Multiple breaches of money-laundering legislation coupled with efforts to frustrate Internal Affairs investigations resulted in fines totalling $7.58 million for money remitters OTT Trading and related business MSI Group.
OTT Trading Group Ltd was controlled by Tonghui Qi; MSI by Ye Duan. According to Companies Office records, OTT will soon be struck off for failing to file annual returns.
The High Court was told of Internal Affairs inspectors given the run around when they attempted to audit money remittance businesses controlled by Qi and Duan. An August 2014 visit at MSI’s Auckland office to audit compliance with the Anti-Money Laundering and Countering Financing of Terrorism Act was met with a quick response; MSI was closing down operations, it said. Further investigation into MSI was then closed. An April 2015 audit of OTT’s Auckland operations discovered that OTT was acting as a conduit for MSI and that MSI was still in business. Neither OTT nor MSI could provide evidence of compliance with money-laundering protocols required by the Act.
Internal Affairs investigations identified that MSI had actioned money remittances totalling $213 million over a five year period, failing to complete customer due diligence on some 750 transactions valued at over $50,000. MSI said the larger the amount being transferred the less willing customers were to provide detailed information. It did not press for required information about source of funds and customer identity for fear of losing custom. Trading separately on its own account, OTT transferred funds totalling at least $196 million, also without proper due diligence required by the Act.
Tonghui Qi and Ye Duan each agreed to a three year ban. OTT employee Lee Chon Woon agreed to an indeterminate ban from all work as a money-laundering ‘compliance officer.’
Internal Affairs v. OTT Trading Group Ltd – High Court (15.05.20 & 10.07.20)
20.122