Two former Standard Chartered managers jailed for three years for conspiring to defraud Japanese investors

The Zhitong Finance App learned that an investigation by the Hong Kong Independent Commission against Corruption revealed that bank employees colluded with illegal groups and issued false bank documents and falsely claimed that the bank accounts of various companies held more than HK$37 billion in assets, thereby lobbying many Japanese investors to invest in African investment projects claimed by these companies. The investment amount involved reached 400 million yen (about HK$28.4 million at the time of the incident). The five defendants involved in the case have earlier pleaded guilty or were convicted after trial. Two of the former bank managers involved in the case were jailed together in the District Court today (August 6) for three years.

Hu Wenhao, 38, and Chen Decheng, 39, were also account managers for Standard Chartered Bank (Hong Kong) Limited at the time of the incident. They both earlier pleaded guilty to four common law charges of conspiracy to defraud, and were both jailed for three years today.

Judge Li Qingnian pointed out at the time of sentencing that the two defendants had long been premeditated, seriously violating professional integrity and severely undermining the public and investors' trust in the banking system. The crime took more than a year and a half. The number of victims involved was large, and the amount of fraud was over HK$28 million. If the case is not revealed, the criminals are bound to continue to commit crimes, so they must be punished in a deterrent manner.

The judge used six years in prison as the starting point. Considering that the two pleaded guilty and took the initiative to assist the prosecution in the case, the sentence was reduced by half according to law, and finally the two were imprisoned for three years.

The remaining three defendants involved in the case are Leung Ho-yin, 40, who is also a former account manager at Standard Chartered Bank; Luo Wenhui, a 52-year-old self-employed financial advisor; and Gan Kit-ching, a 58-year-old ADF Capital Limited (ADF) manager. Among them, Leung Ho-yin and Lo Man-fai earlier pleaded guilty to three counts of conspiracy to defraud; after trial, Kam Kit-ching was found guilty of conspiracy to deal with property known to have benefited from prosecutable crimes (commonly known as “money laundering”), in violation of section 25 (1) of the Organized and Serious Crimes Ordinance and section 159A of the Crimes Ordinance. The three have been remanded and their sentences will be handed down on September 30.

The ICAC launched an investigation after receiving the corruption complaint earlier. During the incident, Hu Wenhao, Chen Decheng, and Leung Ho-yin worked in Standard Chartered Bank's SME Financial Management Department and Priority Private Finance Department respectively. Luo Wenhui was a self-employed financial advisor, while Gan Jiezhen worked as an ADF manager for an investment company.

According to the circumstances of the case, between January 2015 and September 2016, four people, Hu Wenhao, Chen Decheng, Leung Ho-yin, and Law Wenhui, conspired with four foreigners to commit fraud using multiple false financial certificates and company refund acceptance notes to trick many Japanese investors into investing in the ADF and various companies involved in the case, with a total investment of over 400 million yen.

The false bank documents involved in the case were all signed by Hu Wenhao and Chen Dezheng. The documents were disguised as being officially issued by Standard Chartered Bank. Using false documents, the four defendants falsely claimed that Standard Chartered Bank provided guarantees to the ADF, with a related acceptance amount of about HK$450 million, and fabricated the false fact that the foreigners involved in the case held huge assets of over HK$37 billion and could be used for various investment projects in Africa.

The identities of the four foreigners involved in the case are: two male ADF shareholders and directors (Zambian and Korean), Chen Decheng's Thai client, and a Japanese female company chief executive.

Meanwhile, Gan Jiezhen conspired with the men of Zambian and Korean nationality mentioned above to use bank accounts to launder the criminal proceeds of fraud in this case. The amount involved was about 55 million Hong Kong dollars being laundered. The ICAC investigation confirmed that Standard Chartered Bank never held any of the huge assets claimed to be involved in the case for the foreigners involved, and all asset certificates were falsified.