HKSAR v. ROBERT LEON HATCH AND ANOTHER

DCCC1066/2008 & DCCC194/2009 (CONS)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NOS. 1066 OF 2008 AND 194 OF 2009 (CONS)

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Reasons for Sentence

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1.   Defendants, initially, you denied all charges against you. However, after the commencement of trial, guilty pleas were entered as detailed below.

2.   D1, you pleaded guilty to three charges, those charges were Charges 1, 2 and 4. Each was an offence of fraud, contrary to Section 16A of the Theft Ordinance, Cap.210.

3.   D2, you pleaded guilty to four charges, each of dealing with property knowing or believing it to represent the proceeds of an indictable offence, contrary to Sections 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455. These were items 7 to 10 on the indictment.

4.   You admitted the facts of those charges, each of you, and you were convicted.

5.   Charges 3, 5 and 6 were ordered to remain on file not to be proceeded with save with the leave of this court or the Court of Appeal.

6.   On those charges to which you are convicted, the facts are as follows.

7.   D1, you are an American citizen whose status is that of a visitor. D2, you are a Filipino employed by D1 and you were permitted to remain in Hong Kong until 19 February 2008.

8.   Both of you are directors and shareholders of Crown Management Holdings Limited with two bank accounts at the Hongkong and Shanghai Bank. Both of you are signatories and both were required to sign to operate the accounts.

9.   D1, you are a director and shareholder of United Gold Limited. The other director and shareholder was Mr Mark Anthony McGovern. UG had a Hongkong and Shanghai Bank account and both were signatories.

10.   Miss Ji Hope, PW1, an American Korean citizen, is a director of Alpha Omega Realty & Investment Incorporated.

11.   Amy Liu, PW2, is a Chinese American citizen and a director of BACE Financial Incorporated.

12.   PW1 and PW2 were introduced to you, D1, and invested in schemes under your control.

Referring to Charges 1 & 2

13.   PW1 was asked by D1 to invest in a two-part investment plan by initially depositing US$500,000 in CMH’s HSBC account. The return would be 25 times the investment, that is US12.5 million after 60 days.

14.   The second part was to invest US$500,000, and after 20 days, receiving 64 times the deposit, that is, $32 million.

15.   PW1 wired the first amount to CMH’s account on 16 April 2007 and the second amount on 14 May 2007.

Referring to Charge 4

16.   PW2 was introduced to D1 by a friend. She was persuaded by D1 to invest in banker’s debentures operated by UGL.

17.   You, D1, told her that the return would be 240 times the amount of the investment. On 18 October 2007, she and you, D1, signed a contract to this effect. That same day she deposited US$250,000 into UGL’s HSBC account. She was to receive US$60 million in 21 days.

18.   On 19 October, PW1’s husband, Bernard Liu, signed a similar contract with UGL. You, D1, countersigned it and D2 signed as a witness.

19.   When time passed and no moneys were paid, PW2 and her husband came to Hong Kong to look for you, D1. There were meetings held on 11 February, 11 March and 6 June 2008.

20.   Charges 7 to 10 relate to you, D2. These four charges stemmed from the moneys deposited into CMH’s account and UGL’s account and how they were disposed of.

21.   The initial deposit of US$500,000 made to CMH’s account on 19 April 2007 was withdrawn by D1 in 20 separate transactions between 19 April and 2 May 2007. Two of the 20 withdrawals were deposited to your personal HSBC account, D2, on 19th and 24 April 2007 respectively. The two withdrawals were each for HK$50,000 (Charges 7 and 8). D2, you subsequently withdrew the said two sums between 14 July 2007 and 21 September 2007.

22.   The second deposit by PW1 was on 15 May 2007 into CMH’s account and was withdrawn by D1 on 15 May 2007. One of the withdrawals was then deposited into your HSBC’s account between 14 July and 21 September 2007. D2, you withdrew these moneys from your account (Charge 9).

23.   PW2’s deposit of US$250,000 into UGL’s HSBC account on 18 October 2007 was subsequently withdrawn by D1 in six separate transactions between 18th and 22 October 2007. One of the proceeds of these withdrawals ended up in your Citibank account on 22 October 2007. Subsequently, D2, you withdrew that amount from your account (Charge 10).

24.   Both of you are of hitherto clear record. You have no convictions in Hong Kong.

25.   D1, you were previously represented by Mr Poots of counsel who entered mitigation on the previous occasion. He asked me to allow you the full one-third discount despite the late plea of guilty.

26.   I was told that you are 69 years of age, you are now in fact 70, an American citizen, you have a mother in her late 80s, two daughters and a son. You are educated to university level, an engineer by profession.

27.   I was asked on that occasion to adjourn the case to give you opportunity to pay compensation. I was fully prepared to do that and, in fact, did so.

28.   Today, I have been informed by Mr Tse that unfortunately, despite your efforts, you have been unable to raise the money. Therefore, I resolve that we should move now to sentence in fairness to D2.

29.   In respect of D2, Miss Lai has entered mitigation also. I am told that you are 35 years of age, single and a graduate. I was told of the various jobs you had held, ultimately becoming the personal assistant to D1, earning a salary of some $30,000 per month. I am told that your mother is unfortunately very sick with advanced stages of cancer and that your father died some time ago. Also, you have taken it upon yourself to look after D1 to an extent in his advanced age.

30.   The minor role that you played in these schemes was emphasised. The part you played was not a sophisticated part and the total amount involved is approximately $190,000.

31.   Various sentencing authorities were referred to me. I do not need to repeat those referred to me fully, but I have taken them into account.

32.   Turning now to the sentences.

33.   D1, you have pleaded guilty to three serious offences. According to my calculations, the total amount is US$1¼ million. These are serious charges, serious indeed. They were deliberate frauds. You preyed on the gullible nature and, to a certain extent, the greed of the victims. I find it incredible people would accept that the returns you were offering were indeed even possible.

34.   I do accept that you have made sincere efforts to try to repay what you took and I understand that that has not been successful.

35.   I note that you are of clear record and that you are 70 years of age, and whilst the medical report shows nothing positive, you are not generally in the best of health.

36.   D1, as far as you are concerned, I have taken an overall starting point, taking into account the amount involved, the facts of the case, the mitigation advanced, making an allowance for your age and also for your general health. That starting point I take is 4 years’ imprisonment.

37.   Turning to the discount, I do note that the pleas of guilty were only offered once the trial had started and witnesses had attended from aboard. The one-third discount that is offered to a person who pleads guilty at the first available opportunity is clearly not appropriate in this case. However, some discount is your entitlement and I take that to be one-sixth, half the normal discount.

38.   Therefore, D1, allowing you one-sixth discount, that is 8 months, you will go to prison for 40 months on each offence concurrent, that is 3 years and 4 months.

39.   In respect of you, D2, clearly your role was relatively minor. Clearly, you acted under the influence of D1.

40.   I did indicate a range of penalties to your counsel on the last occasion. That range of penalties is appropriate.

41.   I do note the total amount involved is some HK$190,000.

42.   I adopt the same approach as I did for D1, that is I take an overall starting point. That overall starting point is one of 18 months. You will have the same discount that D1 had, that is one-sixth.

43.   Therefore, you will go to prison for a period of 15 months on each charge, concurrently.