HKSAR v. WONG YUK WAH, WALLACE

DCCC 380/2023

[2023] HKDC 1388

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 380 OF 2023

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REASONS FOR SENTENCE

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Introduction

1.  The defendant pleads guilty to the following charges:-

(a)  Charges 1 & 2: theft, contrary to section 9 of the Theft Ordinance (Cap 210);

(b)  Charge 3: theft, contrary to sections 6(1)  and 9 of the Theft Ordinance (Cap 210); and

(c)  Charges 4 & 5: using false instruments, contrary to section 73 of the Crimes Ordinance (Cap 200).

2.  These charges involved the misappropriation of funds totalling HK$2,341,571.12.

3.  For all purposes in the present case, the victim was the former employer of the defendant and therefore this case involves the element of breach of trust.

The Facts

4.  The facts admitted by the defendant show that at all material times, PW1 had two companies, VTC-1 and VTC-2.  Basically, PW1 relied on his employees to run VTC-1 and VTC-2. 

5.  PW2 was one of them who joined VTC-1 on 1 February 2004 and later became the sole director of VTC-1.  In addition, PW2 was the General Manager of VTC-2. 

6.  On the other hand, the defendant joined VTC-2 as an accountant on 23 March 2006 and later on became an accountant for VTC-1 as well.  At all material times, the defendant worked under the supervision of PW2. 

7.  There are two accounts involved: VTC-2’s HSBC account (Account 1 – Charge 1)  and VTC-1’s HSBC account (Account 2- Charge 2). PW2 was one of the signatories of these accounts with a limit of HK$100,000. There were cheques of VTC-2 and VTC-1 drawn on respectively Account 1 and Account 2 and they were mostly signed by PW2.  Sometimes, however, PW1 would sign blank cheques and leave them in the office.

8.  In July 2019, due to financial difficulties of the companies, PW1’s son provided a personal loan of HK$600,000 to VTC-1. Subsequently, as instructed by PW1, PW2 had arranged the defendant to issue 2 cheques from VTC-1’s account (each at HK$300,000 and both pre-signed and dated 15 November 2019 and 18 December 2019 respectively by PW1), purported to be used to settle the aforesaid personal loan. 

9.  In early April 2021, PW1’s son chased PW2 for repayment.  PW2 was puzzled as she had already arranged the defendant to issue the 2 cheques for repayment.  Upon inspecting bank documents, PW2 discovered that only the cheque dated 18 December 2019 had been deposited to the account of PW1’s son whereas the other one was not.    Rather, this another cheque seemed to have been deposited into the defendant’s personal account.

10.  Upon enquiry, the defendant informed PW2 that he had not deposited that cheque, instead issued another pre-signed cheque and deposited it into his own account.  The defendant also suggested to terminate the employment such that he could use his severance payment to repay the HK$300,000 he had misappropriated. 

11.  Since PW2 was unable to hire a replacement and that the defendant had also agreed to return the misappropriated funds, PW2 did not sack the defendant and he therefore continued to work for VTC-2 and VTC-1.

12.  Later in early August 2021, PW2 obtained bank records of VTC-1 and VTC-2 and discovered further suspicious account activities.  PW2 found that a lot of cheques of VTC-1 and VTC-2 had been deposited into the defendant’s accounts.  PW2 then reported the matter to the police.

13.  Subsequent investigations revealed that the defendant had forged signatures of PW1 to issue cheques to his benefits and on other occasions misappropriated funds of VTC-2 when those were supposed to be used to pay off PW1’s credit card liability or insurance bills.

14.  On 20 January 2022, the defendant was arrested for theft.  Upon arrest, under caution, the defendant remained silent.

15.  At a subsequent video recorded interview, the defendant said, inter alia, that:-

(a)  He joined VTC-2 as an accountant in 2007 and later on worked as an accountant for both VTC-1 and VTC-2.

(b)  His duties included bookkeeping and issuing cheques. He could access the account information of VTC-1 and VTC-2 in the office.

Charges 1 and 4

16.  The defendant admits that he had forged PW1’s signature on 5 cheques of VTC-2, and presented them for payment into his own accounts.  The total sum was $230,000.

17.  The defendant did the same on 27 cheques of VTC-2 and presented them for payment either by way of cash or into his own accounts.  The total sum was $988,364. 

18.  These two figures represent the stolen choses in action for Charge 1 and the presentation of cheques bearing forged signatures forms the basis for Charge 4, using false instruments. 

Charges 2 and 5

19.  Similarly, the defendant admits that he had forged PW1’s signatures on 7 cheques of VTC-1 and presented them for payment. The total amount was $360,560.

20.  He had also drawn on 8 cheques of VTC-1 and presented them all for payment to his own benefits.  The total sum was $511,800.

21.  These two figures represent the stolen choses in action for Charge 2 and the presentation of cheques bearing forged signatures forms the basis for Charge 5, using false instruments.

Charge 3

22.  The defendant admits that PW2 signed a number of cheques in favour of him to enable him to settle PW1’s credit card or insurance bills via PPS.  However, he used the same in full or in part for his own personal purposes.  These involved a total sum of $250,847.12. 

23.  It is revealed that the defendant used the sums he misappropriated to repay his gambling debts. 

24.  The total amount embezzled was over $2M.

25.  In summary, the defendant stole the debts in the total sum of HK$1,218,364 owed by HSBC to VTC-2 at Account 1 by way of depositing or cashing of 32 cheques (Charge 1).  He also stole the debts in the total sum of HK$872,360 owed by HSBC to VTC-1 at Account 2 by way of depositing or cashing of 15 cheques (Charge 2).

26.  For Charge 3, the defendant dishonestly appropriated a total sum of HK$250,847.12, which was issued to and entrusted the defendant with to settle the bills payable by PW1 and which VTC-2 had a proprietary right or interest, by keeping them for his own personal purposes with the intention of permanently depriving VTC-2 of the same.

27.  Based on the above, the defendant used 32 cheques which were, and which he knew to be false, in that they were purportedly issued by PW1 in the terms in which they were issued but PW1 in fact did not issue them in those terms, with the intention of inducing staff members of HSBC to accept them as genuine, and by reason of so accepting them, to do some acts to the prejudice of VTC-2, namely to honour those cheques (Charge 4).

28.  Similarly, the defendant used 15 cheques which were, and which he knew to be false, in that they were purportedly issued by PW1 in the terms in which they were issued but PW1 in fact did not issue them in those terms, with the intention of inducing staff members of HSBC to accept them as genuine, and by reason of so accepting them, to do some acts to the prejudice of VTC-1, namely to honour those cheques (Charge 5).

Mitigation

29.  The defendant is 51 years old. He is a married man and with a daughter now aged 17.

30.  The defendant is a Higher Diploma holder.  Up until the time of his arrest, he was working as an accountant, earning around HK$26,000 per month.

31.  The defendant is said to be the primary provider for the family.

32.  The defendant has a clear criminal record.

33.  Defence counsel also emphasised that the defendant had made a bad friend and developed a gambling habit which landed him in debt.  Now the defendant is determined to turn over a new leaf.  The defendant took two practical courses during his remand which shows that he has a good and self-motivated progress in rehabilitation.  On that basis, it is said that the defendant has reformed and the likelihood of re-offending is low.

34.  I have the benfits of reading the mitigation letters.  They consistently suggest that the defendant was otherwise a kind-hearted person and a reliable family member.

35.  It is also submitted that the following matters are relevant to sentencing:-

(a)  Guilty Plea: the defendant is entitled to a full 1/3 discount;

(b)  Partial restitution: the defendant had made partial restitution of approximately $210,000 to the victim company;

(c)  Positive Good Character - Charitable donations: annual sponsorships of two orphans in China through the Rural China Orphan Sponsorship Project;

(d)  The defendant’s physical health: the defendant sustained injuries at work, resulting in numbness in his right hand and neck, for which he needed to periodically seek physiotherapy treatment. He has difficulty closing his right hand into a fist; and

(e)  Totality principle: the five charges essentially involve one enterprise. The false instruments in respect of Charges 4 and 5 were required to carry out the thefts in Charges 1 and 2. The thefts were committed against one victim.

36.  Defence counsel properly accepts that this case involves a clear breach of trust element and the case of HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776 and HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 are applicable.

37.  Now that this case involves a sum of approximately $2.3M, the range of 3 to 5 years starting point should be considered.

Consideration and Sentencing

38.  It is important to note that it remains incumbent upon the court to arrive at an individual starting point for each of the charges even though it seems obvious and sensible that a concurrent sentence should be adopted for Charges 1 and 4, for that matter, Charges 2 and 5, or even Charge 3.

39.  For the offences of theft and using false instruments, there is no straight jacket approach and it is often said that each case would depend on the particular facts pertaining to the commission of the offences and the personal circumstances of an accused.  

40.  Whilst I agree that identifying the overall figure would help, to a certain degree, when it comes to the assessment of an overall criminality, it does not detract from the fact that the accused should receive separate sentences corresponding to all the individual charges he or she is facing.  Therefore, instead of passing a global sentence, I intend to set out the analysis and spell out the respective sentences in this case.

41.  Charge 1 (and Charge 4)  involves a total amount of HK$1,218,364.  As aforesaid, there is a clear breach of trust element.  The offences took place across 9/2015 and 12/2019 (ie 4.25 years).  Without down playing the gravity of the criminal activities involved, the practice was not very sophisticated – the defendant was merely taking advantage of the trust he enjoyed and the loophole or lack of measures that should have been implemented at the material times by the owner or superior, and all he needed to do was to carry out the signature forgeries before he would and he knew he would get the money to pay off his own debts.  No sympathy should there be when it is said that the money went mainly to settle the troubles for which, he, the defendant was the real author. 

42.  Charge 2 (and Charge 5)  involves a total amount of HK$872,360.  The offences took place across 7/2017 and 2/2020 (ie 2.5 years).  The criminal activities were very similar if not identical on most of the occasions. 

43.  Charge 3 involves a total sum of $250,847.12. Likewise, it is clear that the conduct of the defendant between 10/2018 and 7/2019 (ie 9 months)  was a blatant breach of trust.  I think needless to say, the defendant should expect a substantial sentence which is sufficient and severe enough to reflect the gravity of the offences and serve the purpose of deterrence.

44.  For the theft charges, I have considered the cases of HKSAR v Leung Shuk Man [2002] 3 HKC 424, HKSAR v Lai Hoi Yan Vivian CACC 350/2012 香港特別行政區 訴 鄭嘉欣 DCCC 623/2019.  Suffice it to say, the number of charges and the individual figures vary very much in these cases.  The figure in Lai Hoi Yan Vivian was over $2M albeit that the real loss of the company was limited to $328,000 because the scheme was not successfully implemented.  The Court of Appeal did not disturb the starting point of 4 years.

45.  For using false instrument, I am minded to pass a concurrent sentence correspondingly.  In 鄭嘉欣, it was also held that a 12-month imprisonment as starting point was appropriate for similar cases involving use of forged cheques.  It seems quite clear that using false instrument charges were usually brought against an accused in addition to charges like, theft, deception or fraud and therefore, the sentencing court would have to put the matters in proper context and as a result it is understandable that a tariff is not called for.

46.  Going back to the mitigations, I note the guilty plea of the accused and that he had repaid HK$210,000.  It represents less than 10% of the loss of the company and I do not think that a very substantial discount should be given in addition to the usual 1/3 discount.  In Leung Shuk Man, a repayment of over $400,000 (that represents the whole loss of the company)  warranted a 6 months’ reduction.  I am sure that only a lesser discount should be given to the present case.  I also note that the defendant has been remanded since January 2022 and he has sufficient reflections on his wrong doings.

47.  Having carefully considered all the circumstances and mitigations, I am minded to adopt the following starting points:-

(a)  Charge 1: 3 years and 3 months;

(b)  Charge 2: 2 years and 9 months;

(c)  Charge 3: 2 years;

(d)  Charge 4: 1 year;

(e)  Charge 5: 1 year.

48.  Based on the guilty pleas, these sentences become:-

(a)  Charge 1: 26 months;

(b)  Charge 2: 22 months;

(c)  Charge 3: 16 months;

(d)  Charge 4: 8 months;

(e)  Charge 5: 8 months.

49.  Should a global approach be adopted, one would have suggested that the appropriate starting point should be around 4 years and 3 months and the guilty plea would make it a resulting 34 months.  One would further suggest that a 3-month discount or less might be warranted because of the repayment made timely before the present court proceedings.

50.  Having carefully considered all the factors, legal principles, including the totality principle, and mitigations, I shall pass an overall sentence of 30 months’ imprisonment according to the following formula: Charges 1 (26 months)  and 4 (8 months)  to be served concurrently; Charges 2 (22 months)  and 5 (8 months)  to be served concurrently and two months of each of these charges to be served consecutively to those for Charges 1 and 4; 2 months in Charge 3 (16 months)  to be served consecutively to those for all other charges (i.e. 26 + 2 + 2 = 30).