The Avanti Group Accounting Fraud, The HK$8.5b gambler who fooled the City
by Suzanne Mendelin FreelancerThe
suited executives behind Macau's gaming industry knew Navin Aggarwal as a
respected adviser in big land, hotel and casino deals. But it was a façade that
hid a craving to gamble that could lose him as much as HK$10
million in
a day.
It
has also cost Aggarwal, 47, the next 12 years of his life - his jail sentence
for engineering an HK$8.5 billion fraud scheme described by a High Court judge
last month as the worst embezzlement case in Hong Kong's history.
The
victims lost at least HK$572 million.
Law
Society vice-president Stephen
Hung Wan-shun said Aggarwal would be struck off the roll of solicitors and be
banned from ever practising again. The society will refer his case soon for
disciplinary proceedings.
"Stealing
clients' money is a very, very, very serious misconduct," Hung said.
The
former partner of international law firm K&L Gates found himself drawn to
the gambling tables not long after he was assigned to Macau to advise clients
in the gaming industry in the early 2000s.
He
headed a corporate finance team specialising in mergers and acquisitions,
regulatory compliance and securities work. Professionally, he was a successful
man, but that meant nothing when it came to controlling a desire to keep trying
his luck at the gambling tables.
Generous
in placing bets, Aggarwal was soon taken to the VIP rooms, where he played
baccarat. The money he earned as a high-flying legal eagle - as much as US$1
million a year - quickly became insignificant compared to his debts.
Finding
no way out, he put an elaborate scam into play starting from 2007.
By
the time he was caught in 2011, he had duped 92 investors and two clients - including
some of the shrewdest businessmen and professionals in Hong Kong - into handing
over their money for "business opportunities".
Aggarwal
was declared bankrupt in July last year.
The
seven current partners of K&L Gates had dug into their pockets to pay two
clients HK$83 million in compensation.
The
firm is also fighting claims by 17 major victims for HK$686 million.
The
firm may have its US parent to thank for having taken out insurance against
fraud. But if the insurer shoulders the payouts, higher premiums are almost
inevitable in the future - and the whole legal industry will be the poorer for
it.
Born
in Hong Kong to an Indian family, Aggarwal was the third of four children, with
an elder brother and sister and a younger sister. He attended Island School
before leaving for the University of Hull in England to read for a Bachelor of
Laws degree. Returning to the city, he studied for a Postgraduate Certificate
in Laws at the University of Hong Kong.
In
1992, Aggarwal was admitted as a solicitor and specialised in commercial law.
He set up a law firm, Aggarwal & Associates, in 1999 but a year later
joined Preston Gates & Ellis, which merged with another firm in 2007 to
form K&L Gates.
Despite
his job, Aggarwal did not live the high life, according to a lawyer who
represented him. Home was a modest flat in Pok Fu Lam and he drove a Toyota.
"The
tragedy of the case is all the money has now gone to casinos," another of
his lawyers commented. "He is now left with nothing. All he has left is
the disgrace he brought upon himself."
Staff
at K&L Gates were instructed not to talk to the media about Aggarwal. The
firm's spokesman, Asia managing partner David Tang, would make no comment.
None
of Aggarwal's colleagues at the firm wrote to the courts to seek clemency for
the man, who had pleaded guilty.
Defence
barrister Graham Harris SC asked in mitigation: "How would a person of
such intelligence allow himself to dig such a huge hole?"
The
question was not answered in court, but City University's Professor Tom Yuen
Chi-man, an expert on the counselling of gamblers, had a clue.
"Gambling
addiction has nothing to do with IQ," he said.
"Many
professionals get hooked because they want to prove, if not to pretend, that
they are intelligent. They want to outwit the casinos."
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