HKSAR v. LAI CHEUK WANG WALLACE

HCCC 109/2023
[2023] HKCFI 3251
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
CRIMINAL CASE NO 109 OF 2023
________________________
HKSAR
v
LAI CHEUK WANG WALLACE
Defendant
________________________
Before:
Deputy High Court Judge Douglas Yau
Date of Hearing:
11 December 2023
Date of Sentence:
11 December 2023
Date of Reasons for Sentence:
11 December 2023
________________________
REASONS FOR SENTENCE
________________________
1.
The defendant pleaded guilty to one count of Theft
[1]
before Magistrate Mr Wong Ching-yu Edward on 24 April 2023 and was committed to the Court of First Instance for sentence. He confirmed his plea and admission to the summary of facts before me and was duly convicted.
2.
Particulars of the charge are that the defendant between 3 November 2008 and 7 July 2015, both dates inclusive, stole choses in action, namely debts in the total sum of HK$11,975,559 owed by HSBC to Bestrap Manufactory Limited (“BML”), the property of the said BML.
SUMMARY OF FACTS
3.
The defendant was an accounting clerk of BML, which manufactures watch straps with leather purchased from suppliers.
4.
The defendant was responsible for settling payments and making entries in the company ledger.  Upon receiving an invoice from the supplier, the defendant was required to fill in the internal transfer invoice, to prepare the cheque to be issued to the supplier by filling in the payee and amount, and then to submit them to two of the three company directors for their authorized signatures.
5.
Once signed, the defendant would submit the internal transfer invoice and the cheque to the company accountant for signing and the application of the company chop on the cheque, which would then be delivered to the supplier. A receipt would be issued by the supplier upon payment.
6.
The defendant was entrusted with the cheque book for the company account held with HSBC (“the BML account”), which was used for the sole purpose of receiving transfers and paying company expenses and not otherwise, in particular not for the payment of the defendant’s salary.
7.
Between 3 November 2008 and 7 July 2015, the defendant stole a total of HK$11,975,559 from the BML account by depositing 187 company cheques into his own bank account.
8.
The management of BML noticed a decline in profit since March 2015. Initial inspection of the company ledger showed that between 2012 and 2015, payments were made to two companies, being Leaton Leather & Trading Company Limited (“Leaton”)  and Jaycee International Company Limited (“Jaycee”)  respectively. Yet, BML had not purchased from them since 2010.  The investigation continued.
9.
The three company directors confronted the defendant on 10 August 2015. The defendant admitted to stealing about HK$3 million from BML since 2010 and signed a confession letter to the effect that he had stolen about HK$3 million or more.
10.
The defendant was asked to, and did on the same day, identified in the company’s accounting record the entries that represented the stolen money, in the amount of HK$6,110,716.
11.
The defendant repaid $132,000 to BML on 14 August 2015 and was dismissed on the same day.
12.
Further investigation revealed that the two authorized signatories had signed the 187 cheques as particularized, but they did not show the defendant as the payee at the time of signing. The corresponding internal transfer invoices do not have the required accountant signature, and the 187 transactions were entered as payment to either Leaton or Jaycee in the company ledger.
13.
The matter was reported to the Police on 18 August 2015.  The total amount of money stolen was still being investigated at the time.  The defendant was arrested on the same day and was cautioned for stealing $6,110,716.
14.
In the subsequent video recorded interview, the defendant claimed under caution that he prepared the cheques with an erasable pen, providing bogus invoices of Leaton and Jaycee to the company signatories.  After the cheques were signed, the defendant would change the payee to his own name and deposit the money into his own bank account.  He would also prepare bogus receipts from Leaton and Jaycee for BML’s record.
15.
The defendant used the stolen money to settle his credit card debts incurred
via
horseracing and stock trading. He claimed to have stopped stealing after he had repaid all the debts in July 2015. The bogus invoices of Leaton and Jaycee and the erasable pen had been disposed of.
16.
Investigation of the defendant’s theft were eventually concluded and it was found that he had deposited a total of 187 cheques in the total amount of HK$11,975,559 into his own bank account.
17.
BML did not have insurance cover for the theft and bore the losses in full.
18.
By pleading guilty and admitting to the summary of facts, the defendant admitted and accepted that he had stolen a total of HK$11,975,559 in the BML account by depositing the 187 cheques into his own bank account.
PREVIOUS CONVICTION
19.
The defendant has no previous convictions.
BACKGROUND AND MITIGATION
20.
The defendant is 51 years old. He was born and educated in Hong Kong up to Form 5 level. He is married and they live together with their 19 and 14 year old daughter and son.
21.
The defendant’s mother is 81 and is living in an elderly home. The defendant’s father passed away in 2022 after having required full time medical care since 2011 for his deteriorating health.
22.
The defendant’s wife was diagnosed with breast cancer in 2022, two months after the father’s death. She underwent surgeries, chemotherapy and radiotherapy and is continuing with follow up treatment.
23.
The defendant’s son was born in 2008 and was diagnosed with Autistic Spectrum Disorder and Development Delay and requires special care, training and therapy.
24.
The defendant started working at BML as an accounting clerk in 2002, earning around $12,000 per month. He continued working there until 2015 when he was terminated for this case. The defendant found work at another company as an administrative officer earning around $9,000 per month.
25.
The defendant has been working on a part-time basis for the past two years in order to look after his ailing wife. He resigned in November 2023 in anticipation of the term of imprisonment he is going to face.
26.
In 2008, the defendant’s wife was working as a merchandiser earning $13,000 per month. With a combined income of just $25,000, the defendant found it difficult to support his family, with a significant amount going towards his father and son’s treatments.
27.
As expenses piled up the defendant was unable to make his monthly credit card payment and started to borrow from banks and finance companies.  He also started to gamble and trade in stocks, resorting to luck to try to solve his problems.
28.
When all else failed, he foolishly committed the present offence.
29.
I am told that the defendant has been making annual donations of $1,200 to Po Leung Kuk since 2007 and only stopped in 2015.
30.
Ms Wong for the defendant accepts that there was a certain degree of premeditation in the defendant’s commission of the offence, which involved a number of cheques and took place over a lengthy period of time, but points out that the defendant acted alone and that the plan was “not a clever or meticulous one” since the money could be easily traced back to the defendant’s own bank account.
31.
The defendant did make a restitution after he was confronted, albeit a small portion of the stolen amount, but it was the best he could do under the circumstances.
32.
Ms Wong submits that the defendant is remorseful, and he and his wife have been living under a lot of stress since his arrest. The defendant had found a new job after he was fired by BML in 2015 and had worked hard to continue to provide for his family. The defendant suffered a series of misfortunes in 2022 when his father died and his wife got cancer. The family will continue to suffer when the defendant serves his prison term.
SENTENCE
33.
The maximum sentence on conviction upon indictment for the offence of theft is that of 10 years’ imprisonment.
34.
The defendant committed the offence by exploiting his position as an employee of the victim company, thereby breaching the trust reposed in him by the company.
35.
Sentencing guidelines for cases involving an element of breach of trust are found in the cases of
HKSAR v CHEUNG Mee-kiu
[2006] 4 HKLRD 776 and
HKSAR v NG Kwok-wing
[2008] 4 HKLRD 1017.  For thefts of $3 to $15 million, the sentencing range is 5 to 10 years’ imprisonment.
36.
Based on the stolen amount, an arithmetical approach would lead to a starting point of 105 months’ imprisonment.
37.
The defendant committed the offence over a period of 6 years and 8 months. He forged invoices and receipts, and tampered with checks 187 times. The money he stole were to support his gambling and stock trading.  The company had to bear the losses in full. There was some restitution in the repayment of $132,000, being 1.1% of the total stolen amount, and that was repaid at the time when he admitted to stealing around $6 million from the company, which was in fact only half of the money he had stolen.
38.
For the defendant’s partial restitution, I will grant him a 3 month (2.85%)  discount, taking the starting point down to that of 102 months’ imprisonment.
DELAY
39.
It is Ms Wong’s submission that there was a time lapse of about 8 years between the defendant’s arrest and his being charged in the present case. The defendant had since been working with a different company and in the past two years working part-time and had not given up on trying to support his family. Given the health condition of his father, son and then wife, this waiting had put him and his family under immense pressure, causing him considerable stress.
40.
Ms Wong relies on factors 5 and 6 identified by Buss JA in the Western Australian case of
Scook v The Queen
[2008] 185 A Criminal Review 164 at 176 as matters that the court should take into consideration when there has been delay in prosecution. The case was referred to and approved by the Hong Kong Court of Appeal in
HKSAR v Chiu Chi Wing
, CACC 243/2012, and the 2 factors are quoted as follows:
“37. The seven factors identified by Buss JA, which were stated not to be intended to be exhaustive or inflexible, were:
…
Fifthly, delay may be conducive to the emergence of mitigating factors; for example, if, during the period of delay, the offender has made progress towards rehabilitation or other circumstances favourable to him or her have emerged.
Sixthly, delay (not being delay of the kind described in the second, third and fourth guiding principles)  will ordinarily be a mitigating factor if:
(a)  the delay has resulted in significant stress for the offender or left him or her, to a significant degree, in ‘uncertain suspense’; or…”
41.
Ms Wong, very fairly, says that they are not saying that there had been unreasonable delay in prosecution, accepting that this case involved bank records and accounting documents which took time to obtain and go through. They only rely on the fact that there had been a delay, and say that if the two factors which are present in the situation of the defendant are properly considered, the court should grant him a meaningful discount.
42.
I do accept that there has been a delay in prosecution, through no fault of either the prosecution or the defendant. He found new employment after his dismissal from BML and had continued to support his family. Due to his familial circumstances, he must have suffered immense stress in the period between his arrest and being officially charged in 2022.
43.
As such, I will grant the defendant a further discount of 6 months based on the delay, lowering the sentence to 96 months.
44.
Outside of the context of a delay in prosecution, it is trite law that the defendant’s personal circumstances count for very little in mitigation. The defendant chose to use the stolen money to gamble and trade, not once or twice, but apparently over a period of 7 years.  I find that there are no other mitigating factors to further reduce his sentence other than his timely plea.
45.
The defendant is sentenced to 64 months’ (5 years and 4 months)  imprisonment after granting him the full 1/3 discount for his guilty plea.
(Douglas Yau)
Deputy High Court Judge
Mr Marcus LEE, Senior Public Prosecutor of the Department of Justice, for the Prosecution/HKSAR
Ms Vivian WONG, instructed by Messrs. Tang and Lee assigned by DLA, for the Defendant
[1]
Contrary to s.9 of the Theft Ordinance, Cap 210.