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. 4 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 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. 6 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.