HKSAR v. WONG KA KEUNG AND OTHERS

HCCC 182/2023

[2024] HKCFI 857

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 182 OF 2023

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT: The 1^st, the 2^nd and the 3^rd accused were jointly charged with two counts of conspiracy to defraud. That is Counts 2 and 3. The 1^st accused alone was also charged with four other counts of conspiracy to defraud, being Counts 1, 4, 5 and 6, and three counts of forgery, being Counts 7, 8 and 9. The three accused pleaded guilty to all the charges against them at the Eastern Magistrates’ Court on 10 July 2023, and they were committed to this court for sentence.

Facts

On 28 February this year, they confirmed their pleas before me and accepted the Summary of Facts in support of those charges. According to the Summary of Facts admitted by all the accused, at the material time, the 1^st accused was an insurance agent of AIA International Limited, a licensed insurer in Hong Kong.

Between year 2008 and 2016, the 1^st accused took out for himself six insurance policies with critical-illness coverage from AIA. In the period between November 2017 and May 2018, the 1^st accused conspired with others to arrange for a patient, who was suffering from a critical illness, to falsely pose as the 1^st accused and obtain medical documentation in his name. As a result of the false claims, AIA paid compensation totalling HK$11,276,496.09 to the 1^st accused in accordance with the six policies held by him. This is the subject of the 1^st charge.

The events in the 2^nd charge occurred between December 2017 and May 2019. On the suggestion of the 1^st accused, the 2^nd accused took out a high-coverage critical-illness policy from AIA and also a medical insurance policy from AIA with the 1^st accused acting as the handling agent. The two of them agreed to make false claims by arranging a cancer patient to falsely pose as the 2^nd accused and to attend medical examinations or treatments. The 1^st and the 2^nd accused agreed to equally share the compensations obtained from AIA after deducting the costs incurred. They recruited middlemen to look for suitable cancer patients for the scam.

In November 2018, through the introduction of a middleman known as Joe Sir, the 1^st and the 2^nd accused came to know the 3^rd accused who was a patient suffering from follicular lymphoma. The 3^rd accused agreed to falsely pose as the 2^nd accused in his medical examinations and treatments for a reward of HK$130,000. All the medical fees incurred by the 3^rd accused in his 37 medical visits were paid by the 1^st accused. As a result of the false claims submitted by the 2^nd accused via the 1^st accused, AIA approved the critical-illness claim and paid $8,834,862.50 compensation to the 2^nd accused. This is the subject of the 2^nd charge.

In addition, AIA also paid $987,036.41 to the 2^nd accused to reimburse the medical expenses incurred by the 3^rd accused in his 37 medical visits. This is the subject of the 3^rd charge.

So the total amount of loss suffered by AIA in respect of Charges 2 and 3 is $9,821,898.91.

Bank records revealed that upon receiving the compensations from AIA, the 2^nd accused paid $6,930,000 to the 1^st accused, and the 1^st accused transferred $32,000 to the 3^rd accused. The overall benefits received by the 3^rd accused included the said $32,000 as well as the free medical examinations or treatments amounting to $987,036.41. That is the subject of the 3^rd charge. So the total overall benefit received by the 3^rd accused is around $1 million or slightly over $1 million.

In respect of Count 4, the offence occurred between October 2017 and June 2018. In this period, the 1^st accused together with a policyholder, Madam Sun, and other persons arranged a breast cancer patient to falsely pose as Madam Sun to obtain medical documentation in the name of Madam Sun. Thereafter, Madam Sun submitted the critical-illness claim to AIA via the 1^st accused. As a result of the false claim, $5,889,825 of compensation was paid by AIA. This is the subject of Charge 4.

Charges 5 and 6 relate to an AIA critical-illness insurance policy with a coverage of US$675,000. That is approximately HK$5.2 million. This policy was held by a Madam Liao Xiaoyi. The 1^st accused was her handling agent.

Between November 2017 and September 2019, the 1^st accused and others arranged a stomach cancer patient to pose as Madam Liao to obtain medical documentation. Thereafter, Madam Liao submitted the false claim to AIA. The claim was denied by AIA as the medical examination conducted by the AIA medical consultant found no trace of cancer on Madam Liao. So this is the subject of Charge 5.

Despite the failure, between November 2019 and December 2020, the 1^st accused and others arranged for another patient, who was suffering from cancer of the ovary, to falsely pose as Madam Liao when receiving medical treatments. Thereafter, Madam Liao submitted the critical-illness claim via the 1^st accused to AIA. AIA withheld the claim out of suspicion.

Now I shall come to Charges 7, 8 and 9, the forgery charges against the 1^st accused. In November 2019, February 2020 and August 2020 respectively, the 1^st accused forged a total of three sick-leave certificates for a Madam Liao Xiaoqing, who is the ovary cancer patient mentioned in the 6^th charge above, for onward transmission to her employer because Madam Liao Xiaoqing wished to obtain sick leave for a period of two years without telling her employer anything about her ovary cancer.

The 1^st accused made a total of three sick-leave certificates in the name of Madam Liao Xiaoqing. These certificates were purported to be made by a medical doctor with sick leave of 90 days, 180 days and 300 days respectively recommended due to immune system disease.

Eventually, on 15 December 2020, the 1^st accused was arrested by the ICAC, and a mobile phone which contained all the relevant WhatsApp and WeChat messages concerned was seized from him. Under caution, he voluntarily provided the password of his mobile phone to the ICAC.

On 15 September 2021, the 2^nd and the 3^rd accused were arrested by the ICAC, and under caution, both of them confirmed their mobile phone numbers and the usage of their respective WhatsApp accounts.

1st accused

The 1^st accused, Mr Wong Ka-keung, he is now 45 years of age. He has attained university level of education. He is married with two children. He has a clear record and he worked as the AIA insurance agent before his arrest.

He is represented by Mr Tony Li, Senior Counsel, and in mitigation, counsel informed this court that the 1^st accused agreed that the total loss incurred by AIA in the whole scheme is about HK$27 million. Counsel said the 1^st accused only shared about half of that amount and that -- but counsel, on the other hand, also agreed that the conspiracy would not be successful without the participation of the 1^st accused and agreed that this is a case that involved serious breach of trust.

I was informed that when the 1^st accused was an insurance agent, he was a successful insurance agent and he has been included in the million-dollar roundtable for several years and he has won a lot of awards received over the years. And I hate to say that after reading those awards and those mentioned about the million-dollar roundtable, some of those awards indeed occurred in the years of the offences in 2017 to 2020. So he was granted all these awards when he was at the same time defrauding his own company.

A number of mitigating letters have been prepared by his family members, friends and colleagues, and the 1^st accused himself also submitted a letter to plead for leniency. Counsel urged this court to take into account the fact that he is remorseful and he had been co-operative with the ICAC since his arrest. He is a person of clear record and there is no risk of re-offending.

Counsel urged this court to take into account the fact that the forgeries in Charges 7, 8 and 9, they were part and parcel of the conspiracies and that all the offences can be disposed of in a global way, and counsel urged this court to take into account the principle of totality.

2nd accused

In respect of the 2^nd accused, he is now 45 years of age. He has received up to Form 5 education standard. He was a freelance driver and married with two children (two sons). He has the criminal record for the offence of theft on two occasions and also conviction for the offence of using a false instrument and conviction for the offence of pawning goods without authority, but all these criminal records were dated back to year 2005 or 2006.

Ms Liza Yip, counsel for the 2^nd accused, in her mitigation urged this court to take into account the fact that all those criminal records occurred some 20 years ago, and since then, the 2^nd accused had been a man of good record. She submitted that indeed the 2^nd accused is a cousin to the 1^st accused and that he committed the offence out of greed.

Counsel said that at all times, the 2^nd accused was merely following the instruction of the 1^st accused who had it all planned and arranged. The only job of the 2^nd accused was to provide his Hong Kong identity card and sign document whenever he was asked by the 1^st accused to do so, and he was not deeply involved in the scheme or the overall plan. Counsel also urged me to take into account the contents of the letters written by the 2^nd accused, his wife and his friend which urged for leniency, and counsel urged this court to take into account the fact that his mother is now critically ill.

The biggest mitigation for the 2^nd accused is, as rightly recognised by counsel, his plea of guilty.

3rd accused

In respect of the 3^rd accused, Mr Leung Wai-kin, he is now 42 years of age. He has studied up to Form 3 level. He was a renovation worker, married with one daughter. He has the criminal record for the offence of possession of dangerous drugs on two occasions, one in 2014 and one in 2016.

In his mitigation, counsel, Mr Billy Yau, submitted a number of mitigating letters, in fact, two letters, one from the 3^rd accused himself and the other from his wife to urge for leniency. Counsel asked this court to consider him as a man of positive good character in spite of his convictions for the possession-of-dangerous-drugs criminal record.

However, I have considered the record of or the documents concerning the so-called visits to charitable communities and community service done by the 3^rd accused. I do not consider that they amount to any significant service to the community in a very or quite unusual way. I refuse to accept him as a man of positive good character. Having said that, I must also point out that in my consideration of the sentence for both the 2^nd and the 3^rd accused, I would ignore their previous criminal record completely, would not take that into account.

Now coming back to the 3^rd accused, counsel submitted that in 2017, the 3^rd accused was first diagnosed with follicular lymphoma and he was cured following a series of treatments in the year end of 2017. However, the cancer relapsed in 2018 and he was told that he had to receive targeted therapy immediately or, otherwise, it was likely that he would die, and that as a result, well, he tried to raise sufficient funds to receive the treatment. However, he was told that the funding scheme offered by the Social Welfare Department could not cover some of the medical expenses for the targeted therapy. So he was unable to meet the rest of the medical expenses.

At this juncture, he was approached by his friend, Joe Sir -that is the middleman - and that he was invited to participate in this fraudulent scheme because he felt that his condition was getting worse and he needed the treatment. So he agreed to impersonate the 2^nd accused and to follow instructions. Counsel said that he was given $32,000 as a reward for participating in the scheme and that he has largely recovered since after receiving those medical treatments.

Counsel urged this court to consider the fact that he is willing to pay some partial restitution to AIA. I understand that the offer of restitution was not made until February this year despite the fact that he was arrested a couple of years ago. The prosecution confirmed that it was only in February 2024 that the 3^rd accused or those representing him first made the offer of partial restitution to the prosecution. And counsel informed this court that in fact, a cheque for around HK$32,000 was already ready with those instructing him and can be used to repay AIA.

Now, as the authorities show, late restitution still amounts to a mitigating factor even though it is not as good as early restitution. However, I have to take into account all the circumstances. In respect of the 2^nd and the 3^rd counts, AIA suffered a loss of over HK$9.8 million, and the benefit received by the 3^rd accused alone is around HK$1 million. That is the $32,000 in cash or in cheque together with all those free medical treatments during his 37 visits. The total amount of benefit he received was about 1 million and indeed slightly over 1 million. So the $32,000 of partial restitution that he offers to repay indeed is a very trivial amount when compared with his own benefit and also compared with amount of loss incurred to AIA.

Counsel urged this court to take into account the circumstances of his cancer and that he was in need of medical treatment at the time, and submitted that this amounts to duress of circumstances. I forthrightly reject this submission by counsel. I do not think it is and he is unable to produce any authorities to support this proposition.

Counsel also urged this court to take into account the fact that he is remorseful and he is willing to assist the ICAC, and he has rendered assistance about this person called Joe Sir, that is the middleman who introduced him to this particular scheme. However, I have taken into account the fact that indeed the identity of Joe Sir was already known to the ICAC even before any assistance was offered by any accused, and that ICAC also got sources of other evidence, pieces of evidence against this particular person. So I can only say that the co-operation or the assistance given by the 3^rd accused may help to strengthen the case against the other potential co-accused but cannot be said to be critical or that case cannot be proceeded without his assistance.

Nonetheless, the impact of the level of his assistance remains to be seen because up to this stage, there is no actual prosecution resulted in respect of the assistance rendered by him, not to mention that despite his willingness to testify for the prosecution in any future trial, that is a matter that remains to be seen. There may not be any trial. So I do not see it as being fair to the accused to give him a sentence reduction or a very small sentence reduction at this stage.

In order for the extent of his assistance to be fairly and accurately assessed, I consider that no further reduction of sentence will be given to him at this stage, and to wait until any assistance become materialised. Then he can take this matter up on appeal and ask to have the sentence further reduced about it.

Consideration

Those are the background of the three accused persons. In respect of this case, no doubt the 1^st accused was the mastermind who instigated the whole scheme, and the offences committed by him constitute a very serious breach of trust because he was the insurance agent of the AIA at the material time.

I have taken into account the amount of loss incurred by AIA. That is around HK$27 million, counting only the loss incurred as a result of Counts 1 to 4, bearing in mind that AIA refused the application for claims in respect of Counts 5 and 6. I have also taken into account the duration of the fraudulent scheme against AIA which was around three years.

I consider that the culpability of the 1^st accused is much more serious than the other two accused because he was the mastermind of this whole matter. He was fully involved in the whole scheme throughout all those three years, and also he was an employee of AIA at the material time. The case was clearly premeditated and, had the offences not been discovered, the 1^st accused would certainly continue to inflict further harm to AIA.

As for the role of the 2^nd and the 3^rd accused, even though their culpability is less than that of the 1^st accused, however, both of them played an essential role, otherwise the scheme in Charges 2 and 3 cannot be successful. So all of them played an essential role and important part in the scheme.

Taking into account all the factors, and in the case of the 1^st accused, I have also taken into account the authorities like the case of Ng Kwok Wing [2008] 4 HKLRD 1017, the case of Cheung Mee Kiu [2006] 4 HKLRD 766 as well as the case of Stephanie Lo. I take into account the different roles being played by the accused, that the case involved a carefully planned and executed series of frauds over a long period of time involving grave breach of trust by the 1^st accused.

Now, there is no guideline for the offence of conspiracy to defraud and no guideline for the offence of forgery. However, taking into account all the circumstances of the offences, the complexity of the scheme, the period of time it covered, the amount involved, the amount of loss incurred and the amount of gain that the court was informed in respect of the different accused, mitigation being put forward by counsel on behalf of the accused including their personal circumstances, the difference in their culpability and in the role they played, the very slight partial restitution by the 3^rd accused and the concept of totality, I shall now come to the following sentence.

Sentence

I will sentence the 1^st accused first. In respect of the 1^st accused, taking into account the authority of Ng Kwok Wing and Cheung Mee Kiu as mentioned, I consider that for the 1^st count, I will adopt a starting point of 8½ years. That is the 1^st count.

I will look at the 2^nd and the 3^rd counts together. In respect of the 2^nd count, I will adopt a starting point of 7½ years’ imprisonment. In respect of the 3^rd count, I will use a starting point of 3 years, 3 months of which will be consecutive to the sentence in the 2^nd charge. So in respect of the 2^nd and the 3^rd counts, the total length of the starting point or overall starting point would be 7 years and 9 months. That is in respect of the 2^nd and the 3^rd charges.

For Charge 4, I will adopt a starting point of 6 years and 2 months. In respect of Counts 5 and 6, I will look at them altogether. For each of those counts, I will impose the starting point of 6 years, and those two counts to be served concurrently.

So, altogether, the starting point for Count 1 is 8½; for Counts 2 and 3 together, 7 years 9 months; Count 4, 6 years 2 months; Count 5 and 6, 6 years.

And in respect of all those counts, taking into account overall totality of the matter, I direct that for the sentences in Charges 2 and 3, 1 year of the sentence in Charges 2 and 3 to be consecutive to the sentence in Charge 1. Then 1 year of the sentence in Charge 4 to be consecutive to the sentences in Charges 1 to 3. Then 9 months of the sentences for Charges 5 to 6 to be served consecutively to the sentences for Charges 1, 2, 3 and 4.

So the overall starting point for all those six charges would be 11 years and 3 months. That is 8½ for Charge 1; 1 further year for Charges 2 and 3; 1 further year for Charge 4; and 9 months further for Charges 5 and 6. Altogether, the overall starting point, that is taking a global view of the matter, is 11 years and 3 months for Charges 1 to 6, the conspiracy-to-defraud charges.

In respect of Charges 7, 8 and 9 about the false sick-leave certificates, I will impose a sentence of 4 months in respect of each of those counts. 2 months of the sentence in Charge 8 to be served consecutive to the sentence in Charge 7; and 2 months of the sentence in Charge 9 to be consecutive to the sentences in Charges 7 and 8. So, altogether, the sentence for Charges 7, 8 and 9 would be 8 months’ imprisonment – 4 months for Charge 7, 2 more months from Charge 8 and 2 more months from Charge 9.

Now, taking into account the overall totality, I order that 3 months of the sentences for Charges 7, 8 and 9 to be served consecutive to the sentences for Charges 1 to 6. So, that is, to add 3 months to the 11 years and 3 months’ overall starting point for the conspiracy offences. So the overall starting point for all nine counts would be 11½ years.

Having taken into account the guilty plea of the 1^st accused and also all the other information laid before me by counsel, I consider that it is appropriate to give him a 45 per cent discount. I will sentence the 1^st accused to a total of 6 years and 4 months in respect of all nine charges. 6 years and 4 months. That is the 1^st accused.

Now, in respect of Counts 2 and 3 which also relate to the 2^nd accused and the 3^rd accused, as I have said earlier, Count 2 involved about HK$8.8 million; Count 3 involved around HK$987,000. So those two counts involved a total amount of $9.8 million which is the loss incurred by AIA, and the benefit received by the 3^rd accused is around HK$1 million.

Having taken into account all the matters mentioned by counsel in mitigation and the different roles played by the 2^nd and the 3^rd accused, in respect of the 2^nd accused, for Charge 2 I will adopt a starting point of 7 years. For Charge 3 I adopt a starting point of 2 years and 9 months, 6 months of the sentence in Charge 3 to be consecutive to the sentence in Charge 2. So making an overall starting point of 7½ years for both charges.

I consider that the only mitigation is the early plea of guilty. He is entitled to a one-third discount. So I will sentence the 2^nd accused to 5 years’ imprisonment in respect of his conviction for Charges 2 and 3. Altogether 5 years.

Now, in respect of the 3^rd accused, I adopt 6½ years as the starting point for Charge 2; 2½ years as the starting point for Charge 3, and that 6 months of the sentence in Charge 3 is to run consecutive to the sentence in Charge 2. So the overall starting point for both counts would be a total of 7 years for the 3^rd accused.

Taking into account his early plea of guilty, I will give him the one-third discount. The resultant sentence is 4 years and 8 months’ imprisonment. A further 2 months will be deducted in view of the very minor partial restitution of $32,000 offered by him. So the resultant sentence for the 3^rd accused would be 4½ years.

All right. So the 3^rd accused is sentenced to 4½ years; 2^nd accused, to 5 years; and the 1^st accused, 6 years and 4 months’ imprisonment. So these are the sentences imposed by this court.