HKSAR v. LEE KWOK FUNG SIMON

DCCC 364/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 364 OF 2014

----------------------

----------------------

---------------------

Reasons for Sentence

---------------------

1.  This is an insurance fraud case. The defendant had filed 15 false claims with a number of insurance companies for medical treatment in a Mainland hospital arising out of four alleged accidents and successfully obtained as compensation a total sum close to $440,000 ($436,603, to be exact) within a period of 20 months (ie from March 2011 to December 2012).

2.  The defendant was initially charged with 21 counts of fraud and he pleaded guilty before me to 15 of them (Charges 1 to 14, and 17), whilst for the rest of the counts the prosecution offered no evidence and the defendant was therefore acquitted of those charges (Charges 15, 16, 18 to 21).

3.  Defence counsel submitted that this was a case of sheer exaggeration rather than outright lies about the accidents, in that the accidents had in fact occurred, but the defendant only lied about his stay in the hospital for a time much longer than he actually did (for instance, a claim for 18 days for a four-day stay in the hospital).

4.  The prosecution case was that the defendant claimed he had stayed in a Mainland hospital for a period of 18 days, but his movement record showed otherwise.  He was in Hong Kong for 14 days in that period of time.

5.  The court was further told by defence counsel that the four days were, in fact, not consecutive, but just four separate days that the defendant spent in China within the period of the 18 days and the same for the other claims.

6.  The defendant described through his counsel how he came to be so unfortunate to have four accidents within a period of 20 months, with each occurred more or less six months from the previous one.  All these accidents happened whilst the defendant was visiting his aging mother in the Mainland.

7.  According to the defence, the first two accidents were a trip and fall in the street, the third was a fall off the bike, and the last one a fall in the bathroom.  He suffered head injury each time and had to be hospitalised supposedly for a relatively longer time, but he cut short his stay for fear that he might lose his security guard job in Hong Kong.

8.  When asked by the court if there was any documentary proof of his hospitalisation, defence counsel said there was none.

9.  The court then indicated to the defence that, on the available evidence before the court, it was not prepared to accept the defence’s assertion of exaggeration, but made it clear that the court was willing to hear further evidence.

10.  Having taken instructions, defence counsel said that the defendant would like to come forward to testify and thus the case was adjourned to another day for a Newton hearing.

11.  However, during the adjournment, the defendant changed his mind and on the return day he indicated to the court, through counsel, that he called no evidence.

12.  Notwithstanding this, the defence maintained its position that it was a case of exaggeration.

13.  On the return day, the prosecution produced four sets of documents (ie the completed claim forms and the original medical notes from the hospital).  They were produced to the court without objection from the defence.  They are apparently the supporting documents submitted by the defendant to the insurance companies in question at the time when he made his claims. 

14.  It is worth noting that there are not any signs of alteration on any of these documents, be it the claim forms or the medical notes.  On the face of it, these are all seen to be original documents.  That would mean the defendant had not used any of the receipts issued by the hospital, for, if he did stay in the hospital, he would have to make alterations at least on the period of his hospitalisation. 

15.  Now, the documents before the court show no sign of alterations.  The only inference is that the defendant must have made it all up and, in other words, if what he said did happen, he must have in his possession the receipts from the hospital, because he must have paid to leave the hospital. 

16.  It would only help him by producing any of these receipts to support his assertion that the accidents did happen and he did spend time in the hospital for real treatment, but, strangely, none of it is forthcoming.

17.  On the materials before the court, the only conclusion I can come to is that the defence case about the accidents is not worthy of belief.  I would find that the so-called “accidents” did not in fact happen.

18.  Defendant, aged 58, has one spent conviction, which is not similar to the present one.  He is a married man with two children:  a son aged 19, a daughter aged 18.

19.  In his letter to the court, the defendant described himself as a kind person who had adopted an abandoned baby boy.  He raised him and nurtured him.  Now the boy has grown into a young man of 19. The children are still at school and the wife is not working, so he is the sole breadwinner of the family.

20.  It was submitted by his counsel that the defendant sustained head injuries during each of the four accidents in the Mainland while he was visiting his mother, who too had suffered injury as a result of a fall at home. 

21.  Counsel went on to say the defendant was treated at a Mainland hospital, but decided to cut short his stay by discharging himself voluntarily from the hospital for fear that he might lose his security guard job in Hong Kong.

22.  Needing money to support his mother’s medical expenses, counsel said that the defendant was succumbed to temptation by putting in exaggerated claim for the first time and, thereafter, he found it comparatively easy to earn a little bit of money in this way and consequently that set in trend a series of fraudulent action on the part of the defendant whenever he had an accident in the Mainland. 

23.  Though he perpetrated his crimes against eight insurers, what he did, counsel said, was a rather amateur job.  He did it out of greed and now is sorry for what he has done.  The defendant has made full restitution of the money to the insurance companies concerned at the earliest possible opportunity. 

24.  It is further submitted that the defendant liked to help out others by doing voluntary work in the past.

25.  Insofar as delay is concerned, defence counsel complained that the case has been delayed for eight months.  Judging from the chronological list of events prepared by the prosecution, from the time the defendant was arrested to the time the case was brought before the court, it took eight months.

26.  Relying on the case of Hui Siu Man, CAAR 10/1998, counsel argued that the delay plus full restitution in the instant case would justify a suspension of the sentence. 

27.  I think counsel would agree with me that this is not a simple open-and-shut case.  It involves 8 different insurers, 20-odd false claims. 

28.  It is to be expected the police would have to go through lots of documents, interviews and take statements from a good many witnesses for a case like this, and also remember that the defendant had made use of document purportedly issued by a Mainland hospital in his claims.  More time would have been used for investigating into a case involving a Mainland hospital than one with a local one.

29.  Looking at the prosecution list of events, given the relative complexity of the instant case, I do not find anything which could be described as “unreasonable delay” in their investigation of the case.

30.  On the question of restitution,  in Hui’s case, the appellate court in refusing the review by the prosecution against the imposition of suspended sentence, having emphasised the importance of restitution, especially in commercial crimes, and in the end reiterated that, I quote:

“We repeated, however, that(“restitution”)of itself, is not a ‘very exceptional circumstance’ which would warrant a suspension of sentence.”

31.  The other side of the coin is, however, it should be right to say that, in a just system, no criminals should be allowed to benefit from their crimes and thus the court is given the power to order the criminals to pay back the money to the people they had stolen it from by way of compensation.

32.  Viewing the matter from this perspective, the offenders are simply made to give up something they were not entitled to in the first place.

33.  Of course, I am mindful of what the Court of Appeal has said in Hui’s case, but whether the defendants do it willingly (ie by restitution) or unwillingly (by compensation) should not, in my view, make too much of a difference in sentencing.  These are all insurance contracts.  They are entered into in utmost good faith (the Latin phrase “uberrima fides”).  

34.  Defence counsel agreed that the instant case is bordering on breach of trust.

35.  Of course, I will not treat it as such, but the point I would like to make is that there is a wider consideration in sentencing in this type of cases, in that the ultimate sentence should have the effect of maintaining the integrity of insurance industry.

36.  For the reasons given above, I do not think that there is sufficient reason to justify a suspension of the sentence in the instant case.

37.  Frauds are serious offences.  Life experience tells us that they will never stop and have become one of the constants of life.  In fraud cases, the courts have always taken a tough line with offenders. 

38.  The defendant practised fraud on no less than 8 insurers, for as many as 15 times over a period of 20 months and netted not too small a sum of money (nearly $440,000).

39.  Looking at the case in its totality, I would think that 3 years would appropriately reflect the overall criminality of the defendant.

40.  Taking into account all the mitigation put forward, I take 18 months as starting point for each offence and reduce it to 12 to reflect his plea, and for other positive features, such as voluntary work as well as full restitution, a further 2 months is taken off the sentence, so he is sentenced to 10 months for each charge.

41.  Taking into account the totality principle, I order that Charge 1 be run consecutively to 1 month of each subsequent charge. The total term is one of 24 months.