Serious Fraud Office v Huang - [2018] NZHC 86

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2016-004-9392 [2018] NZHC 86

SERIOUS FRAUD OFFICE

v

KANG HUANG

(AKA GANG WANG AKA THOMAS WANG)

Hearing: 9 February 2018

Appearances:

T A Simmonds and E O Jones for Crown
P J Davey and K Brosnahan for Defendant

Sentence:

9 February 2018

SENTENCING REMARKS OF LANG J

SERIOUS FRAUD OFFICE v HUANG [2018] NZHC 86 [9 February 2018]

[1] Mr Huang, you appear for sentence having pleaded guilty to eight charges of obtaining credit by deception,1 one charge of dishonest use of a loan application document2 and one charge of corruptly giving a bank agent consideration as an inducement for approving a loan application.3 The first nine charges were laid under the Crimes Act 1961 and carry maximum sentences of seven years imprisonment. The remaining charge was laid under the Secret Commissions Act 1910, and carries a maximum sentence of two years imprisonment.

[2] You entered guilty pleas after I gave you a sentence indication on 12 December

2017.4 The remarks made during the sentence indication will form part and parcel of my sentencing remarks and will be annexed to my sentencing remarks so that those who read the remarks can also take into account the observations I made during the sentence indication hearing.

Background

[3] The factual background to your offending is set out in considerable detail in a summary of facts presented by the prosecution and agreed to by you for the purpose of the sentence indication hearing. I am required to sentence you in accordance with that summary.

[4] The summary reveals that for approximately 20 years you have been involved in a construction business specialising in building residential homes. In order to fund the development of these properties your company obtained finance from financial institutions.

[5] The offending occurred because you found it was too expensive to fund your company’s operations through a finance company. This was because the finance companies charged higher interest rates for commercial loans than would be the case
for a loan for the purchase of a residential property. In addition, the finance companies

1      Crimes Act 1961, s 240.
2      Section 228(1)(b).
3      Secret Commissions Act 1910, s 3.
4      R v Huang [2017] NZHC 3100.

charged establishment and rollover fees when they made new loans and when they rolled over existing loans.

[6] You adopted a strategy of obtaining finance to fund the development of properties by obtaining residential loans from three financial institutions, all of which were trading banks operating in New Zealand. The way in which you did this was to forward loan applications to the institutions in the names of various entities. These included relatives, friends and employees of your company. On some occasions loan applications were advanced in the names of fictitious entities.

[7] In order to substantiate the loan applications, a significant quantity of false material was also provided. This included detailed information regarding the employment…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NZHC 86
Decision Date: 9 February 2018

CaseChat Overview and Summary

The defendant, Kang Huang, pleaded guilty to nine charges of obtaining credit by deception under the Crimes Act 1961 and one charge of corruptly giving a bank agent consideration as an inducement for approving a loan application under the Secret Commissions Act 1910. The charges related to Huang's involvement in obtaining loans from financial institutions using false information over a period of about three years and ten months between the calendar years 2011 and 2015. The court had to determine an appropriate sentence for Huang's offending, taking into account the seriousness of the offences, the level of culpability, and any mitigating factors.

The court considered the significant scale of the offending, the sophistication of the scheme, and the involvement of a bank employee in processing the fraudulent loan applications. The court also took into account Huang's guilty pleas, his cooperation with the investigation, and his previous good character. After applying the relevant mitigating factors, the court determined a starting point of six years imprisonment. However, due to the involvement of the bank employee, the court increased the starting point to six years and nine months imprisonment.

In the end, the court imposed a sentence of four years and seven months imprisonment, to be served concurrently. The court also imposed a minimum term of 50 per cent on the charges laid under the Crimes Act, requiring Huang to serve two years and three months before being eligible to apply for parole. The court noted that the overall effect of the offending went far beyond the financial loss suffered by any individual financial institution, and that the ripple effects of such offending could have significant repercussions within the commercial community.

Orders