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An Auckland foreign exchange company has been convicted and fined $1.125 million for failing to report suspicious activities and submit financial transparency reports relating to money laundering.
Qian Duoduo Ltd, which trades under the name Lidong Foreign Exchange, failed to report 197 international transactions to China between 2018 to 2019, a Department of Internal Affairs investigation has found.
Of these transactions, 26 involved suspicious activities and 171 involved prescribed transactions, totaling more than $19 million.
The transactions were made by two individuals, Xiaoyu Lu and Musabayoufa Fuati, who have both been convicted of criminal offending involving money laundering.
The District Court found the company failed to carry out adequate customer due diligence about the source of the pair's funds, relying on questionable documents despite recognising its operations were at high risk of being used to launder money.
Serge Sablyak, director of anti-money laundering and countering financing of terrorism at the Department of Internal Affairs, said the department took offences under the Anti-Money Laundering and Countering Financing of Terrorism Act "very seriously".
"Suspicious transactions have the potential to be linked to money laundering or terrorist financing activities," Sablyak said.
"Prescribed transaction reports are vital in alerting law enforcement to suspected offenders and make money laundering and terrorist financing difficult to hide."
Sablyak said Qian DuoDuo Ltd had a history of non-compliance.
"In 2017, the department took civil action against the company following non-compliance with its obligations, and the High Court confirmed multiple breaches of the company's legal obligations," Sablyak said.
"When financial institutions, including money remitters, continue to fail to meet their obligations under the Act, the department can and will take action."
Qian DuoDuo Ltd has appealed the District Court's decision in the High Court.
