• Wed
  • Sep 17, 2014
  • Updated: 4:56pm
NewsHong Kong
FRAUD

Gambling lawyer in Hong Kong’s biggest fraud case jailed for 12 years

Former senior partner once gambled HK$10m in a day in Hong Kong’s worst case of embezzlement

PUBLISHED : Saturday, 24 August, 2013, 12:00am
UPDATED : Saturday, 24 August, 2013, 7:34am

A former senior partner of an international law firm who once gambled away HK$10 million in a day was jailed for 12 years yesterday for a HK$8 billion fraud and money laundering scheme designed to pay off his huge betting debts.

Sentencing Navin-kumar Aggarwal, former partner of K&L Gates, a judge described it as Hong Kong's worst case of embezzlement.

How does a man get through at least HK$500 million of other people's money? The answer in your case was gambling
Mr Justice Peter Line

Aggarwal, 47, pleaded guilty in the Court of First Instance to two counts of fraud and one of money laundering in a scheme that caused losses for 92 potential investors, two clients and the law firm over a period of four years.

The scheme involved HK$8.5 billion, with most of it being repaid to the victims.

The potential investors - from Hong Kong and overseas - and the two clients suffered actual losses of HK$572 million and the firm had paid compensation to the clients while facing legal claims from the other victims.

"How does a man get through at least HK$500 million of other people's money? The answer in your case was gambling," Mr Justice Peter Line, told Aggarwal. "So the money has gone forever, lost in the casinos of Macau, wasted in the pursuit of your own pleasure."

The judge said that as a senior partner in an international law firm, Aggarwal was in a position of great trust. "Because of that trust you were able to have access to enormous sums of other people's money. For a period of four years you betrayed that trust and fraudulently plundered their accounts."

Barrister Graham Harris SC, for Aggarwal, said: "He is now left with nothing. All he has left is the disgrace he brought upon himself."

The court heard that the solicitor, who earned up to US$1 million a year, needed the money to settle huge debts he ran up by gambling, a habit he picked up in mid-2000s.

The court heard that K&L Gates paid HK$83 million in compensation to the two clients, businessman Hui Kau-mo and investor Mark Lightbown.

The firm has more than 2,000 lawyers who practise in 48 offices on five continents.

William Gates Sr, father of Microsoft chairman Bill Gates, was a founding partner at Preston Gates & Ellis, which merged with another law firm, Kirkpatrick & Lockhart Nicholson Graham, to form K&L Gates in 2007.

The court heard that between 2009 and 2011, Aggarwal gave false instructions to accounting staff of the law firm to transfer HK$302 million from the accounts of Hui and Lightbown. About HK$241 million was transferred back into their accounts.

Between 2007 and 2011, Aggarwal approached 92 potential investors and falsely claimed that he had business opportunities for them, but the investors had to deposit money with the firm to show that they had sufficient funds.

A total of HK$8.1 billion was deposited with the firm, including HK$1.4 billion in overseas remittances.

Aggarwal paid HK$7.6 billion to the investors as interest for the deposits.

But he forged signatures and ordered accounting staff to transfer money into a dormant client's account and then funnelled out the money.

Hundreds of millions of dollars were transferred to casinos, his relatives in India and other companies, some of which he served as a director.

Aggarwal born in Hong Kong to an Indian family and studied at Island School before going to the University of Hull to complete a bachelor of law degree.

He studied in the professional legal qualification programme at University of Hong Kong before he was admitted as a solicitor in 1992 and specialised in commercial law.

Aggarwal set up his own law firm in 1999 before joining K&L Gates.

The court heard the investigation began when police initially spotted suspicious transactions totalling HK$16 million. Aggarwal was arrested in June 2011.

 

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