TWO CONVICTED IN MASSIVE FRAUD AGAINST HSBC BANK

Recently Unsealed Cases Reveal Scams that Led to $48 Million in Losses

An Alhambra CPA and the CEO of a large wholesaler of Asian dry goods have pleaded guilty to wire fraud and other crimes stemming from elaborate schemes that defrauded HSBC Business Credit (USA) out of $48 million through a series of fraudulently obtained credit lines, United States Attorney Debra Wong Yang announced today.

Richard Po-Chun Wong, 56, of Covina, pleaded guilty to wire fraud, admitting that he caused more than $48 million in losses to HSBC Business Credit (USA). Wong, who entered his guilty pleas in May, also pleaded guilty to tax evasion.

William Chan Lim, 55 , formerly of Rowland Heights, pleaded guilty on September 29 to wire fraud and money laundering. Lim turned himself in to federal agents at Los Angeles International Airport on August 22 after returning to the United States from the Philippines in order to surrender.

The cases against Wong and Lim were recently unsealed by United States District Judge S. James Otero.
Wong, a certified public accountant, operated an accounting practice in Alhambra for more than 20 years. For a number of years, he prepared false financial documents for his clients and helped them fraudulently obtain credit lines.  During the years 1998 through 2001, Wong prepared false financial documents for Nikko Importer, Inc., dba Wing Shing Food Company, a San Gabriel Valley Asian food wholesaler that was operated by Co Tro “Sammy” Lam.  As part of this scheme, Wong “re-did” the books and records for Nikko in order to make the company look more profitable when it sought lines of credit from HSBC. After HSBC issued $9 million worth of credit lines to Nikko, Wong assisted Nikko in continuing the fraud by regularly completing false reports that were required to be submitted to HSBC on a bi-weekly basis. Wong instructed Lam to sign blank reports, which Wong completed with false information that caused HSBC to extend further credit advances. Nikko ultimately defaulted on the full $9 million credit line, although HSBC was able to recover approximately $1 million through a court-appointed receiver. Lam, 50 of San Gabriel, pleaded guilty to tax evasion and wire fraud in 2004 (see: http://www.usdoj.gov/usao/cac/pr2004/099.html ) and was sentenced in 2005 to one year in federal prison.

From 1998 through 2001, Wong helped two other Asian food distribution companies fraudulently obtain approximately $43 million in credit. With Wong’s assistance, UFC Seafood and Food Company, Inc. obtained a $34 million credit line, and Tri-Ocean Seafood obtained a $9 million credit line. UFC and Tri-Ocean were owned or controlled by William Chan Lim, and both were in the business of importing, supplying and distributing Asian food products. Wong created false financial statements for both companies and also prepared false collateral reports for both companies on a regular basis. The companies defaulted on the credit lines, resulting in losses of more than $40 million to HSBC.

In August 2002, Wong assisted Pro Sales Marketing Group, a Monrovia based Asian dry goods wholesaler, in obtaining a $1.2 million credit line from Mellon First Business Bank. Wong prepared false financial documents for Pro Sales, which ultimately defaulted on the loan, causing over $1.3 million in losses to Mellon. Pro Sales’ owner, Angelito Robles, 49, of Valley Village, has pleaded guilty to bank fraud and is scheduled to be sentenced by District Judge Dean D. Pregerson on December 14.

Lim, who was the owner and CEO of UFC and was a silent partner in Tri-Ocean, left the Los Angeles area and returned to the Philippines in early 2002 after HSBC instituted civil proceedings against him in Los Angeles Superior Court.  In August, Lim returned to the United States and surrendered to federal authorities. Lim pleaded guilty three weeks ago and is scheduled to be sentenced on January 8 by Judge Otero.

Earlier this year, Lim’s daughter, Catherine Miave Go, 32, a Northridge resident who previously resided in Rowland Heights, previously pleaded guilty to bank fraud in relation to another scheme that caused Wells Fargo Bank to suffer $8 million in losses. Go is scheduled to be sentenced on January 29 by Judge George P. Shiavelli .

Wong also pleaded guilty to tax evasion for failing to report nearly $1 million in income he failed to report, including a $400,000 payment he obtained after fraudulently securing the credit lines for Nikko. At Wong’s request, Lam paid the $400,000 fee using multiple fictitious companies to make a series of smaller payments. During the years 2000 through 2002, Wong omitted these payments and other sums from his tax returns. In total, Wong failed to report more than $900,000 on his tax returns, and he attempted to evade the payment of more than $370,000 in income taxes.

Wong is scheduled to be sentenced on December 14 by Judge Otero. At the time of sentencing, Wong faces a maximum possible sentence of 18 years in federal prison.

This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation Division.