Ex-Hong Kong banker jailed over $1.6B fake letters of credit

Lam Chun-yin, 32, a former customer relationship manager at China Construction Bank (Asia), was sentenced to four years in prison in Hong Kong after pleading guilty to falsely authenticating letters of credit linked to transactions totaling more than $1.6 billion. The court also ordered him to repay more than $470,000 in payments identified as cryptocurrency bribes.

Court documents show Lam approved and authenticated letters of credit used in trade finance, which then allowed fraudulent draws on funds. The documents presented at trial related to transactions that exceeded $1.6 billion in value.

Judge Ernest Lin Kam-hung said deterrent sentences are necessary even for first-time offenders, “especially in light of the grave nature of the crime and its impact on society,” and noted that banking and insurance form the backbone of Hong Kong’s economy.

The court included the cryptocurrency payments in an asset recovery order after investigators traced the sums to digital wallets. Hong Kong’s Independent Commission Against Corruption has obtained warrants for the arrest of others believed to be involved, and inquiries into the wider network are continuing.

Hong Kong is expanding the use of tokenized deposits, digital assets and blockchain settlement. The city’s monetary authority has launched a framework to assess banks’ preparedness for quantum-computing threats and aims for full sector readiness by 2030.

Authorities and market participants have called for stronger oversight of trade finance and digital-asset flows following the case.