In Vancouver on the night of October 2, 2001, five friends from a small river town in Guandong province boarded a private jet bound for Las Vegas. Xu Chaofan and Yu Zhendong were both former managers of the Bank of China (BOC) branch in their native Kaiping. Kwong Wa-po, who had known them since childhood, was along for the ride with his girlfriend, Ching Fo-chu, Xu's sister-in-law. The fifth person in the party was Hui Kit-shun, then the BOC Kaiping head.
It would be a night to remember, especially for three state bank employees who had never made more than 7,500 yuan a month. This was their chance to live like real high-flyers. Xu, who worked at the Kaiping branch nearly 20 years, blew US$2.37 million at the Caesar's Palace and Paris casinos.
It was one of the last nights the five would spend together. Within two weeks, all would be on the run for their role in the single biggest case of bank fraud in modern Chinese history. According to the listing prospectus for BOC's Hong Kong branch, an estimated US$482 million went missing.
On Monday, a judgment handed down in Hong Kong's Court of First Instance pulled back the curtain on a bogus loan scheme, masterminded by bankers Xu, Yu and Hui, which from 1992 to 2001 laundered some $1.96 billion out of Kaiping via Hong Kong through a front company, Ever Joint Properties.
Kwong, who was on the receiving end of $346.27 million transferred through accounts at Hang Seng Bank, HSBC, Standard Chartered and other banks, was ordered to repay BOC more than $200 million. Two of his associates, including Ching, are on the hook for $19 million.
Millions remain unaccounted for, but Kwong's defence detailed how he funnelled at least $58 million of those funds into Sociedade de Turismo e Diversoes de Macau (STDM), the unlisted parent firm of Stanley Ho Hung-sun's gaming empire. Asked about the case, an STDM spokeperson said yesterday: 'No comment on court cases.'