Rising star PwC partner Shao Hong implicated in $3.3 million fraud

Sydney-based PwC partner Shao Hong has been implicated in a $3.3 million fraud claim lodged in the Federal Court, accused of being an active or knowing participant.

A prominent partner of PwC in Australia has been accused of participating in a $3.3 million fraud perpetrated by her husband, according to a report from news publication the Australian.

Shao Hong, noted as PwC’s first Chinese-born audit partner on her ascension to the top ranks in 2018, is alleged to have joined or willfully ignored her husband Di Wu’s activities in setting up an elaborate system of fake and altered invoices to defraud his employer.

The Sydney-based family-owned company, Creative Promotions, has since lodged a lawsuit in the Federal Court, with legal documents obtained by News Limited media outlets detailing a lengthy period of systematic, coordinated fraud alleged to have taken place since 2010, whereby Wu together with Hong and “possibly others” conspired to digitally alter existing invoices and create entirely fake ones – totaling $3.3 million over a decade.

The stolen money, it’s alleged, was then used via a convoluted system of bank transfers to fund their lavish lifestyle, including renovations on a six-bedroom mansion in Sydney’s North Shore and the purchase of a $200,000 luxury Porsche coupe. It’s in this respect the claim states that Hong had at the very least “shut her eyes to the obvious”, and “willfully and recklessly failed to make the inquiries that an honest and reasonable person would.”

Moreover, its alleged that large sums of the ill-gotten money were regularly funneled to an Australian bank account in Hong’s name, some of it via an ‘employee’ in China by the name of Cheng Yunfei – who Creative Promotions director Mark Isaacs says has never been employed by the company. He and fellow director Barbara Isaacs commenced their investigation into more than 220 orders overseen by Wu back in August.

According to the reports, PwC only became aware of the allegations on Monday, before Chief Strategy and Reputation Officer Sean Gregory then informed the firm’s partnership by email, adding that Hong was currently on a leave of absence from PwC while responding to the personal matter before the courts. Her company contact page has yet to be pulled, although her LinkedIn profile has at some stage been deactivated.

It would represent a considerable fall from grace should Hong be proven to be a willing participant. According to an interview with the AFR, she first migrated to Australia in 2005 with little English after working with EY in China, before then gaining her local chartered accountant qualifications and being appointed as manager at EY three years on. She later joined PwC, and was celebrated as the firm’s first native Chinese partner on her promotion in 2018.

“When I came to Australia, I was well established in China, had a bright future at the Big Four – people thought I was crazy, and maybe I am,” Hong stated last year in her interview with the AFR. “I’d never even been to Australia and I’ve never worked as hard as in those first six months. I even forgot my husband’s birthday!” On the subject of her husband, she adds; “He’s my role model and my biggest support.”