Lawyer convicted for trying to hoodwink Overseas Investment Office investigation

Korean lawyer Dr Jaeho Choi has been convicted and fined more than $60,000 for trying to obstruct OIO investigators. Photo / Supplied

A Korean lawyer who lied to the Overseas Investment Office and drafted a fake loan document to conceal his ruse has been convicted and fined more than $60,000.

It has been described as a terrible "fall from grace" by a proud man who previously had an impeccable reputation but now faces humiliation, professional ruin and huge financial loss.

Dr Jaeho Choi was sentenced yesterday in Auckland District Court for his role in the sale of a $3 million Helensville property in 2016.

Choi's client, Korean doctor Won Joo Hur, signed a sale and purchase agreement after his wife fell in love with the large rural property, paying a $300,000 deposit.

But shortly before settlement, Hur, a permanent resident, realised he needed Overseas Investment Office consent as it was considered sensitive land.

After consulting Choi, the pair concocted a plan to hoodwink OIO investigators and skirt foreign ownership rules by attempting to hide Hur's identity.

They discussed finding someone else to hold the property for a short time until Hur could find a buyer, or until he and his wife became eligible to buy it under OIO rules.

Choi called Hur in Korea and suggested nominating a company called HK Search Limited as purchaser. The company's director was Choi's wife, whose name would appear on property records instead of Hur's.

The two men then drafted an agreement stating HK Search Limited was only to act on instructions from Hur "as if Hur is the real legal owner of the property".

The company was to sell the property as soon as possible and transfer all sale proceeds directly to Hur.

But the scheme began to unravel early the following year.

In April 2017 the OIO wrote to Choi seeking an explanation over the purchase, saying it was investigating whether HK Search Limited had acquired the property as "an associate" of Hur in breach of the Overseas Investment Act.

Korean doctor Won Joo Hur was fined $100,000 for his role in the deception. Photo / File

It issued a compulsory notice requiring Choi's firm to produce relevant documents to investigators.

Hur and Choi then set about a deliberate and premeditated course of deception designed to obstruct investigators and provide false information, prosecutor John Dixon QC said.

They told investigators the transfer to HK Search Limited had occurred at arm's length and been funded by a $3m loan from Hur.

They drafted a "fictitious" loan agreement to support the lie, which was backdated to September 2016. Hur transcribed the agreement by hand to avoid leaving a computerised date stamp then sent it to Choi by "express mail".

Hur suggested adding a clause requiring Choi's wife to repay at least 20 per cent of the imaginary loan within three months to make the loan document look more "credible".

Choi switched communications with Hur to his Gmail account to avoid OIO scrutiny, rather than using his JC Legal address.

Choi then sent the loan document to investigators along with a covering letter containing more misrepresentations.

The letter denied HK Search was an associate of Hur and claimed the property had settled for the benefit of Choi's wife and that Hur had "no legal rights to the property".

It also claimed the loan document had been signed in September 2016, another falsehood.

Hur eventually came clean, admitting to the lies during interviews.

He was convicted and fined $100,000 earlier this year.

In court yesterday, Dixon said Choi was more culpable than Hur and his role as a lawyer was an aggravating factor.

"This was deliberate offending. This was premeditated and planned.

"There was a degree of sophistication about it - some artfulness.

"It calls the integrity of the profession into disrepute."

Choi's lawyer Harry Waalkens QC said his client accepted he had done wrong but 18 personal references reflected his good character and reputation.

"It's an understatement to say today represents for Mr Choi a very significant fall from grace but also conduct that is utterly out of character."

Choi had been "out of his depth" in relation to the Overseas Investment Act rules and "panicked" when he received the OIO letter.

He had nothing to gain from his offending.

"The conduct was a complete paradox. One wonders why on earth would a lawyer do this.

"Yes he acted wrongly and he breached the law and he's facing the music today."

Waalkens said Choi also faced a likely six figure financial penalty in civil proceedings connected to the case. His career was at risk due to Law Society proceedings that were underway.

Choi, a permanent resident with no prior convictions, was humiliated by the publicity and faced huge financial loss.

Judge Bouchier convicted Choi on a charge of obstructing the OIO's exercise of power and fined him $60,250.