HKSAR v. KAMARUDIN BIN KHALIL

DCCC 898/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 898 OF 2013

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REASONS FOR SENTENCE

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1.  I convicted the defendant after trial of a charge of conspiracy to defraud. The charge was that between August 2008 and June 2011 the defendant together with a Mohamed Nazari, Bin Abdul GHANI (Nazari) conspired to defraud Thomas Benedict Quinn-Schofield (PW1) of AUD1,221,320.00.

2.  It was not in dispute that PW1 was defrauded. The defence case was that, not only was the defendant not a party to such fraud, the defendant himself was also a victim of the fraud. I was sure after trial that Nazari and the defendant were acting in concert to defraud PW1.

Overview

3.  PW1, an Australian national, is a retired plumber with property business interests. Through a third party he was introduced to Nazari, a Malaysian national. PW1 was led to believe that Nazari would be able to arrange investment opportunities with large returns by accessing international money funds which he referred to as “Private Placement Programmes” (PPP).  PW1 was told that investors with access to significant funds, in excess of USD1 million, would be able to secure the release of large sums of money held by banks on fixed deposits, and receive a share of  such deposits.

4.  Through Nazari,  PW1 was introduced to the defendant and his wife, who are also from Malaysia. PW1 was led to believe that the defendant was also seeking to invest in such a scheme but did not have sufficient funds. It was suggested that PW1 and the defendant pool their resources to give them a better chance of  securing a PPP.

5.  The defendant and his wife were directors and shareholders of a company called Ever Legend Holdings Limited (ELHL), a British Virgin Island (BVI)  Company incorporated on 14 May 2008.

6.  PW1 said that over a period of months various programmes were considered.

7.  In February 2009, PW1 was told that ELHL held a fixed term deposit  at the Dexia Bank in the sum of USD100 million (the Dexia Fund). PW1was told that by his paying a net amount of AUD1,221,320 and the defendant paying a lesser sum, the fund could be released and PW1 would receive USD22 million. Forged Dexia Bank documents were shown to the victim to support the assertion that monies were held by Dexia in the name of  ELHL. PW1 was initially persuaded to make a remittance of  AUD773,306 from the ELHL account to Dexia Bank. He was then informed, on 27 February 2009, that there was a problem with the remittance and that  a second remittance was necessary in the sum of AUD1,221320 to be paid to the bank account of a BVI company set up by Nazari.  PW1 was told that the monies would be forwarded to Dexia by Nazari’s company. Until this payment PW1 had control of the money he had paid into the ELHL account.

8.  The Dexia Bank fund did not exist and PW1 lost the sum he paid. Bank records showed that there were substantial movements of cash between Nazari’s bank accounts and an account set up by the defendant after PW1 had remitted the money to the account of  Nazari’s BVI company.

Mitigation

9.  The defendant has a clear record.

10.  The defendant is married with two children in their twenties. He has three children by a previous marriage.

Sentencing Considerations

11.  Clearly, this is a serious offence involving a substantial fraud with international dimensions. The scheme devised by the defendant and Nazari was elaborate and sophisticated and the loss suffered by the victim was substantial.  The conspirators used BVI companies, numerous bank accounts and forged documents purportedly issued by a bank in New York to perpetrate the fraud on the victim

12.  The victim told the police that he thought that what was proposed was too good to be true yet still went ahead. The defendant and Nazari are obviously accomplished and practiced fraudsters. Over a period of years, by using the smoke and mirrors of  shell companies,  bogus banking  documentation and lies they were able to conjure up a scenario which induced the victim to suspend rational thinking.

13.  This was a well organised scam.  Until 27 February 2009 PW1 had control of the money he paid into the ELHL account as it could not be released from the account without his signature. A trip was organised to Zurich ostensibly on the pretext that a suitable PPP could be arranged there.  The scheme was skilfully conceived and the defendants were patient in the way in which it was executed. PW1, having transferred AUD 1.9 million the ELHL account in Hong Kong  in early November 2008 had second thoughts about the matter and  on 13 February withdrew the money from the ELHL account. Within less than a week PW1 was persuaded to transfer the money back into the ELHL account having been convinced he was about to receive a windfall of USD22 million.

14.  There are no tariffs for this kind of offence and each case depends on its own facts. Having considered all the circumstances surrounding the commission of this offence I took the view that a sentence of 5 years was appropriate.