Edward Gong : How to hide $53m: Mogul used mother and son's finance firm

Edward Gong: How to hide $53m: Mogul used mother and son's finance firm

Author

An Auckland firm concealed millions of dollars belonging to Edward Gong, who is accused of and denies running a $202m pyramid scheme. 

 

Publish Date

25 Nov 2019

An Auckland finance firm and its mother and son owners can now be revealed as the company and pair who failed to report $53.4 million of suspicious transactions from a Chinese-Canadian mogul accused of running a $200m pyramid scheme.

Jiaxin Finance Limited, Fuqin Che and her son Qiang Fu, also known as Michael Fu, were found guilty on Friday of all four charges the company and the family faced.

Today, the Herald can reveal their identities after an interim suppression order lapsed at 4pm.

Jiaxin Finance, the 40-year-old Fu and the 65-year-old Che failed to keep adequate records for and report 311 suspicious transactions.

They also failed to conduct customer due diligence and structured transactions in an effort to avoid its Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT) requirements as a money remitter.

They did so for a customer, whom defence counsel David Jones QC described during the trial as "the elephant in the room".

"He is an international businessman, a very wealthy man, owning substantial assets. That of course is significant and important in terms of the transactions undertaken."

Qiang Fu, also known as Michael Fu, and his mother Fuqin Che were on trial in the High Court at Auckland this year.

This man was Xiao Hua Gong.

Also known as Edward Gong, the entrepreneur is known for building a business empire through a hotel chain and television channels in Toronto.

He is friendly with Canada's Prime Minister Justin Trudeau - having donated to the governing Liberal Party - and attended Trudeau's controversial "cash-for-access fundraising dinners".

But Gong was arrested in Canada and charged with fraud and money laundering in December 2017 over a pyramid scheme involving the "fraudulent sale of hundreds of millions of dollars" in shares in China.

He has denied his financial success and influence was gained from a $202m scheme selling medicines in China.

Gong later claimed the evidence against him was gathered by coercion in China, while several people in China have been jailed and fined for their part in the alleged pyramid scheme.

Nine months before Gong's arrest in Canada, however, the New Zealand Police froze nearly $70m of the mogul's assets here as part of a global investigation into the businessman.

Gong had also bought two Auckland properties, in Panmure and East Tamaki, in 2012 and 2015.

He paid in cash - a total of $2.3m for both homes.

At Jiaxin Finance's trial during October in the High Court at Auckland, the Department of Internal Affairs (DIA) accused the company of having "intentionally concealed" Gong's money in New Zealand with the help Che and Fu.

While Fu was the company director, Gong's primary contact in New Zealand was Che, the court heard. A shell office in Auckland was also kept for the sole benefit of the mogul during the company's offending in 2015 and 2016.

Court documents, which were reported by the Herald after the lifting of a suppression order last June, showed Gong deposited $77m into New Zealand over seven years.

Nearly $12m was later transferred from New Zealand to Canada.

Police say Gong was hiding money here to distance himself from the pyramid scheme.

"The pyramid scheme involved the making of representations to potential investors which were false and dishonest, including a claim that the company share price would increase by 2000 to 4000 per cent and that the products sold were legitimate health products, which they were not," Justice Paul Davison wrote in a High Court judgment, summarising the police case.

"Instead of applying investment funds in the manner represented to investors, the majority of the funds were paid into bank accounts nominated and controlled by [Gong]."

There were at least 50,000 investors in the fraud, according to police.

The trial of Jiaxin Finance, Fu and Che was the first case of its kind in New Zealand's courts since specific anti-money laundering laws were introduced a decade ago.

Jiaxin Finance, Fu and Che were not convicted by Justice Tracey Walker on Friday to allow Jones to seek instructions from his clients about the precedent-setting case before a sentencing hearing in February.

• Quote

 Jan 13th, 2018

China accuses Canadian-Chinese tycoon of major role in pyramid scheme



Edward Gong (far left) has been accused by Chinese authorities of running an elaborate pyramid scheme. Mr. Gong has attended fundraisers with friend Prime Minister Justin Trudeau.

A Chinese-Canadian businessman who attended one of Prime Minister Justin Trudeau's controversial cash-for-access fundraising dinners last year is now fighting accusations by prosecutors in China that he played a key role in a massive pyramid scheme that took in more than $350-million.

Edward Gong, from his home in Markham, Ont., has assembled a business empire in recent years, acquiring hotels in the Toronto-area as well as the second-largest hotel in Michigan and two Chinese-language TV channels in Canada, including Canada National TV. He was an opera director before he moved to Canada in 2002 and became a wealthy entrepreneur, according to a 2016 profile in state-run China Daily.

He was in one of the widely circulated photos of the Prime Minister at the event – it shows Mr. Trudeau making dumplings for his donors. The picture was part of The Globe and Mail's coverage of cash-for-access fundraisers that prompted the Liberals to usher in legislative reforms concerning donations to political parties.

https://www.theglobeandmail.com/news/po ... e35825459/

And then Liberal MP Geng Tan tries to make it all go away for Trudeau and Gong...and gets caught:

Former Ontario Liberal MP Han Dong, left, lawyer Bang Gu Jiang, and Laura Huang are seeking the Liberal nomination in the GTA riding of Don Valley North. The nomination opened up last month when Liberal MP Geng Tan, right, announced he would not seek re-election in order to spend more time with his family. 

Liberal MP Geng Tan acted as intermediary for businessman now accused of fraud

 JANUARY 5, 2018

Liberal MP Geng Tan hand-delivered a letter to a top official at the Canadian embassy in Beijing and personally spoke to Chinese authorities on behalf of a Liberal Party donor who has been charged with money laundering and the fraudulent sale of hundreds of millions of dollars in securities to Chinese citizens.

Chinese-Canadian businessman Xiao Hua Gong, also known as Edward Gong, was arrested in Toronto last week and the Ontario Securities Commission (OSC) has charged him with fraud over $5,000, possession of property obtained by crime, laundering proceeds of crime and uttering a forged document. 

On June 1, Mr. Tan acted as an intermediary for Mr. Gong, who at the time was under criminal investigation by the RCMP, Ontario Securities Commission [OSC] and China's Ministry of Public Security in connection with a $466-million pyramid scheme.

The rookie Liberal MP delivered an unsigned letter from Mr. Gong to Cindy Termorshuizen, the deputy head of mission at Canada's embassy in Beijing, according to an OSC affidavit filed in a Toronto court.

Ms. Termorshuizen turned the letter over to the RCMP liaison officer in China, who forwarded it to investigators in Canada, the document says.

The affidavit said Mr. Gong denied in the letter that he was running a pyramid scheme and promised to co-operate with investigators in both countries.

He claimed he was "running a legitimate marketing and sales method called multilevel marketing and direct sales" of health-care products in China. A former Canadian ambassador to Beijing, David Mulroney, expressed surprise that the Liberal MP would approach the embassy on behalf of Mr. Gong, and praised Ms. Termorshuizen for giving the letter to the Mounties.

"It suggests a pretty shocking misunderstanding on the part of the MP on how our system works," Mr. Mulroney told The Globe and Mail on Thursday. "It is the kind of thing you do in China … when you try to use your prestige or connections to smooth something over. It is not how things are done in Canada."

The MP did not respond to written questions from The Globe about why he did not take the letter to the RCMP in Canada, what was his relationship to Mr. Gong and who paid for his trip to China.

"I simply transported a piece of correspondence on behalf of a fellow member of the Toronto-North York Community," Mr. Tan said in an brief e-mail on Thursday. "I was unaware of any Canadian investigation into this individual. Any inference of influence in this matter is simply wrong."

His office later confirmed that the MP also raised Mr. Gong's case with Chinese authorities.

"Mr. Tan communicated his hope to local officials that due process will be followed," the MPs' office told The Globe in an e-mail.

The Prime Minister's Office had no comment on Mr. Tan's actions.

"This would seem to be a serious example of very poor judgment and improper behaviour," Conservative ethics critic Peter Kent said in an interview. "One has to wonder whether this was a misguided favour on behalf of a financial contributor [of the Liberal Party]."

Mr. Gong is not a constituent of Mr. Tan and does not live in the MP's Don Valley North riding.

His home in Toronto's Bridle Path area, which authorities raided in December, is in Don Valley West, held by Liberal MP Rob Oliphant.

Since the 2015 election, Mr. Tan has travelled frequently to China, where he has met Communist Party officials whose goal is to win overseas support for the authoritarian government's political agenda.

In April, he accepted a free trip to Hunan province paid for by Toronto businessman Kai Wu, who runs an an immigration investment and education enterprise.

https://www.theglobeandmail.com/news/po ... e37511074/

Chinese affairs correspondent

@RealAndyLeeShow

gave

@EzraLevant

a breakdown of the candidate and businessman with a shady past known for littering Toronto with an excess amount of election signs.

Who is Edward Gong? A look into the Toronto mayoral candidate’s mysterious background

Chinese affairs correspondent Andy Lee gave Ezra Levant a breakdown of the candidate and businessman with a shady past known for littering Toronto with an excess amount of election signs.

On last night’s episode of The Ezra Levant Show, Ezra was joined by Andy Lee, Rebel's China affairs reporter, to talk about the suspicious connections behind Toronto mayoral candidate, Gong Xiao Hua, AKA Edward Gong.

Ezra talked about the massive amount of advertising Gong has done for his campaign in Toronto, with lawn signs and billboards plastered all over the city. He questioned where Gong got all his money from and asked Rebel News' Chinese affairs correspondent Andy Lee for a breakdown of the candidate's background.

Andy began the lengthy run-down:

So Edward Gong is a Chinese Canadian, he emigrated here in 2002. He set up two media stations, one is called CNTV, that's Canada National Television, and then there's another network called the Canadian National Chinese Television Network. So Edward Gong, he's just fascinating his story. He was best known for attending these pay-for-play fundraisers with Justin Trudeau back in 2016. He's a heavy liberal donor. I believe he's donated almost $7,000+ attending these pay-for-play fundraisers.

So that's sort of when he came into the spotlight. But, we were sort of led to believe that these pay-for-play fundraisers were a passing relationship, right? Like these people just happened to show up at a fundraiser with Justin Trudeau. But when you deserve to dig into the back story, it looks like there were deeper connections, and I did dig into the back story a little bit. And so I found that Edward Gong has been hosting these festivals, and his guest of honor was Justin Trudeau one year. He's also got a website and Justin Trudeau's featured prominently on it.

So Edward ran afoul of law agencies shortly after these meetings with liberal MPs and Justin Trudeau. And he ended up being charged with some very serious allegations— fraud, money laundering, etc. He also had assets forfeited in New Zealand. So he was accused of running a massive pyramid scheme and frauding investors in Canada and in China and elsewhere, out of hundreds of millions of dollars. So this was New Zealand's biggest-ever bust and seizure of the proceeds of crime. It was over $60 million that he forfeited to the New Zealand government.

Ezra commented on the strange situation where Liberal MP Geng Tan acted as an intermediary between Gong and a Chinese Embassy after his charges went to Beijing:

"So a Trudeau MP is going to bat for Edward Gong, including delivering messages to the Chinese embassy. I mean, you raise a good point. What's that got to do with anything if he's in trouble for securities fraud in New Zealand or in the United States or even in Canada? Why does the Chinese government need to get involved? That's weird.

Chinese criminals in Canada and Trudeau. The story that just keeps on giving!