HKSAR v. HO PO WAH RICKY

DCCC 1145/2016

[2019] HKDC 1284

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1145 OF 2016

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REASONS FOR SENTENCE

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Introduction

1.  This case is a typical example of commercial bribery where, briefly put, an owner of company A offers bribe to the senior management of company B to secure continued business from company B. Here the defendant, a freelance agent, played the role of a middleman for the parties in their corrupt dealings.

2.  The defendant pleaded guilty before me to 3 counts of offering advantages to an agent, contrary to sections 9(2)(a) and 12 (1) of the Prevention of Bribery Ordinance, Cap 201, i.e., Charges 2, 3 & 4 while Charge 1 is left on court’s file.

3.  The agent named in all the charges is a man called Lam Chi Ming who worked as a Product Design manager of a toy company, Fotorama, at the material times.

Background

4.  The instant case involves 4 companies:

(1)- Fotorama, a Hong Kong subsidiary of a Mexican toy

company;

(2)- East Star Printing Company Limited (East Star), a printer;

(3)- Fortune International (HK) Limited (Fortune), a toy

manufacturer;

(4)- Luen Tat Merchandise Limited (Luen Tat), also a toy

manufacturer.

And the following persons are involved:

(1)- Two employees of Fotorama:

(a)- Mr Lam Chi Ming, the Product Design manager and

(b)- Mr Cheung Kwok Yee, the Executive Director;

(2)- Owner of East Star, Mr Danny Lo;

(3)- Owner of Fortune, Mr Qiu Xiaoming.

5.  Through the introduction of the defendant, East Star and Fortune became Fotorama’s supplier and manufacturer respectively.

6.  As demanded by Mr Cheung and Mr Lam, the two manufacturers, Fortune and Luen Tat, had to engage the printing services of East Star.

Charge 2

7.  What happened was when the boss of East Star, Mr Lo, asked the defendant to look for business for his company, the defendant approached Mr Lam of Fotorama who agreed to do business with Mr Lo on condition that Mr Lam was to be given 8% of the costs of each order as kickback to which Mr Lo agreed, and Mr Lo further agreed to give the defendant an extra 4% as reward (which was regarded as remuneration by the prosecution).

8.  As it turned out, when the two manufacturers, Fortune and Luen Tat, placed orders with Mr Lo’s company, Mr Lo would pay Mr Lam and the defendant the agreed amount as if the orders had been made by Fotorama.

9.  The modus operandi was very simple: every time the defendant received the bribe money from Mr Lo by way of cheque payable to him, he then handed over the money to Mr Lam in cash.

10.  As far as Mr Lam was concerned, the defendant had collected bribe money totalling about $1,130,260.89 from Mr Lo’s company and paid it to Mr Lam during a period of more than 3 years from January 2012 to March 2015. This amount represents about 8% of the business turnover between the two manufacturers and the printer (Mr Lo’s company) from September 2011 to December 2014.

Charge 4

11.  Here involves Fotorama and one of its manufacturers, i.e. Fortune. The boss of Fortune, Mr Qiu, had to pay bribes to Mr Lam of Fotorama to secure continued business from Fotorama.

12.  The kickback was calculated as 3% to 4% on the amount of the orders placed by Fotorama. The defendant would collect cheques at different times for the payment of kickback issued by Fortune, pay into his personal account first, withdraw and then pay it to Mr Lam.

13.  Between September 2012 and July 2015, the defendant had totally withdrawn $3,208,400 from his account and paid it to Mr Lam as bribe money.

Charge 3

14.  This was a sequel to the past corrupt dealings between Fotorama and Fortune as particularized in Charge 4. On 16 September 2015, after the defendant had paid Mr Lam the bribe money from Fortune, ICAC officers took action and arrested the defendant, Mr. Lam and Mr. Cheung when they came out of Mr. Lam’s office at Peninsula Centre, Tsim Sha Tsui. The officers recovered a white envelope of cash- marked money in the sum of $245,000 from Mr Cheung’s rucksack and a brown envelope from Mr Lam.

15.  In fact, on the previous day, the defendant had put the marked money first into a white envelope and then a brown envelope and on the following day gave it to Mr Lam at his office in the presence of Mr Cheung.

Giving assistance to ICAC

16.  The sentence of the defendant has been put on hold because the defendant would like to give information to ICAC about the other actors in the corrupt deal.

17.  Thanks to his information, 6 people including Mr Cheung and Mr Lam were arrested and charged with various corruption offences. Their case went to trial in the District Court (DCCC 1058/2017) in which the defendant testified for the prosecution, but all of them, except D6 who had absconded, were acquitted.

18.  The defendant has been in custody for about 10 months before release on bail pending the trial of the other case- DCCC 1058/2017.

Mitigation

19.  The defendant, 47, a baptised Christian and a married man with two children (13 & 10), has no previous convictions. He received education up to Form 5 level.

20.  The court heard that he had all along worked in the toy manufacturing industry in various capacities; at the time of the offences, he worked as a freelance agent sourcing orders for different companies.

21.  Counsel for the defendant, Miss Ema Leung, submitted that given his current situation with the likely prospect of going back to prison again, the defendant could hardly land a stable job, and thus his wife has become the breadwinner of the family. His wife, however, is suffering from various medical ailments including thyroid disease, high blood pressure and cholesterol.

22.  Worse still, the defendant’s mother had a serious stroke recently making her unable to move the left side of her body, and had to reside in a nursery home. In the doctor’s opinion, she is likely to have a second stroke in the coming year.

23.  In his letter to the court which is full of agonies of remorse, he stated his fear of losing his mother to stroke. Numerous letters from his family members, friends, colleagues, churchmates etc., have been submitted; they all speak very highly of the defendant – a loving husband, caring father, good friend and supportive colleague.

24.  Turning to his assistance to ICAC, Miss Leung submitted that the defendant had not only given detailed statements to ICAC leading to the arrest of 6 people facing corruption charges, but also took the stand for the prosecution at their trial; notwithstanding the result of the trial, he had indeed given substantial and considerable assistance to the ICAC, which should warrant the maximum discount of 50%.

25.  Miss Leung cited in support a passage in the case of Z v HKSAR (2007)10 HKCFAR 183 where the court said:

“Where an appellant had not only given information but had proceeded to give truthful or material evidence, the Court of Appeal has given a usual discount of 50% (including the one-third reduction for pleading guilty).”

26.  In addition, Miss Leung argued that the defendant should be given an extra reduction in sentence in view of the fact that he is willing to make voluntary restitution of $55,356, which is asked for by the prosecution.

27.  In HKSAR vs Lam Kong CACC 499/2011, the Court of Appeal said:

“Voluntary restitution in fraud cases should always be encouraged and such restitution, irrespective of the time or the motive of, is a mitigating factor and should be taken into consideration in sentence.”

Sentence

28.  The charges to which the defendant pleaded guilty are undoubtedly very serious ones - it is so serious as to very often being likened to cancer in a society and be nipped in the bud the sooner the better. Consequently, the sentence should always carry sufficient deterrent.

29.  Individuals violating bribery laws are liable for up to 7 years’ imprisonment and a maximum fine of $500,000, but there are no tariffs for this type of offence because of the myriad of ways in which the offence can be committed.

30.  The defendant is entitled to at least one-third discount for pleading guilty but he is entitled to something more than that because of his assistance given to the ICAC.

31.  In supporting her plea for a 50% discount, Miss Leung submitted that the defendant’s assistance should not be negated by the acquittal in the other case in which he testified for the prosecution. His assistance ought to be evaluated on the basis of whether it was “of practical use” and should not be limited to whether it has led to a “tangible result” such as a successful prosecution. (See HKSAR vs Yeung Hoi Tung [2019] 3 HKLRD 516).

32.  Miss Leung emphasized that the defendant’s evidence was crucial to the prosecution case in DCCC 1058/2017 and that the evidence which was given over 10 days was consistent and in line with his statements.

33.  The modus operandi in the instant case was that one of the corrupt parties would issue cheques payable to the defendant, the defendant acting as the intermediary would then withdraw cash from his bank account and pay it to the other party.

34.  Miss Leung cited the main reason given by the trial judge in acquitting the 5 defendants in DCCC 1058/2017 that the trial judge considered the bank records (deposit and withdrawal) of PW1 (the defendant in the instant case) alone could not prove that the sums withdrawn were illegal rebates given to the other defendants in DCCC 1058/2017, as there were no subsequent deposits, transfers or any connections to bank accounts controlled by the defendants in DCCC 1058/2017.

35.  I think it would be fair to say those who are minded to engage in cash transaction do not want to leave a money trail. On the information before the court, I am satisfied that the defendant had done his part and in the circumstances I am prepared to give him a 50% discount.

36.  In one of the authorities relied upon by the defence, Stock VP identified that the scale of the bribery and the length of time over which it is committed are factors to be taken into account in sentencing

37.  For charge 2, the amount involved is slightly over 1.1 million over a period of 3 years or thereabouts; charge 3, the amount is $245,000 and the time is one day only; charge 4, the amount is about 3.2 million and the period is 3 years or thereabouts

38.  Having heard all the mitigation and based on the facts of the instant case, I take the following starting points 3 years, 1 year and 4 years for charges 2, 3, 4 respectively and after deducting it by half, they become:

Charge 2: 1½ years;

Charge 3: 6 months;

Charge 4: 2 years.

39.  Miss Leung further submitted that since the defendant was willing to make restitution, which was applied for by the prosecution, to Fotorama in the sum of $55,356 in respect of charges 3 and 4, the defendant should be given extra reduction in sentence.

40.  Miss Leung is relying on a passage in the case of HKSAR vs Lam Kong CACC 499/2011 in which the Court of Appeal said:

“Voluntary restitution in fraud cases should always be encouraged and such restitution, irrespective of the time or the motive of, is a mitigating factor and should be taken into consideration in sentence.”

41.  In a case like the instant one where the defendant is to be sentenced for multiple offences, the usual practice is for the court to take into account the totality principle and the total term would be one of partly consecutive sentence to reflect the overall criminality of the accused.

42.  Given the charges relating to different amount of bribe money and involving different actors, it would be right for me to consider making partly consecutive sentence, but in view of the fact that the defendant is willing to make restitution, I therefore order that all the terms should run concurrently. The total term is one of 2 years.

43.  In addition, I order that the defendant should pay to Fotorama a sum of $55,356 as restitution, to be deducted from his bail money (the defendant consented).