HKSAR v. CHAN JANE

DCCC 30/2017

[2018] HKDC 1324

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 30 OF 2017

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REASONS FOR SENTENCE

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1.  There are originally two defendants in this case. In this present proceedings, I am dealing with D1 only. Her sentence was deferred until now because she has given evidence for the prosecution in the 2 trials against 11 defendants in the magistrates’ courts.

2.  D1 and D2 were jointly charged with one count of conspiracy to defraud (Charge 1). D1 was also charged with one alternative charge of fraud (Charge 2) and one charge of doing an act tending and intended to pervert the course of public justice (Charge 4). D1 pleaded guilty to charge 2 and 4. Charge 1 against D1 is therefore to be kept in court file and not to be proceeded with without the leave of the court.

THE FACTS

3.  The International Social Service Hong Kong Branch (“ISS”), a non-governmental organization, has been entrusted by the Social Welfare Department to provide assistance-in-kind, including rental allowance and allowance on utilities charges, to asylum seekers and torture claimants (“ASTCs”).

4.  To apply for rental allowance, an ASTC is required to submit to ISS a Landlord Information Form (“LIF”), together with copies of his or her landlord’s Hong Kong Identity Card, bank card or passbook and tenancy agreement.

5.  Apart from rental allowance, an ASTC can also apply for allowance on utilities charges by submitting an Electricity and Water Consumption Form (“EWCF”), which should again be duly signed by his landlord.

Fraud (Charge 2)

6.  Mr. LAY Tuan-wen (“LAY”), the late husband of Madam FANG Ruizhen (“PW1”), was a business partner of Mr. CHAN Kam-on (“CHAN”), the father of D1. Before Lay’s death on 16 June 2009, he and CHAN were owners of Ancity Employment Centre (“AEC”).  At all material times, D1 was the operator of AEC. D2 was an acquaintance of D1. 

7.  Between 31 July 2008 and 20 February 2014, ISS received LIFs and/or EWCFs together with the relevant supporting documents in relation to 27 ASTCs. In the said applications, it was stated that D1, as the landlord, had leased premises located at twelve different addresses to the said 27 ASTCs.  In fact, D1 did not own any property at all material times.  In the belief that the information on the applications was true, ISS released and deposited rental allowances and allowances on utilities charges in the total sum of $788,325.7 into D1’s bank account.

8.  On 15 January 2014, D1 was arrested.  Under caution, D1 confirmed that she was the operator of AEC.  She admitted that she had filled in some LIFs for ASTCs which together with tenancy agreements were provided to ISS.

9.  Search conducted by ICAC at the offices of the AEC had recovered copies of LIFs, payment records of ISS, bank card/passbook and other supporting documents in relation to D1, D2, PW1 and LAY.  These were related to the applications for rental allowances and allowances on utilities charges in relation to most of the abovementioned ASTCs.

Perverting the course of public justice (Charge 4)

10.  After the abovementioned operation and on or about 25 January 2014, D1 visited Lot No. 717, D.D. 77 in Fanling, where some ASTCs in fact resided. D1 requested Madam ZHU Lizhen (“PW2”) to assist her so that whenever any person made enquiries, PW2 should falsely represent that she had rented premises to D1 and that D1 in turn had sub-leased them to the ASTCs.  PW2 turned down D1’s request immediately as she herself was only a tenant of the said premises and had no property to lease to D1 for sub-leasing.

11.  According to the LIFs of the abovementioned 46 ASTCs (of which 4 ASTCs were in common), D1 and D2 purportedly rented premises to the said ASTCs located at 18 different addresses.  However, the relevant landlords or their representatives confirmed that seven out of the addresses were never leased to D1 or D2.  For the remaining eleven of the addresses, they could not be found in the records of the Lands Department and the Land Registry.

MITIGATION

12.  D1 has a clear record.

13.  The Prosecution confirmed that D1 had given evidence for a total of 4 days against 11 defendants in two separate trials in the magistrates’ courts (TWCC1553/2016 and WKCC413/2016).    Her evidence was in line with her non-prejudicial statements. She was co-operative with the authorities throughout. The courts accepted her evidence.   However, all the 11 defendants were acquitted for reasons unrelated to D1.

14.  For the first case, the court found that the defendant from Bangladesh did not fully comprehend the Chinese tenancy agreement and the English documents from the ISS. He was acquitted because of the language problem. Regarding the second case, apart from the translation issues, the ten defendants were acquitted due to the poor evidence from the ISS officials. Their procedures in processing the tenancy applications had been slack with no standardized format. The court found that deceit had not been practiced on the ISS officials.

15.  D1 is now 44 years old and divorced since February 2017.  The custody of the 2 children aged at 13 and 10 years old goes to her ex-husband.

16.  D1 was born from a middle class family where her father was a police officer and her mother was a housewife.  She has four other siblings.

17.  After completing her education, D1 took various employments including sales and clerical work. In 2007, her father, together with one named LAI Shui Man (“LAI”) commenced the business of a domestic helper agency.  Although she was never formally employed at the agency, she often visited her father at work and helped with some clerical work.

18.  At the end of 2007, LAI informed D1 that he was collecting rental income from some refugees and enlisted her assistance in rental collection.  However, at the time, D1 was not fully aware of how the fraud was being perpetrated by LAI.

19.  In June 2009, LAI passed away and D1’s father has retired to the UK. Therefore, D1 took over the operation of the agency and also the “rental business” of the ISS.  Due to financial pressure and demands from the existing ISS recipients, D1 continued with the fraud and enlisted the help of D2.

20.  Since June 2009, D1 took about 10 to 15% of the amount of money issued by the ISS, i.e. she pocketed about $118,248.

21.  On 25 January 2014, D1 contacted a landlady whom accommodated ASTCs and asked her to provide false information to investigators. Since D1 had never been prosecuted before, she did this out of sheer panic. This request was not made with financial benefits but more like a plea of help.

22.  D1 is now working as a clerk with a monthly salary of $10,000.  Apart from the $34,800 that she had paid back to the ISS after the arrest, D1 indicated that she can no longer able to make further repayment.

CONSIDERATION

23.  In passing sentence, I have carefully considered everything said on behalf of D1 by Ms. Tsang together with D1’s mitigation letter.

Fraud

24.  The Court of Appeal in the Secretary for Justice v Leung Wai Kei [2007] HKCLRT 206 considered the appropriate sentence for offences involving the obtaining of public assistance funds by deception. The Court of Appeal expressed the following views on the severity of sentences and whether an immediate custodial sentence was warranted:

“27. We agree that the CSSA Scheme is intended to help those in genuine need of assistance. Our society does not tolerate any act of defrauding public funds by dishonest means. However, we do not endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds. Each case presents its own facts and each defendant has his own circumstances, and it would go against sentencing principles to lay down a hard-and-fast rule of adopting immediate imprisonment as a starting point.

25.  The Court of Appeal then listed seven factors to be considered in determining whether a severe sentence is to be imposed. They are as follows:

(1) whether the defendant pleaded guilty;

(2) the amount involved and the length of time over which the offence was committed;

(3) the circumstances leading to the offence there being an obvious difference between a legitimate claim which became false due to a change of circumstances and a claim which was false from its inception;

(4) the purpose for which the money has been used with the use of the money for providing household necessities more readily attracting the court’s sympathy than spending the money on luxuries;

(5) the defendant’s character and previous record;

(6) circumstances specific to the defendant, such as illness, disability, family difficulties, etc; and

(7) whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid.

26.  Bearing in mind the “views” above, it can be seen that:

(1) D1 pleaded guilty to the offence.

(2) the offence was committed over a period of 5 years and 7 months and $788,325 involved was a substantial amount. D1 claimed he could only obtain about 10 to 15% from the scheme. She got about $118,248.

(3) D1’s claim was a false one from start.

(4) In the mitigation letter written by D1, she indicated the money was used to assist the business in the agency to make ends meet.

(5) D1 has a clear record.

(6) D1 suffers from hepatitis B and leg pain.

(7) D1 has only repaid $34,800 out of the benefit of $118,248 that she obtained from ISS.

27.  According to the information gathered during investigation, it was stated that D1, as the landlord, had leased premises located at twelve different addresses to the said 27 ASTCs.  In fact, D1 had never owned any property nor leased any property to ASTCs.  As a result, ISS released the rental allowances and allowances on utilities charges in the total sum of $788,352.7 into D1’s bank account.

28.  The appropriate terms of imprisonment as set out in Leung Wai Keiare less than 9 months where the amount involved is less than $50,000; 9-15 months where the amount involved is between $50,000 and $100,000; 15-24 months where the amount involved is between $100,000 and $200,000; and over 24 months where the amount is over $200,000.

29.  In the present case, D1 alleged that she got $118,248 out of $788,325.7 which the ISS deposited into her account.  Ms. Tsang, counsel for D1, submitted that a large part of the money was paid to the ASTCs.  Ms. Tsang urged the court to adopt the third sentencing band of 15 to 24 months’ imprisonment after trial in the case Leung Wai Kei where the amount of is $100,000 to $200,000.

30.  I disagree. In Leung Wai Kei, the Court of Appeal in setting down the sentencing principles involving fraud on public fund, the amount to be considered should be actual overpayment made to the recipient. In my view, it is definitely not the case of the share of money that D1 got from the fraud. I accept that there is no evidence of what the ASTCs had been overpaid. This however must be viewed in the light of the fact the claim was a false one from start. D1 never owned any property.  Of the 18 different addresses purportedly rented to the ASTCs, the relevant landlords or their representatives confirmed that seven out of the address were never leased to D1 or D2.  For the remaining eleven of the addresses, they could not be found in the records of the Lands Department and the Land Registry.

31.  When the court determines the appropriate sentence involving fraud on public assistance of the present nature, the court is under a duty to impose a deterrent sentence in order to curb the offence.

32.  Even I take into account D1 has no previous conviction, however, this must be viewed in the context that this is not a single isolated offence but an offence which was committed over a period of 5 years and 7 months and involves a substantial sum of $788,352.7.  The claim was fraudulent when D1 first started receiving allowances in 2008. The commission of the offence involved substantial planning and organization. D1 was the instigator of the scheme of fraud.  She even recruited D2 to the fraud scheme to falsely claimed to have owned the properties and leased them to the ASTCs. 

33.  Given the length of time over which the offences were committed; the amount of money involved and the fact that it was a deliberate deception from the very beginning, custodial sentence is warranted.

34.  Unlike those defendants who had defrauded the Social Welfare Department who is usually disadvantaged members of our society, this is not such a case in the present situation. D1 could lead a decent life herself. She committed the present offence out of greed. Even if she did it out of financial difficulties, there is no excuse for her to commit the offence.  The court would never accept any economic reason for committing an offence.

35.  Having considered the circumstances of the offence, D1 deliberately and methodically embezzled a very large sum of money from the ISS. In my view, the appropriate starting point would be 3 years and 8 months’ imprisonment (44 months).

Perverting the course of justice

36.  There is no guideline as to the appropriate sentence that should be imposed for offence of this nature.

37.  In R v Tunney (Reynolds) [2007] 1 Cr App R 91, the Court of Appeal in England set out the relevant factors in sentencing pervert of justice at page 568:

“In our judgment, the sentence which is appropriate for offences of this nature depends effectively on three matters. The particular factors which the court must have regard to are, first, the seriousness of the substantive offence to which the perverting of the course of justice relates. The second matter is the degree of persistence in the conduct in question by the offender; and thirdly, one must consider the effect of the attempt to pervert the course of justice on the course of justice itself.”

38.  The present case is a District Court case which reflects its criminality is serious.  I note that no threat of violence nor financial reward was offered to PW2 by D1.  This was a one off incident.  D1 was not successful in perverting the course of justice. However, this offence strikes at the very heart of the system by which law and order is enforced in society.  If it were to succeed to any appreciable extent, it would completely destroy public confidence in that system. Strong measures are needed to preserve that confidence:  see Attorney General v Yeung Sau Shing [1981] HKC 129 at 132. 

39.  I take a starting point of 9 months’ imprisonment.

DISCOUNT & TOTALITY

40.  The two offences are distinct and separate in nature.  The perverting course of justice charge is not part and parcel of the fraud charge and really ought to run consecutive to the fraud charge. However, having considered the matter of totality, I order 6 months of Charge 4 to run consecutive to that of 44 months of Charge 2, making a total term of 50 months’ imprisonment (44 months + 6 months).

41.  D1 was arrested in January 2014.  D2 indicated in his hearing that he has been under tremendous pressure in his mitigation letter to court. The case has spanned for 3 years and 7 months from the time of arrest to the time that he was brought to court. Though Ms. Tsang did not take the issue of delay, for the sake of consistency, I am satisfied some credit should be given in sentence for this factor (see HKSAR v Wong Ka Wah CACC 260/2006).  In the circumstances, I reduce the sentence by 4 months to 46 months’ imprisonment. 

42.  I have also borne in mind that D1 has actually made repayment of $34,800 to the ISS.  I further reduce the sentence by 1 month to 45 months’ imprisonment.

43.  In Z v HKSAR (2007) 10 HKCFAR 183, it is repeated that the Court of Appeal was well placed to consider the range of reductions of sentence for co-operation with the authorities.  It had applied a usual discount of 40% for a defendant who provided assistance to authorities without giving evidence; and where the defendant had given truthful and material evidence, the Court of Appeal had given a usual discount of 50%.  

44.  I find D1 had made genuine undertaking to give evidence for the prosecution in the two trials in the magistrates’ courts.  The acquittal of all the defendants were for reasons not related to D1.  I find that it should not prejudice her claim to a discount in sentence.  I am satisfied that D1 is entitled to a discount of 50%.  She is therefore sentenced to 22 months and 2 weeks’ imprisonment.