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Notes: Ho Wing-cheong (D1) and Chan Wingkui (D2) along with two other individuals were convicted of several counts of fraud including one involving letters of credit (HKSAR v. Ho Wing Cheong & Ors, [2006] HKCU 2031). D1 was sentenced to a total of nine years imprisonment and D2 to eight years imprisonment. Until his resignation in December 2002, D1 was an Executive Director for Fu Cheong International Holdings Ltd (Fu Cheong). The letter of credit indictments allege that D1 caused Yue Fung Development Company Ltd. to apply for letters of credit in favor of Fortune and Good News Development Ltd. (Fortune), a subsidiary of Fu Cheong, by evidencing to Dah Sing Bank underlying commercial transactions that did not exist. The pay out to Fortune totaled approximately HK$88 million (US$11.28 million). These funds were used to generate a cash flow for Yue Fong and settle debts owed to Fu Cheong.

In this action, D1 sought leave to appeal against the sentence, arguing that the delay of four years and four months from the time he was arrested until his conviction along with the efficiency with which he conducted his defense should mitigate his sentence. The Court of Appeals, Stone, J., dismissed D1's application for leave to appeal his sentence. He ruled that the trial judge, having sat through the 70- day trial, was in a better position to adjudge the sentence and that the sentence was not manifestly excessive.

D2 sought leave to appeal against both his conviction and his sentence. Against his conviction, D2 argued that the trial judge erred in directing the jury to disregard the testimony of someone who had not seen the fraud take place. The court ruled that the trial judge had not gone beyond permissible bounds in allowing the testimony. D2 also asserted that there was not sufficient evidence for the jury to infer D2's guilt, but the appellate court ruled simply that, "when placed in its proper perspective," D2's argument was unacceptable.

The appellate court, however, looked more favorably upon D2's application for leave to appeal his sentence. The court was persuaded by D2's argument that as a salaried employee he did not benefit from the fraud and that his relatively late involvement in the fraud should mitigate his culpability. The court, thus, treated the application as the appeal and substituted the eight-year sentence for a sentence of six years three months.

[JEB/jdc]

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