HKSAR v. CHOI LOI FAT

DCCC 9 /2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 9 OF 2012

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BETWEEN

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Reasons for Sentence

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Introduction

1.  The defendant is convicted upon his own plea of the charge of conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance (Cap.200).

Facts

2.  The facts admitted by the defendants are as follows:

(i) On 16 September 1992, Wilson Company (the “Company”) was set up with the defendant as the sole proprietor. The defendant signed the tenancy agreement for renting the Company’s office. On 30 September 1992, the Company opened a current account with Standard Chartered Bank (the “Current Account”), of which the defendant was the sole signatory. YEUNG Chong-yu (“Yeung”) was the manager of the Company;

(ii) Ngan Fung Trading Company (“Ngan Fung”) is a denim supplier incorporated by Mr Tsui Ngan-sang (“PW1”). Between 10 November 1992 and 5 January 1993, Yeung placed a total of 11 purchases of denim with Ngan Fung, of which the first two were duly paid and nine were unpaid. After the first two duly paid transactions, there were seven transactions paid by post-dated cheques signed by the defendant and drawn from the Current Account, but those post-dated cheques were subsequently bounced; and no payment was ever made for the last two transactions. All denims ordered by the Company were delivered as instructed. The unpaid denim valued at a total of HK$2,928,288.21. None of the unpaid denim was recovered;

(iii) Between October 1992 and 6 January 1993, Yeung made 12 purchases of denim with Bring Fortune Limited (“Bring Fortune”), of which two were paid and ten unpaid. After the first two paid transactions, Yeung asked for a 45-day credit and Bring Fortune accepted. There were eight transactions paid by post-dated cheques signed by the defendant and drawn from the Current Account, but those post-dated cheques were subsequently bounced. No payment was ever made regarding the last two transactions. The unpaid denim valued at a total of HK$4,501,434.30. None of the unpaid denim was recovered;

(iv) On 6 January 1993, the Company was closed down; and the defendant fled from Hong Kong to Macau on the same day. On 8 January 1993, the Current Account was closed. All post-dated cheques issued in favour of Ngan Fung and Bring Fortune were dishonoured. The case was reported to the police in January 1993. As a result, the defendant was put on the wanted list, immigration stop list and Interpol red notice;

(v) HO Hing-chung (“PW6”) was the supervisor of Safety Godown Co Ltd (“Safety Godown”), a storage engaged by the Company for temporarily storing the denim obtained in four purchases from PW1. The record of Safety Godown showed that the defendant was the person in charge of the Company. From Safety Godown’s record, the defendant had taken the denim away on five occasions between 5 January 1993 and 6 January 1993. On each occasion, PW6 or his colleague would check the defendant’s signature on the delivery orders with the specimen signature card of Safety Godown; and they also recorded the defendant’s HKID card number and name on the back of the delivery orders as the person withdrawing the goods;

(vi) Over the years, the defendant was at large. On 23 October 2011, the defendant was arrested at Lo Wu checkpoint upon his return to Hong Kong from the Mainland. At the scene and under caution, the defendant said the reason for his return was to treat his tuberculosis;

(vii) In a video-recorded interview conducted with the defendant on 24 October 2011, the defendant said, inter alia, that:

(a) The reason for him leaving Hong Kong was because he was a drug addict and he had very poor relationship with his family;

(b)At the end of 1992 or in early 1993, he was employed by someone called “Ah Leung” to work at the Company for three or four days and he was given HK$2,500 or HK$3,000 as salary;

(c) The defendant followed Ah Leung’s instructions to register the Company, to open the Current Account of which he was the only signatory; and sign the tenancy agreement for renting the Company’s office;

(d)Upon Ah Leung’s instruction, the defendant signed some blank cheques for Ah Leung; the defendant did not know how the cheques were going to be used;

(e) When the defendant was shown the post-dated bounced cheques including those seized from Ngan Fung and Bring Fortune, he admitted having signed them upon Ah Leung’s instructions; and

(f) The signatures on the signature card of Safety Godown and the delivery orders of Safety Godown were probably signed by the defendant but he forgot when he signed those documents.

Previous criminal conviction record and antecedent

3.  The defendant has 6 previous criminal convictions, one of which was attempt theft sentenced in 1983. The defendant also has four previous convictions of possession of dangerous drugs and one conviction of possession of pipe/equipment fit and intended for smoking/injecting/inhaling dangerous drugs. As there is only one previous conviction relating to dishonesty which dated back to 1983, and the other convictions are not related to dishonesty, I am not taking the defendant’s previous convictions into account as an aggravating factor.

4.  The defendant was born in March 1960. He has received education up to Primary 6 level. He is now unemployed. His wife and 12-year-old son are now living in Shenzhen.

5.  Prosecuting counsel referred me to the Court of Appeal judgment in R v Yeung Chong Yu (CACC592/1994) and advised that Yeung was convicted after trial of 10 charges of obtaining property, namely denim cloth, by deception. The total amount deceived was about HK$3.8 million and Yeung was sentenced to three years’ imprisonment on each charge, the sentences being ordered to run concurrently.

6.  Prosecuting counsel also referred me to HKSAR v Chan Wing Kam [2007] HKCLRT 172. The applicant in Chan Wing Kam was convicted after trial of one charge of conspiracy to defraud. The case involved a fraudulent scheme whereby the applicant and X set up a shelf company that issued dishonoured cheques for the purpose of dishonestly obtaining goods valued at over $7 million from 19 suppliers. The applicant made a cautioned statement admitting that he had signed blank cheques on a number of occasions and confirmed that the dishonoured cheques were issued by X and himself. The applicant sought leave to appeal against the sentence of 6 years’ imprisonment on the grounds, inter alia, that the trial judge erred in rejecting as a mitigating factor that the applicant was not the “mastermind” of the scheme, that his involvement was confined to setting up the shelf company and signing blank cheques at the initial stage, and that the applicant had not contacted the suppliers to deceive them. The Court of Appeal dismissed the applicant’s application for leave to appeal against sentence, and held, inter alia, that the applicant was an indispensible part of, and played a significant role in, the fraudulent scheme. Whether the applicant was the mastermind had no relevance to his culpability. The Court of Appeal also held that although the term of 6 years’ imprisonment upon conviction after trial was on the high side, it was not manifestly excessive.

Mitigation

7.  In mitigation, Mr Lok submitted that the defendant only played a secondary role in the fraudulent scheme. An Application by an Individual for Registration of Business(es) carried on by him in Hong Kong dated 16 September 1992 and signed by the defendant was submitted by Mr Lok. A letter written by the defendant asking for leniency and a letter written by the defendant’s son to the defendant were also submitted to this Court.

8.  Mr Lok also submitted the following cases for this Court’s consideration:

(i) HKSAR v Cheung Mee Kiu (CACC99/2006);

(ii) HKSAR v NG Kwok Wing and Lai Hoi Yan Vivian (CACC398/2007);

(iii) HKSAR v Yeung Chiu (CACC105/2009);

(iv) Attorney General v Ling Kar Fai (CACC705/1996);

(v) HKSAR v Yuen Kwok Kee (CACC336/2005); and

(vi) R v Lam Hon-kwan and Mok Man-wai (CACC525/1984).

9.  Mr Lok submitted that in light of the decisions in Cheung Mee Kiu, Ng Kwok Wing and Yeung Chiu, and since the present case is not a breach of trust case, the sentence to be imposed in the present case should be lower than the tariff sentence laid down in Ng Kwok Wing.

10.  Relying on Ling Kar Fai in which the Court of Appeal imposed a suspended sentence, Mr Lok also submitted that this Court may impose a suspended sentence on the defendant in this case. In this connection, I note that in Ling Kar Fai, the Court of Appeal found that the circumstances of that case were wholly exceptional. On the other hand, I do not see any exceptional circumstances in this case justifying a suspended sentence.

11.  In Yuen Kwok Kee, the Court of Appeal was of the view that the sentencing judge was not wrong to give only a one-third discount to the appellant who remained in Australia for 7 years before returning to Hong Kong to surrender to the police. In that case, the appellant left Hong Kong for Australia before his crime came to light.

12.  Relying on Lam Hon-kwan and Mok Man-wai, in particular paragraph 5 of the judgment, Mr Lok submitted that the defendant in the present case was not an instigator/initiator of the conspiracy but only played a secondary role, and that the defendant should not be sentenced in the same way as the instigator/initiator of the conspiracy. In this connection, Mr Lok submitted that although a total of about $7.42 million was deceived from Ngan Fung and Bring Fortune, the defendant only received a total reward in the sum of about $27,500 to $33,500.

Other authorities

13.  I also invited prosecuting counsel and Mr Lok to have a look at:

(i) HKSAR v Lam Kam Tou [2006] 4 HKLRD 103 (CACC397/2005);

(ii) HKSAR v Chow Tak Fuk (CACC428/2004); and

(iii) HKSAR v Kwan Po Keung (CACC79/2011).

14.  In Lam Kam Tou, the applicant pleaded guilty to seven charges of obtaining property by deception. He obtained, from two companies within a period of 10 days, gold with a total value of approximately $6.6 million by means of dishonoured cheques. The applicant committed the offences from late 1992 to early 1993 (the last day he issued a dishonoured cheque was 4 January 1993) and thereafter went to Macau on 5 January 1993. He stayed there until 2005 when he returned to Hong Kong and surrendered himself to the police. For each offence, the sentencing judge adopted 6 years’ imprisonment as the starting point, reduced the term by one-quarter to 4½ years’ imprisonment on account of plea, and ordered that all sentences were to run concurrently. On appeal, the Court of Appeal considered the starting point of 6 years’ imprisonment was proper. However, the Court of Appeal considered it appropriate to give the applicant the usual one-third discount.

15.  In Chow Tak Fuk, Mr. Justice Stock, JA (as he then was), said in paragraph 7 of the judgment:

“7. The applicant then complains that he was not given full credit for his plea of guilty, namely the one-third discount that normally follows such a plea. In this regard the Recorder denied the full discount because the applicant had absconded. The Recorder was correct in viewing the fact as one that will normally cut into the discount that might otherwise be expected. That said, surrender to the authorities is a mitigating feature but the extent of the mitigating effect is always a contextual question. Thus, for example, surrender by a person whose participation in an offence may not otherwise have come to light would be a significant mitigating factor indeed; much more so than surrender of an arrested person after he has absconded, and even in the latter case the circumstances behind that surrender will vary from case to case. Whilst the courts must always encourage persons to surrender, so that some credit for that fact will normally be given, those who might be minded to flee should not be led to believe that if ultimately they return they will be in no worse a position than had they not fled in the first place.”

16.  In Kwan Po Keung, the applicant absconded from court bail and successfully remained a fugitive from justice for 12 years and 7 months. The Court of Appeal considered it wrong to give the applicant a discount of one-third from the starting points. The Court of Appeal considered 25% discount an appropriate discount.

Sentence

17.  Having considered the circumstances of this case and applying Lam Kam Tou (gold with a total value of approximately $6.6 million was deceived in late 1992 and early 1993) and Chan Wing Kam (goods with a total value of over $7 million was deceived in 2004), I consider it appropriate to adopt a starting point of 6 years’ imprisonment. In this connection, the defendant was the sole proprietor of the Company. He signed the tenancy agreement for renting the Company’s office. He was the sole signatory of the Current Account. From Safety Godown’s record, the defendant was the person-in-charge of the Company. The defendant took denim away from their storage at Safety Godown on five occasions on 5 and 6 January 1993. I find the defendant an indispensible part of, and played a significant role in the conspiracy. I find it irrelevant if he was the instigator/initiator of the conspiracy.   

18.  As to the discount to be given to the defendant for his guilty plea, I note that the defendant had not been arrested when he fled from Hong Kong on 6 January 1993. His surrender was not “surrender of an arrested person after he has absconded” as stated in Chow Tak Fuk. I note the decision in Kwan Po Keung but the applicant there surrendered after he had jumped court bail. In the circumstances, I am minded to adopt the one-third discount as adopted in Lam Kam Tou the facts of which were similar to those of the present case, thus reducing the sentence to 4 years’ imprisonment. 

19.  There being no other valid mitigating features justifying further reduction in sentence, I impose a sentence of 4 years’ imprisonment on the defendant.