Duo jailed for conspiracy to defraud

A 66-year-old man and a 45-year-old man were sentenced to four years and six months' and two years and six months' imprisonment respectively at the District Court today (January 26) after being convicted of one count of conspiracy to defraud.

The court heard that the two defendants were the ex-directors of a securities group and a securities company engaged in securities trading.

The Securities and Futures Commission (SFC) discovered some serious problems regarding the financial solvency and liquidity during a routine inspection to the Group in May 1998.

The case was reported to the Commercial Crime Bureau after the SFC further discovered that the shares of the clients of the Group shown on their records could not be reconciled with the record kept at the Central Clearing and Settlement System.

Investigations revealed that the 66-year-old man conspired with the 45-year-old man in creating eight bogus margin accounts for selling shares of their clients and channelled the sale proceeds back to the 66-year-old man.

Both men produced false accounting records to conceal the actual fund movement. It was in fact the 66-year-old man who owed the Group $74.4 million but used the bogus margin account as a disguise.

They were arrested in 2004 and were each subsequently charged with one count of conspiracy to defraud.

The defendants were convicted of the charges on January 13 this year and the sentence was meted out today.

The 66-year-old man was sentenced to four years and six months' imprisonment while the 45-year-old man was sentenced to jail for two years and six months. The 66-year-old man and the 45-year-old man were disqualified from being a director for seven years and three years respectively.


Police Report No. 11

Issued by PPRB

End/Thursday, January 26, 2006