Listed company's former chairman gets four years for $36m L/C fraud
2002-10-23
The former chairman of a listed company was today (Wednesday) sentenced to four years' imprisonment at District Court for his involvement in a $36 million Letters of Credit (L/C) fraud based on bogus commercial transactions.
Chan Chun-hung, 45, former chairman of Hung Fung Group Holdings Limited (Hung Fung), earlier pleaded guilty to 12 charges of conspiracy to defraud. The court had taken into consideration 11 other similar offences in sentencing.
Hung Fung's former manager Man Man-kwan, jointly charged with Chan in the same case, was jailed for two years and three months today.
Man, 44, earlier admitted seven counts of conspiracy to defraud. The court ordered the remaining 16 conspiracy charges be left on file.
In sentencing, Judge Chua said custodial sentences were meted out to the defendants to reflect the criminality of their fraudulent L/C scheme, which lasted for two and a half years and involved six banks.
The case arose from a corruption complaint, alleging that some bank staff had corruptly connived at a bogus L/C scheme initiated by Chan. ICAC enquiries uncovered the conspiracy offences.
The court heard that between January 1998 and July 2000, Chan and Man had conspired to defraud six banks over the applications for 23 L/Cs, made under the name of Hung Fung's subsidiary, Hung Cheong Toys International Limited (Hung Cheong).
In order to support the L/C applications, the defendants had submitted false documents to the banks, purportedly evidencing genuine underlying commercial transactions between Hung Cheong and four other companies.
As a result, the banks released $36 million in total to the four companies, which were in fact shell companies.
The prosecution was today represented by Juliana Chow on a fiat, assisted by ICAC officer Patrick So.
Chan Chun-hung, 45, former chairman of Hung Fung Group Holdings Limited (Hung Fung), earlier pleaded guilty to 12 charges of conspiracy to defraud. The court had taken into consideration 11 other similar offences in sentencing.
Hung Fung's former manager Man Man-kwan, jointly charged with Chan in the same case, was jailed for two years and three months today.
Man, 44, earlier admitted seven counts of conspiracy to defraud. The court ordered the remaining 16 conspiracy charges be left on file.
In sentencing, Judge Chua said custodial sentences were meted out to the defendants to reflect the criminality of their fraudulent L/C scheme, which lasted for two and a half years and involved six banks.
The case arose from a corruption complaint, alleging that some bank staff had corruptly connived at a bogus L/C scheme initiated by Chan. ICAC enquiries uncovered the conspiracy offences.
The court heard that between January 1998 and July 2000, Chan and Man had conspired to defraud six banks over the applications for 23 L/Cs, made under the name of Hung Fung's subsidiary, Hung Cheong Toys International Limited (Hung Cheong).
In order to support the L/C applications, the defendants had submitted false documents to the banks, purportedly evidencing genuine underlying commercial transactions between Hung Cheong and four other companies.
As a result, the banks released $36 million in total to the four companies, which were in fact shell companies.
The prosecution was today represented by Juliana Chow on a fiat, assisted by ICAC officer Patrick So.