A Hong Kong court has sentenced two people to jail terms of between 40 and 48 months for their part in a massive letter of credit (L/C) fraud.

The fraud involved hundreds of L/Cs and nine local banks.

Forged documents

The pair used forged documents, including invoices and cargo receipts, to defraud the banks.

The banks issued 158 L/Cs worth a total of $360 million between June 2006 and June 2007.

Shell companies

The pair set up various shell companies to trade in raw paper materials and transferred funds between the companies to make them appear as though they were legitimate trading businesses.

The District Court heard that the supposed trades were fictitious and found the pair guilty of conspiracy to defraud the banks.

The court jailed a 37-year old man for 48 months and a 29-year old woman for 40 months after they were convicted.

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