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An anti-corruption student media start-up says there’s an ugly underbelly to building a new life in Aotearoa, The Spinoff's Maria Slade reports

An anti-corruption student media start-up says there’s an ugly underbelly to building a new life in Aotearoa, The Spinoff's Maria Slade reports
Photo: Getty Images.

By , The Spinoff*

Leo Shao is an unlikely caped crusader. The softly spoken 20-something looks like any other student striding around Auckland’s CBD in his dark duffle coat, takeaway cup in hand.

Yet behind this understated exterior lies an alter ego. Shao and a band of fellow young Kiwi Chinese are on a moral crusade to expose wrongdoing among their countrymen. PhD and Masters students by day, by night they work to fulfill a duty they believe they owe to their adopted nation and the Chinese migrant community alike.

There is an unsavoury side to the business of building a new life in Aotearoa, the group says. Immigration fraud, worker exploitation, tax evasion, mortgage fraud – you name it, they have it in their sights, and their reach is surprising.

The students have established a non-profit think tank called Youth Startup Herald, or YS Herald (no connection to the NZ Herald itself). On the surface YS Herald’s website looks like a collection of musings on New Zealand immigration and economic news, international affairs, and the like.

But dig a little deeper and you will find details of investigations it has conducted into Chinese Kiwis it claims have established themselves here by less than legal means.

While the group publishes high level details of these cases on its New Zealand website, it says it releases the real oil via Chinese social media – both because it seeks to publicly shame the alleged perpetrators in their home country, and in order to circumvent New Zealand’s privacy and defamation laws. The law is less stringent in China, the group says.

YS Herald has received threats, so only Shao speaks publicly while the other members remain anonymous.

Shao came to New Zealand four years ago to study for a PhD in mathematics, and now works as a system analyst at an Auckland luxury vehicle services company. Although he views this country as his new home he hasn’t started applying for residency just yet.

But most Chinese who come here are on a mission to create a better life and this quest can lead to desperate actions, he says.

“Because they care about residency they lose their mind so sometimes they will do bad things, this kind of thing happens every day,” the YS Herald spokesperson says.

“They lose their business honesty, they will try to defraud people to get money, residency, everything.

“We warn all Chinese people, ‘you should follow the rules, you should not forget your traditions. Be an honest man, do good business, be a nice person.’

“Everything has a cost. If any person believes that he does the wrong thing but there’s no cost, that’s not right.”

The wheels of justice move slowly, however, and government agencies rely on tip-offs, says the YS Herald spokesperson. And so they have taken matters into their own hands.

Its access to information about its targets is impressive. The Spinoff has seen copies of emails, personal bank statements from both New Zealand and China, passports, drivers licences, visas and other documentation.

“Some people are very scared [of] us because we can research very deeply,” Shao says.

Initially YS Herald tried working with local Chinese media, but felt these outlets were more concerned with keeping their advertisers happy than breaking stories.

“They care about money things too much, they don’t want to create conflicts among the Chinese community, so they cover each other,” Shao says.

YS Herald has no such qualms.

Its extensive investigations into the activities of a local businessman and his cousin are a case-in-point.

One of the cousins – we’ll call him W – ran a west Auckland fast food outlet. YS Herald alleges that between 2014 and 2017, W funnelled proceeds from the restaurant through a bank account in the name of his cousin – X – in order to avoid paying tax.

In return, it is alleged, W gave his cousin X a job as a chef at the restaurant so that he could get a New Zealand work visa. But, YS Herald claims, X never actually worked at the fast food business, and in addition had to pay W thousands of dollars for the privilege of getting the visa.

X got his work visa in April 2017. The Spinoff has seen copies of bank statements from 2017 which support YS Herald’s claim that X was making large payments to his cousin.

W also had another business, an auto company providing services such as car grooming and nano coating. YS Herald says this is where X actually worked, and once again it claims payments to the company were being channeled through X’s mother’s bank account to avoid tax. The Spinoff has viewed copies of the account statements from 2017 showing deposits with descriptions such as “car wash”, “Qashqai Cam”, “Passat” and “car clean”.

Meanwhile W appears to have become a prosperous man. YS Herald says between October 2014 and July 2017 he bought five Auckland properties – one each in Mt Albert, Mt Eden, Hillsborough, and two in Epsom. The Mt Albert property was sold after a year at a profit of $260,000, while one of the Epsom homes was sold after just three months for a profit of $170,000.

The Hillsborough and Mt Eden properties are currently on the market.

YS Herald alleges W dealt with a mortgage broker at a major bank who was known in the Chinese community for taking on “tricky” situations. The broker has since left that role and is working for another major bank.

X has now returned to China. The Spinoff has heard various explanations for the move, ranging from from personal relationship issues to health concerns.

W denies all of YS Herald’s allegations.

“Who told you? What this person doing?” he told The Spinoff. “Before you call me you should do some homework.”

W says his cousin X did work at at the fast food restaurant, while it was X’s wife who worked at the auto service company. X got his work visa when he was employed at a restaurant in Christchurch, he says. “I never charged him any money.”

He also strongly denies not paying tax on the income from his businesses, saying everything goes through his accountant.

He insists the allegations are retaliation for a family falling out over rival auto service businesses. “We are not happy with each other,” he says.

Wherever the truth lies, YS Herald has reported the cousins’ activities variously to Inland Revenue, Immigration Minister Iain Lees-Galloway, the Serious Fraud Office, and both major banks.

Immigration New Zealand’s general manager of compliance Peter Devoy says he isn’t able to comment on individual cases.

However complaints to the agency about alleged immigration fraud have more than doubled in the last three years, he says.

In the 12 months to June 2016 it received 882 reports; by June 2018 that number had jumped to 1842.



There is “evidence to suggest that the exploitative-type practices that you’re describing to me are becoming more prevalent,” he says.

“The amount of work that’s coming to us, getting my resources across it is difficult.”

Some complainants are migrants who have tried to buy their way in, he says. “People come to us when they get desperate, and quite often if a person has been complicit and they are borrowing money and investing significant amounts of money, as you’ve attested, when something goes wrong in the process, that’s when they complain.”

In cases of serious workplace exploitation migrants who come forward may be allowed to stay in New Zealand while they apply for a new visa.

People try to buy jobs in many ways, from working extra hours without being paid, to a work payback system and buying shares, Devoy says.

“That often involves a structure where Inland Revenue are being paid so that a work record can be established… but it may well be a non-existent job.”

One of the challenges is New Zealand’s “welcoming” structure, he says. A person who is here unlawfully can still get an IRD number and other documentation such as a driver’s licence, giving them the facade of legitimacy.

The agency does take a whole of government approach to immigration fraud, and in particular works closely with the Labour Inspectorate which looks at work standards such as whether people are being paid minimum wage, Devoy says.

Inland Revenue says it also co-operates with its fellow agencies to identify tax fraud and other criminal activity. It is a member of the Combined Law Agency Group (CLAG), a group of around 25 partners that looks at serious non-compliance against one or more agencies, it said in a statement.

It’s also a member of the Joint Assessment Group co-ordinated by the Ministry of Business, Innovation and Employment (MBIE) which applies another multi-agency lens to compliance risks. “The Labour Inspectorate is part of MBIE so topics such as aggressive labour practices, employee manipulation and non-compliance with wider labour laws do come up,” it says.

And cash jobs leave a trail, Inland Revenue says.

“People either spend the cash on travel, lifestyle, gambling or use it to acquire assets or pay the mortgage. We can trace all of those.”

However there are limits to the taxman’s ability to share. While the Privacy Act allows government agencies to pass information to each other, Inland Revenue also operates under the Tax Administration act which says it must keep taxpayer information secret. In short, tax law trumps privacy law.

Mechanisms that allow for better inter-governmental information sharing is “a discussion that needs to be had”, Immigration New Zealand’s Peter Devoy says.

Leo Shao describes YS Herald as “kind of freaky” in the local Chinese community. Another word for that might be “disruptive”, and the group says it has plenty more cases up its sleeve of immigrants sidestepping New Zealand regulation to better their situation. They are adamant that they will work to ensure corrupt practices that have flourished in other societies don’t take root in Aoteaora.

*This article first ran on The Spinoff here and is used with permission.

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Is anyone surprised by this stereotypical behaviour? Corruption is a way of life in China. If you own a pet tiger it's going to bite you one day.

It goes way beyond mortgage fraud. They have spies in parliament and people who expose the truth like researcher Anne-Marie Brady have had their offices broken into.

Our politicians are stupid enough take loans from them and sell them assets like Wellington power lines.



What evidence is there that political funding influences the NZ govt? When did a cabinet minister last meet Nobel prize winner the Dalai Lama? Why do we have roughly forty times as many Chinese as Indian qualifying for Investor category residency when in the USA and the UK it is mainly Indians who have created new businesses?

"Corruption a way of life in China" - it seems to be the same in NZ but more subtle.


Sad, but I guess the moral of the story is STOP selling New Zealand out to the third world. I for one will only support New Zealand or other western businesses. If I can't pronounce it, it's not getting my money.

And it's not just the Chinese community. I am hooked in to the local community of a certain South-East Asian country where I was an expat for almost 2 decades. It's a horrible thing to say but pretty much everyone I come across in the community has some con going be it Immigration tomfoolery or tax fiddles or their favourite - ripping off their own kind. Many of them got their residence visa through out and out lies and the whole idea of paying tax is very, very foreign to them. These are not sophisticated people by any stretch and many are running businesses that simply aren't registered for tax and they get away with it for years and years.

This particular country, like China, is also known for its corruption - which makes me wonder about immigration and the big picture. We seem to attract a lot of migrants from countries where corruption is an issue. Is this sort of skullduggery endemic in all of these communities? Are we unwittingly importing corruption?

Obviously any country with a welfare state has a major attraction to anyone who lives in a country without one. They may love their home and their family and their friends but when it comes down to having children or thinking about old age everyone puts aside all those for health care when needed and decent schooling.

I don't think these other countries are necessarily more corrupt but the potential for fiddling benefits and immigration rules makes NZ a big magnet for the dishonest minority from whereever.

In my experience, a key reason many people want to immigrate is to escape corruption (and the violence that accompanies it).

Sadly, I think on arrival here, many immigrants from non-English speaking countries find integration into NZ society difficult - much to do with barriers to good, regular employment.

So quite quickly, disillusionment sets in and one struggles daily to survive. The main prospect of maintaining/achieving their dreams/goals for a "better life" in this new country, is to jump on one or another bandwagon of corrupt practices. And given where they have come from, they have plenty of life knowledge of such practices as observed in their home countries.

During the 80s and 90s, we pretty much downsized every enforcement unit in every government department we had. Hence, the authorities here just can't keep up - and so corruption pays - and spreads.

Eventually, what they sought to immigrate from becomes implanted here.

It's a vicious cycle all arising from very bad immigration policy in NZ over many years. We set the bar too low, and too many in number with very, very lack enforcement/investigation of English language ability/requirements.


I've written many comments about too many immigrants and worker exploitation of immigrants and even a few about difficulties with multi-culture and the value of English language for immigrants. This article combined with the Yikun Zhang rumours make this time to get NZ's immigration policies reviewed.
However hopefully there will be a minimum of anti-Chinese comments. A pro-Chinese remark: Leo Shao came to NZ to study a PhD in Maths four years ago. So he is brighter than me and surely would be an asset to NZ - give him residency and hope he doesn't emigrate.


Leo Shao seems like exactly the sort of immigrant New Zealand would want (and possibly, struggle to attract enough of). Especially this bit here:

Leo Shao describes YS Herald as “kind of freaky” in the local Chinese community. Another word for that might be “disruptive”, and the group says it has plenty more cases up its sleeve of immigrants sidestepping New Zealand regulation to better their situation. They are adamant that they will work to ensure corrupt practices that have flourished in other societies don’t take root in Aoteaora.

Sometimes it takes someone from outside to recognise that there are some special things about New Zealand, and the low level of corruption that we've had (and need to fiercely seek to retain) is one of them. Kiwis who haven't lived in such places sometimes don't realise how bad a high level of corruption makes life, for almost all of society.

"..ensure corrupt practices that have flourished in other societies don’t take root in Aoteaora."

sorry, folks, it is too late now. There is a lot of corruption in Aoteaora. One simple example, property investment: when buying a property, investors have to declare if they intend to sell for capital gains and everyone says No, but they can change their mind later and so most of them do :)

you cannot isolate your country from rest of the world.



I love this guy, Leo Shao. The man has all the marks of integrity and honesty we prize in anyone. I wish him success in everything.

But...what are the odds someone elsewhere influences immigration by fair or foul means to deny him his residency, and ultimately his citizenship because of what he is doing?


It's time to get our house in order and close the door to immigration from certain destinations. Judging by yesterday's events and exposures there is a 'fifth column' that has influenced New Zealand politics for the last decade which now needs to be exposed. As for instances of corruption and fraud, these should result in residency being revoked and immediate deportation back to the home country. New Zealanders have a trusting nature but sadly the way of life will quickly be undermined if action isn't taken to stem the corruption that has grown roots in our communities.

I don't agree about 'certain destinations'. Good is good and bad is bad - the tale of the good samaritan says all you need to know. Where I do agree with you is that the idea that all cultures mix together with equal ease is clearly rubbish - see the reviews of the book 'Two Sisters' by Åsne Seierstad.
How about a quota system for residency same as the working-holiday scheme? Note that it would mean making it harder for ex-POMs like myself to get residency - but a quota that takes into account reciprocal emigration could work.

Do you really want to be in a racial minority Lapun? I'm sure you'll enjoy the wonderful diversity because we all know Han Chinese are never racist or nepotistic and always go out of their way to speak the local language.
Think of the tasty ethnic food though! We don't have enough Chinese restaurants.

Why certain destiniations? After the last decade how about stopping it from all sources for 5 years or so at least, exempting only those with skills we actually have a demand for that we can't satisfy by training locals.

Don't disagree with that. It would have to come with a reduction in beneficiary payments and housing supplements so as to make it more 'worthwhile' for beneficiaries to seek employment. Not a bad thing. The unemployment target for the Reserve Bank could then be met by encouraging people to work and the government outlay on benefits reduced would allow more cash for training the existing population.


A really worthwhile read of the website - the main message being that the study abroad industry is harvesting/milking the middle classes in China and once study is completed here in NZ - there are no jobs in the studied profession for the graduates. Subsequently, these middle-class students from good families with sound morals and backgrounds - become desperate and turn to corrupt, illegal means of earning in an attempt to get permanent residency here.

My take is that those behind the website initiative do not want such corruption - endemic in China - to become the norm here. Nor do they want their country men and women to be subject to the exploitation. It's a noble cause, I wish them all the best.

Today I am buying tyres from a tyre company in North Shore that has a Chinese manager who resembles a triad enforcer. There is a reason I haven't even bothered getting an alternate quote. Last year I took a car there to get a wheel alignment (cost $70) and when I returned he explained the problem was with the steering rack (whatever that is) and so he said no charge. It would have been so easy for him to take my cash - I really appreciate an honest professional whereever he comes from.

We sold a property to a young Chinese couple with two children - absolutely salt of the earth people. I could not have more respect for them, their Christian morals, their work ethics and the beautiful, respectful way they are raising their children. We expect to remain friends with them forever - just lovely, lovely people.

There are good and bad eggs in every society. The point about China is that even the CCP admit and struggle to contain corruption among their bad eggs. Once it takes hold in any society it is very difficult to reverse/combat. NZ governments need to be very, very aware of this and act accordingly. So far, our record isn't good and our int'l reputation will suffer.

Many people seek to emigrate for the key reason that they wish to leave behind the corrupt societies that they live in.

Contrast my tyre merchant telling an obvious car ignoramous to save his money with say a prominent politician deciding whether to accept $100,000. If it is an honesty competition between Chinese and Kiwi I know who is winning. Well I can choose my tyre supplier and I can vote for who I like.

The problem in New Zealand goes way back to the 90s, when we got a segment of that Hong Kong diaspora, and thanks to inadequate vetting, that intake included quite a few organised crime figures. Of course that was a total slap in the face to all the honest Hong Kong immigrants who had hoped to get away from that kind of thing, but were being extorted and threatened in New Zealand by the same gangs who ran Hong Kong.

Or quoting a friend speaking about his fellow immigrants from India: "they brought in the wrong Indians".


Unfortunately every time an issue arises with (alleged) influence on NZ politics by a country rhyming with shina, absolutely nothing comes of it. It seems that at this point, we are corrupted by the lure of easy cash with the genuine ignorance that it comes at no cost.

Also very telling that in terms of political indiscretions, there seem to be a disproportionate amount that are associated specifically with the Botany and Pakuranga electorates. Pansy Wong, Maurice Williamson and now Jamie Ross. Of the four people that have held those seats in the past 10 years, 3 have left Parliament due to reasons associated with corrupt practices.

Note also the numbers of drug masterminds turning up in the courts and who just happen to reside in those two electorates.


All the more reason to restrict voting to CITIZENS ONLY.
If you are Chinese you cannot have dual citizenship AFAIK

Note also the latest National party scandal initiated as the result of a Chinese $100k donator who wanted to remain anonymous and just happened to turn up in the Honours List


A prominent NZ academic at a U3A lecture in Northcote earlier this year said us elderly Kiwis should be glad that rich Chinese immigrants have made us wealthier by increasing the value of our houses. Pity it makes me and my wife wealthy but none of our six adult children can afford to buy. Immigration is like alcohol - a little does you good.

It's like alcohol in the best quality is on the top shelf. Little NZ can't reach the top shelf like other western nations and thus we get the low quality stuff. The fridge is full but we keep buying it anyway even if that means tossing out food and replacing it with box wine.

Absolutely excellent work Mr. Shao and team. If there is exploitation of the system let's fix the system and, where possible, expedite remediation actions to the fullest extent.

Forcefully expressed - can anyone disagree?

well done to him, shame he is telling what most of us already know about our flawed systems and very little notice will be paid at the top levels to beef up enforcement

Be fair to Mr Lees-Galloway - at least he gives lip-service to enforcement. There have even been two prosecutions at my local shopping centre (exploited restaurant workers). But Squishy is right - it is the system that is wrong and enforcement can never catch up. Too many naive middle class foreigners doing pseudo-studies and too few PhDs in Maths.

Wow, Leo Shao and YS Herald are doing amazing work, don't give up, keep it going

Just don't step inside an embassy or consulate office!

Indian students exposed and now is the turn of Chinesse Student to expose which has been supported and promoted by earlier national government and everyone is aware of it.

This is how our ecenomy works.

Many bussiness in NZ survive by exploiting students (paying peanut wages) and profit by giving job letter.

Another scam that has not been fuly highlighted is contract scam.

If the current Labour government has a will should conduct serious investigation and expose all so called bussinessmen (Whose confidence is low under Labour for the same reason) and earlier government mantra of prosperity.

Stop mucking around with these people. All of the corrupt things these people are doing to screw each other over ultimately leads to someone under-declaring their income. That is tax fraud. Establish a flying squad within IRD. Half a dozen well trained and streetwise investigators that can rock up to your home or business unannounced and crack your financial affairs wide open. Use biometric data from customs Egate combined with Skycity casino facial recognition data. That should identify a few candidates you can start with.
When they are finished they can rip them a new one with fines and penalties. Maybe they can use proceeds of crimes act to seize assets as they did with the Masala Restaurant Gang
These guys like to transact everything in cash because they think it makes them anonymous. But they still can't resist swiping the loyalty card for a few points or a bit of discount. It is 2018 everything leaves a trail.

Or are they an arm of the CCP themselves?

Exactly. Be careful who you point at. They might point back. And they might have something in their hands. Sadly, we have come to this. It is affecting/effecting(?) all of us whether we like it or not. What's worse... it's too late to turn back. We'd be broke if we did. Somehow or another we have to fashion something positive out of what we've created, otherwise it's going to be hard work all round. Tough laws would be my first suggestion, but that's as about as likely as Jacinda changing her mind on oil & gas exploration.
When the Nats have finished self-destructing, there's an election winner in here somewhere.

The crooked indians and chinese were bound to happen because big business wanted them in to help drive down costs and compete with local staff. Look at couriers for example, around 2009 2010 there began a complete shift in staffing of all the publically listed companies like Mainfreight. The highcost employees of NZ origin have all been pushed out and replaced with lowcost immigrants and boy is the customer service appalling!

In NZ our tax system has historically to a degree been reliant on individuals respecting and therefore adhering to our tax and legal system for it to function efficiently.

However, an increasing proportion of immigrants in the last 30 years (particular south and east asia based on media reporting) appear to be ignorant of or intentionally ignore tax, company and employment law for immediate personal gain (examples: GST and immigration fraud among Indian kiwifruit contractors; buying and selling of loss making restaurants and fast food business between immigrants to support residency applications). The threat of being caught and the penalties dished out are insufficient. Stronger enforcement and more resources is therefore required from the government which comes at a significant cost of the taxpayer.

IRD is now being more aggressive (together with Immigration NZ) on enforcement, targeting specific industries and business, however this a bottom of the cliff approach and the problem appears to be the quality of immigrant being accepted into the country.

Perhaps could obtain from IRD and publish statistics on audits, negotiated settlements and prosecution of fraudsters in the hospitality, kiwifruit and certain service industries to shed further light on the extent of the problem.

You should read Prof Christina Stringers report 'Worker Exploitation in New Zealand: A
Troubling Landscape' published in 2016. It is an academic study; the authors were surprised by how widespread the rorts were. The then national govt did nothing to their eternal shame and Mr Lees-Galloway has admitted the problem but claims to have insufficient money to fix it.