Three jailed for duping banks into lending to high-risk clients
Two moneylending agents and a digital products trader were jailed yesterday for a scam in which banks were tricked into lending more than HK$1.3 million to borrowers with bad credit records.
Duncan Tam, 57, the director of a digital-product vendor called Veto, was sentenced to two years and three months in District Court for two counts of conspiracy to defraud. Lam Wai-hung, 34, director of moneylending agent Hero Ocean, was jailed for one year and nine months on four similar charges.
Lam Shun-kit, 39, director of moneylender Wah Chung - described by Judge Rickie Chan Kam-cheong as the 'mastermind' of the trio - received the most lenient sentence of one year and three months. He had pleaded guilty to three counts of conspiracy to defraud and testified against the other two, who denied the charges.
The court heard that the trio misled BOC Credit Card (International) and Dah Sing Bank into making loans to borrowers whose credit records were too poor to make formal loan applications to banks.
The 26 people who borrowed money from Wah Chung and Hero Ocean were required to sign up for purchases at Veto and Chung Yuen Electrical Company, the court was told earlier. They also agreed to pay by instalments with their credit cards, the court was told earlier.
But instead of goods, the borrowers received lump sums of 80 to 90 per cent of their purchase amounts from the two moneylenders, shifting the risk of bad debts onto the banks.
Judge Chan said he could find no plausible reason for Tam to commit the crime, given the small profit he made compared with his profits from the digital-product chain, which at one point had an annual turnover in the hundreds of millions.
He agreed to a lenient sentence because there was no evidence the two banks had suffered financial losses. He also granted the defendants a three-month deduction due to the stress they had endured from awaiting trial for 15 months.
