05 September 2019

Fraud: Worldwide Holidays Ltd v. Wang

Finding over $1.4 million had been stolen over ten years, Worldwide Holidays Ltd sued former employee Xiaoning Wang, her mother Bu Jun and Wang’s friend Haimeng Lin to recover its losses. During the decade ending 2017, Wang and Lin lost $3.5 million gambling at Sky City casino.
The High Court was told Wang started work for Worldwide Holidays’ Auckland Newmarket branch as a travel consultant in 2010, later promoted to branch manager of its Auckland Albany branch.  Worldwide became aware of financial discrepancies in early 2017, when Wang was on holiday.  A detailed investigation uncovered a ‘teeming and lading’ fraud: client money was stolen, covered by payments from later customers.  Worldwide was alerted by a large number of customer transactions recorded as payment by post-dated cheque; a very uncommon form of payment now.  It discovered Wang had been invoicing Worldwide customers with payment directed to her personal bank account, simultaneously supressing any account receivable in Worldwide’s accounting system.  Worldwide suspects more than the $1.4 million it sought to recover was stolen.
Evidence was given that Worldwide’s managing director went to Beijing, confronting Wang and her mother Ms Jun.  They promised repayment; Wang signing an acknowledgement of debt for $1.4 million, Ms Jun signing as guarantor.        
The High Court held Wang and Ms Jun jointly liable to repay $1.4 million together with interest at five per cent specified in the acknowledgement of debt.  Both said they signed under duress, but did not attend court to defend Worldwide’s claim.
Wang’s friend Haimeng Lin was held jointly liable for $526,700 of the money stolen.  This was money transferred by Wang to Ms Lin’s bank account.  Wang told her this was done on a mortgage broker’s advice; frequent high value ATM withdrawals at Sky City showing up on her banking records would prejudice her ability to get a home mortgage.   Ms Lin attended court, saying she was unaware the money was stolen and that she held the money only temporarily for Wang. Banking records showed only $20,000 was clearly repaid to Wang.  Justice Gault said the evidence was that Ms Lin spent the balance of the transferred funds gambling with Wang and for her own personal use.
Worldwide Holidays Ltd v. Wang – High Court (5.09.19)
19.160