Financial Crime Cases Make Headlines in New Zealand-China Deal

New Zealand has agreed to hand over $38 million to China as part of a deal to share assets seized from Canadian-Chinese businessman Xiaohua Gong, who laundered millions through the country.

Background on Xiaohua Gong

Xiaohua Gong is a Canadian-Chinese businessman who lives in Canada and ran for mayor in Toronto last month. He was investigated by New Zealand police and Chinese authorities for his role in a half-billion-dollar pyramid scheme. Gong’s business empire includes two TV channels, several hotels, and health supplement companies.

Details of the Deal

The deal was agreed upon after four years of investigation into Gong’s activities, which included laundering $77 million through several New Zealand bank accounts. The money was recovered as part of a joint operation between New Zealand and China. In exchange for the share of assets, China provided significant evidence that helped New Zealand authorities build their case against Gong.

Breakdown of the Deal

• New Zealand will receive 45% of the seized assets ($17.1 million)
• China will receive 55% of the seized assets ($20.9 million)

Concerns About International Cooperation on Financial Crime Cases

Critics have pointed out that too much trust is placed in China’s justice system, and that the country’s human rights record should be considered when making deals like this. The deal has raised concerns about the level of cooperation between New Zealand and Chinese authorities on financial crime cases.

Similar Incidents

Gong’s case is not an isolated incident. In 2017, New Zealand gave Beijing $30 million as part of a deal to share assets seized from another Chinese businessman, William Liu. Liu pleaded guilty to money laundering and had his assets forfeited.

Impact on the Proceeds of Crime Fund

The transfer of funds has cut the total in the Proceeds of Crime Fund by more than half, leaving $72 million. The fund is used to compensate victims of crime and support law enforcement efforts.

Response from Authorities

RNZ approached the Chinese embassy for comment but did not receive a response. Gong’s lawyer also denied any wrongdoing and stated that his client is currently suing Ontario authorities for $8 million in damages.