'Exploited' fugitive admits laundering millions, 13 years after he fled to Canada

PUBLISHED : Tuesday, 05 August, 2014, 4:29am
UPDATED : Tuesday, 05 August, 2014, 8:24am

A fugitive who, more than 13 years ago, laundered millions of Hong Kong dollars that had been embezzled by three mainland bank managers returned to Hong Kong voluntarily to face justice, a court heard yesterday.

Kwong Wa-po, returned to the city in 2011 after spending 10 years in Canada. He pleaded guilty in the District Court yesterday to one count of dealing with property believed to be proceeds of an indictable offence.

Defence counsel Koo Yeuk Lan said her client decided to return to Hong Kong when his mother died on the mainland in 2009. "[This made him] wonder if he should stay in Canada forever," said Koo. Kwong's father, 76, who suffers from a chronic disease, still lives on the mainland, the court heard.

Kwong, 50, admitted he handled HK$278 million in his Standard Chartered Bank account - believed to be proceeds of fraud by Xu Chaofan, Yu Zhendong and Xu Guojun, three former managers at the Bank of China's Kaiping branch. Xu Chaofan is Kwong's brother-in-law.

Xu Chaofan and Xu Guojun were sentenced to 25 and 22 years in jail, respectively, in the US in 2009. Yu was given a 12-year jail term after being extradited back to China in 2004.

The trio's scam was exposed in October 2001 after an audit report revealed that they embezzled billions of dollars from the state-owned bank. The three fled to Canada days after they were exposed and later moved to the US. Kwong, a Canadian passport holder, left a day after the trio fled.

The court heard that bank records showed Kwong received a HK$72,100,000 deposit from Xu Chaofan, HK$54,000,000 from Ever Joint Properties, a company which Xu Chaofan and Yu co-owned, and HK$23,000,000 from Xu Chaofan's Yau Hip Trading.

Part of the proceeds was transferred to Australian casino giant Crown, while some went to Sociedade de Turismo e Diversoes de Macau, the operator of many of Macau's most famous casinos. Kwong previously admitted he helped the three managers to arrange loans and debt payments at casinos in Macau, Australia, and in the US, the court heard.

The delay in coming back, the counsel said, was because Kwong wanted to wait for his youngest daughter to finish her studies.

Koo also said Kwong's friendship with Xu Chaofan and Yu, dating back to their childhood, was to blame. "He trusted his friends, but he was exploited," she said.

But district court Judge Kwok Wai-kin questioned Koo's claim that her client had made no personal gains, as Kwong received HK$100,000 to HK$200,000 per month for his services. He also cast doubt on Kwong's role and his awareness of the legality of the funds. "When the trio left ... Why did they have to notify the defendant? They could have left him behind to deal with the funds alone," the judge said. Kwong will be sentenced tomorrow.