Xiaoling "Annie" Chen is accused of obtaining $600,000 by deception. Photo / Supplied
Xiaoling "Annie" Chen is accused of obtaining $600,000 by deception. Photo / Supplied
A businesswoman who received $600,000 in "finder's fees" linked to a multimillion-dollar property development told buyers the money was needed to pay a real estate agent's commission, a court has heard.
The Crown says Xiaoling "Annie" Chen pocketed the cash and that she is guilty of deceiving the wealthy businesspeople she convinced to invest in the massive housing project.
But her lawyer says the case hinges on whether it is "open to interpretation" that she was liable to receive the money for acting as an intermediary or "middleman".
Chen went on trial yesterday at Papakura District Court facing two counts of obtaining by deception.
The court heard she signed joint venture agreements with deep-pocketed investors to purchase large lots of rural land at Pokeno in 2016 and 2017.
The agreements were made on the understanding the land was earmarked to be rezoned by Waikato District Council. This would enable large scale housing construction on the sites and deliver total profits of $36 million.
Investors Zhenlin "Robert" Luo and Ang Yip agreed to plough millions of dollars into purchasing several sites in separate sale and purchase agreements with Chen.
Chen did not commit financially but would oversee "operations", including zoning and infrastructure work needed to deliver the projects, and take a share of the eventual profits, the court heard.
Taking the witness stand, Yip said Chen told her that on top of a $1.1m deposit, she needed to pay $100,000 in real estate commission to Remax agent Eric Chase, who was handling the sale on behalf of the vendors.
But the payment must be in cash, as Chen "was worried about Inland Revenue investigators", Yip said.
Investors were told the Pokeno development could deliver total profits of $36 million. Photo / Google
After signing the sale and purchase agreement in 2017, Yip travelled to Europe the following day. She said Chen contacted her daily by phone and We Chat asking for updates on the $100,000.
Yip read We Chat messages to the court she said she'd received from Chen while abroad, which included claims "Eric is angry".
"Can you give Eric the money today?" read one message.
Another said: "Can I pick up the money and give it to Eric to calm him down?"
Yip said she was uncomfortable providing $100,000 in cash so sent the money to Chen in 10 separate bank transfers of $10,000 each.
When she returned home she became suspicious and contacted Chase, who told her he had not received any commission fees from Chen, the court heard.
"I checked with Eric. He didn't get the money."
Yip tried to contact Chen to demand repayment of the $100,000 but said Chen did not pick up her calls and blocked her on We Chat.
However, Chen later withdrew from the joint venture agreement in a "negotiated settlement" and repaid the $100,000 to Yip, plus interest and costs, the court heard.
Luo told the court he invested at least $7m into the project. The money came from the "family business" in China, where his father worked in Customs.
Luo said Chen demanded five separate payments of $100,000 to cover Chase's "agency fees".
He agreed, providing the money in cash to Chen, on top of multimillion-dollar deposits he'd paid for the land, which made him feel "uncomfortable".
"She requested it in cash so I withdrew the cash.
"According to Ms Chen the $100,000 had to be paid to this Eric person because he was the agent responsible for the Pokeno area.
"What she meant was that if I did not pay that $100,000 I would not be able to get the project."
Luo said he received a call from Yip in late 2017 asking about the agent fees. He was later contacted by Chase warning him that his investment may incur a loss.
Luo said he engaged lawyers and tried to renegotiate the joint venture agreement with Chen.
"I believed I had been deceived."
Under cross-examination, Luo accepted the payment receipts had no mention of "agent fee" and he expected to be repaid the $500,000 once the properties were eventually sold.
When Chen's lawyer John Billington, QC, said his client had never suggested the cash payments were for Chase, Luo replied:
"100 per cent, absolutely she said that, otherwise why would I come up with the money?"
Billington told the court the contracts included a Mandarin character which could be interpreted as "intermediary, brokerage or middleman fees".
The clause was "non-specific" and didn't name Chen, but in each case she had received the money.
He said the case came down to whether it was "open to interpretation" in each case that the fees were payable to the defendant.
Crown prosecutor Ross Burns said it was his contention that the cash payments were obtained from the complainants through misrepresentations.
"Were they obtained by deception in that they were to go to the real estate agent or was it common knowledge they were to go to the defendant as a finder's fee?"
