HKSAR v. LAU TSE KEUNG

DCCC859/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 859 OF 2011

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Reasons for Sentence

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1.  Defendant, you have pleaded guilty to one charge of fraud, contrary to section 16A of the Theft Ordinance, Cap.210.

2.  You have admitted that on or about 18 January 2002 in Hong Kong, together with one Wong Tak-wai and Li Po-shan, you falsely represented in relation to a loan application to Standard Chartered Bank Limited that you were a genuine employee of Tak Shing Metal Supply Company when you were not and induced the Standard Chartered Bank to approve a loan and release a loan to you in the amount of $192,000.

3.  The two others named in the charge, Wong and Li, had set up 18-odd shell companies, and these shell companies purported to employ groups of people like yourself as employees.  The company accounts show that these companies paid purported salaries to people like yourself.  Wong and Li, who were husband and wife, then submitted tax returns to the Inland Revenue Department purporting that you were employees with jobs and salaries at those companies. 

4.  Then what would happen is the false employees like yourself would apply to the banks or financial institutions for loans and submit the bank passbooks and company letters as income proof which were false.

5.  In respect of yourself, you had applied to the Standard Chartered Bank for a loan of $192,000 and you then would give that money to Wong. 

6.  In respect of Wong and Li, it appears from the facts admitted by you that in this particular instance in respect of other employees, there were a total of 13 bank loans and the total amount of loan money which Wong and Li obtained was $1,734,945.  That was over a period of about 6 months between 4 August 2001 and 8 January 2002.  Except a few initial instalment repayments, the bank loans were largely left in default.  The banks suffered financially and in these 13 bank loans, including yourself, there was a default of $1,550,582.25, and in your loan alone the default was $152,768.

7.  In respect of sentence, I understand that this case came to the District Court as you were proposed to be charged or this offence was intended to be consolidated with the other 12 bank loans which were in the District Court.  However, I am informed that the consolidation application made by the prosecution was refused.  

8.  I made inquiries with the prosecution as to whether there were other cases similar to yours and the prosecution helpfully informed me that there were a number of cases already in the Magistrates’ Court concerning the same type of facts.  Those were all purported employees applying for loans and either charged with conspiracy to defraud or dealing with proceeds of an indictable offence. 

9.  The sentence and the amount of loan and the default in loans have been very helpfully set out in a table before me.  The loans there in the magistracy were of a greater amount than the loan that you took out as a purported employee and also over a longer period of time in some cases, and also on more than one occasion. 

10.  Your solicitor, Mr Yaddy Cheung, has referred to these matters and brought my attention to the various amounts, times and sentences and has urged me to impose a sentence similar to that as passed, although accepting that they are not tariffs or guidelines for this court.  

11.  You are 56 years of age and have two previous convictions dating back to 1991 for gambling and 2008 for managing a vice establishment.  I am also informed by Mr Cheung and will refer to this matter later in respect of you not answering your police bail, that you were sentenced for a smuggling offence in China from 1 June 2010 to 31 May 2011. 

12.  Mr Cheung has rightly pointed out this offence happened in 2002, some 9 years ago now, but it appears that the offence came to light only in 2007.  At that time you had been unemployed and you offered yourself to be used in a scam in this syndicate.

13.  You agreed and you received a benefit of $1,000 to $3,000.  In fact, the bank account that was opened was controlled by the mastermind and at the time you were taken to the bank with someone to apply for this loan.  You were aware that you were being used in this scam, but you at that time did not know the scale of the fraud that was practised on the banks.   

14.  However, you knew that you were not the only one applying as a purported employee.  When you were arrested you gave a full confession and explained your role.

15.  You have of course pleaded guilty before this court.  I am informed that the reason why you were charged after the other defendants was because you had not answered your police bail. 

16.  You were arrested on 10 December 2007 by the police and you were due to answer bail on August 2010.  There was no restriction for you not to leave Hong Kong as one of the bail conditions.  You therefore left Hong Kong to travel to China and that is when in June 2010 you had committed the offence in China and were sentenced to imprisonment on 1 June to 31 May 2011 in China. 

17.  Mr Cheung tells me that is why you were unable to answer your police bail in August 2010.  I further have had submitted to me a document supporting the same and to which the prosecution are not challenging. 

18.  Approximately a week after your release you returned to Hong Kong and were arrested at the Immigration Check-point.  You have been in custody since then. 

19.  For this reason, I would not have estreated your bail and I accept your explanation for not returning to police bail but that matter I understand has already been dealt with in the magistracy and your bail has been estreated.  I will however leave that other application to be dealt with to the magistracy and not before me.  

20.  In respect to this offence, defendant you were a pawn in this scam.  It was only committed on one day, that is on or about 18 January 2002, in the amount of $192,000 and with only one bank loan.  Taking into account the other sentences imposed in the magistracy, I consider that the appropriate sentence in this case had I convicted you after trial would be one of 6 months’ imprisonment. 

21.  However, giving you full credit for your plea of guilty, you shall be sentenced to 4 months’ imprisonment.