Finance company, owner and worker face money laundering charges

An Auckland finance company accused of being involved in an alleged multi-million dollar pyramid scheme has pleaded not guilty to money laundering charges.

The finance company, its owner and a worker, which all have name suppression, appeared in the High Court in Auckland on Wednesday facing Anti-Money Laundering and Countering Financing of Terrorism Act charges brought by the Department of Internal Affairs.

The charges are in relation to another case brought by the Police Commissioner against a Xiao Hua Gong, also known as Edward Gong, in what could become New Zealand’s largest ever forfeiture order.

David Jones QC, the lawyer acting on behalf of the finance company, its owner and worker, entered not guilty pleas on their behalf.

A judge alone trial has been set down for two weeks from September 30, 2019.

According to court documents, Gong was arrested in Canada in December 2017, accused of running a $202 million pyramid scheme.

A Canadian search warrant obtained by Stuff says the police froze and seized about C$63m (NZ$69m) in New Zealand bank accounts as well as two Auckland properties worth about $3m.

Gong funnelled more than $75m into New Zealand bank accounts, the documents show.

In May the business owner charged in connection to Gong said he would not comment on the matter and referred Stuff to his lawyer.

Court documents said “complex or unusually large” deposits made by or on behalf of Gong were going into bank accounts in China allegedly controlled by the finance company.

The deposits allegedly exceeded the finance company’s maximum remittance transaction limit, were received at short notice and were “objectively suspicious”, court documents said.

Once the finance company received deposits it allegedly paid proceeds in New Zealand using multiple transactions per day or over several days, from multiple accounts operated by the company, including false payment references, court documents said.

The funds allegedly had no “visible or lawful purpose”, court documents said.

The company and two accused allegedly failed to keep or retain adequate records relating to a suspicious transaction and transferred $53.5m in funds for Gong across 311 individual payments between April 2015 and May 2016, court documents said.

Suspicions about Gong’s money were raised in New Zealand in 2015 when ANZ alerted police it had concerns about the large sums of money being transferred to his account.

Gong is yet to go to trial for the charges he faces in Canada. (via Stuff)