HKSAR v. SIU YIN PING AND ANOTHER

"Siu Yin-ping, also known as Coty Siu, on or about the 29th day of April 1994, in Hong Kong, dishonestly, with a view to gain for herself or another or with intent to cause loss to another, procured from Greyland Trading Company Limited ("GTL") the execution of a valuable security, namely a cheque number 449553 and dated 29th April 1994 drawn on the account of the said GTL held with the Bank of East Asia for the sum of $32,400 by deception, namely by falsely representing that the said sum of $32,400 was the lawful transportation payment purportedly owed by the said GTL to Long's Company."

"Man Chi-wai, also known as David Man, on or about the 29th day of April 1994, in Hong Kong, dishonestly, with a view to gain for himself or another or with intent to cause loss to another, aided and abetted Siu Yin-ping, also known as Coty Siu, to procure from Greyland Trading Company Limited ("GTL") the execution of a valuable security, namely a cheque number 449553 and dated 29th April 1994 drawn on the account of the said GTL held with the Bank of East Asia for the sum of $32,400 by deception, namely by falsely representing that the said sum of $32,400 was the lawful transportation payment purportedly owed by the said GTL to Long's Company."

      "During the time of the offences between 29th April 1994 and 7th June 1995, the two defendants were the respective managers of the shipping department and the accounting department of a Hong Kong company, Greyland Trading Limited (GTL), which was a wholly owned subsidiary of an American company, Aqua Leisure Limited (Aqua). GTL was the purchasing and sourcing company for Aqua and one of its functions was to arrange for transportation and shipment of goods purchased by Aqua from its place of manufacture through Hong Kong to various destinations.

      The prosecution claimed that in arranging for payment of a transportation company for services rendered in Hong Kong D1, aided and abetted by D2, on 17 occasions made fraudulent claims on behalf of a transportation company called Long's Company, for the transportation of 109 containers. The alleged fraud was perpetrated in three different ways. For the sake of clarity I will set out and deal with them under different headings."

"Duplicated Payments to Long's Company

      Two Long's invoices were found to carry the same container numbers and had been paid separately. Six sets of charges were under this category:

(1) Charges 1 and 18: a cheque dated 29th April 1994 in the sum of $32,400 was issued for the payment of two Long's invoices:

(i) 0116 dated 15th April 1994: of the five containers listed, three had previously appeared in the invoice 0063 and two in invoice 0067, all of which bear the same dates.

(ii) 0070 dated 26th April 1994: two of the containers named had appeared in an earlier Long's invoice 0063 dated 15th April 1994.

(2) Charges 4 and 21: a cheque dated 22nd December 1994 in the sum of $25,000 was issued for the payment of invoice 1219 dated 22nd December 1994. Of the seven containers listed therein, three had appeared in an earlier invoice, 1203 dated 3rd December 1994.

(4) Charges 8 and 25: a cheque dated 16 March 1995 in the sum of $48,420.80 was issued for the payment of four invoices:

(i) 2213 dated 6 March 1995: of the five containers named therein, two had appeared in 2259 dated 4 March 1995. One had appeared in 2310 dated 6 March 1995.

(ii) 2326 dated 16th March 1995: of the five containers named, three had appeared in 2280 dated 2nd March 1995 with identical dates among the charges.

(5) Charges 12 and 29 (It should be noted that 29 D2 was acquitted): a cheque dated 13th April l995 in the sum of $21,400 was issued to pay for the invoice 2360 dated 31st March 1995. Of the three containers mentioned two had appeared in 2352 dated 25th March 1995 and two in 2358 dated 28th March 1995.

(6) Charges 15 and 32 (D2 was acquitted on charge 32): a cheque dated 28th April 1995 in the sum of $45,000 was issued to pay for three invoices, one of which being 2448 dated 26th April 1995. Of the three containers named therein one had appeared in 2441 dated 23rd April 1995."

      "In the course of its operation, GTL had to engage transportation companies to carry out transportation work for which service GTL would be invoiced. In the invoices one would find the particulars of service rendered, the container numbers, and the date on which service was rendered. Supporting documents such as copies of the equipment interchange receipt (EIR) issued by the container terminal to which containers were delivered, manifests or dock receipts, if any, would be submitted with the invoice. Once the invoices had been submitted to the shipping department they would be forwarded to the accounts department, together with a payment journal prepared and approved by the account manager (D2), a payment approval form listing payments to be made would be prepared and faxed to Aqua's office on a regular basis for approval. After approval was faxed back to GTL, staff of the accounts department would then prepare a cheque for signature. In the case of cheques of less than $50,000 only the defendants joint signatures were required...................

      During the examination and scrutiny of the GTL books between April 1994 and June 1995, PW1 noticed the transportation charges paid to Long's Company had inflated, as compared to the preceding years. Accordingly, he had caused a thorough examination of the GTL books and noticed that some of the container references had been duplicated in different invoices and were separately paid for, i.e. in the case of the first lot of charges."

      "PW2 was responsible for preparing shipping documents and arranging for transportation and delivery of merchandise. The shipping department had a staff of 2-4 headed by D1, the most senior staff of the shipping department. After a loaded container had been delivered to one of the container terminals for shipment or the container was delivered to a go-down, an EIR or mate's receipt would be issued to acknowledge receipt. The original would be sent to the shipping company for preparing a bill of lading while at least two photocopies of the same would be made to be kept for record purposes respectively by the shipping department and accounts department. Entries would also be made in a container-loading book. Invoices would be submitted by transportation companies usually in the form of monthly statements and they would pass to the accounts department for settlement. GTL had an approved list of transportation companies to turn to whenever such service was required. This list included Mile Express and Long's Company which were recommended by D1. The former was owned by D1's ex-husband, one Ng Kwong-chi. Wong's speciality was transportation services in the Chinese territory.

      When shown that EIR was included in the prosecution exhibits, PW2 could tell some of it carried D1's handwriting. Under cross-examination, PW2 stated that simply by looking at the invoices she could not tell what kind of work had been done by the transportation company and she could not say whether there had been double payment without the assistance of additional information on the worksheet which was similar to D35. She also agreed that it was possible for a container to be handled by two different transportation companies within the same day. On this basis, nor by looking at the invoices of Long's and the debit notes of Winton could she tell what kind of services had been rendered.

      It was also possible for one transportation company to take up the task of patrolling the container to the Hong Kong border and another to take it across the border to the warehouse or container terminal. However, those who did not deposit the container to the warehouse or container terminal would not get a mate's receipt or EIR (as the case may be). She would expect instead a worksheet or a manifest to come with the invoice and supporting documents.

On the question of missing documents, PW2 stated since GTL's office had been moved every two to three years, some had been discarded but she was not aware of any documents having gone missing."

"Long's Company and D1:

        Two witnesses were called by the prosecution to show the connection between D1 and Long's Company. PW5, Madam CHAN Sau-ying, the mother of D1, was an old lady, aged 66. She stated that she was the sole proprietor of Long's Company and was registered as such with the Business Registry. She had started the company at the suggestion of her ex-son-in-law and she went through the registration process in the company of D1. Although she stated she 'operated the business', her job was only to sign various documents given to her by her daughter. She had no idea what plants and equipment Long's had, nor was she conversant with other aspects of the business such as its expenditure and income.

        For her trouble, she was not paid either in the form of a share in the business profits or a fixed salary. According to her, all of her three children had assisted in the running of the business and in particular D1 who had asked her to sign documents. When shown a sample of Long's invoice, P1C, and EIR, P1D, she had no idea what they were nor did she remember seeing them before. Long's was closed down for three to four years by reasons of her poor health and her husband's winning the Mark Six in August 1994.

        Under cross-examination, she further stated that with the funds furnished by her husband a cafe was set up for the children to operate. In addition, each of the three children received $2 million in cash after the father had received the windfall. She claimed that her ex-son-in-law owned a transportation company which supplied tractors to Long's Company for his business although she had no idea how many tractors the latter had.

        PW6, Shiu King-hung, was D1's brother. He was a bank supervisor. His evidence was to the effect that Long's Company was set up at the suggestion of D1 and her ex-husband and his mother was named as the proprietor. Initially he was given some money for his trouble but eventually he stopped taking money as he considered that chore a favour to his mother. Long's Company had no staff, no lorries, no tractors, no equipment and no office. It would sub-contract its work to other transportation companies which, in 95-99 per cent of the cases, was the Mile Express. Its registered office was PW6's former residence in Tsing Yi Garden which was also occupied by PW5 and later by D1 after she had separated from her husband.

        PW6's mother's duty was mainly to sign cheques whereas PW5 was to make out invoices by using the EIRs and other documents initially deposited in the mailbox of his residence and subsequently handed to him by D1 personally. The freights were given by D1 and Ng and he was to work out the charges based on the size of the containers particularised in the EIRs. He would turn to his sister when he had queries. The invoices he prepared invariably were sent to GTL. He did not realize some of the invoices were 'duplicated' in the sense that the EIRs had been repeated. Payments to the invoices would be sent to the registered address of Long's Company and would be given to his mother, PW5, who since 1994 had been living with her daughter in that address.

        PW6 had no idea where the cheques went and the financial status of the business. PW6 contended further that his younger brother, the youngest of the three siblings, was not involved in the business of Long's Company. PW5 and PW6 struck me as rather reluctant witnesses and understandably so.

        PW5 was trying to assume responsibility for the affairs of Long's Company but had been hopelessly incompetent in her attempt. The contention that she operated Long's Company was obviously unreliable since it would be difficult to imagine how one could do so without knowing anything about the business and financial status of the company. She had repeatedly said that the business was hers when it was clear that she had no idea what it was, what was its worth, how much was its turnover and its profits. As a proprietor, she did not even benefit from the business.

        Likewise, PW6 seemed to be torn between trying to distance himself from Long's Company's affairs, and protecting himself and his family members. He contended his role was confined to manual tasks of making out invoices. He was unable even to identify his handwriting and denied authorship of any of the invoices produced by the prosecution.

        When at last I found that there were some elements of truth in their testimony, piecing bits of their testimony together, it seemed clear that Long's Company was set up at the behest of D1 and/or her then husband, using the residential address of PW5 and PW6 as its registered address and PW5 the nominated owner. She and her then husband supplied the EIRs for PW5 to make invoices to be submitted to GTL. She helped to fix the rates. When the cheques came, she would arrange for the same to be paid into Long's account. The role of PW6 was one of the unpaid nominees whereas PW5 offered his time in physically making out the invoices. Whatever Dl's role was, she was instrumental both in the operation of Long's Company business and the issuing of the invoices.

"It was further admitted under section 65C of the Criminal Procedure Ordinance that between 18th December 1992 and 30th November 1994 a total of $2,835,703 was paid into Long's bank account and a total of $1,397,565.49 had been paid into Dl's account while $810,656 in all had been paid into D2's account. The particulars of how these monies were channelled could be gleaned from Exh.P90. A total of 8 bankers' affirmations had been submitted by the prosecution pursuant to the provisions of section 20 of the Evidence Ordinance, Cap. 8, Laws of Hong Kong, marked respectively as P90A-H. They furnished prima facie evidence to prove inter alia the relationship between the defendants and Long's Company.

      Both 90A and 90B refer to the accounts of GTL. From gleaning the information therein, I was satisfied that all the cheques referred to in the charges and in fact in the prosecution exhibits had been paid out of GTL company accounts to Long's Company and Winton Express."

"P90B was affirmed by an officer of the Standard Chartered Bank. He recounted inter alia the history of Long's Company account with the said bank. Long's Company opened a current account on 18th December 1992 by a sole proprietorship mandate for banking accounts signed by CHAN Yau-ying, PW6.

      Initially D1 was the authorised third party signatory but the authorisation was withdrawn on 2nd April 1993. During the period between 13th January 1993 and 13th October 1995, the following cheque withdrawals from Long's Company current account were detected:

      47 cheques were made payable to SIU Yin-ping, D1, totalling $1,233,735.49. 25 cheques were made payable to MAN Chi-wai, D2, totalling $755,656 and 22 'cash' cheques totalling $186,570.

      Further study of the other bankers' affirmations made respectively by the officers of Hongkong Bank, Bank of East Asia, Sin Hua Bank, 1990, revealed the following:

      Of the 47 Long's cheques made payable to D1, 44 cheques representing 98.4 per cent of the funds were successfully traced of which 42 cheques representing $1,197,802 went to D1's account with different banks."

"... I had indicated my concern over the sheer volume of exhibits and their relevance. At one point, I was shown a whole stack of copies when the witness was asked only to look at one page. I had expected assistance in the form of submissions or oral evidence to navigate through these documents. I received none. Although some of them did shed some light on the general conditions of the GTL accounts, in my view the majority of them were not really related to the charges which concern this court.

      PW1 was further cross-examined in detail on the contents of several articles which the parties agreed under section 65C of the Criminal Procedure Ordinance were downloaded from the Internet. I had read and noted their contents. While they might provide fascinating insights into American politics I failed to see how their contents could bypass the rule against hearsay, relevancy or inadmissibility. I had specifically invited counsel for assistance on this point. However, even after I had had the benefit of Mr. Allan's wisdom, I failed to see the light. In my view, this exhibit could go no further than proving that a certain article concerning Mr. Fineman and his associates was available in the Internet but could not be used to prove the truth of its contents. Even if their contents were proved true for the reasons already stated above their relevance, put to the highest, could only be described as remote."

"... primarily and ultimately responsible for checking the invoices and recommending the same to the Aqua office in the USA for payment approval. The combined effect of the evidence from the former staff of GTL show that it was the responsibility of the defendants to sign the cheques after approval was given. The duo, therefore, were instrumental in the execution of the cheques."

      "For reasons not relevant to these proceedings D1's separated husband was not called as a prosecution witness. Although the role of Mr. Ng Kong-chi was unclear, D1 herself definitely played a very decisive part in the running of Long's Company which had no staff, no equipment and no office. What it had was one customer, GTL. D1 was responsible for recommending the service of Long's Company along with Winton Express, another company owned by her separated husband to GTL. She furnished the EIRs, gave instructions, fixed freight rates for her brother, PW5, to make out invoices to be sent to GTL. She gave directions to her mother to sign documents and cheques.

      Further, from the banker's affirmations (P90) one could detect a constant flow of cash from GTL's account to her accounts with different banks during the period roughly coinciding with the charges. Sums of money went to D2's various accounts. There was even a savings account in the joint names of D1 and D2.

      This evidence by itself might not amount to anything but when put together, in geometrical progression they led me to the inevitable conclusion that Long's Company was the alter ego of D1 who had liberally helped herself to its funds by channelling the same to the different accounts under the name of herself and/or D2. In my view, this was the only irresistible inference one could draw from the facts available."

      "Since the trial has taken a total of 29 days to reach its conclusion it would not be feasible to refer to every iota of evidence introduced in this verdict. Although all the evidence had been reviewed with the utmost care, here I can only set out some of what I consider to be the most significant features. The failure to refer to some of the evidence in this case is a matter of necessity and must not be taken for my neglect of the same."