Expert says timing of $7m in payments into Auckland woman’s accounts correlated to shipments from China.

More than $7 million in cash was deposited into bank accounts of an Auckland mother accused of smuggling huge shipments of drugs into the country.

The frequency of cash transactions spiked after shipments of food from China landed in New Zealand, according to a financial expert for police.

Yixin Gan, 35, has pleaded not guilty to three charges of importing a class-B drug and possession. She is on trial in the High Court at Auckland.

The Crown alleges Gan, also known as Lonna, exploited a loophole in New Zealand's border control to commit an "almost perfect" crime of smuggling 250kg of drugs into the country.


The case is about pseudoephedrine, once the active ingredient in New Zealanders' favourite cold and flu medicines, but now banned as it's the main ingredient needed to cook methamphetamine.

Gan was arrested following the termination of Operation Ghost, an 18-month police investigation involving an undercover police officer. In giving evidence at the trial this week, police forensic accountant Laura Clay described her analysis of the financial affairs of Gan, her husband and their businesses between April 2007 and December 2013.

She reconstructed the transactions of 31 different bank accounts and found more than $7 million of deposits in "cold, hard, folding cash".

The Crown alleges Gan disguised pseudoephedrine inside food exported from China to Tonga, then offloaded the drugs in Auckland while the shipment was in transit.

She was arrested after a 250kg shipment of pseudoephedrine was discovered in October 2013. The police then searched freight records for similar shipments from China.

Ms Clay then compared the dates of those shipments to the cash deposits in Gan's bank accounts.

Cash was not a large source of deposits until January 2010, said Ms Clay, when the first shipment to Tonga was identified.

Following that, Ms Clay said, there was a "dramatic change in banking behaviour" with a sharp increase in the size and frequency of the cash deposits.

For example, there were 138 deposits of cash totalling $1.6 million in the eight months following a shipment in January 2011.

"There did appear to be some correlation around the time of each import date," Ms Clay said.

"Around each shipment date, cash deposits intensify."

Many of the deposits were under the $10,000 threshold where banks are obligated to make Suspicious Transaction Reports under anti-money laundering laws.

"It's really important for the finance industry to know ... who is putting cash through them and why."

Defence lawyer Graeme Newell said evidence would be given to say Gan made cash deposits in her personal bank accounts, on behalf of her money exchange businesses, in order to avoid transaction fees.

In response, Ms Clay said the money remittance industry was heavily regulated and she would expect a "long paper trail" behind every transaction.

Mr Newell also quizzed the forensic accountant about matching Gan's gambling records at SkyCity with banking transactions. Ms Clay conceded the task was too difficult to complete, but pointed out the $7 million in cash deposits were separate to the $1.8 million Gan lost as a casino VIP.

Earlier in the week, Crown prosecutor Scott McColgan told the jury Gan had "cottoned on to an almost perfect" method of smuggling the drugs into the country.

"It was almost the perfect scam," said Mr McColgan, "but for Gan's involvement with two people, who unfortunately for her were under surveillance by police. Otherwise it is very unlikely this scam would have ever come to light."

Those two people, Van Thanh Tran and Da Wen Shao, have been convicted for their part. Tran was convicted of importing a Class-B drug and Shao convicted of possession of a Class-B drug for supply.

The "inside man" for Gan, Mosese Uele, was also convicted of importation of a Class-B drug, while Yoke Lee was convicted of possession for supply.

The trial in front of Justice Edwin Wylie is expected to end next week.