An Auckland finance firm, its director and an office worker are facing charges over allegedly laundering more than $53 million belonging to a Chinese businessman who denies running a $200m pyramid scheme from Canada.
The pair and the firm are accused of knowingly or recklessly failing to conduct customer due diligence for Xiao Hua Gong over the transfer of $53,462,190 Chinese funds.
Facing 10 total charges, laid by the Department of Internal Affairs, the firm and duo appeared in the Auckland District Court last month for the first time over the alleged money laundering, which is said to have occurred between April 21, 2015 and May 10, 2016.
Gong, also known as Edward Gong, is named in court documents as a customer of the downtown Auckland firm, which has its name suppressed along with the name of the director and office worker.
A wealthy entrepreneur, Gong built an empire including a hotel chain and television channels in Toronto and is friendly with Canada's Prime Minister Justin Trudeau - having donated to the governing Liberal Party.
He attended Trudeau's controversial "cash-for-access fundraising dinners".
Gong was arrested in Canada and charged with fraud and money laundering last December over an alleged pyramid scheme involving the "fraudulent sale of hundreds of millions of dollars" in shares in China.
He has denied his financial success and influence was gained from the alleged $202m scheme selling medicines in China.
Last year, nine months before Gong's arrest in Canada, the New Zealand Police froze nearly $70m of Gong's cash in bank accounts here as part of a global investigation into the businessman.
A High Court judge had granted the freezing orders over Gong's Kiwi assets, which include $69.5m in accounts and an Auckland home worth $2m.
Suppression orders on Justice Paul Davison's ruling were lifted yesterday, following an application by the Herald to allow publication.
Gong had deposited $77m - allegedly profits from the pyramid scheme - into New Zealand over seven years, the court documents read.
Nearly $12m was later transferred from New Zealand to Canada.
Court documents also show Gong made 311 individual payments to the Auckland finance firm.
The deposits by or on behalf of Gong included payments into bank accounts in China controlled by the finance company, described by Internal Affairs as "complex or unusually large".
The deposits exceeded the company's maximum remittance transaction limit as stipulated in its risk assessment, were received at short notice, and were "objectively suspicious", court documents read.
Internal Affairs alleged that once the firm received the deposits it paid the proceeds in New Zealand using multiple transactions per day, or over a period of several days, from multiple accounts operated by the company - including using false payment references to describe the transactions.
The overall manner in which the transfer of funds was conducted had no apparent or visible or lawful purpose, Internal Affairs claimed.
The office worker is also facing a money laundering charge over a single alleged deposit of $710,772 in cash on 14 separate tranches into an ANZ bank account under Gong's name.
The worker, director and firm are all due to appear in court again next month.
Police allege Gong was laundering money in New Zealand to distance himself from the alleged pyramid scheme in China.
"The pyramid scheme involved the making of representations to potential investors which were false and dishonest, including a claim that the company share price would increase by 2000 to 4000 per cent and that the products sold were legitimate health products, which they were not," Justice Davison wrote, summarising the police case.
"Instead of applying investment funds in the manner represented to investors, the majority of the funds were paid into bank accounts nominated and controlled by [Gong]."
There were at least 50,000 investors in the alleged fraud, according to police.