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Multi-million mortgage fraud trial gets underway

The trial of three people allegedly involved in a complex $52 million dollar mortgage fraud scheme has now started at the Auckland High Court.

Tuesday, February 27th 2018, 11:14AM

by Miriam Bell

Kang Xu, also known as Yan (Jenny) Zhang, lawyer Gang (Richard) Chen and a former BNZ employee, Zongliang (Charly) Jiang, are charged with multiple counts of fraud involving over 70 properties.

The Serious Fraud Office (SFO) alleges they were part of a group which used false information, or withheld information, to fraudulently obtain mortgages from three banks to purchase the properties in Auckland and Hamilton between 2011 and 2015.

The banks involved were BNZ, ANZ and an overseas bank which has name suppression.

Two other people are also said to have been involved in the scheme. One was a former ANZ employee, Peter Cheng, who left New Zealand before he was arrested.

The other person was property developer Kang (Thomas) Huang who the SFO alleges was the instigator of the scheme.

He pled guilty to his role in the alleged fraud last year and was sentenced to nearly five years in prison earlier this month.

In his opening submissions to the judge, prosecution lawyer Todd Simmonds described the scheme as an "increasingly organised, systematic and complex deception of the banks".

He said each of the defendants played a critical role in the scheme and detailed the charges against them.

Yan (Jenny) Zhang, who is the wife of Huang, is accused of forging the documents used, which included fake IDs, bank statements and employment letters, and supplying the banks with them.

The SFO has laid 34 Crimes Act charges of ‘obtaining by deception’ against her.

Gang (Richard) Chen is accused of not informing the banks that Huang’s development company, LV Park, was actually the borrower behind the mortgage applications.

He faces 11 Crimes Act charges of ‘obtaining by deception’, as well as a representative Secret Commissions Act charge of ‘corruptly giving consideration to an agent’ for paying off the BNZ and ANZ bankers.

Former BNZ employee Zongliang (Charly) Jiang faces a representative Secret Commissions Act charge of ‘corruptly accepting’ $260,303 in kickbacks, as well as 25 Crimes Act charges of ‘obtaining by deception’.

The judge-only trial is set down for 12 weeks and 35 witnesses, who include bank managers, accountants, real estate managers and accountants, will give evidence over that time.

Read more:

Prison sentence for mortgage fraudster 

Tags: fraud Lending mortgages serious fraud office

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Lender Flt 1yr 2yr 3yr
AIA 4.55 2.19 2.59 2.99
ANZ 4.44 2.79 3.19 3.59
ANZ Special - 2.19 2.59 2.99
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.19 2.59 2.99
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▼2.19 2.55 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼2.79 3.15 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▼2.15 2.35 ▲2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.04 3.40 3.84
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.19 2.55 2.99
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▼1.99 - -
The Co-operative Bank - Owner Occ 4.40 ▼2.19 2.59 ▲2.99
The Co-operative Bank - Standard 4.40 ▼2.69 3.09 ▲3.49
TSB Bank 5.34 2.99 3.35 3.79
TSB Special 4.54 2.19 2.55 2.99
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼2.79 3.19 3.59
Lender Flt 1yr 2yr 3yr
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.19 2.59 2.99
Median 4.55 2.68 2.99 2.99

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