A property developerwho mastermined a $54-million mortgage fraud has been jailed for four years and seven months.
A property developer at the centre of a mortgage fraud scheme involving about 75 properties in Hamilton and Auckland has been sentenced to four years and seven months' imprisonment with a minimum non-parole period of two years and three months on charges brought by the Serious Fraud Office.
Kang (Thomas) Huang, also known as Gang Wang, was sentenced today in the Auckland High Court. Mr Huang pleaded guilty to all ten charges he faced on 21 December 2017, 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’.
Mr Huang operated a property development business and was charged with providing false documents or information to several banks across multiple home loan applications. He was also charged with bribing a bank employee. Mr Huang dishonestly obtained about $54 million of loans through these activities.
The other defendants in the case, Mr Huang’s wife, Kang Xu (also known as Yan (Jenny) Zhang), lawyer Gang (Richard) Chen and former bank employee Zongliang (Charly) Jiang, are due to appear in the Auckland High Court for trial commencing on 26 February.
SFO Director, Julie Read said, “Such use of deception, and bribery in one instance, undermines lenders’ confidence in borrowers in the mortgage market. If banks have to introduce additional checks, these costs may be passed on to borrowers increasing the cost of mortgages for all. The sentence imposed today reflects the serious nature of misconduct in this case. The SFO is committed to investigating and prosecuting this kind of offending to maintain the integrity of the mortgage market and preserve New Zealand’s reputation for having corruption free business practices.”
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Note to editors
Crimes Act offences
Section 240 Obtaining by deception or causing loss by deception
(1) Every one is guilty of obtaining by deception or causing loss by deception who, by any deception and without claim of right,—
(a) obtains ownership or possession of, or control over, any property, or any privilege, service, pecuniary advantage, benefit, or valuable consideration, directly or indirectly; or
(b) in incurring any debt or liability, obtains credit; or
(c) induces or causes any other person to deliver over, execute, make, accept, endorse, destroy, or alter any document or thing capable of being used to derive a pecuniary advantage; or
(d) causes loss to any other person.
(1A) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document or thing capable of being used to derive a pecuniary advantage knowing that, by deception and without claim of right, the document or thing was, or was caused to be, delivered, executed, made, accepted, endorsed, or altered.
(2) In this section, deception means—
(a) a false representation, whether oral, documentary, or by conduct, where the person making the representation intends to deceive any other person and—
(i) knows that it is false in a material particular; or
(ii) is reckless as to whether it is false in a material particular; or
(b) an omission to disclose a material particular, with intent to deceive any person, in circumstances where there is a duty to disclose it; or
(c) a fraudulent device, trick, or stratagem used with intent to deceive any person.
Section 228 Dishonestly taking or using document
(1) Every one is liable to imprisonment for a term not exceeding 7 years who, with intent to obtain any property, service, pecuniary advantage, or valuable consideration, —
(a) dishonestly and without claim of right, takes or obtains any document; or
(b) dishonestly and without claim of right, uses or attempts to use any document.
(2) Every person is liable to imprisonment for a term not exceeding 3 years who, without reasonable excuse, sells, transfers, or otherwise makes available any document knowing that —
(a) the document was, dishonestly and without claim of right, taken, obtained, or used; and
(b) the document was dealt with in the manner specified in paragraph (a) with intent to obtain any property, service, pecuniary advantage, or valuable consideration.
Secret Commissions Act offences
Section 3 Gifts to agent without consent of principal an offence
(1) Every person is guilty of an offence who corruptly gives, or agrees or offers to give, to any agent any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal’s affairs or business (whether such act is within the scope of the agent’s authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal’s affairs or business.
(2) Any gift or other consideration given or offered or agreed to be given to any parent, husband, wife, civil union partner, de facto partner, or child of any agent, or to his partner, clerk, or servant, or (at the agent’s request or suggestion) to any other person, shall be deemed for the purposes of this section to have been given or offered or agreed to be given to the agent.
About the SFO
The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act.
The SFO is the lead law enforcement agency for investigating and prosecuting serious or complex financial crime, including bribery and corruption.
The presence of an agency dedicated to white collar crime is integral to New Zealand’s reputation for transparency, integrity, fair-mindedness and low levels of corruption.
This work contributes to a productive and prosperous New Zealand and the SFO’s collaborative efforts with international partners also reduce the serious harm that corrupt business practices do to the global economy.
The SFO has two operational teams: the Evaluation and Intelligence team and the Investigations team.
The SFO operates under two sets of investigative powers.
Part 1 of the SFO Act provides that it may act where the Director “has reason to suspect that an investigation into the affairs of any person may disclose serious or complex fraud.”
Part 2 of the SFO Act provides the SFO with more extensive powers where: “…the Director has reasonable grounds to believe that an offence involving serious or complex fraud may have been committed…”
In considering whether a matter involves serious or complex fraud, the Director may, among other things, have regard to:
- the suspected nature and consequences of the fraud and/or;
- the suspected scale of the fraud and/or;
- the legal, factual and evidential complexity of the matter and/or;
- any relevant public interest considerations.
The SFO’s Annual Report 2017 sets out its achievements for the past year, while the Statement of Intent 2014-2018 sets out the SFO’s strategic goals and performance standards. Both are available online at www.sfo.govt.nz(external link)
The SFO Twitter feed is @FraudSeriousNZ(external link)