Two of three defendants in $54m mortgage fraud jailed

Two of three defendants convicted of fraud following a Serious Fraud Office Investigation have been sentenced to jail while another received home detention.

The three defendants were convicted for their roles in a $54 million mortgage fraud scheme run by the company LV Park.

The scheme enabled LV Park to obtain finance at a significantly lower rate than was available to commercial developers and involved the fabrication of mortgage applications.

The mastermind of the fraud. Kang (Thomas) Huang, also known as Gang Wang, pleaded guilty earlier and has already been jailed for four years and seven months.

His wife, Kang Xu, received 12 months’ home detention after Justice Sarah Katz found she had helped doctor some of the applications.  

Suspended lawyer Gang (Richard) Chen who had been the solicitor for the sale contracts was given six years' imprisonment with a non-parole period of three years.

Former bank employee Zongliang (Charly) Jiang was sentenced to four years and nine months’ jail with a minimum non-parole period of two years and four months.

Another bank employee was involved in the scheme but left the country in 2015.

SFO director Julie Read says the sentences reflected the serious nature of the offending.

“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 marketplace.”

Couple’s background

According to Justice Katz’ 212-page verdict, Huang and Xu immigrated to New Zealand from China in 1997.

They were both bankrupted in 2010 and discharged in 2013 but throughout their bankruptcy were able to carry on as directors with their retired parents as named directors.

From 2011 the couple, through LV Park, created 57 loan applications, relating to 110 separate property transactions.

In some cases, it is not clear precisely how the false documents were provided to the banks. In other cases, however, they were sent by email, with many of them sent by an email address used by both Huang and Xu.