HKSAR v. CHAN YU HANG

DCCC 30/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 30 OF 2013

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REASONS FOR SENTENCE

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1.  The defendant pleads guilty to three charges of theft, contrary to section 9of the Theft Ordinance, Chapter 210 and one charge of forgery, contrary to section 71of the Crimes Ordinance, Chapter 200.

2.  In summary the defendant was employed by Nippon Paint (HK) Company Limited as a sales representative whose responsibility included managing the orders of clients of Nippon.  One of these clients was Chuen Sun Paint & Metal Company Limited, the proprietor of whom was Mr Tang Kwok-kuen.

3.  In July 2010 the defendant falsely represented to Mr Tang that by paying cash he could obtain Nippon paint cheaper from Heng Hing Decoration, another client of Nippon handled by the defendant.  Between July 2010 and July 2011 Mr Tang, acting on this representation, placed 43 orders through the defendant for paint from Heng Hing.  

4.  There were in fact no transactions with Heng Hing, the defendant arranging delivery of the paint direct from Nippon to Chuen Sun.  Using a receipt booklet he had obtained earlier from Heng Hing the defendant issued false invoices to Chuen Sun in the name of Heng Hing. 

5.  A total sum of $1,552,961.20 was paid by Chuen Sun to the defendant either in cash or by cash cheque (charge 1).

6.  In November 2010 when Nippon pressed Chuen Sun for payment the defendant falsely represented to Mr Tang that a discount would be offered by Nippon if he pre-paid for paint ordered from Nippon.  As a result Mr Tang agreed and signed 7 sales agreements for paint from Nippon in the total sum of $2,828,290.40 which Mr Tang paid for by seven separate cheques all made payable to Nippon. 

7.  In July 2011 Mr Tang discovered no discount was given and the sales agreements were forgeries.  Nippon had by this time delivered paint to Chuen Suen to the value of $1,553,351.20.  The defendant diverted $1,552,961.20 from the $2,828,290.40 paid by Chuen Sun in order to settle payment of the paint delivered to Chuen Sun purportedly from Heng Hing.  The balance was used in part-payment of the paint delivered pursuant to the false agreements (charge 3).

8.  Upon discovery of the forged agreements the defendant was summoned to the company when he admitted forging the agreements.  The police were called and in a search of the defendant’s office 20 sales agreements and one credit notice were found, all of which were confirmed to be forgeries (charge 4).

9.  In total Chuen Sun had purchased from Nippon paint to the value of $4,381,251.60 but only received delivery of paint to the value of $3,106,312.40.  The loss to Chuen Sun was therefore $1,274,939.20.   Nippon having received payment of $2,828,290.40 has suffered a cash loss of $278,022 in respect of paint delivered to Chuen Sun. 

10.  Investigation revealed that in June 2011 a similar false representation that cheaper paint could be obtained direct from Heng Hing had been made by the defendant to Mr Fung Kwok-sing, the proprietor of Luen Fat Decoration Company, another client of Nippon.  As a result Mr Fung placed through the defendant five orders for paint from Heng Hing to the total value of $197,160.  Payment was made by cash cheque or into a bank account designated by the defendant.  Luen Fat received delivery of all the paint ordered (charge 2).

11.  Under caution and subsequent video interviews the defendant explained how he deceived Mr Tang and Mr Fung and that when Nippon pressed Mr Tang for payment he devised the scheme of pre-payment in an attempt to obtain payment for the paint already delivered to Chuen Sun.  The defendant also admitted the sales agreements and the credit notice found in his office were forgeries.  Five sales agreements in the name of Chuen Sun were intended for use in deceiving Chuen Sun and 15 blank agreements were intended for future use.

12.  The defendant also said he stole the money initially to pay his debt and subsequently to pay the medical expenses of his mother and for gambling.  The defendant claimed his mother had been admitted to St Teresa’s Hospital and Tuen Mun Hospital.  However police investigation revealed the mother had only been admitted to Tuen Mun Hospital with medical fees amounting to $9,129. 

13.  The police also discovered that between July 2010 and July 2011 a sum of $2,670,598.00 had been deposited in the defendant’s Hong Kong Jockey Club account. Clearly as seen from the background report and letters submitted to court the defendant’s addiction to gambling led him to steal.

14.  I have carefully considered everything said on behalf of the defendant by Miss Cheng together with the letters from the defendant, his father and brother and the Caritas Family Service.  Sadly since the defendant’s arrest his mother has passed away.  The defendant very much blames himself for indulging in gambling rather than leading a better life.  To try rectify his behaviour after arrest the defendant attended counselling sessions with Caritas Family Service and  is determined after serving his imprisonment term not to resume gambling.  I take into account the defendant has no previous convictions.

15.  By stealing the money of Nippon and their clients the defendant breached the trust placed in him by his employer.  In passing sentence I have considered the principles laid down in R v Clark (1998) 2 Cr App R 137 as applied inHKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776 as revised in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017.  The guidelines state the proper starting point after trial is less than 2 years where the amount stolen is HK$250,000 or less and 3-5 years imprisonment where the amount stolen was between HK$1-3 million.

16.  Taking into account the amount stolen, the degree of trust reposed in the defendant; the thefts took place over a period of one year; and involved the use of forged documents, I am satisfied the proper starting point after trial on charge 1 is 3 years and 6 months imprisonment and on charge 2 is 1 year and 6 months imprisonment. 

17.   Although the sum subject of charge 3 is $2,828,290.40 the actual loss to Chuen Sun is $1,274,939.20 and to Nippon of $278,022.  I am satisfied the proper starting point after trial on charge 3 is 3 years and 6 months imprisonment.

18.  In respect of the forgery charge I am satisfied the proper starting point after trial is 1 year and 6 months imprisonment.

19.  Giving the defendant full credit for his pleas of guilty reduces the sentences on charges 1 & 3 to 2 years and 4 months imprisonment and on charges 2 & 4 to 12 months imprisonment. 

Restitution

20.  In calculating the loss to Nippon I take into account that the seven cheques obtained in the pre-payment scheme, albeit dishonestly, were used to repay Nippon for the paint delivered to Chuen Sun.  As a result there is no loss to Nippon in respect of charge 1.  In these circumstances I reduce the sentence on charge 1 to 1 year and 9 months imprisonment.

21.  After arrest and before charge the defendant repaid to Mr Tang of Chuen Sun $90,000. The rest of the money having been lost on gambling the defendant is unable to make any further repayment.   The defendant is to be given credit for this payment made at an early stage of the investigation.  I reduce the sentence on charge 3 to 2 years and 2 months imprisonment.

Totality

22.  Whilst the thefts are part of a course of conduct the victims are different, one being the employer Nippon and the other Chuen Sun a customer of Nippon.  The total loss to Nippon is $278,022 in respect of paint delivered to Chuen Sun and $197,160 in respect of paint delivered to Luen Fat.  Chuen Sun’s loss is $1,274,939.20 being the value of the paint undelivered less the $90,000 repaid by the defendant.  Taking into account these actual losses and that in respect of charge 1 there has been no loss I am satisfied a total sentence of 2 years and 6 months imprisonment after plea is appropriate.  

23.  Although the defendant may have proceeded to deceive other clients of Nippon with the blank sales agreements the forgery charge is in essence part of the dishonest conduct revealed in the theft charges and not separate and distinct as in HKSAR v Tai Kai Chung CACC 350/2010, referred to me by Mr Tam.  In the circumstances I am satisfied a concurrent sentence is appropriate.

Delay

24.  Delay in bringing an offender to justice is a mitigating factor which can be taken into account in sentence.  All the circumstances must be looked at including whether the offender has acknowledged guilt; whether the delay has given the offender the opportunity to rehabilitate himself; whether restitution has been made; whether there was a legitimate expectation the matter will not be further pursued; the size of the investigation and whether the time taken to bring the case to court was longer than necessary (see for example HKSAR v Cheung Suet Ting CACC 226/2009). 

25.  The defendant was arrested on the 8 July 2011 but only charged on 4 December 2012, almost 17 months later.  Mr Tam has provided to court a detailed investigation chronology and has explained the difficulties the police experienced in conducting the investigation.  These arose very much out of the way the defendant dishonestly obtained the monies, in particular that on the face of the documentation of Nippon all transactions appeared to be genuine.  Further as a result of the police investigation the defendant was charged also in relation to deliveries to Luen Fat, which had not been revealed at the time of arrest.

26.  I accept the explanation for the time taken from arrest to charge.  I am satisfied in the circumstances of the case there was not excessive delay whereby there should be a further reduction in sentence.

Sentence

27.  In summary the defendant is convicted and sentenced as follows:

CHARGE 3 – 2 YEARS AND 2 MONTHS IMPRISONMENT;

CHARGE 1 – 1 YEAR AND 9 MONTHS IMPRISONMENT CONCURRENT TO CHARGE 3;

CHARGE 2 – 12 MONTHS IMPRISONMENT,

4 MONTHS CONSECUTIVE AND 8 MONTHS CONCURRENT TO CHARGE 1 & 3;

CHARGE 4 – 12 MONTHS IMPRISONMENT CONCURRENT TO CHARGES 1, 2 & 3;

TOTAL SENTENCE TO BE SERVED IS 2 YEARS AND 6 MONTHS IMPRISONMENT WHICH I AM SATISFIED PROPERLY REFLECTS THE DEFENDANT’S CRIMINALITY ON THE FOUR CHARGES.