Asset Recovery in Hong Kong Fraud Cases: Q&A
– What are the most common types of fraud in Hong Kong?
Common types of frauds in Hong Kong include email frauds, telephone frauds, CEO frauds, fake investment platform frauds, London gold frauds, loan frauds, etc.
– What does a victim do immediately after being scammed?
After realising that they have been defrauded, victims should immediately:
(1) report the case to the Hong Kong police;
(2) report the case to the Joint Financial Intelligence Unit (JFIU) of the Hong Kong Government;
(3) report the case to the recipient bank;
(4) if necessary, instruct a Hong Kong solicitor to apply to the court for an emergency freezing order on the recipient’s account; and
(5) instruct a Hong Kong solicitor to file a civil lawsuit to recover the defrauded funds.
– How do I recover fraudulent funds in a fraud case?
Recovering fraudulent funds usually requires the following steps:
(1) Freeze the bank account of the payee who received the fraudulent funds;
(2) Obtaining the identity, address and bank transfer information and documents of the holder of the payee’s bank account (the first tier payee account and the subsequent second quarter third tier payee account (if any)) from which the fraudulent funds were received;
(3) To file a civil lawsuit against the payee bank account holder and obtain a judgement;
(4) After obtaining a judgement in favour of the victim, apply to the court for a third party debt order against the bank holding the receiving bank account to enforce the judgement and have the bank garnish the money and return it to the victim (the plaintiff in the lawsuit).
– In fraud cases, how can the victim freeze the bank account from which the fraudulent funds were received?
There are two ways: (1) After reporting the case to the Hong Kong Police, the Hong Kong Police will issue a Letter of No Consent to the bank and freeze the bank account;
(2) A solicitor will apply to the court for an urgent Asset Freezing Order (AFO) and an Ownership Freezing Order (OFO) on behalf of the victim to freeze the payee’s bank account.
– What is a Mareva Injunction?
A Mareva Injunction is a court injunction issued by the court to prohibit any person from using or dealing with the assets of the defendant. For more information about Mareva Injunction, please read the article ‘Mareva Injunction – Pulse Bombs in Civil Litigation in Hong Kong’.
– What is a Proprietary Injunction?
A Proprietary Injunction is an injunction granted by the Court to prohibit any person from using or dealing with assets owned by the Plaintiff (in which the Plaintiff has a proprietary interest).
– What type of injunction should a victim apply for in a fraud case?
In a fraud case, the victim can apply to the Court for both a Mareva Injunction and a Proprietary Injunction. The advantage is that a Proprietary Injunction does not require proof that the Defendant is at risk of transferring assets and is easier to apply for, but the assets frozen are limited to those directly sourced from the Plaintiff’s remittances; whereas a Mareva Injunction requires additional proof that the Defendant is at risk of transferring assets but the assets frozen are not limited to those directly sourced from the Plaintiff’s remittances; whereas a Mareva Injunction requires additional proof that the Defendant is at risk of transferring assets but the assets frozen are limited to those directly sourced from the Plaintiff’s remittances. Mareva Injunction requires additional proof that the Defendant is at risk of transferring assets, but the assets frozen are not limited to those directly sourced from the Plaintiff’s remittances.
– How do I find out how much money you have left in a blocked bank account?
To find out how much money you have in a frozen Receiving Bank Account, you will need to apply to the Court for a Disclosure Order, details of which are set out below.
– Why do you need to know how much money you have in a frozen Receiving Bank Account?
To recover fraudulent funds, a civil action must be filed against the payee. To file a civil lawsuit, the name and address of the defendant must be included in the lawsuit and the defendant must be served with the lawsuit. Therefore, it is necessary to know the identity and address information of the recipient bank account holder.
– How to obtain the identity and address information of the payee bank account holder in fraud cases?
Two ways: (1) By applying to the court for a disclosure order, whereby the court will issue a disclosure order against the bank, and the bank will provide the identity and address information of the payee bank account holder in accordance with the disclosure order issued by the court; (2) By obtaining the relevant information through the police, by making an application to the police and having the identity and address information of the payee bank account holder provided by the police.
– Can the Hong Kong Police provide information on the identity and address of the payee in fraud cases?
The police can provide such information, but not in all cases the police are willing to do so.
– What is a Disclosure Order? How do I apply for a Disclosure Order?
A Disclosure Order is an order made by the court ordering an outsider (e.g. a bank) who is in possession of litigation evidence to provide the applicant with litigation evidence relevant to the case. For more information about disclosure orders, please read the article ‘Norwich Parmacal Order in Hong Kong Litigation’.
– If funds have been transferred from a collection account, how can the fraudulent funds be traced?
If it is known through the bank disclosure documents obtained that the funds originating from the receiving account have been transferred away from the victim, the victim can and will continue to apply to the court for disclosure of the identity of the holder of the second tier receiving account, the whereabouts of the funds, the account balance, etc., and the holder of the second tier receiving bank account will be added as a Defendant. If the funds are transferred out of the second-tier bank account, a further application will be made for information about the third-tier bank account, and so on.
– Will the Hong Kong Police return the fraudulent funds to the victim?
No. The Hong Kong Police Force handles fraudulent cases as a criminal matter and does not have the duty or authority to return fraudulent funds to the victim. If the victim wants to recover the money, he or she must file a civil lawsuit in court to recover the money.
– Who is the defendant in a civil action for fraud in Hong Kong?
In fraud cases, as the victim often does not know who the actual perpetrator of the fraud is behind the scenes, he or she can only recover the funds from the receiving bank account holder by tracing the funds back to him or her. As a result, the defendant in a civil action for fraud is usually the bank account holder who received the fraudulent funds, including the first tier of receiving bank account holders and the subsequent second and third tier bank account holders (if any).
– What is the cause of action (the legal basis of the action) for a civil action for fraud in Hong Kong?
In Hong Kong civil fraud litigation, the main causes of action usually include unjust enrichment, constructive trust, etc., of which unjust enrichment is often the main cause of action relied upon by the victim.
– What are the legal procedures for civil proceedings in Hong Kong for fraud cases?
For a general description of civil proceedings in Hong Kong, please refer to the Overview of Hong Kong Civil Proceedings. The Hong Kong civil procedure for fraud cases mainly consists of the following stages: (1) applying for an injunction to freeze the receiving bank account (this procedure is not necessary in all cases); (2) applying for a disclosure order to obtain information about the identity and address of the holder of the receiving bank account (this procedure is not necessary in all cases); (3) litigating the case by filing a writ of summons in the court until the court has handed down its final judgement (4) Apply to the court for a third party debt order (enforcement order) against the bank to enforce the court judgement and garnish the funds back from the bank account.
– How long does civil litigation take in Hong Kong?
The length of civil proceedings in Hong Kong depends on a number of factors, such as whether the defendant is defending the case, whether a disclosure order needs to be applied for in court, whether extra-territorial service is required (if the defendant’s address is outside of Hong Kong), etc. In the simplest of circumstances (e.g. where the defendant’s address is outside of Hong Kong), the length of the proceedings may vary from one case to another. In the simplest scenario (e.g. the defendant does not come to defend, no application for a disclosure order is required, no extra-territorial service is required, etc.), it will take about 6 months to complete the civil proceedings and enforce the proceedings if the litigation process progresses smoothly. If the Defendant comes to defend the case, it will usually take more than one year to complete the litigation process unless the parties reach a settlement or either party abandons the litigation in the middle of the litigation.
– How much does it cost to litigate a civil fraud case in Hong Kong?
For general information on solicitors’ fees for civil litigation in Hong Kong, please refer to the article “Hong Kong Civil Litigation, How Much Do Solicitors” Fees Cost? For general information on solicitors’ fees in Hong Kong civil litigation, see the article ’Hong Kong Civil Litigation: What do Solicitors Cost? Where the defendant does not defend the case, experience suggests that the fees are generally in the region of HK$60,000 to HK$100,000, but may be more if there are complications. It is often difficult to estimate in advance the total amount of solicitor’s fees that will be required in the event that the Defendant comes to defend the case.
– What is a default judgment? What are the circumstances under which a default judgement can be applied for?
A default judgment occurs when a defendant fails to file a Notice of Appeal with the court within the time limit set by law, or when a defendant fails to file a defense with the court within the time limit. In such cases, on the application of the plaintiff, the Court may, on the application of the plaintiff, enter a judgment (usually against the defendant) based on the plaintiff’s claim in the context of a substantive trial of the case. In the case of a default judgment, the defendant is deemed to have waived his right to defend the case.
– What is a Third Party Debt Order? What is a Third Party Debt Order and what does it do?
A Third Party Debt Order is a form of enforcement procedure in civil proceedings in Hong Kong. After the Plaintiff has obtained a judgement in favour of the Defendant, if the Plaintiff wants to enforce a debt against the Defendant’s bank account, the Plaintiff needs to file a Third Party Debt Order against the bank which holds the Defendant’s bank account, so as to add the bank as a third party debtor, so as to enable the Court to make an order requiring the bank to debit and pay the Plaintiff with the funds belonging to the Defendant’s bank account, so that the judgement can be satisfied. to satisfy the judgement debt.
– In what circumstances are settlement negotiations recommended in civil fraud cases in Hong Kong?
In fraud cases, where the defendant is defending the action and the amount in dispute is not substantial, it is advisable for the parties to consider settling the dispute. The reason for this is that both parties will have to pay more in legal fees if the litigation and defence are pursued to the end. If the amount in dispute is not too large, it may not be economically worthwhile to litigate and defend the case.
– How do settlement negotiations work in Hong Kong fraud litigation? What are the usual outcomes?
Settlement negotiations in Hong Kong fraud cases can usually be conducted through the respective legal representatives. The outcome of a settlement negotiation depends on a number of factors, such as the strength or weakness of each party’s case and its merits, the determination, will and financial resources of the parties to continue with the litigation, and the skill of the settlement negotiators. Experience shows that in many cases, the outcome of settlement is that both the plaintiff and the defendant make some concessions, that is, the defendant meets part of the amount claimed by the plaintiff and the plaintiff agrees to give up part of the amount claimed.
– If a settlement is reached, how will the procedures be handled and performed?
If a settlement is reached, the Plaintiff and the Defendant, with the assistance of their respective solicitors, sign a Settlement Agreement and submit it to the Court for approval by way of summons. After the Court’s approval, the parties perform in accordance with the Settlement Agreement. If the defendant is required to make payments to the plaintiff under the settlement agreement, the terms of the settlement agreement provide that the payments may be made from the defendant’s frozen bank account (after the bank account is unfrozen), or from funds other than the frozen bank account.
– How can I contact Yan Lawyers to ask questions about fraud litigation?
You can contact the Yan Lawyers by phone, email, WeChat, WhatsApp, or Line. Please see Contact Us for contact details. It is recommended that you first send an email to our firm explaining the basic circumstances of your case and attaching any relevant documents that you already have (e.g. proof of remittance of the fraudulent remittance to Hong Kong, notes of the report made to the Hong Kong police, emails of contact with the police, and records of the contact of the fraudster requesting for payment of the money, etc.), so as to enable our firm to assess your case as soon as possible.
(Bob Yan, principal solicitor of Yan Lawyers, solicitors. Email: [email protected], Tel: +852 31881995, +86 15018939249, WhatsApp: +852 5103 9249)