A NETWORK of firearms dealers has rorted the $600 million national guns buyback scheme, and weapons supposedly destroyed years ago have resurfaced in criminal hands in NSW.

The Herald can reveal that at least two of the so-called "phantom guns" - both pistols written off by the Queensland Firearms Registry - have been fired at the scene of separate unsolved robberies in Sydney in the past six months. Police believe there are hundreds more like them.

The buyback scheme has been credited with removing about 650,000 firearms from the streets in the past 10 years. A newly elected John Howard staked his political future on forcing it through after the 1996 Port Arthur massacre. He still regards it as one his finest achievements.

But thousands of the guns were never destroyed. The man largely responsible for the rort is Frank Curr, a licensed firearms dealer and pawn shop owner from Wacol in Queensland.

Curr paraded as a civic-minded dealer concerned about drugs and violence in his neighbourhood while secretly arming criminals across the border with an estimated 2000 guns he had been paid to destroy or render inoperable. Only 50 of the weapons have been recovered.

Curr, who was convicted last year and will be sentenced next week, was brought down by a four-year covert operation by the NSW Firearms Squad, which describes him as Australia's largest dealer in illegal firearms.

Police say Curr used a network of 20 other illegal arms dealers in NSW and Queensland, with links to Victoria and South Australia, to flood Sydney with 1600 to 2000 guns between 1998 and 2002. At the same time, Curr was being reimbursed by the Government for supposedly destroying or rendering harmless firearms he had received from gun owners who surrendered their weapons.

Detective Inspector Albert Joseph, of the Firearms Squad, and other undercover officers infiltrated the heart of the illegal gun trade operating from Queensland. He says only a few of Curr's guns were recovered because of steps the dealer took to obliterate their serial numbers. Those that have been found had remnants of their serial numbers that were traceable by ballistic experts.

Police alleged that Curr made between $1.6 million and $2 million before he and his network of illegal gun dealers - which included a cartel on the NSW mid North Coast and Blue Mountains - was finally shut down.

Inspector Joseph said Curr corrupted a licensed armourer into providing certificates that weapons had been rendered harmless, so the dealer could then sell them as replica pistols in Queensland, thereby exploiting a loophole in the buyback scheme.

In evidence presented to the trial, police said official statistics showed handgun violence had increased more than fourfold since 1996.

"The possession and sale of illicit firearms is the subject of intense media, political and community interest and the recent release of statistics by the Bureau of Crime Statistics and Research clearly indicate the significant rise of handgun-related crimes resulting in violence," Inspector Joseph told the court.

Both the pistols recovered in NSW were used in robberies in which only the empty cartridge cases of bullets fired were found at the scenes of the crimes.

* A man faced court yesterday after police uncovered a cache of weapons, including a rocket launcher and a hand grenade, in his Melbourne home and ute.

Timothy Robert Vivoda, 36, of Monbulk, faced eight firearms-related charges in Ringwood Magistrates Court. Army experts told the court the rocket launcher and the grenade were inoperable. Vivoda's lawyer said the weapons were in the ute because they were to be taken to the tip.

Vivoda was remanded to reappear in the same court on Monday.