Scams Led to Approximately $46 Million in Losses to Lender
A former Alhambra-based CPA who was involved in several elaborate schemes that defrauded HSBC Business Credit (USA) out of approximately $46 million through a series of fraudulently obtained credit lines was sentenced today to 2½ years in federal prison.
Richard Po-Chun Wong, 59, of Covina, was sentenced this afternoon by United States District Judge S. James Otero. In addition to the prison term, Judge Otero ordered Wong to pay full restitution.
Wong pleaded guilty in 2006 to wire fraud and tax evasion, admitting that he caused millions in losses to HSBC Business Credit (USA).
A second defendant in the case, William Chan Lim, 58, of Diamond Bar, was sentenced last September to 57 months in prison. Lim, who pleaded guilty to wire fraud and money laundering, was the CEO of a large wholesaler of Asian dry goods that was involved in the fraud.
Wong 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 more than $1 million through a court-appointed receiver. Lam, 50 of San Gabriel, pleaded guilty to tax evasion and wire fraud and was sentenced in 2005 to one year in federal prison.
From 1998 through 2001, Wong helped other Asian food distribution companies fraudulently obtain credit. With Wong’s assistance, two of the companies – UFC Seafood and Food Company, Inc. and Tri-Ocean Seafood – obtained approximately $43 million in credit. Lim owned or controlled UFC and Tri-Ocean, 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 $38 million to HSBC.
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. Lim returned to the United States in 2006 in order to surrender to federal authorities.
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.
This case is the result of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation.
CONTACT: Assistant United States Attorney Angela J. Davis
Release No. 09-019