Former lawyer Cheung Yau-hung’s sentence reduced on appeal in multi-million dollar investment fraud case

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Cheung Yau-hung

20th May 2024 – (Hong Kong) Former District Councillor and long-retired lawyer Cheung Yau-hung, who served in the Central and Western District in the 1990s, was involved in a recent court case regarding an investment scam. In 2014, Cheung violated his commitment when he entrusted a male participant in the investment scheme with US$10 million (approximately HK$78.4 million) but transferred the entire sum to another individual’s bank account. The victim subsequently suspected foul play and reported the incident to the authorities. In 2022, Cheung pleaded guilty to theft and was initially sentenced to seven years and three months in prison. Dissatisfied with the severity of the sentence, Cheung decided to appeal the ruling.

Today (20th), the Court of Appeal issued its verdict, granting Cheung’s appeal and reducing his sentence to seven years of imprisonment. Cheung Yau-hung, 71 years old, became a lawyer in 1985. In 2015, he was involved in a US$500 million counterfeit bill case but was eventually acquitted. The appellant’s legal team previously argued that Cheung had reported the incident to both Hong Kong and US authorities, leading to the prosecution of several individuals involved. They questioned why the original trial judge did not provide sufficient credit for this mitigating factor in reducing the sentence. The Court of Appeal stated in its judgment that the three-month reduction for this factor alone was inadequate and decided to deduct an additional six months from the sentence, resulting in a total adjustment of three months from the initial term of seven years and three months.

According to the agreed facts of the case, in September 2014, the male victim, known as X, learned about a high-yield investment scheme through a friend and met with a woman surnamed Tsui in October of the same year to discuss the details. Tsui claimed that the scheme was overseen by the Federal Reserve Bank of New York (FRB) and promised investors a daily return rate of 40%, along with the opportunity to obtain U.S. permanent residency. X decided to invest and transferred US$10 million to Cheung’s bank account, acting as a custodial agent. However, Cheung subsequently transferred all the funds to an account belonging to a woman in Singapore. During the investigation by law enforcement agencies, it was revealed that Cheung had previously reported the incident himself, claiming that he had also participated in the investment scheme and suspected being deceived. He had written to the U.S. Consulate General in Hong Kong and personally filed a report with the Federal Bureau of Investigation (FBI) in New York.