Company directors jailed for $10.5m credit fraud
2002-1-10
Two company directors were today (Thursday) sent to jail by the District Court for conspiring to cheat bank credit facilities totalling $10.5 million with bogus business transactions.
Tam Kei-kwong, 49, shareholder cum director of Pure Guard Industrial Limited (Pure Guard) and Dragon Marine Services Ltd. (Dragon Marine), and Leung Chi-por, 51, shareholder cum director of Pure Guard, were respectively jailed for 15 months and 12 months.
The defendants were earlier found guilty on a total of 17 charges of conspiracy to defraud.
Deputy Judge Anthony Kwok said although the loans had been repaid and the bank had not suffered any actual losses, the offences committed by the defendants were nonetheless serious.
The case came to light during the course of an ICAC investigation into alleged credit fraud and corruption involving bank officers.
The charges stated that the defendants had conspired with Lee Tsang-kong, Lam Shuk-yi and others to defraud Hua Chiao Commercial Bank Limited by dishonestly:
- causing Dragon Marine to apply and utilize credit facilities from the bank in the form of 17 L/Cs in total;
- submitting to the bank false documents purportedly evidenced genuine underlying commercial transactions between Dragon Marine and Pure Guard;
- causing the bank to issue a total of $10.515 million to Pure Guard under such L/Cs.
Lee was another shareholder of Dragon Marine, while Lam was the company's manageress.
The court heard that between October 1993 and August 1997, the defendants submitted a total of 17 applications for Letters of Credit (L/Cs) to Hua Chiao Commercial Bank Ltd in favour of Pure Guard.
All these applications were supported by false documents in relation to bogus business transactions between Pure Guard and Dragon Marine over the trading of water purifiers.
As a result, the bank was caused to issue a total of $10.515 million in credit facilities to Pure Guard.
The court also heard that after deducting $17,000 as "handling charge", Pure Guard remitted the remaining sums to Dragon Marine.
The prosecution was today represented by Susanna Ku on a fiat, assisted by ICAC officer Patrick So.
Tam Kei-kwong, 49, shareholder cum director of Pure Guard Industrial Limited (Pure Guard) and Dragon Marine Services Ltd. (Dragon Marine), and Leung Chi-por, 51, shareholder cum director of Pure Guard, were respectively jailed for 15 months and 12 months.
The defendants were earlier found guilty on a total of 17 charges of conspiracy to defraud.
Deputy Judge Anthony Kwok said although the loans had been repaid and the bank had not suffered any actual losses, the offences committed by the defendants were nonetheless serious.
The case came to light during the course of an ICAC investigation into alleged credit fraud and corruption involving bank officers.
The charges stated that the defendants had conspired with Lee Tsang-kong, Lam Shuk-yi and others to defraud Hua Chiao Commercial Bank Limited by dishonestly:
- causing Dragon Marine to apply and utilize credit facilities from the bank in the form of 17 L/Cs in total;
- submitting to the bank false documents purportedly evidenced genuine underlying commercial transactions between Dragon Marine and Pure Guard;
- causing the bank to issue a total of $10.515 million to Pure Guard under such L/Cs.
Lee was another shareholder of Dragon Marine, while Lam was the company's manageress.
The court heard that between October 1993 and August 1997, the defendants submitted a total of 17 applications for Letters of Credit (L/Cs) to Hua Chiao Commercial Bank Ltd in favour of Pure Guard.
All these applications were supported by false documents in relation to bogus business transactions between Pure Guard and Dragon Marine over the trading of water purifiers.
As a result, the bank was caused to issue a total of $10.515 million in credit facilities to Pure Guard.
The court also heard that after deducting $17,000 as "handling charge", Pure Guard remitted the remaining sums to Dragon Marine.
The prosecution was today represented by Susanna Ku on a fiat, assisted by ICAC officer Patrick So.