HKSAR v. WONG KA LUNG

DCCC687/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 687 OF 2010

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Reasons for Sentence

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Charges

1.  The defendant was charged with two counts of fraud, i.e. Charges 1 and 2, which were contrary to section 16A of the Theft Ordinance, Cap. 210, and five counts of using a false instrument, i.e. Charges 3 to 7, which were contrary to section 73 of the Crimes Ordinance, Cap. 200. Both offences carry a maximum sentence of 14 years’ imprisonment.

2.  The defendant pleaded guilty to Charges 1 to 3 and was convicted of the same. The remaining Charges 3 to 7 were then left on the court’s file and not to be proceeded with without the leave of the court.

Facts of the case

3.  At the material times Miss Chang, PW1, was the sole proprietor of Kai Wan (Chan Kee) Transportation Company (“Company A”) and Lucky Company (“Company B”). The defendant and Hui Kwok-hung (“Hui”) were the only two partners of Kwan Kin Engineering Company (“Company C”) which was set up on 11 July 2008. PW1 came to know Hui in 2000 who was a contracted driver for Company A at that time. Hui ceased to work for Company A in 2006. Hui introduced the defendant to PW1 in September 2008.

The Macpherson Playground project - Charge 1

4.  In mid-November 2008 the defendant and Hui led PW1 to Macpherson Playground at Yim Po Fong Street of Mongkok. The defendant informed PW1 that if PW1 invested about $100,000 into the demolition work of Macpherson Playground she could expect a profit of $700,000 to $800,000. As a result, PW1 paid 10,000 in cash to the defendant on the same day for placing the tender. A few days later the defendant told PW1 that he had successfully obtained a contract for the demolition work of Macpherson Playground. Thereafter the defendant had on 19 occasions requested PW1 to inject capital into the project by presenting to her 12 letters purportedly to be issued by Hong Kong Playground Association to support the defendant’s various allegations and for the purpose of demanding money from PW1. Between 1 November and 31 August 2009, PW1 had paid the defendant $39,200 in cash and had deposited a total of $354,900 into certain bank accounts in accordance with the instructions of the defendant and for the purpose of Macpherson Playground project. On 31 August 2009, the defendant proposed to stop the Macpherson Playground project. From then onwards no money was injected into this project by PW1.

The Tuen Mun Project - Charge 2

5.  On 30 September 2008, Hui produced a document to PW1 and stated that Company C had successfully obtained a contract from a company called Wah Man Construction Company. Hui claimed that this company was a contractor of a $16 million government road construction project in Castle Peak Road, Tuen Mun. Later in late July 2009, the defendant told PW1 that Company C had been dissolved and he had to give up the Tuen Mun project. The defendant agreed to transfer the Tuen Mun project to Company B. Consequently from 11 August 2009 onwards, PW1 invested into the Tuen Mun project as instructed by the defendant. A number of false documents including a draft contract purportedly to be signed by the Highways Department and Company B and letters between the Highways Department and Company B were presented to PW1 by the defendant to support his various allegations. Between 11 August 2009 and 15 December 2009, PW1 had paid $23,000 in cash to the defendant. Another sum of $323,300 was deposited into certain bank accounts and a Hong Kong Jockey Club account in accordance with the instructions of the defendant and for the purpose of the Tuen Mun Project.

The Mud Removing Project

6.  In late December 2008, the defendant persuaded PW1 to invest in the mud removing and filling business in the New Territories. PW1 agreed and asked the defendant to handle the mud removing project on behalf of Company B. The defendant then led PW1 to visit a number of the sites of the project. The defendant told PW1 that the mud removing project involved seven sites. Wing Wai Machinery Trading Company and Luen Fung Contractors Limited were the clients for these sites. On 24 December 2008, a forged contract between Company B and Tsang Chao-ling purportedly for the provision of services of mud transportation (“FD-1”) was drafted and shown to PW1 by the defendant. As a result of the defendant’s allegations and presentations of the false document, PW1 had invested a total of $594,500 into the mud removing project from 23 December 2008 until 31 August 2009 when the defendant proposed to stop the mud removing project. PW1 had never received any profit sharing with regard to this project.

The arrest of the defendant

7.  On 15 December 2009, PW1 felt suspicious and made enquiries with the Highways Department with regard to the Tuen Mun Project. Eventually she discovered that the Highways Department had never contracted the Tuen Mun Project to Company B, the matter was therefore reported to the police.

8.  The defendant was arrested on 22 March 2010. Under caution he said that he committed the offences out of greed. He admitted that he did place the tender for the Macpherson Playground Project but he failed to get it. He forged the Macpherson Playground Project documents. The Tuen Mun Project had never started. He forged the Tuen Mun Project documents in order to get money from PW1. He did work on the mud removing project but he had never shared the profits of it with PW1 and he forged FD-1. The defendant also admitted that he used some of the money from PW1 to repay his creditors and the rest of the money from PW1 was lost in gambling.

Subsequent investigations

9.  In relation to the Macpherson Playground Project. (Charge 1), Hong Kong Playground Association confirmed that the purported Project documents were forged. In relation to the Tuen Mun Project (Charge 2), police investigation revealed that there was no construction project contracted to Wah Man Construction Company. The Highways Department also confirmed that the purported Tuen Mun Project documents presented by the defendant to PW1 were forged. In relation to the mud removing project, police investigations revealed that Wing Wai Machinery Trading Company and Luen Fung Contractors Limited were not in existence. It was also revealed that the bank accounts in which PW1 had deposited money as directed by the defendant belonged to either the defendant’s creditors or the family members of his creditors.

The defendant’s background and mitigation

10.  The defendant is aged 33, he was a construction site supervisor and had obtained a diploma in engineering and construction. He had been engaged in engineering and construction work since then. In August 2000 when he was 23, he was sentenced for 18 months probation for charges of theft and using a false instrument. Ten years later at present, one of the charges he was convicted of was of the same nature, i.e. using a false instrument and the money he had defrauded this time was in the sum of $1.34 million approximately. The defendant was not in a position to make any restitution.

11.  The defendant claimed that he was engaged in a housing project as a subcontractor between 2007 and 2009 at Foshan but unfortunately he was not remunerated by the main contractor at all and had incurred loss in the sum of $1.5 million approximately for buying housing materials and also to maintain the 15 workers of his company which he claimed were set up in 2006 as opposed to 2008 as reflected in the facts of this case. As a result of the said housing project, the defendant was in financial difficulties. It was said that on one hand that the defendant had tried to recoup the project losses by trying his luck with the Hong Kong Jockey Club. On the other hand the defence claimed that the defendant was not engaged in any heavy gambling and as most of the time only $100 for each betting was spent. It was alleged that the gambling pattern of the defendant was reflected in his telebet account with the Hong Kong Jockey Club. This court failed to see how gambling could help to recover his financial loss in the said housing project, nor to pay for his workers, especially it was small-scale gambling of mostly $100 per bet as claimed by the defendant.

12.  The fact that the money defrauded did not go directly to the defendant’s pocket but to his creditors makes no difference to the defendant’s culpability and criminality. The money was in effect obtained dishonestly by the defendant for his ultimate use and purpose. The facts revealed that part of the money deceived went into the defendant’s telebet account with the Hong Kong Jockey Club. Moreover the defendant had also admitted that a certain amount of money he cheated from PW1 was lost in gambling.

Breach of trust case?

13.  This case was a blatant dishonesty. However, the relationship between the defendant and the victim, PW1, was short of fiduciary and hence could not be categorised for situation contemplated by the Court of Appeal in HKSAR v. Cheung Mee Kiu CACC 99/2006. As such, this court views that the guidelines in Cheung’s case has no application in this case. Having said that, there was no sentence tariff for offences of using a false instrument and of fraud.

Other factors for consideration

14.  The case was not a one-off incident of dishonesty but involved considerable and premeditated planning. Such plan was effectively formulated and completed. The three charges involved three unrelated, distinct and separate events. They were being carried out over a period of 16 months during which the defendant had taken an active and ongoing role in the affairs. On numerous occasions the defendant had falsified documents to deceive PW1 into paying a large sum of money to him. Eventually PW1 had suffered actual and total loss of $1.34 million approximately.

Sentencing

15.  Having fully considered the background of the case and of the defendant, mitigation put forward by the defence counsel and nature of the offences, this court will adopt starting points for each charge as follows:-

Offence in Charge 1 which was carried out over a period of 10 months and involving a loss of an approximate sum of $400,000: 24 months.

Offence in Charge 2 which was carried out over a period of 15 months and involving a loss of about $346,000: 24 months.

Offence in Charge 3 which was carried out over a period of 9 months and involving a loss of about $594,000: 27 months.

16.  Upon the defendant’s plea the above term would be reduced by one-third to:-

Charge 1: 16 months;

Charge 2: 16 months; and

Charge 3: 18 months.

17.  The three charges were unrelated and separate offences, partially consecutive sentences should be imposed to give effect to the appropriate totality. As such, it is now ordered that 2 months each of the sentence on Charges 1 and 2 shall run consecutively to the sentence on Charge 3, the remainder is to run concurrently. The total term of imprisonment to be served shall be 22 months.