Police seized more than $5 million of assets from convicted drug boss Ka Kit Yim and his wife Chien-Hui Wu. Photo / Supplied
The wife of a major Auckland drug dealer who lived a lavish lifestyle has failed in her bid to keep their family home, Ferrari and Porsche vehicles, $500,000 in funds, as well as designer watches, handbags and jewellery worth hundreds of thousands of dollars.
Chien-Hui Wu is married to Ka Kit Yim, better known as Chris, who was caught with 1kg of methamphetamine after Customs earlier intercepted a 40kg shipment of the drug concealed inside granite tea trays.
In 2017, Yim was jailed for 11 ½ years but a parallel investigation into the couple's financial affairs led to more than $5 million worth of assets being frozen, as police suspected their unexplained wealth was the ill-gotten gains of Yim's crimes over many years.
Among the staggering list of seized assets were: a $1.1m home, 13 vehicles including a Lamborghini, Ferrari, Porsche and Mercedes-Benz, nearly $1.9m in cash, more than $550,000 in various accounts, as well as 115 luxury items like Louis Vuitton handbags, a vintage French wine collection and Tiffany jewellery.
The couple, who got married in 2005, were able to afford this lifestyle despite tax records showing they declared income of just $35,000 between them dating back to 1991.
Wu fought to keep the Panmure home, the Porsche and Ferrari cars, the $550,000 held in accounts, and 42 of the 115 personal items which had "particular sentimental value" to her.
In a High Court hearing in 2019, Wu denied any involvement in her husband's drug business, or even any knowledge of where the money came from, and argued that the assets she wanted to keep could not be considered "tainted property" derived from criminal activity.
Wu claimed her parents in Taiwan were her main source of income and they had funded the purchase of the home in Panmure, although she also made money by importing luxury goods in Hong Kong to sell at a mark-up in New Zealand.
She said the Ferrari 458 Speciale and Porsche GTS Cayman had been purchased with money loaned by a friend in Hong Kong called "Lilian".
The funds in the couple's CMC Markets trading account and a lawyer's trust account, a total of more than $550,000, were legitimate loans or transfers from friends and family, said Wu.
She considered herself to be the "sole and lawful" owner of the 42 luxury items she wanted to keep, as they were gifts or she had bought them with her own money.
Justice Pheroze Jagose dismissed that claim and the rest of Wu's evidence. In particular, the HIgh Court judge cast doubt on the existence of "Lilian", the friend who supposedly loaned $1m in undocumented transfers which Wu tried to validate with post-dated agreement in her own handwriting.
"I do not believe the 'acknowledgments' are authentic," said Justice Jagose, who went on to describe Wu as "not a credible witness" without any records or evidence to back up her story.
"Her blindness to Mr Yim's large deposits into their joint bank accounts, and to items connected to his offending in plain sight in their home, literally is incredible."
In his written decision, Justice Jagose said Wu had benefited from Yim's significant criminal offending, which dated back to the early 2000s, ruling that all of the seized property was therefore "tainted" and to be forfeited under the Criminal Proceeds Recovery Act.
Her lawyer Ron Mansfield, QC, asked the Court of Appeal to overturn the ruling on the grounds Wu had advanced credible explanations for the sources of the money used to purchase the assets, and the "wholesale disregard" of her evidence was unwarranted.
In terms of her "blindness" to her husband's wealth, a psychiatrist's report noted Wu had a "strong sense of pampered naivety" because of her upbringing where her parents gave her money when she needed it.
Responding on behalf of the police, Mark Harborow said Justice Jagose was entitled to draw together the strands of circumstantial evidence and draw conclusions about Wu's credibility in making his findings.
In a decision released last week, the Court of Appeal said there were "clear inconsistencies and implausibility" in Wu's story and dismissed the appeal.
"Ms Wu — who had been in a relationship with and married to Mr Yim for the better part of 12 years, with significant amounts of money and luxury assets with no explained sources of legitimate income — had to have known about that activity."
The appeal was dismissed and Detective Inspector Craig Hamilton, who is in charge of the police asset recovery teams, was pleased with the result.
"We want New Zealand to be the hardest place in the world for criminals to do business," said Hamilton.
"By taking their money, we're trying to take their power and influence. This is about crime prevention. By taking their money, we're stopping them from expanding their criminal enterprise."
More than $1 billion worth of real estate, luxury cars and cash are among the assets restrained from drug dealers, gangs and other criminal groups since the Criminal Proceeds Recovery Act was passed in late 2009.
The success of the New Zealand police in enforcing the law was "impressive", according to a report published last year by the Financial Action Task Force (FATF), which estimated 8 per cent of criminal profits were frozen each year. The global average is around 2.2 per cent.
Now, the Government plans to change the law to give police even more powers to target gang leaders, or organised crime figures, who have distanced themselves from any criminal activity but allegedly still reap the financial benefits.
Under the current law, police do not need a conviction. They only have to show someone profited from criminal offending to the lower standard of proof applied in civil cases — "on the balance of probabilities" — rather than surpassing the more difficult "beyond reasonable doubt" threshold for criminal cases.
Under the proposed change to the law, the police would be able to ask the High Court to restrain - and later forfeit - the assets of anyone "associated" with an organised criminal group, if their declared income was insufficient to pay for the assets.
This is designed to target the leaders of gangs and organised criminal groups who the police allege have structured their affairs to "insulate" themselves from involvement, or even knowledge of, profit-driven crimes committed by their members.
