Three guilty of HK$138m pyramid fraud scheme

PUBLISHED : Thursday, 20 December, 2007, 12:00am
UPDATED : Thursday, 20 December, 2007, 12:00am

The architects of two pyramid schemes that scammed about HK$138 million from more than 8,000 people were found guilty yesterday of conspiracy to defraud.

Yip Tsang-ming, Lee How-kom and Lee Hin-hoe, formerly known as Lee Shing-lam, were found guilty by a jury in the Court of First Instance of two counts each of conspiracy to defraud related to the alleged pyramid schemes and their proceeds.

The jury was reduced to the minimum of five people after two jurors had withdrawn from the case, which has taken more than six weeks. All the verdicts were unanimous.

Lee How-kom's daughter, Chiu Wai-sum, who faced two charges of conspiracy to defraud, was found not guilty. Ms Chiu was visibly relieved and was released as soon as the jury had delivered its verdicts.

Lee How-kom, who wore a fur coat during the hearing, was also found guilty of four counts of dealing with property known or believed to be the proceeds of an indictable offence.

It had been alleged that the two scams, named Turbo Rich I and II, were run through Turbo Rich Development and bore all the characteristics of pyramid schemes.

Prosecutor Charlotte Draycott said victims were enticed to invest either HK$10,700 for Turbo Rich I or HK$3,450 for Turbo Rich II. They were promised returns of about HK$103,000 for Turbo Rich I and HK$21,390 for Turbo Rich II if they recruited others.

Ms Draycott told the court that prospective victims were identified through contact lists maintained by Lee How-kom's cosmetics business, Skin Club. The indictment said victims were falsely told that the number of investors required had been determined by an actuary, and that Turbo Rich Development had deposited HK$10 million at HSBC to cover the scheme.

Part of the proceeds from the scheme, some HK$55.6 million, were allegedly directed to the purchase of Albion Place, a building in Hau Fook Street, Tsim Sha Tsui.

The schemes were shut down and the accounts of Turbo Rich Development frozen on May 3, 2001. Albion Place was sold in January 2004 for HK$62.3 million.

Mr Justice Alan Wright thanked the jury and adjourned sentencing until this morning. He denied bail.