HKSAR v. TSOI KAI CHUNG TERRY AND OTHERS

CACC 51 / 2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 51 OF 2009

(ON APPEAL FROM DCCC NO. 931 OF 2007)

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BETWEEN

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J U D G M E N T

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Hon Hartmann JA (giving the judgment of the Court):

Introduction

1.  On 17 January 2009, following a trial in the District Court before Deputy District Judge R Chan, the three applicants were convicted of offences of conspiracy to defraud and/or dealing with property known or believed to represent the proceeds of an indictable offence, the latter commonly called ‘money laundering’.

2.  The charges arose out of schemes to defraud banks by seeking loan facilities supported by false documentation and by dealing with the moneys thus obtained.

3.  The three applicants were among eight persons who faced trial, all eight, either on their own plea or by the verdict of the judge, being found guilty of one or more charges.

4.  The first applicant, D5, was convicted of four charges.  They were the first, second, third charges on the indictment, being charges of conspiracy to defraud, contrary to Common Law and punishable under s. 159C(6) of the Crimes Ordinance, Cap. 200, and Charge 9, this being a charge of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to s. 25 (1) of the Organised and Serious Crimes Ordinance, Cap. 455.  The first applicant was sentenced to a total of 54 months’ imprisonment.  He sought leave to appeal his conviction on each of the four charges.

5.  The second applicant, D8, was convicted of the second charge on the indictment, namely, conspiracy to defraud.  He was sentenced to 30 months imprisonment.  At the hearing before us he abandoned his application for leave to appeal against sentence and sought leave to appeal his conviction only.

6.  The third applicant, D9, was convicted of three charges.  They were the second, seventh and eighth charges on the indictment.  The second charge (the same charge of which D5 and D8 were convicted) being one of conspiracy to defraud, the seventh and eighth charges being charges of dealing with property known or believed to represent the proceeds of an indictable offence.  The third applicant was sentenced to a total of 30 months’ imprisonment.

7.  D9 sought leave in person to appeal out of time, giving brief reasons why he was out of time but giving no grounds of appeal.  By the date of the hearing before us, he had served his term of imprisonment.  He filed no further documents and made no appearance at the hearing.  Accordingly, his application for leave to appeal was dismissed.

The charges of conspiracy to defraud

8.  These were the first three charges on the indictment.  In each conspiracy the same essential method of operation was employed.  The co-conspirators operated through a company, arranging for that company to make applications to various Hong Kong banks for loan facilities.  The fraud lay in falsifying most, if not all, of the documents that supported the loan applications; in short, it lay in falsely representing that the documents given to the various banks in support of the loan applications were, to cite from each of the charges, “genuine banking, accounting and commercial documents”.  In each conspiracy, the presentation to the banks of a substantive body of false documentation resulted in them advancing loan facilities which they would otherwise not have done.

9.  The succession of conspiracies was dictated by the need to create a new company with a new business as credit lines generated by the previous conspiracy began to dry up.  While some of the moneys obtained from the banks was repaid in order to give an appearance of regularity and to extend the life of each conspiracy, the inexorable dissipation of the funds lead in the final analysis to the banks being left with unpaid debts in excess of $30 million.

10.  The conspiracies were sophisticated in the manner of their execution.  By way of illustration, offices had to be rented and factories acquired in the Mainland to give the impression to visiting bank officials that the companies were substantive business enterprises.  Persons had to be recruited to hold themselves out as senior officers of the companies, being able to do so in a manner which convinced the banks that they were prudent and successful businessmen.  As the judge noted, the false papers that were created for presentation to the banks were on occasions “masterpieces of work”. 

11.  The original conspiracy, the subject of Charge 1 on the indictment, was carried out in the name of the Yuan Chien Computer Company Limited.  The charge alleged that this conspiracy ran from April 2004 until July 2005.  In the course of the conspiracy six banks were defrauded.  They were Citibank, the Bank of China, the Shanghai Commercial Bank, the Bank of East Asia, ICBC and DBS Bank.

12.  The second conspiracy, the subject of Charge 2, was carried out in the name of Orient Power (Hong Kong) Limited.  The charge alleged that this conspiracy ran from January 2005 until July of that year.  In the course of this second conspiracy three banks were defrauded.  They were the Bank of East Asia, HSBC and Dah Sing Bank.

13.  The final conspiracy, the subject of Charge 3, was carried out in the name of Mason Holdings Limited.  The charge alleged that this conspiracy ran from May 2005 until March 2006.  In the course of this final conspiracy three banks were defrauded.  They were Citibank, HSBC and Hang Seng Bank.

The money laundering offences

14.  The second group of charges, those of dealing with property known or believed to represent the proceeds of an indictable offence, arose out of the manner in which, in part at least, the three conspiracies to defraud came to be executed.

15.  Certain of the loan facilities obtained from the banks pursuant to the conspiracies were structured so that moneys to be advanced under the loans were not paid direct to the company seeking the loan – Yuan Chien, Orient Power or Mason Holdings – but were instead paid direct to third party enterprises which the banks had been led to believe were creditors of those companies.  Such loan agreements, we understand, were known as ‘trust receipt’ agreements.

16.  These third party enterprises, however, were not genuine creditors.  Although a number were operating business concerns, in the main they were shell companies set up for the limited purpose of supplying false invoices, receiving moneys from the banks pursuant to those false invoices and then routing the moneys back to the conspirators.

17.  With the dismissal of D9’s application for leave to appeal, only one money-laundering offence fell for consideration: Charge 9 on the indictment, the charge of which D5 was convicted.

18.  At all material times D5, together with D4, was a director of a company called ATA Limited.  Between about August and November 2004, in the carrying out of the first conspiracy, false invoices in the name of ATA were supplied to three banks.  These showed that Yuan Chien, the company used in the first conspiracy, owed ATA approximately $3.9 million.  Pursuant to the loan agreements in place with the three banks, ATA was duly paid the $3.9 million.  Within a day or so of the receipt of those funds by ATA, in a series of cash cheques, all of the funds, less a commission, were paid out. D5, who was in charge of day-to-day administration of the company, signed five of the six cash cheques.  Evidence showed that the funds found their way back to the conspirators who were operating the Yuan Chien conspiracy.  The judge was satisfied that, when D5 dealt with those funds, he had reasonable grounds to believe that they represented the proceeds of an indictable offence.

The principal prosecution witnesses

19.  The masterminds behind the conspiracies to defraud were, first, a woman named Yuen Sau Han, Diana, PW1, an accountant, and, second, a man named Chan Wai Hung, Dennis, PW2, a businessman with experience in both the banking and technology industries.

20.  Both PW1 and PW2 testified for the prosecution as accomplice witnesses, doing so under immunity from further prosecution.  At the time when she testified, PW1 was serving a term of imprisonment of six years for other similar frauds.  At the commencement of the trial, PW2 pleaded guilty to the first and second charges on the indictment.  When he testified, he was awaiting sentence in respect of those offences.

21.  Although both PW1 and PW2 were extensively cross-examined on the basis that neither were worthy of belief, after a detailed assessment of their credibility, the judge concluded that both had attempted to be “as truthful as possible” and that he was able to rely on the main body of their evidence to a sufficient extent to found his convictions.

D5: relevant evidence concerning the first conspiracy (Charge 1) and the money laundering offence (Charge 9)

22.  D5’s conviction on both Charges 1 and 9 was founded on the same body of evidence.

23.  The history of the first conspiracy to defraud was to the effect that, in or about late 2003, PW1 and PW2, together with an associate, reached an agreement with a Taiwanese businessman named Chen Hui Tung who ran a technology business in the Mainland called the Yuan Chien Computer Company.  The agreement was to use Yuan Chien as a vehicle for raising money from banks.  As to the nature of the agreement, in his Reasons for Verdict (para. 88) the judge said:

“PW1 said her intention was to borrow money from the banks through illegal means, that is, by preparing and submitting false accounts to the banks in order to deceive them. Her idea was accepted by the other three ... and it was decided that the four of them would each play a part in this plan.”

24.  In order to obtain substantial loan facilities from banks, it was necessary to inflate the true worth of Yuan Chien and to this end it was necessary to create a false business edifice. Integral to this was the creation of false documentation for which PW1 was primarily responsible.

25.  At the time when the first conspiracy was launched, PW2 was friendly with D4, who, together with D5, was a director of ATA.  It was PW2’s evidence that, through his friendship, he was able to draw D4 into this first conspiracy.  D4, he said, agreed to supply false invoices to make it appear that ATA was a creditor of Yuan Chien and further agreed that, when payments were received from the banks in respect of those invoices, arrangements would be made for the funds, less a commission, to be channelled back to Yuan Chien.

26.  It is to be noted that neither PW2 nor PW1 testified that they had any dealings with D5 in respect of the first conspiracy.

27.  Although D5 did not himself give evidence at trial, when he was arrested on 28 August 2007 he was interviewed under caution.  In that interview, he said that ATA had been a small enterprise engaged in business consultancy and in the field of mergers and acquisitions.  The company, he said, employed just one receptionist and a part-time accountant.  It had a bank account with the Bank of East Asia.  Although he and D4 were joint signatories on the account, he said that he was the one who had day-to-day charge of the administration of the company and that, unless he was unavailable, he would sign all cheques.

28.  D5 said that in 2004 there had been very little business and therefore few transactions recorded in the company’s bank account.  Concerning D4, however, he did recall a number of transactions going through the account but, to the best of his memory, they were all for consultancy fees earned by D4.  That, he said, was what D4 told him was the nature of the fees earned.

29.  D5 said that he had no recollection of a company called Yuan Chin although he said that he had heard of PW1 and knew PW2.

30.  It was not disputed that false invoices in the name of ATA were used in support of applications for bank loans.  During his cautioned interview, D5 was shown a number of these invoices and accepted that they had to be false.

31.  As indicated earlier, between August and November 2004 ATA received a series of six payments totalling some $3.9 million from three banks: ICBC, the Shanghai Commercial Bank and DBS Bank.  All of these payments were made to ATA by the banks on behalf of Yuan Chien to pay off amounts due under false invoices issued in the name of ATA.  Within 24 hours of the receipt of each payment, cash cheques were issued for the full amount less only an amount for commission, the total withheld for commissions being some $368,000.  D5 signed five of these cash cheques, D4 signing the other, and personally cashed one cheque in the sum of $80,000.

32.  During the course of the trial no internal accounting documents of ATA were put into evidence to show how at the time the six payments had been recorded, indeed if they had been recorded at all.

33.  While in his interview under caution D5 denied any knowledge of Yuan Chien, D4, who also made a statement under caution and who chose to testify at trial, accepted that he had had fairly extensive dealings with the company, mainly in the area of business consultancy.  He emphasised however that the company had been his client and that D5 had taken no part in any dealings with it.

34.  Concerning the series of six payments made to ATA, D4 testified that these payments had been made in respect of a number of parallel import transactions that he had completed on behalf of Yuan Chien.  The arrangement was to the following effect.  PW2 would send a list of the products that Yuan Chien wished to purchase on the parallel import market: cameras, mobile telephones and the like.  D4 would endorse the list with details of the products that he could secure.  He would then return the list to PW2.  If PW2 agreed the prices, arrangements would be made to transfer the necessary funds through Yuan Chien’s various bank accounts to ATA.  D4 would then pay in cash for the goods, retaining ATA’s commission, and would arrange transportation.

35.  D4 testified that he informed D5 that the funds passing through the account of ATA – with the exception of one payment of about $400,000 which was in respect of consultancy fees paid by Yuan Chien – were all in respect of these parallel import transactions.  It was on the basis of this explanation, he said, that cash cheques were issued.

36.  The judge rejected as a fabrication D4’s contention that, to his belief, the bank payments that had gone through ATA’s account had arisen out of this arrangement to purchase goods on the parallel import market.  He was satisfied that there had been no parallel import transactions.

37.  Concerning D5’s conviction of the first charge of conspiracy to defraud, bearing in mind the evidence that ATA was a small business operation, that it had not successfully concluded many transactions in 2004 and that D5 was in charge of its day-to-day administration, the judge was not prepared to accept that, to D5’s admitted knowledge, ATA had received an amount of approximately $3.9 million over a limited period of time and that D5 had been actively involved in paying out all of that money, less a substantial commission, by way of cash cheques without knowing the source of the payments and the true reason why it was necessary to take the unusual step of passing on the funds in the form of cash cheques.  On the basis of this evidence, he was satisfied that he could draw the inference that D5 “knew exactly what was going on” (para. 901).

38.  As we have said, D5’s conviction of Charge 9, that of dealing with property knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence, was based on the same body of evidence that founded D5’s conviction of Charge 1.  In respect of this charge, the judge was satisfied that he could draw the inference that, in dealing with the payments received by ATA in the manner that he did, D5, if he did not have actual knowledge, certainly had reasonable grounds to believe that the funds represented, either directly or indirectly, in part or in whole, the proceeds of an indictable offence. 

D5’s grounds of appeal in respect of Charges 1 and 9

39.  D4’s conviction of both Charge 1 and Charge 9 was founded on direct evidence.  Both PW1 and PW2 testified that D4 agreed to supply false invoices in the name of ATA and made good on the undertaking.  On the evidence of the two accomplices, D4 played a central role in the conspiracy.

40.  In respect of D5, however, there was no such evidence.  The evidence that D5 was a member of the first conspiracy was entirely circumstantial.  Accordingly, it was for the trial judge, on an evaluation of the whole of the evidence, to make his findings of fact and then, abstaining from making assumptions, to determine what inferences could properly be drawn from those facts.

41.  In respect of both Charge 1 and Charge 9, it was submitted by Mr Selwyn Yu SC, leading counsel for D5, that, in carrying out this exercise, the judge fell into error.  He did so, it was argued, by giving undue weight to certain aspects of the evidence and insufficient weight to other aspects.  The essential submission, however, was that the primary facts proved could not reasonably bear the inferences that the judge had chosen to draw from them.  Mr Yu argued that the inferences that were drawn were not, and could not be, the only compelling inferences; on the primary facts proved, there were other inferences which tended to exonerate D5 of both Charge 1 and Charge 9.

42.  That there was a conspiracy to use Yuan Chien as a vehicle to defraud banks by way of false loan applications was never denied.  Nor were D5’s actions disputed.  They related to the receipt by ATA of six payments totalling some $3.9 million between August and November 2004, by the retention of a commission of some $368,000 and by the payment out of the remainder of the moneys by way of cash cheques, D5 signing five of those cheques and cashing one in the sum of $80,000.

43.  The circumstances in which those actions took place were also effectively common cause.  At that time ATA was involved in the field of business consultancy, specialising in mergers and acquisitions.  In the second half of 2004 there were few business transactions recorded in the accounts of the company, especially on the part of D4.  As for D5, he was in charge of day-to-day administration and had control of the accounts.  Funds coming into the company and funds going out, certainly funds of any significant size, would have been of his immediate concern.

44.  While D5 did not give evidence, in his cautioned interview he recalled that there had been several payments received in 2004 by way of consultancy fees earned by D4.  When asked if they were all consultancy fees, D5 said that is what he understood from D4.  No mention was made of a period in which parallel import transactions took place, commissions being earned in that manner.

45.  D5 did call a witness in his defence but the evidence of that witness had no direct bearing on Charge 1.  We shall refer to that witness later in this judgment.

46.  As we have indicated, stripped to its essentials, the first conspiracy, the subject of Charge 1, was one in which, by the use of a corporate vehicle, Yuan Chien, false loan applications, that is, applications built on a body of false documentation, were made to banks in order to obtain credit facilities.

47.  To be convicted of this conspiracy, the judge had to be satisfied that, based on the primary facts set out above, it was established as a matter of inference that, in dealing with the bank payments in the manner he did, D5 knew not only that he was involving himself in criminal activity but that he knew the essential terms of the criminal objective to which he was allying himself.  He could not be a co-conspirator acting in pursuance of a common criminal purpose unless he knew at least the essential nature of that criminal purpose.  Hence the judge’s conclusion (para. 865):

“… it is interesting to note that he [D5] says he has not heard of Yuan Chien. There are vast amounts of money going through ATA’s account, six times. As a signatory to the account he has signed five cheques and he still says that he has not heard of Yuan Chien. As a reasonable man, when he has to write out a cheque for that sort of money, a reasonable man would ask his partner, “what is going on here?” If he had asked that, he would have been given the answer.”

48.  The judge qualified this conclusion by saying (para. 901):

“D5 is one of the signatories to the account of ATA. He was the one who had control over the account. He had the right to sign cheques and on this occasion he signed five cheques each for a relatively large sum of money. It is just beyond comprehension if one has to accept that D5 knew nothing about it. I have no doubt in my mind that D5 knew exactly what was going on. He was a partner of D4. He knew full well that ATA would be used as a bogus supplier and that all he had to do was to sign cheques for the money to be channelled out. I see no other reasonable conclusion to be drawn.”

49.  As we have said, Mr Yu submitted that there was no basis for drawing any such inference as the only reasonable inference to be drawn from the primary facts proved.  In this regard, counsel laid emphasis on two matters. 

50.  The first was related to D4’s testimony.  When he testified at trial, D4 said that the six payments totalling $3.9 million received by ATA had, with the exception of one consultancy fee, concerned the purchase of parallel import goods on behalf of Yuan Chien.  Mr Yu acknowledged that the judge had rejected this evidence.  However, he said that D4 had further testified that he had informed D5 of this fact and it was on the basis of this explanation that D5 had been prepared to issue cash cheques.  Concerning this second matter, said Mr Yu, the judge had failed to come to any finding.

51.  In our view, there was no substance in this submission.  While admittedly the judge made no specific finding in this regard, we are satisfied that it was implicit in his Reasons for Verdict that he found D4’s evidence to be a false explanation invented after the event to try and explain the receipt of such large amounts of money into ATA’s account and the payment out of those funds in the form of cash cheques.  There had been no parallel import transactions and therefore no explanation given to D5 at that time to that effect.

52.  In our judgment, there was more strength in the second limb of Mr Yu’s submission.  As he submitted, there was no evidence, direct or indirect, that D5 had had any dealings with PW1 or PW2, the driving forces behind the conspiracy.  Nor was there evidence of any dealings with any other conspirator other than D4.  But D4 did not himself implicate D5.  He did not testify, for example, that, aside from the parallel import transactions, D5 was kept informed of his dealings with Yuan Chien; as D4 testified, Yuan Chien was his client.

53.  As we have said, if D5 was to be convicted of the first charge of conspiracy to defraud, the judge had to be satisfied that, in dealing with the payments in the manner he did, D5 knew more than that he was involving himself in some form of criminal activity.  The judge had to be satisfied that, in doing so, D5 was knowingly allying himself to the conspiracy charged so as to become a member of that conspiracy and to be a member D5 had to know at least of the essential elements of that conspiracy. 

54.  The judge was satisfied that he could draw the inference that D5 “knew exactly what was going on”.  But on the basis of what primary facts did he do so?  How was he able to come to that inference?

55.  While the judge’s reasoning was somewhat terse, and open to criticism in that respect, it encapsulated the fact that there was a body of primary facts concerning the six payments received by ATA from which to draw the inference that D5 must have known that the company was being used to further criminal activities of some sort. 

56.  But what of the further inference that had to be drawn if D5 was to be convicted of the first charge of conspiracy to defraud, namely that he must have known, or come to have learnt of, the essential terms of the first conspiracy, thereby knowing that, in dealing with the payments in the manner he did, he was becoming a member of that conspiracy?  

57.  In the first passage cited above, the judge appears to have drawn the inference – albeit speaking of what a reasonable man would have done and not what D5 himself must have done – that D5 must have made enquiries of D4 concerning the payments paid in and the cheques to be paid out and that D4, for his part, must then have told him the truth, namely, ATA’s role in the conspiracy.

58.  The second passage, contains no different or extended reasoning, the judge going direct to the finding that it is simply “beyond comprehension” to think that D5 would have involved himself in dealing with the payments in the way he did without knowing what was going on.

59.  The judge’s difficulty in explaining the basis upon which he felt it proper to draw the inference that D5 must have known “exactly what was going on” is understandable.  It lies in the fact that, while, as we have said, there was a body of primary evidence from which facts could be found enabling the inference that D5, in dealing with the payments in the manner he did, must have had good reason to believe that ATA was being used to further criminal activities of some sort, there was an almost complete absence of primary evidence upon which facts could be established enabling the inference, it being the only reasonable inference, that D5 must at the same time have known that, in so doing, he was becoming a party to the first conspiracy.  With respect to the judge, whatever his suspicions may have been, and there was ample grounds for such suspicions, while it was permissible to infer that, in respect of the six payments, D5 must have made enquiries with D4, his single partner in the company, it was conjecture to conclude that D4 must himself have then informed D5 of the nature and extent of ATA’s involvement in the first conspiracy.

60.  Once the judge had decided to place no weight on D5’s record of interview, the remaining primary facts from which the judge sought to draw his inference were never really in dispute.  The single issue was whether, on a correct analysis of those primary facts, it was permissible to draw the inference.

61.  It is now well settled that where the point in dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it must, of course, bearing in mind that the trial judge has had the advantage of hearing all the evidence, give due weight to his opinion: see HKSAR v Lee Ming Tee and Securities and Futures Commission (2003) 6 HKCFAR 336, at 363, para. 73.

62.  In our judgment, in respect of the first charge of conspiracy to defraud, it was not the case that the judge failed to give adequate reasons to support the inference that D5, in dealing with the payments in the manner he did, joined the first conspiracy.  It was instead the case that, there being such a limited basis of established primary facts, it was not possible, without straying into the realm of conjecture, to draw the inference he did.  The judge went too far.  Whatever the suspicions, the inference that D5 must at least have known the essential elements of the conspiracy could not be established as a matter of inference from the facts proved.

63.  On that basis, D5’s application for leave to appeal against the first charge of conspiracy to defraud must be allowed.

64.  However, concerning D5’s conviction of Charge 9, as we have earlier indicated, we are satisfied that there was a body of evidence upon which the judge could properly draw the inference that at least D5 must have had reasonable grounds to believe that the six payments received by ATA represented the proceeds of an indictable offence.

65.  It was on this basis, that is, on the basis that D5 must have had “reasonable grounds to believe” rather than on the basis of D5 having actual knowledge, that the judge founded his conviction.

66.  This finding was criticised by Mr Yu on two grounds.

67.  First, Mr Yu submitted that the prosecution had at all times advanced its case in respect of Charges 1 and 9 on the basis of actual knowledge.  If therefore it sought to change its stance it was obliged to inform the defence so that it could respond appropriately.  Nothing was put before us, however, to suggest that the prosecution did change its stance.  Even if they arose out of the same set of facts, Charges 1 and 9 were independent of each other.  The particulars of Charge 9 were expressed to be the alternative allegations of actual knowledge or reasonable grounds to believe.  However the prosecution chose to advance its case, that alternative basis was fairly before the court and it was for the judge to determine the level of knowledge, if any.

68.  Second, said Mr Yu, a finding only of “… at least reasonable grounds to believe” in respect of Charge 9 was contradictory to the judge’s finding in respect of D5’s participation in the conspiracy to defraud, that finding being based on D5’s actual knowledge.

69.  We do not see that the findings are in any way mutually inconsistent.  Both are levels of awareness, the one being greater than the other.  For D5 to be convicted of Charge 1, actual knowledge of the existence of the conspiracy was essential.  Proof of that knowledge had to be by way of inference based on a limited body of primary facts.  For D5 to be convicted of Charge 9, however, actual knowledge that the payments were the proceeds of serious crime was not essential.  It was sufficient if it could be properly inferred that D5’s awareness, although not absolute, at least gave him reasonable grounds to believe that they were such proceeds.  In the present instance, the judge did no more than look to the differing elements of the two separate charges and, in respect of the second, even if his language is taken literally rather than, as we think it to be, a matter of expression only; it is clear he intended his finding to go no further than the requirements of s. 25(1) of the Organised and Serious Crimes Ordinance.

70.  As with Charge 1, D5’s conviction of Charge 9 was based on inferences drawn from primary facts.  In this regard, the judge concluded (para. 926):

“Turning to D5, it is my finding that he knew that there was no business between ATA and Yuan Chien, and anyone in the capacity of D5 who was one of the signatories to ATA’s account when signing cheques for large sums of money must be put on alert and must have attempted to find out what the money was about. Therefore, any reasonable person in the position of D5 must have reasonable grounds to believe that the money represented proceeds of an indictable offence.”

71.  The judge continued (para. 927):

“We have more evidence from PW1 and PW2 here and I have every reason to believe that D5, well knowing the relationship between ATA and Yuan Chien at least had the reasonable grounds to believe that the money he dealt with represented proceeds of an indictable offence. There was no active business, in fact, done by ATA, and within a short space of time large sums of money were passing through ATA’s bank account plus the fact that almost as soon as the money was deposited it was withdrawn, and any reasonable person in the position of D5 must have reasonable grounds to believe that the money was proceeds of an indictable offence.”

72.  In both passages, the judge spoke of D5 knowing of the relationship between ATA and Yuan Chien.  In the second passage, he spoke of there being “more evidence from PW1 and PW2 here”, the only interpretation of that somewhat enigmatic phrase being that, because of PW1 and PW2’s on-going relationship with D4, it could be inferred that D5 must have come to know of it.  As we have said earlier, there was no basis upon which that inference could properly be drawn, certainly not an inference that D4 must have confided in D5 as to the true nature of the relationship.

73.  However, even if the judge was in error in that regard, that error was not integral to his reasoning and can be excised from it without compromising its substance.  That substance, the substance of both passages, when set against the body of evidence already identified by the judge, was to the effect that D5 must in any event have had reasonable grounds for believing that the funds he was dealing with were in some way, directly or indirectly, in part or in whole, the proceeds of serious criminal conduct.  At that time, ATA was doing little, if any, business.  Yet, in a period of four months between August and November 2004, in a series of six payments, the company received approximately $3.9 million.  More than that, in each case, within a matter of 24 hours or so, the amounts received were paid out, less only a figure to cover commission, and paid out in each instance in cash cheques, five of those cheques being signed by D5 himself and one of them (in the sum of $80,000) being cashed by him.

74.  In such circumstances, absent a credible explanation – and there was no credible explanation in the present case – we do not see how the judge can be criticised for finding that D5, in dealing with the funds in the manner he did, must have had reasonable grounds to believe that he was dealing with the proceeds of a serious offence, even if the nature of the offence itself could not be specifically identified.

75.  For the reasons given, we are satisfied that D5’s application to appeal against his conviction of Charge 9 must be dismissed.

D5: relevant evidence concerning the second conspiracy (Charge 2)

76.  A company named Orient Power was used as the corporate vehicle for carrying out the second conspiracy to defraud.  This conspiracy started some eight months after the first conspiracy but ran in tandem with it for the first seven months of 2005.  While Yuan Chien had conducted some genuine business, Orient Power did not.  It was entirely a sham.

77.  Concerning D5’s involvement in this conspiracy, it appears that he and D4 introduced an intermediatory who in turn introduced Orient Power to the Bank of East Asia so that loans could be obtained from that bank.

78.  It was PW2’s testimony that he first came to meet D5 sometime in 2005 well after the commencement of the Orient Power conspiracy.  The circumstances were as follows.  Orient Power was already being pressed for repayment of the loans that it had been able to fraudulently obtain from the Bank of East Asia, HSBC and Dah Singh Bank.  To keep the conspiracy alive, PW2 needed more funds.  It was on this basis that he approached D5 in the hope that D5 would be able to make a loan to him.  D5 agreed to make a short-term loan in the sum of $400,000.  However it was repayable within 10 days.  In addition, it was subject to a usurious interest factor; PW2 recalled it being between $10,000 and $20,000.  PW2 further recalled that at some time thereafter D5 agreed to make a further loan to assist Orient Power.  This second loan had been in a sum of between $50,000 and $80,000 and was interest free.  PW2 said that both loans were repaid.

79.  It is to be emphasised that, in testifying as to these dealings with D5, PW2 did not say that he confided in D5 as to the true position, namely, that Orient Power was a sham company set up for the single purpose of fraudulently obtaining funds from banks.

80.  It was PW2’s testimony that later still, in August 2005 when Orient Power was still being pressed to repay loans to HSBC, he went back to D5 to try to raise further finance.  D5 was not prepared to make a further loan, being concerned Orient Power may not have the means to repay him.  However, according to PW2, it was D5 who then came up with a scheme to try and reassure HSBC that Orient Power would be able to meet its debts thereby stalling the bank in its demands.  As it was part of ATA’s business to identify corporate targets for acquisition on behalf of companies looking to expand, D5 suggested that ATA make representations to HSBC to the effect that it was negotiating on behalf of a client to purchase Orient Power.  As such, so it would be implied, if HSBC was prepared to withhold action, it would receive the money due to it by Orient Power when the purchase took place. 

81.  In the result, said PW2, three letters were prepared on ATA letterhead and signed by D5.  The first letter was addressed to Orient Power, showing that ATA was representing an unspecified client company interested in the purchase of Orient Power.  The second two letters were addressed directly to HSBC.  The first of these two letters, dated 10 August 2005, read:

“We act for our client – a company listed on the main board of the Stock Exchange of Hong Kong – hereby inform your bank that our client shall acquire all issued and outstanding shares of Orient Power. The payment for the acquisition of Orient Power shall be comprised of both cash and common shares of our client upon signing the formal agreement with our client. As we are going to conduct a detailed due diligence examination of Orient Power, our solicitor and professional accountants will contact your bank shortly in order to obtain the bank balance and loan balance for Orient Power. Thank you for your kind attention.”

82.  As the judge observed – correctly in our view – this letter was drafted in such a way as to give an impression that an acquisition was in the process of detailed negotiation and may well be imminent.

83.  As it was, however, when D5 gave his cautioned statement, although he insisted that the correspondence reflected a genuine investigation conducted by him at the time, he said that he had never visited the offices or factory of Orient Power, had never consulted face-to-face with its senior management and had not had an opportunity even to look at the books of the company.  D4, he said, had carried out all liaison duties.  The judge was not prepared to accept that this is how a professional consultant would have acted.

84.  While D5 did not testify, he did call one witness, Pang Ming Kin, who was a director of a subsidiary of a Hong Kong listed company.  Pang testified that he got to know D5 in or about 2002 and that, at some later stage, he gave D5, together with others, a mandate to identify companies for possible acquisition, carrying out some preliminary due diligence and reporting back.  Pang said that a memorandum of understanding to that effect had been signed.  Pang had not heard of Orient Power.  When shown the correspondence between ATA, Orient Power and HSBC, Pang said that he had never seen that correspondence.

85.  When D4 testified, he confirmed that he had introduced Orient Power to D5 and that he had carried out all liaison duties.

86.  While Pang’s evidence supported the fact that in or about 2004 and 2005 ATA had a mandate to seek out suitable corporate acquisitions, the difficulty faced by D5 concerning Orient Power was the fact that the original drafts of the correspondence bearing the ATA letterhead were to be found on PW1’s computer.  This accorded with PW2’s testimony that it was part of the agreed scheme to stall HSBC that PW1 would prepare the drafts and e-mail them to D5 who would then print them on ATA letterhead and sign them.

87.  The judge rejected the assertion that the correspondence was signed by D5 on ATA letterhead in good faith as part of a genuine exercise to evaluate Orient Power for the purposes of a possible acquisition.  In this respect, it was implicit in his findings that D5 had acted dishonestly: see paras. 862-864.

D5’s grounds of appeal in respect of Charge 2

88.  Concerning D5’s conviction of Charge 2, Mr Yu submitted that the judge fell into error in two ways.  First, he made findings of fact which on the evidence were not open to him to make.  Second, those primary facts that were correctly proved could not reasonably bear the inference of guilt that the judge drew from them.

89.  In finding that D5 was a member of the second conspiracy, the judge said the following (paras. 904 and 905):

“As far as the roles played by D4 and D5 are concerned, I find that both of them knew at the time that Orient Power existed to apply for credit facilities from banks. I find as a fact that both of them knew that PW1 and PW2 were moving on to another operation to defraud further banks, having started off from Yuan Chien…

D5’s involvement as far as Orient Power is concerned, he has also lent money for Orient Power to get over its financial difficulty.  He has also written three letters for Orient Power.  The dates may be a problem here [the conspiracy as charged was from January to July 2005, the letter being written in August 2005] but even if I accept the dates are beyond the conspiracy period it goes to show the state of mind of D5 that he knows that Orient Power is having difficulty, and therefore he writes to support them …”

90.  There was a further, final sentence to the second paragraph but it appears to have been wrongly delivered by the judge or wrongly transcribed; in so far as it can be understood, it is a non sequitur.

91.  Mr Yu’s submission that the judge made findings of fact which were not open to him to make was focused on the judge’s findings contained in the first paragraph.  In respect of that paragraph, whatever may be the case with D4, we agree that there was no direct evidence that, during the period of the second conspiracy, that is, from January to July 2005, D5 knew that PW1 and PW2 “were moving on to another operation to defraud banks, having started off from Yuan Chien”.  Nor was there any direct evidence that D5 knew that Orient Power was a sham company, existing only to seek credit facilities from banks.  Whether it was possible to draw the inference that D5 must have known of these matters depended on the scope of the primary facts proved.

92.  Insofar as the judge went through this exercise, his reasoning being somewhat ambiguous in this regard, the primary facts proved fell into two tranches.  First, there was the evidence of the two loans made by D5.  But, as Mr Yu emphasised, this did no more than demonstrate a relationship of creditor and debtor.  There was no evidence that, in lending money to Orient Power, D5 at that time learnt of the true nature of the company.  Second, there was the evidence of the letters though they were signed and sent outside the charged period.  This evidence, for the reasons already traversed, pointed to some sort of complicity on the part of D5.  But what was capable of being inferred from this complicity?

93.  The judge appears to have drawn just one inference, namely, that it evidenced the fact that D5 knew that Orient Power was in difficulties and that he prepared the letters to support the company.  It was on that narrow basis, considered in the light of the two earlier loans, that the judge was satisfied that D5 was guilty of the second conspiracy to defraud. 

94.  Although we have considerable reservations, we concede that, given a careful exposition, it may have been possible to demonstrate how the primary facts leant themselves to the irresistible inference of D5’s guilt.

95.  The judge, however, while he set out the primary facts and stated the conclusion drawn from them, did not demonstrate the basis upon which he had been drawn to that conclusion.  This was not a case where the conclusion to be drawn was self-evident, far from it.  Accordingly, the duty lay on the judge to explain how, on the basis of such limited primary facts, he felt able to reach the conclusion that he did.  The judge did not do so.  In the result, it has not been possible to understand to a sufficient degree the manner of his reasoning, namely, how it was that he felt able to draw the inference, it being the only reasonable inference, that D5 had not merely been complicit in certain dealings with HSBC after the conspiracy was ended but had himself been one of the conspirators.  In the result, D5’s conviction is untenable.

D8: relevant evidence concerning the second conspiracy.

96.  D8 was an employee of Orient Power. Both PW1 and PW2 testified that they had extended dealings with him in the operation of the second conspiracy.  Indeed PW2, who had once been a banking colleague of D8, testified that he recruited him into the conspiracy.

97.  PW2 testified that, when he recruited D8, who was out of work at the time, D8 was concerned that Orient Power, a start-up company, may meet financial difficulties, putting his salary at risk.  PW2 said that he then explained to D8 that, while initially certain funds would be paid into the bank accounts of Orient Power to demonstrate to the banks that the company was one of substance, in fact it was not intended that the company would conduct any genuine business.  Its business would be to obtain loans and these loans would be sufficient to guarantee that D8 received a regular salary.

98.  As to D8’s reaction, the judge came to the following finding (para. 397):

“After all this was explained to him, D8 said there was no need for PW2 to explain so much to him because he did not want to know so much about what PW2 or the company was supposed to be doing. What he cared most was whether or not he would get paid punctually and that he did not want to get involved in this matter. It was in these circumstances that D8 agreed to join in to work for Orient Power.”

99.  On the basis of that finding, while D8 may have wished to turn a ‘blind eye’ to the true extent of the fraud, when he agreed to work for Orient Power he well knew that he was participating in a conspiracy to defraud the banks by way of making fraudulent applications for loans.  As such, he became a co-conspirator.

100.  PW1, who was primarily responsible for preparing the false documentation to be used in Orient Power’s applications for loans, accepted that she did not go to the offices of the company on a daily basis and consequently she was not familiar with D8’s daily office routine.  However, she testified that, when the pressure of work got too great for her, more especially when she found herself facing criminal charges in respect of other frauds, she passed on the job of preparing certain invoices to D8.  She testified that on several occasions she saw D8 preparing invoices to be used in support of loan applications.

101.  She further said that, from what she did see during her visits, D8 could not have failed to have appreciated that he was preparing false documents, more especially as the chops had to be collected from the stock kept by Kenneth Law who was the ‘front man’ for the company.  Orient Power, she said, had no legitimate business and D8 must have known of that fact.

102.  D8 was interviewed under caution and chose to testify in his defence at trial.  As the judge observed, the cautioned statement and the testimony were to the same effect, namely, that D8 was employed at a very menial level, essentially as a messenger, and had no knowledge of the fact that Orient Power was a sham or that the documents which he dealt with were false.

103.  D8 accepted that his name was given on a number of loan applications to banks as a person to be contacted in the event of a query but said he understood this to be no more than a matter of convenience.  The judge was not prepared to accept that a mere errand boy would have his name put down on loan application forms as a contact person unless he was trusted to answer any queries raised by the banks.  That involved knowing something of the loan applications themselves and the documents that supported them: see para. 872.

104.  D8 called two witnesses.  The one witness testified that D8’s level of English was just ordinary and that he struggled with his computer.  The other, a female security guard, said that she had seen him going in and out of the building and believed him to be just the messenger.  The judge found that the evidence of these two witnesses took matters no further either way.

105.  The judge had no difficulty in rejecting D8’s evidence that during the time he was employed by Orient Power he was an unsuspecting minion.  He said (para. 906):

“… I have rejected his exculpatory evidence. I find that he knew what was going on. I find that he knew that it was not going to be a genuine business because I find that PW2 is a truthful witness on this issue. I accepted PW2’s evidence that before D8 joined in he has clearly explained everything to D8 in that the false documents will be used to borrow money from banks. I therefore had no difficulty in arriving at the conclusion that he is a party to this agreement.”

D8’s grounds of appeal

106.  D8’s principal ground of appeal was to the effect that the judge erred in finding that PW1 and PW2 were credible witnesses when they had admittedly told lies on previous occasions, when there were material inconsistencies in parts of their evidence and when PW1 in particular had refused to answer certain questions on the basis that they may be self-incriminating.

107.  This was supported by the general ground that the judge erred in rejecting the defence case that D8 had been an unsuspecting employee ignorant of the fraudulent scam being practised by PW1, PW2 and their cohorts and was further in error – insofar as it was necessary to come to a finding of D8’s knowledge by way of inference – in drawing the inference, it being the only reasonable inference, that D8 had the requisite knowledge.

108.  As to the principal submission that the judge was in error in accepting the evidence of PW1 and PW2, it cannot be said that the judge was unaware of their potential fallibility as witnesses.  Indeed, he went to great pains to analyse their evidence and to assess the degree to which, if at all, he could accept that evidence.  At the end of his assessment, he concluded (para. 836):

“We have to be pragmatic and realistic in assessing PW1 and PW2’ evidence. I do not find that they had lied in this court in order to get what they want. They may not appear to be the brightest witnesses or they may not appear to be the most honest witnesses, but the evidence that they give in relation to the operations of all these three companies, when put into the context of the documentary background or the documents, their evidence is of a high quality. I do not find any doubt whatsoever that they have tried to be as truthful as possible in these proceedings.”

109.  While there were inconsistencies in the evidence of PW1 and PW2, the judge was satisfied that they arose out of the complexity of the history of the various frauds and the vagaries of memory.  As we have indicated, he rejected the contention that either of them gave perjured evidence.

110.  As to PW1 and PW2’s evidence concerning D8 in particular, nothing was put before us by D8’s counsel, Mr William Allan, to suggest that their evidence in respect of D8 was undermined by material inconsistencies.

111.  As this court said in HKSAR v Chan Hok Pang, unreported, CACC 193/2008:

“Often, though not always, discrepancies, if treated with common sense, do not detract from credibility of the core story by the witnesses and this, in our judgment was such a case.”

112.  We are satisfied that this observation applies equally in the present case.

113.  We find nothing in the supporting ground that the judge was wrong in rejecting the defence case, affirmed by D8 and two witnesses, that D8 was no more than a menial employee who had no knowledge of the true nature of the business of Orient Power.  Once the evidence of PW1 and PW2 was accepted as being both truthful and accurate, there was ample evidence upon which to base a conviction, including, for example, the fact that D8 was put as a contact on loan application papers, that fact alone indicating that D8 was trusted to answer enquiries from the banks in respect of what were, on the objective evidence, entirely false applications.

114.  For the reasons given, D8’s application for leave to appeal against his conviction is dismissed.

D5: relevant evidence concerning the third conspiracy (Charge 3).

115.  The third conspiracy involved the deployment of a company called Mason Holdings.  As with Orient Power, it had no genuine business.  It too was a sham.

116.  It appears that Mason Holdings was brought into active operation in or about mid of 2005 as a matter of some urgency as the lines of credit secured by the two earlier conspiracies were drying up.

117.  However, as the judge recognized, there were material inconsistencies in the evidence of PW1 and PW2 as to the genesis of this conspiracy.

118.  PW1 testified that, in or about mid 2004, the first steps were taken to use Mason Holdings, a shelf company, for the purposes of acquiring more fraudulent loans.  This would appear to agree with certain independent evidence, for example, the registration of a co-conspirator, Chan Chun, as a director of the company.

119.  PW2, however, testified that it was only when Yuan Chien was facing demands for repayment of its many loans and when Orient Power was in operation, which would have been in or about March 2005, that steps were taken to set up Mason Holdings.  There was also a difference in recollection concerning who had first suggested the use of Mason Holdings.

120.  However, both accomplice witnesses were agreed that meetings took place in or about May or June 2005 to put a third conspiracy into operation as a matter of urgency as by then both Yuan Chien and Orient Power’s lines of credit were drying up and the two companies were under increasing pressure from creditor banks.  Equally important, both were agreed that D4 and D5 played central roles in these meetings, more especially D5.

121.  While the judge recognised that PW1 and PW2 had differing recollections as to the initial stages of the third conspiracy, he was satisfied that he could nevertheless rely on their joint evidence to the extent that it implicated D5 in this conspiracy.  His finding (paras. 833 and 835) was that -

“… these events took place a long time ago, and a long lapse of time between the events and the time of recollecting them may prove to be as difficult as one can imagine. There is a high degree of complexity involved in their evidence because there were so many talks, so many agreements, so many meetings, so many documents. The number of brokers companies and shelf companies were also of great number.”

122.  Concerning the third conspiracy, PW1 and PW2 spoke for the first time of having face-to-face meetings with D5 concerning setting up and operating a scheme to obtain fraudulent bank loans.

123.  PW2 testified that D5 participated in a meeting at which it was agreed that Mason Holdings would be held out as being a plastics company.  He testified that it was also D5 who suggested that a man known as Chan Chun should be the ‘front man’ for Mason Holdings.  PW2 recalled D5 saying that Chan Chun was loyal and would obey instructions.

124.  PW2 further testified that, as PW1 knew nothing of the plastics industry, she would often raise queries concerning the preparation of false business documents and that he, that is PW2, would obtain the relevant information from D4 and/or D5.  PW1 qualified this by testifying that, when the third conspiracy was underway and bank staff called her up in respect of Mason Holdings, she would on occasions require assistance from D4 or D5 in answering those questions.

125.  PW1 recalled a meeting in a restaurant in Wanchai which took place fairly early on in the conspiracy.  She testified that she was at the meeting with PW2 and also D4 and D5 to discuss matters aimed at getting the conspiracy underway without delay.  In respect of this meeting, the judge recorded the following (para. 274):

“It was also the time when the banks were chasing Orient Power and Yuan Chien for outstanding loan payments, and therefore PW1 and PW2 were anxious that Mason be put into operation to generate money as soon as possible.  PW1 and PW2 therefore urged D4 and D5 to supply documents sooner because preparation of false documents and arranging meetings with bank staff took time. “

126.  Independent evidence showed that the registered office of Mason Holdings was given as the offices of ATA in Causeway Bay.  PW1 recalled making visits to that office in respect of the Mason Holdings conspiracy.

127.  PW1 spoke of factory premises being identified across the border by D5 in order to convince bank officials that Mason Holdings was a genuine operating concern. D5, she said, was the one who arranged for machinery to be placed into the factory premises.

128.  In summary, both PW1 and PW2 testified that D5 played a direct and active role in the third conspiracy.  Their evidence in this regard, even if confused as to how exactly, and when, the conspiracy came into operation, was accepted by the judge as being truthful and accurate.  He concluded (para. 909):

“I find that they [D4 and D5] transferred the lease to Mason Holdings Limited knowing that Mason needed an office. Therefore, they came up with this plan of transferring the lease to Mason. Their roles as far as charge three is concerned can be said as playing a major role. I accept that even for payment of a share of profits D5 had a say here and they continued to carry on the operation of Mason after PW1 was unable to participate anymore because of her loss of liberty. Although no more ATA accounts were involved here, apparently because of the slightly different nature of the loans applied for, I have no doubt in my mind that D4 and D5 are party to this agreement to defraud the banks by using false documents and Mason Holdings as an applicant, knowing that Mason had no genuine business.”

D5’s grounds of appeal

129.  In respect of this charge, the only one in which D5 was implicated in direct and unambiguous terms by the accomplice witnesses, and indeed implicated as a major player, Mr Yu’s submissions echoed those made on behalf of D8, namely, that, in coming to the conclusion that he could rely on the evidence of PW1 and PW2, the judge had adopted a flawed approach in performing his fact-finding task.

130.  In this regard, it was submitted that the judge failed to resolve the inconsistencies in the evidence of PW1 and PW2 and in particular the inconsistencies concerning the coming into operation of the Mason Holdings conspiracy.  But, as we have earlier indicated, the judge took considerable pains to analyse the evidence of the two accomplice witnesses and to come to a finding as to their credibility.  In so doing, he took into account inconsistencies in their testimonies, specifically considering the inconsistencies related to the origins of the Mason Holdings conspiracy.

131.  In his submissions, Mr Yu went in great detail through the inconsistencies in the evidence of PW1 and PW2 related to the origins of the Mason Holdings conspiracy.  Unsurprisingly, when broken down into tabular form, bearing in mind that PW1 and PW2 had markedly different recollections, numerous individual inconsistencies can be listed.  But this ignores the fact that the judge was well aware of this area of divergence; he accepted that it constituted a material inconsistency.  He then looked to consider the reason for it and was satisfied, as we have said earlier, that the reason lay in the complexity of the history of the various conspiracies together with the natural vagaries of memory.  In this regard, it is to be remembered that PW1 involved herself in other fraudulent activities too, adding to the complexities of her own criminal conduct.

132.  Mr Yu reserved special criticism for the fallibilities of PW1 as a witness, pointing to certain emotional outbursts on her part, her avoidance of certain questions and the fact that “she took cover under the privilege against self-incrimination after being warned by the learning deputy judge of her right.”  These and other characteristics of her evidence, said counsel, were dire warnings of the fact that PW1 was an inherently untruthful witness, a perjurer.  But these matters, he argued, had virtually been ignored by the judge.  We do not agree.  The judge was aware of them and took them into consideration.  The fact that, in doing so, he may have used relatively terse language is no indicator that he failed to give the matters due weight.

133.  Other similar matters were raised by counsel; for example, the fact that the two accomplice witnesses were not always in harmony as to their recollection of certain meetings and what took place in such meetings.  But, as the judge observed, when reminding himself that the evidence of PW1 and PW2 had to be assessed in a “pragmatic and realistic way” (para. 835):

“One has to bear in mind that the operation of these three companies was continuing during a period of two years during which time different companies will have to be set up, different banks will have to be approached, different personnel will have to be recruited and, most importantly, excuses will have to be found in order to delay payment. So, if one projects himself into these circumstances of PW1 and PW2 back in 2004, 2005 and 2006 then, perhaps it may be easy to understand that it is, in fact, difficult to remember all the details, especially when they are times when operation of one or two or three companies are ongoing at the same time…”

134.  In summary, despite Mr Yu's meticulous dissection of the testimony of PW1 and PW2, nothing has been put before us to persuade us that the judge failed properly to evaluate the evidence of PW1 and PW2 nor that he erred in finding that, in respect of D5’s involvement in the Mason Holdings conspiracy, he could rely on their evidence.  Accordingly, D5’s application for leave to appeal against his conviction of Charge 3 is dismissed.

D5’s sentence

135.  For the reasons given in this judgment, D5 remains convicted of Charges 3 and 9.  In respect of Charge 3, he was sentenced to 44 months’ imprisonment.  In respect of Charge 9 he was sentenced to 20 months’ imprisonment, all but 4 months of that sentence to be served concurrently with Charge 3.  In the result, in respect of the two charges, D5 received a total sentence of 48 months.

136.  We are constrained to observe that, having regard to the nature of the criminal conduct of all the conspirators, not just D5, the sentences imposed appear to us to have been remarkably light.  In the circumstances, although D5’s convictions on two charges of conspiracy to defraud have been quashed, we see no basis in any way modifying the remaining sentence of 48 months.

Conclusion

137.  The following orders are made:

(1)    D5’s application for leave to appeal against conviction in relation to Charges 1 and 2 are allowed and, treating the applications as the hearing of the appeals, the convictions are quashed.

(2)    D5’s application for leave to appeal against conviction in relation to Charges 3 and 9 are dismissed.

(3)    D8’s application for leave to appeal against conviction and sentence in relation to Charge 2 is dismissed.

(4)    D9’s application for leave to appeal against Charges 2, 7 and 8 are dismissed.