Cocaine cargo: the yacht Friday Freedom was used to smuggle 300 kilograms of cocaine into Australia. From his eight-bedroom, three-storey hill-side mansion house in the trendy suburb of Joá in Rio De Janeiro, Spanish-born Oliver Ortiz's balcony offered sweeping views of the white sand beaches of Barra and São Conrado. To reach his Harley-Davidson in the garage, Ortiz used a glass elevator. Ortiz's ostentatious digs stood in stark contrast to Rio's notorious favelas or shanty towns, just a short drive from his house. But there were similarities, too. The favelas were built into hillsides that gave their most powerful inhabitants - the drug traffickers who mostly lived on higher ground - sweeping ocean views. In a favela, a gram of Bolivian or Colombian cocaine is easier to buy and costs less than a six-pack of beer. In Australia, a gram of cocaine costs about $350. Ortiz avoided the favelas, but he'd been to Australia. In October 2010, he travelled to Sydney and then on to Vanuatu, describing the reason for the trip on his customs declaration as "tourism". Ortiz travelled to Port Vila with another Spaniard, Sanchez Barrocal. Both men were keen sailors and divers, passions shared growing up together in the same small Spanish coastal town. In Vanuatu, they met another Spanish sailor, Christobal Chamorro. Unsurprisingly, the trio's trip to Vanuatu had raised no suspicions among customs officers used to tanned and wealthy tourists island-hopping through the Pacific. Chamorro had told customs about his intention to sail a yacht called the Adamas from Vanuatu to Bundaberg in the annual Port2Port rally. On October 24, 2010, Chamorro had sailed into the Port of Bundaberg without incident. Around the same time, Ortiz had returned home to Rio and Barrocal moved to the Gold Coast.

Drugs confiscated as part of Operation Avalon. Australian Federal Police (AFP) agent Grace Calma knew none of this when, three months later, she was assigned a classic "cold targeting" case. It was February 2011, and her task was to identify a man who had contacted a known money launderer in Sydney. "All we had was a dude," she says. And $4 million. This "dude" had olive skin (a witness described him as possibly Greek or Lebanese) and he'd met the money launderer at Granville railway station in Sydney's west, where he handed over white boxes containing the cash. CCTV vision allowed Calma to track the man from the station carpark back to an apartment block in Bondi Beach. Rental records recorded his name as Herrero Calva, although his car was registered in a name that was also unfamiliar to her: Oliver Ortiz. Ortiz didn't register on any law-enforcement databases, but Herrero Calvo did. Oliver Ortiz's mansion in Rio de Janeiro. The Spaniard had never been charged with any criminal offence, but customs officers had red-flagged him after he'd flown to Australia in late 2009 and, when quizzed about the purpose of his trip, had replied that it was raining in Madrid. When he left Australia four days later, Customs marked him as a traveller who should be subjected to scrutiny if he ever returned.

A year later, when Calvo flew into Sydney, his luggage was discreetly searched. Along with the usual tourist items, a customs officer found a single piece of paper that recorded the costs of transporting a shipping container. In February 2011, Calma was armed with strong suspicions and a phone-tapping warrant, but little more. Calvo wasn't connected to any known criminals apart from the money launderer he'd met near Granville station. And the phone tap yielded little. He regularly attended his English classes and didn't use drugs or even talk about them. Tactical move: Ian McCartney, left, and David Sharpe. Credit:Stefan Postles This was the point I'd cracked it. I put an alert on every Spaniard coming in. The only thing that regularly tweaked Calma's curiosity was the Spaniard's frequent discussions about sailing, yachts and shipping containers. Phone taps revealed that the man with whom Calvo had these discussions was another keen Spanish sailor, Sanchez Barrocal, who was living on the Gold Coast and who was also studying English. Curious, Calma checked Barrocal's travel history. He had travelled to Vanuatu several months before with the man whose name Calvo's car was registered in, Oliver Ortiz. Barrocal and Ortiz may have been doing no more than snorkelling and sailing. Indeed, Barrocal's affinity with the ocean had led his friends to call him El Calamar. But to Calma, something smelt more than a little fishy.

The fact a 29-year-old former forensic specialist who had spent just four years as a detective could be assigned a potentially major international operation speaks volumes about a decision inside the nation's police agency to shake things up. By late 2010, it was accepted inside the AFP that the agency's focus on terrorism, cyber crime, overseas deployments and asylum seekers had shifted attention too far away from organised crime, just as it was booming. Crime bosses were increasingly based offshore and setting up compartmentalised syndicates utilising the latest counter-surveillance technology. At the same time, Australians were paying top dollar for drugs, which was increasing supply. Police were struggling to keep up and they knew it. So Commissioner Tony Negus picked two blokes with a difference and told them to come up with some new ideas. Commander Ian "Irish" McCartney had joined the AFP in the 1980s after spending 18 months as an accountant. The quietly spoken Northern Irishman's qualifications meant he was sent to the fraud department, which at the time was regarded as the Siberia of policing. McCartney was unfazed. It was obvious that knowing how to follow a money trail was a vital skill, and one he sharpened as he developed a reputation as one of the AFP's most effective, albeit understated, performers. Commander David Sharpe's early policing experience could not have been more different. A former top rugby player from the bush, the personable and energetic agent had cut his teeth in the ACT drug squad and the taskforce investi-gating the 1989 murder of AFP assistant commissioner Colin Winchester. Sharpe's generation of federal police regarded "fraudies" like McCartney with almost as much suspicion as they regarded state police and other federal agencies. Both Sharpe and McCartney had excelled in mid-career overseas postings - Sharpe in Vietnam and McCartney in China - and had developed a close friendship. They knew how to play policing politics, but avoided it. They also both knew the AFP had to change if it was to tackle a global nemesis. International crime syndicates were increasingly using "shore parties" - expendable runners with no knowledge of who was directing them - to infiltrate Australia and operate as hands-on drug importers. If these runners were arrested, they were quickly replaced and the impact on the overseas syndicate was minimal. No wonder the amount of drugs passing across the nation's borders far exceeded what was being seized. McCartney proposed that money might provide a way in. "What we were seeing was the major [crime-syndicate] controllers were actually based offshore. So our focus shifted to targeting and disrupting the professional money-laundering syndicates that are in effect moving money on behalf of organised crime.

"We could go out and do a cash grab in terms of disrupting the money-laundering syndicate, or we could start working backwards or working forwards to identify the primary crime syndicate [generating the dirty cash]." The AFP established dedicated money-laundering teams and quickly unearthed a "United Nations" of corrupt but highly efficient remitters (predominantly Vietnamese, Middle Eastern, Tamil and Chinese) in major cities, particularly Sydney and Melbourne - two cities McCartney says are "awash with drug cash". These money movers were prepared to knowingly flout anti-money laundering laws in return for a 3 to 5 per cent cut of every dollar moved, and to even underwrite funds, replacing money if cash was seized by police. But seizing money was only part of McCartney and Sharpe's new equation. Money launderers would be allowed to operate for days, weeks or even months after being uncovered and, in extreme and "highly controlled" cases, to move suspected drug funds offshore. "Allowing that money to run gives us the opportunity to identify major organisers overseas and track fresh importations," says McCartney. Grace Calma, a self-professed nerd who bred and sold tropical fish to pay her way through university, was one of McCartney and Sharpe's earliest and keenest recruits. "Money scares the shit out of everyone [in the force], 'cause they're like, 'Oh, it's so hard,' " she says. "But investigating money is no different to investigating drugs. In many respects, it's easier because it's a physical commodity that they [criminals] have to [continually] move, versus a drug shipment that can occur very infrequently." Calma showed promise for another reason; she didn't care for the inter-agency squabbling that previously hindered the fight against crime. (The AFP says these old jealousies are long dead, and 65 per cent of its organised-crime probes are done in partnership with other agencies, including state police forces.) Yet some things never change in policing. Senior cops prosper or perish on results. Without some big hits, McCartney and Sharpe's vision would founder. And Calma knew it.

By August 2011, after spending months building a picture of English-language students Herrero Calvo and Sanchez Barrocal (Oliver Ortiz had not returned from Rio), Calma was becoming frustrated. "They were really boring," she says. "Barrocal used to play [computer game] Battlefield 3 almost every day. I'm a computer nerd myself, so it would be kind of exciting hearing some of their conversations ... [but] they never once mentioned drugs." In late September, Calvo accidently "pocket-called" a number in his mobile phone. This inadvertent phone call would change everything. The number he dialled was unfamiliar to Calma. It belonged to a Spanish national called Christobal Chamorro. Chamorro's travel records revealed that when Barrocal and Ortiz had been in Vanuatu, Chamorro was also there. But unlike the other Spaniards, Chamorro hadn't travelled by plane. In October 2010, he had sailed in the Port Vila to Bundaberg yacht rally on the Adamas. Before Vanuatu, the Adamas had visited the Port of Balboa in Panama, a known cocaine-trafficking hub. Calma had no proof, but the available intelligence and her instinct suggested the Adamas was carrying drugs that had been sold in Australia, generating the $4 million Calvo had handed over to a money launderer in February 2011. Calma asked Customs how many Spaniards had previously travelled from Vanuatu to Australia by boat or plane every month. The number was around six, small enough to request Customs to conduct live monitoring. "This was the point where I'd cracked it," Calma says. "I decided to put an alert on every single Spaniard coming in." Calma wouldn't have to wait long. On October 13, she received an alert that a Spaniard named Ramos Valea had contacted Customs to tell them he was planning to sail from Vanuatu to Australia. Like Chamorro the year before, Valea had entered the Bundaberg Cruising Yacht Club's Port2Port Rally (all sailors must flag their intention to enter a port with the local customs officials). Valea told Customs he was departing in a matter of hours. "I was like, 'Oh, shit, this is sounding pretty good. The yacht is in Vanuatu at the moment,' " Calma says.

She asked the AFP's Pacific Islands liaison officer to take a photo of Valea's boat. A short time later, she was sent a picture of a 17-metre white cutter with the name "Friday Freedom" painted in blue letters on the side. Calma also received two more pieces of information. Valea had been nominated as the recipient of $2000 that had been wired from Sydney to Panama a year earlier. The sender was Oliver Ortiz. Valea had also used an unusual email address to notify Customs of his travel intentions. It was lobezno36@hotmail.es. In Spanish, a lobezno is a baby lobo - a wolf cub. An excited Calma picked up the phone and called Canberra. The Wolf was sailing to Australia: "I went from sort of just plodding along to 'Holy shit, I've got a lot to do all of a sudden.' " Intelligence from the US Drug Enforcement Administration corroborated AFP information suggesting that the Spaniards were a "logistics" cell active since at least 2009 and moving huge shipments of cocaine for a South American syndicate to Australia. But if that were true, Calvo, Valea and Barrocal weren't making it obvious. They never used the word cocaine and appeared to leave all sensitive discussions to face-to-face meetings or online chat sessions. Calma deciphered several code words the three had been using with increasing frequency on the phone: "mosquito" was Vanuatu, "the mammoth" was the yacht. Her confidence increased when Barrocal and Calvo had a series of discussions about buying suitcases and hiring cars to meet "the mammoth" in "the place you know". Among the few certainties in the operation was that the Wolf was a brilliant sailor; anyone in the AFP who knew anything about sailing marvelled at Valea's ability as they tracked the Friday Freedom across the Pacific Ocean. Valea sailed into the Port of Bundaberg on October 20. Four days later, surveillance operatives observed him using a new email account (lobo362011@hotmail) at a backpackers' internet café to send a message to the Squid: "I'm where you already know ... I wait for you, calamar!"

The police were also waiting, dotted throughout Bundaberg like a human spiderweb. But Valea was in no rush. After securing a two-week mooring permit, he went to the Bundaberg Yacht Club's pirate party with his Spanish girlfriend (his companion on the boat) and won first prize for best dressed. Police waited one week and then two. Once a third week had drifted by, Calma began doubting herself. On November 11, she flew to the Northern Territory for her grandmother's 80th birthday dinner. That same day, Calvo and Barrocal drove from the Gold Coast to the Bundaberg marina. AFP surveillance crews saw them meeting Valea and disappearing down the hull of the Friday Freedom with several suitcases. Twenty minutes later, the trio reappeared and carried the suitcases to two cars. They were arrested while driving a few minutes later. Police found a total of 300 kilograms of cocaine. At Barrocal's Gold Coast apartment, they discovered $288,850 in a safe; a further $3.7 million was found in Calvo's Sydney home. It was one of the AFP's biggest organised-crime hauls. But Calma had no illusions about the impact of what, on paper at least, was an extraordinarily successful operation. If the three Spaniards were a logistics cell, they were acting on someone else's orders. The AFP had no idea about the identity of the supply syndicate or the identity of the Australian buyers. Intelligence suggested it was the cell's third importation and they had moved at least $50 million over three years. After creating a 25-page chronology of the operation, Calma found something else that frustrated her. The man living it up in Rio, Oliver Ortiz, had appeared multiple times throughout her operation and Calma believed he was a senior player. And what was it about the Pacific Islands that had made the Spaniards so confident they wouldn't get caught? In the months after the Spaniards were arrested, the AFP launched a confidential project to examine why the Pacific Islands were increasingly being used as a staging point for international drug syndicates. Recently, the AFP finalised a confidential briefing paper that details serious "vulnerabilities", including corruption, in the region. Sharpe and McCartney won't talk about this paper, aside from pointing out that Operation Avalon was only the start of their efforts. Last November, Operation Walcott seized 200 kilograms of cocaine on a yacht near Tonga, and Operation Saba detected 200 kilograms in a boat near New Caledonia. Earlier this year, Operation Basco was launched based on information found during Calma's investigation, and as a result 750 kilograms of cocaine was seized from a yacht in Port Vila. Investigations are ongoing.

But it isn't all about drug busts. Sharpe stresses the federal police is examining the broader, social factors at play that contribute to drug demand, such as education and health. The AFP is convening a youth drugs summit in the next few months to generate debate. "If you look at the yachts coming in, we've stopped a huge amount of cocaine hitting the streets ... Well, that's well and good. But what does that actually mean?" The word "decriminalisation" is still taboo in mainstream policing, but no one is talking about a war on drugs, either. Says Sharpe: "We cannot simply arrest our way out of the problem." In late 2012, Grace Calma headed to the US Drug Enforcement Administration headquarters in Virginia. She was escorted to a briefing room with the AFP's Colombian-based liaison officer and the DEA's Special Operations Division. Six months later, in late June, Calma got the email she had been waiting for. A hillside mansion in Joá, Rio De Janeiro, had been raided by the Brazilian Federal Police. Almost $10 million in assets, including a Harley-Davidson, was seized. Oliver Ortiz had been charged with money laundering. Calma smiled. She then got back to work. This article appeared in Good Weekend. Find Good Weekend on Facebook at facebook.com/GoodWeekendMagazine