Two men were each jailed for three years and four months yesterday for setting up shell companies that cheated foreign customers out of $8 million through bogus transactions over four years. The 32 duped companies - from Australia, New Zealand, the United States, South Africa, Israel and many European countries - were led to believe that the accused, who responded to their Internet advertisements, could supply them with electronic components. Lee Shiu-keung, 39, and Waman Siu Ka-yan, 42, who pleaded guilty in the District Court to six counts of conspiracy to defraud, admitted they perpetrated the scam between March 1997 and August last year. Prosecutor Hayson Tse told the court six shell companies were set up in the SAR between March 1997 and October 2000 under Siu's name. The companies were registered under fake addresses or those of the secretarial services used by the accused. Lee and Siu also made use of a one-call phone service, which enabled them to direct all calls to the number without being traced. Police located 32 overseas companies that had paid deposits by telegraphic transfer to the shell companies as part payment for electronic components. A total of US$1,021,700 (HK$7.97 million) was involved, the court heard. The pair, who were arrested at their homes on August 13 last year, failed to deliver the goods, despite telling customers the shell companies had branches on the mainland with a considerable number of workers. Judge Alan Wright said the scheme was 'cynically designed' and set up with the intention to deceive genuine traders. 'There is an aggravating feature in this case. There were victims from at least 10 foreign countries. What the accused have done harmed Hong Kong's international business reputation,' he said.