinoids and how they can be used safely can be found through the Drugs Foundation.

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