Kang Xu, lawyer Gang Chen and former banker Zongliang Jiang were on trial over an alleged $50m mortgage fraud scheme. Photo / Michael Craig
Kang Xu, lawyer Gang Chen and former banker Zongliang Jiang were on trial over an alleged $50m mortgage fraud scheme. Photo / Michael Craig
A three month-long trial over an alleged $54 million mortgage fraud scheme has come to an end, with a former banker, lawyer and the wife of a property developer now anxiously waiting the judge's decision.
The trio were part of a quartet charged by the Serious Fraud Office (SFO) overmore than 70 properties and suspicious mortgages in Auckland and Hamilton.
The trial concluded last week with Justice Sarah Katz indicating she will deliver her judgment next month.
The SFO alleges the group used false information or documents, or withheld information from three banks, to obtain loans and purchase properties between December 2011 and October 2015.
The banks included BNZ, ANZ and an overseas bank, which has its name suppressed.
The scheme, the SFO claims, involved loans of more than $54m, 57 applications for finance, 76 Auckland and Hamilton properties, and "bribes" to two bankers who approved some loans.
The SFO wished to charge the second banker, however, he fled the country before court action court be taken. It is believed he is now in China.
Xu is facing 34 charges for obtaining by deception.
She is the wife of Auckland property developer Kang Huang, who has been sentenced for his part in the alleged fraud.
Kang Huang was sentenced to four years and seven months' imprisonment earlier this year. Photo / Michael Craig
The SFO said Huang was the architect of the scheme and he pleaded guilty to 10 criminal charges late last year and was sentenced to four years and seven months' imprisonment earlier this year by Justice Graham Lang.
Xu's lawyer Adam Simperingham said at her trial that Huang was a "megalomaniac" who hid his fraudulent nature.
SFO prosecutor Todd Simmonds said Huang managed the property construction company LV Park, which owned and controlled the properties.
LV Park would obtain cheap finance and retain control of the properties to "dramatically increase" the size of its portfolio, Simmonds told the court during his opening address.
The SFO said Huang began the scam because it was cheaper to fund the operation with home loans from banks rather than via finance companies, due to the higher costs associated with commercial lending.
Xu had supplied many of the false documents to the banks or supplied them to Chen, who gave them to the banks, Simmonds alleged.
Chen faced 12 charges, two of which are representative for his alleged deliberate intention to deceive the banks of the identity of the true property buyers.
He also was accused of failing to twice identify the real borrower, a further seven charges for providing the alleged false and misleading documents, and one representative charge under the Secret Commissions Act for the kickback payments.
