A Police Detective Sergeant and the Mystery of His Wealth

A Police Detective Sergeant and the Mystery of his Wealth

INDEX

Chronicle of Events

Societal z Widespread corruption background z Enemies of the law z The rise of the detective sergeant

First suspicions z Wallowing in money and early z Impossibly large savings investigations z Amended laws shut the escape window

The ICAC takes z Immediate difficulties arise over z Ownership of assets concealed z Uncovering family aliases

A hardened z Appeals and evasive tactics criminal is z The same old explanations brought to justice z Difficulties in collecting evidence

Trials and z Pleading immunity appeals z Exchange rate claims countered z Integrity in serious doubt z Sentencing and aftermath

2 Chronicle of Events

(The key events and background of this case are set out below. Unless otherwise specified, all sums are quoted in Hong Kong dollars.)

1935 The principal figure in this case, a police detective sergeant, joined the force as a messenger and became a constable the following year.

1941—1945 He left the force and started running businesses on the Mainland. In 1945, after the war was over, he rejoined the force.

1956 He was promoted to sergeant, and became station sergeant of Yau Ma Tei Police Station, a post he held until his early retirement.

August—December The Anti-Corruption Branch—then an arm of the police 1968 force—began to investigate his very extensive assets. He was twice interviewed and asked to account for his wealth. He claimed that it derived mainly from his wartime business activities. Once all possible avenues under the law as it then stood had been explored, the investigation necessarily ground to a halt. The most that could be done was to order him to take early retirement. This he did on 13 August 1969.

14 May 1971 The Government replaced the existing Prevention of Corruption Ordinance with the Prevention of Bribery Ordinance (PBO). Section 10 of the PBO made any person who was or had been a Government employee, and failed to give a reasonable explanation to the court of property or pecuniary resources disproportionate to his or her official emoluments, guilty of an offence.

15 February 1974 The Government set up a new agency independent of the police—the Independent Commission Against Corruption (ICAC)—to fight corruption. Many of the

3 ICAC’s earliest corruption investigations involved public officials. In 1975 alone, cases implicating police officers accounted for 42 percent of all ICAC cases. 28 August 1976 The ICAC took over the detective sergeant’s file and resumed investigations. By now, seven years had elapsed since his retirement.

5 January 1977 The ICAC arrested him in accordance with Section 10 of PBO. He was requested to offer a justification for his assets, which were well in excess of his income from employment with the police, and he was ordered to surrender his travel documents and make no changes to his assets.

May 1977 He applied for the injunctions against him to be lifted. He contended that he had already retired before Section 10 of PBO took effect in 1971 and that therefore he could not be bound by that ordinance. This application was rejected by the High Court two months later.

19 August 1977 The detective sergeant had offered no account whatever of his assets. The ICAC thus decided to furnish him with a list of such assets, the origins of which he now needed by law to explain.

17 October 1977 The ICAC received Part I of his explanation of how he had amassed his wealth.

8 November 1977 He lodged an appeal with the Court of Appeal, reiterating that he could not be bound by the PBO. The Court of Appeal rejected this appeal on 23 November.

11 January 1978 The detective sergeant then gave the ICAC Parts II and III of his explanation regarding the sources of his wealth. These turned out to differ little from the account he had given to the Anti-Corruption Branch ten years earlier.

October 1978 He finally took his appeal against being bound by the PBO to the Privy Council, which was then Hong Kong’s highest appeal body. Once again, his appeal was rejected.

17 October 1978 Based on the evidence provided by the ICAC, the Department of Justice agreed to institute a prosecution against the detective sergeant. He was arrested by the ICAC and appeared before a magistrate on the same day.

The charge, which he denied, stated that between 1951 and 15 May 1971 (the latter being the date when the PBO came into effect), he possessed assets worth about $5.3 million and that this was disproportionate to the approximately $220,000 emoluments he had earned as a police officer. (The assets involved would have been worth over $9 million in 1978 money.)

1 November 1978 He was allowed bail in the huge sum of $15.95 million—$1 million in cash, plus a surety of $2 million and a guarantee made up of real estate, valued at $12.95 million, which was in his wife’s name.

5 March 1979 The detective sergeant was tried in the District Court where he denied the charges. Through his defence lawyer, he twice proposed to the court that he surrendered $16 million in exchange for a suspended sentence. The judge opined that as a matter of social justice he would be committed to jail if convicted. His defence lawyer then withdrew the surrender offer.

May 1979 Pending further trial, the detective sergeant was again allowed out on bail. This time it amounted to $1 million in cash, a surety of $2 million, and a guarantee of $13 million provided by his wife. ($12 million of which had to be placed in a bank custody with changes allowable only with the court’s consent.)

4 July 1979 The prosecution calculated that the value of the liquid assets he owned had risen to approximately $21.5 million by the time judgement was handed down. He was convicted and sentenced to two years’ imprisonment and a fine of $16 million. Of this, $12 million had to be paid immediately, with the balance to be settled within nine months of sentencing.

December 1979 He lodged an appeal against the sentence, but this was turned down on 13 December.

Societal Background

Widespread corruption In the 60s and 70s corruption in Hong Kong was rife, and this could to some degree be explained by the history and development of the territory.

Hong Kong had always been a free port since the mid-nineteenth century, and gradually developed into an important regional entrepot. Chinese and overseas traders and entrepreneurs flocked in droves to take up residence and try their fortune.

In the 1950s the territory’s economy began to take off, and the speedy development of manufacturing over the next two decades brought with it a rapid growth in population. The Government managed to maintain social order and stability by delivering essential housing and other necessary public services, but in many cases the demand for social resources far exceeded the supply. It was this factor, coupled with lax supervision, that turned Hong Kong into a fertile place for corruption.

Corrupt officials, major, minor and petty, took advantage of their positions to demand favours and advantages. In those bad old days, people got what they wanted or needed done quickly by using the back door route. For example, paying what was euphemistically called “tea money” could help you jump the application queue for a public housing unit. Firemen attending an incident were often known to solicit “water money” before they would turn on their hoses. Perhaps most shocking of all was that corruption had penetrated the police force, which riddled with systemic corruption that was often syndicated in nature.

On 8 June 1973, a Chief Superintendent of Police named Peter Godber contrived to bypass tight security and sneak surreptitiously out of Hong Kong, thereby not only temporarily evading the law for bribery offences but also taking with him more than $4 million of ill-gotten assets. His escape and his alleged crimes prompted intense fury and resentment. People took to the streets to demand that the Government not only bring Godber back to Hong Kong for trial but also take firm steps to stop corruption in its tracks. The Government acted promptly, setting up the Independent Commission Against Corruption

7 (ICAC) in 1974. The public was most keen to see how the ICAC would turn the tables on corruption and show clearly that justice would triumph.

Enemies of the law The Government had in fact passed a Prevention of Corruption Ordinance as early as 1948, and four years later, it set up the Anti-Corruption Branch of the police force. Corruption had however become so deep-rooted as Hong Kong approached the 1970s that the public was increasingly vocal. To strengthen the hand of the Anti-Corruption Branch, the Prevention of Corruption Ordinance was amended and was recast as the Prevention of Bribery Ordinance in 1971.

Although the Anti-Corruption Branch was expanded and renamed the Anti-Corruption Office, it remained under the police, and the desired reforms were yet to take hold.

The rise of the detective sergeant The territory was then divided into three main police regions: Hong Kong Island, Kowloon and the New Territories. Each region had its own chief detective sergeant, and under him were detective sergeants responsible for criminal investigations and were invariably Chinese. This was largely because many high ranking expatriate officers could not speak Chinese. They therefore had to rely on their Chinese detective sergeants when carrying out investigations. This core group of detective sergeants also served as a bridge between non-English speaking citizens and expatriate police officers. Despite their lowly rank, they wielded enormous influence.

When the ICAC was set up, its most urgent task was clearly to combat police corruption. A series of ICAC investigations that followed had led to the demise of a number of corruption syndicates within the force. Many of the detective sergeants who had accumulated wealth by corrupt means, when sensing that an investigation was in the wind, would typically either leave the police force early or flee overseas. Since his early retirement from the force in 1969, the detective sergeant (DS in short) in question had been leading a very comfortable life. He was, however, prosecuted by the ICAC in 1978 on charges of possessing pecuniary resources which were disproportionate to his official emoluments.

8 The case attracted wide attention because DS was twice required by the court to post bail amounting to more than $10 million in cash and sureties. Such an unprecedented sum underlined the seriousness of the case.

Upon conviction, he was sentenced to two years in jail. An order was made for his assets, which amounted to $16 million, to be confiscated. Once again, the community was in awe, for it was revealed that his police job had earned him only about $228,000 over the years.

9 First suspicions and early investigations

Wallowing in money DS joined the police as a messenger in 1935 and became a constable in 1936. Between 1941 and 1945, he left the force to run transportation and other businesses on the Mainland. He rejoined the force after the Second World War came to an end. In 1956, he was promoted to the rank of detective sergeant and became the station sergeant of Yau Ma Tei Police Station before he took early retirement.

During his time with the police, he was attached to a number of Criminal Investigation Departments (CID) in districts on the Hong Kong Island and in the Kowloon region. These included the densely populated districts of Wan Chai, Sham Shui Po, Wong Tai Sin and Yau Ma Tei, all of them hotbeds of vice, gambling and drug activities. Triads—the criminal gangs that controlled such activities—were willing to offer any advantages in a bid to obtain protection from law enforcement officers.

Police officers who had been sweetened with bribes would tip the triads off about police raids and other threats to their criminal livelihood, and would conveniently turn a blind eye to their many illegal activities. Such dealings suited both sides admirably. DS saw an awesome opportunity to get rich beyond the dreams of avarice.

Impossibly large savings By 1968, DS was over 50 and had been with the police for 23 years after the war ended. Enveloped as he was by a culture of greed, he no doubt felt that collecting advantages was just a run of the mill affair—a mutually agreed and convenient way of oiling a few squeaky wheels. So it may well have come as something of a shock to him when, at around 11:00 am on 18 December, while on duty, he was abruptly informed by his superior that the Anti-Corruption Branch wanted him for an interview. His superior officer did not explain why.

At 5:30 pm the same day, he duly reported to the Anti-Corruption Branch and found himself face to face with five senior officers. They questioned him on his lavish lifestyle and his sources of wealth. It soon occurred to the senior officers that he controlled more than HK$3 million in assets including land, premises

10 and bank deposits in his own name and those of his wife and a girlfriend. To put such a sum in context, the monthly salary in 1965 for a primary school teacher started at $300, a roast pigeon cost $5.50 and the asking price for a large shop premises in Happy Valley was $120,000.

His alleged wealth was thus practically beyond belief. According to the Anti-Corruption Branch’s reckoning, his wife had never worked, his children were studying, and his police job was the family’s only source of income. After allowing for daily expenses and tuition fees for his children, he would have been able to save at most $140 per month. That meant that he could have saved a maximum of about $50,000 during his time with the police. To compound matters, he travelled a lot and was also supporting a girlfriend. He could not have accrued such massive assets merely by way of his police salary.

All along he had been very frugal was his explanation. He did not shoulder the expenses of a second home and on his travels he would stay only with friends. That was how he had managed to save so much over the years, he claimed. He further claimed that his assets also came from his Mainland businesses conducted during the war, including the sale of houses and land, as well as by selling goods vehicles through his transportation company.

It should be noted that in the 60s the Prevention of Corruption Ordinance was still in force and it was not an offence to fail to give a reasonable explanation of why assets were disproportionate to official emoluments. DS calculated that the Anti-Corruption Branch could at most subject him to disciplinary action for failing to declare assets—something that he should have done under police regulations.

The Anti-Corruption Branch could not obtain from him any statement that might forward the case. Nor could they collect any other evidence of corrupt conduct. The investigation had in effect come to a dead end. The only resort was for the Deputy Commissioner of Police to order him to take early retirement. In fact, he resigned of his own accord in August 1969. At the time of his retirement, he was only 51 and he used his pots of money to set up a securities investment company.

Amended laws shut the escape window In the 60s and 70s, corruption involved chiefly civil servants. Cases such as the

11 one involving DS were proving particularly tough to crack. Even if individual officers were believed to have acquired enormous wealth from corrupt activities, there was no easy way to gather evidence and trace witnesses from so many years back. A lot of information would likely have been destroyed, and it would be difficult to find witnesses who could provide reliable testimonies. Given both evidence and witnesses had faded into the distance, many unscrupulous officers found that they could get off scot-free with their corruptly acquired wealth.

Following legislative amendments in 1971, however, Section 10 of the new Prevention of Bribery Ordinance (PBO) clearly stated that if any person who, being or having been a government employee, possesses assets disproportionate to his official emoluments shall, unless he gives a reasonable explanation for them, be guilty of an offence.

The ICAC was set up on 15 February 1974, operates independently and separately from any Government departments. The ICAC replaced the Anti-Corruption Office of the police, and was the dedicated agency to combat corruption in both the public and private sectors.

Section 10 of the PBO had given Hong Kong a fresh lease of life in its fight against corruption. Now, when investigated by the ICAC, defendants were required to explain the source of their assets to the satisfaction of the courts. Section 10 of the PBO was indeed both apt and timely, and resulted in a number of corrupted Government officers to be successfully prosecuted by the ICAC in the 70s.

DS was a prime example. Given the amended legislation, he would find no avenue of escape when the ICAC tracked down the full details of his long past misdeeds.

12 The ICAC takes over

Immediate difficulties arise

The Anti-corruption Office had kept all the records and information relating to DS, and these were handed over to the ICAC when it was set up. The ICAC formally launched its own investigation in August 1976. DS was by now 58 and had been enjoying a comfortable retirement for seven years.

Although anti-corruption officers of the police had started to collect information on the detective sergeant’s huge fortune as early as 1968, the ICAC officers now had to probe into his assets all over again because so much time had elapsed. They had to look through all business, personal correspondence, bank accounts that could be connected to him.

Such elaborate tracing required massive resources of manpower and time, especially when only two of Hong Kong’s major banks assigned staff to help with ICAC’s investigation. To find out more about DS’s savings at a number of other banks, ICAC officers had to visit each branch involved to search through the files. Electronic data storage was uncommon in the 60s and banks usually only kept records of a client’s accounts for seven years. So just the task of tracing DS’s bank accounts was a tall order for the ICAC officers concerned.

The officer in charge of the investigation, an Acting Chief Investigator then, notes that the case spanned a period from 1935 to 1968. “Here we were in the 70s,” he says, “but we had to investigate people and events from the 40s and 50s. The chaotic wartime situation and the need to collect evidence on the Mainland made our investigations particularly difficult, for then time there was no Mutual Case Assistance Scheme, under which the ICAC can interview witnesses across the border with the assistance of our Mainland’s counterparts.”

Ownerships of assets concealed Documented evidence showed that DS had developed a parcel of land in Hong Kong on which a guesthouse with a restaurant was erected. He had been an executive director of this venture from the start and had apparently taken care of all the business himself. The proprietor of the property was a woman whose maiden name was the same as that of DS’s wife. She was thus at first thought to be his sister-in-law, although he resolutely denied all knowledge of her. As the

13 case officer recalls, “He arranged for the building contractors to meet with this woman and even signed as a witness to a variation order. So it was very hard to believe that he was telling the truth when he claimed he had no idea who she was.”

Then came a stroke of good fortune. A witness in the case revealed that he had on one occasion overheard a girl, who turned up at the restaurant, had addressed this woman as “mum”. This helped lift a veil for the investigators. This girl turned out to be the daughter of DS, and the restaurant proprietor was actually his wife, not his sister-in-law (as the woman’s use of an alias had led investigators to believe.)

Later, the ICAC team found three wills in his home. One of them mentioned his wife but the name used was the same as the proprietor of the guesthouse development. This clinched the matter. It was now clear that the development was indeed owned by DS’s wife. This was why he had personally selected the contractors. This was why he himself had spent around one million dollars on the project.

In 1969, most of the shares in the project were transferred from the proprietor to a person whose registered address was in Taiwan. Then, in 1972, some time after DS had left the police force, the shares were transferred back to him, using a residential address in Hong Kong. On the surface, it looked as if the property had been transferred from one person to another, but actually only one person was involved. DS had carefully orchestrated matters in order to conceal his assets. Having become more cautious after the Anti-corruption Branch’s interrogation in 1968, he had deliberately held the property in the name of a fictitious person using a Taiwan address.

Uncovering family aliases As ICAC officers observe, “The man and his family never bought a property or other assets under their real names. But in the early stages of the investigation we had no way to find out how many aliases they had used. Even if we could prove that a property was being held under an alias, we still had to prove that this arrangement linked to him. Naturally, he strongly denied having used any aliases when questioned by the ICAC.”

Then an investigator hit luck while checking records at the Lands Registry. He

14 stumbled on the strong evidence and proof that was needed to uncover the aliases. It appeared that DS had absent-mindedly written his full name on a land registration document and had then obliterated one of the characters in the name. This obvious amendment proved that this was in fact DS attempting to use an alias to register at least this particular asset. By following up this careless slip, the ICAC was finally able to confirm that DS had used no fewer than three aliases while his wife had employed one. This new evidence proved invaluable in pinning down for future analysis the real ownership of the assets connected to the case.

The investigators also discovered that the rent collected from leasing out the properties under the name of DS’s wife was all funnelled back to him. It was he who handled all tenancy matters and brazenly told a number of other people that he owned the properties. Even while claiming to be herself the proprietor, his wife handed out business cards bearing DS’s name to tenants. The investigators also found the same name cards at his home.

In addition, a number of Chinese seals bearing his aliases as well as one bearing his wife’s alias were also found. Further investigation revealed that the rent receipts issued in connection with the properties under the name of his wife bore the seal of one of her husband’s aliases. After his wife had sold the properties she held, the money from the sales also went to her husband. In July 1971, she transferred the title deed of a property to him. All this evidence combined to show that it was DS who was in control of the assets in question.

15 A hardened criminal is brought to justice

Appeals and evasive tactics During the investigation, the ICAC interviewed more than 95 witnesses, taken 79 court statements and subsequently submitted 504 documentary exhibits in court. The ICAC revealed that from 1951 to 15 May 1971 (the effective date of the PBO), the bank savings and assets, including company shares, land and estates, held by DS, his wife, his daughter and the two children he had had with his girlfriend might run up to over $5 million.

DS was arrested by the ICAC on 5 January 1977. He was asked to explain the source of his assets under Section 10 of the PBO and was restrained from selling assets in his ownership under Section 14 A（1) of the PBO.1 He was also required to surrender his travel documents under Section 17 A of the PBO.

As an experienced police officer who understood the many intricacies of legal proceedings, DS was certainly not going to take this lying down, especially when faced with the prospect of trial. In May 1977, his lawyer applied for the withdrawal of the injunctions against him, stating that he was not governed by Section 10 of the PBO as he had already retired by the time it became effective. He claimed that there was no need for him to surrender his travel documents to the Commissioner of the ICAC and that his assets should not have been frozen. His application was rejected by the High Court in July the same year, however.

The same old explanations During interrogation by the ICAC, DS had never once provided a detailed account of his assets. So on 19 August 1977, the ICAC handed him a checklist listing item by item the assets which required an explanation of their source. Between 17 October 1977 and 11 January 1978, he provided three explanatory documents through his lawyer. His explanations, however, were basically the same as those he had given the Anti-corruption Branch years earlier.

DS insisted that apart from earnings from the police force, his wealth consisted mainly of proceeds from his wartime Mainland businesses. He claimed that he had made a profit of 6 million silver dollars from his transportation business in the Mainland some time around 1941, and had obtained 7 million silver dollars

1 This section was repealed in a legislation amendment exercise conducted in 1996.

16 by selling two trucks as well as 400,000 silver dollars from property sales on his return to Hong Kong in September 1945. Totalled up, that was 13.4 million silver dollars.

After the war, DS claimed he had converted the 13.4 million silver dollars to HK$2.68 million at an exchange rate of 5:1. In April 1949, he bought a plot of land in Guangdong for 50 million Gold Yuan. He said that this sum was equivalent to HK$500,000 after conversion, and that he had sold the land for about HK$300,000 three months later in view of the region’s unfavourable investment environment. In 1949, after deducting this loss, his assets were worth about HK$2.48 million.

Accounts of assets DS claimed to have gained from wartime business and up to 1949 (All sums are approximate)

1940 Proceeds from 6,000,000 silver dollars Mainland business 1945 Sale of vehicles 7,000,000 silver dollars Sale of properties 400,000 silver dollars and land Total: 13,400,000 silver dollars converted into HK$2,680,000 HK$ at an exchange rate of 5:1 1949 Land purchase 50,000,000 Gold Yuan (worth approximately HK$500,000) Land sale after Loss: (HK$200,000) three months Grand Total (as at 1949) HK$2,480,000

Difficulties in collecting evidence The ICAC officers found many aspects of this explanation suspicious. For instance, if he already held some HK$2 million worth of assets when he returned to Hong Kong after the war, why didn’t he simply buy a house instead of renting one? In fact, he did not purchase a property for residence for a whole

17 year and it was a further six years before he bought any other properties. Finally, if these properties were simply standard investment vehicles, why did he proceed to purchase them using other names in disguise?

His response was to claim that did not at first deposit his Mainland earnings with a bank. Instead he kept them in a suitcase, later storing them in a safe at his home. To the ICAC it seemed the height of folly that he should keep such a large sum of money in his house and equally illogical to forgo interest.

Despite the clear absurdities in this story, the ICAC however still had a duty to verify the information DS had provided. “The crux of the matter,” ICAC investigators, “was that we were obliged to ascertain if he had really made a profit from his transportation business and his property transactions during the war. Proof or disproof alike would depend on both witness statements and exhibits.”

Add the investigators, “Was the conversion rate really 5:1 as claimed by our quarry? War was raging, Hong Kong was occupied by the Japanese, society was in turmoil, and there was much confusion surrounding the various currencies and exchange rates being used in both the Mainland and Hong Kong. So searching for truly relevant information was like looking for a needle in a haystack.” (hyperlink: A Chaotic Currency System)

18 Trials and appeals

Pleading immunity DS kept up his resistance in the hope that he could escape a jail term by exhausting all appeal procedures. His defence lawyer made a further appeal to the Court of Appeal on 8 November 1977, arguing this time that the words in Section 10 of PBO “any person, who having been a government employee” were intended to apply only to a person who became a government employee “after the Ordinance came into force”. The law should not have a retrospective effect.

On 23 November, the three trial judges unanimously rejected the appeal. The burden of their judgement was that the intent of the provision was to permit employees to be pursued under the law even though they had by then left Government employment. The wording of the ordinance was very clear and the clause in question included the word “before” as well as the word “after”. A police officer was evidently a “government employee” and therefore DS was bound by Section 10 of the PBO. Faced with this setback, DS persisted. He took the appeal to the Privy Council2. In November 1978, the Privy Council rejected the appeal, reaffirmed that the appellant was indeed bound by Section 10 of the PBO.

On 17 October 1978, the Department of Justice agreed to prosecute DS in the light of the ICAC investigation report. He was immediately arrested by the ICAC, and appeared before a magistrate the same day on charges that between 1951 and 15 May 1971, his wealth was disproportionate to his official emoluments under Section 10 of the PBO. He denied the charges.

Taking into account the seriousness of the case and the possibility that he might flee Hong Kong, he was allowed out pending trial only after a huge sum of bail had been set. The bail consisted of $1 million in cash, a surety of $2 million from his brother, and property in his wife’s name forming a guarantee worth $12.95 million.

2 Today, this has been replaced by the Court of Final Appeal.

19 Exchange rate claims countered The case was tried at the district court in March 1979. Now at the end of his tether, the detective sergeant, through his defence lawyer, twice told the court that he was willing to surrender $16 million in exchange for a suspended sentence.

The ICAC officers were however well prepared for the fierce court battle. “As it eventually turned out to be impossible to either prove or disprove that he had earned big money from his wartime ventures,” says the case officer, “we took a different tack, looking instead into the prevailing exchange rates.”

The prosecution asked financial and academic experts, including the bills department manager of Hang Lung Bank, who had worked in the banking sector both during and after the war, and a professor at the Centre of Asian Studies at the University of Hong Kong, to give testimonies in court as expert witnesses.

According to these experts, between 1942 and 1945, i.e. from the Japanese occupation of Hong Kong till the Japanese surrender, the exchange rate between silver dollars and Hong Kong dollars was subject to such fluctuations that no banks would operate any exchange department. Currency could thus be exchanged only at local money changers and no official exchange rate was ever quoted. For example, in September and October of 1945, 10,000 silver dollars could be exchanged for anything between HK$15 and HK$16. By the experts’ estimation, if the accused had held 13.4 million silver dollars in 1945, they could have been exchanged for at most some HK$21,000.

The experts agreed that in 1949 it was possible to purchase land using Gold Yuan. Land costing 50 million Gold Yuan would have been worth around HK$150,000 according to the then prevailing conversion rate—nowhere near the HK$500,000 claimed by the defence.

After weighing the expert evidence concerning exchange values, the court found it impossible to believe that the accused could have earned such prodigious wealth from his wartime exploits. The judge opined that in order to maintain social justice, DS should be imprisoned if he were convicted. His defence lawyer immediately rescinded the offer of $16 million that had been made in exchange for a suspended sentence.

In May 1979, he was allowed out again on a huge court bail. This time it consisted of $1 million in cash, a surety of $2 million and a guarantee of $13 million from his wife, $12 million of which had to be deposited with a bank. Changes could only be made with the court’s consent.

Integrity in serious doubt According to statements provided by DS, he and his wife kept on investing and accumulating wealth after earning their first pot of gold. The trial judge asked why he returned to the police force if he already possessed such considerable wealth. Even if he was really interested in police work, fond of firearms and wished to serve the community as claimed, he had not explained why as a wealthy man he would choose to accept a police constable’s meagre salary of around $50 per month.

A meticulous analysis of the information furnished by DS showed that the largest single investment he made between 1946 and 1960 amounted to only HK$80,000 and that the total sum he invested over those years was under HK$400,000. It was hard to believe that his rapidly increasing wealth could have been purely the result of investments.

He had told the Anti-Corruption Branch in 1968 that he had sold four or five vehicles to obtain cash during the war. In 1977, however, he had told the ICAC that he had traded only two vehicles. Such inconsistency caused the court to cast doubt on his integrity.

Another key defence point was his claim that his wife had amassed the assets under her name through her own investments. The assets belonged to her and should therefore not be included in his assets. The ICAC countered that the role of his wife was merely to conceal the true nature of the accounts; the assets were in fact being controlled backstage by DS himself, and in the end his wife’s bank deposits were fully transferred to him.

A will produced in court as evidence stated that DS’s wife would obtain one sixth of his assets upon his death, but that he would obtain 55 percent of his wife’s assets upon her death, with 30 percent of her assets going eventually to the two children he had fathered on his girlfriend. Although his wife admitted in court that her husband’s extramarital affair had destroyed her relationship

21 with him, the judge believed that the apparently extraordinary provisions of the would make sense only if the property allegedly owned by her was not actually hers.

Sentencing and aftermath On 29 June 1979, judgement was handed down. The judge took the view that DS’s explanation of his wealth was untrustworthy and refused to accept the defence claim that he possessed assets of only around $3.2 million.

According to the evidence submitted by the prosecution, as at 15 May 1971, his official emoluments including his pension amounted to some $228,000 while the total value of assets controlled by him was over $9 million in 1978 money, most of which were held under the name of his wife and children. The prosecution reckoned that the value of the liquid assets that he owned had risen to approximately $30 million by the time the case came to judgement. Even if the estimated value was to be discounted by 15 percent the defendant possessed assets worth around $25.5 million. After deductions of some still mortgaged properties worth around $4 million, he possessed around $21.5 million in liquid assets.

Under Section 10 of the PBO, DS was convicted of the offence of, being a Government employee, possessing unexplained wealth. He was sentenced to two years’ immediate imprisonment and confiscation of $16 million, $12 million of which had to be paid at once with the remaining $4 million to be paid within nine months after sentencing. He lodged an appeal upon hearing the sentence but this was rejected and the original sentence was upheld.

He paid the required immediate fine of $12 million at one go by cash cheque, proving his ready access to very real wealth. This huge sum was a record among similar cases.

For some three years, ICAC officers had worked on this case night and day in search of clues, poring over minutely detailed and even trivial records and sorting out complex information suitable for submission to the courts. Their professionalism won praise from the court.

The ICAC used Section 10 of the PBO to successfully have this corrupt detective sergeant sent to jail. Yet not all corrupt officials were brought to

22 justice.

Although a few fish had managed to escape the net, the ICAC continued to charge ahead with its prescribed duties, demonstrating to the public that corruption crime would be vigorously pursued.

In 2006, the ICAC recovered $140 million of corruptly derived estate, through civil proceedings lasting for six years, of a deceased staff sergeant－yet another landmark of ICAC’s versatility, perseverance and professionalism.