HKSAR v. LAI WAI HO

CACC 392/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 392 OF 2006

(ON APPEAL FROM DCCC NO. 1006 OF 2005)

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

1. This applicant seeks leave to appeal against a sentence of three years and eight months’ imprisonment imposed on 6 September 2006 by Deputy Judge C P Pang in the District Court.

2. The applicant was one of the three defendants in a trial upon a charge sheet with three charges:

(1)	The first charge was conspiracy to defraud, wherein it was alleged that between March 2002 and August 2004 he (as the third defendant, D3) conspired with the first and second defendants (D1 and D2) and with another to defraud New York Life Insurance Worldwide Ltd (‘New York Life’) by falsely representing to that insurance company that premiums paid under policies arranged by a company called Silver World Limited (‘Silver World’) were paid by potential policyholders whereas, in truth, there existed no genuine buyers of the insurance policies; the objective of which was to induce the insurance company to pay Silver World commissions in advance.
(2)	The second charge was directed against D1 and D2 alone.  It was a conspiracy to defraud of precisely the same kind but this time directed against two insurance companies and spanning the period January 2003 to April 2004.
(3)	The third charge was one against this applicant alone of using a copy of a false instrument, contrary to section 74 of the Crimes Ordinance, Cap. 200.  The false instrument was a certificate issued by the University of Windsor in someone else’s name which the applicant had used in June 2001 to secure a position as an officer of an insurance broking company, Sino Cheer, which position he was not, but for the type of qualification represented by the certificate, entitled to hold.

3. What happened in the case of Silver World was that New York Life was led to believe by the use of false proposal forms and other documentation that Silver World was introducing a large number of clients to take out insurance policies; the defendants arranged millions of dollars worth of premium payments to New York Life; and in return commission was paid to Silver World up to about 130% of the premiums.  The net sum fraudulently obtained in the case of the first charge was $1.25 million and in the case of the second charge $2.87 million.

4. All the defendants pleaded not guilty and were convicted after trial. 

5. The sentencing judge noted that the crime was a calculated and premeditated scheme and was sure that D1 and D2 and a person called Wood had orchestrated the conspiracy and had pocketed the proceeds of the offences.  He concluded that this applicant took instructions from those two for the operation of Silver World, that he played a lesser role than D1 and D2 and that his involvement could be regarded as “operational”.  There is no evidence one way or the other as to the financial gain gleaned by this applicant.

6. None of the defendants had previous convictions. 

7. In relation to the first charge, the judge took a starting point of five years’ imprisonment in the case of D1; a starting point of four and a half years’ imprisonment in relation to D2; and a starting point in D3’s case of four years’ imprisonment.  He saw no mitigation in D1’s case and so sentenced D1 to a term of five years’ imprisonment on this charge.  He noted that D2 was D1’s wife who would have been in difficulty in refusing to co-operate with her husband and for that reason and also because of the position of the couple’s children, he reduced her sentence by an overall period of eight months, resulting in a sentence on this charge of three years and ten months’ imprisonment.  In the case of this applicant, the judge gave four months’ credit because the applicant challenged none of the evidence and did not himself testify, an unusual and in general an incorrect basis for a discount in sentence.  The result was a sentence of three years and eight months’ imprisonment.

8. In addition, he sentenced the applicant to a term of one year’s imprisonment for the third charge, and ordered that to run concurrently with the sentence imposed in relation to the first charge because, he said: “I … treat it as part and parcel of the conspiracy.”  This makes a total of three years and eight months’ imprisonment.

9. For reasons that we shall shortly identify, it is necessary to record also the sentences imposed upon D1 and D2 in respect of Charge 2.  In that regard, he sentenced D1 to a term of four years’ imprisonment and D2 to a term of 3½ years’ imprisonment and ordered these sentences to run concurrently to the sentences imposed upon them for the conspiracy covered by Charge 1.

10. It is, with respect to the sentencing judge, a little difficult to follow his approach in relation to the first and second charges.  The second offence secured a profit more than double that secured by the first conspiracy, yet the sentences on D1 and D2 for the offence covered by the second charge were less.  The fact that the time span covered by the second charge was shorter than that covered by the first does not in our judgment account for the difference, given that both offences spanned a long time.  More particularly what we have, in the result, is a five-year term imposed upon D1, whose role was significantly greater than that of the applicant, whobenefited very substantially in financial terms from the fraud and to an extent that, we can safely assume, was much greater than did this applicant, and who was convicted of two conspiracies, not one, and in respect of an overall amount three times greater than the amount covered by the first conspiracy of which this applicant was convicted; and yet this applicant received a sentence of a little over one year less.

11. We think in the circumstances that the appropriate sentence in relation to the first charge in the case of this applicant is one of three years’ imprisonment.  We grant the applicant leave to appeal against sentence and, treating the hearing of this application as the appeal, we allow the appeal, set aside the sentence of three years eight months’ imprisonment in relation to Charge 1 and substitute a sentence of three years’ imprisonment.

12. This leaves the question of the sentence in relation to Charge 3.  We do not take issue with a sentence of one year’s imprisonment imposed in relation to this charge and that sentence will stand.  The question that therefore remains is one of totality. 

13. It was inappropriate for the judge below to treat this offence as part and parcel of the conspiracy the subject of Charge 1.  The Charge 3 offence was committed prior to that conspiracy and in the setting up of a company separate from Silver World, a company called Sino Cheer, itself suspected of complicity in a similar scam.  A consecutive sentence is in principle required but to reflect appropriate totality, we order that six months of the one-year sentence on Charge 3 shall run consecutively to, the remainder concurrently with, the sentence on Charge 1, making a total of three years and six months’ imprisonment.  To that extent, the appeal is allowed.