A Hong Kong District Court has sentenced a former relationship manager at China Construction Bank (Asia) to four years in prison for accepting more than $470,000 in Tether bribes in exchange for authenticating fraudulent financial instruments with a stated value exceeding $1.6 billion.

Lam Chun-yin, 32, pleaded guilty to conspiracy charges related to the scheme, which ran between April and June 2022. Judge Ernest Lin Kam-hung imposed the term after starting from a six-year baseline and reducing it by one-third to account for the guilty plea. Lam was also ordered to repay approximately HK$3.7 million—matching the value of the bribes—to the bank.

Role and Scheme Details

Lam worked in consumer banking at the bank’s Causeway Bay retail branch. His duties did not include authority over commercial credit facilities or letters of credit. Despite this, he presented himself as a bank contact for Yu Po Holdings Limited, an investor that entered deals through Vesttoo Limited, an overseas fintech platform focused on insurance-related investments.

Investors on the Vesttoo platform were required to provide bank-issued standby letters of credit as guarantees. A syndicate arranged for Lam to act as the purported China Construction Bank contact. In return for Tether payments totaling more than $470,000, he authenticated multiple standby letters of credit that falsely claimed to have been issued by the bank, along with two collateral letters falsely attributed to Yu Po Holdings and endorsed by the bank.

The Independent Commission Against Corruption stated that Lam conspired with a Vesttoo department head and other associates, including a Vesttoo employee and a middleman. The instruments carried a combined stated face value of more than $1.6 billion.

Investigation and Court Findings

China Construction Bank (Asia) discovered irregularities through its own internal review and reported the matter to the anti-graft agency, providing full cooperation. Investigators confirmed that the bank and its related entities had never issued the documents Lam authenticated.

The judge noted that banking and insurance form the backbone of Hong Kong’s economy. He stated that the scheme exposed the bank to significant potential risk and damaged the city’s reputation as an international financial center. Deterrent sentences remain necessary even for first-time offenders given the seriousness of the offense and its broader impact, the court said.

Those involved attempted to obscure the payments by routing them through cryptocurrency. The Independent Commission Against Corruption has applied for arrest warrants against other individuals linked to the case.

Connection to Vesttoo Collapse

The fraud formed part of a wider set of issues surrounding Vesttoo, which later ceased operations and sought bankruptcy protection in 2023 after the discovery of fraudulent collateral documents. The episode has generated subsequent litigation involving banks, insurers and other market participants.

Lam’s conviction closes one chapter of the Hong Kong investigation while authorities continue efforts to pursue remaining suspects.