Tracing the proceeds of graft and bribery

After the high-profile conviction of Rafael Hui Si-yan for accepting a bribe while an officer of the government, recent news has concerned the published intention of the liquidator in Hui's bankruptcy to trace and recover assets in the hands of his former mistress, Eline Shen, who has also expressed her concern that she may lose some of the gifts she received from the disgraced former public official.

As yet the government has not commented on any intention to trace and claim the bribes that were paid to Hui.

If Hui received the bribes while he was employed by the government, then the government has clearly established proprietary rights in the bribes and any substitutions for the bribes or proceeds derived from them.

As in the famous case of Warwick Reid, the disgraced former deputy crown prosecutor in Hong Kong who took bribes to obstruct justice in his office, the government is considered to be the beneficial owner of the bribes. Hui should have handed the cash to the government as soon as he received it. As he did not do so, the cash, gifts and anything they were substituted for are regarded as the property of the Hong Kong government.

The government's ownership rights trump those of the liquidator, as the assets were never Hui's to become part of his bankrupt estate. Thus the government may recover assets from the liquidator.

The rights are also easier to enforce than those of the liquidator. The government's proprietary rights may be enforced against the mistress, Hui's wife and anyone who received a gift from Hui which is directly traceable to the bribes. The government may also enforce these ownership rights against anyone who bought items which are substitutions for the bribes if they can establish the buyer had knowledge or reason to suspect that the money or its substitute had been obtained by Hui in contravention of his fiduciary obligations to the government.