Police targeted the assets of a karaoke bar owner after financial records revealed a spending splurge on jewellery and luxury items from unexplained funds.

A jailed Auckland businessman and his "wife" have been ordered to hand over millions of dollars in assets to police, including a BMW and the profit from a Remuera house sale.

In 2013, a New Zealand Customs operation revealed Yat Ming Lau, who once owned the popular Queen St gaming hall Yifan Arcade, was also linked to a drug importation scheme.

Eight packages containing 11.4kg of ContacNT were intercepted, while a further 14 packages slipped through. The Chinese medicine is rich in pseudoephedrine, a class B controlled drug, which can be used to manufacture meth.

Lau was arrested for importing at least 5.5kg of ContacNT into New Zealand. He was charged, convicted and later imprisoned for seven years.

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Police also came after the 55-year-old's assets and profits derived from the criminal enterprise - worth some $2.15 million. During a two-day High Court hearing in October, they argued for forfeiture orders against Lau and his partner Shuo Chang.

The pair met in 2002 and developed an intimate relationship with Chang later being described in an electrical account as Lau's "wife".

She also worked at the BB Club, Lau's Auckland karaoke bar, and in 2011 the couple formed a company together.

Police claimed the 37-year-old Chang "actively assisted" Lau's criminal activity, but even if she hadn't the sums of money were so large she must have known what he was doing.

Whatever Chang knew remains clouded but the financial evidence, outlined in court documents obtained by the Herald, was clear.

It revealed more than $1.3m, much of it cash, was deposited in the pair's bank accounts between December 2007 and May 2014.

During the same period, Lau and Chang also splurged $293,285 on "jewellery and luxury items", court papers read.

Yat Ming Lau was arrested for importing at least 5.5kg of ContacNT into New Zealand. Photo / File
Yat Ming Lau was arrested for importing at least 5.5kg of ContacNT into New Zealand. Photo / File

Four pieces of property were also implicated in the scheme.

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The first was a Richard Farrell Ave home, valued at $2.52m, in Remuera and the profit from its sale.

The house was initially bought with funds by Lau's mother but in December 2012 the property was refinanced with two loans. Police claimed $72,920 of this was from "significant criminal activity", court documents read.

A property on Rukutai St in Orakei, with a valuation of $1.65m, was also targeted. Chang was its registered owner and bought the house from Lau and his family in March 2012 for $490,000, including $151,533 by bank cheque.

Police, however, contended the cheque involved the transfer of $150,000 from Lau to Chang through an intermediary.

A BMW M5 registered to Chang, which she claimed was bought with money from her parents in China, was also sought and $7500 in cash found at Lau's business premises.

Lau and Chang's declared incomes and the funds entering their bank accounts also showed a dissonance, court documents show.

Between 2008 and 2014, Lau's average, annual taxable income was $44,933, while between 2008 and 2013, Chang's was $38,341.

But during this period the pair received $1.32m in unexplained funds, much of it in cash.

Lau and Chang also spent $293,285 on
Lau and Chang also spent $293,285 on "jewellery and luxury items". Photo / 123rf

The pair's luxury spending also stopped shortly after Lau was caught, police said.

The large deposits, Chang explained, came from friends repaying her in cash after buying them luxury items, money from her parents, and reimbursed items for BB Club.

She further claimed the rest came from investments and repayments for a $190,000 handwritten agreement with Lau's brother.

In his judgment last month, Justice Mathew Downs said Chang's travel patterns also changed after Lau's arrest.

"Ms Chang's long China trips stopped ... These changes support the conclusions Ms Chang's spending has been funded by Mr Lau's significant criminal activity, and Ms Chan had knowledge of that," he said.

"I find Ms Chang knew Mr Lau was repeatedly importing pseudoephedrine to New Zealand, and helped conceal his likely interests in property."

ContacNT is rich in pseudoephedrine, which can be used in the manufacture of meth. Photo / File
ContacNT is rich in pseudoephedrine, which can be used in the manufacture of meth. Photo / File

Police also alleged Chang went one step further and helped Lau import the drugs from China while she was in the country on a 10-month trip.

Fourteen SIM cards were also found in the couple's bedroom, including four inside a Louis Vuitton purse and handbag. And in September 2013 Chang received $10,000 from one of Lau's co-offenders, court papers read.

It was "possible" Chang helped Lau import the pseudoephedrine, Justice Downs said, but the evidence failed to show it was more likely than not.

But the judge said the disparity between the pair's income and bank deposits was "striking, especially as much was cash".

"Ms Chang's expenditure on jewellery and luxury items is irreconcilable with her declared income. This spending stopped shortly after Mr Lau's arrest. The significance of this is self-evident."

Chang also claimed much of her money came from her parents but Justice Downs commented: "If Ms Chang's parents were a material source of her wealth, it is odd they did not say so. Absence of related documentary evidence is also odd."

"Ms Chang's claim she had large investments also lacks support."

The judge continued Chang's claim her intimate relationship with Lau began shortly before his arrest was "a proposition of dubious veracity".

Chang "unlawfully benefitted from Lau's significant criminal activity", while the Orakei house and BMW were "tainted property", Justice Downs said, when approving the forfeiture order against Chang.

Lau, meanwhile, reached a settlement with police which included a forfeiture order for the restrained funds from the sale of the Remuera property and interest.

Some $100,000 was to be returned to his mother, while the maximum recoverable amount was $1.48m, court documents read.

Police said a campaign to harass organised crime includes seizing $500m in cash and assets by 2021 through the Criminal Proceeds Recovery Act.