Group guilty in $54m fraud case
The lawyer, banker and wife of a convicted property developer who were on trial for their alleged involvement in a $54 million mortgage fraud have been found guilty in the High Court at Auckland.
Yesterday morning Justice Sarah Katz handed down 72 verdicts in relation to the 12-week trial concluded last month.
The wife of a convicted property developer, Kang Xu, lawyer Gang Chen and former Bank of New Zealand employee Zongliang Jiang have been found guilty on a number of charges and face 56 convictions, Serious Fraud Office (SFO) prosecutor Todd Simmonds said.
The trio – who previously pleaded not guilty – will be sentenced later this year.
SFO director Julie Read said the crimes, which relied on a high level of calculation and collaboration, undermined lenders’ confidence in borrowers in the mortgage market.
‘‘The banks were misled in a number of respects including the financial position of the purported borrowers and the level of associated risk,’’ Read said.
Earlier this year the man at the centre of the fraud case, Kang Huang, also known as Gang Wang, was sentenced to four years and seven months’ prison after admitting providing false information to acquire fraudulent home loans, and to bribing one employee.
During Xu, Chen and Jiang’s trial, Simmonds told the court that the fraud was ‘‘organised, system-
‘‘The banks were misled in a number of respects including the financial position of the purported borrowers.’’
SFO director Julie Read
atic and complex deception’’.
Xu’s lawyer, Adam Simperingham, said Huang was a megalomaniac who did everything that he could to decrease costs and increase business profits, and kept his wife out of the loop about the fraud.
‘‘For cultural reasons, pride and a certain degree of arrogance, Huang concealed the fraudulent payments from his wife,’’ Simperingham said.
Xu made payments into the bank accounts of some buyers on instructions from her husband, not knowing the loan applications would be made fraudulently, he said.
He alleged Huang or one of his employees forged Xu’s signature on four loan applications.
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 obtain bank loans via the use of false documents.
The false documents used fake identification and names of employees, friends and family.
The fraudulent activity involved 75 properties. There are three banks involved in the case – ANZ, BNZ and a third that has name suppression.
Lawyers for former BNZ bank employee Jiang and lawyer Chen kept their defence argument short, asking the judge to keep an open mind and to wait to hear from the forthcoming witnesses.
The SFO laid more than 100 charges against the group in October 2016.
A fourth associate allegedly involved in the fraud, former ANZ banker Peter Cheng, fled overseas before his arrest.