HKSAR v. CHEUNG YUET

 DCCC554/2009

IN THE DISTRICT COURT OF THE

HONG KONGSPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 554 OF 2009

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Reasons for Sentence

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1.  I convicted the defendant after trial of the charge of conspiracy to defraud. The charge was a conspiracy to defraud persons or firms delivering goods to a firm called Yee Fu Enterprise Company by falsely representing the cheques were good and valid orders for payments and that payment would be made for goods delivered.

2.  The amount referred to in the particulars of the offence is a sum in excess of $13 million. The evidence presented, however, the amount involved by the suppliers who gave evidence totalled $6,683,595.

3.  This was an audacious scam. The defendant registered himself as the sole proprietor of Yee Fu Enterprise on 22 March 1991. The company commenced its business trading at Room 112A of the Silvercord Building in Tsim Sha Tsui (“Silvercord”) in April of 1991. The company rented godowns in Yuen Long and in Tuen Mun. The Yuen Long godown was rented from 13 June and the Tuen Mun godown from 14 October.

4.  In April and May of 1991 the defendant opened three bank accounts in the name of Yee Fu at the Chase Manhattan Bank, the Bank of East Asia and the Overseas Trust Bank. Yee Fu traded for some time with no complaint of default from suppliers. The office premises were spacious and appeared to be properly manned by its employees.

5.  From September 1991 onwards Yee Fu, through its employees, ordered various items of goods from a number of suppliers. The goods ordered included wrist watch, video tapes, cassette recorders and tapes, cloth, stationery, glue and other goods. The goods were delivered to one of the godowns, or to premises in Dongguan on the mainland, or to its offices in Tsim Sha Tsui. Payment was usually made by way of post-dated cheques signed by the defendant. When a number of suppliers presented their post-dated cheques dated on or after 7 November they were informed that the cheques would not be honoured due to insufficient funds. A number of suppliers attended the offices of Yee Fu at Silvercord, but found that they were vacant. The matter was reported to the police, and goods worth just under a million were recovered. None of the suppliers were able to contact any person connected with Yee Fu.

6.  The defendant left Hong Kong on the evening of 6 November to go to the mainland. He returned on 24 March 2009, and he was arrested then. Under caution he admitted opening the accounts and signing some of the post-dated cheques. He also admitted signing a number of documents on the instructions of the persons he referred to as Ah Kei. He claimed he did not know what they were and that he was merely employed by the company as a cleaner or janitor. I did not accept the defendant’s contention that he was merely a cleaner or janitor of this company. I am satisfied that the defendant was at the heart of this elaborate, sophisticated and well planned fraud.

7.  There were a number of people involved in the fraud. One of the witnesses said that when he attended at the premises in Silvercord he saw 9 to 10 persons apparently working there at desks. Specific roles were assigned to the various conspirators, and they gave consistent names to the various suppliers. The offices were set up in a prime commercial building in Tsim Sha Tsui. Two warehouses were rented. The movement of the large quantity of goods out of the warehouses in early November would have incurred significant transportation costs. The capital costs of setting up this scam would have been substantial. I am sure that the logistics of the scam required very detailed planning.

8.  The defendant does not have a clear record. There are four matters recorded on the record that has been produced: in 1984, for obtaining property by deception, he was sent to prison for 18 months; in 1986, for possession of dangerous drugs, he was imprisoned for two years.

9.  I was told in mitigation that the defendant is 75 years of age. He was born in China, and he came to Hong Kong in the 1960s. He was educated to primary school level. I am told that he had menial jobs working in restaurants.

10.  During the course of the hearing the court was presented with two psychiatric reports in respect of the defendant, one from a Dr Queenie Chin and one from a Dr W K Choi. The reports say that the defendant has a history of hypertension and glycoma and had poor memory in recent years. His MMSE score was over 30, which is very poor. This was partly due to his poor vision and his hearing deficiencies. I was told he had suicidal tendencies and was suffering from dementia. Subsequent examination conducted in February of this year found that his MMSE score had improved but was still severe.

11.  I have taken the defendant’s medical condition into account when determining the appropriate sentence. As I mentioned, this is a serious offence. It was an audacious scam. It was committed over a period of months. There were a large number of people involved. It involved significant planning and a substantial injection of capital to keep the fraud afloat. The witnesses who gave evidence lost just over $6½ million. People who embark on enterprises such as this must know that if caught they are going to face a substantial custodial sentence.

12.  Looking at all the circumstances of this case it seems to me that a starting point of 6 years would be appropriate. The only mitigation in this case is the defendant’s medical condition. Having taken that into account I propose to impose a sentence of 5½ years’ imprisonment.