Sentence announced in Cheng Qi Wang fraud case

Sentence announced in Cheng Qi Wang fraud case

The Serious Fraud Office (SFO) has announced that Cheng Qi (Chris) Wang (54) has been sentenced to two years and nine months' imprisonment for dishonestly using a document and money laundering.

Crimes Act charges were laid against Mr Wang in June 2010 and in January this year he was found guilty on all counts. Suppression orders had previously been in place in respect to the charges, conviction and sentencing, while Mr Wang faced other charges in the Courts.

The SFO charges related to property transactions undertaken by Mr Wang during 2008. His method of using false documentation to obtain 100% or greater mortgage funding from lenders was through the use of what is colloquially termed ‘price hydraulicking'. This entails the same day purchase and on-sale of particular properties at significantly different purchase prices; the purchase price on the greater value sale and purchase agreement being relied upon to obtain finance.

Mr Wang processed mortgage money through various entities' bank accounts, normally home stay students living with Mr Wang at the time; he then paid the relevant costs before retaining the net balance of the proceeds.

In total, Mr Wang obtained $2.3 million in mortgage funding.

Acting Chief Executive for the SFO, Simon McArley said, "Mr Wang deliberately set out to deceive the banks concerned into believing that he paid significantly more for the properties than he had. He also dragged other individuals into his scheme. His method should be seen as a reminder to fund providers, and to investors, to maintain a high standard of checks and balances."

ENDS

For further information

Andrea Linton
Serious Fraud Office
027 705 4550

Note to editors

Background to investigation

Cheng Qi Wang has lived in New Zealand for a number of years and set himself up as a property investment advisor, principally to new immigrants within the Chinese community.

Crimes Act offences

Section 228 Dishonestly taking or using document
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.

Section 243 Money laundering
(1) For the purposes of this section and sections 244 and 245,-
conceal, in relation to property, means to conceal or disguise the property; and includes, without limitation,-
(a) to convert the property from one form to another:
(b) to conceal or disguise the nature, source, location, disposition, or ownership of the property or of any interest in the property
deal with, in relation to property, means to deal with the property in any manner and by any means; and includes, without limitation,-
(a) to dispose of the property, whether by way of sale, purchase, gift, or otherwise:
(b) to transfer possession of the property:
(c) to bring the property into New Zealand:
(d) to remove the property from New Zealand
interest, in relation to property, means-
(a) a legal or equitable estate or interest in the property; or
(b) a right, power, or privilege in connection with the property
proceeds, in relation to a serious offence, means any property that is derived or realised, directly or indirectly, by any person from the commission of the offence
property means real or personal property of any description, whether situated in New Zealand or elsewhere and whether tangible or intangible; and includes an interest in any such real or personal property
serious offence means an offence punishable by imprisonment for a term of 5 years or more; and includes any act, wherever committed, that, if committed in New Zealand, would constitute an offence punishable by imprisonment for a term of 5 years or more.

(2) Subject to sections 244 and 245, every one is liable to imprisonment for a term not exceeding 7 years who, in respect of any property that is the proceeds of a serious offence, engages in a money laundering transaction, knowing or believing that all or part of the property is the proceeds of a serious offence, or being reckless as to whether or not the property is the proceeds of a serious offence.

(3) Subject to sections 244 and 245, every one is liable to imprisonment for a term not exceeding 5 years who obtains or has in his or her possession any property (being property that is the proceeds of a serious offence committed by another person)-
(a) with intent to engage in a money laundering transaction in respect of that property; and
(b) knowing or believing that all or part of the property is the proceeds of a serious offence, or being reckless as to whether or not the property is the proceeds of a serious offence.

(4) For the purposes of this section, a person engages in a money laundering transaction if, for the purpose of concealing any property or enabling another person to conceal any property, that person-
(a) deals with that property; or
(b) assists any other person, whether directly or indirectly, to deal with that property.

(5) In any prosecution for an offence against subsection (2) or subsection (3),-
(a) it is not necessary for the prosecution to prove that the accused knew or believed that the property was the proceeds of a particular serious offence or a particular class of serious offence:
(b) it is no defence that the accused believed any property to be the proceeds of a particular serious offence when in fact the property was the proceeds of another serious offence.

(6) Nothing in this section or in sections 244 or 245 limits or restricts the operation of any other provision of this Act or any other enactment.

About SFO

The Serious Fraud Office (SFO) was established in 1990 under the Serious Fraud Office Act in response to the collapse of financial markets in New Zealand at that time.

SFO's role is the detection, investigation and prosecution of serious or complex financial crime. SFO's focus is on investigating and prosecuting criminal cases that will have a real effect on:

• business and investor confidence in our financial markets and economy
• public confidence in our justice system and public service
• New Zealand's international business reputation.

SFO operates three investigative teams:

• Evaluation and Intelligence;
• Financial Markets and Corporate Fraud; and
• Fraud and Corruption.

SFO operates under two sets of investigative powers.

Part I 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 II 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..."

SFO's Annual Report 2012 sets out its achievements for the past year, while the Statement of Intent 2013-2016 sets out the SFO's three year strategic goals and performance standards. Both are available online at: www.sfo.govt.nz(external link)