Queensland's crime watchdog has wielded controversial confiscation laws against alleged sellers of illicit tobacco for the first time, targeting a man who says he once worked in Iraqi military intelligence.
The Supreme Court action has already frozen assets, including $836,000 in cash, bank accounts and four properties that authorities allege are linked to Oliver Bailey.
The state could ultimately seek payment of more than $6 million or any other amount deemed to be the value of proceeds from alleged illegal activity.
The Crime and Corruption Commission (CCC) confirmed the action is the first such civil lawsuit under confiscation laws against alleged illicit tobacco sales.
The lawsuit was initiated last year and has flown under the radar, even as new Queensland Health Minister Tim Nicholls claimed current maximum $10,000 fines against illegal tobacco operators were insufficient, and the state needed to "hit them where it hurts most … financially".
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His office did not answer queries about any knowledge of the confiscation action.
Mr Bailey, 38, was arrested in 2023 after raids on homes, storage facilities and two tobacco shops in Cleveland and Capalaba, east of Brisbane.
Queensland Health, police, the CCC and the Australian Taxation Office seized $836,000 in cash, 3.69 tonnes of loose tobacco and 7.9 million cigarettes.
Mr Bailey has been charged with offences including fraud and sales of more than 500 kilograms of tobacco in breach of tax laws.
His defence lawyer Alex Jones confirmed to the ABC Mr Bailey was contesting the civil confiscation and criminal proceedings, with an application in the confiscation matter adjourned.
Cigarette cartons allegedly hidden in speakers
Investigators with the CCC suspect Mr Bailey was involved in possessing illicit tobacco and directing shop sales of legal and illegal tobacco products, the civil action's filings show.
They allege some tobacco was sold in clear clip-seal bags, while some cigarettes were sold in original packaging without health warnings.
In the Capalaba store, located in a strip mall, was a hole in the wall to the neighbouring store, which contained 414.2 kilograms of tobacco and 168,720 cigarettes, investigators allege.
Photographs of a white-tiled floor with cardboard boxes containing loose tobacco and stacked cigarette cartons were submitted in the filings.
They allege some cigarettes were selling for $15 a packet and staff had asked customers to pay for illegal tobacco with cash.
More tobacco was allegedly discovered at properties and storage sheds, including cigarette cartons concealed inside audio speakers.
Using data from a Square payments device allegedly used in the stores, a CCC investigator calculated sales of products where the transaction price would not have covered the sum of taxes and duties payable for tobacco products.
They estimated those sales amounted to $6.649 million.
A support pension and a Lamborghini
Mr Bailey — who investigators say was stopped while driving a Lamborghini Urus in February 2023 — had not filed tax returns but had received a disability support pension in some years, receiving $6,558 in 2023 alone, the CCC's filings claim.
A CCC investigator told the court authorities had been monitoring his bank accounts and set up database alerts for six properties they believed Mr Bailey had purchased.
In seeking freezing orders in May last year, the CCC alleged a property in Holmview in Logan, south of Brisbane, was being sold that month, and inquiries indicated contracts were signed for two other properties.
"At least $200,000 funds have been withdrawn from various bank accounts of Mr Bailey" since his bail release in March 2024, the CCC alleged.
It was also alleged "preparations have been made for the sale of a fourth real property".
The watchdog questioned one property sale, with the purported buyer allegedly a mother of Mr Bailey's friend. The court file included an allegedly handwritten receipt.
The receipt stated the friend's mother had "purchased the property from Mr Bailey for 423,000,000 Iraqi Dinar" — equivalent to $465,300 Australian dollars.
The receipt stated this amount was paid to Mr Bailey's mother in Iraq on April 11, 2024, the CCC alleged.
Queensland's controversial confiscation laws
Mr Bailey's charges are currently before the Beenleigh Magistrates Court.
Born in Iraq as Mohammad Al Waeli, Mr Bailey legally changed his name. In bail applications, he detailed becoming an Iraqi army intelligence agent between 2007 and 2010 and working with Australian and US forces. He supplied army photographs.
But he said terrorists targeted him for the work, killing his father and brother, and he fled to Australia on a protection visa.
The confiscation laws used against Mr Bailey have been controversial, targeting people from bikies to a live-baiting greyhound trainer.
Even the CCC last year sought reforms.
Meth-trafficking former Hells Angels who had their Harley Davidsons returned and a drug baron only forfeiting $74,000 as unexplained wealth were among examples found by the ABC as part of an investigation of the laws.
Experts have questioned whether confiscation laws miss criminal Mr Bigs, if some aspects are unfair for defendants — including restraining the use of assets for legal fees — and queried regulators' risk appetite for such actions.
