Police move to strip brothel owner Fan Jiang of $2m assets
A Christchurch brothel owner who amassed nearly $2 million in property and cash through suspected tax evasion and "serious criminal activity" is fighting police to keep her assets.
Fan Jiang, 51, has already been fined $10,000 for violating a Christchurch City Council bylaw and breaching an abatement notice. The council investigated a Phillipstown property she owned since 2013, after neighbours raised concerns it was operating as an illegal brothel.
That prosecution prompted a financial investigation by police. In 2014, they seized five properties, with a rateable value of $1.91m, and more than $70,000 cash. Last year the assets were restrained under the Criminal Proceeds (Recovery) Act.
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In an affidavit supporting the restraining order, Detective Doreen Howe said Jiang likely obtained them illegally.
"I believe that money gained through tax evasion and significant criminal activity, namely the operation of an illegal brothel, has funded the purchase of residential property by [Jiang] and her deceased husband.
"Funds generated from the sale of sexual services from the illegal brothel at England Street [in Phillipstown] are likely to be in cash as evidenced in the search warrant executed at the address . . . and the seizure of $71,610 in cash."
Howe said it was necessary to apply for the restraining order without notice – meaning Jiang was not informed.
"I believe the respondent [Jiang] will have the opportunity to dispose of or alter her property ownership including selling or borrowing against the five properties.
"[She] has family members in China and therefore the ability to move money off shore to overseas bank accounts."
According to the affidavit, police identified cash deposits from unknown sources totaling $624,000 into the accounts of Jiang and her late husband, Neville Holmes, between 2009 and 2014. A financial analyst put Jiang's income from "significant criminal activity" at no less than $799,000.
Police sought forfeiture of Jiang's assets under the Act – a civil case.
"We're solely focusing on the asset recovery side," Detective Senior Sergeant Stu McGowan said. "The investigation of the operating of the illegal brothel was attended to by the city council."
McGowan said Jiang opposed the restraining order. A hearing was set down for August.
Police would still need to prove criminality if the case reached forfeiture stage, he said.
"The fact that [Jiang] was convicted of those charges that were prosecuted by the council affirms the position that offending has taken place."
FAN JIANG DATED GANG MEMBER
Jiang became known to police in 2013 as the girlfriend of Paul Andrew Snowden, a member of the 45 Outlaw motorcycle gang in Auckland, the affidavit said.
Snowden and another man, Aaron Joseph Carr, were arrested and jailed for six years after being caught with nearly $100,000 worth of methamphetamine at Christchurch Airport in 2013. Jiang was excluded from visiting Snowden at Christchurch Men's Prison after getting a "positive" response from a drug dog.
The same year, she reported a burglary at the Phillipstown property and the theft of cash in New Zealand, US, Chinese, Hong Kong and Australian currencies.
The brothel at the address drew a string of complaints from neighbours who likened its brisk patronage to "going to McDonald's". Residents struggled to find a park on their street and found condom wrappers in their yards. One local body candidate recorded and publicised vehicle registration numbers in an effort to expose the clientele.
Council officers and police searched the property in April 2014, when they recovered the $70,000 cash. During the search an Asian woman was discovered hiding in a wardrobe using a cell phone. She was found to have expired visa documentation. She was deported two days later.
Jiang, through her lawyer, last year requested the property and cash be returned, the affidavit said. Detective Howe said Jiang distanced herself from the money when she gave evidence in court.
"In the two years since the April 2014 search warrant, neither the respondent's son, nor any other person other than the respondent has approached police for the return of the money. This supports my belief that the cash has been derived from the unlawful operation of a brothel by the respondent."