HKSAR v. Kamarudin Bin Khalil

DCCC 898/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 898 OF 2013

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BETWEEN

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REASONS FOR VERDICT

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1.The defendant pleaded not guilty to a charge of conspiracy to defraud. The prosecution alleged that between August 2008 and June 2011 the defendant together with a Mohamed Nazari, Bin Abdul GHANI (Nazari) conspired to defraud Thomas Benedict Quinn-Schofield (PW1) of AUD1,221,320.00.

2.It was not in dispute that PW1 was defrauded of the sum contained in the charge. The defence case was that, not only was the defendant not a party to such fraud, the defendant himself was also a victim of the fraud.

Overview

3.PW1, an Australian national, is a retired plumber with property business interests. Through a third party he was introduced to Nazari, a Malaysian national. PW1 was led to believe that Nazari would be able to arrange investment opportunities with large returns and that he had access to international money funds which he referred to as “Private Placement Programmes” (PPP).  PW1 was told that investors with access to significant funds, in excess of USD1 million, would be able to secure the release of large sums of money held by banks on fixed deposits, and receive a share of  such deposits.

4.Through Nazari,  PW1 was introduced to the defendant and his wife, who are also from Malaysia. PW1 was led to believe that the defendant was also seeking to invest in such a scheme but did not have sufficient funds. It was suggested that PW1 and the defendant pool their resources to give them a better chance of  securing a PPP.

5.The defendant and his wife were directors and shareholders of a company called Ever Legend Holdings Limited (ELHL), a British Virgin Island (BVI)  Company incorporated on 14 May 2008.

6.PW1 said that over a period of months various programmes were considered.

7.In February 2009, PW1 was told that ELHL held a fixed term deposit  at the Dexia Bank in the sum of USD100 million (the Dexia Fund). PW1was told that by his paying a net amount of AUD1,221,320 and the defendant paying a lesser sum, the fund could be released and PW1 would receive USD22 million. Forged Dexia Bank documents were shown to the victim to support the assertion that monies were held by Dexia in the name of  ELHL.

8.The Dexia Bank fund did not exist and PW1 lost the sum he paid. The prosecution case was that the defendant was party to this fraudulent scheme. The prosecution asserted that a substantial part of the money paid by the victim eventually went into the bank accounts of  Nazari and the defendant.

9.In the course of the evidence, witnesses were referred to a number of companies and bank accounts with the Hong Kong Shanghai Bank (HSBC) and the Hang Seng Bank (HSB).

Companies and Bank Accounts Involved

ELHL HSB Account

10.Ever Legend was incorporated  in the British Virgin Islands on 14 May 2008. The defendant and his wife, Nor Rizan Binti Tajuddin, were appointed as directors and equal shareholders.

11.In September 2008 the defendant and his wife opened an account in the name of ELHL with the HSB in Mong Kok, Hong Kong. They were joint signatories of the account.

12.On 10 November 2008 PW1 became an account signatory.  The signature of PW1 and the defendant or his wife together with the company chop were required to operate the account.

Team Link Limited – HSBC Account no.491-834321-838 ( TLL account)

13.Team Link Limited (TLL) was incorporated in the British Virgin Islands on 2 January 2009. Nazari was its sole director and shareholder.

14.On 10 February 2009, an HSBC account was opened in the name of  TLL with Nazari as the sole signatory.

Super Dynamic Limited – HSBC Account no:491 – 862512-838 ( SDL account

15.Super Dynamic Limited (SDL) was incorporated in Hong Kong on 9 January 2009. Nazari was its sole director and shareholder

16.On 17 February a company  account was set up by Nazari with  HSBC in Hong Kong ( SDL account).

Dendara Pty Limited HSBC account 400-547436-888 –( DPL account)

17.Dendara Pty Limited (DPL) was set up by PW1 and his wife, Denise, in Australia in 1981.

18.On 12 September 2008 an account in the name of DPL was set up with HSBC in Hong Kong with PW1 and his wife as signatories.

Defendant Account – HSBC Account no: 108-723198-833

19.On 2 March 2009, the defendant opened a personal account with HSBC ( Defendant account) . He was the sole signatory.

Nizari Account – HSBC Account no: 491 – 861258 -888

20.On 5 March 2009, Nizari opened an account with HSBC in Hong Kong. He was the sole signatory.

Prosecution Evidence

PW1 Thomas Benedict Quinn-Schofield

21.PW1 lives in Perth with his wife Denise. He was a plumber but retired in 2008. He said he had interests in some property businesses.

22.In 2008 he went on a trip to Europe where he met an Australian called Kevin Burgess. They discussed investments and Burgess said he could introduce him to an investment businessman from Queensland called Trewin. PW1 later got in touch with Trewin who in turn put PW1 in contact with Nazari.

23.PW1 had telephone conversations with Nazari and Trewin. Nazari told him that he had access to international money funds involving short term investments with high returns. PW1 said that Nazari referred to such funds as Private Placement Programs (PPP). Nazari and Trewin told PW1 that he had to have AUD2 million (about USD1.5 million at that time) available for investment. They also told PW1 that he had to open an HSBC personal account to facilitate the transfer of monies to Hong Kong and inform Nazari when the money had been raised. PW1 said that he did not have this amount available. The most he was able to raise was AUD1.9 million secured against his assets in Australia.

September 2008 – PW1’s first trip to Hong Kong

24.It was arranged that after sorting out his finances PW1 and his wife would travel to Hong Kong at their own expense to meet Nazari. PW1 also paid for Trewin to travel to Hong Kong from Queensland. PW1 and his wife arrived in Hong Kong in mid-September and stayed for about one week.

25.In September 2008 PW1 set up the DPL account at the main branch of HSBC  and paid in AUD1.9 million. PW1said that Nazari had told him to bring to Hong Kong the DPL corporate documents to facilitate the opening of the account.

26.PW1 met Trewin at a coffee shop in the YMCA in Tsim Sha Tsui. PW1 said that later that day he was introduced to Nazari who explained to him the PPP process. He said that there were many such funds available and that he would send him the details.

27.PW1 said he was impressed by Nazari. PW1 said that Nazari seemed to know what he was talking about, his appearance was impressive and he dressed well.

28.After returning to Perth PW1 had many phone and email exchanges with Nazari who outlined to him a number of investment options. PW1 said he had seen about 10 to 15 PPP proposals but none went ahead. PW1 said that Nazari told him to be patient.

November 2008 Trip to Hong Kong and Zurich – First Meeting with Defendant

29.PW1 said that Nazari asked PW1 about meeting up with a trader in  Zurich to discuss a PPP. Nazari suggested that they meet up in Hong Kong to put in place the necessary paperwork. Nazari told PW1 that if the meeting in Zurich was successful they would need to be in a position to transfer funds.

30.PW1 and his wife returned to Hong Kong in November 2008. PW1 said that it was arranged that they would meet up at the 21^st floor boardroom of the Hang Seng Bank in Mong Kok. Nazari introduced PW1 and his wife to the defendant and his wife.  Nazari told him that the defendant and his wife were friends of  his from Malaysia and they had done business together in the past. Nazari said that the defendant and his wife wanted to invest in  a PPP but had insufficient funds to do so on their own. Nazari suggested that they pool their recources as they would stand a better chance of securing an investment. PW1 was told that the defendant was able to invest approximately one third of what PW1 intended to invest.

31.PW1 was told that the defendant and his wife were the directors of  ELHL and had opened an account at the HSB bank a few months previously. At that meeting, PW1 was introduced to Desmond Ho (PW3) who was a bank relationship manager. PW1 said  PW3 showed him P8, an open letter from the bank confirming ELHL had opened an account at HSB and that as at 8 October 2008 HKD3,726,894.40 had been deposited into the account.

32.PW1 said he was told to transfer his funds from the DPL account to the ELHL account in Mong Kok and he would become a joint signatory of the ELHL account. The arrangement was that no money could be transferred out of the account without his signature and that of either the defendant or his wife. PW1 said that PW3 told him the funds would be in the ELHL account and could not be withdrawn without his authority.

33.PW1 duly became an account signatory and transferred his funds from the DPL account to the ELHL account. PW1 said the defendant gave him his business card describing him as the managing director of  ELHL. PW1 said that the defendant told him he was in the transport business in Malaysia and that he had done business with Nazari in the past and knew his family.

34.PW1 said that all these matters were handled in the boardroom of  HSB in the presence of  PW3 and he found it very impressive. PW1 said that on this occasion both he and the defendant signed remittance application forms which were to be used in the event of finding any suitable funds on their visit to Zurich. PW1 said that as the trip to Zurich was not successful neither of  these remittance applications were used.

35.PW1 said that he later flew to Zurich at his own expense and Nazari paid for his accommodation. Nazari went with his wife and the defendant went with his wife and two of his children who were in their twenties. Nazari and his wife and the defendant’s family stayed together in an apartment. PW1 said nothing much seemed to be happening in Zurich as regards meeting traders. Only one meeting was arranged which came to nothing. PW1 said that Nazari kept making excuses. PW1 kept rearranging his flights. He said that after a few weeks he had had enough and left. He said that he left Nazari and  his wife and the defendant and his family in Zurich and understood they stayed there for most of the month. PW1 returned to Perth via Hong Kong.

36.PW1 said that as he received no positive news of any investment opportunities and on 12 February 2009 he arranged for the money he had placed in the ELHL account to be transferred back to his personal account in Perth. PW1 instructed PW3 to transfer the money using the remittance form signed before the trip to Zurich, P18.

The Dexia Fund

37.Several days after this remittance, Nazari contacted PW1 and proposed another investment to him. He told PW1 that there was a fund of USD100 million held at an American Branch of Dexia Bank Belgium under the name of ELHL. On 19 February 2009 PW1 arranged for  AUD1.9 million to be transferred back  to the ELHL account.

38.On 20 February 2009 ( Friday) 2.48am Nazari emailed to the defendant and PW1 a “Resolution of the Board of  Directors of ELHL” (the Resolution) dated 20 February 2009  signed by the defendant and his wife as directors of  ELHL, Exhibit P1 and  Ex P10 page 729. In the email Nazari said that he would  call a meeting in Hong Kong for the 21 February 2009. The Resolution stated that USD88 million of the Dexia Fund would be distributed. USD22 million would be paid into PW1’s  DPL account. The Resolution also stated that Nazari had been appointed to manage and distribute the Dexia Fund. Nazari represented that if PW1 contributed money to release the Dexia Fund it would be distributed according to the Resolution. PW1 verified this arrangement with the defendant.

39.On 21 February 2009 Nazari emailed PW1 three attachments ( Exhibit P10 page 731):

(1)A fixed deposit certificate issued by Dexia Bank dated 13 February 2009, Exhibit P2:

(2)A bank proof of funds issued by Dexia Bank, Exhibit P3:

(3)An account statement of the ELHL account with Dexia Bank for the period from 13 to 14 February 2009, Exhibit P4.

40.PW1 contacted the defendant to verify the authenticity of the documents relating to the Dexia Fund and was assured that everything was in order and that the money was definitely there in the company’s name.

41.On 23 February 2009 PW1 arrived in Hong Kong and attended a meeting at HSB with his wife, Nazari, the defendant, the defendant’s son and PW3. According to PW1, PW3 controlled the meeting. Exhibits P1 to P4 were produced as well as a document showing the intended distribution and contributions relating to the Dexia Fund, P6. According to PW1, two further remittance forms were signed by him and the defendant on the ELHL account and his understanding was that they were for the purpose of remitting funds to Dexia Bank in accordance with the discussions at  HSB. PW1 confirmed that Exhibit P5, a remittance for AUD773,306 related to his contribution to the Dexia Fund and he assumed there would have been a remittance relating to the contribution expected from the defendant.  PW1 later received an email from PW3 stating that “[his] wire transfer had been processing.” (Exhibit P11, page 733) which he understood to mean that his transfer to Dexia was being processed.

42.On the morning of 27 February 2009, PW1 received a call from the defendant requesting a meeting at Starbucks near his hotel. When he arrived the defendant was present with his son. PW1 said that, to his surprise, PW3 was also present and told him there was a problem with the remittances. A meeting at HSB was arranged for later that day. PW1 said that at that meeting PW3 confirmed that the Dexia account existed but that HSB did not have a relationship with Dexia Bank and the remittances would have to be sent from HSBC.

43.PW1 said that Nazari told him that the calculation was incorrect and that PW1 would have to remit AUD1,221,320. PW1 said that Nazari suggested that, as his company TLL had an account with HSBC, it would be convenient to remit the funds from ELHL to TLL for onward transmission to Dexia Bank. PW1 said everyone agreed to the suggestion.

44.PW1 said that two further remittance forms were signed by him and the defendant and his understanding was that both were for the purpose of  remitting funds to TLL for onward transmission to Dexia Bank. PW1 said that Exhibit P6, a remittance dated 27 February 2009 in the sum of AUD,1,221,320 in favour of TLL , was payment of his share.

45.PW1 said that he never received any refund of this money nor any return on the investment. He kept in regular contact with the defendant and Nazari and was informed that the money was with Dexia but there were problems with the paperwork concerning large amounts of money being transferred out of the USA. PW1 said that the defendant told him to be patient.

46.In an email, P12,  dated 11 June 2009 to PW1, using the e-mail address of PW1’s wife, the defendant stated “….As my people say to me that the amount of USD100 million that is park in Dexia Belgium have not gone to any transaction or attached to any loan for facilities that Nazari have mentioned to you…….”

47.In an e-mail to PW1 dated 16 June 2009, P13, the defendant stated, inter alia,  “….. I did tell [Nazari] that I know the account in Dexia hasn’t been touch or being pledge to any project or to any of situation.”

48.PW1 said that there was intermittent contact with Nazari over the next two years but he felt increasing frustration with the situation.

49.PW1 said that he lost contact with Nazari in about April 2011 and with the defendant a few months later. PW1 reported the matter to the police on 22 July 2011. He told the defendant that he was going to report the matter.

PW4 John Bambino – Director of Operations at Dexia Credit Local New York Branch - S.65 B Statement – Ex P36

50.PW4 stated that ELHL did not have an account with Dexia Bank and that exhibits P2 to P4 were bogus. PW4 pointed out a number of misspellings and variations in the account number references. The bank had never heard of  Nazari, the defendant or the defendant’s wife.

PW8 Man Kit – Director of Maywood Travel Limited

51.PW8 produced Exhibit 22, a summary of  payments made by TLL for the period between March and August 2009 for hotels and air flights for Nazari, the defendant and the defendant’s son and other persons. The total amounted to HKD164,620 and payment was made by TLL into the HSBC account of PW8’s mother who co-founded Maywood.

PW5 Ahamedmansoor Abdul Rashid – Managing Director of Ritz Resources (HK) Limited

52.PW5 said he met Nazari through a common friend in September 2008. PW5 said that  Nazari contacted him by telephone and said he need to open a bank account. PW5 said he met Nazari at the HSB bank in Cameron Road and there were two Malaysian  persons with Nazari who appeared to be husband and wife.

53.PW5 said that he then understood that it was the Malaysian couple who wished to open an account but understood that the bank would not accept cash and a cheque was needed. PW5 said that he arranged for someone from his office to bring along a cheque and he was given cash by all three persons. PW5 said that after he had been handed the cash  he gave Nazari a cheque for HKD1,890,512 payable to ELHL, Ex 24 page 1037.

54.PW5 said that after the cheque was handed over Nazari asked him if he would give them a second cheque if they paid him a similar amount. PW5 said that he refused. PW5 said that Nazari said it was very important so he agreed to introduce them to a friend of his, Iyadurai Kishore, PW6, who is the operations manager of GCC, a money exchange company. PW5 said he had an account with GCC. PW5 said that he took Nazari and the couple to the offices of GCC in Mirador Mansion. PW5 said that cash was handed over and Nazari received a cheque.

PW6 Iyadurai Kishore – Operations Manager of GCC, Money Exchange Company

55.PW6 confirmed that PW5 was a regular customer. He said that on 25 September 2008 PW5 brought some Malaysian friends to GCC for the purpose of  obtaining a cheque against a cash deposit. PW6 confirmed that the receipt Exhibit P20 was issued by his company. His recollection was that he dealt with PW5 in this transaction.

56.PW6 denied in cross-examination that the Malaysian friends of PW5 had come to GCC earlier that day to collect HKD3.7 million in cash which had been remitted to his company from Malaysia. PW6 said that not only did this not happen but that  his company did not handle remittances in Malaysian Ringgit (MR). He said that they only buy and sell MR in Hong Kong.

PW9 Lee Wai Ming – Administrative Officer of Bestwin Engineering

57.PW9 said her company operates out of the address which is recorded as the registered address of  ELHL.  She has worked for Bestwin since 2008.

58.She said that her company deals in the laying of pipes for tunnels and is the only company to work out of the premises.  PW9 said that she had received correspondence addressed to EHLH and either returned it to the post office marked “ no such person” or threw it away. She said that she had never heard of  Nizari or the defendant.

PW2 Chan Hiu Mei – HSB Business Development Manager

59.PW2 handled the account opening for ELHL with the defendant and his wife, P24, page 902. PW2 said that they supplied the information. PW2 was shown the remittance forms which had been completed in relation to this account. She said that all had been processed at the Mongkok branch where the account had been opened with the exception of P24, page 1050, dated 2 March 2009 in the sum of HKD1,020,000 which had been received at the Hankow Road branch in Tsim Sha Tsui

PW3 Ho Siu Ming, Desmond – HSB Relationship Manager for ELHL

60.PW3 met the defendant and his wife on 22 September 2008, the day they opened the account.  PW3 said that there were other persons present and he could not recall if anyone called Nazari was amongst them.

61.PW3 said that he assisted in filling in the information in the remittance form in the sum of AUD773,306 dated 23 February 2009 in favour of  Dexia Bank, Ex P5. He said he did not know why the transfer did not go through. He said he did not know why the signatures on the transfer form were blocked out. In cross-examination he said he did not know the purpose of the remittance. He said he had never been shown the Dexia Bank documents P2 to P4.

62.PW3 said he had little recollection of the various transactions. He denied that on 27 February 2009 he told PW1 and the defendant that the remittances dated 23 February did not go through because his bank did not have an arrangement with Dexia Bank. PW3 denied that he was ever told by PW1 that the purpose of the remittances was for investment in a Dexia Bank fund.

Video Recorded Interviews – Exhibits P29 -31

63.On 6 March the defendant participated in two video recorded interviews and the following day there was a further interview. The admissibility of the interviews was not challenged.

64.The responses of the defendant during the interview were broadly consistent with his evidence.

Admitted Facts Ex P33

65.There were admitted facts in relation to the relevant companies and bank accounts and the movements of funds through those accounts.

Defence Case

Evidence of the defendant

66.The defendant is aged 52. He has three children from his first marriage and two children in their early twenties with his present wife. He has a clear record. He  was educated up to Form 6 High School standard in Kuala Lumpur. He worked as a customs officer until 1995 and then went into business operating a foodstall and trading in selling items such as stickers earning about MR 10-15,000  per month. The defendant also worked for a company which assisted in raising  funds for the paralympics.

67.PW1 said that in 2008 he was in a bad financial position as he had lost MR 17 million due to an investment in a company called Ezra.

68.He said he met Nazari in 2007 via a friend called Ho Peck. He was told Nazari was a financial expert with access to bank funds. The defendant said that Nazari suggested the defendant came to Hong Kong to engage in trading and also for investments in a PPP. The defendant said he was unclear as to what Nazari traded in. He said Nazari appeared to be a successful businessman wearing good suits and accessories. The defendant said that Nazari was very convincing and he trusted that Nazari could assist him in making back the money he had lost in Malaysia.

ELHL

69.ELHL was incorporated as a BVI on 14 May 2008. The defendant said that he and his wife came to Hong Kong in  2008 and at Nazari’s suggestion set up ELHL as a BVI company with a registered address in Hong Kong. Nazari introduced him to two Chinese gentlemen who became company secretaries and he paid Nazari MR40,000 to set up the company.

70.D produced Exhibit D6 which purported to be a Joint Venture Project Agreement between Atlantic Legend Limited (ATL) owned by Nazari and ELHL. Both companies purported to operate out of the same address in Kowloon Bay which, as PW9 confirmed, was not an address with which the company had any connection. Under this agreement the “Funder” (ATL) would bring forward USD500 million from “Funder Group for investment in a private placement opportunity (PPO) for a period of 12 months”. The “Project Owners (ELHL) will bring forward HKD10 million as Joint Venture Fund and USD100,000 as Transfer fee for Funder Group USD500 million for  PPO.”

71.The defendant said that at that time he only had MR 2 million  but hoped to raise more. The defendant said that the agreement was drafted by Nazari and he signed it in Malaysia on 13 September 2008.

72.The defendant said that after ELHL was set up in Hong Kong they set up ELHL in Malasia (ELH S/B) for the purpose of sending funds to Hong Kong. His wife, son and brother-in-law were directors of this company.

73.The defendant produced Exhibit D7, a special power of attorney dated 15 September 2008 between ELH S/B and Nazari  appointing Nazari as their attorney to deal with HKD3 million and USD100,000 held in HSBC  in Kuala Lumpur which was to be transferred to the bank of their “designated company in Hong Kong.” The agreement refers to a branch of HSBC in Lockhart Road Causeway Bay held in the name of  ELH S/B. The defendant produced, D8, an HSBC bank statement dated 2 September 2008 in the name of ELH S/B showing a balance of just over MR 2 million.

74.The defendant said that the idea to open the ELHL account at the Hang Seng Bank Mong Kok branch on 22 September 2008 (P24) came from Nazari. The defendant said that the Hong Kong address of  ELHL was supplied by Nazari.

75.The defendant said that arrangements had been made to send the money to pay into the ELHL Hang Seng account using a money exchange in Kuala Lumpur called RMEX. The defendant produced D9, A remittance showing the payment of MR 1,700,000 from the ELH  S/B bank account into the account of RMEX Trading on 19 September 2008. The document appears to be signed by the defendant and his wife. The defendant said that Nazari told him that such a large sum of money could not be transferred to Hong Kong through the banking system and the money had to be sent to a money changer in Hong Kong organised by RMEX, namely GCC, run by PW6. The defendant said that when they were in Hong Kong Nazari told him that the money could not be paid into the bank in cash and Nazari arranged for a friend to provide a cheque. The defendant said that PW5 said he was not able to give them a cheque for the whole amount and at the suggestion of  PW5 they went to GCC, the money exchange from which the cash had been withdrawn earlier, to pay in cash and received a cheque.

76.The defendant said that he did not know why this payment could not be made through an account operated by  Nazari.

Meeting with PW1 – November 2008- PW1 becomes co-signatory of ELHL account

77.The defendant said he and his wife returned to Hong Kong in November 2008 and Nazari arranged for him to attend a meeting in the boardroom of HSB in early November. The defendant said that PW1 and his wife were present at the meeting and this was the first time he met them. The defendant said that Nazari had told him a few days earlier that PW1 had wanted to join in the venture. The defendant said, as he had insufficient funds, he was told by Nazari that if  the defendant joined funds with PW1 there would be sufficient funds to proceed with an investment. The defendant said that Desmond Ho, PW3, was present at the meeting. The defendant said that it was agreed that PW1 would pay money into the ELHL account and become a co-signatory of the account which thereafter would require the signature of PW1 and either the defendant or his wife.

78.On 10 November PW1 paid AUD1.9 million into the ELHL account.

79.On 21 November some withdrawals in Hong Kong dollars were made including a total of HKD300,000 which the defendant said was used for the business trip to Zurich in search of potential PPP’s. There was also a further withdrawal of HKD1,245 million on the same day (Ex 24 page 974 and 1046). This was a remittance payment payable to a personal account of Nazari with the Bank of China in Hong Kong from the current account of the ELHL account with HSB. The defendant claimed that he could not recall what this was for but thought it might have been connected with a proposed PPP. The defendant said that PW1 made no payment in this regard as it was agreed that the defendant’s money would be used first.

The Dexia Bank Fund

80.The defendant was shown Exhibit P1, a document headed “Resolution of the Board of Directors” dated  20 February 2009 signed by the defendant and his wife on behalf of ELHL giving authority to Nazari to deal on behalf of ELHL with  a fixed security deposit of  USD100 million available at the Dexia Bank  Belgium and held in the name of ELHL.

81.The defendant said P1 was drafted by Nazari and sent to him by email, Exhibit D4 date 12 February 2009. He said he printed out the  resolution, he and his wife signed it, he scanned it and returned the signed copy by email to Nazari. The defendant said he and his wife also signed D5, an ELHL resolution that an account be opened with Dexia Bank to be operated by Nazari.

82.The defendant said that, later, copies of the Fixed Deposit Certificate, P2, the Bank Proof of Funds, P3, and the statement of account, all dated 13 February 2009, were also emailed to him by Nazari and he understood that the funds referred to in the certificate were in  Dexia Bank. He said he did not ask where the money came from.

83.The defendant said  that he and his son returned to Hong Kong on Sunday 22 February 2009 and met with Nazari, PW1 and his wife and PW3 at HSB the following day. Hard copies of P2 to P4 were produced at the meeting. The defendant said that it was agreed that that they should proceed with Dexia Fund investment and he recalled signing P5, a remittance application form dated 23 February 2009 in the sum of AUD733,306 in favour of the Dexia Bank. The defendant was vague as to whether or not he filled in a remittance form authorising the withdrwal of funds from money deposited in the account by him. He said he did sign something but he could not recall what it was or the amount involved. He said he could recall being shown P6 which purported to relate to the release of funds to Dexia Bank but he could not understand it. The defendant said he had kept his copy of the document but it was in Malaysia.

84.The defendant said that he learned a couple of days later that the transfer to Dexia Bank had not been successful and they had to return to HSB. The defendant said that PW3 told them that there had been a technical problem. The defendant said he did not ask about the funds he thought he remitted. He said that at that time his attention was wandering as his wife was ill in Malaysia.

85.The defendant said that he met PW3 at Starbucks on 27 February. The defendant said that later PW1 arrived. The defendant said that PW3 told them about a problem with the transfer to Dexia Bank and told them that another bank would have to be used for the transfer. The defendant said that they met later in the day at the HSB board room. The defendant said that it was suggested that the TLL account with HSBC be utilised for the transfer to Dexia Bank and PW1 was informed that he would have to remit a larger amount, AUD1,2221,320.

86.The defendant was shown Ex P24, page 1050, a remittance dated 2 March 2009 in the sum of HKD1,202,000 in favour of  TLL. The defendant said that he thought this represented his share of the payment due to Dexia Bank from monies he had paid into the ELHL account. He was unable to say how the amount was calculated. The defendant was unable to say why it was dated 2 March rather than 27 February which is the day PW1 signed his remittance and why it was received at the Hankow Road Branch of  HSB rather than the Mong Kok branch where other remittances were dealt with.

87.The defendant was shown Ex P24 page 1049, a remittance from the ELHL account dated 27 February 2009 in the sum of USD100,000 payable to a remittance company in Malaysia. The defendant said that this was to repay persons who had lent him money in Malaysia.

88.The defendant was shown Ex P24, page 1048, a cheque dated 27 February 2009 in the sum of HKD140,000 payable to his son. The defendant said that he could not recall what this was for.

89.The defendant said that he stayed on in Hong Kong for four months together with his son waiting for funds from Dexia to be released. The defendant’s wife joined him towards the end of the period. The defendant said that he was in regular contact with Nazari who assured him that the funds were still available.

90.The defendant said that he and his son stayed in a number of hotels in Tsim Sha Tsui, Jordan and Mong Kok paid for by Nazari who also gave him money. The defendant said that Nazari gave him money as he had run out of  funds. The defendant said on 2 March 2009 he had opened a personal account in Hong Kong and that the payment of HKD300,000 deposited into this account by Nazari was used for living expenses and he sent some money home.

91.The defendant said he brought his son to Hong Kong to be with him as he did not have many friends in Hong Kong.

92.The defendant said that in his email to PW1, Ex P12, dated 11 June 2009, where he stated that “ my people” had assured him that everything was OK in relation to funds in Dexia, by “my people” he meant Nazari.

93.The defendant said that he did not report this matter to the  police as he still felt that he could get back the MR1.7 million which he claimed Nazari took from him as he knew where Nazari lived in Malaysia.

94.The defendant said that he was told by PW1 that he intended reporting the matter to the police in Hong Kong. 

95.The defendant said that he was arrested on 5 March 2013 in Hong Kong when he came intending to visit his son for one week. His son was working in Hong Kong at that time.

96.The defendant said he was deceived by Nazari and was not party to a conspiracy to defraud.

97.In cross-examination the defendant was asked about the cash he alleged was remitted to GCC, PW6’s money exchange company, by REMX in Kuala Lumpur. The defendant said that on the morning of  25 September 2008 he and his wife together with Nazari went to GCC to collect HKD3.7 million transferred from REMX in Kuala Lumpur. The defendant said they took a bag with them for that purpose. The defendant said that when they left GCC Nazari told them that the banks would not accept cash and Nazari rang PW5 to give them a cheque.  The defendant said that PW5 would only give them a cheque for half the money and suggested they go to GCC to ask for a cheque for the balance of the cash. The defendant said the suggestion of  going to GCC was a coincidence.

98.The defendant said that  PW6 was lying about not giving them the cash on the morning of 25 September. The defendant said he had no documentation in relation to the cash withdrawn from GCC.

99.The defendant said he did no trading in Hong Kong. When asked if he had done any advertising of any products in Hong Kong he said he had  advertised by word of mouth. He said that he had a business idea in relation to drinks cans. The defendant had told the bank that he anticipated a monthly turnover of HKD500,00 to HKD2 million. He said he arrived at these figures  by reference to the population of  Hong Kong.

100.The defendant said that Nazari told him he had an office but he never said where it was and the defendant never asked him. The defendant said he did not know if  Nazari had any staff.

101.The defendant said he never made any enquiries as to any remittances between TLL and Dexia Bank. The defendant said he never wrote to the bank.

102.The defendant said that after the remittances to Dexia in late February he remained in Hong Kong for four months trying to get back the money from Nazari. He said that he did not want to return to Malaysia without the money. The defendant said that his trading business in Malaysia had ceased.

103.The defendant said that he opened a personal bank account in Hong Kong on 2 March 2009 as he had no account in Hong Kong and said he was not intending to go back to Kuala Lumpur immediately.

104.The defendant was unable to explain the purpose of the payment on 21 November 2008 of HKD1.234 million into the personal account of  Nazari, Exh 24, pages 974 and  1046 before they went to Zurich.

Directions

105.I reminded myself that the prosecution are required to prove the guilt of the defendant beyond reasonable doubt. The defendant has nothing to prove. If I were to disbelieve what he told the police when interviewed or his evidence in court that does not mean he is guilty of the offence. Were I to disbelieve what he said when interviewed or his evidence in court I am required to consider the evidence I do accept and decide if that satisfies me of the guilt of the defendant to the required standard.

106.The defendant has a clear record which is relevant to the issues of  propensity and credibility.

107.I also reminded myself that where the prosecution rely on circumstantial evidence, the court can only draw an inference from facts proved beyond reasonable doubt and such an inference must be the only reasonable inference that can be drawn from such facts, it must be an irresistible inference.

Conspiracy to Defraud – Archbold Hong Kong 2014

“ The offence has no formulation which amounts to comprehensive definition of the common law offence. The offence is constituted by becoming a party to an agreement with another or others to use dishonest means: (a) with the purpose of causing economic loss to or putting at risk the economic interests of, another; or (b) with the realization that the use of those means may cause such loss or put such interests at risk.

The Ghosh two-stage test should be applied to determine whether the means agreed upon are dishonest: Mo Yuk Ping v HKSAR [2008] HKEC 1195..

Evaluation of the Evidence

108.There is no doubt in this case that PW1 was the victim of an elaborate scam as a result of which he lost AUD1,221,320. The issue to be decided is whether the defendant was knowingly and dishonestly acting in concert with  Nazari to defraud PW1. The defendant claimed that, not only was he not a party to the fraud, he was a victim and lost a considerable amount of money. In his evidence he claimed to have lost MR1.7 million.

109.The evidence makes it clear that Nazari is a sophisticated and persuasive fraudster with contacts in Hong Kong. He was able to persuade PW1 to pursue an investment which on the face of it was too good to be true. Nazari was also able to keep up the charade for almost 2 years before PW1 finally decided to report the matter to the police.

110.I treated the evidence of PW1 with great caution. His evidence related to events going back over a period of five years. He was obviously very bitter about having been duped and had lost a considerable amount of money. I also noted that  there were conflicts between his evidence and that of  PW3, the customer relations manager of  HSB.

111.PW1’s better judgment in this matter was obviously overcome by greed. He admitted that he did in fact think that what was being offered was too good to be true. He could offer no reasonable explanation as to who he thought the money purportedly in Dexia Bank belonged to and how he realistically thought that he could get a return of USD22 million for AUD1.2 million in one week.

112.PW1 was asked a number of questions about Hong Kong dollar payments out of the ELHL. I bore in mind that once PW1 became a signatory of the ELHL bank account on 10 November 2008, no monies could be moved out of the account without his signature on the relevant document.  I noted that this account was divided into a current account and a foreign currency savings account. PW1 paid money only into the foreign currency savings account and he alone paid money into that account. All other payments into the account were made into the current account. PW1 said that he only concerned himself with  the foreign currency side of the account and did not pay close attention to the current account. I noted that once PW1 made the payment to TLL on 27 February he moved the balance back to his bank in Perth. He would thereafter have no personal interest in the account. PW1 admitted that his signature was on all documents moving monies out of the current account. He said that many of the documents were blank when he signed them and he paid no particular attention to transactions in the current account.

113.In this regard, it was the defence case that PW1 was well aware of the payment of HKD1,020,000 to TLL. He was referred to the Remittance Application Form Ex p24 page 1050 which effected this transaction. The form is signed twice by the both the defendant and PW1. The defence case with that this represented the defendant’s share of the money to be paid to Dexia. PW1 said that he had signed the document but said that on that occasion he signed a number of documents and did not really pay close attention to them. PW1 said that he was surprised to see the amount paid to TLL was only HKD1,020,000. He said that his understanding was that the defendant was to pay HKD2 million to TLL for transmission to Dexia. I also noted in this regard that, unlike other remittances which were submitted to the Mongkok branch of HSB where all the remittances were signed, for some reason this remittance was received at the Hankow Road Tsim Sha Tsui branch of HSB and was dated 2 March 2009. The remittance from the ELHL account in respect of PW1’s payment, Exhibit P7, and the transfer of USD 100,000 from the current account of ELHL to an account in Malaysia were both dated 27 February which was the date on which  PW1 and the defendant met at HSB to sign the relevant documents.

114.In this regard, I noted also that according to PW1 the original remittance in favour of Dexia signed in 23 February 2009 in the sum of AUD773,306, P5, should have been accompanied by a similar remittance  in Hong Kong dollars representing the payment by the defendant to Dexia but no such  remittance was produced.

115.I accepted that PW1 was an honest and reliable witness and was trying his best to recall events which happened a considerable time ago. In my view PW1 was naïve and trusting. As I stated above, his better judgement was overcome by greed and the manner in which this scam was orchestrated.

PW3- HSB Relationship Manager for ELHL Account

116.I noted that there were a number of discrepancies between the evidence of PW1 and PW3. In considering the evidence of PW3 I bore in mind that given his position in the bank he would deal with numerous customers and that the events about which he was testifying occurred many years ago.

117.PW3 met the defendant and his wife when the ELHL account was opened in September 2008 and was present when many of the key documents in this case were signed on the 21^st floor of  the HSB Mongkok branch. I noted that PW1 said he was impressed that the ELHL account was supervised by a senior member of the bank staff and that meetings with Nazari and the defendant took place in what he described as a board room on the 21^st floor of the bank.

118.PW3 did not dispute that he assisted in completing the remittance form dated 23 February 2009  in the sum of AUD773,306 payable to Dexia Bank, Exhibit P5 but he claimed he did not know the purpose of the remittance and the reason it did not go through. He denied having been shown Exhibits P2 to P4, the documents relating to the Dexia Bank fund.

119.Both PW1 and the defendant told the court that that on 27 February they met PW3 in Starbucks and PW3 told them that the remittance to Dexia had not been successful and another bank had to be used. PW3 admitted meeting  the defendant and PW1 in  Starbucks but denied that the events described by PW1 and the defendant took place. He said that his recollection was that they met at Starbucks and the defednant discussed some ideas he had in relation to a business idea for a coffee can warmer for which the defendant had a licence in Malaysia.

120.PW3 denied that he had any discussion with PW1 about any investment with  Dexia Bank.

121.I accepted the evidence of  PW1 that he had discussed the Dexia Bank Fund investment with PW3. I was sure  PW3 had been shown the Dexia Bank documentation, Exhibit P2 to P4. I was sure that PW3 had told PW1 and the defendant that the remittance application form, P5, could not proceed as his bank no relationship with Dexia Bank. I did not accept the evidence of PW3 in relation to these matters.

122.With regard to the ELHL account I noted that the address used for the account was the same as the registered address of the company. This was a bogus address. PW9, an administrative officer of Bestwin Engineering,  gave unchallenged evidence that her company operated from this  address. She said that no company called ELHL operated from the premises and that correspondence received  addressed to ELHL was returned unopened or discarded. She had never heard of the defendant or his wife and ELHL was not a customer of Bestwin.

123.I also noted that when the ELHL account was opened by the defendant and his wife he told PW2, the HSB Business Development Manager, that the business of the company was trading in gifts and that the anticipated monthly turnover was to be between HKD500,000 to HKD2 million per month (P24 page 903). In his evidence the defendant made reference to trading in a type of drinks can for which he held the patent in Malaysia.  I had no doubt that the defendant was lying to the bank about the purpose for  setting up the ELHL account.

PW5 Managing Director of Ritz Resources and PW6 Operation Manager of GCC

124.Their evidence related to the two cheque deposits made into the ELHL account on 25 September 2008 in the sums of HKD 1,890,512 and HKD1,839,377,  Exhibits P19 and P24 ( page 1037).

125.The defendant stated that he arranged for a remittance agent in Malaysia, REMX, to remit funds to GCC. He said that on the morning in question, he and Nazari went to GCC and withdrew HKD3.7 million in cash to take to the HSB bank.  The defendant said that on the way to the bank Nazari told him that the bank would not accept cash and Nazari contacted PW5 for the purpose of getting a cheque from PW5 to pay into the  ELHL account.  It is not disputed that PW5 gave a cheque to the defendant for only half the amount. PW5 said that he suggested that they approach his friend PW6 at GCC to obtain a cheque for the balance. This coincidentally turned out to be the company from whom the defendant had originally obtained the cash.

126.PW6 not only denied that the defendant had withdrawn cash from his company earlier in the day but said that his company did not receive transfers from Malaysia.

I had no doubt that the defendant was lying as to the circumstances in which he came into possession of the cash he gave to PW5 and PW6 in exchange for the cheques they gave him. I did not believe that he had withdrawn the cash from GCC.

Fund Flow Evidence

127.Paragraphs 18 to 32 of the Admitted Facts, Exhibit P33, deal with the relevant bank transactions.  In closing submissions the prosecution submitted an analysis of  the fund movement based on the those paragraphs and the relevant bank records. This analysis was not disputed.

128.They show the flow of the Australian dollar fund and Hong Kong dollar fund in the ELHL account. I noted that the defendant opened a personal account with HSBC in Hong Kong on 2 March 2009, the next working day after PW1 paid AUD 1,221,320 into Nazari’s TLL account.

Australian Dollar Flow Fund

129.The subject of the charge is the AUD1,221,320 which PW1 agreed to remit from ELHL account to TLL account (“PW1’s contribution”). It was PW1’s understanding that his contribution, after transfer to the TLL account, would be remitted to Dexia Bank for redeeming the Dexia Fund held under the name of ELHL. PW1 and the defendant signed the remittance form to effect the transfer at HSB on 27 February 2009 [Admitted Facts, para.18; Exhibit P24, p.1035].

130.The TLL account was opened on 10 February 2009. There was no foreign currency deposit in the TLL account when it was opened. PW1’s contribution was the only significant foreign currency deposit into the account [Exhibit P25 p.1155]. The other deposits were of comparatively insignificant amount made in and after October 2009.  It follows that any Australian dollar transfers and withdrawals from the TLL account between March and April 2009 can be traced back to PW1’s contribution.

131.Between 5 March and 25 April 2009, a total of AUD480,000 was transferred from the TLL account to Nazari’s personal bank account (Nazari account) which was then withdrawn in cash. Nazari opened this personal account on 5 March 2009, only a few days after PW1 remitted his contribution to the TLL account. The foreign currency savings in the Nazari account within this period all came from the TLL account and hence originated from PW1’s contribution.

[Admitted Facts, para.19; bank statements (Integrated Foreign Currency Savings) – Exhibit P27 p. 1532, 1535, 1538].

132.Between 5 March and 28 April 2009, a total of AUD549,614.84 cash was withdrawn from the TLL account, of which Nazari was the sole signatory [Admitted Facts, para.24].

133.A total of AUD65,498.68 (converted to HKD335,000)was transferred from the TLL account to the defendant’s personal account and withdrawn by the defendant between 16 March and 21 April 2009 [Admitted Facts, para.20-23]

134.Therefore, out of the AUD1,221,320 that PW1 contributed for the release of the Dexia Fund:

(1) Nazari’s bank accounts received AUD1,029,614.84

(AUD480,000 + AUD549,614.84); and

(2) the defendant’s bank account received AUD65,498.68 (equivalent to HKD335,000) by the end of April 2009.

135.From May to August 2009, the balance of PW1’s contribution in the TLL account was converted to local currency and transferred to the Hong Kong dollar savings in the same account.

- Exhibit P25

p. 1162-1163 (4/5/2009 - AUD5,000/ HKD28,058)

p. 1165 (29/5/2009- AUD5,000/ HKD60,014)

p. 1173-1174 (15/8/2009 - AUD3,000/ HKD19,210.5)

(17/8/2009- AUD9,463.57/ HKD60,000)

(17/8/2009 – AUD8,863.84/ HKD55,000)

Hong Kong Dollar Flow Fund

136.A total of HKD3,729,889 was deposited into the ELHL account by way of two cheques on 25 September 2009 (HK Dollar Fund) [Admitted Facts, para 25].  The Defendant said this HKD3.7 million odd was his investment fund which he remitted from ELHL S/B Malaysian bank account to Hong Kong through RMEX Trading, a money changer in Malaysia on 19 September 2009 [Exhibit D9].

137.It was the prosecution case that the purpose of this HK Dollar Fund was to mislead PW1 into believing that the defendant had the financial strength to join Nazari’s investment programmes and that the defendant was a genuine investor in the PPPs. The prosecution maintained that the HKD3.7 million did not come from the defendant and was never intended by Nazari or the defendant for any investment programmes but for their own use. They maintained that this assertion is supported by the following fund flow evidence:

(1) The initial deposit of the HK Dollar Fund was made by way of two cheques from PW5-Mr. Mansoor of Ritz Resources (HK) Ltd and PW6-Mr. Kishore of GCC Exchange Private Ltd on 25 September 2008. According to PW5 and PW6, cash was given to them in exchange for two Hong Kong dollar cheques. Exhibit D9 purports to indicate that an equivalent sum in Malaysia ringgit was transferred from ELHL S/B’s account to RMEX Trading in Malaysia but there is no document showing that this sum was converted to Hong Kong dollars and remitted from ELHL S/B to GCC in Hong Kong.

(2) On 21 November 2008 (less than two months after the initial deposit) after the deposit into the HK Dollar Fund, HKD1,245,000 was transferred from ELHL account to Nazari’s personal account with Bank of China [Admitted Facts, para. 26], which was about one-third of the HK Dollar Fund. If the Hong Kong Dollar Fund was really intended for investment, it would not have been transferred to Nazari’s personal account at such an early stage and before any investment deal was concluded in Zurich.

(3) Out of the HKD1,020,000 which the defendant claimed to be his contribution to redeem the Dexia Fund [Exhibit P24 p.1050] and which was transferred to the TLL account on 2 March 2009, a total of HKD942,000 was either withdrawn in cash or transferred from the TLL account to the bank accounts controlled by Nazari:

a. HKD325,000 in cash was withdrawn from the TLL account;

(HKD 310,000 between 3/3 and 7/3/2009; $15,000 on 25/1/2010)

b. HKD400,000 was transferred to SDL account between 4 and 7 March 2009, of which Nazari was the sole signatory; and

c. HKD217,000 was transferred to Nazari account between 5 March and 25 September 2009 [Admitted Facts, paras 28-30; Exhibit P25 p.1155].

(4) The SDL account mentioned in the previous paragraph was opened by Nazari with HSBC on 17 February 2009. The Nazari account was opened on 5 March 2009. Nazari was the sole signatory of both accounts. [Admitted Facts paras.8-9; 13-14]

(5) Between 25 March and 14 May 2009, a total of HKD110,000 was transferred from the TLL account (HKD50,000) and Nazari account (HKD60,000) to the defendant’s account [Admitted Facts, para 30 and 31].

(6) The funds in the Nazari account (from which HKD60,000 were transferred to the defendant account in March 2009) came from the TLL account [Exhibit P27 p.1532]. There were only three deposits into Nazari account before 28/3/2009 and all were from TLL account: HKD100,000 on 5/3/2009; HKD50,000 on 7/3/2009; HKD158,088 (converted from AUD25,000) on 21/3/2009 [Exhibit P27 p.1432-1433 paras. 31, 35, 39].

(7) The funds in the SDL account were all from the TLL account. [Bank Statement Exhibit P28 at p.1615, 1618, 1620, 1622, 1624, 1626].

(8) In sum, Nazari took HKD2,187,000 (HKD1,245,000 + HKD942,000) from the ELHL account via the TLL account, the SDL account and his personal accounts (account with Bank of China and the Nazari account) whereas the defendant took HKD110,000 from the ELHL account via the TLL account and the Nazari account.

(9) A sum of HKD164,620 was transferred from the TLL account to the bank account of Chen Chun Lan, General Manager of Maywood Travel Ltd (PW7), between March to September 2009, in settlement of Nazari’s purchase of flight and/or hotel fares for himself, the defendant and others from Maywood Travel Ltd [Exhibits P22, P23 and P37].

138.I noted that the defendant opened a personal bank account with HSBC in  Tsim Sha Tsui Hong Kong on 2 March 2009, a few days before Nazari opened a personal bank account with HSBC at its Ocean Terminal branch.

139.The fund flow clearly shows that the payments into the defendant’s personal bank account from Nazari’s account and the TLL account were considerable. In his evidence the defendant said that he stayed in Hong Kong waiting for the Dexia fund to come through and that these were contributions made to him by Nazari. The defendant said that he told Nazari that he was in need of funds. The defendant claimed that the reason his son stayed with him in Hong Kong  was because the defendant  did not know anybody in Hong Kong. He said he dare not return to Kuala Lumpur to face his wife without the return on the investment.

140.I noted also that there was a cheque dated 27 February 2009 in the sum of HKD140,000 in favour of  the defendant’s son, Exhibit P24 page 1048. PW1 agreed he signed this cheque but said he knew nothing about the payment. When questioned about this payment the defendant said that he could not recall what it was for.

141.I took into account that after PW1 paid money into the TLL bank account the defendant remained in Hong Kong for a further four months. I also took into account that when the defendant returned to Hong Kong in 2013 he was aware that PW1 had reported this matter to the police. In considering this I noted that the defendant has throughout portrayed himself as a victim of this scam and consistently rejected the suggestion that he participated  with Nazari in a dishonest conspiracy.

142.I did not believe the reasons given by the defendant for his  remaining in Hong Kong after the remittance was made by PW1 into the TLL account on 27 February 2012. I did not believe the evidence of the defendant as to the circumstances of in which the payments were made to him from Nazari’s accounts. I was satisfied so that I was sure that these payments were made pursuant to an agreement between the defendant  and Nazari to defraud PW1.ous

Withdrawals from ELHL Account on 21 November 2008

143.The defendant was questioned about the withdrawals made from the ELHL account on 21 November 2008. I noted that these transactions occurred after PW1 had deposited  AUD1.9 million into the account and became a co-signatory. PW1 had little recollection of these transactions.

144.There were two cash withdrawals of HKD260,00 and HKD40,000 and a payment to Nazari of HKD1,245,000, all made from the current account of the ELHL account, i.e. from funds deposited in the account by the defendant. The defendant said that the cash withdrawals were to cover the trip to Zurich and the transfer to Nazari’s personal Hong Kong account with the Bank of China, P24 pages 974  and 1046. He said that it was for a proposed PPP but he could not recall which one it was.  The defendant said it was agreed that his funds would be used before PW1’s. This was not confirmed by PW1 and there was no evidence as to what happened to this money after it had been transferred to Nazari’s account.

145.The payment to Nazari was effected by a remittance Ex 24, p1046. The payment was to a Bank of China personal account held by Nazari. The defendant said that the remittance was signed on the 21/F of HSB in the presence of the PW1, Nazari and PW3. PW1 said he had no recollection of this although he did not deny his signature was on the remittance. PW1 could not recall the circumstances as to how his signature came to be there. PW1 asserted that at that time there was no specific intention to act  in respect of any particular PPP. This evidence was not chanllenged.

146.In cross-examination the defendant said that he could not now recall what this was about. He said it had nothing to do with the trip to Zurich itself. The defendant also said in his evidence that nothing happened about this  HKD1.245 million.

147.HKD1,245 million is a significant sum of money. It was one third of the total amount of money paid into the account on 25 September. According to the defendant the money paid into the account had been borrowed from friends and relatives for  investment purposes. I was sure that the defendant was lying about the circumstances in which this money was transferred to Nazari.

Email Correspondence in June 2009 – Exhibit P12, and 13

148.The defendant was referred to 2 emails dated 11 June and 16  June 2009, Exhibits P12 and P13. The emails were sent by the defendant to PW1. In the first email the defendant confirmed that he had returned to Kuala Lumpur from Hong Kong. He stated that Nazari was also back in Kuala Lumpur. The email referred to an email sent by PW1 to the defendant in which PW1 had apparently informed the defendant that Nazari had sent PW1 a copy of a payment “ that is made under ELHL which made by Mr Baldwin that he said to be his trusted in US. As I do understand we have not given any instruction for such payment or have the acknowledgement to received any payment for such purpose.” The email continued :

“As my people says to me that the amount of USD100 million that is park in Dexia Belgium have not gone to any transaction or attach to any loan for facilities that Nazari have mentioned to you”.

149.In P13, dated 16 June 2009, the defendant stated that he had spoken with Nazari who assured him everything was in order and that the bank would give confirmation of the payment within a week. The email continued

“And I did tell him that I know that our account in Dexia hasn’t been touch or being pledge to any project or to any of situation”

150.When questioned about these emails the defendant said that in the first email, by referring to “my people “ he meant Nazari. It is clear from the context that that cannot be true. I was sure the defendant’s clear intent was to give the impression that he had verified the situation with at Dexia independent of  Nazari and that he was trying to reassure PW1. This was clearly a lie since there was no such fund. I was sure it was the intention of the defendant was  to continue to mislead PW1 and give the false impression that there was a genuine fund.

The documentation

151.It was not disputed that the Dexia Bank documents, P2 to P4 were bogus. The defendant said that the Resolution of the Board of Directors of  ELHL, Exhibit P1, was signed by him and his wife. The defendant said that a copy was sent to him, he printed out a hard copy, he and his wife signed that copy, scanned the signed document and emailed it back to Nazari. The defendant said that he understood that according to these documents there was USD100 million held in Dexia Bank in his company’ s name. He said he never asked where the money came from. He never wrote to the bank even when he claimed that he thought Nazari was being evasive. P1 is dated 20 February 2009 yet the Fixed Deposit Certificate, P2, is dated 13 February 2009. P1 refers to the Articles of Association of  ELHL being dated 20 February 2009 whereas the company was incorporated in British Virgin Islands in May 2008. No corporate documents appeared to have been lodged with Dexia Bank. I was sure the defendant was aware the documentation produced was bogus and was produced as part of the conspiracy to deceive  PW1.

Conclusion

152.The fact that I do not mention a particular piece of evidence or submission does not mean that I have not considered it or factored it in my decision making.

153.The totality of the evidence left me in no doubt that the defendant was lying as to the true nature of his relationship with Nazari. I was sure the defendant was lying about the source of the funds paid into the ELHL account on 25 September 2008. I was sure that Nazari and the defendant had dishonestly acted in concert to deceive PW1 into paying AUD 1,221,320 into an account controlled by Nazari in the belief that he would receive in return USD22 million out of a fund of USD100 million held by ELHL with Dexia Bank.

154.I was satisfied that the prosecution had established each and every ingredient of the offence charged beyond reasonable doubt.