A former finance manager has been found guilty of overseeing a multi-million dollar Ponzi scheme targeting the Japanese community.
Yuko Hanyu was found guilty at the Auckland District Court yesterday afternoon on numerous charges related to her time at East Wind Company Limited, which was part of the East Wind Group.
The company marketed itself as offering financial services and immigration support to New Zealand's Japanese community.
The group collapsed and was placed into liquidation in 2019 following the death of its director, Masatomo Ashikaga (also known as Tom Tanaka).
Financial products offered by the company – including the Group Term Deposit and Waterloo Fund – operated as Ponzi schemes, a type of fraud in which existing investors are paid using money from new investors lured by ‘get rich quick’ promises. There is normally no investment scheme, and the fraudsters siphon off the money for themselves.
Hanyu had served as the company's finance department manager from 2004 until December 2017.
She and Ashikaga worked together to obtain funds from investors, using false statements about their financial products and promised returns.
In reality, there were no legitimate investments, and the funds were used to repay other investors.
Hanyu had also made unauthorised payments of over $400,000 from the East Wind accounts to her mortgage account and over $430,000 to her personal credit card.
In court, she faced four representative charges of false statement of a promoter, two representative charges of obtaining by deception, one charge of theft by a person in a special relationship, and three representative charges of theft for stealing more than $800,000 from East Wind.
“This was an incredibly complex case involving the analysis of substantial, detailed financial records, many of which were in Japanese, and a large number of mostly overseas-based investors," Serious Fraud Office director Karen Chang said.
“Ms Hanyu and Mr Ashikaga exploited their connections to the Japanese community to deceive investors out of millions of dollars. Many of the investors did not get their money back."
A jury found Hanyu guilty of making false statements as a promoter in the "investment products".
She was found guilty as a party to a charge involving more than $6.5 million in new investments in the Group Term Deposit product and as the principal offender in relation to a charge involving more than $12.5 million in reinvestments.
Hanyu was found guilty of using $1 million to repay one of the Waterloo Fund investors, money that should have been invested in another scheme offered by the company, the Restaurant Fund.
She was also found guilty of three charges of theft.
Two were for transferring around $430,000 from East Wind’s company accounts to her personal credit card. The other related to more than $400,000 she arranged to be paid into an account associated with her mortgage.
She will be sentenced on July 3.
“Offending such as this threatens New Zealand’s reputation as a safe place to do business, undermines legitimate investment markets and dissuades foreign investors from putting their money into our economy," Chang said.
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