HKSAR v. LI WING HONG

DCCC 707/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 707 OF 2010

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Reasons for Sentence

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1.  The Defendant is convicted upon his own plea of one charge of fraud, contrary to section 16A of the Theft Ordinance.

2.  The Particulars of Offence read:

“LI Wing-hong, between the 14^th day of September 2008 and the 13^th day of March 2009, in Hong Kong, by deceit, namely by falsely representing to Oriental Logistics Group Limited (“the said OLG Limited”) that:-

(i) certain clients of the said OLG Limited had placed orders at the said OLG Limited for delivery of goods (“the said orders”); and

(ii) Global Logistics Enterprise Company (“the said GLE Company”) had actually taken up and completed the delivery of the goods pursuant to the said orders,

and with intent to defraud, did induce the said OLG Limited to pay a total of $1,249,121.58 Hong Kong currency to the said GLE Company, which resulted in benefit to himself or in prejudice or a substantial risk of prejudice to the said OLG Limited.”

3.  The facts admitted by the Defendant reveal that:

“At all material times, the defendant was a shipping clerk of Oriental Logistics Group Limited (“OLGL”). OLGL was engaged in the business of providing logistic services to its clients. The defendant’s duties included receiving orders from clients and arranging logistic companies to delver the goods in accordance with the clients’ orders.

On 18^th March 2009, Ms HON Pik-wai, who was the personnel manager of OLGL (PW1), found that several clients still had not settled payments with OLGL. PW1 therefore instructed the defendant to check with the relevant logistic agent. On the next day, PW1 found that the address of the email received from the agent was different from the usual address used by that agent.

Upon enquiry, the defendant admitted to PW1 that he had placed false orders on behalf of OLGL’s clients and arranged a logistic company, namely Global Logistics Enterprise Company (“GLEC”), which was set up by the Defendant, to take up those false delivery orders. He did this in order to deceive OLGL’s money.

Upon a check, PW1 found that between 14^th September 2008 and 13^th March 2009, OLGL had 20 business dealings with GLEC. The total amount of money paid to GLEC for payments of the false delivery jobs was HK$1,249,121.58. A report was therefore made to the police.

Subsequently, the police found that the defendant set up GLEC on 2^nd September 2008. He reported his home address as the business address of the company.

The police conducted two video-recorded interviews with the defendant. During the interviews, the defendant admitted placing false orders at OLGL and arranging GLEC to take up the false jobs. After placing the orders, he issued “cheque request forms” to the accounting department of OLGL in order to obtain money to settle the delivery fee payable to GLEC. After receiving the cheques, the defendant deposited them into GLEC’s current account, of which the defendant was the sole signatory. During the aforesaid period, the defendant had received a total of HK$1,249,121.58 from OLGL.

The defendant had spent part of the money received from OLGL on soccer gambling and to settle his own debts. In order to keep the scam going, he deposited money received from OLGL into OLGL’s account pretending to be payments settled by OLGL’s clients. The defendant had paid a total of $640,927 to OLGL during the aforesaid period (hence, the net amount of money actually obtained from OLGL was $608,194.58).”

4.  The Defendant does not have any previous criminal conviction record.  He was born in November 1980 and is now 29 years old.  He received education up to Form 5 level.  Having completed his secondary education, he started to work as a shipping clerk.   

5.  In mitigation, Mr. Shin representing the Defendant informed me that the Defendant had a supporting family.  Except for the Defendant’s elder sister, his entire family attended this hearing to support the Defendant.  Mr. Shin also submitted to me six letters respectively from The Association of Evangelical Free Churches of Hong Kong (Evangelical Free Church of China – Choi Fook Church), Industrial Evangelistic Fellowship Rehabilitation Centre For Problem Gamblers, the Defendant’s present employer, namely Hong Kong K-9 Academy Limited, the Defendant’s elder sister, the Defendant’s father and the Defendant himself.  The gist of the letters is that the Defendant is remorseful, that he is now in employment, that his present employer finds the Defendant dutiful, responsible and hard-working, that the Defendant had been rid of his gambling habit, and that he has a supportive family.

6.  Mr. Shin then referred me to HKSAR v Chow Chak-man and Li Tak-yin CACC 447/1998 and asked me to consider obtaining a suitability report for Probation Order and Community Service Order before I impose sentence on the Defendant for the present charge of fraud.

7.  Mr. Shin also submitted that after the discovery of the offence, the Defendant has repaid $50,000 to Oriental Logistics Group Limited.

8.  The present case is one which involves considerable planning and a breach of trust.  In this connection, the Defendant made fake orders pretending that those orders were placed by the clients of OLGL.  The Defendant set up the company called Global Logistic Enterprise Company (“GLEC”) to take up those fake orders so that OLGL would make payments to GLEC in the belief that GLEC did deliver goods pursuant to OLGL’s instructions.  There was also a breach of trust as the Defendant, being a shipping clerk of OLGL, placed the fake orders to GLEC so as to deceive money from OLGL.  The scam lasted for half a year from 14^th September 2008 to 13^th March 2009 and OLGL had 20 business dealings with GLEC.  The total amount of money paid to GLEC for payments of the fake orders was about $1.25 million.

9.  In this connection, I note from paragraph 7 of the Summary of Facts that in order to keep the scam going, the Defendant deposited money received from OLGL back into OLGL’s account pretending that they were payments effected by OLGL’s clients.  The Defendant paid a total of $640,927 to OLGL and the net amount actually obtained by the Defendant from OLGL was $608,194.58.

10.  I find, as stated in paragraph 7 of the Summary of Facts, that the purpose of the Defendant paying back $640,927 to OLGL was to keep the scam going.  In considering sentence, I will start with the amount pleaded in the Particulars of Offence, i.e. $1,249,121.58 Hong Kong dollars.  

11.  In sentencing the Defendant, I bear in mind the guideline laid down in HKSAR v Cheung Mee Kiu CACC 99/2006.  According to Cheung Mee Kiu, where the amount involved was $1 million to $3 million, the starting point should be 3 to 4 years’ imprisonment.  

12.  The Defendant is convicted of fraud and the present case involves considerable planning and a breach of trust.  In light of HKSAR v Cheung Mee Kiu, I do not consider probation order or community service order a feasible sentence option.  I am not prepared to call for the suitability report for probation order and community service order as requested by Mr. Shin.

13.  Having considered the facts of this case, the Defendant's clear record and the sentencing guideline laid down in Cheung Mee Kiu, I am going to adopt a starting point of 3 years' imprisonment.

14.  In light of the Defendant's guilty plea, I will give him one-third discount thus reducing the sentence to 2 years' imprisonment.

15.  As the Defendant has repaid $50,000 to OLGL, I am prepared to give him a further reduction of 3 months.  The Defendant is therefore sentenced to 1 year and 9 months' imprisonment.