You are using an older browser version. Please use a supported version for the best MSN experience.

Lawyer and banker jailed over $54 million property fraud scheme

Newshub logoNewshub 3/08/2018 Newshub staff

a close up of an object © Provided by MediaWorks NZ Limited

A lawyer and banker have been jailed for their part in a $54 million property fraud scheme.

The scheme involved obtaining residential home loans for the property development group LV Park through deception and bribery payments to bank employees.

The Serious Fraud Office said the scheme allowed the offenders to obtain finance at a "significantly lower rate" than would otherwise have been available for commercial development.

Suspended lawyer Gang (Richard) Chen and former bank employee Zongliang (Charly) Jiang were sentenced to imprisonment at the High Court in Auckland on Friday.

Mr Chen acted as a solicitor in the sale and purchase agreements and facilitated bribery payments to a bank employee. He was sentenced to six years imprisonment with a minimum non-parole of three years.

He was convicted on nine charges of obtaining by deception and one charge of corruptly giving consideration to an agent.

Mr Jiang is a former BNZ bank employee who facilitated the loans in return for bribes. He was sentenced to four years and nine months imprisonment with a minimum non-parole period of two years and four months.

He was sentenced on 25 charges of obtaining by deception and one charge of acceptance of gifts by agent. Another bank employee was involved in the scheme but left the country in 2015.

Property developer Kang Xu was sentenced to 12 months home detention for her role in the scheme after being convicted on 22 charges of obtaining by deception.

Her husband Kang (Thomas) Huang was the mastermind of the scheme and the head of companies that traded as LV Park.

He is currently serving a four-and-a-half-year jail sentence for his offending after he pleaded guilty in December to eight charges of obtaining by deception, one charge of corruptly giving consideration to an agent and one charge of dishonest use of a document.

Serious Fraud Office director Julie Read said the scheme "relied on a high level of calculation and collaboration".

"Such fraud undermines lenders' confidence in borrowers in the mortgage market. The banks were misled in a number of respects including the financial position of the purported borrowers and the level of associated risk. The SFO is committed to investigating and prosecuting this kind of large-scale offending to maintain the integrity of the financial market place."

More From Newshub

image beaconimage beaconimage beacon