Christchurch brothel owner Fan Jiang loses bid to block $2m police seizure order

Christchurch brothel owner Fan Jiang has lost a bid to block police from seizing $2m in assets, including five homes and $70,000 in cash after she breached council bylaws.

A Christchurch brothel owner has lost a bid to block police from seizing $2m in assets, including five homes and $70,000 cash.

Fan Jiang was fined $10,000 this year after her England St brothel in Phillipstown was found in breach of council bylaws.

In April, police applied for a restraining order under the under Criminal Proceeds (Recovery) Act 2009 to seize five residential Christchurch properties with a rateable value of $1.91m and $71,610.40 cash found at the England St property when police raided it two years earlier.

The police bid, supported by affidavits of a detective involved in the case and a financial analyst, were made on the basis that police believed the properties were "tainted" and that 49-year-old Jiang had "unlawfully benefited from significant criminal activity".

Restraining orders are temporary measures designed to "preserve property while the Crown is gathering evidence to support an application for forfeiture". Today's ruling allows police to seize Jiang's assets but a later hearing may return them to her.

Jiang is also being investigated for alleged tax evasion.

Jiang challenged the restraining order, claiming that there was "no reasonably arguable cause of action, or case appropriate to the nature of the pleading", and that it was an abuse of court process.

Police argued that the cash had come from Jiang's unlawful operation of a brothel and that she had "unlawfully benefited directly or indirectly" by nearly $800,000 and that the money taints the property sought to be restrained, either directly or indirectly.

The police said the assets and cash could not be accounted for from identified legitimate sources of income.

After a hearing at the High Court in Christchurch, Justice Cameron Mander dismissed Jiang's application to strike out the police application for restraining orders.

"I am satisfied that a foundation has been established upon which there are reasonable grounds to believe that Ms Jiang has engaged in significant criminal activity," Justice Mander concluded.

"I am not satisfied that the Commissioner's application for restraining orders is clearly untenable."

The matter will now go to a full hearing.