HKSAR v. LEE WAI YIN

DCCC 697/2019

[2020] HKDC 355

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 697 OF 2019

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REASONS FOR SENTENCE

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1.  Defendant Lee Wai Yin pleaded guilty before me to one charge of Fraud, contrary to section 16A of the Theft Ordinance, Cap 210.

2.  The particulars are that he, between 28 September 2009 and 31 August 2014, both dates inclusive, in Hong Kong, by deceit, namely by falsely representing to officers of the Social Welfare Department (“SWD”) that all the information given in the Application Form of Comprehensive Social Security Assistance (“CSSA”) Scheme dated 16 November 2009 and Review Forms of CSSA Scheme dated 5 January 2010, 26 July 2010, 29 July 2011, 13 December 2011, 18 June 2012, 25 July 2012 and 16 July 2013 respectively was true and a complete and accurate statement of his circumstances, in that he falsely represented that he and his household members had no assets other than those reported in the aforesaid forms, and with intent to defraud, induced officers of the SWD to grant or continue to overpay him in the total sum of $366,411.81 Hong Kong currency as CSSA, which resulted in benefit to himself and in prejudice to the Government of the Hong Kong Special Administrative Region.

Admitted Facts

3.  The facts admitted by Mr Lee are as follows.

4.  On 28 September 2009, Mr Lee applied for CSSA on the ground of being a single parent in a family with two children.  Subsequently, Mr Lee’s mother also joined the family’s CSSA case on 18 June 2012.  On the other hand, on 1 September 2012, Mr Lee’s daughter, who was 19, withdrew from the CSSA case.

5.  During the application interview on 16 November 2009 with PW1, with the Application Form dated the same date (ie 16 November 2009) he was reminded by PW1 that he had to report all assets and incomes.  During the subsequent review interviews listed below between 5 January 2010 to 25 July 2012 by PW1, PW2, and a retired staff member namely:-

(i) 5 January 2010 (by PW1);

(ii) 26 July 2010 (by a retired staff member);

(iii) 29 July 2011 (by PW2);

(iv) 13 December 2011 (by PW2);

(v) 18 June 2012 (by PW2); and

(vi) 25 July 2012 (by PW2),

Mr Lee also declared that he did not have any unreported assets and bank accounts apart from those he had declared on the respective review forms on the above mentioned (i) to (vi) dates.

6.  On 16 July 2013, during another review interview with PW2, Mr Lee again declared he and his household members had no income and signed on the Review Form.  Mr Lee suddenly submitted a few salary slips which showed that he had worked for one General Security Limited between 5 January 2010 and 25 July 2012.

7.  PW3 therefore was assigned to conduct an investigation against Mr Lee.  Upon investigation, SWD officers found that at all material times:-

(a) Mr Lee had an unreported account with HSBC, BOC and Haitong International Security (“Haitong”) respectively;

(b) Mr Lee’s daughter had an unreported HSBC account;

(c) Mr Lee’s mother had an unreported property in the Mainland;

(d) The family asset had exceeded the permissible asset limit;

(e) There were numerous transactions in Mr Lee’s unreported accounts which he admitted that were incomes;

(f) Had the family assets been disclosed to the SWD, Mr Lee would only have been awarded CSSA amounted to HK$102,638.19 between 28 September 2009 and 31 August 2014; and

(g) The total overpayment calculated by PW4 during the period was HK$366,411.81.

8.  SWD then referred the case to the Police for investigation.  On 29 December 2015, Mr Lee was arrested.  The Police took an interview with him.

9.  Under caution, Mr Lee admitted inter alia that:-

(a) His family included his mother, his son, his daughter and himself;

(b) He did not report the HSBC account as he did not have enough money to provide for the family;

(c) He did not report the BOC account as he could use the account to receive salary from his employers;

(d) He did not report the security account held with Haitong International Security as he wanted to invest in the stock market to make some money;

(e) He believed that the SWD would not have found out the relevant HSBC, BOC and Haitong accounts;

(f) He was careless and had forgotten to report his daughter’s HSBC account;

(g) He did mention about his mother’s property in China to the SWD officers. However, he did not know the market price; and

(h) Since he was afraid that he might not be entitled to CSSA, he did not report to the SWD that he had been doing part-time work.

Criminal record

10.  Mr Lee enjoys a clear record.

Antecedents

11.  The antecedents statement shows that Mr Lee is aged 52 (41-46 at the time of the offence), widowed, educated to university level in the Mainland; that he is a part-time security guard and earns about $15,000 [Defence says $12,000-$13,000] per month; that he lives with mother (84), daughter (25) and son (16) in public housing in Kwai Chung.

Mitigation

12.  Mr Ronny Leung of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Lee.

13.  The following is a summary of the mitigation submissions.

14.  Mr Lee migrated to Hong Kong in 2003; his son was born in the same year.  Since arriving in Hong Kong, Mr Lee has been a security guard earning about $12,000-$13,000 a month.  His mother arrived in Hong Kong in 2005; his late wife and daughter came to Hong Kong in 2008.

15.  Mr Lee is now working as a warehouse worker, earning about $15,000 a month (employment proof submitted).

16.  His late wife was a registered nurse, who was earning about $20,000 a month and was the main breadwinner of the family.  In 2008, she was diagnosed with stage 4 cancer and passed away in August 2009.

17.  In order to allow her to receive medical treatment in China, Mr Lee borrowed over $100,000 from his sisters and friends.  After her death, Mr Lee became the sole breadwinner, responsible for looking after his elderly and chronically ill mother as well as the children who were studying.  He was in heavy debt.

18.  Between 2009 and 2012, Mr Lee had to face the enormous stress of supporting the family alone and was in deep sorrow for the death of his wife. He has been suffering from depression and insomnia since 2009; with his symptoms becoming even more serious every August, the month when his wife passed away.  Mr Lee has been suffering from hallucinations, seeing and hearing his wife talk to him; he was required to receive regular psychiatric treatment from the hospital (medical memo dated 24 January 2020 of M.O. Dr Wat Chi Sum submitted).  In 2010, Mr Lee was diagnosed with diabetes and regular medication is required.

19.  Mr Lee concealed his economic and working conditions from the Social Welfare Department (“SWD”) in the hope of obtaining more subsidies to support the family needs and to pay off the debts, because he could not make ends meet.  Even with the CSSA, the funds at home could barely meet the family expenses.

20.  Around the end of 2014, when his daughter began to work, Mr Lee ceased to apply for CSSA.

21.  Mr Lee made full and frank admission to the SWD and Police and was cooperative.  He pleads guilty at the first opportunity to show his genuine remorse and to save the court’s time.

22.  Mr Lee is willing to make full repayment of the $366,411.81 under charge by instalments.  However, he is only able to make a first instalment of $66,411.81 with subsequent monthly instalments of $5,000.

23.  Mr Lee was arrested on 29 December 2015 and made full admission on the same day.  However, he was not charged until 5 September 2019 by the prosecution, ie 3 years and 9 months after arrest.

24.  Since Mr Lee made full admission to SWD and Police, he has been facing enormous stress which caused him often to feel depressed, coupled with fluctuations in emotion, worries and difficulty in sleeping.  Mr Lee is receiving treatment from West Kowloon Psychiatric Centre for “Recurrent Depressive Disorder” (4 appointment slips submitted dated between 9 December 2019 and 21 January 2021).

25.  Since the arrest, Mr Lee has been law-abiding and working hard.  He has fully rehabilitated.

26.  The Defence submits three mitigation letters written by one elder sister and two younger sisters of Mr Lee respectively.  The letters indicate that the sisters felt Mr Lee has shown genuine remorse and that he has always been a responsible son and father; the sisters are willing to assist in his rehabilitation.

27.  In HKSAR v Leung Wai Kei, CAAR 6/2006, [2007] HKCLRT 206, the Court of Appeal stated the following in para 27:-

“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. The following factors should be considered in determining whether a severe sentence is to be imposed:

(1) Whether the defendant pleaded guilty;

(2) The amount involved and the length of time over which the offence was committed. It should be noted that, even where a huge total amount is involved, this may be an accumulation of small amounts received by the applicant per week/per month;

(3) The circumstances leading to the offence. There is 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: using the money for providing household necessities will more readily attract the court’s sympathy than spending the money on luxuries;

(5) The defendant’s character and previous records;

(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 to him.”

28.  After having considered the case Leung Wai Kei, instead of imposing immediate custodial sentence, quite a number of District Court Judges have imposed suspended sentence or community service order in CSSA fraud related cases:-

(a) HKSAR v Yuen Wan Lung [2019] HKDC 638;

(b) HKSAR v Chan Choi Fung [2019] HKDC 597;

(c) HKSAR v Chow Tsui Tsang [2018] HKDC 223;

(d) HKSAR v Lam Mei Tsang [2018] HKDC 376;

(e) HKSAR v Cheung Tin Chi, DCCC 946/2015;

(f) HKSAR v Tam So Tsang, DCCC 270/2014; and

(g) HKSAR v Lok Yau Kau, DCCC 96/2013.

29.  Bearing in mind the above cases and all the mitigating factors of this case including, the timely guilty plea, the fact that the assistance obtained was spent in supporting the family, Mr Lee’s clear record, the illnesses suffered by him and his mother, the difficulties faced by the family, his willingness to make full repayment, the delay in prosecution, his full rehabilitation, the fact that he has ceased applying for CSSA, and the lack of re-offending risk, it was submitted that a suspended sentence would be the most appropriate sentence to impose.

30.  When invited to address the court on whether a CSO report ought to be obtained, Mr Leung said that in view of Mr Lee’s psychiatric medical history, that might not be appropriate.

31.  On the topic of delay in prosecution, Mr Leung made comments against the List of “Chronology of Events” submitted by the prosecution.  In particular, he submitted that the period of 1½ year for the police to contact SWD officers for taking statements was excessively long; that 4½ months taken for the police to contact various companies for Mr Lee’s stock trading records and employment records was excessive; that 5 months taken for the police to contact Mr Lee’s mother and daughter for investigation was too long; that the 7 months for obtaining legal advice was too long; and that the effort by the police to locate Mr Lee between mid-March and the end of May 2019 for re-arrest was too long and during this time Mr Lee alleged that he did not receive any call and was at home.

Background report

32.  According to the background report, Mr Lee did not totally understand the working regulation of CSSA and forgot to report the bank accounts and his mother’s property to the SWD; that he made a wrong decision for solving his financial problem and committed the present offence; he gave no excuse and attributed his wrongdoings to his greediness and carelessness.

33.  The background report concluded by saying, inter alia, that his first wife passed away in 2009 and he re-married in 2015 with a Chinese resident in Hong Kong; that he reported to have completed college education and worked as a teacher in Mainland for 15 years; that he came to Hong Kong in 2003; that he reported that he suffered from depression after the death of his first wife in August 2009 and he applied for CSSA in September 2009; that he attended for medical treatment at the West Kowloon Psychiatric Centre since 2010 (sic); that Mr Lee’s mother and daughter believed that he committed the present offence because of carelessness and financial problem; that during the present remand, Mr Lee had deep reflection on his wrongdoings and expressed his remorse; that he admitted his misdeeds and showed readiness to accept the legal responsibility of the offence he committed.

Psychiatric report

34.  Examination revealed that there is no psychotic symptom elicited.  The Psychiatrist’s opinion is that Mr Lee has history of recurrent depressive disorder in the past; that his current condition is relatively stable despite some adjustment issue related to lawsuit; inpatient psychiatric treatment is not recommended.

Psychological report

35.  The Psychologist’s conclusion is that Mr Lee was troubled by depression following his first wife’s death and the financial burden of being the only breadwinner of the family; that the index offence could be understood as his maladaptive way to cope with financial stress under the influence of depression; that the risk for him to commit criminal offences in the future was assessed to be low.

Further mitigation in light of the reports

36.  The reports are understood and, save some minor particulars, are agreed by Mr Lee.

37.  Despite the fact the Mr Lee has spent the past 3 weeks in custody, there has been no news that he has been dismissed from employment.  So Mr Lee is expected to go back to work if released.

38.  Although Mr Lee is rather tight with his budget, he could still pay back $5,000 each month by reducing his monthly contribution to mother and/or by getting help from his second younger sister Lee Wing Yee who is in court and has signified her assent to help.

Sentence

39.  Before sentence, I ordered for Background report, Psychiatric and Psychological reports on Mr Lee.  I have taken into account the contents of these reports before sentencing.

40.  I have considered all the mitigation submissions including the cases referred to by Mr Leung and the written legal research done by the parties on the sentencing options of a fine, and compensation and restitution orders.  For their assistance, I am grateful to the Ms Cindy Lee for the prosecution and Mr Leung on behalf of Mr Lee.

41.  Regarding the alleged delay in prosecution, I have examined the Chronology of Events prepared by the police and have taken note of the explanations given by them, where appropriate, in the “Remarks” column of that document.  I am satisfied that there are no unreasonable delays.  In any event, Mr Leung has not submitted any or any sufficient evidence that Mr Lee suffered additional stress as a result of waiting for the investigation result; nor have the professional reports obtained on Mr Lee shown such additional stress. Consequently, I do not accept this particular topic qualifies as another mitigating factor.

42.  Fraud under the Theft Ordinance is a serious offence and carries a maximum penalty of 14 years’ imprisonment.

43.  Given the seriousness of the offence and its duration and circumstances under which it was committed, a custodial sentence (with or without the additional imposition of a fine) is the only option that I adjudge to be appropriate.

44.  With reference to the table of appropriate sentences laid down in para 47 of Leung Wai Kei, supra, I adopt a starting point of 3 years’ imprisonment in the case of Mr Lee.

45.  He has indicated an early plea which he has materialized; for this he is entitled to a 1/3 discount.  For a serious offence such as the present one, no further discount will be given to him for a previous clear record.  No other mitigating factors of sufficient weight have surfaced which could justify any further discount either.

46.  I take note of what was said in para 27 of Leung Wai Kei, supra, a major part of which was cited by Mr Leung on behalf of Mr Lee.  Against each of the 7 sub-paragraphs of the cited passage, I have made separate and cumulative considerations, where applicable.

47.  I agree with Mr Leung that this is a suitable case for the imposition of a suspended sentence, together with an appropriate fine, to be paid by instalments.

48.  As I understand it, Mr Lee has already made a repayment of $66,411.81 to the SWD and he is able to repay the outstanding sum by way of monthly instalments of $5,000.

49.  Because of the undesirability of extending the time for payment of instalments over too long a period (a period of 3 years appears to be the limit: see R v Olliver and Olliver (1989) 11 Cr App R(S) 10, 15), I will set the last payment date at 3 years from now.  In the context of this case, I consider 6 half-yearly instalments of $30,000 each to be appropriate.  So assuming Mr Lee will make the full payment of the instalments, he will have paid at the end of the period, together with the sum of $66,411.81 already paid, a total sum of $246,411.81, which is about 2/3 of the amount misappropriated.  I am satisfied that this, together with the suspended sentence that I will impose on him, will meet the justice of the case.  There will of course be imprisonment term which Mr Lee will have to undergo should he fail to pay any of the instalments.

(Mr Lee, please stand)

50.  The sentence for Mr Lee will be in two parts.  The first part is a sentence of 2 years’ imprisonment suspended for a period of 3 years.  The second part is a fine, additionally imposed because he has gained by his crime. Taking into account his means as represented to me by Mr Leung, I order that the fine will be in the total amount of $180,000, to be paid by 6 equal half-yearly instalments of $30,000 each, the first instalment of which is payable on or before 19 November 2020, and so on and so forth.  Should Mr Lee fail to pay any instalment in full on the due date, he will undergo a term of 2 months’ imprisonment for that one failure.  If he fails to pay another instalment, he will undergo another term of 2 months’ imprisonment, and so on and so forth; but the total term of imprisonment will not exceed 12 months in any event because there are only 6 instalments.

(The meaning of a suspended sentence is explained to Mr Lee)