Evicted: State house tenant with $250,000 cars

Paul Yu Hung Szeto. Photo / Greg Bowker

A sickness beneficiary with three luxury cars has been evicted from his taxpayer-subsidised state home.

Police seized two Mercedes Benz and a Porsche from Paul Yu Hung Szeto when he was arrested on money laundering and methamphetamine charges in December 2008.

The 59-year-old was acquitted this week after a seven-week trial in the High Court at Auckland, where a multi-millionaire businessman was found guilty of serious drugs and money laundering charges.

But Housing New Zealand has terminated Szeto's tenancy in a North Shore state home after the Herald revealed he lived in a rental property in upmarket Mission Bay with cars worth $250,000.

A spokeswoman said a Housing NZ investigation started in March last year - one month after the Herald story appeared - and the Tenancy Tribunal had recently ordered Szeto to vacate the property by next week.

Szeto and his girlfriend Wei Na Shi, a 28-year-old known as Candy, were found not guilty in a jury trial at the High Court on money laundering charges. Szeto was also acquitted on methamphetamine supply charges.

Three money laundering charges were laid over the purchases of the Mercedes Benz cars in October 2007. The couple later bought a 2005 Porsche Cayenne in September 2008.

The jury heard evidence the couple bought the 2005 Mercedes SLK convertible with $21,500 cash and two cheques totalling $50,000.

In a second purchase, they bought a 2003 Mercedes sedan with $17,000 cash and five cheques totalling $100,000. The Porsche cost $66,785 cash.

The Crown alleged the money was drug profits. Szeto's defence was that it came from other sources, including gambling.

A spokeswoman for the Ministry of Social Development could neither "confirm or deny" whether Szeto was under investigation for receiving social welfare payments while driving luxury cars.

The two Mercedes-Benz and Porsche were seized under a law which has since been replaced, and the acquittals mean the cars must be returned to Szeto and Shi.

But the police have not ruled out laying a fresh application to seize the cars again under the new Criminal Proceeds (Recovery) Act, which allows police to confiscate wealth without proving an offence occurred, placing the onus on defendants to prove how assets were paid for.

The 59-year-old Szeto has a colourful history.

A former Hong Kong police officer, he was convicted in May 1991 of injuring with intent, with intent causing grievous bodily harm and attempting to pervert the course of justice.

Police said he ordered two men to beat up a Chinese restaurant owner in Hamilton who owed a business associate $5000. The victim's brother-in-law intervened with two meat cleavers, but was stabbed in the melee.

Police then bugged a telephone conversation with the victim's wife in which a man called "Steven" told her to deny Szeto was involved.

Szeto was sentenced to four years in prison.

His lawyer Lorraine Smith revealed at the 1991 court hearing that Szeto had been forced to leave the Hong Kong police force because of a criminal conviction.

After serving his sentence, Szeto returned to Auckland where he became a familiar face at SkyCity casino.

He has worked as a loan shark there, and the Herald understands he was recently barred from the casino for two years.

SkyCity says it has a policy of not commenting on individuals, but a spokesman for the Department of Internal Affairs said the agency was "aware" of Szeto's gambling activity.

Szeto also runs a mah jong club in downtown Auckland.