By JOSIE CLARKE consumer reporter
Li Qun Chen's days running a pawnbroking racket are over. But the multimillion-dollar stolen goods industry that her business helped support is stronger than ever.
Chen, who made her living loaning money with sky-high interest rates in return for various electrical goods, some stolen, stood in the Auckland District Court this month as Judge Cecilie Rushton described her business as a "gross deception at every angle."
Chen has been stripped of her secondhand dealers' licence, and had her application for a pawnbrokers' licence declined.
The court heard how her Mt Roskill company Professional Finance, for which Chen had only a secondhand dealer's licence, operated as a loan service for customers who needed quick, easy cash.
She would give small loans in return for equipment, including stereos, videos and DVD players, held as security, and charge interest of 30 per cent a month.
Customers who did not repay the loan and the interest by the end of the month would have another 30 per cent interest added.
Not only was the loan service illegal but, Judge Rushton said, Chen had also accepted that some of the goods found on her property were stolen.
Auckland district licensing officer Robin Poole says Chen's business is a small piece of what has become a multimillion-dollar industry in stolen goods.
A burglar will break into a house and steal common, easily portable electrical equipment such as stereos, television sets and videos.
The burglar delivers the equipment to secondhand dealers, who buy the goods on the spot, or to pawnbrokers who offer money for the goods in the form of a loan that the burglar has no intention of repaying.
The television that cost $1200 new two years ago will be flicked off by the burglar for as little as $100.
Dealers are required to obtain identification details from suppliers, but forgery is rife and burglars have little fear of being caught.
Mr Poole said the public could protect themselves by keeping records of the serial numbers on their electrical equipment.
"It's not 100 per cent successful, but it is another way of trying to recover stolen goods."
The Auckland area has 143 legally operating secondhand dealers and pawnbrokers.
Operators of such businesses must have a licence on public display.
Secondhand dealers legally own goods as soon as they buy them. But pawnbrokers hold the goods as security for loans and must wait six months before selling the equipment at auction. The proceeds, minus the money owed, should go back to the original owner.
Chen's court appearance comes amid plans to overhaul old laws relating to secondhand dealers. Justice Minister Phil Goff has been working on changes to the 1908 Pawnbrokers Act and the 1963 Secondhand Dealers Act to make it harder for criminals to sell stolen property.
Mr Poole said the bill, due to come into effect late next year, merged the two acts and would strengthen penalties for "buy-back" systems operated by illegal pawnbrokers.
Dealers with incomplete or inaccurate registers that disguise stolen goods face a penalty of $200.
"They're glad to pay the $200. It's a drop in the ocean compared to the amount they're turning over," said Mr Poole.
But the secondhand dealers say they are tired of police unfairly targeting them.
Llannys Burgess, who owns Avondale secondhand dealership Rob's Trading Post, said all dealers were offered stolen goods.
"You don't buy it. You just know the ones who are bringing in the stolen stuff.
"Police say there would be no burglaries if it wasn't for us. But they should check the flea markets. That's where it goes."
Mrs Burgess said she would accept goods only if the supplier signed a form and left a driver's licence number as identification.
She said most people sold their goods because they were shifting overseas or trading up. "There's no way around being offered it [stolen goods], but most dealers are honest."
High turnover in the stolen goods business
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