HKSAR v. YU LIK WAI WILLIAM AND ANOTHER

DCCC 325/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 325 OF 2014

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Reasons for Sentence

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1.   Both defendants were convicted after trial of one charge of conspiracy for an agent to solicit advantage (Charge 1) and another offence commonly known as “money laundering” (Charge 2).

2.   The facts can be summarised as follows.

3.   D1 was well experienced in the management of hotels and food and beverage business.  In 2011, D1 and one Chung Siu-pang (“Chung”) entered into a business co-operation to run a hotel (“the hotel”). D1 provided his expertise in the management of the hotel while Chung provided the funding of the hotel project.  D1 did not provide any money.  If the capital could be recouped in three years, each of D1 and Chung would get 15 per cent of the hotel’s profit as their share. 

4.   To facilitate the operation of the hotel project, Chung set up two companies.  Each of the two companies had two shares of $1 each, owned by Chung and D1 respectively.  They were both appointed as directors of the two companies.  D1 was appointed as the chairman and CEO of the hotel. 

5.   Chung has injected more than $40,000,000 in the project.  Most of the money was provided by investors behind him.

6.   D2 was a friend of D1.  D2 had no position in the two companies or in the hotel.  D2 was not known to Chung.

7.   Through D2, D1 was looking for a caterer to operate the restaurant of the hotel.  They solicited a payment of $1.08 million, which was subsequently reduced to $980,000, as a secret commission to be paid by the selected caterer in return for the contract for the operation of the restaurant.

8.   ICAC received information about it.

9.   Through the introduction of a person known as “X”, undercover officers of ICAC (“UCs”) were introduced to D2 and subsequently to D1.

10.   UCs pretended to be middlemen and investor respectively.

11.   X was a friend of D2.

12.   UCs had eight meetings with D2, three of which D1 attended.  In the meetings, UCs were solicited to pay $980,000 to D1 for getting the operation of the restaurant.

13.   At the last meeting, UCs passed an envelope containing $250,000 cash to D1 as part payment of the secret commission.  D1 and D2 were then arrested by the ICAC.

14.   D1 did not inform Chung of his negotiation with the UCs.  He did not seek permission to receive the advantage.

15.   I find that he had no intention to do so.  He was receiving the advantage as a secret commission.

16.   D1 is a 50-year-old divorced man.  He has no previous criminal record.  He received Form 5 education.  In his career life, he started out as a hotel room attendant, climbing up the ladder in the hotel business until his last position as the chairman and CEO of the hotel in the present case.

17.   I have received mitigation letters from D1’s mother, friends and siblings, describing D1 as a filial son and a kindhearted person involved in community service.

18.   I am told that D1 has a medical history of asthma and renal stone.  

19.   Mr Harris SC, accepting there are no exceptional circumstances in this case to depart from the normal sentence, asks the court to consider the whole circumstances of the case and the personal circumstances of D1.

20.   It is submitted that D1 did not receive benefit in this case and that there was an element of entrapment, by which D1 should be entitled to some reduction in sentence.

21.   In reply to the case which I drew to his attention, HKSAR v Pau Chin Hung Andy, CACC 267/2012 and CAAR 5/2012, Mr Harris SC finds the distinction that the evidence in this case shows that D1’s share was only $400,000, much less than the $1.1 million advantage received by the defendant in Pau Chin Hung case.

22.   He also submits that the sentence in each case turns very much on the facts of the individual case.

23.   D2 is also aged 50.  He has previous conviction for traffic-related offences.  He is married with a son aged 12, suffering from Asperger’s disorder.  D2 received university education.  He is now employed to manage a restaurant in the Mainland. 

24.   I have also considered the mitigation letters from his wife, mother, siblings and previous teachers.  In these letters, D2 is described as a responsible husband and son. 

25.   Receipt of his donation to a charitable organisation is also submitted to the court.

26.   In mitigation, Miss Lee, counsel for D2, adopts the submission of Mr Harris SC, insofar as it is relevant to her case.

27.   She further submits that the role of D2 was only a go-between and a conduit. 

28.   She says, as a result of this conviction, it would be difficult for D2 to find similar job in the future.

29.   It is also submitted that the benefit D2 could receive in this case would certainly be less than D1’s.

30.   Bribery is an evil which can strike at the heart of commercial life and reputation of Hong Kong.  The courts have repeatedly emphasised that bribery and corruption are intolerable offences in Hong Kong. 

31.   The most effective way to combat corruption is to strictly follow the longstanding practice of the courts by imposing a deterrent sentence.  Even the first offender, unless it is merely a technical breach, must expect a deterrent sentence.  This will invariably involve a sentence of immediate imprisonment. 

32.   In this type of serious offence, the defendant’s personal background doe not usually constitute exceptional circumstances.  See a review of previous sentencing cases in Pau Chin Hung Andy.

33.   Counsel for both defendants concede - fairly and properly, in my view - that there are no exceptional circumstances in this case to justify a departure from the norm of imposing an immediate custodial sentence.

34.   The defendants conspired to solicit for a sum of $980,000.

35.   In Pau Chin Hung Andy, the defendant received a total reward of about $1.1 million for two charges.  On a review application, the Court of Appeal said the appropriate starting point was 4 years’ imprisonment.

36.   I accept the submission that the defendants did not succeed in receiving any benefit in this case. 

37.   I cannot accept the submission that there is evidence that D1’s share was only $400,000.  The allotment of a share of $400,000 to D1 was only what D2 said to the UCs.

38.   However, I do accept that D1 would not take the whole of the $980,000, as it had to be shared by D2 and supposedly with X, Ah Chi and Ray as middlemen, and I accept Miss Lee’s submission that D2 would take a lesser share than D1.

39.   Having considered all the circumstances of the case, I find that the appropriate starting point for D1 on Charge 1 is 2½ years’ imprisonment.

40.   In the case of D2, I accept that he was following instruction of D1.  Yet, he played an active and enthusiastic role.

41.   The starting point for D2 should be 2 years and 3 months’ imprisonment.

42.   On Charge 2, I adopt 2 years as the starting point for both D1 and D2. 

43.   I accept that this offence was part and parcel of the overall criminal activity in relation to Charge 1.

44.   The sentence in Charge 2 should run concurrently with the sentence in Charge 1.

45.   In this type of serious offence, I am afraid that I cannot allow any reduction for the personal and family circumstances of both defendants.

46.   Their community involvement is not to such an extent that I should allow any reduction in sentence.

47.   I also respectfully reject the submission of Mr Harris SC that entrapment has a part to play to reduce the starting point of the sentence.

48.   I have found that there was no entrapment in the present case and that the ICAC’s conduct was entirely reasonable and proper.  The defendants were not incited or persuaded to commit the crime.

49.   The defendants are therefore sentenced as follows:

D1:

(1) Charge 1: 2½ years’ imprisonment;

(2) Charge 2: 2 years’ imprisonment, to run concurrently with the sentence in Charge 1.

The total term of sentence: 2½ years’ imprisonment.

D2:

(1) Charge 1: 2 years and 3 months’ imprisonment;

(2) Charge 2: 2 years’ imprisonment, to run concurrently with Charge 1.

The total term of imprisonment is 2 years and 3 months’ imprisonment.

50.   Lastly, it remains for me to express my gratitude to all counsel in this case, in particular to Mr Harris SC for his assistance being rendered in the conduct of the case and his submission made in a responsible and helpful manner.