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Cliff Buddle

A MAN who cheated foreign exchange investors out of $194 million was jailed for eight years and fined $10 million in the High Court yesterday.

  Chan Kang-to, 32, looked stunned as the sentence - the longest imposed for fraud in five years - was handed down.

  Victims of his scam, Hong Kong's biggest forex swindle, applauded in court as he walked to the cells. Chan will face an extra year in jail if he does not pay the fine.

   Mr Justice Ryan told him: 'This was a very well-planned and very well-executed conspiracy to defraud. As a result large numbers of people have lost a large amount of money.

  'It is at the upper end of the scale of seriousness for offences of this kind, falling just short of the most serious cases,' he said.

  John McLanachan, defending, said there was no evidence Chan had received any of the money milked from the 340 victims, including his parents; all investors with the Central-based company EGI International.

  But Mr Justice Ryan said: 'The inference I draw is that you, as a conspirator, would have shared in part of those ill-gotten gains.'  Chan was found guilty on July 14 of conspiracy to defraud in a period between September 1990 and July 1993.

  Investors, said to include well-known names, were attracted by the promise of 50 per cent profits and a guarantee losses would be reduced to two per cent.

  They believed their money would be placed on the market with top United States company Prudential Bache. Trading would be done automatically by a revolutionary computer system devised by Chan.

  But his hi-tech computer program was bogus and the money was not invested on the forex market at all. Instead it was pocketed by company bosses.

  Police are still hunting a missing husband-and-wife team believed to have been behind the swindle.

  Leung Kai-man, a former forex trader, and his wife Ho Sheung-lin, the sole proprietor of the company, fled Hong Kong before the fraud was exposed.

  They flew to South Korea and are now believed to have moved on, possibly to Europe.

  During a two-month trial, the court heard Ho had systematically removed cash from 25 bank accounts under her control, sometimes $300,000 at a time.

  Many of the victims of the fraud worked for the company. They were so taken in by Chan's claims to be a computer genius the employees invested their own money as well as persuading clients to do so.

  The employees, known as account executives, would often encourage their own families and close friends to invest.

  Candace Teng Chen-yu, 33, said the staff members were brainwashed in the same way as the notorious Japanese cult, Aum Shinri Kyo. Ms Teng lost $1.2 million of her own money. Her family injected a further $4 million and her clients nearly $16 million.

  Investors received printed statements telling them how much money they had made. But the statements were fictitious. If they wished to withdraw cash they would be paid out of other investors' funds.

  The company collapsed in July 1993. Account executives turned up at work to find their bosses had fled. Printed statements were left informing them all the money had been lost.

  Chan, who cheated his parents out of their $870,000 life savings, was in Singapore when EGI collapsed. He returned to Hong Kong voluntarily when he heard he was wanted by the police. Mr Justice Ryan reduced the sentence from nine years to eight years because of this.



Forex cheat jailed for eight years