HONG KONG: A former bank manager in Hong Kong has been sentenced to four years in prison after accepting more than $470,000 in cryptocurrency bribes to falsely authenticate financial documents with a stated value of more than $1.6 billion, authorities said.
Lam Chun-yin, 32, a former customer relationship manager at China Construction Bank (Asia), pleaded guilty in Hong Kong's District Court to conspiring to accept bribes. He was also ordered to repay about 3.7 million Hong Kong dollars.
Lam worked at a retail banking branch and was not authorized to handle commercial credit facilities or letters of credit. Investigators said he nevertheless helped authenticate fake standby letters of credit and other financial documents.
The scheme took place between April and June 2022 and involved more than $470,000 in Tether, a cryptocurrency commonly known as USDT. In return, Lam falsely verified documents that appeared to be issued and supported by China Construction Bank.
The documents had a combined stated value of more than $1.6 billion. The case was connected to transactions involving Vesttoo, a financial technology company that used bank-issued standby letters of credit as collateral for investment-related deals.
The case also highlights how cryptocurrency can be used to move illegal payments. Hong Kong's Independent Commission Against Corruption said corrupt groups are increasingly using digital assets to conceal illicit payments.
The fraud was uncovered after an internal investigation by China Construction Bank (Asia). The bank found that neither it nor its related entities had authorized or issued the documents involved in the scheme.
Judge Ernest Lin Kam-hung sentenced Lam to four years in prison. The judge emphasized the need for deterrent sentences in serious corruption cases, particularly when financial misconduct could damage Hong Kong's reputation as an international financial center.
Hong Kong's anti-corruption agency has also obtained arrest warrants for other people allegedly connected to the case, meaning the investigation could continue beyond Lam's sentencing.
