A Mount Maunganui house has been forfeited to the Crown, after it was used by a madam who was illegally employing sex workers. Photo / Mead Norton
Over the course of May Chen’s time as a madam, police believe she illegally employed as many as 150 women as sex workers and pulled in up to $1.8 million.
Chen operated brothels out of houses in Mount Maunganui and on Auckland’s Morningside Drive and Great North Rd as part of her escort business, Sun Entertainment.
But in mid-2021, Immigration New Zealand started getting tips the 38-year-old’s escorts weren’t working legally.
By the end of 2022, Hongxia (May) Chen had been sentenced to five months’ community detention for aiding and abetting women to breach a condition of their visa.
But that wasn’t the end of the matter.
Now, $1,117,000 worth of her assets have been forfeited to the Crown and police have provided evidence to suggest her offending was greater than previously known.
In August 2021, as NZ was in lockdown, someone reported to police that a brothel was still operating out of the Mount Maunganui house, which Chen owned, despite the nationwide restrictions.
The house is a stone’s throw from retirement villages and sits on a main road that runs along the beachfront.
When investigators turned up, they discovered Chinese nationals working illegally as sex workers on expired temporary visas.
Immigration NZ had already, in May 2021, received information unlawful Chinese females were providing commercial sexual services in NZ and launched Operation Orion, which focused on Chen’s brothels.
It’s understood the women found in the Mount Maunganui brothel weren’t deported because of Covid-19 restrictions, but some months later one of them was detained after being found in a car with Chen in Alexandra.
The woman was discovered to have $11,000 in cash on her. Chen tried to claim the cash belonged to her and said she’d lent it to the woman.
Immigration NZ’s investigations continued, leading to search warrants in May 2022 at the Mount Maunganui address, as well as the house on Morningside Drive, Auckland, and Chen’s own residential address on Great North Rd.
All three addresses were working brothels with multiple internal rooms specifically used by workers to provide sexual services, and further unlawful Chinese women were found during those searches.
Chen initially faced charges related to seven women but pleaded guilty and was sentenced on five charges, related to five women, of aiding and abetting a person to breach a condition of their visa.
Under the Prostitution Reform Act 2003, holders of temporary visas, or people unlawfully in NZ, may not provide commercial sexual services.
When spoken to by police, Chen claimed she had provided accommodation for women who could not afford it and admitted paying for and placing advertisements for those girls on an escorting site.
She also admitted supplying one of them condoms.
At sentencing in the Auckland District Court, Judge Kirsten Lummis noted an aggravating feature of the offending was that it hadn’t been a one-off and had taken place over the course of a year.
She also said it was an industry that “already has issues with vulnerability”.
“This offending preys on further vulnerabilities in offering opportunities to women to stay here illegally,” Judge Lummis said.
However, she also took into account Chen’s lack of previous convictions in NZ and China.
Chen told the court she had been suffering a “high level of stress in her personal life at the time”, related to financial insecurity.
She reported being in dire need of income after her divorce.
“In the beginning, I worked for myself but ... I wanted to help others have income.”
Judge Lummis sentenced her to five months’ community detention in November 2022.
Now, her assets have been forfeited to the Crown.
In a decision dated September 5, High Court Justice David Johnstone approved a settlement between Chen and the Commissioner of Police for assets with a total estimated value of around $1,117,000 to be forfeited.
These included the Mount Maunganui house, around $145,000 in cash, a Rolex watch found in a safe deposit box in Auckland and a vehicle.
But initially, the commissioner had also sought what’s called a “profit forfeiture”.
The matter had been on its way to a defended hearing and the commissioner filed material that indicated Chen’s offending went “considerably beyond that proven by her convictions”.
While the charges Chen was sentenced on in 2022 related to a handful of illegal workers, “numerous affidavits” contained evidence alleging that between 2018 and 2022 she had employed up to “150 women on temporary visas as sex workers”.
This was supported by 150 distinct profiles shown on an escort advertising website, registered to Chen, as well as police analysis of bank accounts associated with Chen, her company Sun Entertainment and her ex-husband.
Financial records indicated receipt of around $1.8m between 2016 and 2023, which could be attributed to sex work.
Based on this, the commissioner initially sought a profit forfeiture of just over $2m.
This was reduced to $1.5m, as it was confined to a more limited time period and to account for her doing some of the sex work herself.
The judgment said the commissioner considered amending the profit forfeiture application to include funds allegedly being held in Chinese bank accounts but decided against it because of the delays it could cause and other potential complications.
However, the original profit forfeiture sought, and still in dispute, was scheduled for a defended hearing in November.
But before that could go ahead, a resolution was reached.
Chen consented to the already restrained assets being forfeited and police abandoned their claim of profit forfeiture.
The High Court judgment said “broadly, Ms Chen has left NZ and wants to put this matter behind her”.
In being prepared to formally consent to the restrained property being subject to a forfeiture order, she “assists the commissioner to avoid the further cost of proceeding to judgment”, the judgment says.
Recognising this, the commissioner was prepared to forego the “limited prospect” of any further recovery.
“Consistency with the act’s purposes and the overall interests of justice requires that the settlement achieves a satisfactory balance between the objectives of potential profit elimination (and deterrence) and prompt and cost-effective resolution,” the judgment said.
Justice Johnstone accepted the parties’ submission that the settlement was consistent with this and approved it.
Forfeiture orders were made by consent for the Mount Maunganui property, proceeds of the sale of a 2016 Toyota Vellfire station wagon, around $145,000 in cash and the Rolex watch.
It’s understood the current tenants of the Mount Maunganui property have no connection to the former brothel or the offending.
Immigration NZ welcomed the forfeiture of more than $1m in assets, saying it marked the final step of a “complex and sustained operation” into Chen and her company.
“This has been a significant and sustained operation involving multiple agencies over several years,” said Steve Watson, general manager immigration compliance and investigations.
“We do not tolerate this kind of offending. It undermines the integrity of our immigration system and puts vulnerable people at risk.”
Detective Senior Sergeant Stuart McGowan, of NZ Police’s asset recovery unit, said it was another “good example of an across-Government approach – Immigration and police – working together to hold offenders to account”.
“It is equally rewarding to have secured convictions and the subsequent seizure of illegally purchased assets from someone who preyed on and scammed vulnerable people,” he said.
Hannah Bartlett is a Tauranga-based Open Justice reporter at NZME. She previously covered court and local government for the Nelson Mail and before that was a radio reporter at Newstalk ZB.