HKSAR v. FAN MING KEI, ANTHONY AND ANOTHER

DCCC 4/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 4 OF 2015

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Reasons for Verdict

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1. D1 and D2 were each separately charged with 4 counts of Fraud, contrary to s.16A of the Theft Ordinance, Cap 210.

2. The prosecution case was that for Charges 1 to 4, D1 had falsely represented to four different policyholders that their respective four insurance policies with Zurich International Life Limited (Zurich) were taken out with Convoy Financial Services Limited (Convoy) as insurance intermediary and D1 as the handling Technical Representative (TR).  However, the said policies were in fact taken out with GET Wealth Management Limited (GET) as intermediary and D2 as the handling TR.  All along the said four policyholders did not know their policies were entered through GET nor did they know D2 at all.  They would not have taken out the policies had they known the handling TR was D2.

3. While for Charges 5 to 8, D2 had falsely represented to Zurich that the above policies were taken out through GET with D2 as the handling TR.  In particulars that D2 had fully explained the contents of the assurance scheme and declared having gone through the Financial Needs Analysis Form (FNA) with the respective policy holders but in fact D2 had not done so.  Believing such policies were genuinely taken out with GET and D2 as handling TR, Zurich approved the policies and released to GET commissions totaling $608,127.39.  Had Zurich known that such policies were not duly entered, Zurich would not have approved the policies nor released the commissions.

4. Mr Leung for D1 essentially submits that by appending their signatures on various documents at different stages, the respective policyholders could not possibly have missed nor noticed the name of GET as appeared.  It is further submitted that as the policy was for a lengthy period of time, D1 could not have misrepresented the arrangement or it shall come to light anyhow were it not for a truthful and genuine dealing.

5. Mr McGunniety for D2 challenged the admissibility of the video recorded interview where D2 had admitted signing on the declarations while the details were not filled by him, D2 further admitted not having carried out the Financial Needs Analysis with the four clients nor did he complete any questionnaire with them. It is also submitted that D2 had not been dishonest while under instruction by his boss to do so without checking and having any gain at all.

6. By two sets of admitted facts pursuant to s.65C of CPO (MFI-1 & MFI-6), it is admitted that:-

(i) Convoy Financial Services Limited (Convoy) and GET Wealth Management Limited (GET) were Insurance Broking companies incorporated in Hong Kong and registered with the Hong Kong Professional Insurance Brokers Association (PIBA) and The Hong Kong Confederation of Insurance Brokers (CIB) respectively.

(ii) In August 2000 and October 2007, Zurich International Life Limited (Zurich) entered into broker agreements with Convoy and GET respectively and permitted them to promote investment-linked insurance policies of Zurich. Depending on the volumes and the types of the policies successfully transacted, commissions would be paid to Convoy and GET in accordance with the rate stipulated in the respective broker agreements.

(iii) Broker Agreements between Zurich (formerly Eagle Star (International Life) Limited) and Convoy and that between Zurich and GET are agreed and tendered. (Exh P12-P14).

(iv) The Bankers Affirmation in relation to the account of Zurich (a/c no. 502-120934-001); GET (a/c no. 400-317855-838); GET Consulting Company Ltd. (a/c no. 400-370987-838); D1 (a/c 320-1-240532-2) are agreed and tendered. (Exh 74-76)

(v) D1 was arrested by ICAC Officer on the 05/11/2013 at his residence Flat G, 6F, Block 2, Illumination Terrace, Tai Hang, Hong Kong while D2 was arrested by another ICAC Officer WONG Kwok-kay at 06:54 hours on 05/11/2013 at his residence Unit 715, Yee On House, Wo Lok Estate, Kwun Tong, Kowloon.

(vi) Exhibits P2, P2a, and P2b are contracts between D1 and Convoy dated 04/12/2003, 24/05/2002 & 29/07/2002 respectively. D1 later tendered resignation letter to Convoy dated 05/11/2012. Exh P11.

(vii) D2 was at all material times an agent of GET. His contract with GET, together with related documents are agreed and tendered as Exh P58. Exh P73 is a certified English translation of one of the documents contained in Exh P58.

(viii) The following exhibits numbered Exh P3-P10 inclusive were located at the offices of CONVOY, and provided to the ICAC by PW1 (CHENG Wan-hung ) are tendered:

P3	Copy - “Vista” Policy Application Form of Zurich International Life Limited (Zurich), policyholder AU YEUNG Sheung-kim, Policy no. 8310290, dated 28.3.2012
P4	Copy - Convoy BPD Service Request form regarding Policy no. 8310290 and relevant documents
P5	Copy - “Vista” Policy Application Form of Zurich, policyholder TO Ming-yin, Policy no. 8311553 dated 28.3.2012
P6	Copy - Convoy BPD Service Request Form regarding Policy no. 8311553 and relevant documents
P7	Copy - “Vista” Policy Application Form of Zurich, policyholder CHOW Suk-han, Policy no. 8310272 dated 28.3.2012
P8	Copy - Convoy BPD Service Request Form regarding Policy no. 8310272 and relevant documents
P9	Copy - “Vista” Policy Application Form of Zurich regarding FUNG Man-keung, Policy no. 8357294 dated 8.5.2012
P10	Copy - Convoy BPD Service Request Form regarding Policy no. 8357294 and relevant documents

 

(ix) The following Exhibits numbered Exh P15-34 inclusive were located at the offices of Zurich and provided to the ICAC by PW6 (YU Ka-wing) and are tendered:

P15	“Vista” Policy Application Form of Zurich, policyholder AU YEUNG Sheung-kim, Policy no. 8310290, dated 28.3.2012 and relevant documents
P16	GET Financial Needs Analysis Form, policyholder AU YEUNG Sheung-kim, Policy no. 8310290, dated 28.3.2012
P17	Letter from AU YEUNG Sheung-kim to Zurich regarding Policy no. 8310290 dated 18.7.2012
P18	Premium Payment Record of Policy no. 8310290
P19	“Vista” Policy Application Form of Zurich, policyholder TO Ming-yin, Policy no. 8311553 dated 28.3.2012 and relevant documents
P20	GET Financial Needs Analysis Form,  policyholder TO Ming-yin, Policy no. 8311553 dated 28.3.2012
P21	Letter from TO Ming-yin to Zurich regarding Policy no. 8311553 dated 8.8.2012
P22	Change of Servicing Introducer Form regarding Policy no. 8311553 dated 5.11.2012
P23	Premium Payment Record of TO Ming-yin Policy no. 8311553
P24	“Vista” Policy Application Form of Zurich, policyholder CHOW Suk-han, Policy no. 8310272 dated 28.3.2012 and relevant documents
P25	GET Financial Needs Analysis Form,  policyholder CHOW Suk-han, Policy no. 8310272 dated 28.3.2012
P26	Letter from CHOW Suk-han to Zurich regarding Policy no. 8310272 dated 18.7.2012
P27	Change of Servicing Introducer Form regarding CHOW Suk-han Policy no. 8310272 dated 5.11.2012
P28	Premium Payment Record of Policy no. 8311553
P29	“Vista” Policy Application Form of Zurich regarding FUNG Man-keung, Policy no. 8357294 dated 8.5.2012
P30	GET Financial Needs Analysis Form regarding FUNG Man-keung, Policy no.: 8357294 dated 8.5.2012
P31	Letter from FUNG Man-keung to Zurich regarding Policy no. 8357294 dated 15.6.2012
P32	Change of Servicing Introducer Form regarding Policy no. 8357294 dated 12.11.2012
P33	Premium Payment Record of Policy no. 8357294
P34	Commission Statements of GET regarding Policy no. 8310290, 8357294, 8310272 & 8311553

(x) The following Exhibits numbered Exh P36-P38 inclusive and Exh P62-P69 inclusive were seized from GET by ICAC Officer CHEUNG Ming-yin and are tendered:

P36	Payment Advice of GET Consulting Company Limited regarding Policy no. 8310272
P37	Payment Advice of GET Consulting Company Limited regarding Policy no. 8357294
P38	Payment Advice of GET Consulting Company Limited regarding Policy no. 83102790 & 8311553

 

P62	Letter from GET to AU YEUNG Sheung-kim re Policy Application Receipt dated 29.3.2012
P63	Letter from GET to AU YEUNG Sheung-kim re Acknowledgement Receipt of Policy regarding Policy No. 8310290 and a Client Confirmation Questionnaire dated 12.5.2012
P64	Letter from GET to TO Ming-yin re Policy Application Receipt dated 29.3.2012
P65	Letter from GET to TO Ming-yin re Acknowledgement Receipt of Policy regarding Policy No. 8311553 and a Client Confirmation Questionnaire dated 2.5.2012
P66	Letter from GET to FUNG Man-keung re Policy Application Receipt dated 18.5.2012
P67	Letter from GET to FUNG Man-keung re Acknowledgement Receipt of Policy regarding Policy No. 8357294 and a Client Confirmation Questionnaire dated 20.6.2012
P68	Letter from GET to CHOW Suk-han re Policy Application Receipt dated 29.3.2012
P69	Letter from GET to CHOW Suk-han re Acknowledgement Receipt of Policy regarding Policy No. 8310272 and a Client Confirmation Questionnaire dated 24.4.2012

(xi) Both D1 and D2 have clear criminal records.

7. Ms. YU Ka-wing Carrie was authorized by Zurich to provide a statement to the ICAC on 16/06/2014. Some extracts from the statement are set out as below,

Para.1 I joined Zurich International Life Limited (hereinafter referred to as "Zurich" for short) in 2007. Currently I am the Head of Relationship Management – Hong Kong responsible for coordinating the operation of major independent financial adviser companies in Hong Kong…………

Para.2 After an insurance agent has successfully sold a policy, Zurich will pay a commission to the independent financial adviser company according to the insurance products. Calculations of commissions are listed on the Schedule of Commission of the Agreement………..

Para.5 According to the records of Zurich, Zurich received 4 insurance policy applications submitted by GET during the period from March to May 2012. The applicants of the insurance policies were (i) Mr AU YEUNG Sheung-kim, insurance policy number: 8310290; (ii) Mr FUNG Man-keung, insurance policy number: 8357294;(iii) Mr TO Ming-yin, insurance policy number: 8311553; and (iv) Ms CHOW Suk-han, insurance policy number:8310272. (ICAC Reference Numbers:ZUR/AYSK/1 (Trial Exh.P15), ZUR/FMK/1 (Trial Exh. P29) ZUR/TMY/1 (Trial Exh. P19) and ZUR/CSH/1 (Trial Exh. P24)). According to these four insurance policies, the responsible insurance agent was LAI Kwok-hing (D2). The independent financial adviser company where he belonged to was GET………..

Para.6 After approving the above four insurance policy applications, Zurich released to GET commissions of (i) HK$56,550.00, (ii) HK$226,220.00, (iii) HK$158,340.00 and (iv) HK$167,037.39, which were directly transferred from Zurich’s HSBC account 502- 120934001 to GET’s HSBC account 400-317855838. In the meantime, Zurich also issued a Commission Statement (ICAC Reference Number: ZUR/CS (Trial Exh. P34) to GET listing the commission amount for each individual policy. Zurich does not allow any independent financial adviser companies or insurance agents to provide false or misleading information on the application documents…………….

Para.8 If Zurich had had the knowledge that LAI Kwok-hing was not responsible for the aforesaid four insurance policies and that someone deceived Zurich by falsely claiming that LAI Kwok-hing was the insurance agent responsible for these insurance policies, Zurich would never have approved these insurance policies and paid the commissions to GET — the independent financial adviser company where LAI Kwok-hing belonged. In addition, Zurich considered that such dishonest acts have deceived Zurich and caused Zurich to suffer losses by mistakenly releasing commissions to GET.

8. Prosecution called upon the four policyholders, representative of Convoy and Zurich and the respective ICAC officers to give evidence while both Defendants elected not to give evidence on general issue and D2 did give evidence on special issue.

Summary of evidence

9. PW1 Mr Cheng Wan Hung Gilbert was the compliance manager of Convoy Financial Services Limited (Convoy) at the material times, his duty included overseeing the compliance of regulation on financial products sold to customers by their staff.  D1 was a manager of Convoy and he could sell product of Convoy and earn commission.  D1 and his team of salesman were provided administrative and secretarial services by Convoy. The contract between D1 and Convoy stipulated that he could not promote any business similar to those of Convoy without prior consent and no such consent had been given.

10. In about the end of 2012, he discovered that there were four unusual transactions involving existing clients taking out insurances from other companies and then applied to transfer back to Convoy in a short period of time (see letters from client PW2 Trial Bundle p.186; PW3 p.216; PW4 p.245 & PW5 p.275) and the respective TR was all D1.  These policies (P3, P5, P7 & P9) were all sold by GET and the agent was D2.

11. A meeting was held in November 2012, no explanation was offered and later D1 tendered resignation on 5 November 2012 (P 11).

12. By transferring these policies from other companies, Convoy received no commission but rendering continued services to clients.  However, if these policies were sold directly through Convoy, Convoy should have received a total of $650,067.07 from Zurich which D1 would be paid commission of $363,478.36 from it. Here below showed the respective commission would have been paid for each policy,

Charge	Policy No.	Policyholder	Commission that would have been paid by Zurich to Convoy	Commission that would have been paid by Convoy to D1
1 & 5	8310290	AU YEUNG Sheung-kim	$ 60,449.98	$ 33,799.99
2 & 6	8311553	TO Ming-yin	$ 169,259.95	$ 94,639.97
3 & 7	8310272	FUNG Man-keung	$ 241,799.93	$ 135,199.96
4 & 8	8357294	CHOW Suk-han	$ 178,557.21	$ 99,838.44
		Total:	$ 650,067.07	$ 363,478.36

13. PW2 Au Yeung Sheung Kim, he is a director of an Architecture firm.  He recalled that in about 2011 and 2012, D1 of Convoy approached him in his office and by then he already had another insurance policy with Convoy, D1 suggested that another policy could be entered by some premium took out from the existing one and no extra sum needed to be paid but enjoying a better yield than the existing one. He agreed and proceeded to enter into a new policy (TB P.342-367), he confirmed having signed as the policy holder (p.357). However when referring to para.13 Relevant financial professional’s details and declaration (p.356), he said he did not see this page when signing, he did not know Lai Kwok Hing (D2) nor GET Wealth Management Limited as appeared.  He would not have signed it if he had seen this page as he did not know this person nor GET.  D1 also did not ever mention D2 nor GET to him.  While for the Financial Needs Analysis Form (p.368 – 378), he confirmed having signed at various pages (p.372 to 377) but he did not recall the front page (p.368) where GET appeared at the letter head. As to p.372 where declaration and personal information were made, he did not notice the name of Lai Kwok Hing when signing. As to the Risk Profile Questionnaire, the answers there were not his and he would not be classified as of High Risk with Very Aggressive profile (p.374). Likewise he did not notice the name of Lai Kwok Hing at p.375 or 376. In gist, D2 had never gone through this FNA with him.

14. As to the letter of transferring of policy (P17 TB p.379), D1 said he will follow up his policy and PW2 did not really look into the content, D1 also said it was the company’s requirement and procedures.

15. As to the acknowledgement of receipt of policy (p.723, 724) where he had signed, he did not recall the content and in fact, he said there were times that D1 brought a pile of documents for him to sign and D1 also said that was just for formality and asked him to sign. Likewise, he did not notice the name of GET as appeared.  He further said he would have been quite angry had he known of GET and he would not have trusted this company.

16. PW3 To Ming Yin, he is a senior welfare officer of Hong Kong Police Force. In about since 2011, he had regular meeting with D1 of Convoy discussing about the allocation of fund and for review of his investment, later D1 suggested shortening the instalment period of the existing plan and by then a new policy was entered.  He trusted D1 completely and signed the application form (P19 p.383-404). For the said form, he confirmed having signed on it (p.398), however, likewise, he had not seen the page with relevant financial professional’s details and declaration (p.397) nor did he know Lai Kwok Hing or GET as appeared.  He said if he had seen such information, he would have asked D1 who was Lai and GET.

17. As to the Financial Needs Analysis Form (p.409 – 419), he confirmed signing from p.413 to 418, however he did not see p.409 with GET as letter head and for p.413, there were some parts not filled up when he signed.  Similarly for the questionnaire of his risk profile (p.415),  he said he would just be of medium risk stable instead of high risk very aggressive type, Lai Kwok Hing certainly had not gone through it with him, he felt being misled and deceived. Likewise, he did not notice the name of Lai Kwok Hing as appeared in other pages.

18. As to the acknowledgement receipt of policy (p.725-727), he also did not notice GET or he would ask D1 about it.  As to the letter requesting of transfer of policy (p.420), D1 had briefly mentioned to him that was for saving trouble of asking him to sign document, it was just to authorize him to deal with his policy. Later on, D1 did mention to him that he would leave Convoy to join GET and therefore later the year in November 2012, he was then happy to transfer to GET.  He also admits that he did not look at some pages but still signed on it and even so at some blank pages.  As to the Disclaimer at p.413, he also did not notice the small prints of GET.     

19. As to the letter from Zurich to him with the chop of GET (Exh D1), he said he later also intended to raise this with D1 but he forgot to do so, but in any event he disagreed knowing his policy was actually with GET.

20. PW4 Ms Chow Suk Han, she is the proprietor of a drug store.  She recalled that when she signed on the application form (p.423 – 444), she had not heard of GET nor Lai Kwok Hing, in fact the policy was taken under her name as arranged by her husband.  D1 of Convoy came to see and talk to her husband about it. Likewise, Lai Kwok Hing (D2) was not her professional financial adviser nor did PW4 see him. If she had known it was with other agent, she would not have signed it.  She would feel being deceived.

21. As to the Financial Needs Analysis Form (p.449-459), she agreed that it was virtually a blank form and D1 asked her to sign, she therefore signed on various pages from p.453 to 458.  She also said if she had seen GET, she would have asked why this name appeared. She also said she should be of medium risk instead of high concerning her profile on the questionnaire at p.455.  She was also not aware of the name Lai Kwok Hing (D2) at other pages.

22. For the letter requesting transfer of policy to D1 (p.460), she said D1 had told her he is leaving Convoy to join GET and he will take care of it, she also did not know the content when she signed.  However, when referring to her witness statement, she said she cannot recall the detailed process of , reason for and purpose of signing this letter (MFI-5A para.7)

23. As to the acknowledgement of receipt of policy (p.732-734), she did not recall when signing it and she did not spot that GET or Lai Kwok Hing appeared at these pages.  She also disagreed knowing full well that the said policy was actually with GET.

24. As to a letter from GET to her dated 17 April 2012 concerning login name and password (Exh D3), she said she herself did not try to login.

25. PW5 Mr Fung Man Keung, he is a senior research fellow of City University.  In or about 2005 and 2006, he had a Zurich policy with Convoy. Then in about 2012, D1 of Convoy approached him introducing another policy for him and he had completed the application form (P29 TB p.469-490) with D1.  He confirmed signing the form (p.484) but as to the Relevant financial professional’s details and declaration (p.483), the form was probably blank when he signed and if he had seen the name of Lai Kwok Hing and GET as appeared, he would have asked D1 why would it be so stated.

26. As to the Financial Needs Analysis Form (p.495 – 505), Lai Kwok Hing (D2) had never completed it with him and he also had not seen the front page (p.495) with GET appeared at the letter head.  Throughout the form, he did not notice Lai Kwok Hing or GET as now appeared in the form when he signed it.

27. As to the letter of transferring of policy (P31 TB p.506), he said D1 had told him to prepare a letter transferring the policy to him to take care but he then asked D1 to draft it for him.  Later he signed it but he did not recall the circumstances how he signed it, he only thought of transferring the earlier policy to him. Later on in November 2012, D1 told him that he had already transferred to GET and D1 then suggested transferring the policy to GET for D1 to continue the follow up.

28. As to the acknowledgement of receipt of policy (p.728 – 731), he said he did not recall having signed it and the signature was not similar to his.  For p.731, he did not notice Matthew Lai as appeared and possibly it was blank when he signed or he would not have signed it if he saw this name there.  PW5 particularly denied that he knew buying policy with GET. 

29. PW6 Ms Yu Ka Wing Carrie, she was the Head of Relationship Management of Zurich.  She confirmed the requirement to sign on the declaration under para.13 by the financial adviser that the financial needs analysis and risk profile questionnaire have been completed with the applicant (p.437).  However, she was not the person responsible for the contract between the broker and Zurich.

30. PW7 Wong Kwok Kay (Wong) and PW8 Chow Nim Yan (Chow) were the senior investigator and assistant investigator of ICAC respectively.  They stated that at about 6:50am on 5/11/2013, they went together to the residence of D2 to arrest him. They then revealed their identities and told D2 the reason to arrest him.  Wong also cautioned him and reminded him of his right.  Chow took out the notice to person in custody P78 and Wong read him the rights, D2 understood and signed on the notice.  Then Wong asked to call his supervisor to arrange a lawyer but he could not contact him by then and D2 just waited to be called back.

31. Meanwhile, Wong explained the allegation against D2 and D2 asked to reply.  D2 was again reminded his caution and D2 replied that regarding the policies arranged by Fan (D1) in Convoy, he knew Fan in 2012 under the referral of Leung Wai Hon his supervisor at GET.  D2 learned from Leung that Fan was then working at Convoy but could not transfer to work at GET because the licensing matters had not yet completed.  Leung then asked him to help Fan carry out some procedures of submitting policies. D2 remembered helping three policyholders, one was Mr To, a policeman whom he met with Fan at police officer club, the other was a teaching staff of City U whom he met with Fan at the canteen of City U, the last one was a lady who owned a pharmacy whom he met her there. D2 did submit their policies to GET for Fan with D2’s license.  However, he was never paid commission by GET on these policies and he also could not recall whether meeting these policyholders before or after arranging for their policies.

32. Chow then recorded D2’s reply in her notebook P57 (translation P72) contemporaneously.  Wong read the entry to D2, D2 agreed and signed on it.  After the house search, they then took D2 to ICAC Headquarter at North Point to conduct the video recorded interview from 8:33 to 9:27am (P1; translation P70).  Before the interview, D2 also tried to contact his supervisor but still to no avail.  Wong asked to see if D2 would conduct the interview and D2 agreed to do so.  During the interview, D2 had to switch off his phone so as not to interfere the recording and D2 agreed.  After the interview, later the day D2 was able to contact a lawyer.  Legal advice was sought by D2 before the search of his office in the afternoon.

33. When asked in court the reason why not waited for the lawyer before the interview, Wong said sufficient time had been given from 6:50 to 8:30am and D2 also agreed to do so without the lawyer (as also recorded in the interview; counters 31-42 & 65-70) Wong further said that D2 was also all along allowed to use his phone and Wong also denied deliberately refusing D2’s access to his lawyer.

The Video recorded interview of D2 (P1 / P70)

34. D2 stated that he start to work in GET since October 2010 and he is the Marketing Director responsible for making sure all the policies are clean cases for sales provider; for department marketing; for initial training and for business in Hong Kong (counters 86-100).  Leung Wai Hon was his immediate supervisor and the boss (135-140). D2 was paid the basic salary by GET and commission by related company called eTran (143-177). D2 knew D1 through his boss Leung in the end of 2011 or the beginning of 2012 and he knew D1 came from Convoy and he said there was a chance that D1 would come for cooperation (330-343).  Then his boss Leung was about to recruit D1 and asked D2 to provide support to D1 (351-357).  Leung told D2 to help submitting D1’s policies as D1 would join but the license was not yet ready (377) but there was no money received for these policies (397).  D2 knew that he must go and meet the client first and had some preliminary understanding about the client and then for after-sale service (411-415).

35. Regarding the policy with Chow Suk Han (PW4) (460-551), D2 confirmed signing at para.13 of page 15 of the policy application form P24 (471) but the details were not filled by him (485). D2 did not remember when did he sign it but he did see Ms Chow  once with Fan at her drugstore (490-497) Ms Chow was busy and she did not pay attention to what he said and D2 also did not remember whether he signed it in front of Chow and whether the form was submitted before meeting Chow (501-511).  D2 said he had tried to explain the policy to her but she was rather busy (513) All along D2 only saw Chow once (539).

36. Regarding the policy with Mr Au Yeung (PW2- AYSK) (552-597), D2 had not seen this person but did sign on the declaration at para 13 of page 15 of the policy (P15) while the details were not filled by him. (552-569).  D2 also did not remember when did he sign it (574-575).  D2 also explained that under D1, there were some colleagues, on and off there would be a pile of things for his signatures including internal documents. So perhaps he did not know when did he sign it (587).  D2 also stated that he received no advantage for helping D1, while for that from his boss, there was also no commission according to his record, but there were too many clients after working for three years and he did not check (587-597).

37. Regarding the policy with Mr To Ming Yin (PW3-TMY) (598- 639), D2 said he did not see the document but he did meet this person as introduced by Fan at police officer club (598-605). Concerning para13 at page 15 with Financial Consultant details and Declaration (P19), he said the details were not filled by him but he did sign on it. He could not remember when did he sign it but just not at the club and he was not sure whether it was signed before or after the meeting. (608-620).

38. Regarding the policy with Mr Fung Man Keung (PW5-FMK), D2 said the signature was his but details not filled by him concerning the details of Financial Consultant. He did not remember when did he sign it and he did not receive any commission (647-650).

39. Regarding the Financial Needs Analysis Form and the Risk Profile Questionnaire, D2 confirmed that he did not gone through it with all four policyholders (660-665).

40. For those four policies concerned, D2 did not follow whether the information contained therein was correct or not (694-695) D2 also agreed that he did not explain anything to these clients nor did he complete any questionnaire or financial analysis with them (704-723). D2 further admitted it was his fault that he did not go through the documents he signed in detail.  If he had closely read the document, he would not have let this happen (724-725).

D2’s evidence on special issue

41. D2 is now aged 37 and on 5/11/2013 he lived with his girlfriend now his wife.  He has a clear criminal record and has no previous dealing with ICAC.  In that morning at about 7am, ICAC officers came to his residence to arrest him but there was no caution administered. He was very shock and wished to have a lawyer present to face these strangers.  For the notice concerned (P78), he was not given there and no rights had been explained to him.  The officers just jotted down the conversation and he did not read it clearly when he signed as he was not feeling comfortable and was still very shock. He then called his supervisor Leung Wai Hon that he would probably absent from work and asked to contact a lawyer for him.  Later he was told a lawyer Mr Brian Chung was found and would call him later.  Then Brian called him and said he could not come personally but would arrange another lawyer instead. Then another staff called him and he told him the address of ICAC Headquarter as told by the officer.

42. When reaching the Headquarter, he was told by the officer to switch off the phone so as not to interfere with the interview. Officer Wong also told him that just simple question to be asked and there was no need to engage a lawyer and that nobody could help him. All along he did not know his right to wait for the lawyer to come and he was quite confused.

43. When questioned, D2 agreed to have read the notebook entry but he just had a quick look before signing and was not clear about the content. D2 also agreed that there was no oppression nor threatening by officers for him to sign but just his own mental state under pressure when seeing strangers coming for serious matters.  He also thought it was his civic duty to answer and cooperate but he also knew that he could find a lawyer present.  D2 said he also found himself helpless and felt very nervous during the interview. 

Ruling on the admissibility of notebook entry (P57/ P72 ) and video recorded interview (P1/P70)

44. PW7 and PW8 gave evidence in a straight forward manner and despite under Mr McGunniety’s tactful and detail examination, their evidence still remained unshaken and was consistent and supporting one another.  I find them to be truthful and reliable witnesses.

45. Mr McGunniety essentially submits that there was in fact no pressing need for the interview and all along officers did know D2’s request for a lawyer and that had been undergoing, there was simply no reason not to wait for lawyer to start and that the alleged sufficient time was never an excuse to refuse legal access. However, the fact was that D2 was all along allowed to make phone call to engage a lawyer as he wished but as from what the video can tell, it was D2 who elected to proceed without a lawyer present.  It was simple not a case where access to lawyer was refused.

46. Further, it is also submitted that some questions were so leading that it rendered the interview being unfair to D2, for example on counter 666, a conclusion was reached instead of an open question being asked, however, as officer also mentioned, he only sought to clarify the situation with D2 and that D2 was still free to answer anything as he wished.  Objectively speaking, though the way of seeking clarification was quite unsatisfactory, I did not see it being so unfair to D2 rendering the interview involuntary nor should I exercise my discretion to exclude it.

47. In fact, after viewing the interview, I did not find it anywhere unfair to D2, D2 remained calm and was able to answer all questions smoothly and freely.  As to the notebook entry and notice, it was clearly signed by D2 confirming that he understood the content and that was an accurate record, likewise the notice had also been duly signed by him. 

48. D2 is a person of clear criminal record and he has no duty to prove anything.  However, I do not believe his evidence that no right had been explained to him nor was that no caution had been administered.  Clearly he was also all along allowed to use his phone to contact his lawyer as he wished.  All in all, I do not find D2 telling the whole truth to the court and his evidence on special issue shall be rejected. 

49. Therefore I find that the notice, the notebook entry and the interview were all made voluntarily by D2 and there is no other reason to exclude it. These are all admissible evidence. 

Assessment of evidence and findings

50. Mr Leung for D1 essentially submits that for all the policies in question, the printed name of “GET Wealth Financial Management”  or “GET” was all over the place that it was almost impossible not to have seen it nor noticed it. Further, the policy was not just an one-off transaction and that there must be continuing steps and transactions, for examples the valuation statement, login name and passwords of GET to pass to policy holder from time to time, thus to say that D1 was intending to deceive his client would not be possible, not to mention to do so for such a long period of time.

51. Mr Leung also went into details in each charge, say for charge 1 concerning PW2 Mr Au Yeung, apart from claiming that he did not notice the GET Financial Group or the Chinese print, he even said that he did not receive the acknowledgment of receipt from GET nor was he aware of GET appeared in the letter head.  Mr Leung further submits that he must have signed all documents with blind eyes if he were telling the truth.

52. In my view, no doubt Mr Au Yeung is an architect and highly educated, who could also read English and Chinese.  On the face of it one may wonder why he would have missed all these prints or details. However, one must understand the background circumstances, D1 was no new friend to him, D1 was his insurance agent, he was familiar with Zurich product and had made purchase previously, there was no reason why he would not repose trust on D1.  In fact there were a lot of documents to go through, Mr Au Yeung signed in a rush, not just on one page but numerous places to append signature.  Mr Au Yeung also confirmed that when he signed, a lot of information was not entered.  Therefore, given such background, there was ample reason to miss or not to have noticed the name of GET. 

53. As to PW3 relating to charge 2, likewise, Mr Leung submits that PW3 did not pay attention to the contents and said that D1 might have shown the documents to him in a quick manner and asked him to sign at various places. While for the evaluation statement (Exh.D1), he said it was sent to him and he forgot to ask about it despite the stamp of GET was of considerable size as appeared.

54. One must also understand that according to PW3, D1 had once mentioned to him that he intend to leave Convoy for GET.  Mr Leung would of course suggest that PW3 would not have got no idea of GET by then and thus he would certainly not miss the name of GET.  PW3 however repeated that he would not have trusted him had he known that GET was in place.  The trust upon D1 from him was obvious, where when D1 joined GET, PW3 transferred all policies from Convoy to GET in November 2012.

55. As to Charge 3 concerning PW4, similarly, she did not notice the existence of GET and in fact she did not even take part in the conversation between D1 and her husband, however one could not take it for granted that everything filled in would not be of concern to PW4, anyhow it was still the policy of PW4 and not for her husband.  Although her husband was not called upon, nevertheless it remained the issue on whether PW4 knew anything about GET or D2 when she signed the form, obviously as she said she had not heard of these names at all.

56. As to charge 4 relating to PW5, Mr Leung criticized him for not being a reliable witness as he did not give evidence in a straight forward manner but kept on challenging the defence counsel instead.  Mr Leung also says PW5 was telling different version to ICAC and the court, particularly for the letter prepared to give Zurich to make D1 of Convoy to be his insurance intermediary, whether it was PW5 asking D1 to prepare it or PW5 did not remember it at all.

57. However, I did not consider the evidence inconsistent as PW5 did also mention, it was the only time he had been asked to sign for that purpose and he could now tell the circumstances in court when asked specifically.

58. Mr Leung lastly also submits that the evidence from PW1 the compliance manager of Convoy seems to be different from that of PW6 from Zurich, particularly on whether Convoy would receive further income if taking client from other intermediary.  However, PW1 had clearly stated that Convoy would receive no further income but to manage the policy and render administrative service. Certainly the compliance manager would be able to tell such information while for PW6, she could only tell or second guess the situation as she was not responsible for the contract between the broker and Zurich.

59. For D2, Mr McGuinniety puts much emphasis on whether the Financial Needs Analysis (FNA) must be completed with the client face to face, as neither the declaration requires so nor any regulation or body stipulates it clearly. 

60. However, I consider that whether it must be done face to face was beside the point, what matters was whether D2 had in fact gone through it with the respective policy holders, whether it was face to face or by phone or by other means.  It was crystal clear that according to PW2 to PW5, D2 was never in place as their representative and all along it was D1 whom all policy holders were dealing with and that GET was not in place at all.

61. Further, Mr McGuinniety also submits that it could hardly be imagined how and why these witnesses, with high education background and knowledge, would have been and so willing to sign on some blank documents.  However, first and foremost, they all admitted the same and there was no reason to disbelieve them, particularly given the background circumstances, the dealings between D1 and them and that they already had existing policies with Convoy.  Also, it is submitted that their evidence was far from satisfactory when quite some answers were just “I don’t recall”, “I’ve no idea”, “I don’t know” or “I’m not sure”, however when it came to every single details on certain part of the form, it should not be unusual to have such reply.

62. In fact, the witnesses had in common that they are all telling the truth and did trust D1, no doubt the policy application form and the Financial Needs Analysis Forms were lengthy upon which a wide range of information needed to be filled in, it is thus more than understandable for the policyholders to rely on their agent to complete and go through the form.  Further, there were also full of small prints in the content where one must find it easily to miss out something had it not been specifically pointed out to them.  When referring to the various content in the form in court, these witnesses could also find out quite some part which were not correctly entered, not to mention that when they signed, it could be a blank form or quite some parts were left not filled in when they signed.

63. However, now when anyone going through the form, one may easily find that the responsible financial professional was D2 instead of D1, GET instead of Convoy, upon which none of the policyholders were familiar with nor was D1 ever mentioned such arrangement with them.

64. The respective policy holders stated that they were being misled or deceived by D1, they all said had they known such arrangement or discovered that it was not with Convoy, they would not have entered into the policies, the prejudice to their rights and choices were thus obvious.

65. As to D1, he is a person of clear criminal record.  D1 elected not to give evidence and no adverse inference could be drawn against him. D1 has no duty to prove anything and all the burden shall be rested upon the prosecution to prove each and every charge beyond all reasonable doubt. 

66. However, the facts were crystal clear that D1 must have falsely represented and with intent to defraud each and every policyholders PW2 to PW5 that their policies were taken out with Convoy but in reality it was with GET as intermediary, and that D2 was the respective financial consultant instead of D1 as stated in the forms.

67. Mr Parry for the prosecution also helpfully listed out as below the respective actual commission paid by Zurich to GET and then to D1 when compared to the commission that would have been paid by Zurich to Convoy and then to D1, the difference of which showed that D1 had earned  $100,000  odd more ($475,317.96 - $363,478.36) by his deceit.

Commission flow of 4 policies paid to GET & D1

Charge	Policy No.	Policyholder	Commission paid by Zurich to GET	Exhibit (Commission Statement) [Exh No.]	Commission paid by GET to D1	Exhibit (Payment Advice of GET) [Exh No.]	Exhibit (Banker Affirmation) [Exh No.]
1 & 5	8310290	AU YEUNG Sheung-kim	$ 56,550	P34 [511]	$ 44,200	P38 [547]	P75(5) [969]
2 & 6	8311553	TO Ming-yin	$ 158,340	P34 [514]	$ 123,760	P38 [547]	P75(5) [969]
3 & 7	8310272	FUNG Man-keung	$226,200	P34 [512]	$176,800	P36 [539]	P75(6) [970]
4 & 8	8357294	CHOW Suk-han	$167,037.39	P34 [513]	$ 78,334.78	P37 [545]	P75(4) [968]
					$ 26,111.59		P75(7) [971]
					$ 26,111.59		P76(3) [985]
		Total:	$608,127.39		$475,317.96

Commission payments if the 4 Policies been taken out through Convoy via D1

(Evidence PW1)

Charge	Policy No.	Policyholder	Commission that would have been paid by Zurich to Convoy	Commission that would have been paid by Convoy to D1
1 & 5	8310290	AU YEUNG Sheung-kim	$ 60,449.98	$ 33,799.99
2 & 6	8311553	TO Ming-yin	$ 169,259.95	$ 94,639.97
3 & 7	8310272	FUNG Man-keung	$ 241,799.93	$ 135,199.96
4 & 8	8357294	CHOW Suk-han	$ 178,557.21	$ 99,838.44
		Total:	$ 650,067.07	$ 363,478.36

68. In the circumstances, I find that the prosecution had proved all charges against D1 beyond all reasonable doubt and D1 is convicted of Charges 1 to 4 accordingly.

69. As to D2, he is also of clear criminal record and he has no duty to prove anything.  D2 elected not to give evidence on general issue.  Likewise, no adverse inference could be drawn against him.  However, in his reply under caution as well as in the video recorded interview, D2 admitted that he helped D1 to submit the policies while he did not complete any questionnaire nor financial analysis form with the respective four policyholders.  He was the marketing director responsible for making sure all the policies were clean cases and yet he filed all these policies in his name as financial consultant with GET while in fact he was not, and also knowing that D1 had yet joined GET.

70. Further, for the said policyholders, D2 had not even seen PW2 Mr Au Yeung but nevertheless signed on the declaration while he knew that he must go and meet the client first (though PW2 was not even his client). For the rest of others, he alleged having seen them but even if so, they were also not his clients, not to mention that D2 even did not remember whether signing before or after meeting them.  As to the respective declarations, D2 tried to excuse himself by saying that pile of documents would be given to him so he did not know when did he sign it.  This assertion could hardly be the truth, not only was he specifically asked to help assisting D1 so that he must have known which policy was in question, but also he himself as a trainer, he would not have missed out the nature of document that he was going to sign.  Besides, the bare assertion and excuse in the interview had not been repeated on oath and had not been tested under cross examination.

71. Mr McGuinniety also tries to submit that there was no deceit for what D2 had done nor was Zurich suffered from any prejudice. I cannot agree, it was clear that D2 was never the agent or financial consultant to PW2 to PW5 but D2 had nonetheless put his signature there to say and pretend that he had completed with them the Financial Forms while the facts were that D2 did not.  Further, as stated by PW6, Zurich would not accept the policy had they known that the policy was not completed with the potential policyholders. Needless to say, the financial background comes an important part for the insurance company to assess and approve the policy.  If the information were false, the prejudice was more than clear and that Zurich would not be able to approve or assess with accurate information accordingly.

72. Mr McGuinniety lastly says that D2 was just asked to assist D1 as instructed by his boss and he obtained no commission from GET by doing so.  D2 just signed without checking and that was just akin to all PWs but D2 had to face serious charges.  However, the position of an agent or representative undoubtedly had vast difference from the lay client whom always had to trust and rely upon their professional advice and opinion.  Further, I cannot accept what D2 had said that he only signed it without checking as stated above.

73. All in all, D2 had falsely represented to Zurich that he had fully explained the assurance scheme – Applicant’s Declaration in relation to each and every respective policyholder PW2 to PW5 and with intent to defraud Zurich to accept the information contained to approve the said policies, which would certainly prejudice the right of Zurich to assess and approve, and further to have released commission to GET. 

74. As to the benefit to D2, though he insisted throughout the interview that he earned no commission nor benefit from so doing, again, such assertion was not adopted under oath nor was it tested under examination. It could also hardly be imagined that while all such policies were taken out with D2 as named financial consultant, why would he not earn any commission at all.  Moreover, from another point of view, as admitted by D2 in his interview (429-433), when asked whether he expected any commission by assisting D1, D2 said so at the very early stage and the boss also said if Fan (D1) comes, there will naturally be more business, then the business may possibly expand and this is the synergy effects, that there will be more people when such a well-known person joining the company and there will naturally be much commission. As such, the consequential benefit, if any or indirectly, would also be forthcoming.

75. In the circumstances, I also find that the prosecution had proved all charges against D2 beyond all reasonable doubt and D2 is convicted of Charges 5 to 8 accordingly.