HKSAR v. CHEUNG KAM LUN

DCCC698/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 698 OF 2012

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Reasons for Sentence

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1. The defendant has pleaded guilty to four charges of theft.

2. The 1st charge was committed over a period of 5 years, from late 2006 to September 2011.  He stole money from the bank account of the Pat Heung Rural Committee.  The amount stolen was $597,161.75. 

3. The 2nd charge was committed between 26 October 2011 and 9 December 2011.  Again, from the bank account of the Pat Heung Rural Committee, he stole $261,000.

4. The 3rd and 4th charges were both committed in October 2011 and were thefts of $36,000 and $30,000 respectively, the property of the Tung Yick Tong.

5. The facts admitted by the defendant disclose that since 1993 the defendant was employed by the Pat Heung Rural Committee as a secretary.  His duties included the managing of the committee’s bank accounts, one of which was a cheque bank account at the Bank of China.  He prepared balance sheets and financial reports and issued cheques from the account.

6. In order for the cheques to be honoured, they required the chop of the committee and the signatures of three or four authorized signatories, those persons did not include the defendant.  The chop and cheque books were managed and kept by the defendant. 

7. In October of 2011, $1.13 million was deposited into the account by the government as a subsidy for the committee to organize an event. 

8. The balance sheet of the committee for September 2011 which was prepared by the defendant was distributed to the members of the management of the committee at a bimonthly meeting on 2 December 2011 and this showed that the balance in the account was $625,091.84.

9. Although it was his responsibility to prepare these balance sheets, no such balance sheets were prepared for October and November of 2011. 

10. In relation to Charges 1 and 2, on 9 December 2011, Mr Tsang Hin-keung, I refer to him as PW1, who was the chairman of the committee, requested the defendant to issue a cheque in the sum of HKD 1.13 million in order to pay for the event expenses.  The defendant instead issued a total of six cheques in smaller sums to meet individual expense items.  He was told by the chairman that he wanted a single cheque and the defendant told the chairman he understood that but failed to report for duty the following day. 

11. The chairman tried to reach the defendant by his mobile phone but was unable to do so. 

12. On 11 December, the defendant contacted the chairman and claimed that he was sick the previous day.  He was told to report the following day but failed to do so.  The chairman visited his home but found there was nobody there.  The owner of the flat was contacted and said that she was unable to contact the defendant either. 

13. The chairman then started to concern himself about the funds of the committee, and upon checking the bank records, he discovered that as at September 2011, only $27,930.09 was left in the account. This was a discrepancy of $597,161.75 compared with the amount shown on the balance sheet.

14. The chairman went through the bank records and was unable to identify the fraudulent transactions.  However, he noticed that between 25 October and 9 December 2011, there were 16 suspicious cheques drawn from the account amounting to a total of $261,000.  The cheques were drawn over this 6-week period, sometimes two, sometimes three times a week of amounts varying between $13,000 and $18,000.  They were cash cheques and the signatures of the people authorized to sign those cheques had been forged. 

15. Immigration records disclosed that the defendant went to the mainland on 12 December 2011. 

16. As well as working for the PHRC, the defendant was the treasurer of another rural organization called the Tung Yick Tong (“TYT”), which was related to the PHRC, and he had held that position since 2005.  His responsibilities included the managing and recording of the accounts of the TYT. 

17. When he disappeared, they checked the accounts of the TYT and discovered that two cash cheques with dividend in the sum of $36,000 and $30,000 had been paid to the defendant on behalf of TYT but never deposited into the TYT’s bank accounts.

18. For some reason these dividends were paid out by way of cash cheque which the defendant collected.  He was allowed to collect them because they knew him and recognized him as having collected similar cheques previously. 

19. The defendant was arrested when he returned to Hong Kong from the mainland on 29 April.  He was arrested when he returned and made a video recorded interview in which he admitted the offences, the subject of the charges. 

20. As regards the 1st charge involving nearly $600,000, he said that he forged a number of cheques in relation to those amounts of money in order to obtain cash.  He told the police that he had gone bankrupt in 2005, but I am now told by his counsel that that is wrong, he had gone bankrupt in 2002 and that his bankruptcy was discharged in 2005.  And he admitted the other offences with which he was charged.

21. The defendant has a clear record.  He is 59 years of age.  He is single and he was living alone in Pat Heung when these offences were committed.  I am told he was born in Hong Kong and educated initially to Form 2 standard but went to evening school and was educated there to Form 5 standard. 

22. He worked in restaurants since 1983 as a waiter and then as a manager in the Pat Heung area.  After that he started working for the Pat Heung Rural Committee earning some $13,000 per month.  I am told that he has lost all contact with his relatives.  His father is dead; his mother is divorced and lives in Canada; and he has two brothers and sisters with whom he has lost contact.

23. I am told that the motive behind committing these offences was not because of only drug or gambling problems, but simply to sustain a lavish lifestyle, and that he is now deeply remorseful for his offences. 

24. I am told that he came back to Hong Kong voluntarily knowing that he would be arrested when he returned.

25. In mitigation, it was urged upon me that the defendant not only has a clear record but that these offences were not sophisticated offences.  However, his position as secretary of one committee and treasurer of the other enabled him to conceal his fraudulent activities from the management of the committee for a considerable period of time. 

26. The offences constitute a gross breach of trust.  He held important positions in two rural communities; he was secretary for one organization and treasurer of the other.  He says that he was made bankrupt in 2002 and that he told the then chairman of the committee of his bankruptcy.  Inexplicably, he was allowed to carry on in those positions managing the funds of the committee. 

27. As counsel has rightly pointed out, the leading authority for cases of theft involving breaches of trust is HKSAR v Cheung Mei Kiu [2006] 4 HKLRD 776.  That states that the appropriate sentence for theft involving cash between $250,000 and $1,000,000 is 2 to 3 years’ imprisonment.  The total amount involved in this case is just in excess of $920,000. 

28. In respect of the 1st charge, I am proposed to take a starting point of 30 months’ imprisonment and reduce that to 20 months, to reflect the defendant’s guilty plea. 

29. In respect of the 2nd charge, I take a starting point of 24 months, I reduce that to 16 months to reflect the guilty plea and order that to run concurrently.

30. On Charges 3 and 4, I take a starting point of 12 months’ imprisonment, reduce that to 8 months’ imprisonment to reflect the guilty plea and order that 2 months of that sentence to run consecutively to the sentences on Charges 1 and 2.

31. The total period of imprisonment will be one of 22 months.