HKSAR v. MAK CHAI KWONG AND ANOTHER

DCCC 956/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 956 OF 2012

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Reasons for Sentence

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1.  D1, Mr MAK Chai-kwong, and D2, Mr TSANG King-man, are now called upon to settle some old scores, to use Mr KWOK’s words, that they had owed for over 20-odd years.

2.  During the time, MAK and TSANG had served Hong Kong well and earned respect from many, as evidenced by the mitigation letters and commendation letters placed before me.

3.  The offences committed by both defendants can be described as PTA fraud.  The Private Tenancy Allowance Scheme in the 80s, had many structural deficiencies with it that had lured some civil servants who thought they were cleverer than the scheme, to abuse the scheme to their advantage.

4.  MAK and TSANG could have simply cross-leased their flats and obtained PTA to pay for their mortgage.  Instead of engaging in simple cross-leasing, which was not illegal, MAK and TSANG chose to obtain their PTA through cross-holding and cross-leasing, by doing so, MAK and TSANG, together with their family members, could live in their own property.  The additional benefit of the illegal agreement, when compared to simple cross-leasing, was that any money that MAK and TSANG had spent on the flat they “rented to reside” would be spent on their own property.

5.  MAK had a beneficiary interest in the flat that he leased from Mrs TSANG, ie PAU.  He applied for and obtained PTA knowing that he had such interest in the property.  The total over‑claimed PTA claimed by MAK, amounting to $209,792.33 had been fully repaid with interest after conviction, ie on 28 June 2013.

6.  TSANG had a beneficiary interest in the flat that he leased from Mrs MAK, ie WONG.  He applied for and obtained PTA knowing that he had such interest in the property.  The total over‑claimed PTA claimed by TSANG amounting $363,608 had also been repaid with interest after conviction, ie on 28 June 2013.

7.  Mr KWOK and Mr CHENG urged me to suspend any term of imprisonment that I would pass on MAK and TSANG for the reasons given in their respective submissions.  I do not propose to repeat the contents of the written submissions, they are self-explanatory.

8.  I have gone through all the materials placed before me.

9.  Some of the mitigation letters are quite touching, for example, the one by the four cousins of MAK with the home-made driving test result, brought back many fond memories of bygone years.  Some mitigation letters, with respect are more prototype.  I am indeed surprised to see that there are many friends of MAK and TSANG who still believe in their innocence. 

10.  From the materials placed before me, I accept that both MAK and TSANG have in the past made quite outstanding contributions to society.  On the other hand, I am aware that they should be sentenced for the offences that they had committed rather than simply on the basis of their previous character.  (See the judgment of Mayo JA at page 11 of the judgment of Leung Yat Ming)

11.  I have considered all the authorities cited by learned counsel.  The Court of Appeal, in Pau Wai Hong CAAR No. 3 of 2004, after going through Lau Ming Chu, Sin Law Yuk Lin Agnes v Another, Hau Kam Chor and finally Leung Yat Ming, they all concerned PTA fraud, said at paragraph 19:

“It was plainly the intention of this court to state that a custodial sentence should normally be imposed. In all cases of this kind, it is to be expected that such offenders, who are invariably to be regarded as having exemplary character by virtue of their position as senior Government servants, will normally go to prison for fraudulent behaviour on this scale. They are people who will have every advantage in life and who, motivated by reasons of sheer greed, have acted not only in breach of the general trust reposed on them to act honestly towards the Government which has employed them but also fraudulently towards the public whose taxes are utilised in the payment of such benefits as well.”

12.  The aforesaid paragraph applies to the present case of MAK and TSANG.

13.  In fairness to the defendants, I accept that the standards to be expected from civil servants are much higher today than it was in the 1980s.  The culpability of MAK and TSANG should be read in the light of the standards perceived by what the community did in the 80s.  A sentencer should not see things with all the benefits of hindsight.

14.  The offences committed by MAK and TSANG were committed at a time when they did not have the choice of choosing between PTA and Home Financing Scheme.  The PTA scheme had many structural deficiencies.  The cross-holding part of the illegal scheme disentitled the defendants to any PTA but they could have obtained and maximised their PTA entitlements through simple cross-leasing.  When seen in this light, the illegal scheme that MAK and TSANG embarked did not yield them any additional monetary gain. The culpability of MAK and TSANG was on the low side of the scale.  The PTA scheme had been abolished and there is no likelihood that such abuses will ever occur again, not in the form of PTA fraud at least.

15.  Taken all matters into account, including the staleness of the offences, the structural deficiency of the PTA scheme, the positive good character of MAK and TSANG, their outstanding contributions to society, the final but full restitution albeit made only after their convictions, I come to the conclusion that justice is best served by a suspended term of imprisonment.

16.  On Charge 1, I sentence MAK and TSANG each to 8 months’ imprisonment, the term will be suspended for a period of 2 years.

17.  On Charge 2 and 3, I sentence MAK to a term of 6 months’ imprisonment for each charge, the terms will also be suspended for a period of 2 years.

18.  On Charge 4, 5 and 6, I sentence TSANG to a term of 6 months’ imprisonment for each charge. The terms will also be suspended for a period of 2 years.

19.  All terms of imprisonment are to run concurrently with each other.