A PRIEST and two other men, accused of conspiring to defraud the public of $250,000 in donations by claiming the money would be used for the welfare of old people, were yesterday acquitted in the District Court. Father Chen Tung-liang, 78, and businessmen Mr Yuen Kin-man, 25, and Mr Lo Chi-keung, 38, denied conspiracy to defraud. Judge Kilgour acquitted them, despite contending that they had used a most distasteful way of raising money from the public. The court was told that police investigated an alleged fraud by Father Chen, the chairman of Ji Lin Welfare Association for the Aged Limited, and his co-defendants, following a complaint from a video games centre over a fund-raising scheme. Senior Crown counsel Miss Susie McCarthy accused Mr Yuen, Mr Lo and Father Chen of having conspired with a fourth man to defraud the sum from businesses, offices and shops in Yau Ma Tei between July 1 and September 24, 1991. After a 16-day trial, Judge Kilgour found Father Chen, despite having ideals, was out of touch with reality and incapable of running the organisation. ''He is naive and an easy target for people who would like to take advantage of him,'' he said. He criticised Father Chen for selling the exclusive rights to solicit advertising in the association's year book to Mr Lo for $25,000 a year. Mr Lo was introduced to Father Chen through a late director of the association, Mr Kwan Kin-ho. The court heard Father Chen approached Mr Lo after Mr Kwan's death to deal with the publishing of the year book. But Mr Lo had, without Father Chen's knowledge, sub-contracted the task of publishing the year book to Mr Yuen, who used his advertising agency to help raise money in return for 70 per cent of the total sum raised, it was alleged. Mr Yuen allegedly recruited about 20 to 30 youngsters to solicit funds by inviting the public to either advertise in the year book for 1992, or give donations in return for advertising their names in the year book. He paid them with commission and wages out of his 70 per cent share. The Crown alleged money collected from donations and advertising amounted to $250,000. Among the employees, who were either fresh graduates or working part-time, one youngster admitted having deviated from Mr Yuen's instructions and lied to donors that their money would be used to build a home for the aged in a bid to boost the commission. Mr Lo, who later became a director of the association, allegedly got 30 per cent of the gross taking. The Crown alleged that Mr Lo had deliberately tried to conceal the true amount which he collected through the scheme, and money from a business called Sha Tin Chicken Congee, by placing them in the same bank account. But Mr Lo denied the allegation. All the defendants maintained they got no personal gain or pocketed money from the fund-raising scheme. Father Chen contended that the share he got was used on association expenses. It was not until the arrest of the three defendants in September 1991 that Mr Yuen and Father Chen met for the first time.