Zhang’s money laundering enabled him to buy two homes in Remuera, now worth a combined $9 million, as well as Mercedes-Benz and Bentley vehicles, bought for $120,000 and $280,000 respectively. Who says, ‘crime doesn’t pay’?
Unfortunately for him, living the high life was only fleeting as all these assets were eventually seized by police, along with nearly $1 million which was sitting in two separate bank accounts.
Zhang ended up pleading guilty to providing unregistered financial services, money laundering, structuring transactions to avoid anti-money laundering requirements and obtaining by deception regarding a $2.4m loan. Zhang was sentenced in the Auckland District Court to 12 months’ home detention and judicial monitoring.
Zhang is part of a growing trend in New Zealand known as ‘third party’ launderers. These individuals or syndicates are not involved in making money through criminal activity, (usually drug dealing) but are engaged as contractors solely to disguise the origins of dirty cash or to shift money out of the country.
Unfortunately for reporting entities, the normal red flags are not evident as the individual will have a readymade cover. In Zhang’s case, he was a successful businessman with professional connections with lawyers, accountants, real estate agencies and other established financial services firms.
Cases like this serve as another reminder that money laundering is an ongoing problem in New Zealand and the need to stay informed and vigilant is key to keeping your business safe from been inadvertently involved in a money laundering scheme. This includes creating customer profiles no matter how long you’ve known a customer and being alert to changes in routine or behaviour.
Our Head of Compliance, Royden McGee, has a background in criminal financial investigations, so if you come across anything that doesn’t seem right, feel free to get in touch. All conversations will be confidential and Royden will be able to assist you with your decision making on whether you should file a suspicious activity report. The last thing you want is for your business to become embroiled in a criminal investigation.