ACT Policing was ripped off in an online drug deal by an anonymous cybercriminal during a covert operation.
The operation, in late 2015, involved police contacting a suspected dealer via the internet and striking an agreement to buy drugs.
Police paid the cash and received a package, but the substance inside did not contain illegal drugs.
ACT Policing declined to provide additional information – including the amount of money paid - when questioned about the failed operation, saying the Crimes Act forbid further disclosure.
The incident was outlined in the ACT Policing Controlled Operations Annual Report 2015-16.
Under ACT law, police have immunity to take part in some illegal activities, such as buying drugs, to gather evidence that could lead to the prosecution of a criminal.
The report said the operation had been authorised to run from September until December 2015 to investigate drug trafficking.
It did not say which drug had been targeted, however, the report said it had been a "controlled drug other than cannabis".
The sting started out well, but soon fell apart.
"During the controlled operation a person of interest (POI) was communicated with via the internet and an agreement to purchase illicit substance was reached," the report said.
"Substances were purchased but these did not contain illicit substances.
"POI was unable to be identified due to secrecy of the controlled buy."
An ACT Policing spokesperson said: "Controlled operations are carried out for the purpose of obtaining evidence that may lead to the prosecution of a person for a serious offence and can be undertaken with respect to any relevant offence.
"Investigating and prosecuting those involved in organised crime is complex task.
"Controlled operations are one of many strategies undertaken by ACT Policing to target and prosecute these offenders."
The report showed ACT Policing conducted six controlled operations – with three people charged as a result - in the capital during the reporting period.
The report shows the difficulties associated with controlled operations.
In another case, an undercover operative purchased 0.80 grams of cocaine and lignocaine – a cutting agent - but it did not lead to a prosecution.
"Due to evidentiary challenges, no charges were laid," the report said.
In a successful bust in early 2016, police arrested and charged two people after a controlled drug buy yielded 52 capsules containing about 0.1 grams of MDMA and 1 gram of cocaine.
Another person was charged after police lured a dealer to a location where officers then seized 7.2 grams of MDMA.
Two other operations were cancelled after failures to make contact with the targets.