HKSAR v. LAM HOI CHIU

DCCC581/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 581 OF 2012

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Reasons for Sentence

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1. The defendant has pleaded guilty to a charge of dealing with property knowning or believing it to represent the proceeds of an indictable offence.

2. The offence was committed between 23 December 2006 and 18 January 2007.

3. The amount of money which the defendant dealt with was HK$1,544,000.

4. The summary of facts admitted by the defendant disclosed that, in January 2007, a fraudulent mortgage application was made to the Wing Hang Bank, in which a property - namely, Flat B, 9th Floor, No.1 Ho Man Tin Hill Road - was used to obtain credit facilities from the bank to the extent of HK$8 million.

5. The application was approved by the bank and the amount the subject of the charge was withdrawn from the bank.  No repayment was ever made.

6. At that time the defendant was a director of an electronic trading company called “Eternal Jet International Development Limited”.

7. On 15 December 2006, Mr Wong of the bank met the defendant in the office of Eternal Jet.

8. The defendant told Mr Wong that he and his alleged partner, a Mr Chiu, would like to apply to the bank for credit facilities for expansion of their business.

9. At that meeting, it was asserted that Mr Chiu’s mother was the owner of the property mentioned in the charge and that there would be a mortgage on that property to be banker’s security for the application for credit facilities.

10. Mr Wong’s estimation of the value of the property was about $16 million.

11. The defendant made the application for the amount of $8 million by way of credit facilities, which was to be made up of an overdraft facility up to $2 million and an invoice financing facility up to $6 million, and the property in Ho Man Tin was to be used as security for the mortgage.

12. Based on this application and the forged documents in support of the false representations made, the bank was misled into believing that the property was going to be genuinely mortgaged to the bank as security for the credit facilities sought.

13. The credit facilities were approved by the bank and Eternal Jet was allowed to withdraw the money.

14. Two accounts were opened with the bank.  On 23 December, the defendant, on behalf of Eternal Jet, opened two accounts with the bank:  one a current account and one a bill account.  The defendant was the only authorised signatory of the accounts.

15. A solicitor was involved in dealing with the mortgaging of the property.  The solicitor, a Mr Foo, checked the title deeds of the property and found that the title was in order.

16. He arranged to meet the owner of the property and the defendant for the execution of the mortgage and other documents as requested by the bank.

17. On 10 January 2007, a lady purporting to be the owner of the property attended at Mr Foo’s office.

18. At that meeting, this lady produced a copy of a Hong Kong identity card in the name of the genuine owner.  This lady signed the legal charge and other documents for the mortgage of the property.

19. The same day, the defendant separately attended at Mr Foo’s office and signed the legal charge and other documentation.

20. The bank was obviously deceived by these arrangements that had been made and they approved a drawdown on or about 12 January 2007.

21. Between 13 January and 19 January 2007, the defendant signed four cheques to withdraw a total sum of $1.544 million.

22. Three cheques amounting to $1,060,000 were cashed by the defendant and the remaining cheque in the amount of $484,000 was deposited into the bank account of a company called Canton Asia Digital Technology Limited.

23. Around 20 January 2007, the genuine owner of the property received the mortgage documents from the bank and obviously complained that she had never made such application.

24. The defendant was not arrested until May 2012, when he returned to Hong Kong from the Mainland.

25. He claimed that he was simply a stooge in this case, instructed by a friend to set up Eternal Jet and act as its director.  He did not operate the company and had no knowledge of its business.

26. He claimed further that he was instructed by his friend to apply for credit facilities with the bank and to open the accounts and withdraw the monies.

27. He said he gave some blank cheques from the current account to his friend.  He said that the monies he withdrew from the current account he handed to his friend and was given $80,000 as a reward.

28. The defendant, I am told in mitigation, is 66 years of age.  He is divorced with two daughters, aged 32 and 30.  He was educated up to Form 3 level and I am told that he is unemployed.

29. In mitigation, it was urged upon the court that the defendant has pleaded guilty at the very first opportunity, he was co-operative with the police after his arrest and frankly admitted the charge laid against him.  He said he feels very remorseful.

30. I am told that the defendant lost his right leg in a traffic accident in 1987 and is currently suffering from diabetes and loss of hearing in his left ear.

31. I am told that the defendant had been imprisoned on the Mainland for about 3 years.  He was released in May 2012 and arrested when he landed back in Hong Kong.

32. I have had an authority placed before me which says that the amount of money involved, the level of participation are major considerations in cases such as this.

33. It was stressed that there was no international element for this case, although I note that there was a Mainland firm involved.

34. I am also reminded that if the relevant indictable offence can be identified, the court may take into account the sentence that would have been imposed for that offence.  In this is a case the indictable offence is known.

35. It was suggested in mitigation that the defendant had played a relatively minor part in this case, he did not prepare the forged title deeds or the forged identity card and the laundering period was for less than a month.  As far as Hong Kong is concerned, the defendant has a clear record in Hong Kong.

36. The amount involved in this case is just over $1.54 million.

37. The defendant, as admitted in the facts, was not only responsible for laundering the monies but he was part of what was an elaborate scam in this case.  It involved somebody impersonating the owner of the premises.  A mortgage was granted relying on property deeds which the person purporting to be the owner was not entitled to use.

38. I take the view that these are aggravating features of the case.

39. I, therefore, propose to take a starting point of 4 years in this case.

40. The defendant has pleaded guilty.  He is entitled to the full remission for his admission and the sentence will be reduced to one of 32 months’ imprisonment.