A convicted Auckland property developer's wife, entangled in an alleged $54 million mortgage fraud scheme, claims her husband was a "megalomaniac" who hid his fraudulent nature.

Kang Xu, also known as Yan (Jenny) Zhang, is one of three people on trial in the High Court at Auckland over what the Serious Fraud Office (SFO) says were fraudulent bank loans of more than $54m to buy 76 Auckland and Hamilton properties.

The SFO also alleges two bankers received cash bribes to process and approve the loans.

Xu is facing 34 charges for obtaining by deception and was indicted alongside lawyer Gang (Richard) Chen, former BNZ banker Zongliang (Charly) Jiang, and Xu's property developer husband Kang Huang.

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Huang has already admitted and been sentenced to four years and seven months' imprisonment for his part in the alleged fraud.

The SFO said Huang was the architect of the scheme, which used false information or documents, or withheld information from three banks, to obtain loans and buy properties between December 2011 and October 2015.

The banks included BNZ, ANZ and an overseas bank that has its name suppressed.

SFO prosecutor Todd Simmonds said during his opening address that 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 said.

Simmonds alleged Xu had supplied many of the false documents to the banks or supplied them to Chen, who gave them to the banks and acquired the loans.

Today, however, Xu's counsel Adam Simperingham said his client's husband was "a megalomaniac who did everything he could to decrease costs and increase the business' profits and wealth".

"Ms Xu had very little to do with her husband's fraudulent activity and that if she was involved she did not know about the fraudulent aspects of it," he said.

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Xu's role in the business, Simperingham said, was "very much subservient" to Huang.

"Her role related to the nuts and bolts, feet on the ground, operational aspects of the business," the lawyer said.

"Initially her role was confined to finishing houses – overseeing the painting and decorating."

Kang Xu, lawyer Gang Chen and former banker Zongliang Jiang are on trial over the mortgage fraud scheme. Photo / Michael Craig
Kang Xu, lawyer Gang Chen and former banker Zongliang Jiang are on trial over the mortgage fraud scheme. Photo / Michael Craig

Simperingham said at the peak of Xu's involvement she was dealing with tradespeople and local authorities to gain building permits when preparing the houses for sale.

"She had little to do with the financial aspects of the business, and nothing to do with the fraudulent activity," he said.

Simperingham said the court will hear evidence that "Huang or someone else who worked for or with him", forged Xu's signature on documents relating to property purchases.

"She was busy looking after the couple's younger daughter, and was busy working on the operational aspects of the business – getting the houses built," Simperingham said.

The identities of Chen and Jiang were revealed by the Herald in December 2016.

Chen is facing 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 faces two charges for allegedly failing to 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.

Simmonds said the lawyer acted for the reported vendor and buyer in the majority of the property transactions.

Chen's counsel Sam Wimsett likened his client's involvement to early Australian settlers, "lured onto a boat with promises of a great southern land but yet to find out about the poisonous snakes, spiders and lack of water".

He said Chen was a solicitor involved in thousands of matters and should not be portrayed as a "suburban solicitor doing a handful of transactions on a Friday night".

"It cannot be the case that 'he was the solicitor, he must've been across it'."

Jiang, when working at the BNZ, is accused of processing and approving the loan applications in exchange for kickbacks.

He faces a total of 26 charges for obtaining by deception and the alleged bribe.

The SFO wished to charge the second banker, but he fled the country before court action court be taken. It is believed he is now in China.

Jiang's counsel Julie-Anne Kincade said her client was unaware the documents were fraudulent or that Huang was the true borrower.

The judge-alone trial before Justice Sarah Katz is scheduled for 12 weeks and will hear from 35 witnesses including bank managers, accountants, real estate managers and lawyers.