HKSAR v. CHOI YUET YAN

DCCC209/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 209 OF 2012

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Reasons for Sentence

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1. Defendant has pleaded guilty to seven charges. The 1st, 4th, 6th, 7th, 8th and 11th charges relate to using false instruments or copies of false instruments. The 10th charge relates to a money laundering offence. The other three defendants in the case, upon the prosecution offering no evidence, have been acquitted.

2. The facts admitted by defendant can be summarised as follows.

3. Between August 2007 and September 2010, defendant worked in ING Asia Private Bank Limited (“ING”) as a Relationship Manager. In January 2010, ING changed its name to Bank of Singapore. 

4. In October 2007, a 64-year-old retired lady, Madam Lui Sui-ying, Gloria, PW1, opened an investment account at ING.  She had been acquainted with the defendant since 2000.  All dealings between PW1 and ING had to be made via defendant.  When defendant left employment with ING, another relationship manager, Hung Chee-yan, Ronnie, PW2, took over the accounts of defendant’s clients, including PW1 and defendant’s brother-in-law, Sze Ming-kwok, (“Sze”) who was originally D3 in this case.

5. Later, PW2 found PW1 had acted as Sze’s guarantor for the trades in Sze’s investment account.  PW2 contacted PW1 and found out that PW1 did not know Sze and never acted as Sze’s guarantor.  Some documents purportedly signed by PW1 had never been signed by her.  The offences were then discovered.

6. The charges can be divided into four groups of offences.

The first group

7. By using a false copy of authorisation letter dated 26 September 2008, Exhibit 1, defendant transferred $500,000 from PW1’s account to the bank account of a company called Superbase Industrial Limited (“Superbase”). The money had not been returned to PW1 when defendant was arrested on 30 September 2010 (1st charge).

Second group

8. By using a false copy of instruction letter dated 6 October 2008, Exhibit 2, defendant transferred a bond of ¥50 million from PW1’s account to Sze’s account (4th charge).

Third group

9. Defendant also forged three authorisation documents, Exhibits 3, 4 and 6, for charging the whole portfolio in PW1’s account as security to guarantee the trading of Sze’s investment account (the 6th, 7th and 11th charges). 

10. On the strength of Exhibits 3, 4 and 6, the whole portfolio in PW1’s account became the security for trading of Sze’s account.  The amount of security involved was about US$2 million.  Sze’s account was in negative balance of US$102,827, US$474,766 and US$809,442 in December 2008, January 2009 and February 2009 respectively.

Fourth group

11. A false confirmation letter dated 10 December 2008, Exhibit 5, was used in which PW1 purportedly stated she knew Sze would draw a loan of US$1.3 million and she knew her liability to guarantee the loan obligation of Sze (8th charge).  As a result, ING approved a loan of US$1.3 million to Sze and deposited into his account.  Later a sum of US$1.29 million was transferred from Sze’s account to a bank account held by a company called Lingstar Enterprises Limited (“Lingstar”). Defendant and her husband, Shi Ming-yi, Vincent, formerly D2 in this case, were the only shareholders and directors of Lingstar (10th charge).

12. Defendant was arrested on 30 December 2010. Under caution she remained silent.  She now accepts that she had used Exhibits 1 to 6 which she knew to be false instruments.

Background

13. Defendant is aged 45, married with two children aged 9 and 15 respectively.  She has a clear record.  It can be seen from a mitigation statement signed by the defendant that she graduated from university in 1990.  Through part-time studies she has obtained a law degree.  Since her first job in a bank as a management trainee, she had been working in the banking industry with several promotions with a break of two years when her daughter was diagnosed with speech delay.  In 2007, she resumed work as a private banker at ING. 

14. Defendant says in her mitigation statement that she had tried to return the $500,000 to PW1 who did not reply to her lawyer’s letter offering to repay the money.  She further says PW1 had actually made a profit from her Japanese Yen Bond transaction.  The guarantee that PW1 gave for Sze was never called upon to pay.  Neither PW1 nor the bank has suffered any loss.  Defendant further states in her statement that none of the events were pre-planned.  She says her mother-in-law who is suffering from the final stage myeloma cancer has been adversely affected by what she has done.  Defendant says she is now remorseful.

Mitigation

15. In his mitigation for defendant, Mr Egan says PW1 and defendant were friends.  Defendant has repaid through her solicitor the money she stole in charge 1 together with interest in a total sum of $502,186.15 to Bank of Singapore on 14 June 2012.  The $500,000 defendant obtained in charge 1 was to repay two loans advanced to her by her husband that she used to speculate in property market.  In respect of the Japanese Bond, the bond has been returned to PW1’s account with a profit.  Regarding the loan of US$1.3 million granted to Sze, the money was transferred to the account of the defendant’s husband’s company and used to support the opening of a Letter of Credit for business.  The money had been repaid to the bank.  Sze’s account had been closed with a credit balance.  PW1 was never called upon to pay for the loss in Sze’s account.  It is submitted that full restitution has been made.  Neither PW1 nor the bank has suffered any loss.

16. Mr Egan further asks the court to consider that the guilty plea of defendant reflects her remorse and saved the time for trial.  Defendant has a previous unblemished character.  She has been engaged in voluntary work in the past years and can produce receipts of a donation in the total sum of $59,000.  A letter from the Hong Kong Red Cross is submitted to the court proving the defendant’s voluntary work with them from 2003 to 2011.  Mr Egan describes the defendant as falling from grace and her career in the banking sector has been ruined.  It is highly unlikely that she will commit the offences again.  While accepting that it was a breach of trust case, Mr Egan submits that there is no need to pass a deterrent sentence.

17. The prosecution, relying on HKSAR v Cheung Ka Wo, Johnny [2002] HKC 517 and HKSAR v Ng Sweei Thiam & Others [2000] 1 HKLRD 772, submits that the gravamen in the present case is the potential loss to PW1 and the bank as a result of the use of the false instruments.  In reply, Mr Egan submits that the two cases are not of assistance to the court as the facts of the two cases are quite different.

The sentence

18. It was a breach of trust case.  Moreover, there are aggravating features in the case. 

19. First, PW1 had been acquainted with the defendant since year 2000.  All dealings between PW1 and ING had to be made via defendant.  It can be seen that both PW1 and the bank reposed a high degree of trust in defendant.

20. Secondly, defendant created a particularly high economic risk to one victim, a 64-year-old retired person.  Defendant had caused $500,000 and a Bond of ¥50 million equivalent to about HK$4.85 million (using an exchange rate of HK$97 per ¥1,000) to be transferred out from PW1’s account.  She was further put under the risk of paying the loss in trading of Sze’s account and his loan of US$1.3 million, equivalent to about HK$10 million (using exchange rate of $7.75) granted to Sze.  Sze’s investment account was at one time in negative balance of about US$800,000, equivalent to about HK$6.2 million.  The amount of security involved was about US$2 million, equivalent to about HK$15.5 million. 

21. Thirdly, there was no imminent reasons that drove the defendant to commit the offences.  She only stole the $500,000 from PW1 to repay the loan advanced to her by her husband.  She further put PW1 at risk of paying the bank if Sze lost in his investment and failed to repay the loan.  Defendant just used the money in PW1’s account as her own to facilitate her brother-in-law in his speculation or investment.

22. Fourthly, the offences were committed over a long period of time.  Although it is unclear when was PW1’s security discharged, it is clear that on or about 7 April 2009 defendant was still using Exhibit 6 to cover up the fraud of guaranteeing Sze’s obligations owed to the bank.  The fraud last for at least more than six months.  The $500,000 stolen from PW1’s account was not repaid by defendant when she left employment.  It was not returned until 14 June 2012 when defendant’s solicitor paid back to Bank of Singapore.

23. I do not accept the defendant’s claim in her mitigation statement that none of the events were pre-planned.

24. Fifthly, the defendant’s conduct seriously damaged her employer’s reputation and impaired the public confidence in our banking system. 

25. The two authorities referred to by the prosecution concerned very different facts and are therefore not of much assistance to this court.  I accept that neither PW1 nor the bank has suffered any loss.  However, I agree with Ms Catherine Ko, Senior Public Prosecutor for the prosecution, that it is the risk of potential loss which is important in this case.  PW1 or the bank stood at the risk of losing as much as US$2 million in the guarantee for Sze.  In my judgment, it was a very serious breach of trust case.  A deterrent sentence is called for.  The only option of sentence is imprisonment.

1st Charge

26. There is no guideline for sentence in the offence of using false instrument or copy of false instrument.  In my judgment the amount of the money being misappropriated or the potential loss is one important factor.  By using the false instrument, a copy though, defendant stole $500,000 from her client’s account.  It was a breach of trust case.  I will use the guidelines in HKSAR v Cheung Mei Kiu [2006] 4 HKLRD 776 as reference.  I take 2 years and 3 months’ imprisonment as a starting point. Defendant will have one-third reduction for a plea of guilty.  She has now made full restitution.  I will give a further reduction of 3 months.  On charge 1 she should be sentenced to 15 months’ imprisonment.

4th charge

27. By using the false instrument defendant in effect stole from PW1’s account the Japanese Bond which is worth about HK$4.85 million.  Whether defendant or Sze used the bond as a security or other purposes is not important as defendant had appropriated it.  PW1 stood at the risk of losing all the money.  I will also use the guideline in Cheung  Mei Kiu as a reference.  The starting point for 4.85 million should be about 5½ years’ imprisonment.  Taking into account that all the Japanese money had been transferred back to PW1’s account by July 2009, I take 4 years as the starting point.  Defendant will get one-third discount for her plea of guilty. On charge 4, she should be sentenced to 32 months’ imprisonment.

6th, 7th and 11th charges

28. On these three charges defendant used different false instruments for charging the portfolio in PW1’s account as security to support the trading of Sze’s account.  The amount of security involved was about US$2 million or HK$15.5 million.  Though the money in PW1’s account was not withdrawn, PW1 or the bank stood at the risk of losing the money that Sze might lose in his investment account.  The risk is evidenced by the fact that Sze’s account was in negative balance in December 2008 and January 2009 and as high as about US$800,000 in February 2009.  I will use 3 years’ imprisonment as the starting point for each of the three charges and reduce the sentence to 2 years’ imprisonment, the sentences of these three charges, being part and parcel, to run concurrently with each other.

8th and 10th charges

29. By using the false instruments in charge 8, a loan of US$1.3 million equivalent to about HK$10 million was obtained and eventually transferred to Lingstar which was owned by the defendant and her husband.  The money was used to open a Letter of Credit.  Using Cheung Mei Kiu as a reference and taking into account the money had been fully repaid to the bank, I use 5 years as the starting point and reduce it by one-third for the plea of guilty.  The sentence should be 40 months, i.e. 3 years and 4 months’ imprisonment on each of these two charges and the sentences should run concurrently.

30. For this series of offences, I think a total term of 4 years and 10 months’ imprisonment should sufficiently reflect the overall criminality of all the offences. 

31. Defendant has a clear record.  She has ruined her career in the banking sector.  She has participated in voluntary community work for many years.  For these factors I will allow a reduction of 2 months’ imprisonment.  I will reflect this reduction by reducing the overall sentence to 4 years and 8 months’ imprisonment.

32. Defendant is sentenced as follows:-

1st charge - 15 months’ imprisonment;

4th charge - 2 years and 8 months’ imprisonment;

6th, 7th and 11th charges - Each sentenced to 2 years’ imprisonment all run concurrently;

8th and 10th charges - Each sentenced to 3 years and 4 months’ imprisonment, all run concurrently.

33. The total sentences in the 6th, 7th and 11th charges, i.e. 2 years’ imprisonment shall run consecutively to the sentence in the 4th charge. 

34. The sentences in the 1st, 8th and 10th charges shall run concurrently with sentences in other charges.  As a result, the total term of imprisonment is 4 years and 8 months.