HKSAR v. FONG KAM HO

DCCC 1040/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1040 OF 2016

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Reasons for Sentence

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1.  The defendant has pleaded guilty to a single charge of fraud, and the admitted facts, which she agreed, show that this is a fraud on the government’s Comprehensive Social Security Assistance scheme and the defendant herself had made applications under that scheme between 2004 to September 2013, and it was noticed that in all the reviews of the defendant’s application, she declared two bank accounts to the Social Welfare Department, but had not disclosed any insurance policies (they were what are described as “unreported insurance policies”), and the dates for those are given and they are dates between April 2004 and October 2013.

2.  And on 24 September 2013 the Social Welfare Department was informed by the Student Financial Assistance Agency that the defendant in fact possessed two unreported insurance policies. They had never been reported to the Social Welfare Department and as a result of that there was an interview of the defendant on 7 October 2013.  The matter was passed then to the Fraud Investigation Team.  The defendant was further interviewed.

3.  In all, the defendant had five policies, under which the defendant herself and her two sons were the beneficiaries.  It was also discovered that the defendant had two sons who had worked while she was obtaining the CSSA payments and, as a result of this investigation, the Social Welfare Department confirmed the defendant had been paid in excess of $471,730.99 between 1 April 2004 and 31 October 2013.

4.  The conclusion of the reports and the investigation was that the defendant had, by various deceits, by falsely representing to the officers of the Social Welfare Department that all the information given in her review forms under the dates which are set out in the -- as agreed by her, and she made the representation they were true, complete and accurate statement of her circumstances and when she did that she falsely represented that she had no assets, bank accounts, insurance policies or was receiving contribution from the employment of her family members and, as a result of that, the officers of the Social Welfare Department granted or continued to grant her CSSA in a total sum of $471,730.99, and that is admitted by the defendant.

5.  As far as the defendant’s background is concerned, there is an antecedent statement.  She is now aged 60 years old. Prior to these offences, she had a clear record and was educated up to Secondary 2.  She was married in 1993 and lives currently with her elder son, Mr Li.  She has a younger son who became a missionary in 2015 and has left Hong Kong.

6.  I also, as a result of mitigation, obtained a probation officer’s report and a background report, which was comprehensive. The major problem the defendant has shown since her arrest and prior to her arrest is her medical condition, which has been investigated fairly thoroughly now. 

7.  I have a recent medical report from the Tai Lam Centre for Women dated 2 May 2017, which is able to summarise the various admissions into hospital that she has over the past recent period.  What she has has been complaining of persistent chest pain and the most recent hospital discharge show that she suffers from atypical chest pain, with question mark, and ischematic heart disease. 

8.  However, the various tests done in the Queen Elizabeth Hospital via an ECG, blood test, enzyme test, show there was no heart muscle injury; they are all negative.  This rules out the possibility of myocardial infarction.

9.  The defendant has also received various appointments for consultation; for coronary imaging as well.  She has been given medication for hypertension, ischematic heart disease, ulcer pain, which were given on discharge from the Queen Elizabeth Hospital, and reports show she is also currently suffering from carpal tunnel syndrome, with pain and paresthesia in both hands.  She is provided with wrist and hand splints, which limit flexion of both wrists and ease pain sensation.  She is also going to have follow-up orthopaedic treatment as well.

10.  There is a more detailed report from the Central Kowloon Health Centre.  However, the conclusion is much the same and that is that, at this point, the source of origin of the defendant’s chest pain has not been discovered, but the possibility of myocardial infarction at this stage has been eliminated, but she requires further specialist imaging relating to her heart.

11.  I am confident from the medical reports that the defendant is being well treated, but, of course, she is at present still uncertain as to the medical outcome.  She undoubtedly has hypertension.  She undoubtedly has difficulties in her use of her hands and wrists due to carpal tunnel syndrome, and she will undoubtedly continue to receive treatment and continue to be required for medical investigation and consultation in relation to finding out the underlying problem that may or may not relate to her heart.

12.  Now, turning to the mitigation for the defendant.  Of course, 61 could not describe her as necessarily elderly, but she is not a young person any more, and she suffers from both hypertension and potentially heart disease.

13.  She has accepted the facts that were put forward by the prosecution.  Although the defendant and her sons were beneficiaries of the insurance policy, she did not, in fact, say that she would have actually benefited from those policies and she was doing a favour to a relative to hold on to those policies.  She admits the possession of the bank accounts set out in the admitted facts and also the receipt of income by her children.

14.  It is said that, had she disclosed these matters to the Social Welfare Department, she may well have, in any event, qualified for the receipt of social assistance and she was both ignorant and foolish in her failure to disclose these matters when she should have done.

15.  It is said all these matters taken together are illustrative of a difficult life and a difficult future, especially concerning her medical problems, and should be acknowledged in the determination of the court by perhaps taking a lower starting point than might otherwise be appropriate.

16.  Now, the offence the defendant faces in this case is fraud.  That contains a maximum sentence of imprisonment of 14 years upon conviction on indictment.  The Court of Appeal has dealt with the question of what are described as frauds on the CSSA scheme and the relevant case is HKSAR v Leung Wai Kei, CAAR 6/2006, and we know from that the CSSA scheme was intended to help those in genuine need of assistance and the society does not tolerate any act of defrauding public funds by dishonest means.

17.  The court did say it did not necessarily endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds.  Each case presents its own facts and each defendant has their own circumstances, and it would go against sentencing principles to lay down a hard and fast rule of adopting immediate imprisonment as a starting point.

18.  And the factors the court should be aware of:  whether the defendant has pleaded guilty; the amount involved, the length of time over which the offence has been committed; the circumstances leading to the offence, the purpose for which the money had been used; the defendant’s character and previous records; the circumstances specific to the defendant; whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid.  That should be considered in determining whether a severe sentence is to be imposed.

19.  So in appropriate cases, the court was under a duty to impose a deterrent sentence in order to curb the offence.

20.  It is said that an immediate term of custodial sentence is warranted where the defendant is convicted after trial, which is not the case here.

21.  The Court of Appeal also held that where the amount involved was over $200,000, the term of immediate imprisonment should be over 24 months.

22.  The amount of money admitted to by the defendant in this case is, of course, well in excess of the 200,000 referred to in the Court of Appeal.  The failure to make declarations on the reviews lasted for a considerable time and that is reflected in the period of the indictment, which lies between 1 April 2004 and 31 October 2013.

23.  The purpose for which the money has been used is, of course to continue to maintain the family.

24.  Defendant is a person of good character, and this can be said to be, given her age, an offence that is out of character for her.

25.  The defendant does not appear to be in a position at this stage to make any repayment of the sum, although it is the case that sometimes when the defendant is in receipt and continues to be in receipt of CSSA payments, a deduction can be made from that to make repayment back; may be investigated later.

26.  The other mitigating factor for this defendant is the uncertainty that lies around her medical condition, which I think should be, to a certain extent, reflected in the starting point that is taken for sentence here.

27.  My conclusion, having taken all these factors into account, is that I must follow, in the defendant’s case, the observations of the Court of Appeal that, in excess, a starting point for sentence over 24 months should be appropriate where the sum owed is over $200,000. 

28.  Here, the sum is over $200,000, but the court does not specify to what extent the sentence of the court should be raised when the figure is in excess of $200,000. 

29.  My view in this case is, having regard to all the factors, especially the defendant’s medical condition, that a figure not greatly in excess of 2 years’ imprisonment should be taken as the starting point, and then a deduction of one-third for the defendant’s plea of guilty.

30.  What I shall do, in this case, is to take a starting point of 27 months’ imprisonment. 

31.  The defendant is entitled to one-third discount, which is 9 months from that figure. 

32.  That leaves a sentence of imprisonment for the defendant of 18 months’ imprisonment.