Chinese mining executive is forced to pay back $400,000 after falsely claiming to own the largest jade mine in Australia as part of visa-for-cash scheme
- Chinese student’s family scammed out of more than $300,000 in mining deal
- Haolin Li agreed to buy a stake in GWM Resources for non-existant jade mine
- GWM director De Hong Yu said he would help him to get permanent residency
GWM Resources director De Hong Yu claimed he ran largest jade mine in Australia
A Chinese mining executive who misled an investor by falsely claiming to own Australia’s largest jade mine has been ordered to repay nearly $400,000.
International student Haolin Li, from China, was seeking permanent residency in Australia when he invited GWM Resources director De Hong Yu to dinner with his visiting father – the pair exchanging numbers and WeChat details.
Five months later in September 2017, Mr Li went to GWM’s office in Thornleigh, Sydney where Mr Yu made claims about owning the jade mine and that he could help him get residency if he invested $1.2 million in his company.
He initially claimed his company was worth $15 million and asked for a 10 per cent stake at $1.5 million but said he could speak to other shareholders about a discount as his family could help ‘develop’ the company further.
‘My company owns the largest jade mine in Australia. The investment in my company will help you to obtain permanent residency. After that, you can get your investment fund back with profit.’ Mr Yu said, according to court documents seen by the Daily Telegraph.
Jade (pictured) is found throughout Australia and is used primarily in jewelry
Mr Yu claimed he needed the money to fund an Initial Public Offering to list the miner on the Australian Stock Exchange.
‘Ok. But is my investment safe? Will I lose money?’ Mr Li asked.
‘Once the company is listed, its prospects are brilliant. The return of your investment is guaranteed. You will have a good return,’Mr Yu replied.
The student then asked if he would personally help him with the residency and how long the process would take.
Mr Yu assured him he would, and the visa would take about six months – with his deal offering him a rare opportunity to make money while he waited.
After speaking to his parents, a $150,000 deposit was wired from Mr Li’s mother’s account to GWM a month later, followed by another $184,662.90.
That same month a friend suggested he check Mr Yu’s claims, after which he found an article which the court accepted caused him to doubt whether GWM actually did own any jade mines in Australia.
International students Haolin Li said he began to doubt whether GWM owned any jade mines in Australia after reading articles online (file image)
After tracking him down at his office, Mr Li asked for his money back despite Mr Yu offering him a job an insisting the deal was on track.
The money was not returned – leading to the student’s parents suing.
The NSW District Court in March ordered Mr Yu repay the $334,692.90 plus $55,240 in interest after finding his conduct was misleading and deceptive in breach of consumer law.
This week Mr Yu told the Daily Telegraph the case was a ‘misunderstanding’ and claimed his jade mine would have been the only one of its kind in Australia.
He said he was appealing the decision.