A RESPECTED figure in the Chinese community in the North-East is starting a 38-month prison sentence for running a profitable illegal money lending scheme.

Wai Lun Cheung, 47, is said to have made “significant sums” from his activities dealing with a network of borrowers in the Chinese community across the country.

Durham Crown Court heard that it began from his connections among customers he met visiting casinos on Teesside and in Leeds, which saw him become involved in, and then administering a savings scheme within the Chinese community, described as The Pot.

James Dunstan, prosecuting, said this, in itself, did not form part of the case, but it was the interest he charged on a weekly basis to Pot scheme members and subsequent personal loans made to them, which breached consumer credit regulations, as an unlicensed money lender.

Mr Dunstan said one 62-year-old victim, who borrowed £3,000 over two loans and had paid £6,500 in interest, was rung by Cheung claiming she owed a further £13,000.

Some of the messages sent to her were of a threatening nature, warning her she would “bear the consequences” if she did not pay what he claimed she owed.

Following inquiries involving the Birmingham-based Illegal Money Lending Team for England, Durham County Council and Durham Police, his home address in Bowburn, near Durham, was raided in August 2014.

Various documentation plus £24,000 in cash was seized from the premises, above the Chop Suey House run by his wife, in Durham Road West.

Despite making mostly initial denials, he went on to admit making loans of £85,580 on which he charged interest and £59,370 without interest.

There were also a large number of cash deposits into his bank account, of which an estimated one third related to his illegal activity.

Cheung initially admitted four charges relating to illegal money lending and subsequently also pleaded ‘guilty’ to two money laundering charges.

Mr Dunstan said combining the money lending activities with the money laundering it was accepted it involved amounts totalling approximately £250,000.

Anne Richardson, mitigating, said the Hong Kong-born, UK passport holder came to Britain as a 13-year-old.

She said he has a good name within the Chinese community and presented references to the court on his behalf, including one from Jimmy Chan, who chairs the North-East Chinese Association.

Miss Richardson said the POT scheme was set up as Chinese business people had found it difficult acquiring loans and Cheung was trusted to run it, but when he branched into making loans it came as, “something of a shock” to him that it was a strict liability offence if not regulated.

Jailing him, Recorder Simon Hickey described it as “sustained” offending over a seven-and-a-half year period.

“As you were to finally admit, you were making a profit and ran it as a business, at a time you declared having no income, from 2008, other than a £2,500 in 2014 from assisting in your wife’s take away business.”

Proceeds of crime inquiries will now follow with a hearing to be staged at the court, in August, to see what can be confiscated from the defendant.