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Toh Han Shih

For some it has been a bitter saga of riches to rags. But for at least one of the executives of ill-fated Moulin Global Eyecare Holdings jailed for fraud, it was presented as a redemptive tale.
Prior to his sentencing last week, Cary Ma Lit-kin, the former chief executive of Moulin, had been working in a charity organisation for prisoners and conducted religious classes for them, the Court of First Instance was told.
The charity work was mentioned as part of a mitigation plea presented to Mr Justice Peter Line by Ma's lawyer, Francis Yip, on December 1.
Moulin, an eyewear maker, was liquidated in 2006 and delisted from the Hong Kong exchange in 2007. 
Ma had pleaded guilty to all four charges against him and was remorseful for his wrongdoing, Yip told the judge.
'Cary Ma has apologised to anyone he hurt by his wrongdoing,' he added, citing a letter from a Reverend Ho of Ma's church, saying he had been serving in the church and an association that helps current and former prisoners. 
In the letter, Ho said Ma was determined to turn over a new leaf and was baptised in 2005. That was the year when Moulin fell into provisional liquidation and Ma and his father, Ma Bo-kee, were arrested by the  police. 
The younger Ma was declared bankrupt in 2007, and in the years since his arrest, he had been suffering from depression and had to take medication, Yip told the judge.
When Line gave Ma a 10-year jail term on December 2, the defendant was smiling and looked peaceful. 
The judge said he had started from the maximum penalty of 15 years and given the standard one-third discount because Ma had pleaded guilty. 
 'You were the chief executive officer,' Line  said. 'You played a full part and must also bear major responsibility. Commercial crime on this scale has to be met with a sentence at the top end of the bracket.'
The four charges Ma admitted included inflating his firm's 2003 turnover and attempting to deceive Deloitte Touche Tomatsu and CCIF, which were Moulin's auditors in 2005. Another charge involved conspiring to defraud 18 banks of false import loans totalling HK$466 million. 
In his mitigation, Ma Bo-kee's lawyer, Chan Siu-ming, on December 1 asked the judge to consider the health and age of the 67-year-old former chairman. 
The elder Ma had been suffering from depression, an anxiety disorder and insomnia, Chan told the court. 
'Ma Bo-kee was declared bankrupt in 2006. He sold his house to repay debt and now lives with his children.'
The elder Ma faced the same four charges as his son, but unlike his son, did not plead guilty to any of them. Last month, a jury acquitted him on the charge involving the false import loans but found him guilty on the other three.
'It would be sad to see Ma Bo-kee as a self-made man starting from rags and subsequently becoming a rich man by working hard for many years, becoming a bankrupt and now having to face jail,' Chan told the judge. 
Ma Bo-kee founded Moulin as a sole proprietorship with a workforce of 12 in 1960, shortly after arriving in Hong Kong as a young immigrant from Guangdong province. Moulin was listed on the Hong Kong stock exchange in 1993, and in 1998, was rated by Forbes Global as one of the 300 best small companies in the world. 
Although Chan portrayed his client as a passive player in this fraud, Line told the elder Ma: 'I have no doubt the day-to-day running of the fraud was the responsibility of your son and your sister-in-law [Michelle Lam Yuk-wah]. 
'However, I am equally sure that the part you played [in inflating revenue] was an essential one. You had the power to stop it. You gave it your blessing. 
'A recorded meeting in April 2004 revealed you played an active part in lying to the auditors Ernst & Young, thereby promoting this conspiracy.
'I do find it an aggravation that you recruited friends and relatives to this fraud, playing on their loyalty to you. You exposed them to prosecution with no reward to them.'  
In 2004, Ma Bo-kee sent Chan Kong-ngai, a brother of an alleged girlfriend of Ma Bo-kee, to San Francisco to pose as a customer in an attempt to deceive Moulin's auditor Ernst & Young, the judge noted. Chan was given immunity as a witness.
'You must not look to me for sympathy. You would have cut a very different figure if you had shouldered some of the blame and had the decency to help those you put in jeopardy,' Line said.
Ma Bo-kee was sentenced to 12 years in prison. 
'For a man of Ma Bo-kee's age, that is virtually a life sentence,' said Raymond So Wai-man, a dean at the Hang Seng Management College. 'It is a good signal that if you do something illegal, the regulator will catch you and enforce the rules.'
So said the five-year period between the investigation and sentencing in the Moulin case was faster than in some other corporate scandals in Hong Kong, citing the Carrian case of the 1980s, which lasted over 10 years. 
One relative Ma Bo-kee recruited was his sister-in-law Michelle Lam, who was sentenced to 9 1/2 years' jail on six charges. These  included inflating the company's turnover, the import loan fraud, deceiving auditors and creating false documents. 
 Born on the mainland where she received only elementary education, Lam started working for Moulin in 1975, when it was a small factory in Hong Kong, and rose to become treasurer, her lawyer, Bernard Chung, told the court. 
Even in the last days of Moulin, as company treasurer she drew a relatively modest salary of HK$37,000 per month and owned no shares in the company, Chung said. 
Lam lived in a modest flat in Kwun Tong and received no personal benefit from the fraud. 
'She did it purely out of loyalty to Ma Bo-kee,' Chung said.
After the case broke in 2005, Lam was the first defendant to plead guilty and had been providing extensive assistance to the liquidators and police, he added. 
For the liquidators, Lam drew a diagram explaining the circulation of funds in and out of Moulin, said Audrey Campbell-Moffat, the lead prosecutor. 
The judge told Lam: 'There is no evidence that you benefited directly from the fraud. The picture I have is of you living modestly. 
'Lack of personal gain is a mitigating factor, but to the victims of the massive fraud it is no solace they were cheated by someone on the cheap. If the motive was not personal enrichment, it must have been the promotion of a company known to be unworthy of it.'
Lam Chun-wai, a nephew of Michelle Lam, received a jail sentence of two years for creating false documents. The judge told him:  'No one suggests you made anything from your criminal involvement. You were just paid your salary. It was HK$6,500 per month.'
The frugal lifestyles of Michelle Lam and Lam Chun-wai were in stark contrast to the previously lavish lifestyle of Ma Bo-kee, who lived in a luxury home in Clearwater Bay. He also owned horses at the Hong Kong Jockey Club with names like 'Optic Star', according to the club's website.
Responsible role
Evidence showed Ma Bo-kee played an active part, judge says
The number of years Ma Bo-kee was jailed for his role in the collapse of Moulin Global Eyecare Holdings: 12



Moulin jail terms reflect the crime's scale, judge says