HKSAR v. AU YEUNG HAU WAI, TITUS

DCCC 354/2018

[2019] HKDC 396

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 354 OF 2018

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Reasons for Sentence

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1.  The defendant, Mr Au Yeung, has pleaded guilty to a total of eight charges in this case. They are all charges of fraud and they involve a sum of some $1.68 million, and they represent some eight individual frauds committed against his own employer from July of 2011 through to about May of 2013.

2.  The defendant has pleaded guilty to all the charges.

3.  He is a person of clear record.  He has agreed the facts of the case.

4.  I do not propose to spend too long on that because they are fairly straightforward.  The company we are concerned with is one called Pixel Media, and the defendant had been employed with them since about 2003 and had been promoted through to deputy manager in 2011, and it was while he was deputy manager that the offences were committed.

5.  Pixel Media was involved in promotion of things, and products were promoted on online platforms by the company.  The defendant actually persuaded Pixel through PW1 to open a social media promotion business called Dialogue Labs, and it was through that company that some of the offences were committed.

6.  The defendant has agreed that between July 2011 and May 2012 the defendant had on 12 occasions falsely represented that a company called HTC requested Pixel to buy HTC products for promotion purposes, and a forged email would be used to support that, and also invoices and other supporting documents, and the company was told that Pixel would eventually be reimbursed for those expenditures.  Eventually some 11 cheques totalling over $880,000 were drawn on Pixel’s bank account and paid into the defendant’s personal bank account, and the defendant also asked that certain cheques later be made payable to another company, Creative Consultant Group, and this caused a further four cheques to be issued in the total of $343,280, and so in total in respect of all those transactions Pixel was deceived in a total of 1.224 million dollars, and that is particularised in the 1st charge.

7.  The remaining charges, which are Charges 2 to 8, involve some further seven invoices submitted by another company between January 2013 and May 2013, and these were invoices by what was called Cheeze Company which were falsely represented to the finance department of the DL Company the defendant set up, and that was to settle what was said to be performance fees of various artists who were said to have rendered services to DL.  We can see the amounts represented in Charges 2 through to 8 in the individual cheques.

8.  Cheeze has in fact been set up by the defendant and his wife.  The full financial loss on those transactions was $458,000.

9.  The defendant made his first admissions in this matter as early as 6 June 2013.  He admitted Cheeze was his own company and he was dismissed at that stage.  He sent an email that evening admitting both the HTC invoices and the Cheeze invoices were all false.  He was finally arrested on 20 June 2013, but did not say anything under caution. 

10.  What we know of the defendant, as I have said already, is that he is a person of clear record.  He is now 43 years old, born in Hong Kong, was educated to university level in New Zealand, and is described in the antecedents as being unemployed before his arrest.  Of course, the defendant has been subject to investigation since 2013, so obviously he was unable to, as it were, start another career.  He is described as being married and living with his wife.

11.  I did obtain a background report on the defendant.  He is of clear record, and it is an unfortunate background for the defendant.  Clearly he was a man of some ambition, and became subject to temptation when he received promotions.  The conclusion of the report is that the defendant actually came from a working class family in Hong Kong.  He had parents who had worked hard to bring on his education, and the defendant himself has been described as striving very hard in his studies and career.  10 years of service with the company got him promotions and salary increases that acknowledged both his work commitment and his contributions to the company.  It attributed the offences to the defendant taking up a more extravagant lifestyle on obtaining senior positions, then running into trouble with financial companies thereafter, and then taking what was for him the easy way out of defrauding his own company.

12.  The defendant is remorseful and has considerable family support, and it is said there is good support for his social rehabilitation in the future.

13.  As far as the defendant’s mitigation is concerned, the defence sets out his background which is set out in detail in the background report.  It tells me also the defendant has been declared bankrupt since 2014 and had been up to now living with his wife and his sister-in-law.  The defendant even in mitigation admits he acted in a greedy manner in this case.  Clearly he is remorseful and wishes to make a break with the past conduct.

14.  Turning now to the question of sentence in this case, as far as mitigating factors are concerned, firstly there is the defendant’s pleas of guilty and admission of the offence.  Secondly, the defence point out in their submissions that there has been some delay in this matter being brought to court.  It is not caused by the defendant, not attributable to the defendant, and it would appear that the defendant was released from bail during the course of the investigation some time in mid‑2015, but later rearrested.

15.  I make clear that no criticism is being made of the prosecution or the police in respect of this matter, nor can any criticism be made, I think, of their decision to release the defendant from bail for a period in this case.  It allowed the defendant some more operative freedom during the investigation period, and I do not believe the police can be criticised for doing that.

16.  Nevertheless, the offences were completed in 2013, and it is now 2019.  The result of that, of course, is that the defendant has not been able to get on with his life, I think could be the expression, and has had the matter hanging over him for some time, and the defence simply ask that that be in some way acknowledged in the course of the sentencing process.

17.  There is some authority for that in appellate cases in Hong Kong, and I am prepared to give it some consideration in the approach to sentencing here.

18.  Turning to the overall approach, although the case is divided into individual frauds, it can be seen as one course of conduct of a period of time resulting in a total loss to Pixel of just over $1.68 million, and that should be seen as the overall limiting factor for the question of sentence in this case.

19.  The defence acknowledge that this is properly approached as being a theft within the sentencing guidelines of theft from his employer, and the appellate courts have generally approached the guidelines for sentence for these kinds of offences in relation to the amount of money that is stolen or defrauded during the course of the criminal enterprise.

20.  So an offence of this nature, where the amount that is obtained by the defendant or defrauded is between 1 to 3 million dollars, then the starting point for sentence shall lie between 3 to 4 years’ imprisonment.  Given that in this case the figure is 1.68 million, which is not quite halfway within the guideline, it would appear to me that the operative overall total sentence would have a starting point in the region of 39 months’ imprisonment which, after the defendant’s plea of guilty, would lead to an overall sentence of around 26 months’ imprisonment.  That is if a one-third discount is taken as the proper approach.

21.  As far as the question of delay, which would introduce another mitigating factor on top of that, that could either be taken as an increase in the percentage deduction from the starting point or could simply be taken as a figure that could be deducted from the sentence after deduction for plea of guilty.

22.  What I shall do then is pass individual sentences on the separate eight offences based on the appropriate guideline.

23.  On the 1st charge, being 1.2‑odd million, that would mean a sentence of between 3 to 4 years’ imprisonment.  The 1.2 million puts it, in my view, at the bottom of that guideline, which is 36 months’ imprisonment.  After a deduction of one‑third, that would lead to a sentence of 24 months’ imprisonment.

24.  The other offences, being 2 to 8, would lie on the guideline at below what is described as $250,000, so the starting point would be less than 2 years’ imprisonment.  All these figures are below 100,000, in fact.  So I will set out the figures I will impose for each of these charges, and this is after deduction of one-third for the defendant’s plea of guilty.

25.  On Charges 2, 3, 4 and 5 there will be a sentence of 8 months’ imprisonment; on Charge 6, 10 months’ imprisonment; Charge 7, 8 months’ imprisonment; and Charge 8, 10 months’ imprisonment.

26.  Clearly the offences were committed at different times, so potentially they can be served consecutively.  I have already indicated that by my calculation, the highest operative figure for this entire fraud would be 26 months’ imprisonment.  I have also indicated I think it is appropriate to give some acknowledgment to the length of time that the defendant has been subject to investigation and prosecution of this case whilst emphasising that I make no criticism of the police or the prosecutors in respect of that.

27.  I consider the easiest way to acknowledge that would be to take a figure of around about 2 months for that, and that further 2-month deduction would mean that I can simply order that the sentences on all eight charges be served concurrently to a total of 24 months’ imprisonment.