HKSAR v. YUEN ON KI

DCCC 451/2022

[2023] HKDC 762

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 451 OF 2022

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REASONS FOR SENTENCE

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1.  The defendant (D)  pleaded guilty before me to a Charge of Theft, contrary to section 9 of the Theft Ordinance, Cap.210 (Charge 1)  and another Charge of Conspiracy for agents to use document with intent to deceive their principal, contrary to sections 9(3)  and 12(1)  of the Prevention of Bribery Ordinance, Cap.201 and sections 159A and 159C of the Crimes Ordinance, Cap. 200 (Charge 2). Charge 1 occurred between the 1^st day of September 2019 and the 25^th day of February 2020, involving a sum of $940,000 belonging to her employer, Hui’s Brothers Currency Exchange Group Holdings Limited. Charge 2 occurred on the 25^th day of February 2020, the alleged co-conspirator was one HUANG Peixin, her subordinate in the same employment; and the document involved was a transaction record purportedly showing a sum of the same amount as in Charge 1 had been transferred out of the branch where D worked to another branch of the same employer.

Facts of case

2.  The Amended Summary of Facts admitted by D shows that at the times material to this case Hui’s Brothers Foreign Currency Exchange Group Holdings Limited was the mother company of a group of companies providing currency exchange and remittance services to customers, with Hui’s Brothers Foreign Currency Exchange Company Limited (“HBF”)  as one of the subsidiary companies.

3.  D joined HBF as a Cashier in April 2018 and was posted to the Tai Wai Branch in January 2019. She was promoted to Branch Manager of the same branch on 9 May 2019. Accounting Clerk HUANG Peixin (“HUANG”)  was one of her subordinates. HBF did not provide loan services to its customers, staff members were not allowed to process outward remittance applications on credit for its customers nor were they allowed to take out cash from the branch offices for providing loans to customers without prior approval from HBF.

4.  HBF maintained a computer system through which staff members of each branch would record and report, inter alia, the daily financial position such as cash balance kept by the branch and the inter-branch transactions, to HBF. HBF relied on the records in this system to monitor the business performance and financial position of its branches.

Charge 1

5.  CHEUNG Wai-fat (“CHEUNG”)  was a regular customer of the Tai Wai Branch and his remittance requests were mainly handled by D. Between September 2019 and February 2020, CHEUNG made 27 outward remittance applications totaling HK$395,390 to various Mainland bank accounts through the Tai Wai Branch.

6.  From an unknown date in October 2019, contrary to HBF policy, D began to process remittance applications by CHEUNG on credit and made cash advancement to him from cash held by her branch. She told HUANG that CHEUNG had deposited a cheque as pledge and would tell D to deposit the cheque when fund for repayment was ready, and instructed HUANG to take the credit amount into account when preparing the daily cash balance of the branch. This was done on a number of occasions. By 25 February 2020 the outstanding amount from CHEUNG accumulated to HK$940,000.

Charge 2

7.  On 25 February 2020, HBF informed D that an internal audit would take place at Tai Wai Branch on 26 February as the branch would cease operation that day. D contacted Branch Manager of another branch of HBF in Wanchai, one Mr. HO (“HO”), and requested to make a record of transfer of HK$940,000 from her Branch to the Wanchai Branch, claiming that the shortfall was due to an outstanding remittance payment of a customer of her branch. This was agreed by HO. D then instructed HUANG to submit a transaction record in the computer system of HBF purporting that HK$940,000 cash had been transferred from the Tai Wai Branch to the Wanchai Branch on 25 February. In fact there was no such cash transfer and HUANG did as told though she knew full well of the situation.

8.  In the belief that the transaction as shown in the computer system was genuine, the shortfall of the said HK$940,000 in the Tai Wai Branch was not discovered by HBF during the audit check on 26 February 2020.

Subsequent events

9.  On 9 March 2020, HO was replaced as the Manager of the Wanchai Branch. The new Manager discovered the false record and reported to HBF. 2 days later when HBF enquired about the matter, D admitted that she had advanced the said HK$940,000 to CHEUNG upon the latter’s request. She made full repayment to HBF by 13 March 2020 and resigned on that day.

10.  D was arrested by the ICAC on 23 November 2020. She made full confessions to the 2 offences when interviewed under caution.

11.  According to Mr. LAU, SPP (Ag.)  for the prosecution, the case was reported to the ICAC on 4 May 2020. At the time of the offences D was earning just over HK$20,000 per month. There was no record of CHEUNG ever repaying HBF at any time of any sum advanced to him by D.

Defendant’s Backgrounds and Mitigation

12.  According to the Background Report, D is 31 years old, born in the Mainland on 9 September 1991. She came to Hong Kong in 1994 and received education up to, but not completing, Form 7. She started her working life in 2010. She married Mr. CHIU, who operates a retail business selling hair products, in 2018 and they have no child. She has a clear criminal record.

13.  In mitigation, Mr. WONG representing D submitted that D committed the offences out of stupidity in order to maintain a good relationship with CHEUNG, a regular customer of her branch. D did not make any financial gain in doing so. D is extremely remorseful and had learnt a bitter lesson. Her husband had assisted her in making full restitution to HBF. These were all in line with the contents of the Background Report. Mitigation letters written by D, her father and husband were submitted for consideration.

14.  Mr. WONG cited HKSAR v Ng Kwok Wing & Anor[1], and suggested that the proper starting point for Theft of HK$940,000 involving breach of trust should be 35 months imprisonment. He asked the Court to accord 1/3 full discount for D’s guilty plea and extra discount for full restitution of up to 50% in total, citing HKSAR v Leung Shuk Man[2] and HKSAR v Chiu Peng[3] in support. He conceded that the 2 offences were separate and distinct but asked the Court to consider totality principle and impose concurrent sentences for the 2 offences, citing AG v Frankie Ng Tze Kin[4] in support. Mr. WONG further submitted that D made full confessions and full restitution to HBF in March 2020. The matter was reported to the ICAC on 4 May 2020. D was arrested on 23 November 2020 and again made full confessions under caution. She indicated her intention to plead guilty at the first available opportunity in Court, which finally came on 11 May 2023. There had been some delay and asked the Court to accord further reduction to the sentence to be imposed on D.

Sentence

15.  This is a serious case of Theft involving breach of trust. The amount involved, viz., HK$940,000, represented about 45 times of D’s monthly earnings at the time. It is difficult to accept that she committed the offence in Charge 1 only to maintain a good relationship with a regular customer without personal gain. The offence was committed over a period of about 6 months. When her misdeeds were about to be discovered, she resorted to dishonest means and committed Charge 2 to cover them up, albeit only temporarily, dragging at least one of her subordinates into potential trouble along the way.

16.  I agree with Mr. WONG that so far as Charge 1 is concerned, the guideline in Ng Kwok Wing is applicable.  For Theft of an amount between $250,000 to 1 million, the sentence should be 2-3 years. For this Charge, I will adopt a starting point of 33 months.

17.  D pleaded guilty at the first available opportunity. She is entitled to the customary 1/3 discount, reducing the sentence to 22 months.

18.  D had made full restitution to HBF even before the case was reported to the ICAC. In SJ v Hui Siu Man[5], the CA stated that:

“There is no encouragement to make restitution if the offender knows that it will have little effect on sentence. We are satisfied that full restitution, particularly in commercial crimes, must be encouraged and that this can only be done if real weight is given to it as a factor mitigating sentence. We repeat, however, that, of itself, is not a “very exceptional circumstance” which would warrant a suspension of sentence.”

This was followed in Chiu Peng[6] and HKSAR v Leung Shuk Man[7]. For this factor, I will reduce the sentence for Charge 1 by 6 months, reducing it to 16 months.

19.  D confessed to her employer of her criminal conducts and made full restitution by 13 March 2020. For some reason the case was reported to the ICAC only on 4 May 2020. Another 6 months had lapsed before D was arrested on 23 November the same year. According to the chronology of events provided by Mr. LAU, the ICAC first approached the DoJ for legal advice on 29 June 2021. After further investigation, D was charged on 31 May 2022 and appeared in the Magistrates Court for the first time on 2 June 2022. She appeared in the District Court for the first time on 23 June 2022. She indicated her plea on 6 October 2022 and formally entered her guilty pleas before me on 11 May 2023.

20.  Mr. LAU explained that there were other suspects involved in the case. The initial investigation, which took about 6 months, centered on Charge 1. Charge 2 came into the picture when HBF provided additional documents to the ICAC in late April 2021. COVID pandemic also came into the picture as during the period, the ICAC had encountered difficulties in contacting HBF and making arrangements to interview relevant potential witnesses.

21.  Unreasonable delay in prosecution can be taken into account in sentence where appropriate[8]. Having taken all relevant matters into account, I consider that while there is some delay in bringing D to Court, the delay could not be said to be unreasonable, nor caused by any fault on the part of the prosecution. However, in the special circumstances of this case, in particular, bearing in mind that D had made full and frank confessions and full restitution to HBF in March 2020 prior to the case being reported, and fully co-operated with the ICAC since her arrest in November 2020, I am prepared to exercise my discretion to accord some further discount to D.  For this factor I will further reduce the sentence by 3 months, making the final sentence for Charge 1 to be 13 months.

22.  For Charge 2, this is a very serious offence also. I consider 18 months to be the appropriate starting point, which is reduced by 1/3 for the early guilty plea to 12 months. Although the 2 offences are separate and distinctly different in nature, having regard to the totality principle, I will order 2 months of Charge 2 be run consecutively to that of Charge 1.

23.  In AG v Ngan Suen Kee[9], the CA stated that only in exceptional cases would it be proper to pass a sentence other than an immediate custodial sentence in cases involving breach of trust, as a general deterrent and to mark publicly the gravity of the offence. So far as full restitution is concerned, it was stated by the CA in Hui Siu Man that this factor alone would not warrant the sentence to be suspended as “if that was so, it would almost be an inducement to persons to take the risk involved in such offences knowing that, if they were caught, they could avoid imprisonment simply by paying back the amount they had stolen.”[10]

24.  Having considered all the circumstances of this case, in particular, the added criminality brought about by Charge 2, I do not consider there are exceptional circumstances in the present case warranting the sentences to be suspended.

25.  For the 2 offences D is facing, she is sentenced as follows:

(i)  Charge 1: 13 months imprisonment;

(ii)  Charge 2: 12 months imprisonment, 2 months consecutive to Charge 1;

(iii)  Total sentence: 15 months imprisonment.