Drug kingpin Tony Mokbel claimed he contributed $50,000 to have police informer Terence Hodson murdered, an inquest has heard.
A man who can only be identified as Witness M said Mokbel had told him that he, Mokbel, had paid money to having then detective Paul Dale arrange for hitman Rodney Collins to kill Hodson, the Coroners Court heard on Tuesday.
Mokbel claimed an associate known as "Skinny" put in the rest of the money to have Hodson killed, the court heard.
Witness M said he asked Mokbel who "Skinny" was and was told it was "Carl", who the witness took to be underworld boss Carl Williams.
Witness M said Mokbel told him Mr Dale would provide the drug boss with information because the then detective "owed" him. Terence Hodson and his wife, Christine, were killed at their Kew home in May 2004.
Mr Hodson had agreed to give evidence against alleged police corruption before his death. Mr Dale and Collins were in 2009 charged with murdering Mr Hodson. Collins was also charged with killing Mrs Hodson.
The cases against both men collapsed in 2010 following the prison bashing death of Williams, who told police he had arranged for Collins to kill the informer on Mr Dale's behalf.
Mr Dale, a former drug squad detective, and Collins, now serving a jail term for an unrelated double murder, both deny any involvement in the Hodsons' murders.
Witness M said in a statement read to court he twice met with Mokbel in 2005 and that Collins was present during one meeting. During that first meeting, Witness M said, Collins said he had got rid of Mr Dale's "brain tumours".
"Rodney Collins said he removed the brain tumours and I took that to be referring to the Hodsons and blowing their brains out," Witness M said.
Witness M said although he believed Mokbel and Collins were referring to the Hodsons, the couple's surname never came up in the men's conversations.
At the second meeting with Mokbel, Witness M said a man who he later learnt to be Mr Dale got up and left Mokbel's table when Witness M arrived. It was at this meeting, Witness M said, that Mokbel said he had contributed to Mr Dale's "medical costs" and that Williams had paid the rest.
Mr Dale's barrister, Geoffrey Steward, said it was implausible that Mokbel would provide details he murders he was supposedly involved in to a man he had only just met.
Mr Steward questioned Witness M's credibility as a witness, to which the man responded: "I don't consider myself to be dishonest."
Detective Senior Sergeant Sol Solomon, who took Witness M's statement across 2010 and 2011, said police investigated a lot of the man's evidence and found it corroborated.
He said the only connection police found between Mr Dale and Mokbel were documents that the former detective would have been in possession of, which later ended up in Mokbel's hands.
Detective Senior Sergeant Solomon said a lot of the statement Williams gave to police against Mr Dale and Collins was also independently corroborated.
The inquest continues before state coroner Ian Gray.