Ex-bank manager admits role in JPY400m investment fraud revealed in ICAC corruption probe

An ICAC corruption investigation revealed that an illegal syndicate, with the assistance of bank officers in signing and issuing false bank documents, had deceived Japanese investors into making investments of over JPY400 million (about HK$28.4 million) in various companies which claimed to take part in investment projects in Africa by falsely representing that their bank accounts held asset totalling over HK$37 billion. While three out of five defendants had earlier entered guilty pleas, one more former bank manager today (August 11) pleaded guilty to conspiracy to defraud at the District Court.

Leung Ho-yin, 39, former relationship manager of Standard Chartered Bank (Hong Kong) Limited (Standard Chartered Bank), today pleaded guilty to two counts of conspiracy to defraud, contrary to the Common Law. Two other former relationship managers of Standard Chartered Bank, Woo Man-ho and Chan Tak-ching, both 38; and Law Man-fai, 51, self-employed financial consultant; had earlier pleaded guilty to a total of five counts of conspiracy to defraud.

Deputy Judge Ms May Chung Ming-sun adjourned their case to October 23 for mention, and granted bail to the four defendants.

The ICAC investigation arose from a corruption complaint. At the material time, Woo, Chan and Leung respectively working at Standard Chartered Bank’s business banking department and priority banking department. The bank would issue documents to confirm the balance of a client’s account held with the bank upon request, but the trio were not authorised to sign and issue those documents. At that time, Law was a self-employed financial consultant.

The court heard that between January 2015 and September 2016, the four defendants had conspired with four foreign nationals to defraud various Japanese investors to invest in ADF Capital Limited (ADF) and a number of companies by using false proof of fund letters and corporate refund promissory notes (CRPNs) signed by Woo and Chan, purportedly issued by Standard Chartered Bank.

The four foreign nationals included two shareholders-cum-directors of ADF, respectively a Zambian man and a Korean man. Another individual was a Thai man, who was Chan’s client; and the remaining individual was a Japanese woman, who was the chief executive officer of a company.

Leung admitted that he had conspired with the three co-defendants, together with three of the foreign nationals, to use four false CRPNs involving promised returns totalling US$7.2 million (over HK$56 million) to falsely represent that Standard Chartered Bank was the guarantor of ADF which undertook to pay the relevant investors. As a result, various Japanese investors were deceived into making investments totalling over JPY400 million (about HK$28.4 million) to ADF and a number of companies.

Co-defendants, namely Woo, Chan and Law, admitted that they had falsely represented that the Thai man had asset of 3.3 billion euros (about HK$25.5 billion) in the bank account held with Standard Chartered Bank, and issued eight false proof of fund letters.

Meanwhile, Woo admitted that he had conspired with the Zambian man to issue a false proof of fund letter to falsely represent that the latter’s company had funds of US$1.5 billion (about HK$11.6 billion) available for investments in Africa. Law admitted that he and individuals implicated in the present case had made use of four other CRPNs to make false representations that Standard Chartered Bank was the guarantor of ADF which undertook to pay US$50 million (over HK$390 million) for the CRPNs.

The ICAC enquiries revealed that Standard Chartered Bank had never held the assets concerned on behalf of the Thai man, while the Zambian man’s company had never held any bank account with the bank.

The remaining co-defendant, Catherine Kum Kit-ching, 57, manager of ADF, earlier pleaded not guilty to one count of conspiracy to deal with property known or believed to represent proceeds of indictable. The trial will commence tomorrow (August 12).

Standard Chartered Bank had rendered full assistance to the ICAC during its investigation into the case.

The prosecution was today represented by prosecuting counsel Wong Hay-yiu, assisted by ICAC officer Janice Chan.