HKSAR v. NG CHUN LAM

DCCC 30/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 30 OF 2017

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REASONS FOR SENTENCE

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1.  There are originally two defendants in this case. In this present proceedings, I am dealing with D2 only. The sentence of D1 will be deferred until she has given evidence for the prosecution in the coming 11 trials in the magistrates’ court.

2.  D1 and D2 were jointly charged with one count of conspiracy to defraud (Charge 1). D2 was also charged with one alternative charge of fraud (Charge 3). D2 pleaded guilty to charge 3. Charge 1 against D2 is therefore to be kept in court file and not to be proceeded with without the leave of the court.

THE FACTS

3.  The International Social Service Hong Kong Branch (“ISS”), a non-governmental organization, has been entrusted by the Social Welfare Department to provide assistance-in-kind, including rental allowance and allowance on utilities charges, to asylum seekers and torture claimants(“ASTCs”).

4.  To apply for rental allowance, an ASTC is required to submit to ISS a Landlord Information Form (“LIF”), together with copies of his or her landlord’s Hong Kong Identity Card, bank card or passbook and tenancy agreement.

5.  Apart from rental allowance, an ASTC can also apply for allowance on utilities charges by submitting an Electricity and Water Consumption Form (“EWCF”), which should again be duly signed by his landlord.

6.  Since June 2011, D2 purportedly leased some properties to 19 ASTCs. Between 14 June 2011 and 20 February 2014, ISS received LIF and/or EWCF together with the relevant supporting documents in relation to 19 ASTCs.  In the said applications, it was stated that D2, as the landlord, had leased premises located at six different addresses to the said 19 ASTCs.  In the belief that the information on the applications was true, ISS released the rental allowances and allowances on utilities charges in the total sum of $406,248.9 into D2’s bank account.

7.  On 15 January 2014, D2 was arrested.  Under caution, D2 admitted that he had never owned any property nor leased any property to anyone, including the ASTCs.  Since 2011, at D1’s invitation, D2 became a purported landlord of some ASTCs with whom he was not acquainted.  Upon D1’s instruction, D2 had passed copy of his Hong Kong Identity Card and bank account documents to her and signed on some tenancy agreements for submission to ISS.  D2 had agreed with D1 that 85% of the rental allowances plus $20 per ASTC and the full amount of the allowances on utilities charges which he received from ISS would be given to D1, while the remaining balance would be retained by D2.  D1 also supplied D2 with information of the ASTCs who were his purported tenants, in order to enable him to make response when receiving verification calls from ISS.  D2 admitted that he had benefited about $30,000 to $40,000 as a result of the fraudulent scheme.

MITIGATION

8.  D2 has a clear record.

9.  He is now 37 years old. Married with 2 children aged at 7 and 2 years old. They resided with D2’s father (aged 78) in a village house. D2’s father remarried with two teenage children at 14 and 17 years old.  He runs a coffee shop at the ground floor of the village house.  D2 used to work as a waiter for his father earning $12,000 per month.

10.  D2 is all along the sole bread winner of the family and he is fully employed.

11.  In 2005, D2 received kidney transplant operation. Thereafter he has to regularly take anti-rejection pills as a result. The medication costs around $4,000 per month.

12.  In October 2014, D2 established a transportation company to handle delivery of goods. He bought a light goods vehicle by hire purchase. His gross income is $20,000 per month.

13.  D2 came to know D1 when he was still working as a waiter in his father’s coffee shop. D1operated her employment agency next door. D1 approached D2 and persuaded him to join a scheme to earn easy cash in May 2011. D1 claimed that D2 just required to supply his copy of his identity card, his bank account and sign on the LIF. D1 promised that D2 would receive around $1,000 to $1,200 per month. D1 would also provide names of the ASTCs in case the ISS would call D2 to verify them.

14.  The offence spanned for 2 years and 8 months. D2 could obtain $30,000 to $40,000 in the scheme.

15.  The defence urged the court to call for CSO and PO reports whilst keeping all the sentencing options be opened.

SENTENCING PRINCIPLES

16.  The Court of Appeal in the Secretary for Justice v Leung Wai Kei [2007] HKCLRT 206 considered the appropriate sentence for offences involving the obtaining of public assistance funds by deception. Mr Cheung for the defence accepted that the legal principles in Leung Wai Kei are applicable in our present case.

17.  In Leung Wai Kei, supra, the Court of Appeal expressed the following views on the severity of sentences and whether an immediate custodial sentence was warranted:

“27. We agree that the CSSA Scheme is intended to help those in genuine need of assistance. Our society does not tolerate any act of defrauding public funds by dishonest means. However, we do not endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds. Each case presents its own facts and each defendant has his own circumstances, and it would go against sentencing principles to lay down a hard-and-fast rule of adopting immediate imprisonment as a starting point.

18.  The Court of Appeal then listed seven factors to be considered in determining whether a severe sentence is to be imposed. They are as follows:

(1) whether the defendant pleaded guilty;

(2) the amount involved and the length of time over which the offence was committed;

(3) the circumstances leading to the offence there being an obvious difference between a legitimate claim which became false due to a change of circumstances and a claim which was false from its inception;

(4) the purpose for which the money has been used with the use of the money for providing household necessities more readily attracting the court’s sympathy than spending the money on luxuries;

(5) the defendant’s character and previous record;

(6) circumstances specific to the defendant, such as illness, disability, family difficulties, etc; and

(7) whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid.

DISCUSSION

19.  Bearing in mind the “views” above, it can be seen that:

(1) D2 pleaded guilty to the offence.

(2) the offence was committed over a period of 2 years and 8 months and $406,248.9 involved was a substantial amount. D2 claimed he could only obtain about $30,000 to $40,000 from the scheme.

(3) D2’s claim was a false one from start.

(4) there is information the money was spent on household necessities.

(5) D2 has a clear record.

(6) D2 received kidney transplant in 2005 and is relying on the anti-rejection pills at $4,000 per month. He has a family to support.

(7) D2 has not repaid the benefit of $40,000 that he obtained from D1. However, during mitigation he submitted through his lawyer that he will make repayment in the coming year by 12 instalments.

20.  In determining sentencing guidelines for offences involves fraud on public assistance, the Court of Appeal in Leung Wai Kei at paragraph 46 stated that:

(1) The court should first consider whether a custodial sentence is necessary;

(2) If a custodial sentence is appropriate, the court may consider imposing a community service order in lieu of imprisonment or suspending the sentence;

(3) In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.

21.  Given the above circumstances, I note that the probation officer recommended CSO. However, in my view, this option cannot adequately reflect his culpability. According to the information gathered during investigation, it was stated that D2, as the landlord, had leased premises located at six different addresses to the said 19 ASTCs.  In fact, D2 had never owned any property nor leased any property to ASTCs.  As a result, ISS released the rental allowances and allowances on utilities charges in the total sum of $406,248.9 into D2’s bank account.  

22.  Even I take into account D2 has no previous conviction, however, this must be viewed in the context that this is not a single isolated offence but an offence which was committed over a period of 2 years and 8 months.  The claim was fraudulent when D2 first started receiving allowances in 2011. The commission of the offence involved substantial planning and organization.

23.  Given the length of time over which the offences were committed; the amount of money involved and the fact that it was a deliberate deception from the very beginning, custodial sentence is warranted. Though D1 was the instigator in this scheme, without the participation of D2, the defraud could not have been successful.

24.  Unlike those defendants who had defrauded the Social Welfare Department who is usually disadvantaged members of our society,  this is not such a case in the present situation. D2 could lead a decent life himself. He committed the present offence out of greed. Even if he did it out of financial difficulties, there is no excuse for him to commit the offence.  The court would never accept any economic reason for committing an offence.

25.  In Leung Wai Kei, the Court of Appeal indicated that where the amount involved was over $200,000, the term of immediate imprisonment should be over 24 months.  Here the amount involved is over $400,000.   Having considered the circumstances of the offence and the amount of money the D2 claimed that he had actually pocketed, in my view, the appropriate starting point would be 3 years’ imprisonment. With his plea, the sentence is reduced to 24 months. 

26.  D2 was arrested in January 2014, D2 indicated that he has been under tremendous pressure in his mitigation letter to court. The case has spanned for 3 years and 7 months from the time of arrest to the time that he was brought to court. During this period of time, he has started his transportation business and his younger son was born. I find that there was delay in bringing the matter to court.  I am satisfied some credit should be given in sentence for this delay (see HKSAR v Wong Ka Wah CACC 260/2006).  In the circumstances, I reduce the sentence by 4 months’ imprisonment to 20 months’ imprisonment. 

27.  I have also borne in mind that D2 will make repayment of $40,000 by 12 instalments in a year to the Social Welfare Department.  I further reduce the sentence by 2 months to 18 months’ imprisonment.

28.  I take into account that D2 has undergone kidney transplant in 2005 and he is regularly under medication. Generally speaking, poor health, in principle, is not a mitigating factor.  D2 should be able to receive proper treatment and care while serving his sentence. 

29.  Undoubtedly, D2’s family will suffer, but this consequence is something which D2 should have considered before he embarked on committed the offence. The Court of Appeal had repeatedly said in the past in numerous authorities that family circumstances is not something which the court can consider especially in cases of serious offences. As for the D2’s alleged hardship to his family, he was very much the author of his own misfortune.

30.  I do not find any exceptional circumstances to warrant my suspending this sentence. D2 is sentenced to 18 months’ imprisonment.