AVALON – Within the dry, careful language of a recent appellate court decision waits a tale of international romance and fraud worth at least hundreds of thousands of dollars – likely totaling in the millions.
Appellate Judges Douglas Fasciale and Ronald Susswein Feb. 23 affirmed a Superior Court decision denying an appeal by Ling Zhou of her guilty plea in an email scam that misdirected $788,477 from an Avalon property’s sale to on offshore account.
A grand jury indicted Ling Zhou, 55, of Cupertino, California, in August 2018 on charges of money laundering and theft by deception and impersonation, Cape May County Prosecutor Jeffrey Sutherland announced at the time. The charges stemmed from 2017, when the Prosecutor’s Office and Avalon police investigated the defrauding of the Seaboard Title Company of Avalon of hundreds of thousands of dollars.
According to the court documents, after the sale, the seller instructed the title company to mail the check. Soon after, however, new instructions arrived, requesting the money instead be sent by wire transfer.
No one at the title company noticed a subtle change in spelling on the email address, which turned out to be fraudulent. The money was instead wired to a different Wells Fargo bank account opened in Santa Clara, California, under the name “Happy Oceans Inc.,” bearing Zhou’s signature.
The money was moved almost immediately to an account outside of the U.S.
According to the court decision, Zhou was already under investigation over similar transactions.
“In the course of those investigations, defendant admitted to receiving large sums of money and sending the money to foreign accounts. She admitted to investigators that she knew some of the transferred funds were the result of fraudulent activity,” reads the decision. “She also admitted to lying on multiple occasions to conceal fraudulent transactions.”
That was the basis for the grand jury indictment. Zhou’s attorney appealed, arguing that New Jersey lacks jurisdiction to prosecute her, that the prosecution failed to present a sufficient case for theft, and that the prosecutor failed to disclose evidence that could help excuse her.
She later entered a conditional guilty plea to the second-degree crime of financial facilitation of criminal activity, as part of a negotiated deal. The prosecution agreed to drop the remaining counts in the indictment and to recommend a suspended sentence. She received probation, but the appeal continued.
Superior Court Judge Sarah Beth Johnson denied the appeal, a decision the appeals court upheld. First, the judges found that New Jersey clearly has jurisdiction.
“In this instance, the sale of the property occurred in New Jersey, the escrow account containing the proceeds of the sale was located in New Jersey, the fraudulent email that induced the transfer of funds was received in New Jersey, the victim of the criminal scheme was in New Jersey, the financial loss suffered by the victim occurred in New Jersey, and the amount involved that determined the gradation of the money laundering crime is the amount that was stolen from the New Jersey escrow account,” the decision reads. “We view these circumstances as sufficient to establish a direct nexus between defendant's criminal activity and this state.”
The decision also states that the prosecution does not have to prove a defendant’s guilt to a grand jury beyond a reasonable doubt – that is for the trial. The prosecution must merely show a crime happened and evidence the defendant committed it exists. The judges wrote that an indictment is presumed to be valid.
That leaves only the additional evidence, what is described as exculpatory evidence. In this case, it includes extensive correspondence with a mysterious figure called Gerald Moretti, described as a “foreign conman,” with whom Zhou had a romantic relationship.
“She contends the grand jury should have been provided with the voluminous emails and text messages between defendant and Moretti,” state the court documents. Johnson had ruled that the grand jury would have been required to determine the authenticity of a series of disjointed communications taken out of context.”
In any case, the communications do not show that Zhou had no role in sending the “undisputedly fraudulent” email, or that she had reason to believe she had a legal claim to the $788,00 transferred.
“At best, the text messages and emails show that defendant was motivated to commit the offenses by her misguided devotion to Moretti,” reads the decision. “However, such evidence of motive does not directly negate any element of the charged offenses, and thus was not required to be presented to the grand jury.”
Zhou’s probation runs concurrently with another non-custodial sentence imposed in Minnesota for a similar crime.
To contact Bill Barlow, email firstname.lastname@example.org.