Auckland money laundering trial: Who is Ye Hua, the alleged Newmarket ‘money lady’ for international cartel?

Battling back tears, Auckland woman Ye (Cathay) Hua has taken the stand in her money laundering trial. But will her evidence be enough to convince a jury she was duped by an international cartel mastermind, rather than reckless and complicit in sending nearly $30 million of drug money overseas? George Block reports.

Twenty-six years after she came to New Zealand from China to forge a better life for herself and her children, Ye Hua has found herself in the witness box in the Auckland District Court accused of industrial-scale money laundering for one of New Zealand’s most notorious drug bosses.

Hua, who adopted the English name Cathay, came to New Zealand in 1997 hot on the heels of her father.

Her grandfather was a top judge in Manchuria and had been killed by the ruling Chinese Communist Party. She is described by her lawyer as a devout Christian.

As a result, Hua and her family were badly out of favour with the party, a jury heard.

She was seeking a better life, and she found one.

The trained microbiologist, now 58, moved in with her father and found work first as a laboratory technician, before becoming a successful businesswoman.

She welcomed two more children - and spent a couple of years on maternity leave - to join her two children who were born in China, obtained citizenship in 2000 and opened Kenzie Cafe on Auckland’s Remuera Rd in 2003.

It appears the business thrived, as it opened another branch in Epsom. Hua sold up a few years later and used the proceeds to start Lidong Foreign Exchange, a money-changing and overseas remitting business in Newmarket’s Kent St.

Despite its unassuming location in a small shop tucked behind a movie theatre, the business would thrive. At its peak Hua was turning over $82 million in transactions per year.

It was a tough ride early on.

Hua told the court she was robbed at gunpoint by two hulking men of tens of thousands of dollars in cash about a year after opening, forcing the business to install bulletproof glass and a safety door. She also described being followed by gang members when she took cash home.

But the proceeds from Lidong would help Hua and her husband purchase a palatial St Heliers property in Springcombe Rd overlooking the water.

About a decade after opening Lidong, Hua would be referred by an associate to a customer who went by various aliases, including Zeus and Global Trading.

Ye (Cathay) Hua, the director of Lidong Foreign Exchange, is on trial in the Auckland District Court for money laundering.

He would turn out to be Xavier Valent, the young Auckland man who rose from petty criminal and small-time drug dealer to become a 21st-century Mr Asia.

From his exile overseas on the run from Kiwi authorities, he ran a massive drug importation syndicate from 2016 to until his arrest in an Interpol warrant at the Italian border in 2020.

Valent was jailed for life on dozens of drugs charges earlier this year and some of the evidence amassed by police in their investigation into the syndicate was used in a subsequent money laundering investigation, dubbed Operation Ida, into Hua’s business.

Operation Ida was run by Detective Sergeant Anna Henson, who told the court her team installed a covert listening device in Lidong in 2020 and obtained hundreds of hours of conversations. Ida investigators also obtained warrants to intercept phone calls and screeds more evidence was obtained from Lidong’s computers seized by police.

Police swooped in March 2021, executing simultaneous raids on Lidong in Newmarket and Hua’s St Heliers home.

Hua pleaded not guilty to 19 money laundering charges covering nearly $30m of transactions, most of which were allegedly at the behest of Valent. One charge has been dropped during the trial.

The Crown’s case is that she was reckless as to the origin of the cash and did not follow anti-money-laundering rules by failing to ask for identification or verify the source of the funds.

Crown prosecutor Sam McMullan said she repeatedly ignored red flags, including the fact the money was sometimes wet or covered in powder, sometimes arriving in supermarket bags delivered by suspicious characters.

The Crown has now wrapped its case, featuring as its star witness a former key lieutenant in Valent’s operation who described sending up to a million dollars a week overseas via Hua’s operation, which he dubbed the “Newmarket money shop” or “money lady”. The witness received immunity from prosecution on the money laundering charges and name suppression.

Her lawyer David Jones KC opened his case on Monday and told the jury they had heard but one side of the story. They needed to avoid hindsight while looking at the case from Hua’s perspective, taking into account the Chinese way of doing business, underpinned by trust and where dealing in masses of cash is not uncommon, he said.

Xavier Valent, also known as Harry Whitehead, travelled the world while running an international drug syndicate before being caught in Operation Mystic.

“She’s not looking at it from a typical Kiwi perspective,” he said.

“That is fundamental to understanding where she is coming from. Because she has a different culture.”

Jones’ defence of Hua is underpinned by the theme of trust. He is painting her as a moral and trusting figure deceived by duplicitous drug dealers.

She did business with Valent because he was referred to her by an associate she trusted, he said.

“Ms Hua is a devout Christian.

“She believes what people tell her. That is based on trust.”

Jones is a veteran trial lawyer who establishes an easy rapport with juries and likes a joke at the expense of a Crown witness.

When an Internal Affairs manager was called by the Crown to describe the intricacies of money remitting via video link from Rome, Jones said “Should we ask where you get your money from to be able to go to Rome?” and “If you want some euros so you can go down to the Colosseum, but you haven’t got any … I can let you have money out of my Italian account? Is that how it works?”

Quizzing veteran drug investigator Detective Sergeant John Sowter about covert police searches, Jones said: “If someone goes home and finds Fido’s a bit groggy does that mean the boys have been around?”

Sowter’s deadpan response was that they had never drugged a dog.

When the defence called Hua as the first witness, she fought back tears before Jones began his cross-examination.

But she regained her composure and was able to explain under Jones’ gentle questioning how her business worked, not requiring much help at all from a Mandarin translator.

He coaxed her to tell the jury her life story as a hard-working and successful immigrant, before having her explain the workings of the informal money remitting system, dubbed “Hawala” by officials after the Arabic term for transfer or wire.

David Jones KC is defending Ye Hua and has called her as the main defence witness. Photo / Michael Craig

Hawala operates outside the formal banking channels like the financial messaging system SWIFT.

Lidong would receive cash from people wanting to change money or send funds overseas, then pay it out from overseas, usually Chinese bank accounts it operated, or third-party accounts. That required the business to operate a large cash float, especially after 2016 when banks no longer allowed money remitters like Lidong to have business accounts.

Hua said she had asked Valent where all the cash was coming from and was told he had his finger in various pies, including precious metals, import / export and bitcoin.

She and others at Lidong referred to him in Mandarin as the “foreigner”, “Westerner” or “bitcoin guy”.

This echoed the evidence at Valent’s trial, where a jury heard the young drug kingpin would tell his family and border officials he had made his fortune by trading the cryptocurrency bitcoin.

Messages obtained by police between Hua and Valent show Hua saying she was “scared of drug money” and imploring him to make sure his source was clean.

“I never thought it was drug money,” Hua said under cross-examination.

“I believe him, I trust him.”

The home Hua owned in Springcombe Rd, St Heliers was raided by police in 2021.

Hua acknowledged that sometimes cash dropped off by Valent’s minions would be dirty or sticky and needed to be cleaned before it was fed into Lidong’s money-counting machines.

The secret witness who made many of these drop-offs said they became contaminated by being near people manufacturing and using meth.

But Hua said only about one cash bundle in a consignment of 30 was dirty and she said they could have become contaminated by being repeatedly handled or by having drinks spilled on them.

When she was cross-examined by McMullan, Hua doubled down on her position that she never suspected the illicit origin of the millions of dollars she is charged with laundering.

“Did you ever suspect that Mr Valent’s money was from drugs, at any stage?” asked McMullan.

“I never suspected,” Hua said.

“Why did you ask him whether it was drugs?

“Because I wanted to make 100 per cent sure.”

McMullan also quizzed her on whether she was providing bitcoin trading services in 2019 without having registered as a bitcoin trader, a claim Hua rejected, before the prosecutor cut to the chase and left no doubt as to where his closing arguments would land.

“What I’m going to be saying to the jury later is that you’re making a lot of this up.”

The trial continues on Monday, when Jones is expected to call character witnesses.