SME duo jailed for $102m bank loans fraud revealed in ICAC graft probe
2022-10-24
A director and a former accounting clerk of a Small and Medium Enterprise (SME), charged by the ICAC, were today (October 24) respectively sentenced to over 33 and 36 months’ imprisonment at the District Court for conspiracy to defraud four banks of 83 loans totalling over $102 million and banking facilities totalling $31 million revealed in the course of a corruption investigation.
Chan Wing-fuk, 62, sole director and shareholder of now defunct Waty International Company Limited (WICL), earlier pleaded guilty to 20 counts of conspiracy to defraud, contrary to Common Law. Today he received a jail term of 33 months and 24 days.
Co-defendant Wong Tsz-wa, 30, former accounting clerk of WICL, who was convicted of two of the charges after trial, was sentenced to 36 months’ imprisonment.
In sentencing, Deputy Judge Ms Katherine Lo Kit-yee said this case involved serious crimes of using false documents to defraud banks of substantial amount of loans, warranting deterrent custodial sentences. The court took five and a half years in jail and four years in jail as the respective starting point of the duo. Their sentences were reduced, having considered Chan’s guilty plea and the duo’s various mitigating factors.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences took place between August 2010 and January 2015.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, namely SME Loan Guarantee Scheme (SGS), Special Loan Guarantee Scheme (SpGS) and SME Financing Guarantee Scheme (SFGS), to assist SMEs to obtain credit facilities from banks by providing guarantees to them.
The court heard that in mid-2010, Chan became the sole director and shareholder of WICL upon the invitation of its de facto owner and received a monthly salary of $20,000.
WICL did not have any actual business and was set up solely for the purpose of applying for loans with various banks. Chan was only required to sign on documents for making loan applications while the company’s accounting and administrative matters were handled by Wong and a female associate of the de facto owner of WICL.
Acting on the instructions of WICL’s de facto owner, Chan made various applications for credit facilities and loans with four banks, namely Citibank (Hong Kong) Limited, Dah Sing Bank Limited, DBS Bank (Hong Kong) Limited and The Hongkong and Shanghai Banking Corporation Limited.
The court heard that Chan had conspired with the WICL’s de facto owner and his female associate to submit false supporting documents to defraud the above four banks. Meanwhile, Wong had conspired with Chan and the aforesaid persons to defraud two of the banks. The false supporting documents concerned included bank statements, auditor’s reports, as well as invoices, delivery notes and packing lists purportedly in relation to transactions between WICL and its seven suppliers.
As a result, the four banks were caused to grant banking facilities totalling $31 million and 83 loans totalling over $102 million to WICL, and to release the sums of over $102 million directly to the seven suppliers concerned. ICAC enquiries revealed that the sums released to the seven suppliers were subsequently distributed to various bank accounts held by Wong, WICL, WICL’s de facto owner and his female associate.
Wong was earlier found guilty of his role in conspiring with Chan and others to deceive two of the above banks into granting 41 loans totalling over $57 million to WICL.
Chan earlier admitted that he had also conspired with others, including the WICL’s de facto owner and his female associate, to defraud the TID and the HKMC by falsely representing that all the information contained in five application forms for the SGS and the SpGS and two application forms for the SFGS was true, accurate and complete.
The TID, the HKMC and the four banks concerned had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Paggie Lee, assisted by ICAC officer Gary Li.
Chan Wing-fuk, 62, sole director and shareholder of now defunct Waty International Company Limited (WICL), earlier pleaded guilty to 20 counts of conspiracy to defraud, contrary to Common Law. Today he received a jail term of 33 months and 24 days.
Co-defendant Wong Tsz-wa, 30, former accounting clerk of WICL, who was convicted of two of the charges after trial, was sentenced to 36 months’ imprisonment.
In sentencing, Deputy Judge Ms Katherine Lo Kit-yee said this case involved serious crimes of using false documents to defraud banks of substantial amount of loans, warranting deterrent custodial sentences. The court took five and a half years in jail and four years in jail as the respective starting point of the duo. Their sentences were reduced, having considered Chan’s guilty plea and the duo’s various mitigating factors.
The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences took place between August 2010 and January 2015.
Between 2008 and 2011, the Trade and Industry Department (TID) and the Hong Kong Mortgage Corporation Limited (HKMC) respectively launched various schemes, namely SME Loan Guarantee Scheme (SGS), Special Loan Guarantee Scheme (SpGS) and SME Financing Guarantee Scheme (SFGS), to assist SMEs to obtain credit facilities from banks by providing guarantees to them.
The court heard that in mid-2010, Chan became the sole director and shareholder of WICL upon the invitation of its de facto owner and received a monthly salary of $20,000.
WICL did not have any actual business and was set up solely for the purpose of applying for loans with various banks. Chan was only required to sign on documents for making loan applications while the company’s accounting and administrative matters were handled by Wong and a female associate of the de facto owner of WICL.
Acting on the instructions of WICL’s de facto owner, Chan made various applications for credit facilities and loans with four banks, namely Citibank (Hong Kong) Limited, Dah Sing Bank Limited, DBS Bank (Hong Kong) Limited and The Hongkong and Shanghai Banking Corporation Limited.
The court heard that Chan had conspired with the WICL’s de facto owner and his female associate to submit false supporting documents to defraud the above four banks. Meanwhile, Wong had conspired with Chan and the aforesaid persons to defraud two of the banks. The false supporting documents concerned included bank statements, auditor’s reports, as well as invoices, delivery notes and packing lists purportedly in relation to transactions between WICL and its seven suppliers.
As a result, the four banks were caused to grant banking facilities totalling $31 million and 83 loans totalling over $102 million to WICL, and to release the sums of over $102 million directly to the seven suppliers concerned. ICAC enquiries revealed that the sums released to the seven suppliers were subsequently distributed to various bank accounts held by Wong, WICL, WICL’s de facto owner and his female associate.
Wong was earlier found guilty of his role in conspiring with Chan and others to deceive two of the above banks into granting 41 loans totalling over $57 million to WICL.
Chan earlier admitted that he had also conspired with others, including the WICL’s de facto owner and his female associate, to defraud the TID and the HKMC by falsely representing that all the information contained in five application forms for the SGS and the SpGS and two application forms for the SFGS was true, accurate and complete.
The TID, the HKMC and the four banks concerned had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by Senior Public Prosecutor Paggie Lee, assisted by ICAC officer Gary Li.