In an unusual twist of events, New Zealand police received an audacious email from Cathay Hua, a notorious money launderer, that taunted their efforts to clamp down on her illegal operations. Hua, a Newmarket businesswoman who ran a foreign exchange business as a front for laundering money, boldly claimed it wasn’t her job to help the police fight crime. Instead, she suggested that if criminals were laundering money through her business, it was the police’s failure to stop them in the first place.
Detective Inspector Lloyd Schmid, New Zealand’s most experienced financial crime expert, found the email both shocking and provocative. Schmid, known for his stern demeanor reminiscent of a strict school principal, was taken aback by Hua’s brazen attitude. He recalled reading the email for the first time with disbelief, thinking, “I suspect she’s going to regret sending that.”
The Fall of Cathay Hua
Despite her defiant stance, Hua’s illegal activities eventually caught up with her. In 2023, she received a record seven-and-a-half-year prison sentence, the longest ever handed down for money laundering offenses in New Zealand. Hua’s operation was primarily linked to a notorious methamphetamine importer, for whom she laundered $27.5 million.
New Zealand’s Money Laundering Battle
The case of Cathay Hua is a vivid illustration of the ongoing battle against money laundering in New Zealand. The country’s lucrative drug market, with Kiwis paying some of the highest retail prices for drugs, generates an estimated $1.35 billion a year in illicit cash. Consequently, major drug investigations are not only focused on the narcotics themselves but also on tracing the money and identifying the professionals who facilitate these financial crimes.
Targeting Professional Facilitators
Detective Superintendent Greg Williams, in charge of National Organized Crime, emphasizes the importance of targeting these professional facilitators. Williams, an expert in transnational organized crime, highlights how the landscape of money laundering has evolved. Whereas police once worried about lawyers and accountants, the focus has now shifted to unregulated remitters within the Chinese community who play a significant role in moving money for criminal enterprises.
Williams recounts a notable operation in 2018, codenamed Heracles, where police intercepted a 46-kg cocaine import at the Port of Tauranga. This operation exposed the complex global networks engaged in both drug trafficking and money laundering. A Serbian operative handled the logistics, while a Croatian associate managed the money laundering. Even a Vietnamese woman flew into New Zealand specifically to deposit large sums of cash into local banks.
Legislative Changes and Continued Efforts
The police have made significant strides in addressing these issues, including legislative changes under the Anti-Money Laundering and Countering Financing of Terrorism Act. A key provision now prohibits the purchase of high-value goods with cash above $10,000, aiming to curtail the flow of dirty money into the financial system.
However, the fight is far from over. Investigators like Schmid face high thresholds for proving money laundering, often needing to establish a direct link between the laundered money and specific criminal offenses, such as drug trafficking. Despite these challenges, Schmid remains committed to pushing for harsher sentencing tariffs for money laundering to reflect the gravity of the crime.
The Dramatic Raid
The culmination of these efforts was dramatically illustrated during a police raid on Hua’s St Heliers residence. Officers discovered a hidden room concealed behind an open wardrobe, containing a safe filled with fine jewelry. However, piles of cash were found scattered throughout the house, symbolizing Hua’s overconfidence and eventual downfall.
The tale of Cathay Hua serves as both a cautionary story and a testament to the relentless efforts of New Zealand’s law enforcement to combat financial crimes. It highlights the complex and often international nature of money laundering, the evolving tactics of criminals, and the importance of robust legal frameworks and collaborative efforts to keep illicit money out of the financial system. As Detective Inspector Schmid and his colleagues continue their work, they remind us that while the fight against money laundering is arduous, it is essential for maintaining the integrity of New Zealand’s financial and legal systems.
