Two Hong Kong billionaires convicted of money laundering over Macau government procurement case

By Christine Duhaime | March 14th, 2014

Surprising criminal conviction of two Hong Kong tycoons

In a surprising decision, the Macau Court of First Instance has convicted two high-profile Hong Kong businessmen of money laundering. Joseph Lau Luen-hung, 劉鑾雄, and Stephen Lo Kit-sing, 羅傑承, each received a sentence of five years and three months in prison and were sentenced in absentia. 

Mr. Lau is the chairman of Chinese Estates Holdings Limited, a listed Hong Kong company. On the announcement of the conviction, the shares of Chinese Estates Holdings Limited were immediately halted. Lau is ranked 158th on the Forbes list of the world’s richest people with an estimated wealth of US$8.4 billion. Mr. Lau graduated from the University of Windsor in Canada.

Mr. Lo is the chairman of BMA Investments.

Mr. Lau and Mr. Lo were convicted of bribery and money laundering for offering Macau’s former public works minister, Ao Man-long, a HK$20 million bribe in connection with one of the most well-known public procurement infrastructure cases worldwide. Mr. Ao was incarcerated for 29 years for taking bribes and laundering the proceeds of crime in connection with several real estate developments in Macau, including casinos. The Ao case is well-known because it remains one of the only cases in which a whole family of a money launderer was convicted of money laundering for acquiescing and/or facilitating Mr. Ao’s criminal activities. It is also a well-known case because Mr. Ao kept details of every illegal transaction and the kickbacks he received in a notebook. He amassed a fortune of $100 million in seven years from proceeds of crime and funneled that money to Hong Kong banks, then to the British Virgin Islands.

Mr. Ao was a politically exposed person, as that term is used in money laundering law, and banks in Macau, Hong Kong and the British Virgin Islands were required to report the movement of his funds to law enforcement under anti-money laundering law as suspicious transactions.

The Macau Police are expected to seek the extradition of Mr. Lau and Mr. Lo from Hong Kong and although there is no extradition treaty between Macau and Hong Kong, pursuant to international anti-money laundering conventions and norms, the extradition of  persons suspected, or convicted of money laundering offenses is facilitated and expedited among countries.

The Macau Police are also expected to seek the assistance of Interpol in issuing a notice for the arrest of Mr. Lo and Mr. Lau to ensure they cannot travel anywhere.

Another person associated with the Ao, Lau and Lo cases, Ho Meng Fai, fled Macau while on bail and is being sought by Interpol.

Mr. Lau has had a team of lawyers representing him and switched law firms midway through his defense. It is unclear whether any of his lawyers had experience in proceeds of crime. According to the Macau Business Daily, at one time, Mr. Lau was represented by the lawyer who defended Mr. Ao and lost.

The ICOC will likely commence an investigation into the affairs of Chinese Estates Holdings Limited.

 

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