Jared Savage is the New Zealand Herald's investigations editor.

Citizen Yan to pay police nearly $43m

Controversial citizen William Yan will pay the police $43 million as the final settlement in a money-laundering inquiry.
Millionaire businessman William Yan has forfeited $42.85 million to the police. Photo / Greg Bowker.
Millionaire businessman William Yan has forfeited $42.85 million to the police. Photo / Greg Bowker.

One of New Zealand's most controversial citizens will forfeit nearly $43 million to the police following a money-laundering inquiry.

The Herald this morning revealed William Yan - also known as Bill Liu, Yang Liu and Yong Ming Yan - struck a deal as the final settlement in a civil case two years after the police raided his Metropolis penthouse.

Most of the settlement is secret but the police have now issued a press release with some of the key details.

"In accordance with the settlement, the High Court has made assets forfeiture orders in respect of property to the total value of $42.85 million.

"This is the single largest forfeiture that has occurred in New Zealand to date and is the first that relates to crimes alleged to have occurred in China.

"The activity underlying the forfeiture orders is alleged money laundering."

"This settlement is a full and final settlement of the proceedings under the Criminal Proceeds (Recovery) Act without any admission of criminal or civil liability."

Restraining orders were obtained over various items of property associated with the Yan and his wife Vienna You, including a penthouse apartment in central Auckland, a number of luxury vehicles, and substantial shareholdings.

Connected proceedings were initiated in December 2013 against Yingzi Zeng and Shui Yong Huang, who are close friends of Yan.

"They were alleged to have assisted in money laundering and various property associated with them was restrained, including three Auckland properties, a Porsche and Maserati, and over $4.5 million bank funds.

"Once the settlement sum has been paid, the restrained properties, vehicles, shareholdings and third party assets will be released from the restraining orders."

The settlement follows a complex three year investigation by the Waikato Asset Recovery Unit focusing on money laundering large sums of funds allegedly derived from a series of frauds allegedly perpetrated in China between 1999 and 2001.

"This is a significant success for New Zealand Police," says Detective Inspector Paul Hampton, Manager Asset Recovery/Financial Crime Group, Police National Headquarters.

"The outcome in this case reflects the effective working relationship between Chinese and New Zealand law enforcement agencies," said Hampton.

The next process will be determining how the recovered monies will be shared between the New Zealand and Chinese Governments.

The settlement dwarfs the previous largest judgment against one individual under the criminal proceeds law which was $5.1m. The 45-year-old has not been charged with money-laundering offences and continues to deny any wrongdoing.

New Zealand detectives have worked closely with Chinese authorities, who claim Yan stole $129 million in a complex fraud.

Court documents allege Yan concealed the fortune in New Zealand through complex money laundering transactions, where property and shares in companies were held by trusts and companies in other people's names.

Those assets, including an 18.8 per cent stake in Mega, were restrained under the Criminal Proceeds Recovery Act, which essentially forces someone to prove how an asset was paid for.

These cases are determined by the civil level of proof, the "balance of probabilities", rather than the much higher criminal evidential threshold of "beyond reasonable doubt".

It remains to be seen whether China will now seek the extradition of Yan, who holds New Zealand citizenship.

Justice Minister Amy Adams said there had been no formal extradition request from China.

"I understand that officials from China have made contact informally with my officials and expressed some interest.

"They are requesting information and wanting more information from us about what would be required."

Political reaction

Prime Minister John Key revealed the wealthy businessman was ranked fifth on China's Top 100 most wanted list soon after meeting with President Xi Jinping earlier this year.

Key said he was unaware of the settlement until he read about it this morning.

"Obviously the police will be happy it's quite a lot of money...it's a good outcome."

Asked if the settlement could create the impression that a person could buy their way out of legal trouble, he said that was not the case.

"The police will always prosecute if they can. One option is always to potentially do a deal with anybody, it depends on the circumstances [and] obviously not for criminal proceedings."

Key said if the Chinese wanted to extradite Yan they would be able to make an application to do so.

Asked what the odds were of such an application being successful, Key said he was unsure.

"As has been noted, he is someone of interest to the Chinese. But whether that is ultimately something they want to follow up on is a matter for them."

In April, Key confirmed that China's extradition list came up in his talks with President Xi Jinping at the Diaoyutai State Guesthouse.

The NZ Government has been clear in its discussions with China that its retention of the death penalty is an issue when it comes to forming a special extradition treaty.

But the Government is open to China applying through provisions in the Extradition Act where a prima facie case has to be built in front of NZ courts.

This morning, Key said there had been no follow-up that he was aware of in terms of discussions about a formal extradition treaty.

Police Minister Judith Collins said a settlement was almost always preferable to court.
"[Police] have briefed me on it and I think they have probably done some very good work."

NZ First leader Winston Peters said Yan could not be sent back to China because of the possibility he would be sentenced to death.

The case reflected the "circus" that immigration policy had become under both National and Labour, Peters said.

The latest twist in a long saga

The $43m settlement is the latest twist in a saga dating back to 2001 when Yan arrived in New Zealand.

He first made headlines for his links to the previous Labour government and the decision to give him a New Zealand passport, despite having multiple identities and an Interpol alert against his name.

Former Labour Minister Shane Jones overruled the advice of DIA officials, who said Yan did not meet the good character test for citizenship, following lobbying from Dover Samuels, a Labour MP at the time.

William Yan was supported by former Labour MP Dover Samuels at his 2012 trial. Photo / Brett Phibbs.
William Yan was supported by former Labour MP Dover Samuels at his 2012 trial. Photo / Brett Phibbs.

Yan later stood trial in the High Court at Auckland in May 2012 on five charges relating to false declarations on immigration and citizenship papers.

Justice Timothy Brewer acquitted him despite saying the evidence "proves a situation that is highly suspicious".

The Auditor-General later investigated how Yan came to be granted citizenship, and criticised Jones, but found no evidence of wrongdoing. The politician said he believed Yan would be executed if sent back to China.

Yan has said he made his fortune legitimately as a businessman and the two identities he came to New Zealand with, Yong Ming Yan and Yang Liu - are valid because he was fostered out by his birth parents in China.

Both sets of parents registered him as part of their household with different names and dates of birth, said Yan, and the Chinese Government considers him an enemy because he is associated with Falun Gong and is pro-democracy.

Two years after his acquittal, Yan again came to the attention of police when detectives found a note as part of an inquiry focused on a group of VIP high rollers at SkyCity.

Handwritten in Chinese, the note authorised the purchase of $1.85 million worth of shares in a company registered in the tax haven of the British Virgin Islands and was signed by Yang Liu.

William Yan after visiting the Auckland Central police station in 2009. Photo / Greg Bowker
William Yan after visiting the Auckland Central police station in 2009. Photo / Greg Bowker

That caught the attention of Operation Galaxy detectives, who also know him by other names - Bill Liu to his friends, Yong Ming Yan according to Chinese authorities and William Yan on his New Zealand passport.

But the resurfacing of his name in Operation Galaxy triggered a fresh look at the dormant allegations of fraud in China and his business dealings in New Zealand, culminating in another police raid on his penthouse in the Metropolis tower in August 2014.

The investigation also uncovered Yan's astonishing SkyCity records where he gambled $293 million over a 12-year period - despite being banned twice for two years and losing a total of $23 million.

William Yan - the Man of many names

2001: Arrives in New Zealand with two identities, Yang Liu and Yong Ming Yan.

2002: Granted permanent residency as Yang Liu.

2005: Applied for citizenship. Makes donations to Labour and National.

2007: Immigration New Zealand's moves to revoke permanent residency vetoed by minister.

2008: Three MPs write in support of citizenship application. Citizenship approved by ministerial prerogative, against advice of officials. Ceremony held at Parliament. Changed his name to William Yan.

2009: Arrested at Auckland Airport and charged with making false declarations on his immigration and citizenship papers.

2012: Found not guilty in High Court at Auckland, despite Justice Timothy Brewer saying the evidence "proves a situation that is highly suspicious".

2013: Auditor-General releases report which criticises former Cabinet minister Shane Jones for granting citizenship but said there was no evidence of wrongdoing.

2014: Police raid Mr Yan's penthouse and seize his assets.

2016: He agrees to forfeit $42.85 million as a settlement of the civil case.

- NZ Herald

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