HKSAR v WOO MEI BO, MABLE

DCCC 343/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 343 OF 2013

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Reasons for Verdict

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Introduction

1.  This case concerns false bank documents allegedly used and possessed by the defendant.

The Charges and Pleas

2.  The defendant faces four charges:  one of “Using a False Instrument” (Charge 1), two of “Using a Copy of a False Instrument” (Charges 3 and 4) and one of “Possessing a False Instrument” (Charge 2).  She pleaded not guilty to all four charges.

A Summary of the Evidence

3.  Charge 1 concerns a document (P1) that the defendant allegedly used on 4 March 2011. P1 is a document purportedly issued by the Bank of China (Hong Kong) Limited, (“BOC”). 

4.  P1, which is dated 4 March 2011, shows that the defendant had HK$19.8 billion in her BOC account.

5.  Charge 2 concerns a document (P16) that the defendant allegedly possessed on 26 July 2012.  P16 is a document purportedly issued by the Hong Kong and Shanghai Banking Corporation Limited (“HSBC”).

6.  It is an admitted fact that the defendant was arrested by officers of the ICAC on 26 July 2012.  After her arrest, a house search was carried out at the defendant’s residence.  P16 was seized from an unlocked drawer in the bedroom of the defendant (Paragraph 10 of P50 “Admitted Facts” and paragraphs 2 and 3 of P52 “Admitted Facts II”).

7.  Charge 3 concerns a copy of a document that the defendant allegedly used on 4 March 2011 (P3). P3 is a copy of a document purportedly issued by HSBC. 

8.  P3, which is dated the 4 March 2011, states that the defendant had HK$39.2 billion in her HSBC account.

9.  Charge 4 concerns a copy of a document that the defendant allegedly used on 8 March 2011 (P10). P10 is a copy of a document purportedly issued by HSBC. 

10.  P10, which is dated the 8 March 2011, shows that there was a balance of HK$39.2 billion in the defendant’s HSBC account.

11.  It is an admitted fact that P1 and P16 are false instruments and P3 and P10 are copies of false instruments.  P1 was not issued by BOC.  P16 and the original instruments of P3 and P10 were not issued by HSBC.  The contents of P1, P3, P10 and P16 are not true (P50).

12.  For Charges 1, 3 and 4, it is the defence case that the defendant had not used P1, P3 and P10.  A report by Mr S C Leung, a handwriting expert, was put in by consent (D1).  Mr Leung, for the reasons given in the report, is of the opinion that the signatures which appear on P1 and P3, which appear to be those of the defendant, were not written by the defendant.  Mr Kwok and Mr Lau, who represent the defendant, also argue that the prosecution fails to prove the element of “prejudice”.  It is the defence case that the prosecution witnesses did not really believe in P1, P3 and P10, and they could not have believed in the huge profits that they were promised.

13.  For Charge 2, the defence argues that the prosecution fails to prove that it was the defendant who possessed P16.

14.  The case for the prosecution, in a nutshell, is that Mr Leung Wing-sun, Thomas (PW1), is a financial middle-man.  He looks for investment opportunities for his clients and receives commissions for so doing.  He was introduced to the defendant in March 2011. 

15.  PW1 met the defendant for the first time on 4 March 2011.  PW1 met the defendant and her business partner, a Taiwanese, Mr Wang Tsung-hsi, at the coffee shop in the Bank of China building.  The defendant told PW1 she was looking for people to invest HK$100 billion in a railway project on the mainland.  In support of her creditworthiness, the defendant told PW1 she had over HK$19 billion in her BOC account.  PW1 asked the defendant to provide some proof of capital.  The defendant handed P1 to PW1.  P1 is a document dated 4 March 2011 purportedly issued by BOC. It states that the defendant had HK$19.8 billion in her BOC account.  The defendant also told PW1 that she had HK$39 billion in her HSBC account. PW1 indicated that he would prefer proof of capital from HSBC.

16.  Later on the same day, PW1 met the defendant and Wang in a hotel in Whampoa, Hung Hom.  At the meeting, the defendant handed to PW1 another written proof of capital, P3.  P3 is dated 4 March 2011.  It is a copy of a document purportedly issued by HSBC which shows that the defendant had HK$39 billion in her HSBC account.

17.  PW1 met the defendant and Wang again on 5 March 2011, and the following documents relating to the railway project were signed: 

i. P5: a document titled “Letter of Intent/Request for Service”, signed by the defendant, witnessed by PW1;

ii. P6: a document titled “History of the Origin of the Funds”, signed by the defendant;

iii. P7: a document titled “Authorisation to Verify Funds”, signed by the defendant;

iv. P8: a document titled “Receiving Party Project Consulting Agreement”, signed by the defendant, Wang, PW1 and a business associate of PW1, Wang Jian-ping, who signed the document before PW1 met with the defendant and Wang; and

v. P9: a document titled “MOU of Finance Business”, signed by the defendant and Michael Tse, another business associate of PW1, who signed P9 later on the same day. PW1 also signed on P9 as witness.

18.  The effect of these agreements is that if PW1’s party succeeded in introducing investors who would put in HK$100 billion into the investment project, PW1’s party would make a huge profit.

19.  After the meeting on 5 March 2011, PW1 succeeded in finding a consortium which was interested in investing in the defendant’s railway project.  A meeting was arranged to be held on 8 March 2011 at the HSBC Headquarters in Central.  PW1 and two representatives of the consortium met with the defendant, Wang and an Indonesian gentleman called Djohan Pangestu, an associate of the defendant and Wang.

20.  When Mr Dunn opened the case for the prosecution, his case was that:

“The defendant emerged and handed a document to the two representatives. This was dated 8 March 2011, and purported to be issued by HSBC. It showed a balance of HK$39 billion in the defendant’s HSBC account. The representatives kept the original document, and the defendant gave the copy (P10) to Leung (Charge 4).”

(Paragraph 11 of Prosecution Opening)

21.  The evidence of PW1 is that at the meeting, the defendant gave the original instrument of P10 to the two representatives.  As for P10, the defendant was not the one who provided P10 to PW1.  PW1 got P10 from his associate, Mr Michael Tse, who in turn obtained the same from the two representatives. 

22.  Mr Dunn, in his closing submissions for the prosecution, accepts that the prosecution cannot prove that the defendant used P10 with the intention that PW1 should accept it as genuine.  The prosecution no longer seeks to obtain a conviction on Charge 4.

23.  More documents were signed on the 9 March 2011.  The defendant’s and PW1’s parties attended a solicitors’ firm in Central.  There the defendant and PW1, together with others, signed P11, a letter titled “Receipt of Funds into your account” dated 8 March 2011.  The defendant and PW1 also signed P12, a document titled “150% per day for 3 days pay order” dated 7 March 2011.  P11 and P12 concerned payment of hundreds of millions of US dollars of bonuses to PW1’s party for their services in introducing investors to the scheme.

24.  On 13^th/14^th March 2011, the consortium told PW1 that they wanted the defendant to change the HK$39 billion in her HSBC account into US dollars.  On 17 March 2011, PW1 passed the request to the defendant through Wang Tung-hsi. Wang told PW1 that the defendant was not happy with the arrangement.  Soon after that, Wang had a meeting with PW1 at Harbour Grand Hotel.  When the two met, Wang handed a copy of “Cease and Desist Order” (P13) to PW1.  P13 is a document dated 17 March 2011.  It bore a signature similar to that of the defendant.  An original signed copy of P13 was found and seized by the party of ICAC officers during the house search (Paragraph 4 of P52 “Admitted Facts II”).  Wang told PW1 that the defendant would suffer a loss in exchange rate if she had to exchange the HK$39 billion into US dollars.  She did not want to carry on with the investment project anymore, and the “Cease and Desist Order” should put an end to all activities concerning the investment scheme.  PW1 was upset, as his plan to earn big money from the investment scheme wrecked.

25.  On 19 March 2011, PW1 received a call from Wang Tsung‑hsi, the latter told PW1 that the defendant would continue with the financing business if PW1 would lend her US$1 million to cover the loss in terms of the difference in exchange rate when the defendant’s HK$39 billion was to be exchanged to US dollars.  PW1 told Wang that he did not have the money, but he would introduce someone. 

26.  Wang told PW1 that Wang had discussed with the defendant, the person who would lend US$1 million to the defendant would get a return of US$50 million if the defendant’s project went ahead successfully.

27.  PW2, Mr Cheung Ka-lung, a wealthy factory owner, was the person who PW1 introduced.  On 21 March 2011, PW1 liaised with his associates PW3 Mr Mao Chak-sang and PW4 Mr Man Chung‑pui.  PW3 and PW4 suggested that PW2 was in a position to lend the sum. 

28.  PW1 to PW4 met in the evening on the 21 March 2011.  At the meeting, PW1 did not go into details about the railway project of the defendant.  He showed the proof of funds documents to PW2 to PW4 and what they would get in return for the loan of US$1 million by PW2.  PW2 agreed to lend US$1 million to the defendant.  PW1 informed Wang about the development, ie that PW2 was prepared to lend the sum.  He was given to understand that Wang would relate the message to the defendant.  PW1 prepared the loan documents that night. 

29.  On 22 March 2011, PW1 to PW4 went to a solicitor’s office in Lippo Centre in Admiralty and met with the defendant, Djohan Pangestu and Wang Tsung-hsi. There, the defendant and PW2 signed a loan agreement (P29), the two business associates of the defendant, Wang Tsung-hsi and Djohan Pangestu also signed as guarantors.  Under P29, the loan of US$1 million would be repayable in two months, the defendant was to pay 1% interest per month, if she was late in repayment, the interest rate would rise to 2% per month.

30.  It is an admitted fact that an original signed copy of P29 and three copies of the passport of Wang Tsung-hsi (P27) were found and seized by the party of ICAC officers during the house search.

31.  Later on the same date, PW1 to PW4 and Wang Tsung‑hsi went to Erving Brettell, Solicitors, another solicitors’ firm in Central.  There, a further document (P24) titled “Irrevocable Payment Instruction” was signed by Wang Tsung-hsi.  Under P24, one‑third of US$50 million would be paid to PW2 for three days “of the proceeds generated from the Program”.  After the signing of P24, PW2 transferred HK$7.8 million from his account to an account nominated by the defendant to receive the money.  He obtained the transfer slip (P30) and gave a copy of the same to the defendant. 

32.  It is an admitted fact that the copy of P30 and three copies of the identity card of PW2 were found and seized by the party of ICAC officers during the house search on 26 July 2012 (Paragraph 4 of P52 “Admitted Facts II”).

33.  After the transfer of HK$7.8 million, PW2 heard nothing about his investment and his loan of US$1 million remained outstanding apart from a payment of HK$1.5 million into his account which he believes was a partial repayment for his loan.

34.  It is an admitted fact that on 22 March 2011, the day PW2 transferred HK$7.8 million into the nominated account, the defendant entered into an agreement to purchase a motor vehicle for a total price of HK$368,000.  On the following day, she paid the balance of the purchase price, HK$327,254, by cashier order. 

35.  It is also admitted that on 10 March 2011, the defendant entered into a provisional sales and purchase agreement for the purchase of a village house.  The agreed purchase price was HK$8,480,000.

36.  On 25 March 2011, the defendant made a cheque payment of HK$189,000 to the vendor via the property agents.  The cheque was drawn on the nominated account used to receive the transfer of HK$7.8 million by PW2.

37.  At the conclusion of the case for the prosecution, I found that the defendant had a case to answer on all charges.

38.  The defendant exercised her right and elected not to give evidence. 

39.  The defence called no witness, but an examination report (D1) prepared by Mr S C Leung, a handwriting expert, was produced by consent under Section 65B of the Criminal Procedure Ordinance.  The prosecution does not contest the opinions made by Mr Leung in D1 (D2 “Admitted Facts”).

40.  I am grateful to counsel for their written closing submissions, supplemented by oral submissions in court. 

41.  Before reaching my verdict, I have considered all the evidence and submissions made.  The fact that I have not mentioned a particular piece of evidence or argument advanced does not mean the same has escaped my attention.

42.  I am aware that some of PW1’s evidence is hearsay as to the contents, for example, what PW1 was told by the consortium and what Wang Tsung-hsi said the defendant had said.  Evidence of this nature is only admissible to explain PW1’s state of mind and his subsequent conducts.

A Consideration of the Evidence and of the Prosecution Witnesses

43.  The evidence of PW1 is not flawless.  PW1 said the defendant was not present at the first solicitors’ office where P29 was signed, but was present at the office of Erving Brettell, where P24 was signed.  He is wrong.  The evidence of PW4 and the documentary evidence show that the defendant was present in the morning when P29 was signed.  She was absent in the afternoon when P24 was signed at the office of Erving Brettell.

44.  PW1’s evidence as to whether he had advised PW2 on investment when they met on 21 March 2011 is at odds with the evidence of PW2 and PW4.  It appears to me that PW1 was reluctant to admit that he had given some investment advice to PW2 when they met on the 21 March 2011.

45.  It is also quite apparent that PW1 does not have a very good understanding of the meaning of phraseology he used in the commercial documents drafted by him.  He just used the standard documents commonly in use in his field of business, for example, “securities, statues and regulations both in the USA and internationally”, with the word “statutes” misspelled.  He certainly did not understand the term “exempt individual”.  He could not explain why the Patriot Act of the USA was mentioned in one of the documents.  As he said, the documents were not his creation.

46.  I am fully aware there are drawbacks in PW1’s evidence.  At the end, I am satisfied nevertheless that what PW1 said about P1 and P3 is true and reliable.

47.  The existence of P1 and P3 is not something in dispute, nor is the falsity of the instruments.  As to whether the defendant was the person who handed P1 and P3 to PW1, I am convinced that PW1’s recollection on this important issue is both true and reliable.  He has a clear recollection that when he received P1 and P3 from the defendant, the two signatures, which appear to be those of the defendant, were already there.  He has a clear recollection that the defendant did not sign P1 and P3 in his presence.  PW1’s evidence on this issue is wholly consistent with the findings of the handwriting expert.  In relation to P10, PW1 is adamant in his evidence that though the original instrument of P10 was given to the representatives by the defendant, PW1 did not get P10 from the defendant; he got P10 from the representatives through Michael Tse.  I am sure PW1 was telling me the truth when he said it was the defendant who handed him P1 and P3 on 4 March 2011.

48.  It is true that PW1 could have gone up to the BOC instead of staying in the coffee shop.  I accept his explanation that he stayed at the coffee shop at the ground floor lobby as he was told by Wang Tsung-hsi and the defendant that it was not necessary to have so many people going up the bank.

49.  It is true that PW1 was somewhat puzzled by what happened at Harbour Grand Hotel.  There was a change of meeting place from Whampoa branch of HSBC to Harbour Grand Hotel, P3 was purportedly issued by Sai Kung branch of HSBC, yet a name card of Patrick Tsin of Shatin Plaza branch of HSBC was given to PW1.

50.  I accept PW1’s evidence that it was his intention to pass all the documents he received to the interested consortium for verification.  Obviously on the 4 March 2011, PW1 had not even started to look for a consortium as he just met the defendant for the first time, but he would not have accepted P3 and P4 had he not accepted them as genuine.  The fact that PW1 did find a consortium for the railway project shows that he did accept the proofs of funds as genuine on 4 March 2011.  In my judgment, there is nothing inherently probable in the evidence of PW1 as to what happened at Harbour Grand Hotel on the 4 March 2011.

51.  It was put to PW1 that he never took P1 and P3 seriously.  PW1 denied that was the case.  I do not think PW1 would go into the trouble of introducing a consortium to the railway project of the defendant if he himself did not accept P1 and P3 as genuine.  I do not think PW1 would go into the trouble of salvaging the financing scheme by introducing PW2 to the defendant if he did not accept P1 and P3 as genuine. True it is that PW1 was not relying on P1 after the defendant was able to produce P3 as proof of funds; if PW1 knew that P1 was a false instrument, the business integrity of the defendant would become suspect.  I accept as true and reliable PW1’s evidence that he did believe in P1 and P3 when they were given to him by the defendant.

52.  The same analysis applies to PW2 to PW4.  I do not think PW2 would agree to lend HK$7.8 million to the defendant if he knew that the proofs of funds of the defendant were false.  I do not think PW3 and PW4 would go into the trouble of attending two law firms on 22 March 2011 if they did not accept as genuine the proofs of funds of the defendant. 

53.  I agree with Mr Dunn that, at the end of the day, it is the intention of the defendant that matters (Paragraph 59 of the Prosecution’s Closing).

54.  As for the point made that PW1 to PW4 could not really have believed in the huge profits they were promised, I agree with Mr Dunn that the actions of the prosecution witnesses showed that they did believe in the huge profits they were promised. The signing of P24 and P29 at two law firms and the lending of HK$7.8 million by PW2 show that they did believe in the proofs of funds and the promise of huge profits.  The promise of huge profits truly blinded the prosecution witnesses from reality.

55.  The evidence of PW1 to PW4 is to some extent supported by the seizure of documentary exhibits during the house search and the bankers’ affirmations.  In my judgment, the evidence of PW1 to PW4 as to what went on between them and the defendant concerning the proofs of funds and the loan of HK$7.8 million is true and reliable.

The House Search

56.  Although the defendant was not present when Wang Tsung‑hsi gave P13, “Cease and Desist Order”, to PW1, the fact that an original signed copy of P13 was found during the house search shows that the defendant was aware of what went on between Wang Tsung-hsi and PW1, i.e. that the defendant’s party was threatening to pull out from the financing scheme. 

57.  The fact that copies of the passport of Djohan Pangestu (P28) and Wang Tsung‑hsi (P27) were found during the house search supports PW1’s evidence that Djohan and Wang were members of the defendant’s party.

58.  The fact that i/, an original signed copy of P29, i.e. the loan agreement between PW1 and the defendant and ii/, copies of the Hong Kong ID card of PW2 were found during the house search supports the evidence of PW2 that he and the defendant signed a loan agreement at a solicitors’ firm on 22 March 2011.

59.  The seizure of P30 supports PW2’s evidence that he gave a copy of the transfer slip to the defendant on 22 March 2011 after he had transferred HK$7.8 million into the account designated. 

60.  The fact that the original signed copies of P13 and P29 were found together with P27, P28 and P30 and copies of PW2’s HKID card in a plastic folder reinforces the inference that the defendant was all along aware of what went on between Wang Tsung‑hsi and PW1, from the threat to pull out by the issuance of the “Cease and Desist Order” to the asking for a loan of US$1 million.  The defendant was present when P22, the loan agreement, was signed.  She was a party to the loan agreement, and she signed on it.  If the defendant was kept in the dark as to what went on between Wang Tsung‑hsi and PW1, if there was any secret plot behind her, that would be easily found out when she met PW1’s party on 22 March 2011.

The Bankers’ Affirmations

61.  I attach full weight to the bankers’ affirmation of Ngai Hing‑cheung of BOC (P20) and Tang Wan-pong of HSBC (P21 and P22). 

62.  P22 shows the activities of the HSBC account of Lam Hiu‑wah, i.e. the nominated account that was used to receive the HK$7.8 million from PW2. P22 supports what PW2 said in court, on 22 March 2011, he did transfer HK$7.8 million to Lam’s account pursuant to the loan agreement (Pg. 170 of the bundle).  P22 also shows on 23 March 2011, a cashier order numbered 986318 had been issued from Lam’s account to the bank account of Wai Cheong Motors (Hong Kong) Limited in the amount of HK$327,254.  In other words, the money that the defendant paid for the car she purchased on 22 March 2011 came from the account of Lam. 

63.  On the same day, HK$6 million was transferred from Lam’s account to the defendant’s account (P22 at Pg. 170).

64.  Then, on 25 March, the defendant used a cheque drawn on Lam’s account to pay for the deposit and expenses for a village house she bought (Paragraph 9 of P50).

65.  The aforesaid evidence shows that the defendant was not an innocent pawn used by Wang Tsung-hsi or Djohan, she was actively involved in the scheme and knew what happened to the HK$7.8 million received from PW2. 

66.  It is inconceivable that if, between 22 and 25 March 2011, the defendant was fully involved in the use of HK$7.8 million from PW2, she would be unaware of, (i) the falsity, and (ii), the intended fraudulent use of P1 and P3 when she handed the documents to PW1 on 4 March 2011.

67.  P21 shows that the HSBC account of the defendant was slowly run down, and it was closed on 3 March 2011 with a zero balance.  P1 purportedly states that the account had a balance of HK$19.8 billion on 4 March 2011.  The account did not have a balance of HK$19.8 billion on 4 March 2011, as the account had been closed on 3 March 2011.

68.  P21 shows that the bank account had a balance of less than HK$4,000 on 12 January 2011.  P16, which is dated 12 January 2011, states that the defendant had a balance of US$200 billion in her account. 

69.  P20 shows that on 4 March 2011, the balance of the defendant’s BOC account was HK$10,000.  The defendant did not have HK$19.8 billion in her account, as P1 purportedly shows. 

70.  P20 shows that on 21 February 2011, a cheque of HK$19.8 billion had been deposited into the defendant’s BOC account and it was soon bounced (Pg. 90 of the Bundle).  P21 shows that the bounced cheque was in fact drawn on the defendant’s HSBC account at a time when the account was overdrawn by HK$58.43 (Pg. 133 of the Bundle).

Findings - Charge 1 and Charge 3

71.  The prosecution, in order to succeed, must prove that: 

(a) the documents under complaint, ie P1 in relation to Charge 1, was a false instrument, and P3, in relation to Charge 3, was a copy of a false instrument;

(b)the defendant used the aforesaid documents;

(c) the defendant knew or believed the aforesaid documents to be false;

(d)the defendant intended that PW1 would accept the aforesaid documents as genuine; and

(e) the defendant intended that PW1, by accepting the aforesaid documents as genuine, would do some act to his own or some other person’s prejudice.

The Falsities of the Instruments

72.  It is an admitted fact that P1 is a false instrument.  P1 is a document purportedly issued by BOC on 4 March 2011, when in fact it was not issued by BOC on that date or at all.  The contents of P1 do not show the true state of the defendant’s bank account with BOC at that time.

73.  It is also an admitted fact that P3 is a copy of a false instrument.  P3 is a copy of a document purportedly issued by HSBC on 4 March 2011.  In fact, the original instrument was not issued by HSBC on that date or at all, and the contents do not show the true state of the defendant’s bank account at that time.

74.  I find that P1 was a false instrument and P3 was a copy of a false instrument.

Whether the Defendant had used P1 and/or P3

75.  It is in dispute whether it was the defendant who handed P1 and P3 to PW1 on 4 March 2011. It is the defence case that P1 and P3 were given to PW1 by Wang Tsung-hsi, the Taiwanese business associate of the defendant.

76.  When PW1 testified about P10, the subject matter of Charge 4, PW1 said quite unequivocally that it was not the defendant who gave him P10.  The defendant gave the original document of P10 to the representatives of the consortium.  PW1 obtained P10 from Michael Tse. 

77.  PW1 was able to recall clearly how and from whom he obtained the documents in the present case. PW1 remains adamant that it was the defendant who handed P1 to him at the coffee shop at the Bank of China building on 4 March 2011.  PW1 gave clear evidence that the defendant went up to the bank with Wang and Leung Ming-chung, the person who introduced the defendant and Wang to PW1.  Upon their return to the coffee shop, the defendant handed P1 to PW1 as proof of capital.

78.  As for P3, PW1 gave clear and straightforward evidence that it was the defendant who handed P3 to him at Grand Harbour Hotel.  On the issue as to who handed P1 and P3 to him on 4 March 2011, PW1’s recollection is good and his evidence on this subject is both credible and reliable.

79.  I do not think the evidence of the handwriting expert has the effect of undermining the prosecution case or the evidence of PW1 that it was the defendant who handed P1 and P3 to him.  The handwriting expert, for the reasons given in his report, is of the opinion that the signatures on P1 and P3, which appear to be those of the defendant, were not in fact written by her.  The findings of the handwriting expert are not disputed by the prosecution.  As pointed out by Mr Dunn in his closing submissions, it is not the evidence of PW1 that the defendant signed P1 and P3 in PW1’s presence.  PW1’s evidence is always that the signatures were already there when the documents were given to him.

80.  I accept as true and reliable PW1’s evidence that it was the defendant who gave P1 and P3 to PW1 on 4 March 2011.

The Defendant’s Knowledge

81.  P1 is a document purportedly issued by BOC on 4 March 2011, it refers to the defendant and her BOC account.  The defendant was present at the meeting at the coffee shop on 4 March 2011, and it was the defendant who gave P1 to PW1.  There is no way that the defendant could obtain P1 from BOC on 4 March 2011 as it is an admitted fact that P1 was not issued by BOC on that date or at all.  The contents of P1 do not show the true state of the defendant’s account at that time.

82.  P1 refers to a sum of HK$19.8 billion.  P20 and P21 show that on 21 February 2011, the defendant had issued a cheque in the sum of HK$19.8 billion from her HSBC account and deposited the same into her BOC account.  The HSBC account was overdrawn by HK$58.43 at that time, the cheque was soon bounced.  The issuance of the aforesaid cheque and the bouncing of it support PW1’s evidence to some extent.  It lends credence to PW1’s evidence that the defendant had claimed that she had over HK$19 billion in her BOC account.  As early as on 21 February 2011, the defendant had been working on the figure of HK$19.8 billion.

83.  The only reasonable inference I can draw from the evidence is that the defendant knew that P1 was a false instrument when she used it on 4 March 2011.

84.  P3 is a document purportedly issued by HSBC on 4 March 2011, it is addressed to the defendant and it refers to her HSBC account.  The defendant was present at the Harbour Grand Hotel on 4 March 2011 and it was the defendant who gave P3 to PW1.  There is no way that the defendant could obtain P3 from HSBC on 4 March 2011 as it is an admitted fact that P3 was not issued by HSBC on that date or at all. The contents of P3 do not show the true state of the defendant’s bank account at that time.

85.  The affirmation of Tang Wan-pong of HSBC (P21) shows that on 3 March 2011, the HSBC account of the defendant was closed and no balance was held.  The defendant must have known that P3, which purported to show that her HSBC had a balance of HK$39 billion on 4 March 2011, was false.

86.  The only inference I can draw from the evidence is that the defendant knew that P3 was a false instrument when she used it on 4 March 2011.

The intention on the part of the user to induce PW1 to accept the aforesaid documents as genuine

87.  Mr Kwok put to PW1 to PW4 that they did not really believe in P1 and P3 and they could not really have believed in the huge profits they were promised. 

88.  I agree with Mr Dunn’s submissions that what the prosecution is required to prove is the intent on the part of the defendant: that she intended to induce PW1 to accept P1 and P3 as genuine when she used the documents on 4 March 2011. 

89.  I accept as true and reliable the evidence of PW1 that he met the defendant for the first time when they met at the coffee shop at the Bank of China building on 4 March 2011.  The defendant said she had a railway project and she needed financing of HK$100 billion.  PW1 told the defendant that she had to have some basic capital.  The defendant said she had over HK$19 billion in her BOC account.  It was against the aforesaid background that PW1 asked the defendant for proofs of fund.  The defendant first produced P1 to PW1 after she went up to the bank with Wang Tsung-hsi and Leung Ming-chung, who introduced the defendant to PW1.  When the defendant handed P1 to PW1, she also gave PW1 a name card of Wat Wing-yu, Winnie, Financial Planning Manager of Sheung Wan Branch of BOC (P2) and asked PW1 to contact Wat if he had any enquiry.

90.  As for P3, I accept the evidence of PW1 as true and reliable that after the defendant had given P1 to PW1, she told PW1 that she had HK$39 billion in her HSBC account.  PW1 told the defendant that it would be easier for the defendant to obtain the financing of HK$100 billion if she could get proof of fund from HSBC.  It was against this background that PW1 met with the defendant at Harbour Grand Hotel later on the same day and got P3 from the defendant as proof of fund.  In fact, when the defendant met PW1 at the hotel, she also gave P4, a name card of Patrick Tsin, General Banking Officer of Shatin Plaza Branch of HSBC to PW1, again the defendant asked PW1 to contact Tsin if he had any question.

91.  In my judgment, it is quite clear that the defendant produced P1 and P3 to PW1 in order to persuade PW1 that she was a person of considerable means and what she said about the railway project and the HK$100 billion financing was not mere bluff.  The defendant wanted to get PW1 and other people through PW1, involved in financing her railway project.

92.  I agree with Mr Dunn’s submissions that in all the circumstances, there could be no other reason for the defendant producing P1 and P3 to PW1.  As Mr Dunn put it aptly, they were talking about serious business, they were not in a game of Monopoly.  From the evidence, I am satisfied so that I am sure that the defendant had the intention to induce PW1 to accept P1 and P3 as genuine.

The intention on the part of the user that PW1, by reason of accepting the aforesaid documents as genuine, would do some act to his own or some other person’s prejudice

93.  The defence submits that the prosecution fails to prove that the defendant intended PW1 to act (or omit) to his own/others prejudice. 

94.  The gist of the argument is that:

“No witnesses from the consortium (if it did exist) gave evidence. Everything said about the position of the consortium (for example, that the consortium was suspicious of the defendant’s fund proof, that the consortium tried to test the fund authenticity by demanding a money exchange, or that the consortium signed a confidential agreement regarding the upper parts, etc) was all hearsay. They could only explain PW1’s state of mind and his subsequent conducts.”

(Paragraph 5 of the “Closing Submissions of the Defendant”)

95.  True it is that what PW1 said about the position of the consortium was hearsay evidence, it was only admissible to explain PW1’s state of mind and his subsequent conducts. There is clear evidence from PW1, which I accept as true, that he had found a consortium.  There is also clear evidence from PW1, which I also accept as true, that the consortium had sent two representatives to the meeting on 8 March 2011, and at that meeting, the defendant gave the original instrument of P10 to the two representatives of the consortium.  The evidence of PW1, (hearsay evidence excluded), clearly shows that he had found a consortium for the defendant’s railway project, two representatives from the consortium had a meeting with the defendant’s party on 8 March 2011 and proof of fund, i.e. the original instrument of P10, was provided by the defendant to the representatives.

96.  The fact that P11 and P12 were signed between the defendant’s party and PW1’s party on the following day, i.e. on 9 March 2011, at Erving Brettell Solicitors, dealing with payment of bonuses to PW1 and his associates, shows that he had found a consortium for the defendant’s railway project and PW1 and his associates expected they would be paid hundreds of millions of US dollars for services rendered in introducing investors to the railway project.

97.  It is true that both P11 and P12 do not refer expressly to a railway project.  But at the time when P11 and P12 were signed, there was no other big investment scheme between the defendant’s party and PW1’s party.  The payment of bonuses must be related to the railway project which PW1 had introduced to the consortium.

98.  As P1 and P3 were false instruments, the inevitable result is that the use of P1 and P3 must result in prejudice to PW1.  He would not be able to receive any remuneration.  True it is that there is no evidence from the consortium that the consortium would refuse to remunerate PW1 on the ground of a false fund proof.  The signing of P11 and P12 proves that PW1 and his associates expected that they would be remunerated by the defendant’s party.  If P1 and P3 were false instruments, there is no way that PW1 and his party would be remunerated under P11 and P12.

99.  It was never the intention of the defendant to pay any commissions/bonuses to PW1 and/or PW1’s associates for their services provided.

100.  I am aware that P11 and P12 were both signed after 4 March 2011, but from the evidence, I am sure that the defendant intended PW1 to add to his own/others prejudice when she used P1 and P3 on 4 March 2011.

101.  I agree with Mr Dunn’s submissions in court that the railway investment scheme was just a smokescreen, no consortium was ever going to invest in the railway project unless the defendant could produce some reliable proof that she had the funds she claimed she had, something that the defendant was clearly unable to do.  I do not think the consortium was the real target of the defendant, in other words, she did not intend to hit on the consortium and get $100 billion from the consortium.  What the defendant was doing was to use the railway project as a cover for hitting on PW1 or someone else introduced by PW1.  That was exactly what the defendant did in the present case, she managed to obtain US$1 million from PW2 through PW1.

102.  It is true that the issue of exchanging the HK$39 billion into US dollars was not something known to the defendant on 4 March 2011, PW1 only related this request from the consortium to the defendant through Wang on 17 March 2011, I agree, however, with Mr Dunn’s submissions that if it had not been the exchange rate, it would have been something else; in other words, the defendant would have found some excuse to ask for money from PW1 once she succeeded in inducing PW1 to accept P1 and P3 as genuine.  PW1 would be prepared to do what he could to keep the investment plan alive.  The loan of US$1 million was a huge amount of money on its own, but modest when compared to the bonuses promised to PW1.  The promise to pay huge sum of bonuses as evidenced by P9 to P12 and the “Cease and Desist Order” (P13) sank PW1 deep into the trap. 

103.  In my judgment, if the defendant used P1 and P3, knowing that they were false with the intention to induce PW1 to accept them to be genuine, it must also be the intention of the defendant that PW1, by accepting P1 and P3 to be genuine, would be induced to pay her money, or that he would persuade others to pay her money.

104.  On the evidence before me, I am sure that the defendant had the second leg of the required intent when she used P1 and P3 on 4 March 2011. 

105.  In my judgment, when PW1 received P3 from the defendant, acted on it and located a consortium for the defendant, P1 was no longer relied upon by PW1 as proof of funds.  However, the key issues for Charge 1 are:

(1) whether the defendant used P1 knowing the same was a false instrument; and

(2) whether the defendant had the dual intention required at the time to use P1.

In my judgment, the answers to the aforesaid two questions are affirmative.

106.  The prosecution has proved beyond reasonable doubt all the elements of Charges 1 and 3.

Charge 2

107.  The prosecution, in order to succeed, must prove that:

(a) the document under complaint, i.e. P16, was a false instrument;

(b) the defendant was in possession of P16 when the same was seized by the ICAC officers on 26 July 2012; and

(c) the defendant knew P16 was a false instrument.

108.  It is an admitted fact that P16 is a false instrument.  P16, a document purportedly issued by HSBC on 12 January 2012, was not issued by HSBC on that date or at all, and the contents do not show the true state of the defendant’s bank account at that time.  P21 shows that on that date, the account had a balance of less than HK$4,000.

109.  It is an admitted fact that P16 was found in a drawer in the defendant’s bedroom (Paragraph 3 of P52 “Admitted Facts II”). P16 is a document which refers to the defendant’s HSBC account.  The document is addressed to the defendant, her name is clearly printed on the document.  In fact, the HSBC account referred to in P16 is the same account stated in P3 and P10.

110.  I am aware of the fact that the defendant was not the sole occupant of the flat where P16 was found and seized.  The flat was occupied by her, her husband and their two children.  P16 bears the defendant’s name, refers to her HSBC account, and was found in a drawer inside the bedroom.  The only inference I can draw from the evidence before me is that the defendant was aware of the existence of P16.  P16 was under the defendant’s control and custody, and she was the one who possessed P16.

111.  The defendant must have known that she did not have a balance of US$200 million in her HSBC account when in fact the account had a balance of less than $4,000.  When a person only has less than $4,000 in his/her bank account on a certain date, he/she must know that a bank statement which purportedly states that he/she had a balance of US$200 million in that account on that date is false.  In the present case, the inference is all the more obvious when the account was slowly run down until 3 March 2011, when the balance was zero and the account was closed.

112.  I find that the defendant knew that P16 was a false instrument. 

113.  For Charge 2, “Possessing a False Instrument”, the prosecution has proved beyond reasonable doubt all the elements of the offence.

Charge 4

114.  The concession made by Mr Dunn in his closing is a fair one.  The evidence of PW1 shows that on 8 March 2011, though the defendant gave the original instrument of P10 to the representatives of the consortium, she did not give the copy, ie P10, to PW1.  According to PW1, he received P10 from his business associate, Michael Tse, at a later date. 

115.  In the circumstances, the prosecution cannot prove that the defendant used P10 with the intention that PW1 should accept the same as genuine.  The defendant should be acquitted of Charge 4.

Verdict

116.  I find the defendant guilty of Charge 1. 

117.  I find the defendant guilty of Charge 2. 

118.  I find the defendant guilty of Charge 3. 

119.  I find the defendant not guilty of Charge 4.