HKSAR v. CHAN MAN YEE,NICOLE AND ANOTHER

DCCC 77/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 77 OF 20132

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Reasons for Sentence

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1.  Defendants, you are both jointly charged with an offence of conspiracy to defraud, contrary to common law and punishable under section 159C(6) of the Crimes Ordinance, Cap. 200.

2.  2nd defendant, you have pleaded guilty on the first day of the trial.  1st defendant, you pleaded guilty on the second day of the trial.  Nevertheless, your pleas were entered prior to the commencement of the trial. 

3.  The particulars of the offence are stated clearly in the charge sheet and I shall not go through them but shall set of the offence when referring to the facts of the case.  In short, what you both did was to conspire together to defraud your employer, the Harbour Plaza North Point Hotel by falsifying inputting accounting records and falsely purporting to show that all arrears of payments owed by a company called Dream Tour Hong Kong Limited had been settled and as a result thereby, you had obtained and appropriated a total sum of HK$1.64 million.

4.  This was a clear breach of trust case whereby you both were the employees of the hotel.  D1, you were the Revenue Accountant and had worked there since 2008.  D2, you were the Credit Officer, a subordinate to the 1st defendant.  You had worked there since 2009.  Your duties at the hotel included chasing corporate clients to settle outstanding bills on money owed to the hotel.  One of the clients, who was the company Dream Tour, had not paid their bills however instead of chasing Dream Tour for the amount outstanding, you both together by falsifying the accounts transferred money from other clients’ account into Dream Tour’s account thereby showing that Dream Tour had paid the moneys overdue when they had not.

5.  You had managed to transfer money from other clients’ accounts on the basis that those other clients had in fact overpaid or were in credit with the hotel. 

6.  D1 had falsely told the representative of Dream Tour that she herself would pay first on behalf of Dream Tour from her credit card and thereafter Dream Tour should pay her back personally by depositing the money due into her own personal bank account.  Believing that to be the case, Dream Tour repaid the 1st defendant and deposited into her account $1.64 million for money it thought D1 had advanced on its behalf. 

7.  This occurred between 1 May 2010 to 15 November 2011, for a period of 18 months which is the date of the charge.

8.  When Dream Tour paid the amount into D1’s personal account, D1 would at times deposit part of the funds from Dream Tour into D2’s bank account.  Dream Tour agreed to do this and go by the 1st defendant’s suggestion as Dream Tour was having cash flow problems so it was making late payments to the hotel.  Subsequently it was seen that D1 had made transfers of $508,000 to D2’s personal account and D1 kept the remaining balance of about 1.02 million.

9.  The money that Dream Tour paid to the 1st defendant should have been paid to the hotel but instead D1 pocketed the money and this was clearly a theft and these stolen funds were shared with D2.  These facts depict an obvious breach of trust.

10.  Mr Albert Luk, counsel for the 1st defendant, and Mr Lawrence Law, counsel for the 2nd defendant have mitigated fully and thoroughly on behalf of their clients.  I have taken into consideration all they have had to say and have had regard to the numerous letters written either by the defendants themselves or their family and/or their employers. 

11.  As mitigating factors for both defendants, they are both of clear record.  It is seen that they have exemplary employment records.  They had both been hardworking and diligent.  As can be seen from their record of employment with the hotel, they had received promotions and had been rewarded for their performance. Through their pleas of guilty they have shown me their clear remorse in committing this offence.

12.  The 1st defendant is 41 years of age and is a divorcee with a 4 year old daughter.  The 2nd defendant is 38 years of age, married with two children, a boy aged 17 and a daughter aged 15.  Both parents are aged and her mother is suffering from various illnesses.  Both defendants have made restitution and what is clear on the facts of this case, as a result of their individual restitutions made to the hotel, the hotel has suffered no loss at all.

13.  As mentioned earlier, this is a breach of trust case immediate periods of imprisonment is almost certainly inevitable save only in very exceptional circumstances where the amount of money obtained is minute is such a sentence not inevitable.  This breach of trust is certainly not of a small scale.  The total amount involved was $1.64 million.  The defendants themselves obtained monies of about $1.1 million for the 1st defendant and about $500,000 for the 2nd defendant.  Despite the able mitigation made by both counsel urging this court not to impose an immediate sentence of imprisonment, the court is unable to accede to their request.  There are in this case no exceptional circumstances.  Even though the defendants have made full restitution, this is not a circumstance of which to suspend any period of imprisonment.

14.  As can be seen even in the case of HKSAR v Chiu Peng, Richard, CACC287/2001, the defendant there made full restitution of $16 million.  The court there did not feel that that restitution warranted any exceptional circumstance such as to warrant a suspended sentence of imprisonment.  I do, however, recognise and accept that restitution warrants a further reduction than the usual one-third discount.

15.  In breach of trust cases, conditions that must be taken into account when sentencing are various.  In this case, a quality and degree of trust reposed in the offender including their rank.  The 1st and 2nd defendants were both in a position of trust whereby they were dealing with accounts and moneys.  I recognise that D1 was a superior of D2 and that D2 was involved in this offence as a result of D1’s suggestion.  Further, the period of which the fraud or these thefts took place was over a period of 18 months, so not for a particularly short period of time. 

16.  As for the use to which the money or property dishonestly taken was put, I have no clear facts from Mr Luk as to how D1 had used the money.  What I do know is that whatever was in her account was a very small amount, some $4,000, when this offence came to light. 

17.  As for D2, she stated from the very outset that the money was largely untouched save for her paying for some small basic utility bills.  All the money was otherwise left intact in her bank account. 

18.  There was little effect on the hotel, the victim company, as there was full restitution.  As for other mitigating factors is that there was a full restitution in this case.  It is clear to me on the facts of this case that despite D2 obtaining $508,000 from this theft, she repaid an amount of $650,000 back to the hotel.   That effectively means she has repaid $150,000 more than she has obtained. 

19.  As for D1, she has repaid less than she had obtained.  She obtained 1.132 million and repaid 1.02 million.  The letter written by the husband of D2 reflects the fact that they had to borrow this $150,000 and it has caused extreme difficulty to the family as I see from his letter, he feels he was somewhat deceived by D1 in paying more than he otherwise should have.  I can understand his sense of grievance. 

20.  Clearly in sentencing in this type of case the approach is not one of a pure mathematical exercise.  I must approach this case as is stated in the case of HKSAR v Chan Peter, CACC102/2004, is to reflect the true criminality of each of the defendant’s conduct.  The amounts by which each individual conspirator, that is the defendant, has benefited is relevant in this case because that in my view illustrates where in the scale of culpability each of the defendants should be placed.  In this case, as Mr Luk has conceded, D1’s culpability is certainly higher than the culpability of D2. I accept, however, that the main criminality common to both of them was a plan to defraud the hotel to the sum of 1.6 million.  In my view, this really was a case of a simple theft of money, i.e. moneys due to the hotel was in fact pocketed by both the 1st and 2nd defendant.  For that reason, I am and will sentence the defendants on the basis of the amount of money they obtained in the commission of the offence. 

21.  As is well known in these type of cases, but for their good character and previous good record they would not have been placed in this position of trust.  Both defendants share the fact that they will probably never be able to secure similar employment again.  They have obviously disgraced themselves and caused shame to the family. 

22.  D2’s letter of mitigation speaks a thousand words as to how remorseful she is.  She admits straightforwardly and frankly that this was pure greed.  I have not heard that this was the case with D1 but I will take it and sentence D1 on the basis that she was also driven by greed. 

23.  The sentencing for breach of trust is clearly laid down in Hong Kong by the guidelines of Cheung Kei Mee 

24.  D1, you had in effect stolen a sum of $1.132 million.  Had I convicted you after trial, I would have sentenced you to 3 years’ imprisonment.  However, you have pleaded guilty and that warrants a one-third discount.  That term shall be reduced to 2 years’ imprisonment or 24 months.  You have made restitution of an amount of 1.02 million and for that I shall reduce the term by a further 4 months’ imprisonment.  You are therefore sentenced to 20 months’ imprisonment.

25.  D2, the money you obtained was the sum of $508,000.  Had I convicted you after trial, I would have sentenced you to a term of 2 years, 3 months’ imprisonment or 27 months.  Giving you full credit for your plea of guilty, that term shall be reduced to 18 months’ imprisonment. You too have made full restitution of the sum that you pocketed but you have paid $150,000 over and above the amount.  In the circumstances you deserve a slightly greater discount and in those circumstances I reduce that term by a further 4 months for your restitution.  You shall be sentenced to a term of 14 months’ imprisonment.