Article

Note: For 2 ½ years, Defendant, Chan Chun Hung, together with a partner applied for and successfully obtained 23 LCs from Dao Heng Bank, Sin Hua Bank, Belgian Bank, Jian Sing Bank, Hongkong & Shanghai Banking Corporation Ltd., and Equitable Bank, totaling HK$36.499 million (US$4,645,800). All the underlying transactions were bogus.

Defendant and his partner, while shareholders and directors of Hung Cheong Toys International Limited, applied for the LCs. Four companies, Chun Lee Material Trading, Wing Fung Hong Trading, Wing Tai Woo Metal Steel Company, and Men Fai Enterprises, were named as beneficiaries. Defendant's girlfriend and her sister owned all four Beneficiary companies.

In each of the 23 transactions, false documents were prepared and presented, LC payments were received from the banks, and the proceeds were deposited into the various accounts of Hung Cheong. Defendant was charged with 12 counts of conspiracy to defraud. Defendant pled guilty and was sentenced to four years imprisonment for each charge of conspiracy to defraud, to be served concurrently.

Defendant filed an application for leave to appeal against the sentence imposed, claiming that the sentencing judge did not rightly consider several mitigating factors, chiefly that nearly all the defrauded banks were made whole. The High Court of the Hong Kong Special Administrative Region, Stock, JA., dismissed the application for leave to appeal against the sentence, noting that the restitution to the banks was, in most cases, part of the larger ongoing scheme whereby the sums due for one LC were paid with the proceeds of the next LC that had been fraudulently obtained. While the appellate court stated that the fact that banks suffer no loss is a mitigating factor that the sentencing judge could consider, it concluded that in the instant appeal there was no factor specifically concerning Defendant's conduct warranting a further reduction in sentence.

[JEB/ees]

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