Disgraced Entatech founder Jason Tsai tossed in the clink for contempt of court
Claimed 'cognitive dysfunction' to try dodge jail
“Dishonest and manipulative” channel veteran Jason Tsai has been sentenced to nine months in the slammer for contempt of court.
The founder and one-time boss of Enta Technologies UK Ltd (which changed its name to Changtel Solutions in 2015 and is being liquidated) lied repeatedly to the High Court, claiming his memory was in the bottom 0.1 per cent of people his age, 66, in a bid to evade the judge’s wrath.
The jail time was the latest twist in a long-running case that concerned Tsai's participation in a VAT carousel fraud between 2007 and 2010 (of which he was found guilty), which left him owing millions of pounds to HMRC that the taxman has tried to recoup.
As part of the proceedings, the High Court in February granted a freezing order on Tsai's assets that prohibited him from disposing of, dealing with or diminishing the value of his assets up to £24.7m, whether they were in his name or not. Tsai was required to list all of its assets worldwide. He was also asked to hand in his passports.
And after months spent trying to pull the wool over Mrs Justice Rose’s eyes, the beak found Tsai lied to the court about:
- his worldwide property empire
- his offshore bank accounts
- his sprawling Telford mansion
- Entatech’s finances
- his wife’s health
- his sister-in-law’s identity
- the existence of his Taiwanese solicitors
Even one of his own lawyers, Nick Brett of London law firm Brett Wilson LLP, said Tsai’s credibility had been “shot to pieces” – before Tsai sacked him, claiming Brett and his firm “have not served my interests at all well”.
As a result of his repeated lies to the Chancery Division of the High Court over a prolonged period, Mrs Justice Rose found Tsai guilty on 34 of the 52 counts of contempt brought by Changtel’s liquidators, Julie Palmer and Nicholas Reed of insolvency firm Begbies Traynor, acting on behalf of HMRC.
“I regard Mr Tsai as a dishonest and manipulative person who has no qualms about fabricating important documents, lying to the court and expecting his work colleagues and family members to act dishonestly to assist him” – Mrs Justice Rose, High Court judge
Although Mrs Justice Rose conceded that “there was at least one stage in these proceedings at which Mr Tsai gave reasonably honest evidence” this was hampered by Tsai’s insistence that he needed an interpreter in court – despite having bought his Telford home in 1989 and built up a multi-million pound UK tech distributor over the last quarter of a century.
Tsai’s £20m-plus empire frozen by order of the court included properties in Birmingham, Telford, Spain, Bulgaria and Turkey, along with various bank accounts spread across the planet. In an earlier court filing, he had claimed to have just £6m in assets, of which he directly controlled “under £1 million”.
Amid Tsai’s increasingly frantic attempts to hide his assets, his son Andrew asked Brett “whether Jason needs to declare his wife Jenny Chang’s assets/bank accounts that may be solely in her name and which he retains no benefit from or has access to?”
Brett immediately replied: “It is not acceptable to move money into another person's account and not disclose this as Jason would have a beneficial interest in its contents.”
Notes made by Brett in meetings between himself and Tsai were disclosed under an earlier court order. Mrs Justice Rose relied heavily on Brett’s notes when making her findings about Tsai’s honesty.
The “close to death” wife, the multiple passports and the £8m bank transfer
Upon receiving the freezing order, Tsai – who holds both a British and Taiwanese passport – surrendered the British one and then flew straight to Taiwan. Tsai explained this to the court by saying he was visiting his sick wife, whom he had described as being "close to death.”
Three weeks later, Brett met Tsai to discuss what happened and noted: “Believe DBS Singapore account is now nearly empty and large amount of money was transferred to a Taiwanese Bank in HK. How much? Probably about £10m. This is a very serious breach of the injunction.”
In the time that Tsai himself was in Taiwan, his allegedly terminally ill wife – whom he insisted he had not told about the freezing order – had flown from Taiwan to Singapore, where she signed the order to move the money, and back. In total £8.6m was moved.
Barrister Andrew Young cross-examined Tsai about this in court, resulting in this exchange:
- Q. And you have said that you spent your time in Taiwan at your wife's bedside. That's what you have said, isn't it?
- A. Yes.
- Q. She was housebound with a nurse. That's your evidence, isn't it?
- A. Yes.
- Q. Close to death, was she?
- A. Yes.
- Q. But she was well enough to travel from Taiwan to Singapore, wasn't she?
- A. No, it was – I left her on 2 March and she went there on 9 March. That was quite some time.
- Q. Seven days. So she staged a remarkable recovery in a week, yes?
- A. I am not quite sure, but I know she is a very strong person. Strong minded and determined woman.
This did not impress Mrs Justice Rose at all.
“I find that he kept the passport in deliberate breach of the Freezing Order so that he could travel to Taiwan, explain to his wife what was happening in the present proceedings, and arrange for her to travel to Singapore to move money out of the DBS bank accounts into the Taipei Fubon bank accounts,” said the judge. “It is too much of a coincidence to believe that if she had been so ill she would, without knowing anything about the Freezing Order, suddenly travel to Singapore to move many millions of pounds.”
The fake letterhead from the fake law firm
HMRC obtained a winding-up petition against Changtel, which would have resulted in large amounts of Tsai’s assets leaving his control for good. A Taiwanese law firm calling itself “Just Good Lawers” (sic) wrote to HMRC on behalf of Shu Hua Chang, Tsai’s sister-in-law, offering to pay £2.5m to have the petition dismissed.
“This letter appears to have had no effect on the winding up of the company which is fortunate since the letter has been shown to be a complete fabrication,” said the judge. Tsai had instructed one of his employees, Ryan Lee, to mock up the letterhead. Lee had made a typo which Tsai did not notice before sending it to HMRC.
As for the sister-in-law, Mrs Justice Rose ruled: “Shu Hua Chang was a nominee name used by Mr Tsai to hold assets on his behalf.”
Although the woman exists, and depositions were made in her name, the court found that Tsai had written them himself and then forged the existence of the law firm to make them look as if they were genuine sworn statements.
The Specsavers hearing test
Tsai, quite genuinely, suffered from thyroid cancer and is now on medication for the rest of his life after the affected gland was removed in an operation. He also has gout, according to documents seen by the court.
During proceedings he told the court he was suffering from a host of other health problems, including some related to his medication, which meant he couldn't follow the trial. In particular, he said his thyroid meds "induce drowsiness and confusion" – citing nothing more than the hospital leaflet he had in his possession.
He also took a £20 hearing test at a Specsavers in Birmingham and then tried to use that to claim he had "misunderstand several important aspects of this case".
"The medical evidence that Mr Tsai has placed before the court is very sparse and certainly does not support his contention that he is as ill as he claims," said the judge, who also questioned why Tsai hadn't spoken to a doctor if he was genuinely as deaf as he claimed.
"I find that Mr Tsai's supposed medical problems are a fabricated excuse."
Don’t jail me, I’m cognitively dysfunctional
Towards the end of proceedings it became plain which way the judge was going to rule. Tsai got his last set of lawyers, Neil Davies and Partners, to ask for judgement to be adjourned to later this year after shrink Dr Philip S Moore recommended “that a full psychological assessment be carried out on Mr Tsai.”
The former distie boss, fearing jail, had “completed a psychometric self-report measure of his mood” and given answers that “indicated a 'severe' level of depression anxiety and stress”, while allegedly having looked up ways to hang himself. Further examination by Dr Moore was said to have revealed that Tsai’s memory function “is less than the bottom 0.1 percent compared to age related healthy peers.”
“Mr Tsai ‘appears to have 'severe' cognitive dysfunction’ and … should be urgently assessed by a neurologist,” said Dr Moore.
An exasperated Mrs Justice Rose ruled: “Mr Tsai has been a man of substantial resources, both financial and intellectual. I do not believe that he has suffered the kind of serious, debilitating cognitive impairment that Dr Moore describes over that whole period without seeking medical assistance and there is no evidence of that.”
Tsai was found guilty on 34 of the 52 allegations of contempt of court, having breached the High Court's freezing order. Three of the 52 were taken into consideration. Eight were not proven, while the judge made no finding on five. Two allegations were not pursued.
Ji-Chuen Jason Tsai was sentenced to 18 months’ immediate imprisonment on 21 July 2017. English law means he will be automatically released after serving nine months, indicating he will be released in March 2018 - just after Chinese New Year.
If Tsai co-operates fully with the freezing order, Mrs Justice Rose ruled that he can apply to have the sentence cut from 18 months to 12 months, meaning he could be released in January. ®
The decision is here.