HKSAR v. LEUNG CHI KEUNG

DCCC927/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 927 OF 2009

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

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

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

Reasons for Sentence

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

1.  You appeared before me this afternoon and pleaded guilty to a total of 8 charges of theft contrary to section 9 of the Theft Ordinance, Cap. 210.

2.  Back in 1994, you were a licensed floor dealer of a local stock broker firm, known as Uni-Crown Investment Limited, (Uni-Crown) and the subject matters of the theft in this case relate to your stealing from 4 Uni-Crown clients’ (PW1 - PW4) shares held under their respective shares.

3.  According to the Summary of Facts, which was agreed by you, the total amount of losses suffered by these clients in terms of the purchase price was approximately $819,000 and the benefits obtained by you in terms of the sale price was $745,000.

4.  The details of the theft in each charge has been adequately provided in the Summary of Facts which runs into six pages and I do not intend to repeat the whole content here. Suffice to say that at all material times, the modus operandi was that you would, without the client’s knowledge and instruction,

a)  sell the shares on the victim’s account and pocketed the proceeds of the sales thereafter, (1st, 4th,5th and 6th charge);

b)  withdraw the share certificates of the shares concerned from a Hong Kong Securities and Clearing Company Limited on the victim’s account and then deposited such certificates into your wife’s securities account (2nd, 3rd and 8th charge) held at another stock broker firm; or

c)  withhold from the victim, PW3, the physical script of the securities in question and later gave them to someone else to meet your own private obligation, (7th charge).

5.  After your stealing, you took vacation leave from Uni‑Crown near the end of October 1994. You left Hong Kong for the Mainland on 31 October 1994 and since then you have not been heard since until you came back to Hong Kong from the Mainland on 2 July this year when you were arrested at Lo Wu checkpoint.

6.  In a subsequent police investigation, under caution, you admitted, inter alias, that you had lost a lot of money in trading stocks and shares and you sold the shares of the victims in this case in order to pay for your own losses in investment. You left Hong Kong because you knew that the thefts would be bound to be discovered by your clients soon as Uni-Crown would start issuing monthly statements to their clients in November 1994.

7.  You are now aged 59 and had a clear criminal record. You had Form 5 level of education and before you worked for Uni-Crown between 1993 to 1994, you were already a stockbroker in the trade working for another stockbroker firm for four years already since 1989. You were married and have one son and daughter. Both are now in their 30s. In 1996, which is two years after you fled to China, your wife applied for a divorce.

8.  In mitigation, your solicitor, Mr Lam told the court that you had no contact with your family at all since you left in 1994 with a view to protect the family from the harassment of any debt collector. Although you have sold the client’s shares for a profit of $745,000, I was told all the monies had been used to cover your losses in your own investments. Mr Lam said that since you had only about one month’s notice that the Uni‑Crown would change to a new practice of issuing monthly statement, therefore when you decided to leave, you left hastily without really be able to bring with yourself a lot of money.

9.  During the years in China, I was further told that you only earned your living by being an odd job worker and worse still, you have suffered from a lot of illness. After years of living in solitude, you came to learn that your wife had divorced you and that the police had also issued a warrant against you and you decided to come back to Hong Kong to face your responsibility and concluded your living as a fugitive in China.

10.  Mr Lam said that you have no mean to make any offer of restitution of any kind. Luckily for the victims, I was informed by the prosecution that years ago, Uni-Crown has already reached some settlement agreements with these clients in relation to their losses but as far as Uni-Crown was concerned it ceased its business already.

11.  To me, this is yet another case of a serious breach of trust case involving, as it were some planning and it is exactly a case where persons like you who had enjoyed a position of trust both from your employer and your company’s clients, had decided, for advantage of your own, to abuse your position to defraud them of a sizeable amount of money.

12.  In sentencing, both the prosecution and the defence had agreed that the court can still apply the sentencing guideline in the HKSAR v Cheung MeeKiu [2006] 4 HKLRD 776 although the case was decided in 2006 before the present case which was in 1994. According to the guideline in Cheung MeeKiu the court has set out five financial bands and fixed appropriate types of sentences with each band.

13.  Applying this guideline, for sums involving between HK$220,000 to HK$1.25 million, the appropriate starting point of sentence is between two to three years. Cheung MeeKiu is actually a Hong Kong case which converted the guidelines of the earlier English Court of Appeal case Clark (1998) 2 Cr.App.R.137 into the Hong Kong dollars band. The guidelines of Clark was decided as the court in England needed to revise its earlier guideline in the case of Barrick(1985) 81 Cr.App.R.78 because of the inflation there as well as the fact that the maximum sentence of theft in England has been reduced from 10 years to 7 years. In our legislation, however, the maximum sentence for theft remains to be 10 years.

14.  Against this background, the total sum involved in the present case in terms of the sale price in respect of all the shares in relation to all the 8 charges was in the total of $745,000. Taking all the factors into account, I consider that a sentence of 3 years’ imprisonment as a starting point should be appropriate. In HKSAR v Wong Lo Tak [1998] 2 HKLRD 537, a Chinese judgment from the Court of Appeal, it was held that:

“If a defendant had committed or series of similar offences at different times, in different places and under different circumstances, the judge should adopt a flexible approach in determining the sentence.  Normally he should first consider the more serious or the most serious incident of similar offences and then the number of offences the defendant had committed and the degree of their seriousness.

Having considered the most serious case in this type of offence, the maximum penalty, the sentencing guidelines and the sentence imposed in similar cases, the judge should proceed to decide as to the starting point for sentencing the defendant for all those similar offences.

The next step is to consider the defendant’s mitigating factors, such as the plea of guilty, any restitution and his clear record etc., in order to arrive at an appropriate reduction.  Now, finally the totality principle should be considered to determine the total sentence which the defendant deserves.  Once the total sentence has been determined, this sentence should be imposed on the defendant for each of the offences committed but the sentence should run concurrently.”

15.  I shall follow exactly that decision. You have pleaded guilty which means that you will be entitled to the customary one-third discount on your sentence. Apart from that, you would not entitle for any further reduction because you have made no restitution whatsoever.

16.  I have, of course, considered the fact that you have voluntarily surrendered yourself to the authority in July this year. However, that was only after 15 years. The fact that you decided to abscond was, by itself, an aggravating factor. After all these years, you decided to end your solitary life as a fugitive and come back to Hong Kong to face the legal responsibility. In my mind, these two factors just cancel each other.

17.  In the end, I take into account what has all favourably said on your behalf by your lawyer. In my judgment you were the author of your own misfortune. Your engagement at that time in the speculative trading activities while being a stockbroker was, in the circumstances, inexcusable and you should accept the full responsibility for your own mistakes.

18.  I order that for each charge, you should receive a sentence of two years and those sentences to run concurrently.