Secret witness says $1m washed a week
Court hears claims about cartel’s alleged ‘money lady’
At its peak, the drug cartel headed by Xavier Valent was making up to $1 million a week, a court was told. The drug runners he allegedly ruled with an iron fist from his exile overseas, while on the run from Kiwi authorities, had a problem: what to do with the masses of cash they were making from the wholesale trade of meth, cocaine and other drugs.
That is why the drug money was laundered overseas with the help of unassuming St Heliers woman Ye (Cathay) Hua, a jury has heard.
More evidence of the inner workings of the syndicate and Hua’s alleged role as its “money lady” has emerged in her trial at the Auckland District Court.
She has pleaded not guilty to 19 money laundering charges covering almost $30m, most of which was allegedly at the behest of Valent, the former Auckland Grammar boy turned 21st century Mr Asia.
Crown prosecutor Sam McMullan said Hua repeatedly took masses of drug money at her money remittance business in Newmarket, Lidong Foreign Exchange, before sending it overseas to accounts controlled by Valent.
The Crown’s case is that she was reckless as to the origin of the cash and did not follow anti moneylaundering rules by failing to ask for identification or verify the source of the funds.
McMullan said she repeatedly ignored red flags, including the fact the money was sometimes wet or covered in powder, sometimes arriving in supermarket bags delivered by suspicious characters.
Her lawyer, David Jones KC, said she was the victim of her own trusting nature and her legitimate business was taken advantage of by deceitful drug dealers.
Yesterday, the Crown called a former worker in Valent’s syndicate as its star witness. He did not disappoint.
The man was granted immunity from prosecution on money laundering charges in exchange for his co-operation, along with a reduced sentence on drugs charges he had earlier admitted.
Several other former minions in Valent’s syndicate received similar in exchange for testifying at his trial at the Auckland High Court this year, before he was found guilty last month on dozens of charges and sentenced to life in prison.
The witness served as a drug runner and storeman in the syndicate for several years.
The jury of seven men and five women sat transfixed as he described via audio-visual link the stressful and dangerous life of a drug runner in Auckland.
Some of what he said cannot be
reported without the risk of disclosing his identity as he was granted name suppression.
He told of a world where all are on guard against being ripped off by other drug dealers, nabbed by the authorities or pulled up by their boss.
Like other witnesses in Valent’s trial, he said he would be fined between $500 and $1000 by the kingpin if he didn’t answer his phone within 20 minutes, representing about half of his weekly wages.
“He was always trying to make as much money as he could, he was always in a rush,” the witness said.
“He put this unnecessary pressure on people, which caused stress.”
The syndicate’s main earner was methamphetamine. But it also dealt in MDMA, Ecstasy tablets, cocaine and meth precursor chemicals including ephedrine.
It was a lucrative business even on a slow week, the witness said under cross-examination from McMullan.
“On a good week, anywhere from $800,000 to a million,” the witness said.
“On a slow week, $200,000 or less.” He estimated that during his time with the syndicate in Auckland they made about $25m.
The man said the cash could become wet or sticky — one of the key red flags in the Crown case — because it was being handled by people who were manufacturing or using meth.
Valent was a micromanager, the jury heard, while he was travelling the globe and on the run from late 2016 to his eventual arrest at the Italian border on an Interpol warrant.
He sent daily task lists via the encrypted messaging app Wickr, telling workers where to drop off and pick up drugs and money.
Valent, under his various aliases including Zeus and Optimum Trading, also communicated directly with Hua.
He would tell her when to expect one of his associates to arrive at Lidong’s office in 1 Kent St, Newmarket, dubbed the “money shop” or “Newmarket money lady” in messages obtained by police.
Asked what was meant by the money shop, the witness was unequivocal.
“That’s Cathay’s money shop. No 1 Kent St, Newmarket.”
Detective Sergeant Anna Henson ran the investigation, dubbed Operation Ida, that culminated in simultaneous raids in March 2021 on
Lidong, and at Hua’s home at Springcombe Rd overlooking the water in St Heliers.
Police traced transfers from Lidong to Chinese accounts linked to Troy Xavier Carlton, another name used by Valent and for which he held a UK passport, Henson said.
He changed his name from Harry Whitehead to Xavier Valent by deed poll in 2015.
Henson said they also identified transactions from Lidong to Macedonia, Germany, Armenia Turkey, Russia, Nigeria and Britain as part of the investigation.
“In my assessment, all of the transactions appear to have been for Valent.”
Henson said they obtained a warrant to intercept Hua’s communications on August 5, 2020, and later covertly installed a listening device in Lidong’s Newmarket office.
Earlier, the Crown called Detective Sergeant John Sowter, a veteran drug squad detective.
He ran Operation Mystic, the sprawling investigation into Valent’s syndicate that culminated in 2020 with the arrest of 21 people.
“Probably the largest drug investigation that I’ve ever been involved with,” said Sowter.
Valent was arrested at the Italian border after police obtained an Interpol red notice against his name and he was then extradited to New
Zealand later in 2020.
Sowter said the convictions against Valent covered the importation and supply of 160kg of meth, 7.6kg of cocaine, 73kg of crystal MDMA, about 300,000 tablets of MDMA and 115kg of ephedrine, though the detective said it was clear Valent’s trade extended well beyond what police were able to identify.
Based on the wholesale market prices of those drugs obtained from his informants and the amounts covered by his convictions, Sowter estimated Valent would have made almost $21m from meth, up to $2.6m from MDMA, $553,000 from ephedrine, and up to $1.8m from cocaine.
The trial continues.