ICAC Landmark Cases - The Unmaking of a Legend (Carrian Fraud Case)

The main culprits exhausted every possible means to avoid trial. Nevertheless, the Task Force was undaunted and vowed to bring the corrupt to justice.

A Seven-Year Fight

The high-profile Hong Kong-UK joint arrest operations inevitably alerted the former alternate director of BMFL and created more obstacles to his arrest. The fugitive managed to hide in Europe for two years before the French police could finally tracked him down in 1987.

Many legal hurdles had to be overcome in extraditing the suspects from overseas, and the procedures were complicated and labourous. In consultation with the local judicial authority, TF3 had to craft charges compatible with the laws of both places. And the suspect had a right to appeal to the local judiciary against extradition. As Chu explained: “France has no anti-corruption laws similar to those in Hong Kong, and consequently the French courts had to order the suspect’s release. It was not until 1990 when we amended the charges to ‘conspiracy to defraud’ and ‘theft’ that the French police re-arrested the suspect.”

However, the suspect did not yield and spent another four years fighting the extradition order. Although the French courts had ruled that the man should be extradited back to Hong Kong for trial, the French government considered extradition unnecessary and revoked the courts’ ruling. Chu said: “It was only after repeated extradition applications through French lawyers that we were able to persuade the French Constitutional Court to grant leave to the Hong Kong Government to challenge the French government’s refusal. Only then did we see light at the end of the tunnel, and it was not until February 1994 that we were able to extradite the suspect back to Hong Kong.”

However, as Lo recalled, the extradition trip was not without hitches. Lo recounted the day he was tasked to escort the former alternate director of BMFL back from France: “I remember I was having dinner at home that night when the then Head of Operations Jim Buckle called. He just told me to pack up straight away and travel to France that same night to escort a suspect back home……”

After receiving a call from the then Head of Operations Jim Buckle, Lo headed straight back to office. He was given some cash for contingency use. Lo recalled: “It turned out that an expatriate investigator, Steve Sayell, also got a call from Buckle on the same assignment. Sayell was not a member of the Task Force, but he speaks French and his help was enlisted to assist in communicating with the French authorities.”

The first hurdle they had to clear after arrival was the French immigration service. Lo said: “I was in such a hurry that I didn’t have time to apply for a visa. When I went through the French immigration, I had to identify myself and explain the purpose of my trip. To our relief, they issued a ‘visa on arrival’ to me.”

“After clearing the immigration hurdle, we thought the French police would hand over the suspect to us and that we could return to Hong Kong straight away. But in fact the French police had not even made the arrest! Despite our repeated inquiries through the British embassy in France and the local lawyers commissioned by the Hong Kong Government, we were still being kept in the dark about the arrest operation, which the French police had classified as the top secret.” For a time Lo and Sayell were two extremely anxious men, but they had no other recourse than to wait patiently.

Finally, some four days later, Lo and Sayell were informed by the French police to receive their suspect at the airport. “After both parties had signed the extradition documents, the French police handed over to us the former BMFL alternate director, who was then under our full responsibility. However, we possessed no law-enforcement powers outside Hong Kong and could not handcuff the suspect. We therefore had to be on our highest state of alert to prevent the suspect from resisting or running away.”

(Listen to Lo himself as he explains his mixed feelings)
(in Cantonese only)

We had been waiting for three or four days before the French police instructed us to receive the suspect at the airport the next day. We had not booked the air tickets beforehand since we did not want to alert anyone… To guarantee absolute confidentiality, the suspect had to be taken to the airport immediately after arrest.

Frankly, we were worried that the man would resist or even try to escape. If so, we had no recourse but to restrain him until airport security or the police intervened. Fortunately, it was only an 11-hour flight, and we stayed awake throughout.

Delaying Tactics

Another central figure in the case was the former chairman of BMFL who was a lawyer by profession. He had such extensive legal knowledge that he was far more sophisticated than the former alternate director in abusing the legal process. After his arrest, the former chairman tried every means to frustrate efforts to extradite him. His appeals and judicial review applications went through vitually all levels of the courts in Hong Kong and all the way up to the UK’s Privy Council and the European Commission of Human Rights. He applied for a writ of habeas corpus no less than ten times in the English courts in challenging extradition orders.

However, knowledge of the law seemed to backfire on the former BMFL chairman because his resistance had effectively put him behind bars during the lengthy legal battle. In the seven years from his arrest in 1985 until the end of 1992 when the British courts refused for the tenth time to grant him a writ of habeas corpus, the courts had also been steadfast in refusing him bail. The former chairman remained ‘in custody’ throughout the period and became the ‘longest-serving’ suspect in UK history ahead of a trial and judgment by a court. On 16 December 1992, he was extradited back to Hong Kong to continue his custody at the ICAC Detention Centre. This time a trial in the Hong Kong court was awaiting him.

The Task Force was given less a hardtime from the former BMFL director who was rather cooperative in the subsequent extradition hearing after his arrest in England. He agreed to return to Hong Kong for trial and also pleaded guilty as charged to the offences. He was escorted back to Hong Kong in late 1986.

The late Governor of Hong Kong, Sir Edward Youde, signs the extradition order at the ICAC. Looking on are the then ICAC Commissioner Geoffrey Barnes and former Attorney General Michael Thomas

The extradition battle nagged by the former BMFL chairman

1987	Apr	He lodges an appeal against the extradition in England, on the grounds that he fears a retrial take place after 1997 and his sentence could be served in Mainland China.
	Jun	Applies for a writ of habeas corpus.
	Oct	Submits to the Hong Kong High Court that the Governor’s order for his extradition is unlawful.
	Nov	Applies to the High Court for a judicial review of the extradition order but is rejected. He then lodges an appeal to the Court of Appeal, and withdraws when the Court refuses his request to provide new documentary evidence to support his argument.
1988	Apr	Lodges another appeal to the Hong Kong Court of Appeal to revoke the Governor’s extradition order
	Jun	Applies for a writ of habeas corpus for the second time
	Jul	Appeals to the House of Lords objecting to extradition. Files claims to the London court that he has been appointed Counsellor of the Liberian Embassy in London since October 1984 and therefore enjoys diplomatic immunity.
	Oct	Lodges an appeal with the British Privy Council.Liberia revokes the diplomatic immunity that has been given to him.
1989	Mar	He seeks assistance from the European Commission of Human Rights but is rejected.
1989	Jun	Applies for a writ of habeas corpus for the third time
1990	Feb	Applies for a writ of habeas corpus for the fourth time
1991	Feb	Applies for a writ of habeas corpus for the fifth time
1991	Nov	Applies for a writ of habeas corpus for the sixth time
1992	Jan	Applies for a writ of habeas corpus for the seventh time
	Jul	Applies for a writ of habeas corpus for the eighth time
	Oct	Applies for a writ of habeas corpus for the ninth time
	Dec	Applies for a writ of habeas corpus for the tenth time

Unending Delays

After his arrest, the former Carrian chairman was allowed bail of HK$50 million in cash and a surety of HK$2 million. He was also ordered to surrender his travel documents to the court. By that time the Carrian Group had collapsed; but how wealthy the former Carrian chairman actually was or the whereabouts of the loans obtained from BMFL remained unknown. The prosecution’s worries were not alleviated despite the huge bail amount. The Legal Department’s Principal Crown Counsel raised objections to his bail application on the following grounds: firstly, his foreign nationality and his weak family links in Hong Kong might lead him to abscond; and, secondly, he was so wealthy that he might jump bail to escape trial. The judge, however, insisted on releasing him on bail.

In serving the public interest and for the purposes of minimising prosecution costs, the prosecution requested a joint trial of the former Carrian chairman and the former BMFL chairman, pending the latter’s extradition. The judge granted the prosecution’s wish and, over the following seven years, repeatedly adjourned the former Carrian chairman’s hearing. In 1992, the former Carrian chairman had a mild stroke and later, he submitted a medical report to prove that he had serious heart and ear problems and was not fit for trial. In 1996, he invited three medical experts from England to prove that he was under great pressure and that his health had been deteriorating because of depression.

In his judgment on 27 September 1996, the High Court Judge reproached the former Carrian chairman for choosing to play ‘delaying games’ with the legal system. He also pointed out that each of the defendants had sought every legal and technical means at their disposal to push back the trial.

Cases against the former Carrian chairman

Year of arrest	1983
Offences	Conspiracy to defraud
Case summary	Charged with conspiracy to defraud by providing false information and Carrian performance records to mislead shareholders.
Case summary	The presiding judge acquitted all the defendants in the case in view of duplicate charges and doubtful evidence. They were not required to make a plea.
Year of arrest	1985
Offences	Conspiracy to defraud and bribery
Case summary	Charged with nine offences of conspiracy to defraud BMFL and 14 counts of offences of bribing BMFL senior executives as a reward for obtaining credits without adequate security or guarantees.
	Allowed bail pending trial
	Pleaded guilty to two offences and was sentenced to three years’ imprisonment.
Year of arrest	1988
Offences	Offering bribes
Case summary	Charged with four counts of offering HK$2.37 million to the manager of a European bank and two counts of offering HK$2.43 million to the bank director as rewards for giving favours to the Carrian Group.
Case summary	The prosecution withdrew the charges.
Year of arrest	1989
Offences	Offering bribes
Case summary	Charged with two offences of offering HK$888,000 and 668,000 Carrian shares to a former executive director of an international bank as rewards for giving favours to the Carrian Group.
Case summary	The prosecution withdrew the charges.

Cases against the former Carrian chairman

Year of arrest	Offences	Case summary
1983	Conspiracy to defraud	Charged with conspiracy to defraud by providing false information and Carrian performance records to mislead shareholders.
1983	Conspiracy to defraud	The presiding judge acquitted all the defendants in the case in view of duplicate charges and doubtful evidence. They were not required to make a plea.
1985	Conspiracy to defraud and bribery	Charged with nine offences of conspiracy to defraud BMFL and 14 counts of offences of bribing BMFL senior executives as a reward for obtaining credits without adequate security or guarantees.
		Allowed bail pending trial
		Pleaded guilty to two offences and was sentenced to three years’ imprisonment..
1988	Offering bribes	Charged with four counts of offering HK$2.37 million to the manager of a European bank and two counts of offering HK$2.43 million to the bank director as rewards for giving favours to the Carrian Group.
1988	Offering bribes	The prosecution withdrew the charges.
1989	Offering bribes	Charged with two offences of offering HK$888,000 and 668,000 Carrian shares to a former executive director of an international bank as rewards for giving favours to the Carrian Group.
1989	Offering bribes	The prosecution withdrew the charges.