Jiaxin Finance's director Qiang Fu and his mother, Fuqin Che, were prosecuted in the first case of its kind in 2019. Photo / NZ Herald
Jiaxin Finance's director Qiang Fu and his mother, Fuqin Che, were prosecuted in the first case of its kind in 2019. Photo / NZ Herald
A finance firm and its mother and son operators have had their appeal dismissed after attempting to overturn millions of dollars in court-ordered fines.
Their firm, Jiaxin Finance, failed to report $53.4 million of suspicious transactions from an international mogul accused of running a huge pyramid scheme.
The 2019 trialof Jiaxin Finance, its sole director and shareholder Qiang Fu and his mother, Fuqin Che, was the first criminal case of its kind in New Zealand's courts since specific anti-money laundering laws were introduced in 2009.
Fu and Che were prosecuted by the Department of Internal Affairs and found guilty by Justice Tracey Walker of failing to keep adequate records for and report 311 suspicious transactions between April 2015 and May 2016.
On conviction in the Auckland High Court, Jiaxin Finance was sentenced to pay a fine of $2.55m.
Fu was ordered to pay a fine of $180,000, and Che was sentenced to pay a fine of $202,000. Jiaxin Finance, Fu and Che appealed their convictions to the Court of Appeal in November last year.
This month the appeal was dismissed.
Justice Tracey Walker is presiding over the trial, which was the first of its kind in New Zealand Auckland finance firm. Photo / NZH
Mike Stone, the director of the anti-money laundering group at the Department of Internal Affairs (DIA), said the dismissal of Jiaxin Finance's appeal is a significant judgment for the DIA and the wider AML/CFT system's efforts to deter money laundering and the financing of terrorism in New Zealand.
The funds all belonged to international businessman Xiao Hua Gong, also known as Edward Gong, who last year agreed to a record-breaking $70m settlement with the NZ Government under the Criminal Proceeds (Recovery) Act.
Presenting internationally as a wealthy entrepreneur, Gong was known for building a business empire through a hotel chain and television channels in Toronto.
But Gong was arrested in Canada and charged with fraud and money laundering in December 2017.
He denied accusations of a $202m pyramid scheme involving the "fraudulent sale of hundreds of millions of dollars" in shares and selling medicines 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 Paul Davison earlier wrote in a High Court judgment, summarising the case.
