When Mr Fred Ho’s jewellery shop sold $2 million worth of precious stones to a lawyer in June 2006, he never imagined the sale would entangle him in a legal battle for more than three years.

Most of the money used to buy the gems belonged to rogue lawyer David Rasif’s clients, Mr George Raymond Zage III and Madam Kaori Kathleen, an American expatriate couple.

Soon after Rasif skipped town, the Zages sued Jewels Defred and its CEO, Mr Ho, 48, to recover the funds used to buy the 27 jewels.

On Dec 30, 2008, the High Court ruled that Jewels Defred and Mr Ho should not be held liable.

The Zages appealed and on Feb 10 this year, the Court of Appeal ruled that except for a partial return of $270,000, Mr Ho’s shop could keep the rest of the money.

In an interview with The New Paper, Mr Ho and his wife, socialite Sharel Ho, described how relieved they were that the case was finally over.

Mr Ho, a permanent resident from Hong Kong, said: “I feel that a huge burden has been lifted from my shoulders. Throughout the trial, I believed I wouldn’t be found liable as my conscience is clear.”

Late last year, he relocated his shop from Grand Hyatt Singapore to Mandarin Gallery and renamed it Defred Jewellers, where The New Paper interviewed him.

Lawyers

Recounting the day Rasif bought the jewels, Mrs Ho, 35, a permanent resident from Malaysia, said: “My husband and I aren’t usually in the shop unless we have clients’ appointments.

“That day, our staff told us a lawyer bought some diamonds and jewellery. We didn’t suspect anything then because if you can’t trust lawyers, who can you trust?
 
“The last thing you expect is for them to run away with their clients’ funds.”

Then came news of Rasif disappearing with his clients’ money on Jun 6, 2006.

Mrs Ho, who is also Defred Jewellers’ managing director, said: “My husband and I were watching the news at 10.30pm on Channel 8 and we remembered our staff telling us about a lawyer buying our jewels.

“Fred called the staff to ask if it was the same lawyer who skipped town and they confirmed it.”

By then, the goods had been released to Rasif after the latter’s cheques were cleared.

Mrs Ho said: “There was nothing we could do. It was a pure business transaction – we didn’t do anything wrong.

“Even though one of the cheques stated it was from ‘Clients’ Account’, lay people like us wouldn’t understand it’s actually the lawyers’ clients’ funds.

“On our side, my staff released the goods only after the cheques were cleared – there was no reason to be suspicious.”

A few days later, Mr Ho received a letter of demand from the Zages’ lawyer, requesting that the $2 million be returned.

The Zages sued when their demand was not met.

Mr Ho, who has been designing jewellery for 26 years, said: “When the writ was served on me, I was shocked. I just didn’t know what to do.”

He engaged a team from Drew & Napier, comprising Senior Counsel Hri Kumar, Mr Gary Low and Mr Wilson Wong.

Mr Ho and his wife refused to let the lawsuit affect them.

They continued their business as usual and, in the meantime, even worked on relocating their shop to its present premises.

Last June, the couple launched Just Diamonds by Defred, which sells diamonds through franchise associates.

There was a silver lining – the publicity surrounding the case made more people notice Defred.

Mr Ho said: “Initially, some people had the misperception that my shop was dishonest and only cared about making money.

“But their misperceptions lasted only a while and I actually had more customers after the case.”

His and his wife were not worried that they would be found liable but that the trial would drag on.

Mr Ho said: “We just wanted the verdict to be out as soon as possible because lawyers charge by the hour.”

He, however, declined to talk about the legal fees.

Mrs Ho said she and her husband do not harbour hard feelings against the Zages.

She said: “We’re all victims. The couple sued because they were trying to get their money back. We understand how they feel about losing their money too.”

The staff who served Rasif are still working for Defred.

Mr Ho said: “It’s not their fault. Who would have thought Rasif would target my shop?”

The legal battle has also made the couple more careful.

Mr Ho said in jest: “Maybe the next time someone asks to buy many diamonds, I’ll have to see who they are.”

Mrs Ho said the lawsuit made her and her husband understand that lawyers open separate accounts for clients’ money.

She reflected: “It’s really an expensive lesson.”

Attempts to contact the Zages for comment were unsuccessful.

This article was first published in The New Paper.

» $270,000 to be returned