Two men jailed over ‘prolonged’ $54m fraud
Two people have been jailed and one sentenced to home detention for their role in a $54 million mortgage fraud scheme that used false documents and fictitious house buyers to rip off three banks.
At the High Court in Auckland yesterday, Justice Sarah Katz sentenced the trio after they were found guilty earlier this year of executing the large-scale fraud involving 76 properties in Auckland and Hamilton and home loans obtained from late 2011 to late 2013.
In June, following a 12-week trial, the wife of a convicted property developer, Kang Xu, lawyer Gang Chen and former ANZ and Bank of New Zealand employee Zongliang Jiang were found guilty on a number of charges brought by the Serious
Fraud Office.
Yesterday,
Chen was sentenced to six years in jail. Jiang was sentenced to four years and nine months’ jail, and a tearful Xu was handed
12 months’ home detention.
In a courtroom full of friends and family of the offenders, Justice Katz said the trio were knowingly involved in a ‘‘sophisticated scheme to deceive the banks’’.
The mortgage fraud was on a scale that was ‘‘unprecedented in New Zealand’’, she said.
Justice Katz said the scheme required ‘‘premeditated and prolonged’’ offending and a large degree of planning.
Earlier this year a man at the centre of the fraud case, Xu’s husband Kang Huang, also known as Gang Wang, was sentenced to four years and seven months’ jail after he admitted providing false information to acquire fraudulent home loans, and to bribing one employee.
Huang and Xu were bankrupted in 2010, and were discharged in 2013.
About 14 months after they were declared bankrupt, the pair set up construction company LV Park, which is at the centre of the fraud.
Unable to borrow from the major trading banks, LV Park made sham arm’s-length sales to parties to obtain loans with false documents, which used fake identification and names of employees, friends, family and fictitious buyers.
The banks involved in the case were ANZ, BNZ and a third that has name suppression.
The Serious Fraud Office (SFO) laid more than 100 charges against the group in October 2016.
SFO prosecutor Todd Simmonds said Xu was a central player in the offending, working alongside her husband, ‘‘the mastermind’’, and the three other offenders.
Xu’s lawyer, Adam Simperingham, said her role was ‘‘subservient’’ and ‘‘obedient’’ to her husband, acting on his instructions, and said that should be taken into consideration in sentencing.
Justice Katz said while many of the mortgages had been repaid the banks had lost about $427,000. The losses were low because the activities occurred in a rising market and the properties could be sold for more than their purchase price.