HKSAR v. WONG SZE KEI MAIMEI

CACC162/99

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 162 OF 1999

(ON APPEAL FROM DCCC 602 of 1998)

-------------

--------------

------------------------

J U D G M E N T

------------------------

Woo J. (delivering the Judgment of the Court) :

1. The Applicant faced 28 charges, charges (1) to (27) for theft and charge (28) a forgery. Each of the first 27 charges was for the Applicant stealing a cheque, or the chose in action in the cheque being the money represented by the amount shown on it, drawn on a bank account of the company in which she worked, namely, DPI (HK) Ltd. ("DPI"), or of an associated company known as KCP Limited ("KCP"). To be more specific, only charges (22), (23), (24) and (25) involved cheques drawn on KCP's account, whereas the cheques in the remaining 23 theft charges were drawn on DPI's account. The particulars of offence of charge (28) are that on about 29 August 1997, the Applicant made a false instrument, namely, a document purporting to be a letter to the Inland Revenue Department written and signed by Richard Proctor, David Page, Morris Buenemann, Ronald Richter, Ronald Knight and Jeffrey Schmidt, with the intention that she would use it to induce the Inland Revenue Department to accept it as genuine and by reason of so accepting it, to do some act, or not to do some act, to the Inland Revenue Department's, or any other person's prejudice.

2. The Applicant pleaded not guilty. After a lengthy trial, District Judge Muttrie found her guilty of all the charges and sentenced her to imprisonment for a total of six years. Against the conviction and sentence, she applies for leave to appeal.

3. The Applicant's ground of appeal against conviction is that she did not steal the money.

4. We have carefully examined the reasons for verdict that were given by the Judge when convicting the Applicant. The reasons cover 26 pages of the transcript of the trial and are detailed with careful analysis of the evidence.

5. The facts can be briefly set out. Haggermyer Enterprises North America or HENNA is a USA group of companies, with DPI as one of its subsidiaries in Hong Kong. At all material times, DPI traded in consumer electronics. When formed, KCP acted as the buying agent in Hong Kong of a company in the HENNA group. Within the group, there were a number of overseas personnel, such as the persons whose names appear in charge (28).

6. The Applicant was employed as an accounts clerk since 1983 in the accounts department of a company which later became DPI. She was promoted and in about 1994, she was made the director of finance and administration although she was never a director of DPI. At all times material to the charges spanning 1990 to 1997, she was in charge of the accounts of DPI and KCP. She was also one of the signatories of the bank accounts of the two companies. On the dates specified in charges (1) to (27), the Applicant was one of the signatories of the cheques referred to in those charges drawing sums of money from DPI or KCP's bank accounts, which sums were deposited either into her accounts with various banks in Hong Kong or into the bank account of Victory Dragon Enterprises Limited, a company owned by her and her husband. In the vouchers or documents corresponding to the issue of the cheques, reasons were given such as for the expenses of "Randy" being Mr Randy Chang ("PW4"), the managing director of DPI, or for issuing cheques to a number of overseas personnel of the group. The 27 cheques came to a total of $6,352,129.60.

7. At the trial there was no dispute that the Applicant arranged for the payments represented by the 27 cheques and arranged for them to go to the accounts which they went. What was in issue was where the funds went after that. The Applicant's case was that in 1987, Mr Morris Buenemann told her that certain colleagues in the USA, namely, himself and Mr Richard Proctor, did not want to collect money directly from DPI because of the US tax system. He told her that Mr Proctor and he would claim money from DPI under the accounts of travel and entertainment. The cheques were to be made out to cash and handed to Felix MA, the then head of the Hong Kong organisation. Such cheques were infrequent and small in amount, between $100,000.00 and $300,000.00. In 1989, it was arranged that the Applicant should cash the cheques and hand over the cash. When Mr Randy Chang took over as the managing director for Hong Kong in 1988 or 1989, the Applicant did not tell him that this was happening. In this way, between 1987 and 1989, about $700,000.00 had been paid to Mr Buenemann. From 1990 onwards, money was given in cash to Mr David Page when he came to Hong Kong. In 1994, Mr Page suggested that because they were taking out huge amounts of money, it should be invested in property in Hong Kong. Therefore, he chose a flat in Ma On Shan which was bought in the Applicant's name because if he bought it in his name he would be liable to US tax. The flat was bought with money taken from DPI and put through the Applicant's account.

8. Charge (28) relates to a letter dated 29 August 1997 to the Inland Revenue Department which on the face of it came from and was signed by Mr Proctor, Mr Page, Mr Buenemann, Mr Ronald Richter, Mr Ronald Knight and Mr Jeffrey Schmidt, assigning the Applicant to collect directors fees income from DPI and KCP for the years 1995 and 1996 on their behalf and to report such income along with an attached schedule for the purposes of paying tax on income from DPI. That letter stemmed from the investigation by the Inland Revenue of tax matters relating to the Applicant and DPI. It was not in dispute at the trial that the original letter of 29 August 1997 with the schedule and supporting documents were given to the Inland Revenue Department by the Applicant. These included tax returns for the persons named and the allowance sheets apparently also signed by Mr Proctor and others.

9. Mr Proctor, Mr Buenemann, Mr Page, Mr Chang and many other personnel of DPI, KCP and HENNA all gave evidence before the Judge and they denied the allegations of the Applicant. In particular, they denied that there was this scheme of getting money out of DPI and KCP to pay cash to the overseas personnel. Three of the apparent signatories of the 29 August 1997 letter denied that they signed the letter or the schedule or the allowance sheets. Mr Chang denied that he had ever authorised the expenses allegedly payable to himself, for which many of the 27 cheques were vouched, or that he had ever known that he had been paid any such alleged expenses by DPI.

10. Apart from all these pieces of evidence, the Applicant had also made two confessions, one to Mr Frank Lam Choi Kong ("PW7") who had become DPI's deputy managing director since May 1995, and another to the police in an video interview, Exhibit P48. Despite the Applicant's objection to the admissibility of these confessions, the Judge found them to have been voluntarily made and admitted them in evidence.

11. The significant matters that the Applicant told Mr Lam were that she had kept all the money she listed in the schedule to the said letter to the Inland Revenue; she had forged the signatures on the said letter; she wrote out a list of her property and gave Mr Lam the information which he wrote on the same paper as to how she had financed the purchase of her flat at B4, 20/F, Garden Vista and her flat in Ma On Shan by using DPI's money.

12. The significant features of her confession to the police were summarised by the Judge as follows :

(1) She had taken a total of $16 million which had been deposited into her account or accounts.

(2) She had forged the signatures on the letter to the Inland Revenue and on the allowance sheets.

(3) She had thought that she could get away from the Inland Revenue by paying back money in the names of the directors.

(4) She had spent the money on her various monthly expenditures, including the purchase of a flat at B4, 20/F, Garden Vista and one in Ma On Shan.

13. The Judge found no doubt that the money from DPI and KCP went to accounts which were held by the Applicant, that the said letter was composed for exhibition to the Inland Revenue by the Applicant as an offer to pay tax on some of the money which had come into the Applicant's accounts in order to avoid further investigation of herself and DPI, and that it was she who uttered the said letter and the documents to the Inland Revenue.

14. Although the Judge observed that it was not inherently incredible that persons subject to tax in the USA on worldwide income might try to evade such tax by arranging for payment of income due to them in Hong Kong in such a way as to evade tax, he found that there was nothing in the evidence of Mr Buenemann or his demeanour in the witness-box that would raise any suspicion that a scheme as described by the Applicant might be the case. Nor was there anything in the evidence of the other American witnesses that might have tended to lend support to the Applicant's case. Further, there was ample evidence from the American witnesses that they were not entitled to any kind of directors fees, for which purposes the Applicant alleged to be her payments to them. The Judge analysed the evidence to observe that if the American personnel were allowed to draw money out of DPI and KCP in the manner described by the Applicant, they were stealing money from the companies and not only trying to evade tax, and with her experience in commercial and accounting matters, the Applicant would well have appreciated that aim. Further, it would therefore be most unlikely that Mr Page would have allowed the Applicant to use the money to buy a flat in Ma On Shan in her own name, for it would be impossible for him to get the flat back from her.

15. The Judge also found that the Applicant had taken the money she siphoned off into her bank accounts and made payments out of them for her own use and buying the two flats. She was also quite unable to explain various payments out of her bank accounts into which she had put her employer's money.

16. It was in the light of the overwhelming evidence adduced by the prosecution and the rejection of her evidence that the Judge came to the conclusion, beyond any reasonable doubt, that she committed the 27 theft charges and the forgery charge. We cannot find any fault with his conclusions and the reasoning leading to them.

17. In this Court, the Applicant addresses us at length raising a number of points to show that her convictions are wrong. We have considered those points very carefully. We think it only necessary to say that nothing that she has raised persuades us that her convictions are wrong. The evidence against her was overwhelming, especially that she admitted the thefts in her own voluntary confession to the police which was video-taped and that she had used the money derived from the stolen cheques for her own personal expenses. Her explanation was that if she did not make the confession to the police, her American colleagues would go to jail which she even told the police that she did not want to happen. If that was the reason why she made the confession to have stolen $16 million from her employer, the inevitable inference from the evidence is that she was one way or another involved in taking the money from her employer and also personally benefited from it.

18. The application for leave to appeal against conviction is therefore dismissed.

19. Turning to the Applicant's written grounds for leave to appeal against sentence, she complains that the six-year term imposed by the Judge is too long. She also queries why the Judge passed two series of three years' imprisonment on her, one series regarding some of the theft charges and the other series regarding the rest of the theft charges, and then making them run consecutively. She also states that her child is three years old and her husband has to work, leaving no one to look after the child.

20. Before us, she provides great details as to how her husband has had to take care of their young son since the commencement of her remand for this case. She elaborates how the two members of her family have suffered. She submits that it is unfair to them even if the court finds her guilty as she should be the only one who is punished, not her husband and child.

21. We are of the view that there is not any arguable ground against sentence. The Judge only took the total amount stolen as set out in the charges into account, despite the confession of the Applicant that she had embezzled $16 million from her employer. He treated the case of theft as a breach of the trust that her employer had reposed in her, and rightly so. There was no restitution of any of the stolen money. He therefore came to the view that a starting point of six years of imprisonment was called for in respect of the theft offences. He also opined that the proper sentence for the forgery charge was one year, which should normally run consecutively given that it was perpetrated in an attempt to disguise what had happened. Considering the mitigation factors of her having a clear record and being a mother of a very young child, he made the sentences to run concurrently. When announcing the sentences, however, the Judge said :

" On each of the 1st to the 22nd charges which relate to DPI Limited there will be a sentence of 3 years, all concurrent among themselves.

On each of the 23rd to 27th charges there will be a sentence of 3 years' imprisonment, concurrent among themselves but consecutive to the sentences imposed on the 1st to the 22nd charges.

On the 28th charge there will be a sentence, as I have indicated, of 1 year, but that will be concurrent with the sentences on the 1st to the 22nd charges.

The effect then will be a total of 6 years."

22. The Applicant's complaint seems to be that there is no reason for the Judge to have split the theft offences into two sets and passed a sentence of three years' imprisonment for the offences in each set, and made the two sets of three years to run consecutively.

23. We do not think that the Applicant's complaint has any substance. What we wish to say is that the Judge was obviously trying to separate the theft charges into two sets, one set relating to DPI and another relating to KCP, because they were two separate legal personalities from whom sums of money were stolen. This was apparently trying to justify passing consecutive sentences in order to arrive at a correct sentence in totality. However, the split between the two companies by charge (1) to charge (22) and charge (23) to charge (27) is factually wrong, because it was only charges (22), (23), (24) and (25) that related to KCP whereas the rest of the charges, namely, charge (1) to charge (21) and charges (26) and (27), all related to DPI. Notwithstanding, we do not feel that there is any ground for intervention.

24. Mr Chapman for the Respondent in his written Outline of Submissions has referred us to R v Barrick (1985) 81 Cr App R 78, 81 for the proposition that a defendant's clear record in cases of this nature does not justify a discount in sentence because if a defendant had a previous conviction, he would not have been in a position of trust enabling him to commit such offences. In Secretary for Justice v Wong Kay Din, CAAR No 7 of 1998 (24 June 1999, unreported) a differently constituted Court of Appeal referred to Barrick and R v Trevor Clark [1998] 2 Cr App R 137 which reviewed the sentencing guidelines in Barrick to take into account inflationary values. Wong Kay Din was a case of a defendant in a position of trust in a church having been convicted of nine charges of theft from the church, involving close to $3,000,000.00 The trial judge sent him to jail for three years. Upon the application for review of the sentence by the Secretary for Justice, the Court increased the term to four and a half years. Apart from stating that there was no rational justification to depart from the sentences suggested in Clark, the Court commented on the clear record of the defendant by saying that "inevitably it is the case where someone has been put in a position of trust that they will have an exemplary previous character." This observation echoed the proposition in Barrick and they apply to the present case.

25. The sentences imposed on the Applicant are appropriate for such a case of a lengthy continuing series of thefts from the employer who had obviously reposed great trust in her, and the thefts were reasonably seen as breaches of trust. The amount involved was over twice of that in Wong Kay Din. Although we have much sympathy with the young child who would go without the mother's care for a considerable length of time, we feel that this should have been a matter that the Applicant ought to have borne in mind before embarking on these crimes to the detriment of her employer and society with such substantial financial gain to herself.

26. In the premises, the application for leave to appeal against sentence is also dismissed.