HKSAR v. HO LAU KING

DCCC 552/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 552 OF 2016

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REASONS FOR SENTENCE

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1.  The Defendant has been convicted after trial of one count on the indictment, namely the offence of fraud, contrary to Section 16A of the Theft Ordinance, Cap. 374.

2.  I do not intend to repeat the facts again.  I have given full reasons in my verdict delivered on 14 December, 2016.  Briefly, I found that the Defendant between 27 October, 1999 and 31 October, 2012, by deceit, namely by representing to officers of the Social Welfare Department that she and her family had paid monthly rent of $3,800 for their residence situated at DD 85, Lots 29-31, Tung Kok Wai, Fanling, New Territories, and with intent to defraud, induced the officers of the Social Welfare Department to make extra payment to her and her family totaling HK$571,042.25 as comprehensive social security assistance (hereinafter referred to as CSSA) which resulted in a benefit to her and a prejudice to the  Government of the Hong Kong Special Administrative  Region. I was satisfied beyond all reasonable doubt that by falsely representing to the officers of the Social Welfare Department that she and her family had paid monthly rent of HK$3,800 for their residence when they had not paid any rent, the Defendant was acting dishonestly.

Previous Convictions

3.  The Defendant has a clear criminal record. 

Antecedent Statement & Mitigation

4.  The Antecedent Statement was read into the record by the Prosecution. It disclosed that the Defendant is now aged 50 years. She was born in China and educated to Form 2 in a secondary school in Mainland China.  In Hong Kong, she has been a housewife.  It disclosed that she suffered from depression, hypertension and diabetes mellitus. She lived with her husband and 4 children.  She was not a drug addict. She did not have a triad background.

5.  Defence Counsel asked the Court if it intended calling for reports before sentence in light of the background of the case, and said he would reserve mitigation if the Court intended to call for reports.  I adjourned this matter until 11 January, 2017, calling for a Background, Medical, Community Service, Psychiatric and Psychologist Reports, remanding the Defendant in custody, and reminding the Defendant that the Court kept all options of sentence including an immediate custodial sentence open to itself.  When the matter resumed before me on 11 January, 2017, I had before me the Background, Psychiatric and Psychologist reports.  Defence Counsel took no issue that the Community Service and Medical Reports were not available. Through an oversight, these had not been sought.  After hearing mitigation from Counsel, I adjourned sentence to 16 January, 2016 to deliver my reasons for sentence.   However, the matter was adjourned until 26 January, 2017 as the Court was unwell on 16 January, 2017, and there was no hearing on 16 January, 2017. In the interim, the Community Service and medical reports were called for as well.  When the matter resumed on 26 January, 2017, all the reports that I had called for were available.  Mr. Wu was provided with the copies of all the reports. Mr. Wu indicated that he had explained the contents of all the reports to the Defendant and there was no objection to the contents of Psychiatric and Psychologist reports. In respect of the Background Report, there were some areas the Defendant disagreed with. On page 2, under ‘employment’, the Defendant agreed she was a shampoo girl but said she was the owner of the hair salon in question.  She also said she got married in 1990, not in 1994.  For paragraphs 5 and 6, I was told that the references therein to “Li Yau” should be to “Ah Yau”.  She also never referred to “Li Yau” as being the “late Li Yau” – she did not know that.  In respect of paragraph 7, she disputed that she had ever been offered a public housing unit in Tin Shui Wai. She also said that her monthly repayment to the Social Welfare Department was HK$1,200, and not $1,000 as set out in paragraph 8 of the Background Report. In respect of the contents of the suitability report for community service order, Mr. Wu submitted that in paragraph 1 where it was said that the Defendant had not committed to compensate the victim, this was inaccurate as she had committed to repaying $1,200 to the Social Welfare Department which was deducted from her disability allowance since 2014. Community service was not recommended in the report. As for the Medical Report, Mr. Wu submitted that the name of the clinic in paragraph 2 was wrong – it should be the ‘Shek Wo Hui’ Outpatient Clinic. Other than these inaccuracies, the Defendant agreed with the contents of these two reports.   Mr. Wu had very helpfully prepared his mitigation in writing and submitted 5 letters in mitigation, from the Defendant’s husband and 4 children, seeking leniency on behalf of the Defendant. He supplemented his written mitigation in Court. After hearing further mitigation from Mr. Wu, I adjourned the matter until today to deliver sentence.

6.  In his mitigation, Mr. Wu emphasized that the Defendant is now the recipient of the ‘disabled special allowance’ of $2,000 a month. Her 4 children are now grown up. The Defendant was an old fashioned country woman with limited education.  She had started to repay the Social Welfare Department HK$1,200 each month since 8 January, 2014, which is deducted from her disability allowance.  He accepted that an immediate custodial sentence was inevitable and sought leniency on behalf of the Defendant.  In his further mitigation, Mr. Wu asked the Court to consider an exceptional course, and impose a non-custodial sentence, by way of making a community service order, and said the Defendant was willing to perform community service.  He also said that the Defendant was now remorseful.

7.  I have carefully considered all that has been urged upon me in mitigation on behalf of the Defendant by Mr. Wu, as well as the contents of all the reports that I have called for.  

Sentence

8.  The penalty for offences of fraud is 14 years’ imprisonment upon conviction upon indictment.  This is set out in Section 16A of the Theft Ordinance, Cap. 210. 

9.  The Court of Appeal in HKSAR v. Leung Wai Kei, CAAR 6/2006,  a review against the sentences imposed in Tuen Mun Magistracy for offences of ‘procuring entries in bank records by deception’ dealt with the CSSA Scheme and offences of defrauding public funds. Honorable Cheung, JA, in delivering the judgment of the Court of Appeal, said in his judgment (at paragraph 27 of the English translation) that the CSSA Scheme was intended to help those in genuine need of assistance, and that our society did not tolerate any act of defrauding public funds by dishonest means.  He further said that the Court did not endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds.  Each case presented its own facts and each defendant had his own circumstances, and it would go against sentencing principles to lay down a hard and fast rule of adopting immediate imprisonment as a starting point.  The Court held that factors,  such as whether the defendant had pleaded guilty, the amount involved and the length of time over which the offence was committed, the circumstances leading to the offence, the purpose for which the money had been used, the defendant’s character and previous records, the circumstances specific to the defendant, and whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid to him, should be considered in determining whether a severe sentence is to be imposed.  The Court further said that it agreed that in appropriate cases, the court was under a duty to impose a deterrent sentence in order to curb the offence. The Court of Appeal held that the court should first consider whether a custodial sentence is necessary.  If a custodial sentence is appropriate, the court may consider imposing a community service order in lieu of imprisonment or suspending the sentence. In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.   The Court of Appeal also set out, in paragraph 47 of the English translation of the judgment, the appropriate terms of imprisonment                    where a defendant is convicted after trial and an immediate custodial sentence is warranted. The Court of Appeal held that where the amount involved was over $200,000, the term of immediate imprisonment should be over 24 months.

10.  The Defendant has been convicted after trial and she has shown no remorse, although I was informed by Mr. Wu yesterday that the Defendant had told him yesterday that she was remorseful.  The offence was committed over a period of some 13 years, from 1999 to 2012, in the course of which she submitted 69 purported rental receipts to the Social Welfare Department to support her application for extra payment for rent as part of her CSSA, claiming that her family lived at the subject premises and paid monthly rent of HK$3,800 at 24 of the 36 review interviews conducted by the Social Welfare Department (paragraph 3 of the Admitted Facts, Exhibit P97) when in fact no rent was ever paid by the Defendant for her and her family to live at the subject premises. The claim was false from its inception. It was an intentional and persistent fraud.  The extra payment that she received was HK$571,042.25, what can be described as a large sum.  PW10 in his testimony said that an agreement was reached with the Defendant when he conducted an interview with her on 26/6/2014 that she would repay the overpayment – a sum of HK$1,200 was to be deducted from the CSSA payment she was entitled to – he said the deductions began from August 2014. At the current rate of repayment of $1,200 a month, full repayment to the Social Welfare Department would   take 475 payments (about 39 years).  There is no information as to whether the money was spent on household necessities, but I am prepared to assume that the Defendant did spent the money on household necessities.  The Defendant has a clear record. 

11.  According to the Background Report, the Defendant came to Hong Kong with her children to reunite with her husband whom she had married in China. But she failed to adjust to the stress of his drug addiction, unemployment and financial stringency.  Because of this, she applied for CSSA on 18 October, 1995.  The Psychiatric Report discloses that the Defendant had been known to the mental health services since the 1990’s when she ‘presented with a few months of poor sleep, anxious mood and somatic discomfort including chest discomfort, palpitation, dizziness and shortness of breath’. She was referred to the psychiatric outpatient clinic and was diagnosed to suffer from generalized anxiety disorder, and had regular follow-up and good compliance to medication treatment.  Her mental condition was described as stable and she did not need any psychiatric inpatient treatment. She was viewed as mentally fit to serve any ordinary sentence. The Clinical Psychologist in the Psychologist Report described the Defendant as a ‘primitive individual who is weak in poor problem-solving and consequential thinking in handing the financial and rental problems which resulted in the fraud of social assistance in the index offence. She is negative, worrisome and vulnerable to stress.’ She further opined that psychological treatment on her deteriorated mood triggered by the conviction would be beneficial to her mental well-being’.  The medical report disclosed that a general examination did not disclose any gross abnormality.  The Defendant’s medical condition, as well as her psychiatric condition, can, in the Court’s view, be adequately dealt with. There is medical treatment and attention available at all Correctional Services institutions in Hong Kong.  

12.  Having considered all the circumstances of the offence and of the Defendant, in my view the only appropriate sentence is a custodial sentence.  I have considered whether a community service order would be appropriate in the circumstances.  Community service is not recommended. Nor do I think it an appropriate sentence in the circumstances of the present offence. 

13.  In Leung Wai Kei, supra, the Court of Appeal indicated that where the amount involved was over $200,000, the term of immediate imprisonment should be over 24 months.  Here the amount involved is HK$571,042.25.   In my view the appropriate sentence would be 3 years’ imprisonment, having considered the circumstances of the offence and of the Defendant.  I have also borne in mind that the Defendant has made some repayment to the Social Welfare Department.  I do not find any exceptional circumstances to warrant my suspending this sentence. The Defendant is sentenced to 3 years’ imprisonment.