Israeli pair jailed four years for role in Hong Kong gold-laundering scheme

Sentence must act as deterrent to protect city's image, judge tells men who were part of international plan to launder HK$150m

PUBLISHED : Thursday, 06 June, 2013, 5:03pm
UPDATED : Friday, 07 June, 2013, 11:27am

Two Israeli men were jailed for over four years on Thursday for what a judge called a sophisticated “international” plan to launder HK$150 million worth of gold bars and diamonds in Hong Kong.

The 52-month term for Yoav Hen and Daniel Fadlon, both 28 of age, was a reduced sentence from the original 6½ years - just six months under the District Court’s maximum term – due to their guilty plea.

They appeared calm in court room after hearing the sentence.

Judge Anthony Kwok Wai-on said a strong deterrent was necessary to protect Hong Kong’s reputation. “If money laundering is allowed to be carried out and treated lightly ... that would mar Hong Kong’s reputation as a world-class financial centre.

“A clear message must be sent by the court to other people in Israel and elsewhere,’’ the judge said.

“They should think carefully before they act,’’ he said, adding: “Now they [the two Israelis] have to face the consequences.”

The court had heard that Fadlon joined the Israel Defence Forces in 2002 and served in the anti-terrorist Duvdevan unit, an elite special forces unit noted for conducting undercover operations against militants in urban areas.

He was accused of laundering 342 one kilogram gold bars and four diamonds - each five carats in May last year. This was three years after his honourable discharge from Israel's military.

Hen was co-accused with a third Israeli, Omer Gavish, of laundering gold bars.

While Fadlon and Hen had admitted the offence, Gavish, 26, chose not to plead guilty to a count of dealing with property known or reasonably believed to represent proceeds of an indictable offence. He will learn his sentence later on June 24.

The ringleader, Doran Zvi Schulman, who holds both Israeli and Australian passports, would have his trial conducted separately, the court previously heard.

Kwok said the offences were highly sophisticated based because multiple bank accounts were opened and village houses in Yuen Long and Sheung Shui were bought to store and conceal the gold bars and diamonds.

It was “manned by overseas syndicates” and had a “high degree of international character”. There were also Filipino, Dutch and South African people involved, Kwok said.

“I accept that [the two defendants] assumed a lesser role, and there is another mastermind, or even masterminds, overseas,”

The judge also said: “It must be a shock to the [pair’s] family - due to their previous good characters.”

But he stressed that being a foreigner in Hong Kong would not mean more lenient treatment if a crime was committed.