PwC partner allegedly helped husband in $3.3m fraud scheme

Federal Court filings claim the auditor and her husband used the money to fund their high-flying lifestyle, including purchasing a Porsche and a large family home in Sydney’s north.

Ms Shao in 2018 became the first Chna-born audit partner appointed by PwC Australia after several years at EY. Picture: Krisztian Bocsi/Bloomberg

A senior PwC partner has been accused of being involved in a $3.3m fraud scheme with her husband, the proceeds of which allegedly went to funding a high-flying lifestyle including the purchase of a Porsche Cayenne and a major home renovation.

Hong Shao, a Sydney-based assurance partner at the consulting major, is alleged to have had “actual knowledge” of the apparent fraud perpetrated by her husband Di Wu – or had “shut her eyes to the obvious”, documents filed with the Federal Court allege.

The claim, lodged by advertising materials business Creative Promotions, alleges Mr Wu, over a period of about 12 years from mid-2010 to about July 2022, “obtained money dishonestly and fraudulently from Creative Promotions’’.

Creative Promotions claims Mr Wu, who was employed as an “overseas production assistant’’ in 2005, later started issuing fake invoices to the company’s accountant for payment to three companies – Pretty Arts Products, Best Promotions, and Wenzhou Kindcare Import & Export. Two of these were legitimate suppliers, while Best Promotions was not.

Mr Wu allegedly generated invoices which were entirely fraudulent or which were for amounts in excess of services rendered, with the payments made into at least eight accounts at the Bank of China, JP Morgan Chase, Bank of America, the Agricultural Bank of China and HSBC.

PwC partner Hong Shao.

It is alleged payments were eventually routed back to Mr Wu’s Westpac account and a Bank of China account in Ms Shao’s name.

Some of these payments, most of which were for $US49,990 ($75,253), were labelled “school fee” and “living expense’’.

Other payments identified in the statement of claim have the transaction descriptions “new home”, “slab”, “gyprock” and “concrete pouring”, while $210,035 is alleged to have been paid to Porsche on May 27, 2021.

The claim alleges the proceeds, which total $US2.17m, were at least in part paid into accounts in the name of one or both of Mr Wu and Ms Shao, and were used in part to pay the mortgage of a house in the northern Sydney suburb of Lindfield purchased in 2016 for $2m.

Ms Shao in 2018 became the first China-born audit partner appointed by PwC Australia after several years at EY.

Ms Shao declined to comment. The Australian has also sought comment from PwC.

Ms Shao, it is alleged, “assisted Mr Wu in operating the scheme’’ and “applied or was aware of the application of the proceeds ... to the Pleasant Avenue property, the NAB home loan, renovations and Porsche and to otherwise fund her lifestyle’’.

“Ms Shao had actual knowledge of the essential matters making up Mr Wu’s breaches of fiduciary duty pleaded ... or, in the alternative, shut her eyes to the obvious; in the further alternative, wilfully and recklessly failed to make the inquiries that an honest and reasonable person would make; or, in the yet further alternative, had knowledge of circumstances that would indicate those facts to an honest and reasonable person,’’ the claim says.

“Ms Shao was ‘involved’ in Mr Wu’s contraventions (of the Corporations Act) in that she aided, abetted, counselled or procured, was directly or indirectly, knowingly concerned in or party to the contraventions or conspired with Mr Wu and possibly others to effect the contraventions.’’

Creative Promotions is seeking compensation and exemplary damages from both Mr Wu and Ms Shao.

Creative Promotions says in its claim that further details of Mr Wu’s alleged scheme are likely to be lodged with the Federal Court following discovery, however its investigations have been hampered because, it says, Mr Wu deleted the contents of his company email account “after (he) became aware that Creative Promotions was investigating the scheme, between around 28 July 2022 and 9 August 2022’’.

Creative Promotions claims he also accessed the company’s customer relationship management software and made alterations in a bid to “cover up the scheme’’ and deleted the contents of a shared network drive.

It is also claimed he “took or disposed of’’ his work laptop.

A defence is yet to be filed in the matter.

No charges have been laid against Mr Wu or Ms Shao.