Massive cigarette scam spreads to HK
COMMERCIAL Crime Bureau detectives are investigating a multi-million dollar Marlboro cigarette fraud that has spread from the United States across Europe and Russia to China and Hong Kong.
Detectives are investigating a complaint made by Sweet Field Ltd after the Sheung Wan company became the first victim of a phantom ship fraud involving the bogus sale of Marlboro cigarettes.
They believe the shipping fraud, part of an insurance swindle involving more than US$100 million (HK$773 million), led to the murder of an English accountant who became suspicious of his business partners.
The Hong Kong trading firm lost US$2.2 million in the deal after opening a letter of credit for US company HGS in September 1991 for 10 containers of cigarettes.
They were to be delivered to the territory in December of that year on a cargo ship, Lisa Marie, from Miami, but the shipment did not arrive.
Three months later an accountant and businessman David Wilson, who bought the ship and set up a cargo line to transport the cigarettes, was murdered in Lancashire while on police bail.
Wilson had been arrested by British police investigating an alleged insurance swindle involving a shipment of tobacco from Dublin to Rotterdam. They were also investigating its link to the international Marlboro scam.
When arrested, the accountant told police he feared for his life after being accused of double-crossing his business partners in North and South America when a transatlantic deal went wrong.
It is believed Wilson discovered the operation was a scam and the cigarettes did not exist when he found the Lisa Marie, named after one of his daughters, was still in a US port and had not delivered any cargo.
A Sweet Field manager, who would only give his name as Mr Kwok, said last week he had reported the fraud to police and had hired a US lawyer to try to get the invested money back.
He said Sweet Field opened the letter of credit for the cigarettes on behalf of a Taiwanese man named Lam Kuen, who negotiated the deal with the US company selling the Marlboros.
''It was not the first time our company had opened a letter of credit for him,'' said Mr Kwok.
He said he had never met Wilson nor anybody else connected with the case.
The death of Wilson, 47, led to an international investigation spanning three continents and involving Interpol, US customs and the FBI.
Earlier this month a British arms dealer, Stephen Schepke, was jailed for life for aiding and abetting in the murder.
Another man wanted in connection with Wilson's murder, Hector Portillo, a former colonel in the Mexican Army, was arrested in New York in July last year by US Customs officers.
Extradition proceedings brought by the British Government against Portillo, who is believed to be a cousin of a former Mexican president, are continuing.
The International Maritime Bureau , which has been looking into the fraud for more than a year, estimates the total losses to be more than US$100 million and still rising.