HKSAR v. Chan Wai Hung, Dennis and Others

DCCC931/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 931 OF 2007

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HKSAR

v.

Chan Wai-Hung, Dennis (D1)

Wan Sai-cheung, Thomas (D2)

Chan Kin-keung (D3)

Chun Ka-tsun (D4)

Tsoi Kai-chung, Terry (D5)

Ng Yun-lam (D6)

Wong Wai-chi (D7)

Lee Wai-tong, Philip (D8)

Lee Kay-kiu, Thomas (D9)

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Before:   Deputy District Judge R Chan

Date:     9 February 2009 at 3.13 pm

Offence:  Conspiracy to defraud, etc. (串謀詐騙等罪項)

Reasons for Sentence

 1. This case involves a highly sophisticated, well-planned and well thought out fraud committed by a syndicate to obtain loans from various local banks.  The syndicate set up three companies, namely Yuan Chien, Orient Power and Mason as fronts to be used as vehicles for obtaining credit facility from the banks.

2. In the application for credit facility false banking documents, accounting documents and commercial documents had been used.  These documents were submitted to the banks as evidence that these syndicate companies were doing genuine businesses with a lot of other companies.  In fact, the syndicate companies were never involved in any genuine business and the so-called supplier companies were all shell companies, bogus suppliers which were not doing any real business at all with the syndicate companies.  But their relationship was clothed in such a way that the banks were misled into accepting that the syndicate companies were actually viable companies.

3. According to the evidence given by the key witnesses in this case, namely Diana Yuan and the 1st defendant, the genuine intention was to obtain loans from various banks by setting up these syndicate companies.  There may have been one or two pieces of small business but the business was never meant to be run in such a scale that the banks would be attracted to granting loans to them.

4. Obviously, the syndicate did not only involve PW1, Diana Yuan, and the 1st accused in this case.  They were of course the prime movers for all these frauds.  But in order to practice these frauds successfully on banks, different people would have to be brought into the scene in order to make the banks believe that they were dealing with genuine businessmen.  There were people brought in to act as persons in charge of the bogus suppliers and their role was to open bank accounts and cause money granted by the banks to be conveyed ultimately back to the syndicate companies.

5. There were people brought in to act as persons in charge of the syndicate companies so that meetings could be arranged between directors of the syndicate companies and the bank staff in order to convince the bank staff that they were genuine businessmen doing genuine business.  Ultimately, the goal was to get loans from these banks.  So these people who were supposed to be persons in charge of the syndicate companies have to present themselves as trustworthy businessmen.

6. In the course of dealing with bank staff, the syndicate members managed to find the so-called factory and office in China so that the bank staff could tour around these facilities obviously with the view to convincing these bank staff that they are dealing with very prosperous businessmen.

7. The degree of sophistication as revealed by the evidence in this case is stunning.  Documents with high degree of authenticity were prepared, bank statements were forged in such a way that even bank people were made to accept that these were genuine bank statements.  If one simply listens to the evidence given by PW1, Diana Yuan, and PW2, Chan Wai-hung, who is also the 1st accused in this case, one may not be able to have the feeling that I got in this case.  Once you start reading the documents, going into the background to these frauds, one would be amazed to find out that in fact we are dealing with some really masterpiece of work here.  I was not surprised that the banks were cheated in this way because it is a highly sophisticated crime committed by highly qualified people.

8. The prime movers in this case are obviously Diana Yuan and Chan Wai-hung, the 1st accused.  Diana Yuan was a former qualified accountant.  She has the ability and skill to forge documents.  She demonstrated in the present case that the degree of forgery that she perpetrated in this case was almost beyond comprehension.  She could easily compile a 30-40 page long audit report, which was easily accepted by bank staff that it was a genuine audit report.

9. After convicting these defendants in this case, I adjourned their sentence for the purposes of obtaining background report on each one of them.  After reading all the background reports and listening to submissions made on their behalf by their counsel, suffice to say that most, if not all of the defendants were people of good background.  Most of them do not appear to be persons who would commit syndicated crimes like this.  The majority of the defendants had been described by their family members, friends and colleagues that they are trustworthy, honest and hardworking.  It is really hard to imagine that these people would commit serious crimes such as this case.

10. The prime movers are Diana Yuan and D1.  There were a lot of other players to be involved.  The degree of their culpability varied person to person so it is not at all possible to take a general view of the defendants’ culpability when it comes to sentencing them.  Each defendant has to be given separate consideration.

1st Defendant

11. He pleaded guilty to Charges 1 and 3; these two charges related to Yuan Chien and Mason.  The 2nd charge, in relation to Orient Power, was ordered to be left on court file.  While the evidence clearly showed that D1 had been actively involved in the operation of all three syndicate companies, I can only sentence him on the basis that he was guilty of the offences relating to Yuan Chien and Mason.  D1 is no doubt actively involved in these two syndicate companies.  He is responsible for contacting and negotiating with some of the bank staff.

12. He took an active part in presenting both Yuan Chien and Mason as viable companies.  He caused the office of Yuan Chien to be rented, gave instructions to various syndicate members, including D2 and D3.  He also recruited D8 and he was also heavily involved in the dealing with D9 when payment to D9 became due and unpaid.  Through his sister he managed to get a sample account from Ernst & Young for the benefit of PW1, Diana Yuan, for Diana Yuan to prepare false audit reports.

13. In mitigation, Mr Ma, counsel on behalf of the 1st accused, submitted to this court that the 1st defendant, while admitting his responsibility in this case, he did not gain much from the operation.  It was submitted that D1 had used some of the benefits he got to pay back some of the outstanding loans.

14. While I may be prepared to accept that he did use some of the money obtained through these operations to pay back some of the outstanding loans, there is very little value when it comes to sentencing.  His effort of paying back some of the outstanding loan payments was clearly not motivated by his realisation of his guilt and that he wanted to make up for his mistakes.  What he did was only an effort to avoid the scheme to blow up at that stage.  That is to say, he did what he was possibly able to do in order to keep the whole thing going.  I am afraid I cannot attach much weight to this.

15. After taking into account all the relevant circumstances and the contents of his report, submission made on his behalf by his counsel, in particular the role played by him, I am of the view that 5 years’ imprisonment is the correct starting point for the conspiracy charges.  In coming to this conclusion I am not relying on the Court of Appeal judgment in respect of Law Chi Man’s(?) appeal.  While I accept that the Court of Appeal in Law Chi Man’s appeal had made points about his involvement and culpability in the conspiracy, I do not take it as a binding authority.  Besides, the role played by D1 in this case, in my view is quite different from that of Law Chi Man.

16. The defendant pleaded guilty to these two charges.  As a result he is entitled to the usual one-third discount.  Mr Ma, on his behalf, urged to this court to give him additional discount for the assistance that he had rendered to the prosecution.  I accept that he has testified for the prosecution.  I accept his evidence and his evidence forms the basis for conviction of a number of other defendants.  Therefore, it is only fair to say that his assistance to the prosecution should be awarded with a further discount.  The question is how much more he deserves.

17. After careful consideration I am of the view that the 1st accused in this case is entitled to a full 50 discount.  It applies to both offences.  Therefore, for the 5 years’ imprisonment that I imposed on him on each of the offences, it is reduced to 2½ years.

18. Next is the question of totality.  Although the 1st defendant was involved in the operation of Yuan Chien and Mason within a relatively short time, the coming into existence of Mason, on the evidence, came almost continuously after the existence of Orient Power.  In my view, these two offences are nonetheless distinct and separate offences and I do not think it is right for me to order a wholly concurrent sentence on both charges.

19. In my view, taking into account all the relevant circumstances, a sentence of 3 years’ imprisonment after discount is appropriate.  I therefore order that 6 months of the 2½ years on Charge 3 is ordered to be served consecutively to the 2½ years I impose in respect of Charge 1.  This is the sentences I impose on the 1st accused.

2nd Defendant

20. He is only involved in the 1st charge.  Although there was evidence that he may well have been involved in activities involving other syndicate companies, the 2nd accused is only convicted of Charge 1 and I can only sentence him on that basis.

21. He was recruited to work in Yuan Chien on a monthly salary.  He was not involved in the setting up of Yuan Chien.  He was never made a director of Yuan Chien.  He did not have to sign any banking documents, loan agreements or personal guarantees.

22. However, he played a very active role in Yuan Chien’s operation.  His involvement included obtaining company chops for the bogus supplies, affixing company chops on forged invoices, he even made forged invoices himself.  He was present on a number of occasions to meet with the bank staff.  When money was deposited into various bogus company accounts by the bank on granting the credit facilities, D2 was given the task of dealing with the money by making sure the money ultimately was channelled back to the syndicate company, namely Yuan Chien.

23. He was also involved in taking bank staff to China to visit Yuan Chien’s office and factory.  He was made contact person of Yuan Chien.  He had, on a number of occasions, spoken to bank staff over the telephone.  Although I cannot view him as the instigator or the prime mover of the operation of Yuan Chien, he came very close to such a position.

24. I have considered all the relevant circumstances.  I have read his report, listened to submissions made on his behalf by his counsel, in my view 3½ years’ imprisonment is an appropriate starting point.

25. He is a person of good character, but for offences such as this the fact that he has a clear record in my view is not going to help him that much.  It is my conclusion that taking into account all the relevant circumstances, including his clear record, the sentence of 3½ years’ imprisonment is appropriate.  There is no valid mitigation to enable me to further reduce that sentence.

3rd Defendant

26. He was convicted of Charges 1, 22 to 26.  The 1st charge is the charge of conspiracy to defraud involving Yuan Chien, whereas the other five charges are all what we commonly call money-laundering charges.  Charges 22 to 24 relate to bogus suppliers, namely CNC, Chequers and Vatex.com; and Charges 25 and 26 relate to bogus supplier companies, namely Lei Tat and Zhejiang.

27. D3’s involvement in Yuan Chien’s operation was that he was the director of the company.  Prior to becoming a director of that company, he was a recipient of Comprehensive Social Security Assistance.  The purpose of him taking up the post of director is obviously because he wanted to improve his life.  By becoming a director of Yuan Chien, he was able to earn more.  But unfortunately he made a wrong decision and he finds himself convicted of these charges.

28. Apart from being a director of Yuan Chien, he also has to sign banking documents, personal guarantees, present at meetings with bank staff as well as dealing with money after money was released by the banks and deposited into the various bogus suppliers’ accounts.

29. He has been involved in cashing a good number of cheques.  Without his involvement, the Yuan Chien operation may not have been accomplished as desired because he was the only director who was locally based.  He is not the mastermind, but his role in Yuan Chien’s operation cannot be underrated.  His role in Yuan Chien is, at best, similar to that of D2.  I therefore take 3½ years’ imprisonment as the starting point on Charge 1.

30. I also considered his personal and family circumstances.  I am alive to the fact that he has to support his wife and a small child.  While I may have a lot of sympathy for his family members, especially the young child, who has to lose the loving care of father for a substantial period of time, but this is not valid mitigation in my view.  D3 should have been aware of all this when he got himself involved in the operation of Yuan Chien.  He cannot simply, after conviction, come back and ask for leniency on that basis.

31. For Charges 22, 23 and 24, they were money-laundering charges involving three bogus suppliers.  Substantial amount of money was involved.  Immediate custodial sentence is inevitable.  Taking into account all the relevant circumstances and the magnitude of the crime involved, I take 2 years’ imprisonment as the appropriate starting point for each of these charges.

32. Now, these three charges relate to bogus suppliers, but they were part and parcel of the same conspiracy that he was involved in.  By agreeing to take part as a syndicate member, D3 obviously was reasonably expected to take up other duties as well.  I therefore opine that for these three charges, 22, 23 and 24, their sentences can run concurrently with each other.  And as I said earlier, because dealing with the proceeds is only part and parcel of the bigger conspiracy that he is involved in, I am of the view that concurrent sentence is appropriate.  I therefore order that for Charges 22, 23 and 24, the sentences are to run concurrently with the sentence that he receives in respect of Charge 1.

33. For Charges 25 and 26, they relate to different bogus suppliers.  They were bogus suppliers involved in Orient Power.  D3 was never charged with conspiracy to defraud involving Orient Power.  I therefore have to apply different consideration for the sentences that I am going to impose in respect of these two charges.  Firstly, for the charges themselves, I take 2 years’ imprisonment as the correct starting point for each one of them.  I am of the view that the circumstances under which he committed these two offences were so intimately connected that I think a wholly concurrent sentence is appropriate.  As a result, for Charges 25 and 26, D3 receives on each charge 2 years’ imprisonment, but these sentences are to run concurrently.

34. Lastly, I have to consider the principle of totality.  Lei Tat and Zhejiang were bogus suppliers in relation to the operation of Orient Power and the activities involving these two bogus suppliers were in no way connected to the operation of Yuan Chien.  I am therefore of the view that a wholly concurrent sentence is inappropriate between Charge 1 and Charges 25 and 26.  I am of the view that 6 months of the concurrent sentence of 2 years is to be served consecutively to the 3½ years D3 receives in respect of Charge 1.

35. To avoid any possible doubt, it also means that these 6 months are to be served consecutively to the 2 years I impose in respect of Charges 22 to 24.  In other words, the rest of the 2 years I impose in respect of Charges 25 and 26, namely 18 months’ imprisonment is to be served concurrently with the sentences that I impose in respect of Charge 1, 22, 23 and 24.

4th Defendant

36. He is found guilty of Charges 1, 2, 3 and 9.  Charges 1, 2 and 3 are conspiracy charges, whereas Charge 9 is a charge of dealing with property known or believed to represent proceeds of an indictable offence.

37. On the evidence accepted by this court D4’s involvement in the Yuan Chien operation is that he is a director of ATA, allows ATA to be used as one of Yuan Chien’s bogus suppliers.  He also assisted in the preparation of false invoices.  He is also involved in a number cooperation agreements, the purpose was clearly to stall the banks on the outstanding loan repayments.

38. Now, for Orient Power, he has rendered assistance to Orient Power in order for the credit facility to be activated.  There were also letters from ATA in respect of Orient Power sent to HSBC.  The purpose of those letters were clearly to stall repayments owed to the bank.  So for his involvement in Yuan Chien and Orient Power cannot be described as an overly active one.  He cannot be described as the instigator; he cannot be described as the mastermind behind the operation of Yuan Chien and Orient Power, but his role in Mason is a lot different.  He was heavily involved from the stage of setting up Mason all the way until the whole of the operation ceased to operate.

39. I even accept that after Diana Yuen’s arrest and detention, he became one of the leading figures in the operation of Mason and the work of forging documents was, to a certain extent, shouldered by him.  He was present in a number of meetings between syndicate members.  He played his part in procuring the use of the factory and people do become responsible persons within Mason.

40. He is a person of good character.  By that I mean he has never been convicted before.  It has been submitted on his behalf that additional weight should be attached to his contribution to society.  A folder containing documents, letters and photographs were submitted by D4’s counsel.  It helpfully take me to accept that the 4th defendant, apart from being a person of clear record, he has made active contribution to society.  I am prepared to accept that he is a person of positive good character and on that basis he will get some discount in terms of sentence.

41. For the first two conspiracy charges involving Yuan Chien and Orient Power, I take the view that although he rendered assistance to the operation of Yuan Chien and Orient Power, his role falls short of that of an active member of the syndicate.  Therefore, in connection to Yuan Chien, his role can be described as one that is lesser than the role played by D2 and D3.  For his involvement in Orient Power, I take a similar view.

42. For each of the first two offences, I take 2 years’ imprisonment as the correct starting point.  The fact that he has a clear record is not able to convince me to reduce his sentence.  His positive good character is.  I am prepared to give the 4th defendant 4 months off on each of the 1st and 2nd charges.

43. For the 3rd charge, which is related to the operation of Mason, as I earlier indicated he played a much more active role than in this fraud.  He contributed his views and opinions on how the company was to be run, he was present in a number of meetings with other syndicate members.  In all the circumstances, I am of the view that 4 years’ imprisonment cannot be said to be inappropriate.  And for the same reason, I am prepared to give the 4th defendant 4 months off because of his positive good character.

44. The 9th charge is a charge of money-laundering involving ATA.  ATA is a bogus supplier used by Yuan Chien to get credit facilities from the banks.  Substantial money was involved.  I therefore take the view that 2 years’ imprisonment is the correct starting point.  And for the same reason, because of his positive good character, I am prepared to give the 4th defendant 4 months off on the sentence of 2 years imposed on Charge 9.

45. Firstly, I have to deal with the sentences I impose in respect of Charge 1 and Charge 9.  In my view, these offences are really part and parcel of the same crime.  By allowing Yuan Chien to use his company, ATA, as a bogus supplier, he became a member of that conspiracy and therefore I am of the view that the 20 months’ imprisonment I impose in respect of Charge 9 ought to be given a wholly concurrent order in relation to Charge 1.  The end result is that the whole of the 20 months I impose in respect of Charge 9 is ordered to be run concurrently with the 20 months I impose in respect of Charge 1.

46. Then I have to proceed to consider totality.  D4’s involvement in Orient Power and Mason is quite different from his involvement with Yuan Chien.  As they are separate and distinct offences I therefore do not think it is appropriate to order a wholly concurrent sentence in respect of Charges 2 and 3.  In my view, 4 months out of the 20 months that he receives in respect of Charge 2 and 6 months out of the 44 months he receives from Charge 3 ought to be served consecutively to the sentence I impose in respect of Charge 1 to reflect the total culpability of these offences.

47. To avoid any possible doubt, the effect of my order is therefore like this.  For the 1st charge, 20 months’ imprisonment; 2nd charge, 20 months’ imprisonment; 3rd charge, 44 months’ imprisonment; 9th charge, 20 months’ imprisonment.  The 20 months’ imprisonment in respect of Charge 9 is ordered to be served concurrently with the 20 months in respect of Charge 1.  Firstly, I order that 6 months of the 20 months I impose in respect of the concurrent on Charges 1 and 9 be served consecutively to the 44 months I impose in respect of Charge 3.  A further 4 months out of the 20 months I impose on Charge 2 is ordered to be served consecutively to the 44 months I impose on Charge 3.

48. I have to use the longest imprisonment term as the basis for concurrent order.  For Charges 1 and 9, they are concurrent sentences so it is 20 months in total.  Four months of the concurrent sentence of 20 months be served consecutively to the 44 months.  For the 20 months I impose in respect of Charge 2, I order 6 months to be served consecutively to the 44 months as well as the additional 4 months, making a total of 54 months.

5th Defendant

49. He was, at the time, another director of ATA.  From the evidence accepted by this court, ATA was one of the bogus suppliers used by Yuan Chien and I find on evidence that D5 must be a party to that arrangement.  He had signed cheques on behalf of ATA in order to channel some of the money back to Yuan Chien.  So all in all his involvement in respect of Yuan Chien is very similar to that of D4.

50. In respect of Orient Power, Charge 2, his involvement is evidenced by lending of money to PW2 or Orient Power.  In the course of his involvement he also prepared letters, and his role in respect of Orient Power, again is very similar to that of D4.  Now, as far as his involvement in Mason is concerned, he took a much more active role.  I accept that he was involved in the setting up of Mason, he was involved in the division of labour amongst syndicate members.  He was present at the meetings with other syndicate members in respect of the operation of Mason.  He also assisted Diana Yuen in preparing forged documents.  Again, his role in respect of the operation of Mason is very similar to that of D4.

51. He is a person of clear record.  I said it before that for offences of this nature, a pure, clear record is not going to help a defendant a lot.  In the course of D5’s case, evidence was adduced in relation to his contribution to society.  I have given consideration to those matters, the conclusion is that I am prepared to accept that D5 is a person of positive good character and for that reason, D5 is going to get some discount of his sentence.

52. For Charges 1 and 2, I take 2 years as the correct starting point.  For his positive good character I give D5 4 months off the 2 years’ imprisonment term.  There is no further mitigation.  Therefore, for Charges 1 and 2, the 5th defendant is sentenced to 20 months on each charge.

53. For his involvement in Mason, for similar reasoning I take 4 years as the appropriate starting point.  He gets 4 months off because of his positive good character and the result is that he is sentenced to 44 months’ imprisonment in respect of Charge 3.

54. Charge 9 is a money-laundering charge involving ATA.  ATA is a bogus supplier used by Yuan Chien.  Therefore, D5’s involvement in Charge 9 is really part and parcel of the bigger conspiracy.  I take 2 years’ imprisonment as the appropriate starting point for Charge 9, which is reduced by 4 months because of his positive good character resulting in 20 months’ imprisonment, which is to be served concurrently with the 20 months he receives in respect of Charge 1.

55. On totality, I’ve come to a similar conclusion as in D4’s case.  I am of the view that certain part of the sentences that he receives in respect of Charges 1 and 2 ought to be make concurrent to the sentence that he receives in respect of Charge 3.  I order that 4 months out of the concurrent sentence of 20 months in respect of Charges 1 and 9 is to be served consecutively to the 44 months I impose in respect of Charge 3.

56. On Charge 2, I am of the view that 6 months of the 20 months’ imprisonment on Charge 2 ought to be served consecutively to the 44 months I impose in respect of Charge 3, as well as the 4 months that was ordered to be consecutive out of the 20 months’ imprisonment for Charges 1 and 9.

57. The end result is this.  For Charges 1, 2, 3 and 9, D5 is sentenced to a total of 54 months’ imprisonment.

6th Defendant

58. He pleaded guilty to Charges 4 and 5 in the course of this trial.

59. While I accept that the pleas of guilty ought to be given due consideration and the appropriate discount, these pleas were not tendered at the first available opportunity.  I therefore take the view that he will not get the full usual one-third discount.

60. In respect of Charges 4 and 5, they were money-laundering charges involving two bogus suppliers, Chequers and CNC.  A substantial amount of money was involved.  I am therefore of the view that immediate custodial sentence is inevitable.  For money-laundering charges of this magnitude a starting point of 2 years’ imprisonment is appropriate.

61. The 6th defendant pleaded guilty to these charges during the trial.  I have considered the question of how much discount he should be getting and I come to the conclusion that a discount of 25 per cent is warranted.

62. Now, for Chequers and CNC, they were two different companies but they were involved in the operation of the same syndicate company.  And as far as D6’s involvement is concerned, he was only given the task of becoming a director or the person in charge of these two companies so that the money released by the bank can be channelled back to Yuan Chien.

63. What D6 did in this case is really no more than assisting the money to be laundered and the two companies, namely Chequers and CNC, were involved in the same operation.  I therefore think that a concurrent sentence is appropriate.

64. The result is this.  To each of the charges to which the 6th defendant pleaded guilty, he is sentenced to 18 months’ imprisonment after giving him 25 per cent discount of the 2 years’ imprisonment as the starting point.  These sentences are to run concurrently with each other making a total of 18 months.

7th Defendant

65. D7 is only guilty of Charge 6.  He is only involved in allowing Vatex.com or assisting Yuan Chien in making use of Vatex.com as one of the bogus suppliers.  As  he is only involved in one charge with lesser amount of money when compared to the charges involving D6, I am of the view that in D7’s case he deserves a lower starting point than 2 years.

66. I take 21 months’ imprisonment as the starting point.  He tendered his plea of guilty before the trial started.  He should be entitled the full one-third discount.  After I have considered the other relevant circumstances surrounding D7, I find no other valid mitigation.

67. The result of my order is, therefore, this.  I take 21 months’ imprisonment as the starting point in respect of Charge 6.  I reduce it by one-third making the sentence 14 months’ imprisonment and this is the sentence that D7 receives.

8th Defendant

68. He is guilty of the 2nd charge.  It is a charge of conspiracy to defraud involving Orient Power.

69. On the evidence accepted by this court he was recruited by the 1st defendant on a monthly salary.  There was some dispute as to actually how much he was paid every month, but at the end of the day it does not matter because it is not disputed that he is not paid for the last few months of his service.  Other than that, he gets no other additional benefits.

70. His involvement in Orient Power is that he assisted in making company chops.  He assisted in forging some invoices.  He was also involved in the cashing of a good number of cheques in relation to Lei Tat and Zhejiang.  He was not in a position as D6 and D7.  He was not merely acting as a person in charge of a bogus supplier.  D8 was actually involved in a lot of daily operation of Orient Power.  But his involvement, if one has to compare that to the involvement of similar defendants or defendants in similar position, I am prepared to accept that the culpability of D8 is perhaps lower.

71. I find him to be somewhere in the position as somewhere between an active syndicate member and as a mere helper to set up a bogus supplier.

72. I have read his report, I have listened to submission made by his counsel on his behalf, perhaps what I can say is this.  I have a lot of sympathy for D8 to be involved in this case.  Perhaps he found himself at the wrong place at the wrong time and more importantly, because of his financial position, he was picked out by other people, in this case by D1, who obviously feels that he is a very reliable person to work with.  Because of his urge to earn money, D8 quite wrongly, and perhaps stupidly, got himself involved in this case.

73. In all the circumstances I am of the view that 2½  years’ imprisonment is appropriate.  There is no other valid mitigation that can enable me to reduce the sentence any further.  D8 is therefore convicted of Charge 2 and sentenced to 2½ years’ imprisonment.

9th Defendant

74. D9 is guilty of two charges of dealing with property known or believed to represent proceeds of an indictable offence.  They are Charges 7 and 8.

75. As the evidence unfolds, these two charges involved the operation of the two bogus supplier companies, Lei Tat and Zhejiang, and some $11.5 million was involved.

76. D9 allowed himself to be used as the person in charge of these two companies.  He agreed to sign blank cheques in advance so that money could be channelled back to the syndicate company.  I think, in the circumstances, immediate custodial sentence is inevitable.  For the amount of money involved and the role he played, I am of the view that a sentence of 2 years’ imprisonment is appropriate.

77. I then look for mitigation.  I do not find any.  I therefore order that on Charges 7 and 8, D9 is sentenced to 2 years’ imprisonment on each charge.

78. Charge 2 is a conspiracy to defraud charge involving Orient Power.  The extent of D9’s involvement in respect of Orient Power is that he allowed himself to be used by Orient Power as a person in charge of the two bogus suppliers, namely Lei Tat and Zhejiang.

79. He assisted in cashing money on one occasion.  He also assisted by signing blank cheques in advance to facilitate those in charge of Orient Power to get back the money granted by the various banks.  Although he maintained that he did not know how the two companies were to be used, in fact he said that he did not believe that the companies would be used for anything unlawful because he had specifically told those responsible for operation of Orient Power that these two companies were not to be used to borrow money.  He said it in court, he also said it in his background report.

80. In my reasons for verdict I had already dismissed what he said in evidence and, indeed, that was the very basis upon which I found him guilty of the conspiracy charge that he knew full well exactly why these two companies were to be set up and why he had to sign blank cheques in advance.  But from the evidence accepted by this court, this is just what he did.  This is all that he did.

81. I am therefore prepared to take a view that his role in Orient Power cannot be taken as anything comparable to other more active syndicate members.  I am therefore prepared to adopt a lower starting of 2½  years for this conspiracy charge.

82. His conviction for Charges 7 and 8 in my view are really part and parcel of his involvement in the conspiracy charge because what he did was that he set up these two companies knowing full well that these companies were to be used by Orient Power as bogus suppliers in their application for credit facilities.  I am therefore of the view that the 2 years' imprisonment that I impose in respect of Charges 7 and 8 can be made wholly concurrent with the 2½ years I impose in respect or Charge 2.

83. The end result is, therefore, on Charge 2 D9 is convicted and sentenced to 2½ years’ imprisonment.  On Charge 7, D9 is convicted and sentenced to 2 years' imprisonment.  On Charge 8, D9 is convicted and sentenced to 2 years' imprisonment.  All the sentences are to be served concurrently making a total of 2½ years.