Lawyer and banker jailed for $54 million fraud
3 August 2018
Two people have been jailed for their involvement in a scheme that illegally obtained, through deception and bribery, residential home loans for a property development group, LV Park. The scheme was designed to obtain finance at a significantly lower rate than would otherwise have been available to commercial developers.
Suspended lawyer Gang (Richard) Chen and former bank employee Zongliang (Charly) Jiang were sentenced to imprisonment at the High Court in Auckland. Property developer Kang Xu was also sentenced today to home detention for her role in the scheme. The three of them were earlier convicted of fraud at the conclusion of a three-month trial in June.
Mr Chen, who acted as a solicitor in the sale and purchase agreements and facilitated the payment of bribes to bank employees, was sentenced to six years’ imprisonment with a minimum non-parole period of three years. Mr Chen was convicted on nine charges of ‘Obtaining by deception’, two of which were representative charges, and one representative charge of ‘corruptly giving consideration to an agent’ under the Secret Commissions Act.
Mr Jiang, who was a bank employee that facilitated the loans in return for bribes, was sentenced to four years and nine months’ imprisonment with a minimum non-parole period of two years and four months. He was sentenced on 25 charges of ‘Obtaining by deception’ under the Crimes Act and one representative charge of ‘Acceptance of gifts by agent’ under the Secret Commissions Act. Another bank employee was involved in the scheme but left the country in 2015.
Ms Xu was sentenced to 12 months’ home detention on 22 charges of ‘Obtaining by deception’. Her husband, Kang (Thomas) Huang, pleaded guilty to his part in the scheme prior to the trial and is currently serving a four-and-a-half-year jail sentence for his offending. Mr Huang, who was the mastermind of the overall offending, was the head of a group of companies that traded as LV Park.
Mr Huang, also known as Gang Wang, pleaded guilty to all ten charges he faced in December which were eight charges of ‘Obtaining by deception’, one charge of ‘Corruptly giving consideration to an agent’, and one charge of ‘Dishonest use of a document’.
SFO Director, Julie Read said, “The sentences imposed today reflect the very serious nature of offending, which relied on a high level of calculation and collaboration. Such fraud undermines 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. The SFO is committed to investigating and prosecuting this kind of large-scale offending to maintain the integrity of the financial market place.”