Ex-K&L Gates Hong Kong partner sentenced to 12 years for fraud
A former K&L Gates partner in Hong Kong who committed fraud to repay his gambling debts has been sentenced to 12 years in prison. Navin-kumar Aggarwal, who was previously a senior corporate partner at the US firm, pleaded guilty to two counts of fraud and one count of money laundering in the Court of First Instance.
August 28, 2013 at 11:18 PM
3 minute read
A former K&L Gates partner in Hong Kong who committed fraud to repay his gambling debts has been sentenced to 12 years in prison.
Navin-kumar Aggarwal, who was previously a senior corporate partner at the US firm, pleaded guilty to two counts of fraud and one count of money laundering in the Court of First Instance.
The court heard that between 2007 and 2011, Aggarwal arranged for HK$8.4bn to be transferred from two clients Hui Kau-mo and Mark Lightbrown, and 92 potential investors, into the firm's client ledger account of RIM China.
The company, which had been a corporate client of K&L Gates since 2001, had not given any instructions to the firm to deal with legal matters since 2006 and had no knowledge of any remittances or transfers.
To acquire the funds, Aggarwal had given false instructions to K&L Gates accounting staff to the transfer the money of clients and had approached 92 investors with false promises of business opportunities if they deposited funds with K&L Gates escrow.
K&L Gates at the time had 30 lawyers and seven partners in its Hong Kong office, with Aggarwal – who had worked with the firm since 2000 – being one of the authorised signatories of the firm's 25 bank accounts in the region.
It was K&L Gates' policy that any transaction over HK$40,000 would require the endorsement of two partners from the firm, however, since Aggarwal had prepared false instructions from the client, no other partner queried the illegal transactions.
In June 2011, the defendant was arrested on suspicion of theft and forgery.
In a meeting with Asia managing partner David Tang and senior partner Vincent Tso that month, he admitted that because of his gambling debts, he had forged the signature of a senior executive at RIM China to illegally transfer funds from K&L Gates.
In a letter to Tang, he also confessed to having embezzled about HK$735m from clients of K&L Gates to repay what he owed from gambling, and said he felt sorry for what he had done.
As a result of the fraudulent scheme, the two clients and 92 investors were estimated to have lost at least HK$550m.
Aggarwal's habit is understood to have begun many years ago, but with a peak period in 2007 and 2008 when he incurred substantial debts after visiting casinos in Macau.
One media report on the case said the partner, who earned up to US$1m a year, once gambled HK$10m in a day.
K&L Gates declined to comment.
Related: Clifford Chance Asia head Charlton arrested after Hong Kong car accident
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