HKSAR v. LAU LAI

HCCC 67/2018

[2018] HKCFI 1548

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 67 OF 2018

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT:

The defendant pleaded guilty to eight counts of fraud, contrary to section 16(a) of the Theft Ordinance, Cap 210.

At the material time, she was a Senior Branch Operations and Service Manager of the branch in Tsim Sha Tsui. Between April and August 2016, she had caused and approved four unauthorised transfers of US dollars from two suspense accounts of the SCB to a personal account of a client.

In doing so, she has instructed junior staff to prepare transfer documents which she counter signed. On two of the occasions, she had prepared forged transfer request documents and shown one of those to a junior bank staff.

On four occasions, when she was asked by staff about the outstanding amount in one of the suspense account, she misrepresented that the Financial Crime Investigation Office of the SBC had been investigating the matter, causing the staff not to look for documents or vouchers of the transaction in the suspense account, or report to the senior management, in order for prompt action to be taken for recovery of those amounts.

The amount involved on the first two occasions was the same US$6.15 million and there was effectively only one transfer out from the suspense account in respect of those two charges.

The other two transfers were in the sum of US$5 million and 4.99 million respectively. The total amount involved, in US dollars, was around $16.1 million, an equivalent of about HK$125.9 million.

The defendant is now aged 54 and has a clear record. Counsel advanced the following as mitigation.

(1) Duress:

Counsel submitted that the WeChat messages support the defendant’s claim that she was blackmailed into making the fraudulent transfers. That there were talks about threats, extortion or blackmail and an implicit threat that anything could happen to her and her family. Counsel submitted that the threats were of a nature which went beyond the defendant losing her employment, which caused her to act in the way she did.

(2) Assistance to the Authorities:

Counsel submitted that the defendant had made a full and frank disclosure for the Shared Investigative Service of the bank, which enabled the bank to obtain an injunction to prevent dissipation of the misappropriated funds, and which led to her own arrest.

(3) No Loss to the Victim Bank:

It was submitted that, as an injunction was obtained, the bank suffered no loss.

(4) Personal Background of the Defendant:

I was told that the defendant worked with the bank for about 30 years. Her husband, suffering from long-term illness, was unemployed since the year of 2000 and she had been the sole breadwinner of the family. Now by this single fall from grace, she stands to lose all her pensions and will not be able to continue to work in the same field again. In her handwritten letter to the court, she had shown her remorse and determination to turn over a new leaf.

(5) Her timely guilty plea.

Now, in sentencing dishonesty-related offence committed by a person in a position of trust who had abused that privilege and trusted position to steal or deceive others, the case of Barrick laid down the approach and consideration, as follows:

“(1) The quality and degree of trust reposed in the offender, including his or her rank.

(2) The period over which the fraud or the theft have been perpetrated.

(3) The use to which the money or property, dishonestly taken, was put.

(4) The effect upon the victim.

(5) The impact of the offences on the public and public confidence.

(6) The effect upon fellow employees or partners.

(7) The effect on the offender himself or herself.

(8) The offender’s own history.

(9) Those matters of mitigation, special to the offender, such as illness, being placed under great strain by excessive responsibility or any delay between her being confronted with her dishonesty by her professional body or the police at the start of the proceedings.

(10) Any help given to the police.”

The defendant has, throughout her 30-odd years of working with the bank, rose through the ranks to become a Senior Branch Operations and Services Manager. No doubt, throughout her working life, she knew and learned about the various internal operations and procedures of the bank which she herself made use of and manipulated. This was precisely the high level of trust that the bank has reposed in her.

She breached that trust reposed in her by the bank and the bank staff working with, or under her. She made use of forged or forged the documents to mislead bank staff to approve the unauthorised transfers.

When she was confronted with a deficit in the suspense account, she deliberately lied to the staff with a pretext of either another bank had used the money but would repay later, or that the deficit was already being investigated by the Financial Crime Investigation Office.

In short, what she did was to cover up her original misappropriation from client’s account, which I would elaborate on later, and to buy time to delay her misdeeds from coming to light.

Apart from breaching the trust that her employer and her colleagues reposed in her, her misdeed has breached the public confidence in the banking system. What she had done has brought disrepute to not just the bank, but also harmed the faith that public has in the banking staff and Hong Kong’s reputation as an international banking and finance centre.

In sentencing the defendant, I have taken into account a timely plea, and her frank admission when taxed with the offences. I have also perused the various letters of mitigation written by her family and her ex-colleagues.

However, one factor that this sentencing court cannot lose sight of is the total amount involved in this case is way above the top tier of the tariff laid down in the cases of Cheung Mee Kiu and Ng Kwok Wing which says, “Involving HK$15 million or more, 10 years or above.”

The offences spread over a period of four months, with four transfers amounting to a total of an equivalent of around HK$125.9 million. It also involves deploying tactics of misrepresentation to the bank staff to avoid or delay detection.

Apart from blatant breach of trust, the present case also involved a high degree of planning, premeditation, involving misrepresentation and the use of forged documents.

The alleged means by which Madam Nie, the holder of the client account, was able to manipulate the defendant to act as she did, was a direct consequence of her own fraudulent acts of having misappropriated $200,000 from Madam Nie’s account.

The court was told that the defendant stole from Nie’s account in one go, back in 2008, and returned that money in 2010. After Madam Nie found out about the misappropriation in 2014, and although the money was replaced, it was alleged that Nie made repeated unwarranted demands from her.

Having read the WeChat messages between Nie, as well as a third party, surname Ge, with the defendant, I am of the view that although the defendant might have felt that she was under a degree of pressure to act in the way she did, she offended in consequence, of a financial predicament and dire desire to keep her job, and this does not sit comfortably with the doctrine of duress as mitigation.

Although the subsequent transfer to Madam Nie were disproportionate to the original amount stolen by and replaced by the defendant, as the sentencing court, I do not lose sight of the fact that there were four separate occasions of fraudulent transfers.

There was ample opportunity for the defendant to turn herself in to her employer on each and every occasion, to end this predicament, but she had chosen to further the fraudulent transfers, to cover up her original misappropriation until a point of no return.

When she was confronted with the deficits in the suspense accounts, she made misrepresentation to the bank staff to delay them from making timely investigations for recovery of the misappropriated funds.

Whilst Mr Boyton stressed that the defendant had provided assistance to the authorities, resulting in her own arrest, and assistance to the bank in the sense that the bank suffered no loss in the end, it is noted that the interview of the defendant by the Shared Investigative Services of the bank during which she confessed her role in the fraud, did not take place until June 2017, ie, over one year after the last fraudulent transfer. She was immediately arrested, two days after the last interview, which took place on 13 June.

It was sheer luck that the bank suffered no loss, as misappropriated funds had not been dissipated by the time of the granting of the ex parte injunction on 21 June 2017. These could not be said to be assistance to the authorities which warrants discount further than that of a plea.

I have taken into account that the defendant is a person of a positive good character. I have also taken account of the family circumstances and the circumstances under which she committed the offences. Her fall from grace was at the expense of her career and her family that she has strived so hard to keep and maintain throughout the years. However, these are indeed offences involving gross breach of trust.

On a global approach, for the multiple offences with the amount involved, I adopt a starting point of 15 years’ imprisonment. I reduce by one-third to reflect a timely plea and good character.

Individually, I adopt a starting point of 12 years for each of Charges 1 to 4. And for Charges 5 to 8, I adopt a starting point of 6 years for each. I reduce one-third and consider totality and order individual sentences to run as follows:

Charge 1, 8 years.

Charge 2, 8 years to run concurrently to Charge 1.

Charge 3, 8 years, 6 months out of which to run consecutively.

Charge 4, 8 years, 6 months out of which to run consecutively.

Charge 5, 4 years, 3 months out of which to run consecutively.

Likewise, for Charge 6, 4 years, 3 months to run consecutively.

Charge 7, 4 years’ imprisonment, 3 months to run consecutively.

Charge 8, 4 years’ imprisonment, 3 months to run consecutively.

Total, 10 years’ imprisonment and that is the sentence that I pass.