HKSAR v. Chong Ka-hai, Keefe and Others

DCCC1148/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1148 OF 2011

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Reasons for Verdict

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1.D1, you pleaded not guilty to two offences of fraud as did you, D2, each contrary to section 16A of the Theft Ordinance, Cap. 210. D1, you also denied two offences of evasion of a liability by deception, each contrary to section 18B(1)(b) of the same ordinance. D3 and D4, each of you denied one offence of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455.

2.The prosecution case was as follows:-

It essentially involved the defrauding of two ladies by you, D1, and you, D2, being Lee Yuet-wah, Agnes, PW1, and her mother, Au Yuet-oi, PW2. D1, you were the ex-boyfriend of PW1 and in January 2007 you introduced her to D2 who became her new boyfriend. Through Lee, her daughter PW2 came to know you, D1, and you, D2. Through lying and scheming you, D1, and you, D2, were able to persuade PW1 and PW2 between 2007 and 2008 to invest approximately $10 million in fictitious investments and investment schemes and made personal loans.

3.D1, you were the sworn son of PW2 and PW1, the girlfriend of you, D2.  D3, you were the personal assistant of D2 and the account holder of the account into which $2,830,000 was deposited by PW2 and then redistributed on D2’s instructions.  D4 was in the acquaintance of you, D1, and/or you, D2.  You, D4, had $100,000 deposited into your account by PW2 at the request of D1 and D2.  This was because D1 and D2 had persuaded PW2 that she would lose all her alleged previously invested money unless she loaned them yet more money.  As soon as the money was transferred into your account, D4, it was immediately withdrawn.

Charges 1 and Charge 2

4.Between March 2007 and December 2008, PW1 and PW2 were induced by you, D1, and you, D2, to remit funds to them for investment, specifically you, D1 and D2, alleged that you, D2, owned a company and they were told by you both that if they invested in this company they would receive $20,000 a month.  In order to create an impression that you, D2, was running a substantial business, you alleged that D1’s cousin would inject $20 million.  You, D1 and D2, tried to gain the trust of PW1 and PW2 by paying their travel expenses for trips to Thailand and the USA. 

5.Believing the representations to be true, between March 2007 and December 2008, by cheques, cash and bank transfers, PW1 and PW2 respectively provided sums of 5,068,420 and 5,691,860 and RMB260,000 to you, D1 and D2, for investment.  At the material times, you, D1 and D2, did not run any business or any other company.  Neither had made any investments on behalf of PW1 nor on behalf of PW2.

6.Between 8 October 2008 and 25 October 2008, you, D1, admitted to PW1 and PW2 verbally and in writing that the representations made by you both were false and that you had deceived them.

Charges 3 and 4

7.On or about 31 May 2008, D1, you told PW2 that you wished to buy some ornaments for your wife but had not enough money.  You asked her to buy them on your behalf and promised to repay her later.  She agreed and bought them for $27,270 from Luk Fook Jewellery Shop on 7 June of that same year.  D1, you issued two cheques drawn on the Hang Seng Bank, Account No. 388‑317018‑001 for $28,000 and 30,000 to repay PW2 for the money paid for the gold and a previous debt.  However, both cheques bounced and the account had been closed several years previously, that is on 28 February 2001.

Charge 5

8.D3, you were the account holder of Hang Seng Account No. 286-7-189520 and 347-399324-001.  Between October 2007 and July 2008, on the instructions of D1, allegedly for investment, PW2 deposited a total of $2,830,000 into this account.  D3, you were arrested on 29 August 2010.  On 25 August 2010 and 13 December 2010, you attended cautioned interviews.  You stated you had allowed D2 to use your personal account to assist him to handle his funds.  He alleged that these moneys represented loans from PW1 and PW2 to him.  However, he had no idea if D2 owned any company nor the nature of his business.

Charge 6

9.On or about 10 July, you D1 and D2, further asked PW2 to loan $1 million to your company, D2, as it was in financial difficulties.  She was told if she failed to pay this sum she would lose all the money she had invested.  As a result, between 10 and 17 July 2008, on your instructions, D2, PW2 transferred RMB260,000 cash to you, D2, and $830,000 into a designated bank account provided by you, D2.  The said sum of 830,000 and two deposits of 50,000 each were deposited to Account 039‑750‑1‑011748-2 at the Chiyu Bank Limited in the name of you, D4.  Each deposit was withdrawn after it was deposited.

10.D1, you were arrested at Lok Ma Chau on 10 July 2010 and under caution you remained silent.  D2, you were arrested at Lok Ma Chau on 12 July 2010 and you too remained silent.  D3, you were arrested at Flat 1, 4th Floor, Wing Fu Building.  Later, interviewed under caution, you made certain admissions relating to working for D2 as his friend.  Sometimes you were paid, sometimes not and, D2, to receiving money from PW1 and PW2 and using that money for inter alia betting and daily expenses, also meetings with D1 and meeting with him at feasts and going to the Mainland for massages.

11.D4, you were arrested by police on 5 September 2011 and remained silent under caution.

12.The prosecution case comprised five live prosecution witnesses and the Admitted Facts, P76, as well as numerous exhibits.  In order to make sense of the situation in this case, a résumé of the evidence of the prosecution witnesses, principally PW1 and PW2, is crucial albeit in a much reduced form. 

13.I start with PW1 who is Lee Yuet-wah, Agnes. She is aged 47 and gave evidence.  She said she was educated up to secondary level and since leaving school had worked in the airline industry.  Whilst identification was not in issue, she was able to pick out certain of the defendants.  D1, you had been her boyfriend in 1997 to January 1999.  You were on good terms with her family, especially her mother who trusted you as her own son and you as your own mother.  In 2007, they had met up again and they became sworn mother and sworn son.

14.D2, she came to know you in January 2007 through D1’s introduction.  You, D1, claimed to have invested all your money in D2’s company which provided your living expenses.  You said the company also dealt in real estate.  She believed you to be of independent means.  They had driven you, D1, to a house in Kadoorie Hill in D2’s Volkswagen Touareg in February 2007.  She said that you, D2, became her boyfriend.  In March 2007, D2, you took her parents, D3, who was a member of your staff, and D1 to Bangkok where they had suites in an upmarket hotel flying first or business class.

15.She said that you both were really attentive to her parents.  Also, PW1 said she was of clear record.  In early 2007, she had time deposits of $1 million and the rest of the money went to paying instalments on a flat at Royal Ascot.  She planned to sell it and use the money to discharge the mortgage on the flat she had purchased in Conduit Road. This had been purchased in April that year.  The flat at Royal Ascot was for sale for 3.9 million with a minimum price acceptable of 3.7 million.  Whilst PW1 was out of Hong Kong, you both had dealings with her mother, PW2, and as a result that on PW1’s return she was told that the proceeds of the flat were to be invested in your company, D2.  She did not object to this.

16.However, PW1 became concerned as she said she did not want to invest in your company, D2, and did not want to have a mortgage to pay.  When she spoke to you, you said that if she invested, the company would give her $20,000 a month which would pay the mortgage.  Also, subject to the performance of the company, a dividend would be paid every three months. You said since 1999, D1 had paid all his money into the company and it had gone well.  This was said after you all returned from Bangkok.  The persuading started soon after that return.  PW1 and PW2 were told that you, D1, had invested $5 million but now you had urgent need for the money so PW1 and PW2 were needed to replace you.  PW1 asked about the company and what it was invested in and you, D2, replied, “Real estate, securities, index futures and Century 21”.  PW1 asked for your business card but you said you did not carry one.  She said that this was the first time she had invested. 

17.After agreeing to invest in your company, you said you had an estate agents and it was better for her to place Royal Ascot with someone who would look after it.  She assumed that this estate agency would be Century 21.  Shortly after a buyer was found but PW1 never saw the buyer.  You, D1 and D2, brought the deposit cheque to Conduit Road.  The selling price was $3.3 million which PW1 said was too low but you, D2, promised to make up the $400,000 difference if she invested.  So she accepted the cheque for $150,000. 

18.Then when they signed, she got a further $180,000 which provided 10 per cent of the selling price.  She wrote out another cheque to you, D2, for $330,000 but she could not recall where she was at that time. She was given no receipt as you, D2, you were her boyfriend.  The sale was completed in late June and she gave the last cheque to you, D2, from it on 22 June 2007.  She recalled the documentation being signed at the solicitors with her mother, PW2, being present.  The balance went into her account.  Her mother was not there when she wrote out the cheque.

19.She was leaving Hong Kong that night and asked you, D2, if they should go to a lawyers’ to hand over the cheque but you said that they could do it on return.  At your request, she gave you three uncrossed cheques with no payee specified for 1.5 million, 800,000 and 640,000.  The reason you gave was that it was more convenient to deposit.  She said she only learned of who they were paid to when she reported the matter to the police. Two were to cash and one went to D1.  This was supposed to be her investment in your company, D2.

20.She trusted D1 who had invested since 1999.  She said she never knew the name of the company, she handed the cheques to D1 and the day after she left Hong Kong.  She never said the money could be used for feasting, gambling nor high life.  The money belonged to her and her mother roughly in the proportion of one‑third being hers and two-thirds belonging to her mother.

21.In July 2007, they went on holiday to the USA.  Seventeen people went including herself and her mother and father.  Also, your mother, D2, and they went to Los Angeles and Las Vegas.  D2, you and PW1, went first, the rest including you, D1, followed, and they drove to Las Vegas where you claimed, D2, that you were able to get complimentary rooms and you gambled there.

22.D2, you and PW1 then went to Japan for about four days after the trip.  In Las Vegas, you, D2, went almost daily to the casinos.  PW1 went with you once or twice but on occasions she went to find you.  She said that you were all getting on well.  However, she was worried that you were a heavy gambler so she asked D1 if there was a problem but you, D1, said that D2 always gambled and was very good.  You were very attentive to her parents and you, D2, said you had won US$100,000.  There was no discussion of her investment on this occasion.

23.On one occasion she said that you, D2, had asked if she had any more money and she had told you about the time deposit.  You suggested that she invest in your company.  PW1 did not reply as she said she had invested several millions and had reservations.  On return to Hong Kong, PW1 asked you, D1, how the company was doing and you replied that since 1999 you had placed all your money in D2’s company.  The living expenses for the whole family came from this investment, that every three months you received a dividend of several hundred thousand, better than a doctor’s salary.  She said when you, D2, suggested further investment, she said she would give you the money when the time deposit matured. 

24.At the time of going to Bangkok, PW1 said she lived at the Royal Ascot.  The flat in Conduit Road had been bought for 5.5 million in late February, early March.  Her parents lived in Chai Wan.  D2, you paid $20,000 into her account beginning in late April, early May when the first payment was due.  This continued to be paid up until June 2008.  She was also to receive a dividend every three months and once in September 2007 her mother received $100,000 from you, D2.  Neither D1 nor D2 made any further payments to PW1 for the investment.  By September both had become worried but when they tried asking for their money back you, D2, told them to relax and then you gave them the $100,000.

25.PW1 said they paid 3.3 million to you, D2, as they were buying up D1’s share in your company, that share being $5 million.  She said that her mother paid 1.3 million and you, D2, made up the extra 400,000, the latter being the difference between the selling price at the flat at Royal Ascot and what they were prepared to accept.  She denied they were told by you, D2, that this money was to gamble with and if you got lucky they would get it back.  They did not want to lose it.  It was not a loan.  They were never asked nor gave permission to use the money to travel to Las Vegas to gamble.  D2, you said the trip to the USA was on you.  You said the purpose was for the families to meet. 

26.Many times, PW1 asked to visit your company which was supposed to be located in the APM Shopping Mall in Kwun Tong. However, she never went there.  They asked you, D2, many times for your business card but you always said you would bring it later.  She said she did agree to invest another million dollars in your company.  This was because you were her boyfriend, this was around September 2007. 

27.They told you, D2, they were worried and wanted to withdraw their money, however, you said you could write a cheque but it could not be cashed yet and had to wait about six months.  The cheque was on your own account not the company’s.  You, D1, D2, PW1 and her mother met in the Dickens Bar in the Excelsior Hotel.  D2, you said you needed to return the $5 million to D1 and could not give them their money at one go.  She said she saw you write out a cheque for 5.5 million for them and she filled in the payee.  You asked her and her mother to move away while you wrote out D1’s share.  The cheque was to her mother and they thought everything would be all right if they could get their money back after half a year.

28.After they had returned from the USA, you, D2, did pursue her $1 million time deposit and she did give it to you to invest in your company.  She said she agreed to invest because, D1, you had invested for 8 years and had said there were no problems.  She gave you the money in two lots in late August, early September, $790,000 in late August and $200,000 in September.  She made up the 1 million by cash.  She neither got nor asked for a receipt.  She said D2, you had just given her mother a 100,000 so she thought she would have to wait until December 2007 for a return on it.  She did not tell her mother of these investments.  She said she was aware that her mother was investing more in 2007 but not of the details.  The $20,000 a month continued to be paid but apart from this and $100,000 in September 2007 no other dividends were ever paid.

29.On 21 February 2008 around noon, she said you, D2, called to say there was a problem with the company and asked if she had $600,000.  You said you would repay it in two to three days.  PW1 said she had no more money so you, D2, asked if she borrow it from the bank or withdraw money on her credit cards.  PW1 said she had never owed money to the bank and paid off her credit cards every month.  She had a lot of credit cards.  She said that you kept on persuading her and as you were her boyfriend she eventually gave in.  You said you needed $600,000 as you had money problems. You both went to various banks where she maxed out credit cards for cash.  On 21 February 2008, you went to three banks and got a total of $550,000.  On 22 February 2008, you went to Citibank for the remaining $50,000.  This was a total of $600,000. 

30.She got no receipt.  She said you said you would return it within three days, however, you did not repay her after three days saying you did not have the money and she would have to wait.  She called you as she was anxious.  She did not realise that the loans would attract interest.  You, D2, said she would have to wait and you did not know how long. She could not recall how many times she asked you for it.  In March, the first statement arrived.  She did not have the balance to pay it.  You paid her a $100,000 after 22 February 2008 but on 15 April 2008 you asked for it back as again you had cash flow problems.  She gave it back.  Up to April 2008, she never received the $600,000 back. 

31.In early 2008, you, D2, asked her to buy you 20 tins of abalone at $1,000 each.  These were to be gifts for clients. She gave you the receipt, she paid by credit card but you never repaid her.  In April 2008, you suggested a trip to celebrate her birthday.  She asked you how you could afford it as you had no money and you scolded her saying you had borrowed money, bought tickets and arranged everything.  The trip was to Pattaya.  On the morning before, you told her to withdraw $100,000 for him, that is the 100,000 you had paid her back.  You said the company had cash flow problems. PW1 did as she was asked.  You both went away for three days. Each night, D2, you gambled on the internet until 5 am.  PW1 said she was not very happy, she was very angry, it was not a good holiday.  After returning, she did not call you.

32.In early June she called you to try to get her money back but you claimed not be in Hong Kong.  You said you were in Shanghai on business.  You said you would call her on return.  On 12 June, you called her to say you would deposit money to her account.  PW1 had to leave Hong Kong for 10 days.  When she returned, you had not done so.  On 24 June 2008, she called you and you claimed to be in Shenzhen with D1.  She understood that you would deposit $600,000 into her account.  You said you could only repay part of it.  She never asked about the cheque for $5.5 million as you could not even repay 600,000.  You claimed to be in Shenzhen pursuing a debt of $90,000. You asked PW1 for 90,000 for an important matter.  She told you she had no money so you asked her to borrow from friends.  You said that D1’s cousin promised to loan them the money but did not have time to come to Hong Kong to give it.  D1 confirmed this and said that you could be repaid in three days when he came to Hong Kong.  Eventually, PW1 borrowed from two friends, deposited in two amounts into a bank account which she did not know.  This was repaid.  That night, she met you in Shenzhen for dinner. 

33.On 7 July 2008, you asked her for $1 million saying that your company was in trouble and would close down leading to her and her mother losing all their money.  She said at that stage she stood to lose $5 million, $1 million and $600,000.  Also, she did not know how much her mother had loaned you.  Now you wanted another $1 million.  You, D2, said that D1’s cousin would invest in your company in September but he could not wait that long for the $20 million.  The company would close and your mother and her would lose everything.  PW1 said she had no money and could not borrow from her friends so much.  This occurred at your rented home in Ma On Shan.  PW1 then left.  You broke up and did not contact each other again. 

34.She did try to contact you for the money and asked D1 to ask you for the money without success.  She hoped by September you could repay her.  Around August, D1, you promised to withdraw part of the cousin’s investment to pay her and her mother back.  On 13 August 2008, you called her to say that your relationship with D2 had turned sour because you refused to ask his cousin to invest the $20 million as soon as possible.  PW1 said that he reassured her that he would certainly withdraw their portion.  It was arranged they would meet the cousin on 18 August 2008 and PW1 took the day off work.  However, this did not happen.  You, D1, said D2 had called the cousin directly asking for the 20 million and the cousin was very angry.  He said he would go and explain the situation to the cousin and he left.

35.Later, they found out it was a lie, no appointment with the cousin had ever been made.  At this stage, D1, you still claimed to live at Kadoorie Hill.  On 3 September 2008, you, called her, lowered your voice and claimed you were going through some formalities with lawyers for your cousin to invest 20 million.  You asked her for the number of her bank account to transfer the money to her.  She text you back.  The money was never paid so after several days she asked you why.  In front of her you purported to call the lawyer.  He said that he was told the cousin was not in Hong Kong and she would have to wait several days.  This was all a set-up.  She said before she went to the police, she had written down the events on a paper which was at her home.  This was later produced to the court.

36.On 3 October of 2008, you, D1, called her and said “Congratulations, you’ve won first prize in Mark Six”.  She then asked you what you meant and you said that you were at the Bank of China in Admiralty and your cousin was depositing 10 million into her account.  Later, you called to say it was deposited and you would come on Sunday for a meal. However, you did not show up, the money was not deposited.  You refused to come until Wednesday. 

37.PW1 said that her mother’s friends were pursuing her mother for repayment and advising her to call the police.  On the Wednesday, you, D1, came to Conduit Road where she was with her mother.  She had called you demanding the money and saying that she would call the police. You said your cousin did not deposit the money and PW1 accused you of lying. You then admitted your cousin had not promised to return the 8.5 million, nor would he invest 20 million in D2’s company.  You also admitted you did not have $5 million in D2’s company. 

38.You said that you and D1 did this because they knew there would be money from the sale of the Royal Ascot flat and you and D2 decided to deceive them to get the money.  You also admitted the writing out of the cheque in the Dickens Bar was just an act, also that you did not live in Kadoorie Hill, D2, had dropped you there but you then took a taxi to Ma On Shan. She asked you if it was all a set-up and you said you were sorry.  You went down on all fours, grabbed the legs of PW1 and her mother, you were crying and asked them for forgiveness. 

39.PW1 said she would report it to the police. However, she did not do so and gave you one more week.  You said you would ask your cousin for help.  You said you would put it down in writing and if he could not repay, you would go to the police with them.  PW1 then produced to the court a document written by her in anticipation of reporting to the police.  She believed that she had written it in 2009.  This was marked for identification.  D1, you said you did not know how to write it down and you asked PW1’s mother to do so and you would sign.  PW2 did this.  In it you said the male cousin would repay the money.  You told her mother the name after it was written, you read it over and signed.  PW1 also photocopied your ID card. Her mother kept the document and PW1 believed it was given to the police.  It was produced as PP1-1 and PP1-1A for the translation.

40.The next time that they met you was when you took PW1 and her mother to Kwun Tong supposedly to see D2’s office but the premises turned out to be a Buddhist Monastery.  After one week, you still could not pay so you met in a coffee shop in the Landmark.  They wanted to report to the police but you, D1, wrote out a declaration.  The gist was that you and D2 set up a trap to deceive PW1 and her mother.  You wrote it and signed it yourself and her mother kept it.  This document was produced as PP1-2 and PP1-2A.

41.The next time they spoke with you, you said you had found some debt collectors to retrieve the money.  Also, you told them that D2 still had the money.  Wanting to give you a chance, they decided to allow you to try.  You all met again in the same coffee shop on 25 October 2008.  As you, D1, said they had failed to collect the whole sum but he would be responsible for the remainder.  On this date, you wrote out two documents detailing what PW1 and PW2 had lost. 

42.PW2 said she had been deceived out of 1 million, 8.5 million was spoken of.  PW1 said according to her reckoning, she had lost 1.6 million, 1.3 million, about 2.29 million, also 3 million. She wrote cheques totalling 3.3 million and these were loaned.  1 million was from the time deposit plus 600,000 cash and other amounts.  She said she found her mother had given you, D1 and D2, 1 million after she broke up with you, D2.  Also when they reported to police she learned of other sums she had given you both.  On 25 October 2010, you, D1, wrote out the two documents being PP1-3 and PP1-3A, the translation, and PP1-4 and PP1-4A for the translation. These were kept by her mother, PW2, and given to the police.

43.By 25 October 2008, she accepted they invested a lot of money.  You admitted it was a scam and they had the four documents being PP1-1 to 4 detailing it.  You, D1, asked for a chance to repay.  In early November, you, D2, asked them out and spoke to them.  They had tried to contact you. She said she asked you to repay the money but you said you did not have the money.  On one occasion over the phone, PW1 alleged that you, D2, intimidated her by saying someone would go to Chai Wan and chop her father.

44.You all met in a hotel coffee shop in early November.  At that stage you, D2, offered to repay $50,000 a month and settle the whole sum within three years.  According to her mother, you have made 13 to 14 payments.  PW1 herself got none of the money from you.  Eventually you stopped paying money and they did go to the police.  This was in early May 2010.  The money she paid over and the cost of the abalone were never meant to be presents.

45.PW1 was then cross-examined at length by Mr Chui. The first part dealt with the relationship of PW1 with you, D1, since 1997.  She confirmed that you did not work as you were from a rich family and you had mentioned being part of the Li family.  You said you were a cousin of Mr Fu who is mentioned in PP1-1, that is Fou Ho-fai who was then the owner of the Furama Hotel.  She only knew Fou after they had started their relationship. You two decided to marry each other in 1998.  She said she had called off the engagement because she found that you drank too much and then became violent and drunk. She had heard that you had married someone else.

46.She said she had been impressed by D2.  You, D2, had once been in financial trouble but had managed to pay off your debts.  You, D1, said that D2 was good man and he was a Christian who attended church. Prior to 2007, D1, you had called PW1 from time to time.  She accepted at that stage she had just broken up with her boyfriend and had asked you, D1, to introduce someone to her.  That person was D2.  By February 2007, you became her boyfriend.  You said to her that you had an investment company which was making money and, D1, confirmed this.  She said the first suggestion of investment in your company, was made to her mother.  Both of you together persuaded her and her mother to invest.  You first approached her mother and then PW1 joined the discussions.

47.It was you, D2, who offered to pay $20,000 a month towards the mortgage.  You too were present, D1.  D1, you were also present when D2 said D1 had put money into his company and wanted her to replace you. D1, you were also present when D2 told her that after selling Royal Ascot for 3.3 million, he could soon make up the difference.  She refutes the suggestion that you, D1, was not involved in the dealings of March 2007 to 8 October 2008, in fact you put in most of the effort to persuade her and her mother.  She denied it was her mother who approached you, D1, asking him to introduce D2 to her for investment.  In fact, from time to time, you suggested to her mother that she applied for new stock but PW1 did not take part.  D1, you did say that investing in D2’s company, the living expenses for whole family came from that company. You also said you got a dividend every three months “better than a doctor’s salary, several hundred thousand”.

48.She said that she pursued both of you when she found out that there were problems with the investment.  It was you, D1, who said you would deduct the money from the 20 million your cousin would invest. She did not accept that you, D1, were only trying to help.  You admitted to her that the 20 million was a lie and they were owed a large amount of money. 

49.She did accept that in her witness statement that she never mentioned the incident of the 3rd September when you, D1, called to say they were at the lawyers and going through the formalities for the investment of 20 million.  She accepted that she had made seven pages of notes which were made available for defence and prosecution to peruse. 

50.She insisted that on 3 October 2008, you, D1, did call and said that she had won first prize in Mark Six and they were at the bank depositing 20 million but agreed she never mentioned this in her witness statement.  She said there was a lot of details and she was told there was no need to put everything down.  She accepted that the document that she compiled was not contemporaneous, that it was made afterwards sometime in 2009, the incidents having occurred between January 2007 and 3 December 2008.  She had earlier sent emails to herself and recorded voice messages to herself to remind her of events, the date of 2 May 2010 was the date she last typed this document.  On that day she printed it out.  She took it along to the police station when she made her witness statement and showed it to the police.  She said she did not use it to refresh her memory when giving her witness statement.  She accepted that many things referred to in that document were not referred to her in witness statement.  She claimed the document was not made in 2010 but from time to time as things occurred. 

51.She agreed she mentioned a Jacky Leung who was introduced by you, D1, as someone your cousin trusted.  He was a clerk in a solicitors’ firm.  His role was to consider the documents written by you, and advise them it was a fraud which should be reported to the police.  She said that you, first made the admission on 8 October 2008 and that they met Jacky Leung the next day.  The meeting took place at the YMCA Restaurant at Tsim Sha Tsui.  You suggested Jacky meet your cousin but according to Jacky this did not happen.  The next meeting with Jacky was 17 October 2008.  This was in fact the coffee shop at the Landmark where PP1-2 was written out by you, D1, however it appears that meeting took place with Jacky on 15 October but it was on 17 October that D1 wrote out PP1-2 in the coffee shop.  This differed from what you said in the document.

52.There was an appointment to meet at the Landmark.  She agreed that she had recorded it differently to the effect that you wrote it out in front of Jacky with no mention of the coffee shop.  At the meeting, Jacky made two phone calls to try and find out where D2 lived.  She accepted she asked her mother to go home and that Jacky, you D1 and herself went to Tsim Sha Tsui to look for someone.  You all went to a karaoke but this proved to be fruitless. 

53.She insisted that you wrote out PP1-2 on 17 October 2010 in the coffee shop.  Her evidence was that Jacky had asked you to write it two days earlier.  She thought Jacky was on their side but it turned out not to be so.  D1, your writing out of PP1-2 at the Landmark was voluntary. Jacky put no pressure on you to do so, she denied that she had suggested you write this out to pressurise D2 and said that she had always intended to go to the police.  She agreed in the document she mentioned Circle, a debt collector found by you and Jacky.  In mid-October she said that you told her you had arranged a debt collector and there was a meeting in a restaurant in Mei Foo. Present on that occasion were yourself, D1, Jacky, Circle, and two people he brought, her mother and herself.  She denied Circle told you that you had to be responsible and forced you to come to a meeting in China.  The gist was that it was agreed Circle would pursue the money and keep half of what he collected. 

54.She accepted she wrote out in the document that Jacky arranged three debt collectors to attend but in fact she did not know who arranged it.  However, she said you, D1, would arrange a debt collector.  She did accept that Circle appeared like a big brother and she was afraid.  Circle asked for a photograph of D2 but she provided one of D2 and his relatives.  She said you asked for another chance and said D2 still had the money.  She agreed that on the 17th and 21 October that you wrote out more confessions on your own motion.  She said by now she could not find D2.

55.Then, you D2 contacted her and offered $50,000 a month.  She agreed you did claim to have been harassed as well as his family. She disagreed that her evidence about your involvement, D1, was untrue and said you had been involved from the beginning, that no one had ever forced you to write PP1-1 to 4.

56.PW1 was then cross-examined by Mr Cheng for D2, D3 and D4.  She agreed that her document made no reference to you, D1, writing out two more confessions on 25 October nor that PP1-1 was written by you nor PP1-2.  Her explanation was that the document was merely to remind her of what happened and therefore no need to refer to PP1-1 to 4 which did exist.  She said she did mention this in her witness statement.  She took this document to Chai Wan Police Station on 3 May 2010 and gave it to the police officers, both male.  She said they left the room and returned it to her later.

57.She agreed when dating you, D1, she had gone to meet your cousin at Old Peak Road.  She agreed that you did come from a rich family and did not have to work.  She described your lifestyle, D2, as ordinary, you were not mean but not generous.  She said that when they went out for meals, you paid.  She did come to know, D2, that you had no credit cards. She went on trips with you to Bangkok, Las Vegas and Pattaya.  She said she was not asked for her credit card on checking in at Bangkok and did not know what you did.  She said that you, D2, paid for all the meals as you did in Las Vegas.  The pair of you also went to Taiwan twice, first there was just the two of them and on the second occasion six people.  You paid for all meals and rooms.

58.She reiterated that they invested $5 million in your company which was D1’s share they were taking over.  This idea arose in April 2007 after the Bangkok trip.  She learned of it from her mother.  At first she was shocked by the amount, she had reservations and wanted to know more about it, so the four of you, that is her mother, you, D1, and you, D2, and her discussed it over meals.  They asked the nature of your business, D2, and with D1’s confirmation became satisfied it was profitable.  Her mother was convinced by you, so she was too.  It was decided to use the 3.7 million from the sale of the flat and her mother would put up the 1.3 million.  The flat was put in the hands of you, D2, to sell.  She repeated that both you, D1 and D2, said that D2 had connections to Century 21.  Eventually a buyer was found at 3.3 million which was $400,000 less than they would accept.  She said that you, D2, agreed to be responsible for the difference.

59.In May 2007, PW1 got a cheque from 330,000 from the buyer, the amount was transferred to you, D2, and represented 10 per cent of the deposit.  The balance was received in June 2007 and that too was transferred to you, D2.  D2, she said you also bore the charges of roughly 27,500 which had been deducted by the solicitors.  In PW1’s eyes the amount was $3.7 million.  She had no idea how her mother gave you the balance of 1.3 million.  The cheque for 5.5 million represented an investment and 500,000 she viewed as interest.  This was not their idea.  They asked D2 why such a large amount and you said, “To write 5 million would be embarrassing”. 

60.When she first met you, D2, she had a million dollars on fixed time deposit.  Turning to the cheque, she said she saw you, sign it.  She wrote it including the amount.  This came about because you, D2, did not know how to write her mother’s name.  You expressly told her to write 5.5 million.  She wrote everything except the signature.  She was then shown a cheque to her mother for 830,000 dated 18 February 2008 and agreed she wrote it out but not the reason or the details.  However, she recalled this came from another investment made by you, D2.  You told her mother that you could earn her some lai see.  She invested 800,000 and got 30,000 profit, therefore the cheque for 830,000.  Her mother had told her this.

61.She had refreshed her memory both from her witness statement and from the seven page document.  She denied having refreshed her memory from her mother’s witness statement.  She did agree that after the Bangkok trip that you, D2, did have a sort of lavish lifestyle. Also, you, D3, whom she referred to as Paul was on the trip.  She learned your surname when her mother deposited money into your account.  After various discussions, she was convinced that you, D2, had a profitable investment business and decided to invest.  She was worried because you were unwilling to go through the formalities of acknowledging the investment. 

62.She was not pleased that you, D2, were in fact a heavy gambler.  You had told her that in the past you had been a very heavy gambler but did not gamble like that at that stage.  She agreed that she did see you gambling heavily in Las Vegas and spoke briefly to you about this.  She did ask you, D1, about this but did not complain to you, D2.  D2, you have claimed to be winning. 

63.She disagreed that she and her mother invested in your business, D2, in the hope of huge profits, the main point was to keep the capital.  She said that you told her your company invested in the stock market and was going into the business of index futures.  She denied they were in fact investing in you personally, it was your company.  She agreed they had never received any receipts from your company nor anything to indicate the name of the company, you only told them your business was in stocks and index futures.  You told them there were a lot of independent investors like themselves.  Whilst D2 refused to explain in detail, PW1 thought that roughly what happened was that money was put into it and was invested on their behalf. You did not tell PW1 that the investment was gambling money for the 17 people who went to Las Vegas.

64.Turning to the Dickens Bar incident, she insisted that you, D2, said you had to issue a cheque to D1 but did not say it was it was for 5.5 million.  On 21 February 2008, you, D2, asked her for more money so over the period of the 21st to the 22 February she withdrew 600,000 in cash. This was by overdraft and card.  At this time you claimed to have cash flow problems and $600,000 was to ease these and not as an investment.  You said that clients had defaulted payment.  She did agree that after February of 2008 you did appear a lot more agitated whereas prior you had been all right.  In April, there was the Pattaya trip.  In June 2008 you asked to borrow  90,000 which was put into Paul’s account and repaid in three days.  Once she found out it was a set-up, she lost contact with you, D2, for a period which she could not now recall.  She agreed that it was 8 October 2008, she found it to be a set-up.

65.By October 2008, they were trying to get others to help to chase you, D2.  On 8 October 2008, you, D1, did say it was a scam and in her opinion you actually said so.  They engaged others, that is Jacky Leung and Circle.  D1 introduced Circle.  They met on 21 October 2008 in a restaurant in Mei Foo, subsequently you spoke on the phone to him once.  Both Jacky Leung and Circle claimed to be involved in chasing you, D2.  She did describe Circle as a “Dai lo” which she said meant a man of authority, not necessarily a triad brother.  On 24 October 2008, Jacky did demand her mother to write a letter of authority for Circle.  Jacky said it was needed.  PW2 in fact wrote and signed authorising Circle to chase the money.

66.She met Jacky on 1 November 2008.  Now she believed that the situation with Circle was just a set-up with you, D1. In fact Circle threatened her and demanded money from her on 10 November 2008, $200,000.  The arrangement was for Circle to keep half the money he recovered.  This was said in the restaurant.  PW1 said neither she nor her mother indicated whether they accepted or not.  The writing of the authorisation letter effectively agreed to the split.  There was no further contact with Circle and he collected no money.

67.On 5 November 2008, D2, you contacted her and her mother and then met in a restaurant.  You said you were still in difficulty but claimed to have business to do.  You promised to repay $50,000 a month and the whole sum within three years.  She said you made 14 payments before stopping at the end of 2009.  She agreed that you had continued to pay 20,000 a month towards the mortgage up until mid-2008.  She agreed there was a dividend of a 100,000 paid by you in September 2007 and that you did repay the 90,000 within three days around June of 2008. 

68.She was then referred to the deposit slips, however she was unable to recall exactly what these related to.  She agreed the $600,000 drawn on cards and overdraft facilities was by way of loan to you, D2, but denied that the tins of abalone were a gift.  She agreed that they kept the cheque for 5.5 million. 

69.PW1 was then briefly re-examined.  She said the notes she made were a personal record, not ones she intended defence to see or that she would be questioned about.  She said they were people who did not like gambling and wanted to get her money back by lawful means.

70.I turn now to the evidence of PW2.  Madam Au Yuet-oi then gave evidence as PW2.  She was Hong Kong born, of clear record with three children, one of whom is PW1.  They had now lost contact for the last two years as PW1 blamed her for making her sell the property.  PW2 said she was married and had worked in knitwear in the Mainland earning several 10,000 a month.  They had saved to buy their own flat plus an investment in Royal Ascot which PW1 paid the mortgage on.  In early 2007, you, D2, had been PW1’s boyfriend.  She had met her through her sworn son, who was you, D1.  D2, she said was Benson.  From 1997 to 1999, PW1 had dated you, D1.  They were on good terms then. 

71.In 1997, she said you brought your father to have dinner with her family and got your cousin to pay.  You said that because you did not have enough money and your father was bankrupt so had no credit cards.  She said that D1 had no job and got handouts from the family trust fund of $60,000 a month.  She said that from time to time you, D1, asked her for small loans such as $9,000 which you did not repay.  She did not tell her daughter of this. 

72.In 1999, PW1 and you, D1, broke up and there was no contact until they spoke on the phone again sometime in 2006.  In 2007, she said that you, D1, introduced PW1 to Benson Ho, D2, and they dated.  She said all of you had meals together.  You, D1, said that D2 had an investment company.  They then persuaded her to invest.  She never did know the name of the company.  You, D2, claimed not to carry business cards.  Both you, D1, and D2 claimed to have shares in the company which was situated at APM Mall in Kwun Tong.  You both claimed to be involved in investment of realty, Century 21, and index futures.  She said in late 2007, you, D2, called her and asked her to borrow from her.  You said “Aunty, we have a moneylender’s licence, no worries from now on, like we’ve got a golden egg because customers owe us money and we have to collect money in.  Now we’ve got the licence we can do the money lending business as well”.  She said she believed you.

73.At the beginning of 2007, she went on a trip with you, D1, you, D2, PW1, her husband and D3.  She said D3, who she described as Paul, worked for D2 and later she deposited money into his account.  She positively identified you, D3.  She said it was you, D2, who suggested going to Bangkok for four days sightseeing and that it was on him.  She said that you, D2, paid for the flights, others went business class but PW2 said they did not.  She said the hotels were ordinary, not luxurious.  She said that you, D1, and D2 were very attentive.  You, D3, left the next day.  After the trip, she found the relationship with you, D1, got better and also you, D2, were polite and attentive. 

74.Prior to Thailand, PW1 resided at the Royal Ascot which was sold in 2007 through your company, D2, that was either in May or June.  She bought Conduit Road.  PW1 told her that you, D2, had said someone would buy it for 3.3 million but PW2 said she did not want to sell it at that price wanting approximately 4 million but was prepared to take 3.7 million.  It was sold through your property company which is Century 21.  You, said you could soon earn the 400,000 difference and they should treat it as sold for 3.7 million. She said both of you were urging them to sell and make a 5 million investment in D2’s company.  This was to buy your share, D1.

75.She said that PW1 wanted her to preserve the capital.  Both of you said that you, D1, had been relying on the investments since 1999.  She knew that you, D1, had a $60,000 a month income from the family trust and was living off shares in your company, D2.  The 5 million that you invested was from an inheritance that you got after breaking up with PW1. In March or April after returning from Bangkok, both of you said that you, D1, wanted to get back your investment to open up a sweet soup shop.  She said that you, D1, got some 200,000 to 300,000 every three months but she said that she would not need so much, just wanted to keep her capital.  She just wanted something safe.  She claimed to be simple and trusting.  From first mention to actually investing was five to six months.  PW1 had sold the flat for 3.7 million and she put in 1.3 million.  Also, other amounts were paid to the accounts of you, D2, and you, D3, but almost all went into your account, D3, and she could not recall if one transaction was by transfer.

76.She provided the police with bank book documents.  On 27 February 2007, she withdrew 300,000 in cash from her Hang Seng account and gave it to you, D1, as an investment.  This was the first.  On 8 March, 150,000 and 50,000 to make a total of 500,000 for which she got no receipt.  She said she trusted you, D1.  Her husband said she was stupid.  You both said the 500,000 was part of the 5 million invested.  She said she was buying your investment of 5 million in D2’s company, D1.  3.7 million was from the sale of Royal Ascot.  You, D2, were covering 400,000, so 1.3 million left to pay.  On 27 February 2007, she paid 300,000 to you, D1, then 150,000 and the 50,000 which was not actually part of the investment.  The 50,000 was part of the family money paid from her Hang Seng account.  This was around May.  P3 is the bank transfer.

77.She said she paid money to your account, D1, and to D2’s by cheque.  On 2 May 2007, there was a cheque for 230,000 issued to you, D2; on 10 May, a cheque for 160,870 to you, D1, that is P4 and P5 respectively.  P5 is dated 10 May and was in fact for $187,860.  The amount mentioned above was a slip of the memory.  Now she could not recall why she paid over the two cheques.  The 230,000 to D2 was to invest in stocks.  The cheque to you, D1, she could not recall on whose instructions.  She got no receipt and kept no records as she trusted you. 

78.The amount of just over 417,000 was not part of the 5 million, nor was it to buy stock.  By October 2008, she said she had paid more than 5 million.  The 500,000 and 417,000 were not part of the 1.3 million she had to pay.  By around mid-May 2007, she deposited 1.3 million to you, D1 and D2, but she was not sure of the way in which she did it except it was not cash, it was a transfer.  She said she had given all the transfer slips to the police.  She said she did not ask for receipts after paying all the 5 million.

79.She said that you, D2, said you would take her to the company to sign documents but you never did.  She pursued you several times and was advised by friends to get the money back.  She phoned you, and arranged to meet you around late May, early June.  She told you she did not know what the company was nor actually met your family so you replied, “Aunty, don’t worry, my company is safe, you’ll meet my family soon”. 

80.You, D2, said you had arranged a trip to the USA with your family.  The visit to the USA was in mid-July 2007.  Seventeen people went, 12 of which were your family.  The trip lasted 10 to 14 days.  PW2 agreed she did not pay.  You, D2, said it was on him.  The first part of the trip was to Los Angeles then to Las Vegas where people gambled.  She said that she herself, her husband and PW1 did not.  To her knowledge, the 5 million she paid was not used to gamble.  She said that you, D2, never claimed it to be so used and she said she would have been unhappy if their money had been used to gamble, she would not have gone.

81.On her birthday in 2007, you, D2, persuaded her and D1 to be sworn mother son, therefore she bought you, D2, a gold bowl and gold chopsticks costing about $30,000 and this was because she loved you.

82.After getting back to Hong Kong in July, August, she said she again spoke to you about receipts.  Despite you, D2, having said they would get a dividend after three months, nothing was paid.  She said she spoke to you, D1, and told you she wanted her investment back and complained to you about the gambling.  Shortly after this in September, you, D2, wrote out a cheque for a $100,000 saying it was the dividend.  The cheque was honoured. She also said in addition PW1 received the $20,000 every month. 

83.On 18 October 2007, she said you, D2, called her in China and offered to buy stocks for her and so she deposited 600,000 in two transactions, this was into D3’s account, 130,000 and 400,000 were the amounts.  These transfer slips were produced as P6 and P7.  She said Paul looked after the books for you.  She said that often they went out and you, D1, always said you had no money and always asked her to pay. 

84.She produced a cheque drawn on the Liu Chong Hing Bank for 5.5 million which she said you, D2, gave her and she gave to the police.  She said you issued it on 8 September 2007 in the bar in the basement of the Excelsior Hotel.  The 100,000 dividend was paid to her but she was unsure if this was before or after you gave her the cheque, that cheque is P9. She said the cheque was written by her daughter at your request and she did not know why it was for 5.5 million as she asked for only 5 million.  She asked why and you said “It doesn’t matter, it would be embarrassing just to write 5 million.  The $500,000, just treat it as money to buy food”.  She said she declined and you said, “Treat it as my mistake, I can correct it later”.  PW2 said, “I just want to get my 5 million”. 

85.She said after that the loans kept getting bigger, she then pursued you.  She said you, D2, accused her at one stage of getting $500,000 more in 2008, you said she was a loan shark.  She said both of you told her that a cousin was going to give $20 million but had not returned this money to her, this was in April to May 2008.  The first date was written as 8 September 2007 on P9 but then another date was placed on the cheque as it expired after six months.  She said she had an appointment with you, D2, at the coffee shop at the Royal Plaza Hotel, Mong Kok, but you, D1, were not present.  The $500,000 had not been returned so she asked you, D2, for another cheque but you said you did not have another one and just changed the date.  She said she took the cheque to the bank but it was returned as dishonoured.

86.Then after she got the cheque, about 40 days later in October 2007, she got a phone call in China.  She said you, D2, said you would buy stock for her, $600,000 being 130,000 and 470,000.  You said you could earn money for her in a short time.  She told her daughter but not about earlier transactions.  She said she got a return two weeks later but could not recall how much.  You met in a bar, you, D2, her daughter and herself.  She said that you, D2, wrote down the sums that she could earn, 50,000, 12,399 and 14,822 and 77,217.  You bought a lot of stock for her, this was an investment that she could not now recall the details, P11 is that document.  Also the figures refer to, she said, the 600,000 to be invested was guaranteed, a sure‑fire return.

87.In early November she said you, D2, asked for more to buy stock.  PW2 referred to a huge amount of money and how she trusted you both.  She was asked for 2 million by you, D2, in November 2007 but said she had no more money.  Most of the 2 million she did finally give to you, D2, came from the sister of her boss in China, the money was transferred from China, that is 1.5 million.  PW2 went to collect it from the bank with D1 and D2.  Cash of 1 million was transferred to your staff.  You took the rest in cash.  No receipt was given or asked for.  She produced two deposit slips as P12 which refer to the 2 million: HSBC, 1 million, 9-11-2007, “181MZ9RINGO”.  D2 told her to deposit it to this account but she did not know whose it was even though she wrote it; 1 million to the account and the first line says 300,000 cheque deposited to D2.  Second, 400,000 to D2, another 300,000 transferred through Hang Seng Bank to D2 and people.  She said it was very confusing.  The friend in China did ask for her money back about 10 days after the stock was bought of which said there was a return.  She said 4,000, there later seemed to be some doubt as to the actual return.  Her friend got 3,000.  She said that you, D2, paid her 2,004,000.

88.The next occasion that you asked her for money was early in 2008.  You asked for 800,000 so she could earn some lai see. She said she did not have so much and had to discuss it with her daughter.  On 9 November 2007, she transferred 300,000, P13 refers, and she could not recall why, or the 700,000, P14.  On 17 January 2008, $700,000 was transferred for the lai see, the other 100,000 transferred from the younger daughter to Paul.  She was given a cheque for 800,000 by D2 in her home after Chinese New Year.  P15 is the cheque.  She said you told her not to cash until after Chinese New Year and then rang again asking her to delay.  She tried to cash it in August but never got the money back.  P15B is a “refer to drawer”.

89.Then you, D2, asked her for a loan of $80,000 which you did repay on 25 March 2008.  By this time she was concerned that you did not even have $80,000.  You gave her an extra $2,000 to buy food.  On 25 March 2008, you asked for a loan of 200,000 which you paid over to her the next day, that is P16, transfer slip.

90.Speaking of you, D1, she said you never paid when they went out.  She did not drink but she paid for you to do so.  You were always asking to borrow money from her.  She recalled you, D2, asking to borrow 80,000 which you repaid, then for 200,000.  The 200,000 you got on 26 March 2008 and was repaid.  8 April 2008, you borrowed 500,000 for urgent use.  As you had repaid the other sums, PW2 said she was very stupid and loaned it to you. This was deposited to the bank account of Paul who is D3.  This was a loan, P18 and P19, a transfer of 390,000 and 110,000 respectively.  She said she told her younger daughter about this but not PW1 or her husband, in fact her younger daughter had to help with the money.  PW2 said she thought that you, D2, were creditworthy as you had paid the 80,000 and the 200,000.  She thought you would repay in a few days.  Her younger daughter loaned her 110,000, she did not get the $500,000 back.  After one to two weeks, she called you, D2, and asked for the return of the money but you said you did not have it, you said you would pay soon, lots of excuses.  She pursued you but could not get it back.  By this time she said she thought she had no more money.

91.In late May 2008, she said you, D1, asked her out and requested that she buy gold ornaments on your behalf to give to your wife.  She trusted you like her own son.  You went to Citiplaza at Sha Tin, you, asked her to buy three taels of gold from Lok Fook Jewellery Company, Citiplaza using her credit card.  You said you would pay her back at the beginning of next month when you got your $60,000. She said she paid $27,270 on MasterCard for the three taels of gold, this was on 31 May 2008, another day she bought something else.  She said you both met in a restaurant and she handed it over saying “You owe me so much money, I bought so much for you and food bills, when will you repay me?”  You said you would write out a cheque for 28,000.  That is P21 dated 7 June 2008.  She said you still owed her 30,000 to 40,000, so you wrote her out a further cheque of 30,000 dated the same date, 7 June 2008, and that  is P22.  She said that you, D1, wrote and signed both in front of her. 

92.The gold was bought in late May and the cheque was post-dated for 7 June 2008.  She said only many months later did she try to cash the cheques because you said to her, “Sworn mother, I cannot repay you this month, I owe a lot of money to others, let me repay them first”.  This was said to her before the date on the cheque.  You promised to repay her the following month but you did not do so.  You kept asking her to defer the cashing of the cheque.  She did try to cash the cheques when almost six months had passed but they were bounced, P21A and P22A are the returned cheque advices dated 16 October 2008. 

93.One day later after purchasing the gold in late May 2008, both D1 and D2 called her again.  You, D2, asked her to contact the manager of Luk Fook Jewellery with a view to purchasing a watch called a Daytona which is good for speculation and is difficult to find.  She said you, D1, also phoned and asked the same.  PW2 said she did help you, D2, and was directed to the Wah Hing Shop in Jordan.  You asked her to take you there as one of your clients wanted two of these watches.  You told her the client would repay you once they had the watches and that you had no money with you. 

94.When she actually bought the watches, only D1 was there.  She bought four Rolex watches in total, two that day, being P23 and P23A as one receipt.  Each watch was purchased for $98,500 so she paid $197,000.  The second was on 2 June 2008, this was by a Hang Seng Bank Credit Card.  Then again on 5 June, she bought watches again.  Again, only you, D1, went in to buy them.  D2, she said, you said you would repay when the client repaid you.  She described herself as being really stupid.  24 and 24A are the receipts for the second watches.  Your name, D2, is on both receipts as you are the person who asked her to buy them for you but she kept the receipts as security.

95.The previous day in the trial, she provided documents to the prosecution being receipts, credit card statements and bits of paper with writing.  These include P25, Bank of China Platinum Card statement which showed the card usage as for June, July 2008 but in fact when you look at it it is May and June 2008.  It shows payments for the watches and gold and $230 to the Excelsior Hotel. 

96.She said that you, D1, always asked her out and drank alcohol and she always paid.  She repeated that the watches were not gifts, she expected you, D2, to pay her back but you did not do so.  She kept pursuing you for it.  She said that on 8 July 2008, both of you came to her home about noon.  She told you, D2, that she had no money and asked for the balance to pay her card.  You said that the client had not paid you.  You, D2, suggested to her that she borrow from friends.  In front of you both she phoned two friends her agreed to loan her $100,000 each.  You said that you would find a way to repay her in several days.  She did borrow money to repay the balance.

97.Then she next saw you, D2, on 9 July between 9 pm and 10 pm.  You, D1, phoned to ask her to go out which she did.  You drove her to the next street where you, D2, were.  You asked her to help you.  You said your company needed a million dollars by the next day as there were cash flow problems.  If you did not raise $1 million you would have to close, if you closed then they would lose all their money.  She said she did not know how to say no and wanted to help you.  She agreed that you, D1, were present and spoke but she could not remember what you said, something to the effect that she should loan D2 the money.  She said it was a fake, fraud, a plan.

98.You, D2, had told her that if she loaned the million dollars then everything would be all right.  If everything was all right then you would reward her.  She said by this time she had given you both millions, watches, and borrowed from friends.  She thought Fu, that is your cousin, D1, was going to invest 20 million in August of 2008.  This had been said for almost six months.  You and D2 said she could rest assured because D1’s cousin would pay in 20 million by the end of August.  She said she had no more money so at your suggestion, D2, she called friends and raised 300,00 from her boss plus her sister, the 200,000 she borrowed was still in the bank, so you offered your car as security.  PW2 did not tell her husband or PW1.

99.The next day, you, D2, picked her up and took her to the Hang Seng Bank.  She withdrew RMB260,000 from her son’s account.  On 10 July 2008, she withdrew various sums to give to you, D2.  RMB120,000 was from her son’s, in fact, also RMB90,000 from the Bank of China and RMB50,000 from her deposit box.  She made transfers to D3’s account, P28 refers, a total of 160,000, 100,000 and 120,000 then another 120,000.  She finally raised in total 740,000.  360,000 was paid to your account, D3.

100.A 100,000 to your account, D4, and your surname is Cheng and was a new person to her, P29 and P29A are the transfers each of 50,000.  She never got the 100,000 back and she had absolutely no connection to you, D4.

101.The 740,000 comprised RMB260,000 and 380,000 to Paul, a 100,000 to Cheng.  On 14 July 2008, she transferred another 100,000 to Paul’s account, so on the first day, 740,000.  She said a friend could only come up with 300,000 on 14 July but you, D2, said that it did not matter as you were given money by creditors and you had more time.

102.On 10 July 2008, in a bank near the Peninsula Hotel, you, D2, asked her to place her stocks as securities for future loans. Her friend did remit 300,000, which is P30, and a cheque for 300,000 dated 15 July 2008 and she mailed that cheque that day.  The friend had remitted the money to her the day before.  There then seems to be some confusion over this because she said the money had been transferred to D1, D2 and Paul.  This transfer was included in the million.  P34 is a transfer of 50,000 to D3’s account; P33 is a transfer of 200,000 to D3’s account.  She said she never got any of the $1 million back, she never had any connection to Paul, that is D3. The money placed in his account was at the request of you, D2.  She said that on the night of 9 July 2008 when you, D2, asked her for a million dollars, you told her that you could repay her several ten thousand dollars a day until it was paid off but you never did so. 

103.After 17 July 2008, she did have further dealings with you both.  You both told her again that, D1’s cousin would put in $20 million so the 8 million she was owed could be repaid.  After the 14th she kept calling you both from time to time, sometimes you answered and sometimes not.  You kept delaying saying that you were working on it, that you did not have the money to repay $10,000s a day.  By then she said that you, D2, were avoiding her.  Only D1 came out.  You said soon your cousin would invest.

104.She claimed that you, D2, were hiding.  She said she would text you on many occasions.  On 9 October 2008, D1 told her that his cousin did not trust you but he would get a friend to talk to his cousin.  Then he would invest and then 8 million would be repaid.  On 1 October, PW2 got a call from her daughter, as a result she went home immediately and told her husband to leave the home.  They were very scared.

105.In August to October 2008, they kept calling you, D2, and she reached you once.  You swore at her on the phone, she asked you to repay saying, “You said nice things when borrowing but that was all a scam”.  You, D2, said that she should sue you so you could go bankrupt.  She said she kept calling you.  In September she said that you, D1, finally admitted it was all a scam with D2 to deceive her and her daughter.  This was in later September and was said both on the phone and in a meeting.  The meeting was in a bar with the daughter present.  If the daughter was abroad then she would come alone.  She and her daughter always paid and you never did, D1.  She said both you, D1 and D2, both said this but not together.  D1, you admitted over the phone it was a scam. You told her again but she could not recall if the daughter was present in the bar.  She said she did not recall this conversation, she said in gist you did not say directly it was a scam but on 8 October 2008 you finally told her and her daughter it was a scam. 

106.You got down on all fours and cried, this was at her daughter’s home.  You said that you conspired with D2 to deceive her daughter and her.  PW2 said she was shocked and she too cried.  She said to you, “I was so good to you but you have no conscience, you conspire with an outsider, presenting a boyfriend to my daughter, scam, cheated me of all my money”.  She said she wanted to report it to the police but you, D1, said if D2 did not repay, his cousin would.  You said he said his cousin would repay on 15 October.  However, on 15 October, neither D1’s cousin nor D2 repaid.  D1 then disappeared for a time.

107.On about 6 October, PW2 texted him to the effect that if he did not show up then she would report to the police and cash the two cheques for 28,000 and 30,000.  On 8 October 2008, you showed up at her daughter’s home and told her everything from beginning to end and admitted it was a scam.  PW2 asked you to put something in writing.  You asked PW2 to write what he did, hence, PP1-1 and PP1-1A dated 8 October 2008.  The English name was written by you, D1.  You also said your cousin would pay 8 million to PW2 and her daughter on 15 October and you would not go back on your word.  You signed the document voluntarily.

108.On 15 October 2008, the cousin did not repay so arranged to meet again on 17 October.  On that occasion you, D1, yourself wrote and signed the note.  PW2 said that she asked you to write clearly what you and D2 had duped them out of, how many millions of dollars.  There were other notes, 25 October.  You still said your cousin would repay and when he did not she called you again. 

109.You went to meet in a coffee shop in the Landmark.  You said you were willing to write down the whole course of the incident.  The third note was written in the café and signed by you, D1.  There was a further occasion you wrote a note on the same day.  She suggested that you write down the conversation of 9 July when you and D2 came to cheat her out of $1 million.  This was also signed by you. 

110.She formally produced all notes, being P1-1 to 4 and P1-1A to 4A.  She felt that she had a chance of getting her money back with these notes during the time she occasionally recorded you, D2, on the phone. You said that D1 said that his cousin had already invested 20 million and was prepared to rent a flat in Happy Valley to do business and to reside there. During the time that you admitted the scam, later September, she said she saw D2.  It seems that PW1 had an appointment in October in Causeway Bay when she asked you for repayment and so did PW2.  You said you had no money and would lose your company.  They still hoped the cousin would pay.

111.On 9 October 2008 you, D1, said you would introduce someone regarding debt collection, Jacky Leung and Circle.  There was an agreement for you, D2, to pay $50,000 a month which you did for 13 or 14 months.  When it stopped, they went to the police.  Originally you, D2, said you could not pay in one go and would pay $50,000 a month.  Then within three years you would have cleared the whole debt.

112.She then took the court through various records of payments made, some of which she recalled and some she did not.  Further documents were put to her to comment upon.  She showed examples of when she had borrowed from friends, especially when she borrowed from friends for Benson, that is you, D2.  Also, referred again to credit card statement, being 39A and B, which covered a visit to a bar when she again paid for your drinks, D1, on 17 July.  P40 was a noodle shop on 2 September 2008.  P31, the Dickens Bar.  In fact it shows on many occasions she was paying for your drinks.  She even on one occasion had to buy you clothes, D1. 

113.That completed the examination-in-chief.  Mr Chui then cross-examined on behalf of D1.  She disagreed that you, D1, never said you had shares in Century 21 and that you only said that once you had worked for them.  She also disagreed that you had never said that you wanted to open a sweet soup shop.  She insisted that she did have dinner with you, your father and cousin, Fu.  She said on one occasion they went to the Lu Yeung‑something restaurant near the Excelsior Hotel.  She also said she worked for 20 to 30 years in the Mainland earning some several ten thousand dollars a month and her boss was Mr Ng.  Ng Wai-hung was his sister.  She trusted her enough to invest $1.5 million in stock. 

114.She denied that she spent a lot of time at work playing mah-jong.  She confirmed that she did not gamble.  She also denied playing mah-jong every day in Las Vegas.  She denied she had speculated in property and stock saying that she had not enough money to do so.  However, she did admit that on one occasion she speculated in a property in Leighton Hill with her boss’s sister.  She denied telling you, D2, that she had invested in stock before, she only invested in you.  However, she did agree she bought stable stocks prior to investing through the bank.  She invested in you both because you persuaded her.  She said that you, D1, eventually admitted it was a scam to deceive her and her daughter.

115.You, D2, had told her that the stock was guaranteed to earn money which they did initially, especially the $2 million which gave a return and at this stage she referred to $44,000 whereas previously she had referred to 4,000.

116.She said that you, D1, said you were from a rich family and Mr Fu owned the Furama Hotel.  She denied urging you, D1, to buy a three-bedroom property in Hong Kong so she could use the spare room.  She denied using her credit card so she could get points. 

117.She said she did not know if you, D1, inherited 20 million from your grandmother.  She said she did know that you had worked for AIA in 1998.  In 2007 you did not work.  She had agreed that you got on well together so that you became sworn mother and son but this was at your persuasion, D2.  She described you, D1, as a smooth talker.  She claimed that you both were actually partners although she thought that you, D2, did the investing.  She said that you, D1, were involved in some of the conversations relating to investments. 

118.She agreed that she did hear that you, D1, were discussing with your cousin about investing in the company, not that he might be investing but he was truly investing.  Both of you said the cousin was to invest $20 million in D2’s company and they would be repaid from that.  She maintained that you, D1, later admitted it was a scam with D2.  She was disappointed and cried.  She said she gave $300,000 in cash to you, D1, and $187,860. She confirmed she never transferred cash to your account, either she gave you cash or a cheque.  She disagreed that you never told her that you had $5 million shares in D2’s company nor that you wanted to replace him so you could buy a sweet soup shop.

119.She insisted that you did say you conspired to defraud them.  In respect of the four watches, she said in her presence you handed them over to D2 and later they were admittedly pawned so that you both could engage in horseracing.  She said she said this to the police, she thought she had.  She was then asked to look at her witness statement and could not indicate where this was said, nor could she see where you, D1, had said your cousin had deposited 10 million into the account.  She agreed she gave four witness statements.  She said she never discussed her evidence with PW1. 

120.PW1 did tell her about the document she compiled but had never shown it to her.  PW2 said at PW1’s suggestion, she too wrote something down before she went to the police station, six to seven pages which were printed off.  PW1 did not assist in compiling them.  She took it to the police and the police took it.  She had little impression of where it was now. 

121.She agreed that from August 2008 she kept calling D2 to ask for the return of the money but you, D2, avoided her so she looked to you, D1, instead to go and find D2. 

122.PW2’s case was it was both of you who persuaded her and her daughter to invest in them and that money was put in now and then. In August 2008, they did switch their attention from you, D2, to D1 as only you knew where the former was.  She said she was very anxious about depositing the money in July 2008 and you, D2, did not pay her several ten thousand dollars each day.  She wanted you to be found to sort out whether it was a fraud or not. 

123.She was referred to a document dated 15 August 2008, which is Exhibit D3.  She said it came about when she asked you, D1, out.  She had no security and she asked you to find D2 and sign this document. There was a blank space for D2’s signature and the amount of loans was written out.  She said D2, you did sign as guarantor and it was intended D2 to be the debtor.  She said that you would guarantee the money, you yourself had said so.  You said your cousin would repay.  She disagreed that you, D1, had expressed surprise, that you did not know that D2 had been borrowing from her and her daughter.  Nor did she accept that she had told you that you had to be responsible for the loan amount and guarantee it.  She then agreed that she had in fact said this.  She said this was because you, D1, had introduced D2 to them.  She accepted she wanted to get the money back. 

124.She accepted that you, D1, said you really hoped that you could help them get the money back.  She denied that you made it clear that you did not owe them money as you did not get a cent but was responsible only for the introduction of D2 to them.  She said that this was on 10 August 2008 and she got emotional on that day when you, D1, admitted it was a scam by you and D2.  Then she accepted it was in fact October, not August.  She agreed that the document was true and clear that she had loaned D2 money.  Referring to Exhibit D3, PW2 says that she did not give it to the police as D2 had not signed it so she thought it was of little worth or effect. 

125.Between the time of writing PP1-1, she said she repeatedly called D1 and D2.  She saw D2 twice in September but he neither signed Exhibit D3 nor did he pay the amount.  It seemed that the first time D1 admitted it was a scam was over the phone in late September.  She said it was clearly a scam but finally admitted in October and she insisted it was the case that D1 voluntarily signed all four documents, being P1-1 to 4.   

126.The scam D1 described was that D2 had agreed with him to deceive money from them.  She disagreed that in her witness statement there was no mention of D1 admitting on the phone it was a scam or when they went to bars.  It was then put to her by defence counsel who had been through the witness statements that it was not there.  She accepted this saying she mentioned it but it was not put down.

127.It was put to PW2 it was a pack of lies that D1 admitted it was a scam and she disagreed.  P1-1 was in her handwriting.  The brackets, ID card number and signature are yours, D1.  The document is a result of a discussion with you, D1.  The sum of 8.5 million is the 5 million, the 1 million and other sums and another 1 million from the daughter.  She said that they actually were given. 

128.Exhibit D3 had been signed by one, not two.  It was designed to chase you, D2, for money.  She said she asked you, D1, initially to write P1-1 but you said you did not know how to so she wrote it. You never said at any stage it was incorrect, you simply signed it.  She felt that she had proof of this then, that you kept lying to her and that she said you had not been forced to sign.  You did say your cousin would not invest in D1’s company.  You denied that she and her daughter then scolded him and told him he would have to take responsibility for the whole thing.  She agreed they did say D1 should be responsible and gave him one week to pay.  The date was suggested by you, the 15 October 2008.

129.This happened before you signed, she denied you were not allowed to leave until you signed.  She also denied asking you, D1, if you knew anyone to give her legal advice but then apologised and agreed it was said.  She said that Jacky Leung was then mentioned as someone who your cousin was familiar with.  You had said that Jacky was someone who would come, to help. The next day Jacky came, that is on 9 October.  Present were PW1, D1 and her. As mentioned, the restaurant was at the YMCA, Tsim Sha Tsui.  They showed documents to Jacky.  It was then put to her that D1 never admitted deceiving them, never knelt and cried and that PW1 was inaccurate in referring to the deceiving and she disagreed.

130.At the meeting with Jacky, he was told what had occurred.  Jacky said they were deceived.  She thought this was said in front of you, D1, and shortly after you then left.  They told Jacky that you, D1, said you would make an appointment with his cousin and ask him to pay.  You said to Jacky it seemed that you were deceived and then left.  The meeting did in fact end with Jacky suggesting that they report to police.  PW1 said they did not do so.  And in fact they had no contact with D1’s cousin at any stage.

131.It was also put to her that Jacky had conspired to force you, D1, to sign PP1-1 to 4 as they wanted to get their money back and PW2 disagreed.  There was an occasion they met Jacky and some debt collectors in a restaurant in Mei Foo.  PW2 said it was between the 20th and 30 October 2008.  She and her daughter were shocked that debt collectors were to be found.  It did seemed Jacky Leung was on good terms with you, D1.  She said that you, D1, were never threatened in her presence by Jacky. 

132.On 17 October 2008, they met at the Landmark coffee shop, that is you, D1, PW1 and her.  Then you wrote out and signed P1-2. She agreed neither she nor her daughter prompted you as to what to write.  You also signed and wrote out your ID card number. After finishing it, you handed it over to her and her daughter and left.  You said again that you would get your cousin to repay.  That is the reason they did not go to the police.  She denied they were squeezing you to get the money back.  PW2 denied PW1 in fact dictated the document for you to write. 

133.On 21 October 2008, she, PW1, you, Jacky and Circle met in a restaurant in Mei Foo.  She agreed they brought along a photo of D2 and his whole family.  This was because you, D1, and Jacky had told them they had found a debt collector and assured them it was legal.  She put on name stickers for D2’s family.  This was requested by the debt collectors.  She said she could remember little of what happened.  You, Jacky and Circle negotiated amongst yourselves.  Circle seemed like a “Dai lo”, as did the other two men.  They did not seem to threaten you. Circle did ask you to find D2 so they could meet in the Mainland.  Before you left, Circle said, “If they found D2 and he refused to pay they would chop off his arms and legs and dump him in the sea”.  Then Circle left and they spoke with you and Jacky.

134.On 25 October, she again met you at the coffee shop in the Landmark.  They requested you to make it clear in writing what happened.  You had arranged the meeting.  You also met Jacky there that night. You said that D2 still had the money and you could find him for them.  On 25 October 2008, you wrote out a further confession, which is P1-3, and signed it.  This was because the previous one was not clear.  Jacky also asked you write it out.  This was supplemental to P1-1 and P1-2 and clearer.  PW2 refuted the suggestion that Jacky had advised them what you had to write.  Jacky had advised them to do this at the meeting in the restaurant in Mei Foo on 21 October.  This was in the presence of you, D1.  You wrote P1-3 yourself without prompting and at one go.  She disagreed that P1-3 was dictated to you by PW1. She agreed that she then asked you to write something further about the $1 million loan on 9 July 2008.  That document is P1-4.  You used your own words in that document, not prompted.  In fact your daughter had gone by then. 

135.She agreed that sometime in November D2 had come to discuss it, they arranged that D2 would pay $50,000 a month to her and her daughter until all was paid back.  She disagreed P1-1 to P1-4 did not reflect the truth, that it was a civil dispute, which was also disagreed with.  She said it was fraud.  She disagreed that you wrote these under threat of a criminal charge. 

136.Mr Cheng then cross-examined on behalf of D2, D3 and D4.  She said D1 and D2 together brought up the question of investing during a dinner.  They said that money could be earned.  She said that D1 said D2 had earned a lot of money for him.  PW1 was also present when they asked her to invest $50,000.  She trusted you, D1, as you were her sworn son so she agreed.  She agreed that she was stupid not to ask for more information as she only knew how to invest in stable stocks.

137.You, D1, then arranged for her to go to the Hang Seng Bank the next day to transfer the money.  You wanted cash.  The next day they went to the bank and as there was only 300,000 in the account, she got this out for you, D2.  This was on 22 February 2007.

138.On 8 March 2007, she issued a cheque to your wife, D1, this at your request, it was for $150,000, it is P3.  She gave the remaining $50,000 to you, D1, in May 2007.  She said she never asked about profit or when she would get it back.  After about three months she saw you, D2, it was June or July, and you wrote out P11 on an envelope.  She had not yet received any profit. 

139.She was referred to P35, the HSBC passbook, showing $77,217, 2 May 2007 deposited to her account and she said she did not think it was from the investment of 500,000 but changed her mind saying it was money from D2 from money invested.  She said by May she had given them a lot of money, $150,000, another $230,000 to D2, by 2 May 2007, more than $500,000. She said she could not recall the exact sum given by 2 May 2007, the first sum was 500,000 but looking at the passbook she said the first 500,000, then 150,000 deposited to D2, then 130,000 and then on 2 May 2007 a cheque deposited to D2 of 230,000. 

140.The 150,000 was given in the middle of the year, she thought by transfer.  From the records, she said she had no impression of anything relating to this 150,000.  Some receipts she had taken to China and left them there.

141.The next sum was $1.3 million which was part of the 5 million, the rest of the 3.3 million from the sale of the property. On 2 May 2007, she agreed she received 77,000-plus from you, D2.  You said it was money you had earned for her.  She was happy so kept giving you money.  She agreed that you had said you had made a good profit for her on the 500,000. You said you would buy stocks for her and guaranteed a profit.  She agreed to keep investing.  You would call her and suggest what stocks she should buy, therefore she issued a cheque for 230,000 for further investment on 2 May 2007.  She made her own decisions to invest money.  She conceded that looking at the cheque for 230,000, P4, that it was written either by her younger daughter or PW1, only the signature was hers.

142.P5, the cheque for $187,860 dated 10 May 2007. Apart from the signature, possibly, it was not written by her.  It seemed that you, D1, wrote the payee’s name, this was cash to D2.  She did not think her daughter objected, if she had done so she would not have written the cheque.

143.She was then referred to P35, the HSBC passbook, three entries, 28 May 2007, 120,000, 50,000, 21,860, these were deposited by ATM.  PW2 said she did not know what they were. 

144.Exhibit D5 was a voucher at page 007 with her name and account number, 120,000.  The 28 May 2007 deposit from P35 showed the same amount that day.  Also on page 002, a sum of 50,000 cash transfer and also 28,160.  Mr Cheng suggested that D2 caused the three amounts to be deposited to her account on that day and PW2 agreed for 003 but not clear about 002.  She said D2 did not give her large sums on every investment.

145.She said at this time she was often out of Hong Kong and accepted she did not look at her bank account and may not know if D2 had deposited money into her account.  She was then referred to the amount of 191,860 and it was suggested that this represented capital investment of 187,860 and 4,000 interest from the investment of 10 May 2007.  She said she could not confirm this as could not recall.  She said at that time there were a lot of new stocks which D2 said would go up in the market.  She thought that she told D2 to go ahead with the new stock.  She could not now remember if he said that the cost would be 180,000 to 200,000.  Later, she accepted D2 did contact her to say that he had applied for new stock and wanted reimbursing $187,860.

146.On 18 October 2007, she said she transferred $600,000 to D3’s account.  D2, you phoned her in China and she agreed to purchase stocks in that amount.  She was referred to two deposit slips, P6 and P7 dated 18 May 2007.  She said “He called”, that is D2, “on 17 October 2007” but she could not be sure if she came back to make the deposits but accepted it was likely that she did so.  She thought her younger sister contributed towards the 600,000, the rest being from her bank account.  Also saying that her younger daughter chipped in too, both did ask the name of the stock and she told them.  It was put to her that she got $72,000 profit from this, she said she did not know.  Referring to her Hang Seng Bank statement, 22 October 2007, she said the deposit of 207,000 “may be by younger sister, younger daughter or friends but not sure”.  It was the return of part of the 600,000.  She said she bought a lot of stock and her friends invested too. 

147.She was referred to 6 November 2007 cash deposit of 365,000; 9 November 2007, 100,000 and with the 72,000 the sum added up to 672,000.  However, she did not know if this was the investment of 600,000 and the interest of 72,000 being returned.

148.When referred to the next page of AV02-4 for the same account, 19 January 2008, first entry 21 December 2007, she said the deposit of 330,000 was a matured time deposit.  She was then referred to Exhibit D5, page 004, this a deposit form, 21-12-07, the same amount, and said it could be herself or D1 or D2 but could not remember.  She definitely had a time deposit mature that month.  She did not know what the sum represented. She made no record and obtained no receipt.  It was put to her the deposits of 22-10-07 for 207,000, 6-11-07 for 365,000 and 9 November 07 for 100,000 added up to 672,000.  PW2 said she could not say what they were.  They may have been moneys from relatives or friends.  She was not sure if deposited by D2. 

149.She agreed the 2 million about 9 November 2007 was another huge investment, that she had deposited 1 million to the account of a person she had not heard of.  She said prior to this D2 invited her to invest 2 million and she in turn invited Madam Ng Wai-hung to chip in.  She accepted D2 always told her the name of the stock.  She said she got back the 2 million plus 40,000 over 2 million.  She accepted she did not mention her friends and relatives chipping in as did not think it was necessary. 

150.She agreed that in 2007 D2 did well with investments and never asked to borrow money in 2007.  The first time he asked for a loan was $80,000 on 20 March 2008.  She was surprised that he did not even have $80,000.  On 25 March 2008 he repaid it with $2,000 extra.  The next was on 25 March 2008, again he called and asked to borrow 200,000.  This too was repaid but without interest.  She was referred to AY02-5, 19 April 2008, the entry for 7 April 2008 was 204,000.  She said she had little or no idea who deposited this.  She was then referred to AY02-5, 31 March 2008, 205,000.  She confirmed that perhaps both amounts were deposited by D2.  Then the account transfers at 005 seemed to be D3’s account.  She said she really did not know if D3 deposited to her account on 31 March 2008.  She maintained that the deposit of 204,000 on 7 April was made and she did not know by whom.  This was the first time she realised these sums had been deposited. She maintained that D2 put money into it bit by bit.  She denied lying about the two entries on 8 April 2008.  D2 asked to borrow 500,000 from her and she had difficulty raising that sum.  She checked but did not realise she received in excess of $200,000 on 31 March and 7 April 2008. 

151.P12, a deposit slip, relates to 1 million dated 9 November 2008, this is related to the $2 million of Madam Ng’s deposit to Mr Ng’s account. 

152.She said of the 300,000 Hang Seng transfer, she did not know what it meant transferred to D2’s account.  P13, deposit slip, 300,000 dated 9 November 2007, Hang Seng Bank form AY06 and PW2 accepted signed by her and same sum transferred, P13.

153.PW2 confirmed that on 9 November 2007, she transferred 300,000 to D2.  This was for the 2 million investment.  On P12, Chinese characters were written regarding the transfer to D2.  She accepted this all meant 300,000 had been repaid.  She claimed she did tell the police at least of 2 million of the 2007 investments had been repaid.  That was not in her witness statement but she said she had mentioned it to the police that some investments in stocks had been repaid. 

154.She agreed there were two reasons for D2 depositing into her account, moneys from investments and repayments of loan. As for D3, she said perhaps he acted on the instructions of D2, his boss, to pay into her account.  She was in China, so money was deposited without her knowledge, she had no idea what the money represented. 

155.She said that she and her daughter required capital‑protected investments regarding the 5 million.  It had to be safe.  It did not matter if it did not earn much money.  She said they made this clear to D1 and D2 from the outset.  PW2 made it clear on each occasion the capital must be safe.  She made no assessment of the risks as they said for sure she would make a profit.  She agreed that the position was that $5 million had to be capital preserved but for the other investments she was willing to accept some risks.  This was because they said they would make a profit.  She accepted prices of shares did fluctuate, even new stock would go up or down.

156.Later, her sister, friends, and younger daughter chipped in.  She said PW1 was not involved.  She said she never learned PW1 was investing in stocks through D2.  PW1 never told her how much she loaned to D2. PW2 said she was only aware of PW1’s loans to D2 after the incident and before reporting to the police when she told her how much she had been cheated of. 

157.She accepted she herself could find no documents relating to the 1.3 million.  Said they may be in China.  Part of the 5 million.  The first witness statement was given on 16 June 2010 and the last on 29 August 2011.  She claimed in the first she had given 1.3 million to D2. She could find no documents relating to it.  The deposit of 500,000 she thought was part of the 1.3 million.  She treated Royal Ascot as selling for 3.7 million as D2 said he would make up the difference.  They in fact sold it for 3.3 million in order to help D1 as he wanted to get back the 5 million to open a sweet soup shop and D2 was willing to be responsible for the 400,000 difference.  PW2 said that you, D2, were responsible for selling the property and spoke of Century 21. 

158.She said speaking of Exhibit D3, this was a kind of IOU, it was written on 15 August 2008.  As you, D2, did not sign the document she felt it was useless, so told no one about it.  She agreed she herself wrote “5.5 million capital-preserved investment”, however this was because it was written on the cheque, P9, and she knew she was only entitled to 5 million.

159.The reference to 1.37 million that PW1 loaned was from money she loaned to D2.  She agreed she drafted D3 exhibit and wrote it by hand.  She said it was D1 who told her to write the amount according to the cheque. D2 had refused to sign the Exhibit D3 on both occasions in September, when they met.  She did not tell PW1 of the contents of Exhibit D3. She wanted to find D2 but did not know the name of his company.  She wanted D2 to sign the IOU.  The sum of 1.37 million owed to PW1 by D2 was confirmed by D1.  She did not think that D2 deposited 20,000 to her account on 13 October 2008. 

160.Referred to Exhibit D5 of defence bundle page 005, she claimed to have no idea why $20,000 was deposited to her account on 13 October 2008.

161.She said regarding the deposit of 100,000 on 30 June 2008, she believed it to be D2 who said it was part-payment. She said it could be watches but she was not repaid for the previous $500,000 yet.  She agreed she had written on the Exhibit D3 that D2 had repaid 150,000 towards the watches she had received on 30 June.  She said she recalled she had told the police that he had paid her back for the watches despite what is said in the witness statement of 16 August 2010.  In fact he returned 150,000 to her, not the 500,000 promised nor the 800,000 from investments.  She did not know what to treat it as. 

162.She agreed that she took a more active role than her daughter in investments.  She was referred to Exhibit D5, page 001, $77,217, she said this did not represent profit from the capital-preserved investment. She thought, she believed it was from shares bought on her behalf.  She said she only got a $100,000 back from the 5 million.

163.She agreed when she made a handsome profit she was happy.  2 May 2007 was before the sale of Royal Ascot but would not accept this was risky.  She agreed that D2 was on a good run up to the end of 2007 making a profit on the money she gave him.  She said she could not remember the rise and fall in the Hong Kong Stock Market although she agreed that between October 2007 and October 2008 the value of the shares held at the banks by her are halved.  She believed the market was going down.  She could not tell why D2 borrowed from her in 2008 but agreed he did say the company was not doing well.  He said so when he borrowed 1 million.  He said if the company closed, all investments would be lost.  She disagreed, she knew she was investing in something much more risky than capital-preserved investments.  She ended by saying she was deceived by D2 and put money into the accounts of D3 and D4.

164.Now, Mr McGuinniety then applied to re-open cross‑examination in order to produce the DVD of recorded conversations.  This was done without objection by either defence counsel.  She agreed that on 21 May 2012, while being cross‑examined by Mr Cheng, she attempted to produce two disks to court to prove she was not lying.  These were the ones recorded conversations with D1 and D2 between 2008 and 2009.  She was asking for repayment. D2 stopped paying by 2010, so not seeing him anymore.  D1 rarely contacted her in 2009. 

2009 recordings of D1 and D2

165.D1’s recordings around April 2009, D2’s were sometime after that but before reporting to the police.  She said it seemed that she and her daughter reported to the police in 2010, so D2’s was between April 2009 and before 2010.  In fact it was in 2010 when he stopped paying after Chinese New Year 2010, her younger daughter burned the disks, that is Lee Yuet-ming.

166.DPC5063 was tendered as PW3 and cross-examined but little if any real relevance emerged.  WDPC6672 was also tendered as PW4 and cross-examined and re-examined, but again, there was nothing of any moment.  DPC58733 was tendered as PW5 and there were no questions.

167.Madam Lee Yuet-ming then gave evidence as PW6. She was the sister of PW1 and daughter of PW2.  She confirmed burning conversations on the two disks in May this year.  They related to D1 and D2. They were stored on a USD at home, she had never interfered with the contents and made random checks to ensure quality.  PW2 was then re-called and produced the two disks as P48A and P48B for the translation and P49A and P49B.  She said the two conversations took place in April to May 2009 with D1.  He admitted conspiring with D2 to get the money.  She was then taken through some of the questions and answers referred to.

168.A second conversation was in May 2010, the tenor of the conversation that D2 was in difficulties and had no money.  She was then taken through various questions and answers. 

169.There was cross-examination, the gist was that D2 was still being pursued for money and was still complaining about money, begging people to invest.  She admitted making sarcastic comments to him.  He did admit to illegal bookmaking at one stage.  She was then re-examined by Mr McGuinniety.  PW1 was then re-called, again with no opposition, this was on the application of Mr Chui.  She was cross-examined about a car she and D1 had bought but little turned on what she said.

170.The Admitted Facts were produced as P76, Part 1, produced into evidence, the various bankers’ affidavits being P50 to P64 inclusive.  Part 2 referred to two cheques for 28,000 and 30,000 drawn by D1 on the Hang Seng Bank account and given to PW2 on or about 7 June 2008 produced as P21 and P22.  The account had in fact been closed in 2001.

Section 3 - the cautioned statement of D3, were produced as voluntary, that is P65, P66, P67 and their equivalent A numbers for the translations.

Section 4 - D3 was the account holder of the Hang Seng Bank accounts nos. 286-7-189520 and 347-393324-888.

Section 5 - D4 had the Chiyu Bank account no. 039-750-1-01782.

Section 6 - That on 20 July 2010, under warrant, police searched D1’s home at Room 2, Flat K, 41 Ah Hung(?) Road, To Kwa Wan, and found a Hang Seng chequebook, P68.

Section 7 - Four pawn tickets, P69 to 72, found at Floor A, 52nd Floor, Tower 2, Manhattan Hill, Lai Chi Kok, were for the four watches bought by PW2 on the 2nd and 5 June 2008 for D2.

Section 8 - D1 was arrested at Lok Ma Chau on 20 July 2010. Under caution he remained silent.

Section 9 - D2 was arrested at Lo Wu on 12 July 2010. Under caution he too remained silent.

Section 10 - D3 was arrested at Flat 1, 4/F., Wing Fu Building, Tak Man Street, Whampoa Estate on 20 August 2011.

Section 11 - D4 was arrested at Chai Wan Police Station on 5 September 2011 and remained silent.

171.The prosecution case was then closed.  Mr Chui on behalf of D1 made a submission of no case to answer in respect of charges 3 and 4.  That was briefly but strenuously opposed by Mr McGuinniety for the prosecution.  The full text of the submissions can be found in the transcript of evidence and my ruling thereon.  Basically what Mr Chui submitted was that there was insufficient evidence of any false representation or deception.  The cheque was post-dated and prior to the date D1 had persuaded PW2 not to cash them as he needed to pay other debtors first.  This was prior to 7 June 2008. As PW2 agreed to this, Mr Chui contended there was no operative deception to evade this liability.

172.Mr McGuinniety opposed this, putting it very simply that if a person issued a cheque drawn on a bank account which had been closed for many years, then it was clearly open to notional reasonable jury properly directed to infer that the defendant did indeed evade the liability by an operative deception.  PW2 was led to believe and did believe that the cheques were valid instruments capable of being honoured and her agreeing not to encash them was of no consequence.

173.With respect, I agreed with the prosecution’s interpretation and ruled there was a case to answer on both charges for reasons which I gave in my record.

174.A further agreed fact was that D2 and D3 were of clear record and D4 has got one previous conviction for an unrelated offence, namely police obstruction. 

175.Each defendant having had his rights fully explained to him by counsel elected neither to give evidence nor to call any defence witnesses.  The case for defence was thereby closed.  In accordance with convention, as none of the defendants had given evidence, Mr McGuinniety made no final submissions on behalf of the prosecution.  However, Mr Chui on behalf of D1 and Mr Cheng on behalf of D2, D3 and D4 made full written submissions supported by oral representations.  In order to assist the court, Mr McGuinniety did supply to the court a list of transactions in chronological order which has been extremely helpful and I am very grateful to him for that.

176.I turn now to the verdict itself.  This was one of those special cases that became increasingly complex as the evidence unfolded.  The allegations themselves are on the face of it simply enough but the events, twists and turns of what happened between the parties in 2007 to 2008 became somewhat labyrinthine and torturous.  Therefore, in my opinion, and I make no apology for it, it was clear that one had to set out the evidence as related by PW1 and PW2 in some detail and even though I have tried to reduce it as much as possible.  The two prosecution witnesses gave evidence over a period of days.

177.PW2, Madam Au Yuet-oi, was determined to have her say, her day, or in fact several days in court.  She was somewhat verbose and liable to stray into irrelevancies but this in no way detracted from the content and theme of her evidence which comprised scenarios, events and conversations recalled from 5 to 6 years ago in great detail.  It is self-evident but worthy of repeating, that each defendant and each charge must be looked at separately and whilst one may or may not discern a theme or a pattern, the evidence must be clinically assessed as it relates to each defendant and each charge.  In short, the charges do not stand or fall together.  I do not need to repeat the charges each of the defendants face, that is dealt with in my opening paragraph.

178.I also remind myself that D2 and D3 are of clear record and D4 has but one previous conviction of a totally different character than the charges he now faces.  I therefore treat all three as being of hitherto clear record for a purpose of assessing their propensity to commit these offences.  Stating and reminding myself of the most basic principles, the test now is whether the prosecution has established beyond all reasonable doubt each and every essential element of each or any of the charges alleged against each or any of the defendants.

179.I also make it abundantly clear, whatever is said by individual defendants, whether written or oral, cannot and is not in the context of this case admissible evidence against any other defendant.  This is especially so referring to P1-1 to 4 which the prosecution hold out as D1 making certain admissions; Exhibit D3, the document signed by D1 which is in fact a defence exhibit, and Exhibits P48 and P49, the transcript of recorded conversations between PW2 and D1 and D2 respectively.  I shall return to these important exhibits later. 

180.At this stage I make it abundantly clear that I found PW1 and PW2 to be honest and sincere prosecution witnesses who did their very best to faithfully and accurately recall events and conversations as they occurred in the years 2007 and 2008 particularly.  They presented honest and fair, even allowing for an element of bitterness, and especially on the part of PW2, a feeling of betrayal by the persons they had trusted.  They were in fact mutually corroborative on important issues to a very high degree. 

181.There is in this case large areas of common ground or at least lack of dispute especially in the background information. You, D1, had been the boyfriend, fiancé, of PW1.  The relationship had terminated in 1999 and that would seem to be at the behest of PW1.  You had then ostensively removed yourself from the scene for a period.  However, it appears that in late 2006, early 2007 you had reappeared and re-established a relationship both with PW1 and PW2, albeit with the former not now a romantic one.  It was you, D1, who introduced you, D2, to them.  Shortly thereafter PW1 and you, D2, became in the nature of boyfriend/girlfriend.  You, D2, supported by D1, held yourself out to be a successful investor or dealer in securities, index futures and real estate with links to a well-known company, that is Century 21. 

182.It is clear from the evidence that you, D1, claimed to have a 5 million investment in D2’s company which you now wished to reclaim to start your own business.  I believe and accept that you made extravagant and untrue claims that you had very good returns from these investments which had allowed you to live well and care for your family.  This was held out both to PW1 and to PW2 as real and genuine.  At the behest of and with the encouragement of you, D2, D1 and PW1 established the relationship as sworn son, sworn mother.  This seemed to include some sort of ceremony and the presentation of gold to D1.

183.Throughout the evidence of PW1 and PW2 set out in great detail in my summary are numerous references to payments made by cash, cheque or transfer from PW1 and PW2 to you, D1, you, D2, and various nominees including you, D3, and to a lesser extent, you D4.  These amounts are generally well-documented in the bank accounts and other documents.  They have been referred to by me, the prosecution and defence solely for the purposes of this verdict and need not be reiterated and referred to individually.

184.In fairness to the defence, there is clear evidence of repayment of some of these sums and what purports to be interest on some of the investments.  The head and main charges in this case comprise the allegations of fraud against you, D1, and you, D2, being charges 1 and 2. Other charges while being serious, especially the OSCO charges, flow from these.  The alleged fraud perpetrated on each victim is approximately 5 million in each case.

185.After hearing and considering the evidence, given the complications of computing the total involved and allowing for the return of some portion of the sums, it is clear to me that the final sum must purport to be an approximation and not a specific sum.  The allegation is of course that you, D1, and you, D2, operated in concert to defraud PW1 and PW2 using the special relationship to each.  Those relationships having been engineered and cultivated to inspire trust.  It is in my opinion not necessary nor indeed possible to establish the exact extent of the alleged fraud although an approximate amount must be shown.  It is more important from the prosecution perspective to establish whether or not these losses to PW1 and PW2 were because of a fraudulent scheme or poor commercial management.  In other words, the court has to look to see if PW1 and/or PW2 paid over the money to the parties based on a concerted scheme of misrepresentation by D1 and/or D2 or were possibly the victims of adverse market forces.

186.Obviously if a criminal conviction is to lie, the prosecution must prove it beyond all reasonable doubt not that a civil claim arose or possibly arose, the question is what, if any, is the evidence to support fraud. 

187.I have made references to sums allegedly defrauded by D1 and/or D2.  The basic sum was 5 million plus other amounts passed over from time to time.  The $5 million came from the sale of a flat at the development known as Royal Ascot which was jointly owned by PW1 and PW2.  That property was purportedly sold by D2 through what I find as an established fact, Century 21, the famous company that you claimed at the very least to be associated with.  The property was on the market for approximately $4 million but PW1 and PW2 said in evidence, which I accept, that they were willing to settle for a minimum of 3.7 million.  You, D2, claimed to have a buyer at 3.3 million.  You then strangely persuaded PW1 and PW2 to accept this on the basis you would cover the 400,000 shortfall and all costs.

188.In evidence, PW2 said she paid the balance of 1.3 million to make up the total investment of 5 million.  The purpose of this was supposedly to allow you, D1, to extract your 5 million investment in D2’s company so you could start your own business.  I did note that PW2 had difficulty pointing to the exact payments which made up the $1.3 million but I believe and accept her evidence that she did so.  She explained that a lot of records had been left in the Mainland.  PW2, whilst garrulous and somewhat aggressive, was in my opinion as witness of truth and faithfully recalled as best she could the payments.  She, in my opinion, stood up admirably to intense cross-examination on the point and emerged as a credible and accurate witness.  She was not a witness who would misremember such an important matter.  Indeed, the cheque issued by D2 at the Dickens Bar of the Excelsior Hotel and dated initially 25 March then re-dated 8 September, and drawn on the Liu Chong Hing Bank, P9, acknowledges and stands as receipt for this payment.  The general tenor of fraud is amply supported by the following facts:-

1) Clearly payments were made but no receipts were ever issued despite requests by PW2 especially, and PW1 to some extent. These were made in respect of the $5 million though I accept they did not seem to be asking for receipts in respects of the other amounts.

2) No formal accounts were ever produced to show how money invested or borrowed had faired or been dealt with.

3) Despite requests, you, D2, refused or were unable to supply either with a business card.

4) You, D2, never divulged the address of your supposed office truthfully.

5) There is much evidence of you, D1, and you, D2, acting together to ingratiate yourselves into the affections and thus the trust of PW1 and PW2. For example, it was you, D1, who introduced D2 to PW2 and shortly thereafter they became romantically linked. You, D2, persuaded PW1 to become the sworn mother of D1, D1 becoming her sworn son. These are the hallmarks of cynical and slick manipulation of victims and targets.

6) The mechanics of the deal leading to the $5 million investment are not the actions of bona fide business persons. Your acceptance of the 400,000 shortfall, D2, and payment of the costs of the deal, refusal to formalise the investment through legal representatives and the agreement by you, D2, to pay PW1’s mortgage at Conduit Road. The impression which is never dispelled is that there is a desperation and determination to get your hands on the money at any cost.

7) That your company, D2, was in any way connected to Century 21 is a palpable lie. It is clearly a throwaway line to entrap and seduce by claiming connections to a company, and I take judicial notice of that, which is a major international property company. It may be that you, D1, have worked for them in the past but that is neither here nor there given the claims that were made.

8) The ultimate sweetener was of course the provision of holidays to Bangkok, Los Angeles, Las Vegas, supposedly with you, D2, as the host and with D1 in attendance. Also, you lavished attention on the parents of PW1, that is PW2 and her husband.

189.All these matters taken together point to an irresistible inference that a fraud was practiced on PW1 and PW2.  Now let us look at what, D1 and you, D2, the case is against you.  The question is, can the cases be proved beyond all reasonable doubt that either or both of you are connected to these frauds or part of it. 

190.I deal first of all with you, D1.  I deal with you on the additional evidence to what I have already pointed out of your involvement.  It is clear from the evidence that you are a man of straw, D1. You may be connected or part of a rich family but you seem not to reap the fruits of that.  PW1 and PW2 paint you as a man who is very fond of alcohol, a man fond of dining and going out but PW2 was abundantly clear, and I find truthful, when she says on each occasion you were unable or unwilling to pay. She was expected, or PW1 was expected to fund your junkets.  She pointed to many occasions when she had to pay the bill.  Further, we have the purchase of gold ornaments for your wife.  These were made by PW1 at your request.  These of course are the subject of charges 3 and 4 too. 

191.D1, it was you who constantly sought to reassure and persuade first that D2 was a successful and resourceful businessman who had nurtured your fictitious investment of 5 million so that your family could live well on the proceeds.  It was you who sought to reassure PW1 and PW2 that your rich cousin, a Mr Fu whom you claimed to be the owner of the Furama Hotel was riding to their rescue.  That this did not occur, nor did Mr Fu meet with them shows this to be the lie for what it was. 

192.Then of course we have the serious admissions and confessions to be found in P1-1 to 4, D3 and P48, the latter being the conversations recorded.  None of these were given under caution so their weight is somewhat reduced but by the same token, despite what Mr Chui put to the main prosecution witnesses, nor was there in my finding any suggestion that they are the results of threats or intimidation.  All were voluntarily given and accepted by you, D1, even though at least P1-1 was written by someone else. 

193.In respect of the records of whatever is said or admitted by you, I repeat, is not and cannot be evidence against D2 nor vice-versa.  Let us look perhaps at the admissions that I find to be unequivocal.  In P1-1, D1 you say this:- 

“As in recent months, I Chong Ka-hai, repeatedly deceived my sworn mother and her daughter by stating elder cousin Fu Ho-fai would help me pay off the debt amounting to 8.5 million”.

As I said before, although you did not write that yourself, you signed and adopted it.

P1-2 you say:-

“As Ho Kar-lun and I knew that Au Yuet-oi had sold a flat, at the request of D2 I joined him to persuade PW1 and PW2 into paying 5 million for capital- protected investment. Furthermore, D2 requested me to falsely claim I had sold my share of 5 million so Madam Au could buy the shares. Actually there was no selling of shares.”

On page 3 also, you say this:-

“In this incident I gained not more than $200,000 of benefit.”

P1-3:-

“I am clear that I participated in the plan of Ho Kar‑lun between early 2007 and July 2008 and cheated PW2 and PW1 out of 8.5 million. They fell into the trap for they trusted me.”

P1-4 restates the incident of 9 July 2008 when they persuaded PW1 to loan them a further 1 million.

“D3, this is in fact an acknowledgement of what is owed and I owe you”,

- But not such as to move from the criminal sphere to the civil sphere as Mr Chui suggested. Only you, D1, signed it, therefore only you, D1, accepted and adopted it.

P48, the taped conversation, when you, D1, bemoaned the fate at marker 287. PW1 outlines the history of the fraud at 288. You do not deny, in fact agreeing and adopting the statement.

194.So I find that you, D1, accept the fraud that you took part in for some positive benefit in an active manner.  The evidence is overwhelming.  You admit to being the creature of D2, aiding and actively participating in the fraud referred to in charges 1 and 2.  There is no question of this merely being a civil matter, these are crimes where active deceit is employed.  The deceit is that money is to be invested in a company that does not exist and by a person who if he trades at all, which is extremely doubtful, it is merely as a dabbler and not, as I understand it, a proper trader.

195.Further, the hope held out by you, D1, of an investment by your cousin was a total and acknowledged falsehood.  In my opinion, the introduction of Jacky Leung and Circle, men ostensively to help track down D2 and retrieve the money is clearly a ruse to buy time and I find that they are merely confidents of yourself.

196.I find on the evidence given and accepted by me, all essential elements of the alleged frauds proved beyond all reasonable doubt.  You, D1, are convicted on each charge, save that I would add the words “approximately” before each amount therein.  Therefore I find you guilty on charges 1 and 2.

197.D2, you also face charges 1 and 2.  I found as a fact from the evidence I have referred to that this was a situation where fraud took place, that is a fraud on PW1 and PW2 and I find this proved beyond all reasonable doubt.  The question then is whether the prosecution has proved beyond all reasonable doubt that you participated in that fraud.

198.I repeat yet again what I have said regarding your actions and participation, that what D1 says is of no evidential value against you and my findings are not influenced to any extent by what D1 said. 

199.A very strong piece of evidence set alongside my findings I have already made is the cheque P9 re‑dated 9 September 2008. I have referred to this as a clear acceptance by you that you dealt with the 5 million in a way that was wrong.  Defence invite me to accept this was a civil matter but given all the circumstances, I do not accept that proposition.  My finding is that cheque indicates you had actively participated in the fraud. 

200.The addition of $500,000 is put as a sop to quieten and reassure PW1 and PW2.  If it is merely a civil matter, one questions why you did not simply explain to PW1 and PW2 the fate of their capital-protected investment.  There is but one inference I can draw and I draw it and that it was lost or used on purposes for which neither PW1 nor PW2 expected nor consent to its being used, purposes for which you had not and knew you had no permission.

201.Also, we know from the evidence that you were a gambler.  You gambled extensively in Las Vegas on the USA trip of July 2007, you gambled in Pattaya in 2008 and there is extensive evidence of you gambling on horses in Hong Kong.  You made admissions to that effect.  Whilst it is not for the prosecution to show exactly how the money fraudulently obtained was used, I do draw the irresistible inference that at least in part some of it was lost by gambling. 

202.Extensive evidence of your involvement in the fraud comes from a recorded conversation with PW2 produced as P49.  Paragraph 10, I quote, “Those horses, I lost a lot recently”.  Paragraph 13, “Do you understand, I, the horses I mean, depend on gambling, frankly speaking depend on”.  Para 127 to 129, there is a partial admission of tricking people albeit not specifically PW1 and PW2.  Para 167, “I gambled on horses”, that was said in reply to why he had not repaid PW2.  Para 203, you refer again to duping people.  I do note again that this was recorded without your permission or knowledge or consent and the admissions were not made under caution. However, I do accept and believe those admissions as being true, that is so far as the inculpatory admissions go.

203.Taking all matters together, the only possible inference is that you, D2, had no office, you had no company, you had little if any investments, you needed money, at least partially to gamble and pursue your high lifestyle.  Trickery and misrepresentation as set out in the charge was used with D1 as your accomplice to dupe and con PW1 and PW2.  All essential elements within charges 1 and 2 are proved beyond all reasonable doubt and so far as you are concerned charges 1 and 2 are proved beyond all reasonable doubt.

204.I turn now to charges 3 and 4.  These two charges have been the subject of a submission of no case to answer which I have ruled against for the reasons on the record.  These two charges involved two cheques being Exhibits P21 for $28,000 and P22 for $30,000 each dated 7 June 2008. 

205.Those two cheques were given to PW2 by you, D1, to pay for gold ornaments bought for you on 31 May and other goods which had been purchased previously.  They are a Hang Seng Bank cheque.  You post-dated them as you would not have any money to cover them until your allowance of 60,000 was paid into your account.  Therefore, you made the date 7 June 2008.  You then asked her not to cash them on that date as you had other debtors.  PW2 agreed and she only tried months later in October 2008 when they were dishonoured.  In fact, the account had been closed in February 2001, seven years earlier.

206.Mr Chui at paragraph 18 in his final submission leaves this as a matter for the court with no further representations being made.  For my part, the signing and presenting of these albeit post-dated cheques drawn on an account closed for over seven years clearly amounts to an evasion of a liability by deception.  The only inference I can draw is that you, D1, knew these cheques were not valid instruments as the account was closed and you intended to evade the debt by deception and PW2 was indeed deceived.

207.Therefore, both cases are proved all reasonable doubt and you are convicted in respect of charges 3 and 4 also.

208.Charge 5.  This relates to you, D3.  The charge is one of dealing with property known or believed to represent the proceeds of an indictable offence and refers to just over $2.8 million. 

209.PW1 and PW2 had been introduced to you who D2 described as your employee.  You in your first cautioned statement, P65, describe yourself as D2’s assistant.  The evidence shows that under the instructions of D2, PW2 paid a total of $2,830,000 into your integrated bank account with the Hang Seng Bank between 18 October 2007 and 17 July 2008 in differing amounts.

210.From the bankers’ affidavit, P62, we see that the amounts were moved out very quickly on practically all occasions, either by cash withdrawal or transfer.  In your cautioned statement, P65, you explained why your bank account was so used.  You said D2 had no account with the Hang Seng Bank.  PW2 used the Hang Seng, so faster for him to use this account. Then, D3, you transferred the sums to persons to whom D2 owed money.  You transferred various amounts as instructed.  You said you believed PW2 loaned money as he was dating her daughter, PW1.  You further said that money was used to settle gambling debts. As far as you were concerned, this was just to settle debts and you took no part in any deception.

211.I have to tell you, D3, I found that to be incredible.  It is self-serving, so of little weight, it does not explain why D2 did not simply open his own bank account at Hang Seng Bank.  The amounts passing through the accounts were not small and moved out very quickly indeed. I reject and do not believe your explanation.  I have already found these sums to be part of a fraud perpetrated by D2. 

212.I now find on the evidence before me that you did deal with the money knowing or at least having reasonable grounds to believe they were property in which the whole or part directly represented the proceeds of an indictable offence.  There is no other explanation that is tenable, in my opinion, therefore, D3, you are convicted on charge 5.

Charge 6

213.The case against you, D4, in my opinion is sparse in the extreme.  D4, from the bankers’ affidavit, your account with the Chiyu Bank received two deposits from PW2, they were each of 50,000.  Each was immediately withdrawn.  You made no admissions and gave no records of interview.  You do not appear to be known to PW1 and PW2 and there is no certain connection to D1 and D2.  The amounts do indeed stem from fraud and they were moved out or withdrawn with considerable haste.  That is all we know, nothing significantly more. 

214.There are simply too many possibilities and too few facts to find that you knew or indeed had grounds to believe that the two sums, being 100,000, were dealt with and represented the proceeds of an indictable offence.  Therefore, D4, the case against you is not proved beyond all reasonable doubt and is dismissed.

Please refer to CACC411/2012 for the relevant appeal(s) to the Court of Appeal.