HKSAR v. CHEUNG HING CHIK

DCCC 363/2022

[2025] HKDC 296

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 363 OF 2022

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REASONS FOR SENTENCE

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1.  The defendant has of course been convicted after trial of two counts of theft and the sums and the dates as far as the 1^st charge relates to the company being described as SSHL, and the offence was committed between 18 February 2016 and 3 January 2020 with a total of, over that period a total of US$426,200 were stolen from that company.

2.  And then on the 2^nd charge, related to the company of Ling Sing, or LSL, that was between 26 July 2019 and 28 December 2019, a total of US$832,000 were taken from that company.  This of course is a sum in the region in total of HK$10 million, after conversion.

3.  The facts of the case have been outlined in my Reasons for Verdict so I do not propose to repeat them, but in essence we know that the companies themselves were owned by the prosecution witnesses, particularly PW1 and PW2, and in the course of time trust instruments were set up whereby the defendant, who was a qualified CPA who was entrusted by the victims or by the witnesses to handle the affairs of the company through a trust instrument and over the course, the defendant was of course also the signatory to the accounts in respect of both companies.

4.  Over the course of the time set out in the charges, the defendant then, it is found, stole the assets of these companies for his own use, clearly a manifest breach of trust, a clear breach of trust committed over a fairly lengthy period which involved in itself also acts of deception to reinforce the theft.

5.  The defendant, as far as his background is concerned, is a person with hitherto clear record and aged 76 years old.  Because of his age and the rather unusual nature of a person committing an offence of this nature at this advanced age, I obtained background reports on him, psychological reports and psychiatric reports on the defendant to see if what the particular motivation could be for a person such as him to involve himself in criminality of this nature.

6.  The background report I find very helpful because it sets out a lot of the background of the defendant and what he has gone through over the years. He is described as being a 76-year old CPA with a long career in accounting along with various investments or side projects.  He came from a poor peasant family in the Mainland and came to Hong Kong at the age of 7, and been educated in this city.

7.  He was described as working diligently towards his career, establishing his company around at the age of something like 26.

8.  It notes his marital history, also the onset of chronic illness and death of his daughter in 2000, a traumatic event for the defendant, so that after that the defendant became increasingly focused on earning, became more generous, apparently, helping others in financial need.  He begun in various investments or side-projects and is described as losing money in most of them.

9.  In 2004, apparently he engaged in an inheritance fund project in the Philippines aimed at assisting the heir of provenance estates supporting legal proceedings and living expenses for the heir and his family and also helping other peoples in need.  These I am told led to significant expenses, financial mismanagement resulting in living condition poorer than that of most CPAs.

10.  The report tells me that in 2000 to 2011, the defendant was entrusted by the prosecution witness to manage their companies for tax planning purposes. That is clear from the offences the defendant committed.  It says that the defendant used the funds of the inheritance project which he appeared to be obsessed with.  Unforeseen circumstances delayed the completion hindering his ability to repay the prosecution witnesses.  The defendant was made bankrupt in August of 2020.  In respect of this, in his discussions with the probation officer, the defendant acknowledged his moral shortcomings and his failings to pay the prosecution witnesses.

11.  Testimonies from his son and ex-wife highlighted his kind character and past good behaviour.  Those are a feature of the case or of the mitigation that I heard.  The defendant has in the past been generous with people in need and has, certainly in the last few years, looked after his elderly mother with a high degree of devotion.

12.  Naturally, I wanted to find if there were any psychiatric or psychological problems that may have led to the defendant being involved in offences of this nature.  The psychiatric report describes the defendant, fortunately, not suffering from any mental illness, and there is no recommendation to make.

13.  The psychological report made a more in-depth analysis of the defendant’s psychological condition.  It describes him personality-wise as confident, rigid and gullible.  It says “Despite achieving success as a CPA and established his own firm, Mr Cheung faces significant financial difficulty due to his tendency to support individuals he barely knew, believing he could gain monetary or other benefits.  This pattern of behaviour led him into a questionable scheme that solicited his money, prompting him to steal company funds and attempt to maintain his financial support for someone, with the hope of eventually recovering more money from that individual’s inherited estate than he had provided”.

14.  He describes Mr Cheung as unfortunately shows no remorse for the offences.  He forcefully believes he had the right to use the funds of the companies without the consent of the true companies’ owners.  His social judgement was poor.

15.  There was nothing to suggest he suffers from any recognisable psychiatric disorder.  However, the psychological report says that in view of his age, personality traits, the nature of the offences, the risk of reoffending is still present if he is given the opportunity.  Psychological treatment for focusing on the prevention of reoffending is recommended.  Fortunately, it would be that, I think it is submission, that the risk of the defendant reoffending is very low because he is unlikely to have the opportunity to ever do this again, having regard to his bankruptcy, and no doubt the disciplinary proceedings that relate from his conviction for this offence.

16.  I also obtained a medical report on the defendant.  It shows that he has a reported history of diabetes mellitus which is not unusual in a man of his age, and retinol problems.  These are being followed up and of course his present incarceration will mean he will be on strict diet in any event. Nevertheless, the defendant is a man hitherto of clear record and of an advanced age.  There is no doubt about that.

17.  I turn to the approach to sentencing in these cases.  Both the thefts involve a serious breach of trust.  There are guidelines in respect of that offence.  We all can see from the case of HKSAR v Cheung Mee Kiu [2008] 1 HKC 113.

18.  The guideline sentences are of course based on the amount of money that has been stolen.  The category that the defendant falls into is between HK$3 million to HK$15 million, where the starting point should range between 5 to 9 years’ imprisonment.  The overall figure that the defendant has stolen over the course of what would be 4 years of offending is around about HK$10 million, putting it towards the middle of the guideline.  The guideline, of course, is only a guideline, it is not a straightjacket on this court.  The court can take into account numerous factors in relation to the offence to find a correct sentence for the defendant.

19.  I bear in mind the following factors.  That the offences were committed over a lengthy period, against clearly, innocent people.  The two owners effectively of the companies had placed a great deal of trust in the defendant because of his professional background and reputation, and had done that over a considerable period of time.  It was poor judgement as it turned out due to certain factors relating to the defendant’s personality.

20.  The offences themselves were also committed with an element of deception.  The victims were misled as to what was going on and that is a particularly egregious and serious matter in relation to these offences.

21.  Now I must balance against that what are the mitigating factors relating to this particular defendant.  Each person has an individual set of factors that must be considered.  The first one is the defendant’s hitherto clear record.  Now of course a clear record in an 18-year old is different from a clear record in a 76-year old.  It means the man has gone through his life, through his whole career without committing any offences and it is something that is worthy of consideration as to be valued in determining what the appropriate sentence should be.

22.  Secondly, the defendant has the support of his family who have been here present through the sentencing process.  He has worked hard for that family. He has endured considerable personal tragedy in his own life in relation to his daughter.  The defendant has lived a long and respectable life in Hong Kong and has pursued a career, a respectable career.  I note also the support that the defendant has given to his mother which cannot be continued whilst he is incarcerated.  She is a very old lady.

23.  Finally, the defendant is elderly.  He is 76 years old.  That is a considerable period of life that has been lived so far.  Now one of the problems one often encounters in the elderly is a rigidity of thinking and combined with a gullibilty of thinking and the psychologist in this case has identified those as being clear factors in the defendant’s offending.  He described him originally as confident, rigid and gullible, and later, again as confident, rigid and gullible and it is clear that those factors of his personality have led him into this offence and have led him into this behaviour which has led to the offence.  These are qualities that may not exist in a younger man and so do provide some mitigation for the defendant in this case.

24.  I take into account all those factors and also the guideline that is given for these type of offences.  Any sentence of imprisonment will impact harshly on a man of this age, more harshly than it would do on a younger man and I accept that as something I must also take into account when determining the level of sentencing.  However, age does not excuse one completely and a sentence of imprisonment must be imposed.

25.  What I shall do is simply impose a sentence of 5 years’ imprisonment on each charge, to be served concurrently.  A total of 5 years’ imprisonment. That is the order of the court.