International Cooperation in
Asset Recovery
Mike Burley IMS
Principal Investigator
Independent Commission Against Corruption
The Malaysian Experience
The defendant was charged with Criminal
Breach of Trust.
Defendant was the Ex-Managing Director
of one of Malaysia’s largest public owned
company.
That company went bankrupt in 1996 with
losses of over US$4 billion.
Who Organized the Money
Laundering Scheme?
 ACA Malaysia discovered that the defendant was
connected to two Japanese businessmen Yuji and
Yasuomi.
 ACA suspect Yuji and Yasuomi to be the
middlemen in a massive long term money
laundering scheme orchestrated by the defendant
using banks in Hong Kong and Switzerland.
 They were assisted in Hong Kong by Jessica, a
Public Certified Accountant and MD of a
Corporate Services Company.
Where did the Money Go?
 Jessica established two BVI companies named
Frilsham and Borneo.
 Sole registered proprietor of Frilsham was Ms
WONG and of Borneo was Mr Cheng.
 Yuji and Yasumi established Water International
Ltd, in Japan.
 Two bank accounts in the name of Frilsham and
one bank account in the name of Water were
opened by Jessica with an American Registered
Bank Hong Kong.
Swiss Banks
Jessica arranged for Yuji and Yasuomi to
open an account with Calyon Bank in
Geneva through Calyon Bank Hong Kong
(Formerly known as Banque Agricole
Indosuez) in the name of Borneo.
Yuji maintained his own Hong Kong
based Swiss account with UBS Hong
Kong.
The Money Flow
The Defendant
Misappropriate MR74 million from his company and dev.
Funds disguised as settlement proceeds of a fraudulent invoice with ABC Japan.
Transfer from Bank BPM via Bank BPM Tokyo to Frilsham HK account 1
Jessica of Corporate Service caused the funds to be diverted to Frilsham No.2 acc.
Upon receipt onto Frilsham no. 2 account MR64 million transferred to Water
Account with the American Bank.
MR10 million transferred to UBS Hong Kong (Yuji’s personal account)
MR10 million then forwarded to UBS Geneva (Also Yuji’s personal account)
MR64 million transferred from Water’s HK account with the American Bank to
the account of Borneo with Calyon Bank Geneva.
MR64 million transferred to the account in the name of Sitar Investments
With UBS Zurich.
There it was held on a 24 hour time deposit
Before being dispersed through various accounts maintained by the defendant’s
family.
94 FEB 22
Frilsham A/C #1
95-300-18xx-x
Written instruction to
divert the money from
Frilsham A/C #1 to
Frilsham A/C #2
95-470-03xx-x
25th Feb 1994
Please transfer by telex YEN
2.8 Billion…to the Waterfront
Int’l Ltd A/C by debiting our
YEN A/C 95-470-03xx-x
Time is of the Essence
It took less than
72 hours for the
funds to pass
from Malaysia
through Japan
and Hong Kong
before arriving
in Switzerland.
Covering the Tracks
It took less than
another 72 hours
for all Bank
accounts in
Hong Kong to
be closed.
Lessons from the Search Warrant
LOOK!!!!
File of Sake Inc. another BVI company seized
under strong protest from Jessica of Corporate
Services. Review of file discovered a further
Swiss Bank Account.
ACA later confirmed that this account was
used to pay Jessica and others involved in
minor aspects of the laundering scheme.
ACA were unaware of the Sake connection
before ICAC’s search of Corporate Services
Don’t Underestimate the Power
of a Production Order
American Bank claimed that all
documents were destroyed.
Evidence clearly suggested the contrary.
The Production Order issued by the
District Court demanded American Bank to
produce.
They finally produced and guess what?
A Near Smoking Gun
Bank TT Document showing funds
intercepted and route from BPM Tokyo
Japan to account of Frilsham Account 1
with American Bank.
Effectively diverted in cyberspace to
another account called Frilsham Account 2
How an MLA Production Order
Works
Issued by the District Court.
Proceedings for failure to produce would
be before the District Court.
Response by means of affidavit with
documents exhibited.
Response must be within 7 days.
Section 10 MLA Examination
This procedure is used to examine
witnesses orally.
It is an independent procedure that can be
used in conjunction with a Production
Order and a Search Warrant.
However it is not necessary if full and
cooperative production is obtained
through either Warrant or Production
Order.
Proceedings before
Eastern Magistrates Court.
Prosecution represented by the AG of
Malaysia personally.
Defence represented by a Distinguished
Lawyer.
Before Mr. D.I. Thomas Magistrate.
All evidence and exhibits obtained by
way of deposition.
How Does the Evidence Get to
Malaysia?
 All witnesses sign their depositions which are
prepared by the court.
 The evidence is then given by the Court to the
D of J Hong Kong.
 D of J report outcome to Ministry of Foreign
Affairs.
 Evidence officially handed to the Consular
General for Malaysia in Hong Kong.
 Transported to the Ambassador for Malaysia in
Beijing.
But this story did not end there.
A Brilliant Success turns to
Disaster- Defendant Acquitted
 It seemed odd that throughout the HK deposition
proceedings the Defence Counsel said absolutely
nothing.
 He had found a fatal flaw and kept it up his
sleeve.
 Under the Malaysian Evidence Laws, (pre MLA
Agreement) in relation to Foreign witnesses, it
was necessary that they indicate their
unwillingness to give evidence at trial.
The Evidential trap
 The Defence kept this quiet right up until an
appeal was lodged at Malaysia’s Highest Court.
 The Court ruled that none of the Hong Kong
Evidence was admissible as there was no
precedent to accept evidence from a Hong Kong
Deposition Proceedings and no witnesses said
that they were unwillingness to appear in
Malaysia to testify.
 This issue was missed by all parties to the
prosecution until it was too late.
The Hard Lesson to Learn
 Respect for Sovereignty is a work in progress in
all matters that deal with ground level multijurisdictional investigations.
 Remember that as part of the respect for the
sovereignty of other Nations in MLA that it is our
duty to acquaint ourselves with all the aspects of
the Evidence Laws of the client jurisdiction.
 Any doubt in this regard should be referred to
your Justice department for clarification and
advice. IF NOTHING ELSE PLEASE
REMEMBER THAT.
Don’t let them get away with it
 If we don’t then it is only the
criminal that will benefit !!!
Options of Evidences for MLA
Production Orders
Search Warrants
Deportation before a Magistrate
etc…
ALL other things are possible!
International Cooperation in
Asset Recovery
Thank You