"Such fraud undermines lenders' confidence in borrowers in the mortgage market," says SFO
Two people have been sentenced to imprisonment at the High Court in Auckland for being involved in a $54 million mortgage fraud.
According to the Serious Fraud Office (SFO), suspended lawyer Gang (Richard) Chen and former bank employee Zongliang (Charly) Jiang devised a scheme that illegally obtained, through deception and bribery, residential home loans for a property development group, LV Park. Their goal was to obtain finance at a significantly lower rate than would otherwise have been available to commercial developers.
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. He was convicted on nine charges of obtaining by deception and one representative charge of corruptly giving consideration to an agent.
Meanwhile, 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 and one representative charge of acceptance of gifts by agent. Another bank employee was involved in the scheme but reportedly left the country in 2015.
Property developer Kang Xu was also sentenced to home detention for her role in the scheme. 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. Huang was the mastermind of the scheme, and was the head of a group of companies that traded as LV Park.
The three of them were earlier convicted of fraud at the conclusion of a three-month trial in June.
“The sentences imposed today reflect the very serious nature of offending, which relied on a high level of calculation and collaboration,” SFO director Julie Read said. “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.”
