Sharing 25 Years Experience in Law Enforcement - Fighting Corruption & Organized Crime
Tony Kwok, SBS, IDS,
former Deputy Commissioner and Head of Operations, ICAC, Hong Kong,
on the 22nd International Asian Organized
Sharing 25 Years Experience in Law
Fighting Corruption & Organized Crime
Ladies and Gentlemen,
I am honoured to speak at this Conference. I joined the Independent Commission Against Corruption (ICAC) in Hong Kong shortly after it was set up in 1974 and have been involved in its fight into corruption and associated organized crime. As Deputy Commissioner and Head of Operations, I believe I can speak with some degree of authority to state that corruption is often the root of organized crime. Hence, I hope I can share with you some of our useful experience.
Short history and an independent organization
Let me explain briefly about the Hong Kong ICAC which has a particularly interesting history and story to tell. It was established in 1974 at the time when corruption was widespread, and Hong Kong, as a British Colony, was probably one of the most corrupt cities in the world. There was at that time a close “business” association between law enforcement agencies and organized crime syndicates. Nearly all types of organized crimes, vice, gambling and drugs, were protected. As a taxi-driver, you could even buy a monthly label stuck on your taxi and it would guarantee you from any traffic prosecution. Such was the scale of open corruption in Hong Kong. When ICAC was set up at that time, very few people in Hong Kong believed that it would be successful. They called that “Mission Impossible”. Within three years, we smashed all corruption syndicates in the Government and prosecuted 247 government officers , including 143 police officers. Some, labelled as “Billion Dollar Detective Sergeants” and notorious drug traffickers had managed to escape and are still hiding in Taiwan.
No doubt the fight against corruption in Hong Kong is a success story and has a wide ramification to the change of culture in Hong Kong. In the recent Millennium survey, the establishment of ICAC was voted as the 6th most important event in the 150 years of history in Hong Kong. So, what is our secret of success? Maybe some of them can be applicable to fighting organized crime. To me, there are five factors :-
- First. We are an independent agency, directly responsible to the very
top, i.e. the Chief Executive of Hong Kong. This ensures that we are free
from any interference in conducting our investigation. Provided there
is reasonable suspicion, we will investigate any person or organization
without fear or prejudice.
- Second. We receive strong financial support. We are probably one of
the most expensive anti-corruption agencies in the world. Our annual budget
amounted to US$90M, about US$15 per capita. You may wish to multiply this
figure with the US population and work out the anti-corruption budget
that needs to be given to the equivalent to ours!
- Third. We enjoy wide investigative power. Not only are we empowered
to investigate corruption offences, both in the Government and private
sectors, we can investigate all crimes which are connected with corruption.
We enjoy special investigative power, such as power to check bank accounts,
requiring witnesses to answer questions on oath, restraining properties
suspected to be derived from corruption, holding the suspects’ travel
documents to prevent them from fleeing the jurisdiction. I must hasten
to add that there is an elaborate check and balance system to prevent
abuse of such wide power.
- Fourth. We strive to be highly professional in our investigation. We
are one of the first agencies in the world to introduce the interview
of all suspects under video; we have a dedicated surveillance team with
over 120 specially trained agents who took surveillance as their life-long
career. We have a number of other specialized units such as witness protection,
computer forensic and financial investigation. I will add that many of
our officers received training from the FBI National Academy here!
- Finally. We adopt a comprehensive “three-prong ” strategy in fighting corruption, i.e. through investigation, prevention and education. Education is particularly important in fostering public support which you all know is an absolute success factor in fighting crime.
(a recap of the 5 factors)
Effectiveness after the reunification
Before the reunification of Hong Kong with China in 1997, there had been widespread scepticism in overseas media about the corruption situation in the Hong Kong Special Administrative Region. As the Head of Operations of ICAC, I am happy to say that corruption does not deteriorate and ICAC remains active and effective in our fight against corruption. ICAC cases continue to hit the headlines. Examples of our major cases include:-
(a) horse race fixing;
(b) car smuggling;
(c) cigarettes smuggling;
(d) counterfeit VCDs;
(e) major corruption-related fraud in China state-funded companies in Hong Kong.
In a recently concluded major corruption/bank fraud case - the Carrian case - which took 15 years to conclude, we successfully prosecuted 6 bankers and a chairman of a large public listed company. The trial judge, while sentencing a prominent banker called Ewan Launder, head of an investment company of Hong Kong Bank, and the last accused in this case, to five years’ imprisonment, said, “The ICAC’s dogged persistence in this investigation demonstrates to the people of Hong Kong and indeed the world that corruption both in the private and public sectors would be rooted out when it is discovered and at whatever cost to society. It is fortunate for Hong Kong to have the ICAC.”
Our effectiveness after the re-unification has prompted quite a number of favourable and supportive editorials from leading newspapers in Hong Kong. The South China Morning Post, a leading English newspaper, wrote in 1998, “Anxiety about the increase in corruption appears to be receding, The lessening of public concern in recent months has been based on the continued high profile of the ICAC.” It concluded, “Hong Kong maintains a clean image which is an extremely valuable asset in these difficult times (financial turmoil). No efforts must be spared to protect it and that means both recognizing and supporting the contribution of the ICAC to our well being.”
All the survey results by various agencies after 1997 also
confirm that Hong Kong remains one of the least corrupt places. Political
and Risk Consultancy Limited rated Hong Kong as the second cleanest place
to do business; Transparency International, second least corrupt place to
business in Asia.
Corruption and Organized Crime
Corruption rarely exists alone. It is often a tool to facilitate crimes and it appears that criminals cannot do without it. Over the years, ICAC officers have investigated a wide range of organized crimes facilitated by corruption. Law enforcement officers have been arrested and convicted for corruptly assisting drug traffickers and smugglers of various kinds; bank managers for consummating bank fraud and money laundering; bank and retail staff for perpetuating credit card fraud. The close association between corruption and organized crimes is best illustrated in the following ICAC investigations.
Briefing on individual cases
Illegal Passport & Money Laundering syndicate
ICAC smashed an international illegal passport and money laundering syndicate last year. The syndicate members include a Customs Senior Inspector, two Immigration Officers, a Principal Immigration officer who was the head of Immigration of an African Country, a bank manager and casino operator. This syndicate arranged illegal passports, including diplomatic passports from various foreign countries for sale to people who wanted to emigrate to the US. The syndicate could also assist in laundering illegal money. We succeeded in infiltrating into the syndicate through an ICAC officer acting as undercover. At the critical stage, we also enlisted the assistance of a Russian speaking undercover officer from an US law enforcement agency to pose as a member of Russian organized crime. All the key figures were apprehended and some are awaiting trial. This is a classic example of international co-operation, and the mutual assistance that should be developed in undercover operations.
Counterfeit Credit Cards - HK/UK joint operation
Counterfeit credit card fraud continues to be a lucrative source of revenue for organized crime groups. In 1992, Hong Kong was responsible for 32% of the world’s credit card fraud. Now we are only responsible for 2% of the fraud. This type of fraud is often facilitated by corrupt retail staff who steal the genuine credit card information from customers and pass them to the syndicate for making counterfeit cards. In late 1998, ICAC co-operated with the National Crime Squad in England in the synchronized arrest of two criminals, one in England and the other in Hong Kong, which also resulted in the smashing of a counterfeit credit card factory. This was a typical international syndicate with operation stretching through at least four jurisdictions . Following the successful conclusion of the investigation, an ICAC Chief Investigator was awarded “Law Enforcement Officer of the Year 1999” by the International Association of Financial Crime Investigators in America. This is another example of successful international co-operation.
Cigarette Smuggling Case
We carried out a protracted investigation which lasted for three years from 1993 to 1996 into a cigarette smuggling syndicate. Its members include ex-customs officers, senior manager of an international tobacco company, a number of established cigarette traders and senior triad members of Wo On Lok Triad Society. The investigation revealed bribe payments of over US$4.2M (HK$33M) paid by the syndicate to the senior manager of tobacco factory to ensure unlimited supply of cigarettes to facilitate smuggling into China. During the course of investigation, a key member of the syndicate, who had earlier agreed to assist ICAC in the investigation, was found brutally murdered and dumped in the harbour in Singapore. His murder was suspected to be carried out by five members of the Wo On Lok Society. In the end, three members of the syndicate were convicted of bribery, murder or perverting the course of justice charges. Three persons are still wanted on warrant. This is one of the most serious organized crime cases investigated by ICAC.
Hong Kong Jockey Club race fixing case
Horse racing is a very popular game in Hong Kong and the total amount of bets placed by punters at each race meeting is in the tune of tens of million of dollars, one of the highest in the world. Hong Kong Jockey Club is keen to maintain the integrity of racing. Indeed the current Director of Security is an ex-FBI agent. In a joint investigation with the Jockey Club, we succeeded in unearthing a case of race fixing involving a number of jockeys who were bribed by an off-course betting syndicate with triad background. The total amount of bribes paid to riders for not letting their mounts run to the best of their ability exceeded US$180,000 (HK$1.4 million) in a single race. This amount of money is only a drop in the ocean compared to the revenue the syndicate gets in illegal bookmaking. Seven persons were prosecuted and three jockeys and two civilians were subsequently found guilty of bribery and gambling offences, and sentenced to substantial terms of imprisonment. Unfortunately, we were not able to get to the head of the syndicate simply because there was a missing link with no one preparing to provide the necessary evidence against the head. This is the difficulty of investigating organized crime groups.
Soccer match fixing case
Betting on soccer match results is illegal in Hong Kong, although there are a lot of discussion in recent months on whether soccer betting should be legalised. ICAC has investigated a case involving an illegal international soccer bookmaking syndicate. The syndicate involves in illegal soccer betting on international matches and also ‘fixed’ the outcome of local football matches. This was achieved by bribing key players in the team. A corrupt police sergeant was bribed to assist the legal operation in Hong Kong. This was a particularly difficult case to investigate. To begin with, no aggrieved individuals came forward to complain. Secondly, the syndicate’s operation is transnational. Bets accepted in Hong Kong were then placed with a major bookmaker in Malaysia through a middleman in Singapore, and all financial transactions were conducted through an ‘underground’ banking system. To add to the complexity of the case, all bets were recorded on a sophisticated computer programme which was capable of total erasure through a push of button on the keyboard. We carried out a strike operation on the first day of the World Cup Final in 1998 and we managed to break into the premises so swiftly that the operator was so shocked and that he was unable to push the crucial button on time. Nonetheless, it still took a long process of computer forensic to retrieve the evidence from the computer and had them admissible in evidence in court. This investigation resulted in the arrest and conviction of eight individuals in Hong Kong. Five footballers were sentenced to terms of imprisonment ranging between 12 and 22 months, the police sergeant was jailed for four years, and the head of the syndicate and his ‘lieutenant’ were each sentenced to two years’ imprisonment. The need to upgrade ourselves in information technology is obvious if we want to tackle sophisticated organized crime.
Conclusion and Recommendations
In the cases quoted above, it is pretty obvious that corruption and organized crimes are difficult to investigate. There are at least three unique features : -
- a. Firstly, the corrupt and the criminals of organized crime have no
national boundaries at all.
- b. Secondly, criminals have gone high tech. Information technology
can be a useful tool for investigation but at the same time a threat to
law enforcement officers.
- c. Conventional methods of investigation is not good enough to tackle organized crime. More sophisticated methods such as undercover operation and professional financial investigation should be adopted
I have three more observations on this subject
Firstly – I recommend a strong partnership approach
We see great value of a strong partnership approach with other local law enforcement agencies, including the Police, Customs, Immigration and Correctional Services in Hong Kong. In the old days, when ICAC arrested a government official, this might not be welcome by his head of department, who blamed ICAC for bringing scandal to his department. “Don’t wash your dirty linen in public” is outdated and can only encourage corruption. If the dark days of corruption teach us anything, it is that turning a blind eye to corruption simply will not do. The problem will only grow bigger. We are pleased that heads of departments, particularly the law enforcement agencies, today have changed that attitude and are taking a proactive strategy to tackle corruption. Indeed, many of our most successful cases originated from their proactive approach or as a result of joint investigations. Therefore, as a food for thought, all police force should adopt a more positive and proactive approach to corruption. The Interpol took lead in this direction. With the blessing of Interpol General Secretariat, an ‘Interpol Group of Experts on Corruption’ was formed in 1998 with a mandate to develop and implement new anti-corruption initiatives. ICAC is a member of this group and it is hoped that this Expert Group will co-ordinate different national and regional approaches to a united front to fight against corruption.
Adequacy of the criminal justice system
In a corrupt dealing, the offeror and the acceptor of bribe are willing parties and they will not give up each other. We call this a ‘satisfied customer’ situation. The present system in Hong Kong which basically follows the old UK one, allows the suspect to remain silent when questioned under caution. If they have a lawyer, the first thing the lawyer will advise them is to maintain his right of silence. In the absence of other corroborative evidence, our investigation often concludes with no result when everyone involved in the case refuses to say anything! Under the new UK caution system, the suspects are now warned that any delayed response to questions may prejudice their defence in subsequent legal proceedings. The new caution read like this, “You do not have to say anything. But it may harm your defence if you do not mention when questioned something which you later rely on in court. Anything you do say may be given in evidence.” We believe this new caution strikes a better balance between the human rights of suspects and the public interest to investigate crime. We should consider a change in legislation along a similar line.
Consideration should also be made in introducing new legislation to protect whistle blower, witness protection, and allowing greater degree in entrapment to facilitate successful undercover operations, and in the admissibility of intercept evidence.
Mutual Investigative Assistance in Criminal Matters
We all appreciate that organized crimes this day have no boundary and international co-operation is vital. However, at present, we rely heavily on mutual legal assistance which have restriction on areas of co-operation and at the same time lay down strict judicial procedure which is often a time consuming and complicated process. We need to act faster than criminals and there should be a more efficient mechanism amongst law enforcement agencies to call for and obtain assistance at short notice. I am hoping that Interpol can do more and for anti-corruption agencies which are not members of Interpol, perhaps time has come for an international association of anti-corruption agencies to be formed to enhance international liaison.
1st ICAC Symposium
International Anti-Corruption Newsletter
In recognition of the above problem on international liaison, ICAC will be hosting the first ICAC Symposium on anti-corruption in 13-15 November, this year. This replaces the Pacific Rim Regional Seminar on Corruption-related Crime, which was held annually in Hong Kong, to enhance its international dimension.
The symbolism is essentially for anti-corruption agencies and other associated law enforcement agencies worldwide to discuss practical issues on corruption investigation. I would like to take this opportunity to invite you and your colleagues to attend the Symposium.
Following the transformation of the Regional Seminar on Corruption-related Crime, its by-product the Regional Anti-Corruption Newsletter also had its name changed to International Anti-Corruption Newsletter. This is a quarterly publication. The inaugural issue came out in January this year and is on the Internet ICAC website. The Newsletter welcomes contributions from all law enforcement agencies worldwide on their strategies and experiences in tackling corruption. By providing an international forum for like-minded bodies, we hope that the Newsletter will further enhance international understanding and co-operation in fighting the increasingly trans-national corruption and organized crimes. Today, we get together here for the same reason and I wish the conference every success. Thank you.