Ex-bank manager charged by ICAC admits accepting bribes worth US$470,000 in cryptocurrency for illegal authentication of false standby L/Cs

A former bank manager, charged by the ICAC, admitted today (September 9) at the District Court that he had conspired with an employee of a fintech company (the Company) and associates to accept bribes worth totalling over US$470,000 in cryptocurrency Tether for illegally authenticating multiple false instruments as guarantees for various insurance-related investment transactions without the bank’s authorisation.

Lam Chun-yin, 32, former relationship manager of China Construction Bank (Asia) Corporation Limited (CCB (Asia)), pleaded guilty to one count of conspiracy for an agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance. Another charge of conspiracy to use false instruments against the defendant was left on the court file.

Judge Mr Ernest Lin Kam-hung adjourned the case to September 18 for sentencing, and remanded the defendant in the custody of the Correctional Services Department.

CCB (Asia) is a subsidiary of China Construction Bank Corporation (CCB) in Hong Kong. At the material time, the defendant was a relationship manager of Consumer Banking Division at the Causeway Bay retail branch of CCB (Asia), responsible for providing retail banking services to individual customers. His duties never involved processing any applications for business credit facilities and Letter of Credit (L/C), and the bank had never authorised him to handle such matters.

At the material time, the Company, an overseas fintech company Vesttoo Limited (Vesttoo) (ceased operations), was operating a digital platform to facilitate insurance-related investment transactions. Investors were required to provide standby L/Cs issued by banks as guarantees to ensure that, should they be unable to cover relevant losses, the issuing bank would assume ultimate payment responsibility.

Yu Po Holdings Limited (Yu Po) became an investor via the Company in early 2022. Under arrangements made by a crime syndicate, the defendant falsely represented himself as the contact point of CCB for issuing standby L/Cs for Yu Po.

The defendant admitted that between April and June 2022, he conspired with a department head of the Company and his associates to accept bribes in Tether, worth over US$470,000. In exchange, the defendant authenticated multiple standby L/Cs falsely claiming to be issued by CCB and two collateral letters falsely claiming to be issued by Yu Po and endorsed by CCB, totalling over US$1.6 billion.

The incident was uncovered in an internal investigation by CCB (Asia), after which the bank lodged a corruption complaint with the ICAC and rendered full assistance. The ICAC enquiries revealed that neither CCB nor its sister companies had issued any of the relevant standby L/Cs and collateral letters. These false instruments would have caused potential economic and reputational damage to both CCB and CCB (Asia).

An ICAC spokesperson stated that the case involved an individual frontline bank staff member accepting bribes to commit illegal acts. The ICAC had applied to the court for arrest warrants of other individuals implicated in the case. The ICAC has long attached great importance to the integrity of banking practitioners. With the full support of the Hong Kong Monetary Authority, the Hong Kong Association of Banks and the banking industry, the ICAC earlier launched the Banking Industry Integrity Charter to promote an integrity culture within the sector, provide integrity training for bank practitioners to deepen their understanding of relevant anti-corruption law and corruption risks.

The prosecution was today represented by Senior Public Prosecutor Douglas Lau, assisted by ICAC officers Cody Chung and Carson Lau.