Judge orders prison for Auckland businessman who imported black market cigarettes, drugs

Following a raid of Han Zhang's business, authorities found a spreadsheet labelled "little prince of counterfeit cigarettes". Photo / Getty Images

An Auckland businessman once dubbed the "little prince of counterfeit cigarettes" has been sentenced to 11 years' prison after an investigation into his tobacco smuggling revealed he also managed to quietly help import 21kg of methamphetamine, nearly 7kg of MDMA and various other drug-making ingredients into New Zealand.

The drugs - not including the hundreds of thousands of cigarettes he is believed to have illegally imported - would have been worth nearly $5.5 million, authorities estimated.

But despite being lured into the scheme to help prop up his struggling business, Han Zhang, 30, saw little financial windfall from the drug importation, defence lawyer David Jones QC argued at the High Court at Auckland in December. Justice Paul Davison, in a written sentencing decision released to the Herald over the weekend, agreed but said that doesn't make him innocent.

"He says that ... it was not driven by greed, but driven out of a need to survive
financially," Davison said. "While I recognise that the circumstances of your offending were brought on by the financial strain you were under, your offending was clearly motivated by your desire to make money."

Zhang faced up to life in prison for the 11 methamphetamine importation charges alone - all of which he pleaded guilty to in September.

Justice Davison also ordered him to serve concurrent five-year terms for 10 counts of importing ephedrine totalling just over 1kg; five counts of importing pseudoephedrine totalling just over 5kg; four counts of importing the MDMA; five counts of attempting to import methamphetamine totalling 6.7kg; five counts of dishonestly using a document; one count of attempting to import amphetamine; one count of importing the drug 5-APDB; and two counts of having false foreign passports.

For the cigarette importation, he was handed a concurrent two-year sentence for defrauding Customs revenue and a concurrent two-month sentence for one representative charge of selling uncustomed goods.

Zhang was initially arrested on tobacco smuggling charges in June 2020, a decade after immigrating to New Zealand from China to study English and earn a business degree.

An investigation had initially been launched in January 2020 after Customs discovered 75,000 undeclared Chinese-branded cigarettes in a sea cargo container that was supposed to contain household items. The person listed as the recipient was a false identity, but further investigation led police to eventually search Zhang's Epsom-based business, JSS Food.

The black market cigarettes were likely intended to be sold in bulk over social media, Customs officials said at the time of his arrest.

During their search of the business and storage units linked to Zhang, officials reported finding about $16,000 in cash, 3200 cigarettes, over 20 telephones and a large quantity of SIM cards.

The High Court at Auckland. Photo / NZME

They also found a spreadsheet with a Mandarin title which was translated to mean "little prince of counterfeit cigarettes". The file suggested that 268,000 cigarettes had been sold since October 2018. An analysis of the confiscated SIM cards suggested that over 400,000 cigarettes had been intercepted since August 2018, amounting to roughly $470,000 in unpaid Customs duty.

But a further analysis of his spreadsheets uncovered references to serious drug importation as well.

Crown prosecutor Henry Steele said the spreadsheets suggest Zhang managed the logistics of the importation and distribution of the drugs and that he was obviously aware of the scale of the operation.

Defence lawyer Jones, however, said his client did not know the type or quantity of the drugs being imported and that he wasn't the main offender - as evidenced, he argued, by authorities not seizing flash luxury items during their 2020 raids.

Justice Davison noted that Zhang recognised the seriousness of the cigarette scheme, which Zhang said he became involved with after his legitimate business became unstable enough that he had trouble making enough money to support a mortgage application.

The judge also noted a cultural report that cited an immense pressure on men from Zhang's region of China to "emigrate overseas and generate income and wealth in order to support parents in their retirement back in China". A sense of obligation as an only son was cited in the report as a "key cultural reason underlying your motivations for offending".

But Zhang didn't seem to understand the seriousness of his involvement in the drug scheme, which he characterised as a "stupid decision", or accept responsibility for it, the judge also noted.

"I accept that you come from a background where there is a sense of obligation to succeed in business in order to better provide for your parents, and that you are likely to have felt a weight of expectation also from your Taiwanese parents-in-law to provide for their daughter and for their grandson, your son," the judge said.

"However, your cultural background and cultural obligations were not an immediate cause of your offending. As you yourself have explained, you decided to become involved for financial gain when you found your business ventures were failing and you were under financial pressure."

Although a permanent resident of New Zealand since 2020, it is possible Immigration New Zealand will revoke Zhang's status and deport him when he is eventually released from prison. Because he is from mainland China and his wife is from Taiwan, New Zealand is likely the only place they could stay together as a family, the judge noted.