Police at the Red Devils pad in Nelson at the end of Operation Explorer in March, 2011.

The case against the Red Devils gang in Nelson has been dropped because of possible "serious criminal offending" by police, involving a fake search warrant and arrest of an undercover officer, during the investigation.

The Crown officially dropped the case on Thursday, opting not to appeal a High Court ruling that resulted in all but six charges being thrown out of court because evidence for them was improperly obtained by police.

There were originally 148 charges against 21 defendants, who were patched members or associates of the Red Devils Motorcycle Club in the Nelson area.

Justice David Collins said a fake search warrant and prosecution of an undercover officer during the investigation, known as Operation Explorer, amounted to "significant misconduct" and possible "serious criminal offending".

He said that allowing the trials to continue, based on improperly obtained evidence, would undermine public confidence in the justice system.

Crown lawyer Jackson Webber said on Thursday that the remaining six charges, which pre-date the police misconduct, were "heavily intertwined" with the improperly obtained evidence and the decision was made not pursue them.

He said a court date would be set to discharge the remaining defendants.

Police assistant commissioner Malcolm Burgess said it was a disappointing end to a long and complex investigation.

Police reviewed their policy and practices following the earlier High Court decision in October, 2012, and had implemented changes "to ensure that police and the courts are not put in this position again", he said.

"I can say the activity which was criticised by the court was a small but vital part of a much larger investigation which was successful in exposing the unlawful activities of gang members.

"The officers involved were acting in the honest belief that their actions were lawful and necessary to protect the undercover officer."

Police launched an undercover investigation of the Red Devils in 2009, believing the motorcycle club was an organised criminal organisation.

Two undercover officers, known as Michael Wilson and Kasey Robinson, attempted to infiltrate the Red Devils and obtain evidence to build a criminal case.

When the gang became suspicious that Wilson was a police officer, the investigation team came up with a plan to boost his credibility.

That plan, known as the false warrant and prosecution scenario, is the reason why the case has fallen apart.

It was arranged for Wilson to rent a storage unit in Motueka and police planted apparently "stolen" laptops, ammunition and drug paraphernalia inside.

Police prepared a fake search warrant, signed it in the place reserved for the signature of a court registrar, and used it to search Wilson's storage unit.

Wilson was arrested outside the Red Devils' clubrooms in Nelson on May 29, 2010, and charged with a drugs offence.

He appeared in court before several judges who all believed they were dealing with a genuine case.

The fake warrant and arrest was pivotal to Wilson earning the gang's trust and obtaining evidence to build the police case.

However, Justice Collins said police misused the justice system and all evidence for charges following on from the fake warrant and prosecution was improperly obtained.

He said the fake warrant and prosecution scenario "involved the police engaging in significant misconduct" and "may have amounted to serious criminal offending".

"Senior police officers devised the false warrant and prosecution scenario because they believed the ends justified their means. Had a private prosecutor engaged in similar tactics he or she could expect to face the full wrath of the criminal justice system."

Justice Collins said he had to protect the justice system from being "degraded".

For that reason, all evidence for charges between June 2010, immediately following the fake arrest, and March 2011, the conclusion of Operation Explorer, was inadmissible at trial.

The Crown has decided not to pursue the six remaining charges, which were linked to evidence obtained before the fake arrest.

It is the second time the case has been scrapped. In October 2012, Justice Simon France ordered a stay of prosecution, saying police committed a "serious abuse of the court's processes".

The Red Devils is now a prospect chapter of the Hells Angels.

Operation Explorer timeline

* In September, 2009, Nelson police launched an undercover investigation of the Red Devils gang. The covert surveillance of the gang was known as Operation Explorer.

* In November 2009, police decided to embed two undercover officers, known as Michael Wilson and Kasey Robinson, into the Red Devils. They posed as a couple and worked to infiltrate the gang.

* In May 2010, after the Red Devils became suspicious of Wilson, police executed the fake warrant and prosecution scenario. They arrested Wilson and charged him with a drugs offence to boost his credibility with the gang. He appeared in court before several judges who thought they were dealing with a genuine case.

* In March 2011, police raided more than 60 addresses in Nelson, Tasman and Marlborough and arrested more than a dozen people linked to the Red Devils at the conclusion of Operation Explorer.



* In October 2012, charges against 21 people linked to the Red Devils were dropped after Justice Simon France ordered a stay of prosecution, saying police committed a "serious abuse of the court's processes" by staging a fake arrest of an undercover officer.



* In 2013, the Court of Appeal overturned that decision, ruling that the link between the police misconduct and any trial was weak, and public interest favoured a trial going ahead.

* In February, Justice David Collins ruled that evidence improperly obtained by police between June 2010 and March 2011, in relation to charges which are not serious, is to be excluded from trial.

* In March, Justice Collins ruled that 31 charges against eight defendants were serious enough to proceed to trial.

* In April, Justice Collins ruled that 116 that were not serious enough to proceed to trial were stayed. All patched Red Devils members were in the clear.

* In May, Justice Collins ruled that all charges, whether they are serious or not, were stayed because evidence for them was improperly obtained. He said allowing them to proceed to trial would undermine public confidence in the integrity of the justice system. This left only six charges.

* On Thursday, the Crown said it would not appeal Justice Collins' rulings and would not pursue the remaining charges. The case against the Red Devils is over.