Nugan Hand Ltd. was founded in Sydney in 1973 by Australian lawyer Frank Nugan (who was reputedly associated with the Mafia in Griffith, New South Wales) and former U.S. Green Beret Michael Jon Hand who had experience in the Vietnam War (after which he began training Hmong guerillas in Northern Laos under CIA aegis, an experience alleged to account for his ties to the "Golden Triangle" heroin trade). It has been alleged that the two generally split the business: Nugan took care of tax fraud and money-laundering, while Hand managed the drug money and the international branches.
The Nugan Hand Bank attracted investors with promises of up to 16% interest rates on their deposits and assurances of anonymity, tax-free accounts, specialist investment assistance, along with more surreptitious services such as money laundering (charging a mere 22% fee). Nugan Hand rapidly gained business and expanded its offices from a single Sydney office to a global network that included branches (registered in the Cayman Islands) in Chiang Mai, Manila, Hawaii, Cape Town, Hong Kong, Taiwan, Cayman Islands and Washington D.C..
The Nugan Hand Bank gained respectability by the recruitment of a number of retired senior U.S. military and intelligence personnel, such as former Rear Admiral Earl "Buddy" Yates as bank president and ex-CIA head William Colby as legal counsel.
Concerns over the bank's questionable accounting processes began to circulate by the late 1970s as investors attending annual general meetings were prevented from asking questions by the bank. These concerns turned into panic for bank investors in the early hours of 27 January 1980 when Nugan (who was facing charges of stock fraud) was found shot dead by a .30-calibre rifle in his Mercedes-Benz outside Lithgow, New South Wales. It is said that a hand-written list was found on his body with a list of substantial loans Nugan Hand had extended to various notables, such as William Colby and Bob Wilson. The following police investigation returned a verdict of suicide. Suspicions of the bank's activities grew in subsequent days as details emerged of the contents of Nugan's car (including the business card of William Colby) and news that Nugan's house and office had been ransacked by Hand and Yates and important company files destroyed or stolen.
The official inquest into Nugan's death in June 1980 made front-page news amid testimony from Hand that Nugan Hand was insolvent, owing at least A$50 million (and as much as hundreds of millions), including $20,000 rent on their Sydney headquarters. He then promptly fled Australia under a false identity on a flight to Fiji in June 1980, after destroying Nugan Hand's remaining records. Hand has not been seen since. It is possible that, as as a CIA operative, he re-entered the US and was given a new identity.
A subsequent royal commission inquiring into the activities of the Nugan Hand Group revealed money-laundering, arms shipments, drug dealing, theft (including US$5 million from US military personnel in Saudi Arabia) and large-scale tax avoidance by Nugan Hand throughout its brief but eventful existence. One witness, a former Nugan Hand director, stated that Hand threatened bank executives: "If we didn't do what we were told, and things weren't handled properly, our wives would be cut into pieces and put in boxes and sent back to us."
An Australian investigation, the 'Joint Task Force on Drug Trafficking', compiled a report on the Nugan Hand bank in 1983. It determined that, above and beyond the revelations of the Royal Commission, Nugan Hand had acted as a CIA front to finance a war in Laos by laundering drug money. The Nugan Hand Chiang Mai branch participated in the covert sale of an electronic spy ship to Iran and weapons shipments to Angola.
Continued speculation that Nugan had faked his own death and was in hiding led authorities to exhume Nugan's body in February 1981 (the body was Nugan's). No one connected with Nugan Hand has ever been convicted of a crime and Admiral Yates and his fellow senior officers who were involved with Nugan Hand have not responded to Australian requests to testify about the bank.
Other accounts of Nugan Hand activities and personnel (largely lacking authoritative citations) are available at