Cop’s family cuts deal to hand over ill-gotten gains

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Wed, February 06 2008

By Mata Press Service

Hon Kwing-shum

The ill-gotten gains of a notorious Hong Kong police sergeant who fled to Vancouver with millions of dollars he had accumulated in bribes will stay hidden in British Columbia.

Hong Kong officials, who were tracking the cop’s loot, said they are unlikely to seek the overseas assets that they linked to the proceeds of criminal activities of Hon Kwing-shum, after cutting a deal with the man’s family.

Hon Kwing-shum, alias Hon Shum or Hon Sum, served in the Royal Hong Kong Police from September 1940 until he retired in August 1971, during which time he was earning a total of about $35,000 annually.

But upon retirement, he and his beneficiaries owned millions of dollars worth of assets. These included over 50 properties, various bank accounts, investments in Hong Kong, Florida, Thailand and B.C.

Hon died at the age of 76 in August 1999 in Taipei.

Last Thursday, several Hong Kong properties linked to the corrupt cop, known as one of the “Five Dragons,” were put up for auction in Hong Kong.

His family had given up about $20 million dollars worth of property to the government of Hong Kong to close one of the darkest chapters in the former British colony’s policing history.

Hong Kong media reported that bidders spent about $2 million to snap up five properties once owned by the disgraced police sergeant.

One investor, surnamed Liao, snapped up four properties worth $1.6 million during the 45-minute auction held in a Wan Chai hotel.

These included a 1,284-square- foot flat in Cleveland Street, Causeway Bay; a 612-sq-ft Canton Road flat; and, two others measuring 560 sq-ft and 640 sq-ft in Yuet Wah Street in Kwun Tong.

“I am just an ordinary investor and I found the prices reasonable,” Liao said, according to local media. “I did not realize the source until I read about it in the papers.”

Another buyer, a woman who asked not to be named, paid about $350,000 for an 810-sq-ft residential property in Hong Kong’s Bute Street. She said she knew beforehand who owned the flat but did not mind as she and her family will live in it.

Ellen Lo, managing director of the auctioning Dudley Surveyors, said the auction results were satisfactory, with 80 to 100 people trying to outbid each other.

“The prices of the properties are clearly listed during an auction. Everything is transparent and fair,” she said.

The assets handed over were all in Hong Kong and do not include the millions of dollars worth of property and investments linked to Hon in Canada.

A covert police study obtained by The Asian Pacific Post shows that Hon and his family had bought at least 11 residential and commercial properties and established a dozen companies in Vancouver, including a restaurant on Robson Street.

The properties were mainly located in the posh Shaughnessy, Kerrisdale and South Granville neighbourhoods.

The police study done by Asian Organized Crime Investigators indicates that up to 44 former Royal Hong Kong cops followed the lead of Hon and the other so-called “Five Dragons” to escape a corruption crackdown and establish themselves in Canada with their ill-gotten gains.

The ex-Royal Hong Kong police officers, their wives, concubines and children have invested tens of millions of dollars in businesses and real estate in Canada, mostly in B.C. and Ontario, according to the secret Canadian police study.

The study also found that four of the cops, whose average salary was about HK$30,000 a year each, had built a two-tower, 600-room hotel in Toronto valued at more than $20 million.

The richest eleven of the 44 fugitive cops were estimated to have a combined asset base both directly and indirectly of some $80 million.

“It is not exactly understood how much influence or power these former police officials possess regarding Chinese criminal activities in North America but, because of past ties, former influence, possible triad connections and money illegally obtained, they definitely could influence Chinese criminal patterns as we know them today,” the study said.

The exodus of Hong Kong cops to Canada can be tracked back to the mid-1970s, when the newly formed agency called Independent Commission Against Corruption (ICAC) began enforcing prevention-of-bribery laws.

In the ensuing investigations, ICAC brought 260 police officers to court after finding 18 criminal syndicates operating in the police force.

Five station sergeants known as the Five Dragons led the criminal element in the Hong Kong police force at that time. One of the Dragons was Hon.

The Five Dragons, all of whom eventually ended up in Canada, had geographical control of police jurisdictions in Hong Kong and collected graft while allowing the triads to conduct their criminal activities.

In the mid-70s, as the corruption crackdown in Hong Kong intensified, Hon, despite his criminal connections, became a landed immigrant in Vancouver.

B.C. court records show that Hon was arrested by the RCMP on June 22, 1976 at his house at 515 West 54 Avenue in Vancouver on an extradition warrant issued by the Hong Kong ICAC.

At that time he was said to have in his control HK$2,343,624 (C$468,000), a sum disproportionate to his salary as a Detective Staff Sergeant of the Royal Hong Kong Police Department.

The next day, Hon appeared in a Vancouver provincial court where Canadian Justice Department lawyer P.W. Halprin said Hon was a landed immigrant who arrived in Vancouver several months earlier.

He said police seized about $6,000 from him when he was arrested. After spending five days in jail, Hon was released on bail after four people put up $250,000 in property for the bail.

The bail was raised by family and friends of Hon and covered the titles of six houses.

The bail was raised by his:

Concubine — Kan Suk Ying (515 West 54 Ave. Vancouver and later of 2008 West 51st Ave. Vancouver). She raised $120,000.
Son — David Hon Kam Hung (Date of Birth 2 Sept 1950) and his wife Alice Hon Yoke Leng (DOB 14 Aug 1949). They raised $48,500.
Fei-Fung Lui, a University of B.C. student who listed her address as 4135 Salish Drive, Vancouver. She raised $81,500.

The judge also ordered Hon’s three passports — British, Taiwan and Chinese — to be held. On March 2, 1977, after several legal delays, an extradition hearing began.

Hon’s lawyer, H.A.D. Oliver, who later went on to become a judge and a conflict-of-interest commissioner, applied for the case to be thrown out on a legal technicality.

Three months later, a Federal Court judge agreed with Hon’s lawyer and ordered the extradition hearing stopped. Hon was released, bail was discontinued and his three passports returned. The government of Canada appealed this ruling to the Federal Court of Appeals Canada.

On January 24, 1978, the Federal Court of Appeals overturned the ruling and ordered Hon’s re-arrest and the resumption of extradition hearings, but by that time Hon had left Canada for Taiwan, where he died in 1999.

The following year the Justice Department of Hong Kong began its court challenge to go after Hon’s estate.

In an analytical report done by the RCMP liaison office in Hong Kong around the time the corrupt cops were fleeing, it was estimated “that 35 per cent of all Chinese policemen were triad members.”

Police officers and lawyers familiar with proceeds of crime investigations said the money brought in by the corrupt Hong Kong cops is likely to have been legitimized through a variety of means, and that there is very little the authorities can do now, unless the same players are actively involved in criminal enterprises.

The conclusion to Hon’s case marks the end of a string of police corruption cases in Hong Kong dating from the 1970s, Chinese media reported.

One of those cases involved retired detective sergeant Lui Lok, who also invested his fortune in Vancouver. Civil proceedings began in 1978 and an out-of-court settlement was reached with his family in 1986.

Civil proceedings were also launched by the Hong Kong government against the other fugitive cops and assets recovered, but the attempted repossession of Hon’s assets was far and away the largest of the lot.

Tracking a family fortune in Vancouver

The following properties and companies are listed in a covert Canadian police study on the asset base of the family of corrupt ex-Royal Hong Kong police sergeant Hon Kwing Shum. The assessed values are not current.

3500 block, Hudson St. Vancouver - House assessed value at $1,157,000.
2000 block, West 51 Ave. Vancouver - House assessed value at $433,800.
5600 block, Columbia St. Vancouver - House assessed value at $662,000.
Unit block, West 37th Ave. Vancouver. - House assessed value at $630,000.
1700 block, East 47th Ave. Vancouver. - House assessed value at $340,000.
500 block, West 54th Ave. Vancouver. - House assessed value at $418,300.
1600 block, 63rd Ave. Vancouver. - House assessed value at $636,000.
5200 block, Torquoise Drive, Richmond. - House assessed value at $293,000.
1000 block, West 70th Ave. Vancouver. - House assessed value at $228,500.
2000 block, West 41 Ave. Vancouver. - Commercial/residential property assessed value at $716,000.
400 block, East 5th Ave. Vancouver. - Apartment assessed value at $74,400.

COMPANIES

Hon Investment Inc. - Company records suggest this is the family’s umbrella company. Incorporated in British Columbia on Sept 30, 1983.
Yoneda & Associates Consultants Ltd. - Company Incorporated on Sept 5, 1984.
KAD Investments Ltd. - Incorporated on May 22, 1981.
Esprit Management Inc. - Incorporated on June 16 1983. Last annual report filed on June 16, 2002.
Vincent Chan Enterprises Ltd. - Incorporated on Feb 29, 1984. Last annual report filed on Feb 28, 2002.
Sunaco Enterprise Ltd. - Company was incorporated on Sept 13, 1983 and dissolved on Feb 10, 1989.
SDI Software Design Inc. - Incorporated on Oct 24, 1988. Dissolved on March 30, 2001.
CPI Manufacturing and Distribution Inc. - Incorporated on Feb 3, 1988. Dissolved on July 15, 1994.
L & H Engineering Consultants - Incorporated on Feb 24, 1977. Dissolved on July 24 1987.
MACA Management and Computer Consulting Inc. - Incorporated on Aug 23, 1984. Dissolved on Jan 20 1989.
Terran Distribution Ltd. - Incorporated on April 10, 1981. Company dissolved on Sept 25, 1987.
Bloomingdale Development Ltd. - Incorporated on July 18, 1984 and dissolved on Dec 11, 1987.

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