HKSAR v. LAU WING HONG AND ANOTHER

DCCC 1149/2017

[2018] HKDC 902

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1149 OF 2017

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REASONS FOR SENTENCE

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1.  This case relates to 8 counts of “Forgery”, contrary to section 71 of the Crimes Ordinance, Cap 200.  The 1^st charge is against the 1^st defendant only while the 2^nd to the 8^th charges are against both the 1^st and 2^nd defendants.  The 1^st defendant pleaded guilty to all 8 charges while the 2^nd defendant pleaded guilty to the second to the 8^th charges. 

Facts

2.  On 20 March 2014, Mr Lim and the 1^st defendant formed a Hong Kong company, namely, Infinity Trans (Hong Kong) Limited (ITL).  The 1^st defendant was appointed as Company Director and Manager responsible for the daily operation of ITL.

3.  ITL owns a bank account at Standard Chartered Bank (SCB) (ITL’s Account).  ITL’s accounting clerk, Ms Chong would produce a ‘Profit and Loss record’ based on ITL’s bank statements.  By the end of each month, the 1^st defendant should report to Mr Lim about ITL’s monthly expenditure.

4.  At all material times, the 2^nd defendant was an accounting clerk at ITL.

5.  Unknown to Mr Lim, on 29 March 2014, the 1^st defendant acted as ITL’s guarantor, applied for a HK$1.5M Small and Medium Enterprise Loan in the name of ITL from SCB.  According to the Loan agreement, the monthly repayment was HK$71,200.  After deducting administrative fee, a total of HK$1.48M was deposited into ITL’s SCB account on the same day.

6.  Repayments were made by way of cheques on 29 April 2014, 28 May 2014, 30 June 2014, 28 July 2014, 28 August 2014, 29 September 2014 and 28 October 2014.  On each of these occasions, the bank statements of ITL’s Account show ‘Loan Repayment’.

7.  In June 2014, after finding out that Ms Chong sent ITL’s accounts to Mr Lim for inspection, the 1^st defendant verbally requested Ms Chong not to send further documents to Mr Lim unless he agreed.  Thereafter, the 1^st defendant asked Ms Chong to alter the ‘Loan Repayment’ entries in both the ITL’s bank statements and the Profit and Loss Records.  Ms Chong refused.

8.  On 10 December 2014, unknown to the 1^st defendant, Ms Chong sent Mr Lim ITL’s updated accounts via her personal email address.

9.  On 12 December 2014, an email was sent from the 1^st defendant to Mark (ITL’s USA accounting clerk), copied to Mr Lim attaching alleged bank statements of ITL between April and October 2014.  These attached bank statements show that on each loan repayment, the entry was altered as ‘HKD clearing cheque (cheque no. xxxx)’, contradictory to ITL’s genuine bank statements, and ITL’s internal accounting records.

10.  The 1^st and 2^nd defendants were arrested respectively on 4 February 2015 and 30 November 2017.

11.  It was confirmed by SCB that the ITL bank statements sent by the 1^st defendant to Mr Lim on 12 December 2014 were forged documents.

12.  In cautioned interviews, the 1^st defendant identified his email sent to Mark, copied to Mr Lim on 12 December 2014.  He admitted having altered the entries of ITL’s bank statements of 29 April 2014, 28 May 2014, 30 June 2014, 28 July 2014, 28 August 2014, 29 September 2014 and 28 October 2014.  The 1^st defendant said he asked the 2^nd defendant to make the alternations because he did not want to show the words ‘loan repayment’. (Charges 1-8)

13.  Under caution at the time of arrest, the 2^nd defendant said ‘I only acted upon the instruction of my boss, Mr Lau (the 1^st defendant), to alter a few bank statements with computer.  I don’t know why that had to be done.  It was none of my business.’

14.  During post records, the 2^nd defendant further explained that in about April or May 2014, when the 1^st defendant approached him and asked him to alter the bank statement of ITL, he told the 1^st defendant that bank statements could not be altered that way but the 1^st defendant said he wanted the accounts to look better.  In fear of the 1^st defendant’s senior position in ITL, the 2^nd defendant made the alternation accordingly.

15.  Later in about July or August 2014, the 1^st defendant approached the 2^nd defendant with the same request.  The 2^nd defendant reminded the 1^st defendant that the requested alternations would cause confusion to ITL’s accountants but the 1^st defendant said such alight amendments would not mess up the accounts because the figures were not changed.  On this occasion, the 2^nd defendant did not know how to turn down the 1^st defendant’s request, hence he acceded to the 1^st defendant’s request again (Charges 4-6).

16.  Subsequently in about November or December 2014, the 1^st defendant told the 2^nd defendant to make alternations again.  On this occasion, the 2^nd defendant was told that if alternations were not made, ITL would have difficulties in issuing wages.  Believing in the 1^st defendant , the 2^nd defendant  acceded to the 1^st defendant ’s request again (Charges 7-8).

Mitigation

17.  The 1^st defendant is aged 36, married and lives with his wife and 4 children, the youngest being 10 months’ old.  He has no previous conviction record. 

18.  In mitigation, it was submitted that the loan was mainly used for the running of the business of ITL and to meet the shortfall in working capital. The 1^st defendant did not have financial gain.  He admitted to be the mastermind of all the offences and the 2^nd defendant only carried out his instructions.  He felt sorry for the 2^nd defendant. The 1^st defendant was described as a very responsible husband and good father.  He was considered to be a good employee by his previous employer, who has known him for 20 years.  It was further submitted that the 1^st defendant was only charged about 2 years after his arrest when he had already admitted his guilt upon arrest.  The court was urged to reduce the sentence for the delay[1] and impose concurrent sentences for all charges.

19.  The 2^nd defendant is aged 31, single and lives with his elder sister.  He is suffering from ankylosing spondylitis since 2010.  He quitted the job of ITL in late 2015 and was unemployed since then.  He relies on his elder sister financially.

20.  In mitigation, the 2^nd defendant confirmed that the main reason for his acceding to the 1^st defendant’s request is to keep his job.  He had no financial gain from the offences.  He explained that because of his disease, he could no longer walk.  Mr Lim of ITL wrote a mitigation letter confirming that the 2^nd defendant was a hardworking and responsible employee, that he only committed the offences under the 1^st defendant’s instruction and that was the reason why he was still employed by ITL after the offences came to light.  Both Mr Lim and the 2^nd defendant urged the court to impose a lenient sentence on the 2^nd defendant.     

Sentence

21.  There is no sentencing guideline for this offence.  A sentence of immediate imprisonment is normally appropriate.  In considering sentence, I bear in mind both defendants have no criminal conviction records.  I also note that the prosecution confirmed that both defendants did not have financial gain from the offences and no loss was caused to ITL.  There is no evidence to rebut the 1^st defendant’s allegation that the money from the loan was used for the running of the business of ITL.   

22.  Given the 1^st defendant is the prime mover in this matter and the commission of the offences somehow involved some degree of breach of trust and I cannot ignore the potential risk of loss to the company even though there is no actual loss, I consider the appropriate starting point for each charge in respect of the 1^st defendant is 21 months’ imprisonment. 

23.  The 1^st defendant was arrested in 2015 and he admitted all the offences upon arrest.  He was released unconditionally in 2015 and re-arrested and charged in 2017.  The prosecution submitted some time was taken to inspect the bank records but conceded that some steps in the investigation could be speeded up.  Whatever the reason for the delay, no fault can be attributed to the 1^st defendant who admitted the offences when first arrested by the police in 2015.  This matter has been hanging over his head for over 2 years.  In the circumstances, I am satisfied by reason of the time taken to bring the case to court, the sentences should be reduced by 3 months to 18 months’ imprisonment.  Apart from that and his guilty plea, I do not see other mitigating factor justifying further reduction of the sentence. 

24.  In respect of the 1^st defendant, the sentence for each charge is further reduced to 12 months for his guilty plea.  As all offences arose from the same circumstances relating to the loan, the sentences for the 8 charges are to run concurrently.  I hereby sentence the 1^st defendant to a total sentence of 12 months’ imprisonment. 

25.  As far as the 2^nd defendant is concerned, he was not the instigator of the offences, he was asked to acted on the instruction of his boss, the 1^st defendant, he stood to gain nothing by forging the bank statements save to keep his job and no loss was caused to the company, all these placed his culpability towards the lower end.  I consider the appropriate starting point for each of charges (2)-(8) should be 15 months’ imprisonment.  The sentence for each charge is reduced to 10 months’ imprisonment for his guilty plea.

26.  Taking into account the role of the 2^nd defendant, his plea of guilty, his clear record, no loss was caused to the company and his health condition, I am satisfied that there are exceptional circumstances warranting suspension of sentence.  The 2^nd defendant is therefore sentenced to 10 months’ imprisonment concurrent for each charge and suspended for 2 years.