American investigative journalist Jonathon Kwitny in “The Crimes of Patriots” showed Nugan Hand based its main activities on abuse of its banking status, moving billions of dollars internationally during its brief reign from 1972 until early 1980. Much of the money moved between its Sydney, Hong Kong and other branches was never accounted for, due to the ingenious web of false transactions devised by the bank’s principal founder, Frank Nugan. Also many of the investors whose money had been in drugs, tax evasion and other illegal practices stayed quiet, hidden thanks to all the papers that bank executives succeeded in hiding from the investigators.
The bank’s demise came soon after Frank Nugan was found dead in his Mercedes from a single rifle bullet on 27 January 1980. Senior bank people immediately hid and burned bank papers. Realising liquidation of the bank was inevitable, they encouraged the regions’ branch reps in continued deposit-taking from investors, for cash to deal with powerful investors demanding their money back and in order to take money themselves. Cash deposited during February and March transferred from the Philippines and Saudi Arabia in particular to help repay big investors like a Marcos family member. But the many smaller, life-savings investors lost out when forced liquidation closed the bank permanently in April 1980.
Many Americans running the branches were retired generals or other top brass from the US military – a number of them recruited by the bank’s one-time president, retired US Admiral Earl (“Bud”) Yates.
Kwitny traces Frank Nugan’s American connections during university
education as an attorney and the Nugan family produce business which providored
the US
fleet visiting Sydney during the
Vietnam War.
However, the bank’s co-founder, Michael Hand, was the main instigator of
American involvement. An “ordinary Joe” GI born in New
York’s Bronx District, Hand was a highly awarded
Green Beret hero from the Vietnam War who migrated to Australia
in 1967. This was about the time as his close friend Bernie Houghton also came,
to establish and run a Sydney
nightclub catering to American servicemen on R&R leave from the Vietnam
War.
Both men had well developed military connections from Indo China
war service, and had been in CIA operations in and around the Golden Triangle –
the region’s centre for growing opium and processing heroin.
Kwitny’s research into the bank’s origins shows it was set-up in the Kayman
Islands in 1972, as a bank that
appeared to mirror a former CIA bank asset involved in dispersing monies from
drug operations.Nugan Hand Bank went on to have dealings with Aussie drug barons, with at least 26 separate
individuals or groups identified in investigations by Australian officials
working with overseas counterparts.
Hong Kong’s Liquidators Office was deeply involved from February 1980 because of Nugan Hand’s extensive use of Hong Kong as Asia region’s preferred tax-haven. In banking with Nugan Hand Bank, Hong Kong's prestigious Wing-On Bank conferred a respectibility that made Nugan Hand's Hong Kong branch the main conduit for investors' funds transferred from deposits they made all over Asia-Pacific and elsewhere including Saudi Arabia.