Three fraudsters have been jailed for up to six years by the Court of First Instance for a $20-million swindle relating to housing projects.

Former Shun Cheong Holdings managing director George Kwok, 45, was jailed six years and eight months, while its former financial controller Ou Ka-chi, 42, was jailed for 55 months. Former Prelude Assets director Chui Fu-tsang, 67, was given eight months jail.

In sentencing, Recorder Ronny Wong SC commended the Independent Commission Against Corruption officers involved for a thorough and painstaking investigation.

Kwok, Ou and Chui were convicted of conspiracy to defraud and conspiracy to deal with property known or believed to represent proceeds of an indictable offence. The offences took place between October 1999 and March 2001.

The case arose from a corruption complaint in which a Housing Department engineer was alleged to have received bribes from various suppliers and contractors over the management of building services contracts and works supervision at several public housing projects.

Subsidiary swindle

Between October 1999 and June 2000, Kwok and Ou entered into a conspiracy to defraud three subsidiaries of Shun Cheong. They falsely represented that Prelude, a British Virgin Islands-registered company set up by Kwok, provided consultancy services to the subsidiaries for housing projects in Wong Tai Sin, Kwai Chung, Tsing Yi, Tin Shui Wai, Po Lam and Sha Tin.

False invoices were arranged by Ou, who had them endorsed either by himself or by Kwok on behalf of Shun Cheong. As a result, Shun Cheong's subsidiaries were induced to pay $13.58 million to Prelude.

The court heard Kwok and Chui entered into another conspiracy to defraud one of the subsidiary companies. They falsely represented that Yue Fat Engineering Company supplied labour to the subsidiary company for installation, testing and commissioning of electrical devices in the housing estates, inducing the subsidiary company to make payments of $6,376,063.30. Through a similar fraudulent scam, Chui induced the subsidiary company to pay another $2,256,823.40 to Fu Cheong Engineering.

Both Yue Fat and Fu Cheong were companies set up by an associate of the defendants.

The court also heard Kwok had conspired to deal with $5,656,063.30, being part of the proceeds obtained from the Yue Fat fraudulent scam.