HKSAR v. MOK SUM

DCCC1034/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1034 OF 2009

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Reasons for Sentence

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1.  Defendant, you have pleaded guilty to 11 charges before this court. The 1st and 2nd charge to using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap. 200. The 3rd to the 11th charge deals with dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455.

2.  The facts are as follows. Between 1 August 2005 and 9 August 2007, you were an insurance agent of Manulife International Limited. In early 2006 you came to know Mr Lu Jianer via a friend’s introduction. Soon thereafter, you and Mr Lu became lovers. Mr Lu thereafter took out two insurance policies with Manulife Investment Solutions. The first insurance policy was taken out on 10 April 2006 in the amount of HK$1.8 million via yourself and less than a month later, on 15 April, Mr Lu via yourself took out the second insurance policy in the amount of US$500,000.

3.  From early 2007, Mr Lu did not receive the policy statements and the reports as regularly as he did before. Mr Lu was informed by Manulife that his correspondence address was changed but Lu had not actually changed his address. Upon enquiry with you, Lu was told that a staff of Manulife had made the mistake and the matter was rectified. Thereafter, Lu still did not receive the policy statements and a report regularly. Whenever Mr Lu complained to you of not receiving the policy statements and reports in relation to the two policies, he would receive the policy statements and/or reports issued by Manulife purportedly either by mail or directly from yourself.

4.  In April or May 2008 when Mr Lu enquired with Manulife about redeeming both insurance policies, Mr Lu learnt that these two insurance policies had already been transferred to you, the defendant, without his knowledge in November 2006 and January 2007 respectively. He reported the matter to the ICAC.

5.  What transpired was that on 27 November 2006, you, the defendant, without Mr Lu’s knowledge or consent forged Mr Lu’s signature to change the correspondence address for Manulife in respect of the first and second policies to your own address. On the same day, without Mr Lu’s knowledge or consent, you forged his signature and filled in the transfer document with false information claiming that you were Mr Lu’s wife and the insurance policy beneficiary was your daughter. That was the subject of charge 1, the using a false instrument.

6.  And on 2 January 2007, you did the same thing in respect of the first insurance policy, the subject matter of charge 2 of using a false instrument.

7.  Once the policies were transferred to yourself, you began to withdraw funds from those policies. The withdrawals of the funds were in differing amounts and commenced on 17 April 2007, almost on a monthly basis, all the way to 21 December 2007 on the two insurance policies. Having redeemed the funds on each occasion, you deposited those funds into your own personal bank account at HSBC. The total funds that you redeemed on these nine occasions was in the sum of US$949,866.23, making a total of approximately HK$7,408,906.

8.  On 13 November 2008, you were arrested by the ICAC officers. A number of false policy statements and reports were seized from your residence and under caution you admitted that you had made the false policy statements and reports for sending to Mr Lu. You further admitted that you had forged Mr Lu’s signature on the relevant Manulife documents by changing Mr Lu’s correspondence address to your own address for transferring the first and second insurance policies to yourself and thereafter redeeming all the funds therefrom. You admitted that you spent all the funds on stock investments, gambling and for personal use.

9.  You are aged 40, of clear record, divorced with a daughter aged nine. Ms Wong, your solicitor, has mitigated on your behalf today and I have taken into account all that she has had to say for you. Mitigation was very brief. You pleaded guilty at the first opportunity and you have saved costs and time and shown your remorse. You have been penalised as you have lost your job and your career will naturally suffer in the future as a result of these offences and you asked for a suspended sentence or fine of which Ms Wong has advised you that it is quite unlikely.

10.  Nothing was said about why you had committed this offence until I specifically asked Ms Wong, your solicitor. I received some contradictory submissions but in the end I think it is this: Mr Lu was your boyfriend. He had promised you a lot of things. Because of him you had undergone a divorce and in the end I believe he did not keep to his promises. You therefore took revenge on him by committing these offences. At the time you committed these offences, however, he was still your boyfriend. At one stage it was even submitted to me that Mr Lu had induced you to commit these offences. I found this very strange indeed and this was retracted, and as I said, what was said was that you did this on your own initiative to take revenge on Mr Lu.

11.  The offence of dealing with the proceeds of an indictable offence is a very serious offence indeed. The amount involved in this case was HK$7.4 million or US$949,866, that is a significant amount of money. A deterrent sentence is clearly warranted.

12.  In respect of this case, this was a dishonest plan formulated by yourself. You were an insurance agent and you had the knowledge to know what to do and falsify these documents. You knew at the time when you filled in the documents that they were false. Your ultimate plan, of which you clearly knew when you falsified the documents, was to obtain the funds from Mr Lu’s insurance policies. You were the ultimate beneficiary of the money. All the money that was redeemed or withdrawn was deposited into your bank account. You subsequently used all of the funds for your own benefit. Clearly, you knew that the funds you received in your bank account represented the proceeds of an indictable offence for the simple reason that you had stolen those funds.

13.  There are no tariff cases for dealing with the proceeds of an indictable offence. A case that is similar to your case is that of HKSAR v Yam Kong Lai CACC458 of 2006 in a Judgment delivered by McMahon J on 2 July 2008. In that case the defendant was convicted of an offence contrary to section 25(1) of the Organised and Serious Crimes Ordinance. She was sentenced to 5 years’ imprisonment after trial. She appealed against her sentence. In that case the defendant was an investment advisor and dealer in a Hong Kong company. Whilst working at the company she found out that an account belonging to persons by the name of “Coes” in the securities company was dormant. A few months later she left the company and she then falsified documents to that company forging signatures specifying that she was the Coes, such that the time deposit would be uplifted and eventually transferred to her. She then withdrew the money and spent it.

14.  In that case the defendant, a lady, knew she was participating in a fraud, she was aware that the moneys had been obtained using forged documents and the fraud had come about as a result of her realisation that the Coes’ account was dormant and they were unable to be contacted. In that case the court stated that her use of the forged documentation, her knowledge or the sophistication of the methods used to disguise the origin of the funds before their transfer to her personal account and her subsequent use of the funds for her own benefit were matters the judge was entitled to regard as relevant to sentence.

15.  However, the circumstances of the actual theft and its effect upon the Coes pertained only to the theft rather than the charged offence. The court held that the applicant was charged with a section 25(1) offence and should only be sentenced solely on the basis of her role in dealing with the proceeds of theft rather than for her role in the theft itself. In passing sentence, the Court of Appeal passed a sentence of 4 years’ imprisonment after trial for an amount being a sum slightly less than $4 million.

16.  In this case, you were the ultimate beneficiary of the money, you were the person who had forged the signature on the various policy transfer forms to trigger the transfer of the money to yourself. This was well-planned and premeditated, you had a role in the underlying offence which was the theft. You knew that the money was derived from the crime of theft but as stated in the Court of Appeal case, I do not take those circumstances of the theft into account in sentencing you here before me.

17.  You have shown remorse through your plea of guilty. The sum involved is HK$7.4 million and in taking all these facts into account, for charges 3 to 11 I take a global starting point for sentence of 4 years’ imprisonment. I give you full credit for your plea of guilty and reduce that term by one-third to 32 months’ imprisonment.

18.  For charges 1 and 2 of using a false instrument, I take a starting point of 18 months’ imprisonment. I reduce that term to one of 12 months’ imprisonment giving you full credit for your plea of guilty.

19.  The using a false instrument and the dealing with the proceeds are two separate and distinct offences and I am of the view that the sentence should be served partly concurrent and partly consecutive.

20.  I order that 2 months of charge 1 be served consecutive to the 32 months in charge 3 and all other sentences to run concurrent to each other. That means you shall serve a total term of 34 months’ imprisonment, which is 2 years and 10 months and you are so sentenced.