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AAP
AAP
National
Greta Stonehouse

American on trial for Sydney drug murder

Alex Dion has gone on trial accused of murdering Wachira "Mario" Phetmang. (AAP)

A US citizen accused of murdering his small-time Thai drug dealer in Sydney gagged him with the distinctly patterned T-shirt he was wearing, a jury has been told.

Alex Dion, 40, has pleaded not guilty to murdering Wachira "Mario" Phetmang between the evening of May 25 and May 27 in 2018.

Mr Phetmang's extensively decomposed body was found bound and gagged in bushland outside Sydney Olympic Park on June 6.

A truck driver who just happened to pull over to the side of the road noticed the body wrapped in white plastic sheeting.

An autopsy later found the cause of death was likely from at least 27 head injuries causing fractures to his skull, while death by asphyxiation from being gagged is also a possibility.

At the time of death, Mr Phetmang was a small-time drug dealer who frequently ran out of money and hid his gay sexuality from his wife who lived in Wollongong.

Dion started using the drug ice for chronic pain after suffering an accident in Melbourne and eventually began buying from his alleged victim.

"At that stage, the deceased had the drugs and no money and the accused wanted those drugs and he also didn't have any money," crown prosecutor Michael Barr said in his opening address on Tuesday to the Supreme Court.

Mr Phetmang's clothing and glasses were found at the bottom of a water tank on May 28 at a property in East Killara where the accused had previously worked.

Dion's red and blue bed sheets littered with cigarette holes were also found at that location.

Mr Phetmang is captured on CCTV footage as he walked out of a Hurstville 7/Eleven with Dion who had tried and failed to retrieve money three times from an ATM machine on May 25.

"When the deceased and accused walk out the door that's the last time ... the deceased was seen alive," Mr Barr said.

Two days later Dion flew to America but has since been extradited back to NSW to face court.

The trial continues.

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