HKSAR v. TAI KAI CHUNG

 DCCC836/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 836 OF 2010

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Reasons for Sentence

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1.  The defendant has pleaded guilty to 16 counts of fraud, contrary to section 16A of the Theft Ordinance, Chapter 210, and one count of forgery, contrary to section 71 of the Crimes Ordinance, Chapter 200.

2.  Facts admitted by the defendant disclose that the defendant was an account manager of the commercial sales department of PCCW and responsible for, among other things, handling the subscription of PCCW’s mobile phone services by corporate clients. Since 2008, PCCW had launched a promotion of mobile phone services to its corporate clients where complimentary mobile phones might be offered to corporate clients if the corporate clients subscribed for PCCW’s mobile phone service plan. When a corporate client requested to subscribe for PCCW’s mobile phone service plan with the offer of a complimentary mobile phone, the corporate client was required to sign and submit a PCCW telecommunications sale and service agreement and some related documents to PCCW.

3.  The 16 fraud charges related to six alleged corporate clients of PCCW and were committed between 28 March 2008 and 31 October 2008, a period of some seven months.

4.  In respect of Charge 1, on or about 28 March 2008, the defendant was introduced by a Mr Leung Yiu-fai, an estate agent, to Mr Law, the proprietor of the Full Sun Dispensary Limited who agreed to subscribe for 15 mobile phone service plans on the belief that 15 complimentary mobile phones would be given by PCCW. He was told to sign and apply his company chop onto a total of three blank agreements, including the agreement No. A3493742.

5.  The defendant and Mr Leung both falsely represented to Full Sun Dispensary Limited that each agreement could only be used to subscribe for five service plans when in fact there was no such restriction. Subsequently, the defendant without Mr Law’s knowledge subscribed for 60 mobile phone service plans from PCCW by using the agreement No. A3493742.

6.  After the agreement was submitted, Miss Chu Mei-shan, the defendant’s supervisor, requested to meet Mr Law because of the large number of subscriptions. The defendant arranged for Miss Chu to speak on the telephone to Mr Leung who posed as the person in charge of Full Sun Dispensary Limited. Leung lied to Miss Chu that the company needed the 60 mobile phone service plans as there were around 100 salespersons in the dispensary. As a result, PCCW parted with possession of a total of 24 mobile phones valued at $86,016 and paid the defendant a commission of $7,056.

7.  In respect of Charges 2 to 4, between 2 May 2008 and 30 September 2008, the defendant submitted three agreements with the related documents to PCCW, purporting to show that Kelley Production Company Limited had subscribed for a total of 19 mobile phone service plans from PCCW. Believing that Kelley had indeed applied for such, PCCW parted possession with a total of 18 mobile phones valued at $69,688 and paid the defendant a commission of $4,288.80. Kelley had never subscribed for the 19 mobile phone service plans. The defendant had fabricated the agreement and the related documents with a false company chop of Kelley and misappropriated all 18 mobile phones.

8.  In respect of Charges 5 and 6, between 4 July 2008 and 30 September 2008, the defendant had submitted two agreements with the related documents to PCCW, purporting to show that Greencarrier Asia Limited had subscribed for a total of 18 mobile phone service plans from PCCW. Believing that Greencarrier had indeed applied for such, PCCW parted possession with a total of 18 mobile phones valued at $37,860 and paid the defendant a total commission of $4,670.64. In fact, Greencarrier had never subscribed for the 18 PCCW mobile phone service plans and had never received the mobile phones. The defendant had fabricated the agreements and related documents with a false company chop of Greencarrier and he had misappropriated all 18 mobile phones.

9.  In respect of Charges 7 to 9, between 14 July 2008 and 30 September 2008, the defendant had submitted three agreements with the related documents to PCCW, purporting to show that Kunming Electronics Company Limited had subscribed for a total of 20 mobile phone service plans from PCCW. Believing that Kunming had indeed applied for such, PCCW parted possession with a total of 19 mobile phones valued at $49,084 and paid the defendant a total commission of $6,959.48. In fact, Kunming had never subscribed for the said mobile phone service plans and had never received the mobile phones. Again, the defendant had fabricated the agreements and the related documents and used a false company chop of Kunming and misappropriated all 19 mobile phones.

10.  In respect of Charges 10 to 14, between 21 July 2008 and 31 October 2008, the defendant procured a Miss Au Yeung Yuk‑wa, account manager of the commercial sales department of PCCW and his colleague, to submit five agreements with the related documents to PCCW, purporting to show that EHP (Hong Kong) had subscribed for a total of 15 mobile phone service plans from PCCW. In fact, Au Yeung was not the handling agent for the said five agreements. Believing EHP had indeed applied for the said mobile phone service plans and that Au Yeung was the handling agent as stated on the said agreements, PCCW parted with the possession of a total of 14 mobile phones valued at $39,492 and paid Au Yeung commission in the sum of $4,885.92 which she shared equally with the defendant. In fact, EHP had never subscribed for the 15 PCCW mobile phone service plans and had never received 14 mobile phones. Again, the defendant had fabricated the agreements and related documents with a false company chop of EHP for Au Yeung to submit to PCCW on his behalf, and he had misappropriated all 14 mobile phones.

11.  In respect of Charges 15 and 16, between 2 September 2008 and 31 October 2008, the defendant procured Au Yeung to submit two agreements with the related documents to PCCW, purporting to show that Power Side Limited had subscribed for a total of 10 mobile phone service plans from PCCW. In fact, Miss Au Yeung was not the handling agent for these two agreements. Believing that these were genuine agreements, PCCW parted with the possession of a total of 10 mobile phones valued at $18,880 and paid Au Yeung commission of $528 for each agreement which was subsequently shared equally with the defendant. Power Side had never subscribed for the 10 PCCW mobile phone service plans and had never received the 10 mobile phones. In fact, the defendant had fabricated the agreements with their related documents with a false Power Side company chop for submission by Miss Au Yeung on his behalf and the defendant had misappropriated all 10 mobile phones.

12.  In respect of Charge 17, the defendant and Mr Leung, the estate agent from Midland Realty International Limited, had submitted five agreements in the name of Midland Realty for 34 mobile phone service plans. These plans were submitted without Midland Realty’s knowledge. PCCW subsequently approved all the subscriptions, and in respect of 18 of the 34 mobile phone service plans, sent mobile phone bills to Midland Realty.

13.  Upon receipt of these bills on or about 11 August 2008, the administration officer of Midland Realty made an enquiry with the defendant who was the handling staff of PCCW regarding the subscription of the said 18 mobile phone service plans. The defendant fabricated and sent to the administration officer of Midland Realty an agreement No. A3538769 by email, the forged document, the subject matter of Charge 17, which purported to show that Midland Realty had only subscribed for 18 mobile phone service plans from PCCW to induce that administration officer to believe that there were only 18 mobile phone service plans subscribed by Midland Realty from PCCW so she would not take appropriate follow-up action in respect of the suspect subscriptions.

14.  The defendant was arrested by the ICAC on 24 October 2008 and admitted all the offences under caution. The false company chops of Kelley Production Limited, Greencarrier Asia Limited, Kunming Electronics Company Limited, EHP (Hong Kong) and Power Side Limited were all recovered during a house search of the defendant’s home. The total commission defrauded from PCCW as admitted by the defendant in the admitted facts was $34,058.60, and the total value of the mobile phones defrauded was $301,020. There has been no restitution and unlikely to be any restitution in light of the defendant’s current financial situation.

15.  I have been informed that Mr Leung, the estate agent from Midland Realty referred to in the particulars for Charge 1 and who was involved with the defendant pursuant to the facts in respect of Charge 17, is now serving a sentence of 11 years’ imprisonment in the PRC for some other matters and his expected date of release is in 2019.

16.  Miss Au Yeung Yuk-wa, the defendant’s colleague in PCCW referred to in the particulars of Charges 16 and 17, was dealt with in the magistracy for her role in these two offences. She had admitted the offences and was placed on a community service order to perform 100 hours of community service. Her deception was that she had claimed to be the handling agent of the agreements for mobile phone service plans referred to in Charges 16 and 17 when in fact she was not.

17.  The defendant was arrested for these offences on 24 October 2008 and made full admissions upon his arrest under caution. He was only charged for these offences on 21 July 2010, almost 19 months after he was arrested. I am told that police inquiries took a considerable time because there were a number of arrested persons and victim companies and a lot of witnesses involved requiring extensive inquiries, all of which took some time. The schedule of witnesses annexed to the Summary of Facts lists 21 prosecution witnesses. Statements would have to be obtained from all before the full picture of criminality could be ascertained. Although there has been a delay, I am satisfied that it is not an excessive delay.

18.  I am told too that the defendant has co-operated fully with the police throughout their investigations, saving the ICAC considerable time, and he admitted the offences at the first opportunity.

19.  I adjourned the matter until today, calling for a background report which sets out the defendant’s background and personal circumstances in great detail. The defendant is now aged 28 years. He is single. He was involved in a relationship since 2005 but they separated in October 2009 because of incompatibility. He has a previous clear record. He is the elder of two children. He was brought up in a working-class family where both parents had to work to support the livelihood of the family. During his childhood, he was cared for by his paternal grandparents during the day when his parents were at work. His childhood was uneventful.

20.  He started his working life at the age of 21 years after completing a two-year Diploma of Building Services Engineering, which certificate has been produced, and a one‑year higher diploma course at the IVE in Tuen Mun. Although he completed that course, he failed his final exams and did not get the higher diploma.

21.  He started working as a sales representative at PCCW until 2006 when he became an accounts manager with PCCW. He lost his job in October 2008 after his arrest for the present offences. Whilst on bail, he has been employed, his most recent employment since March 2010 being in a surveyor company, earning $9,000 a month as a chainman. The letter of employment dated 8 March 2010 has been produced by the defendant.

22.  The defendant’s story is not an unusual one. Because of a lavish spending habit and gambling on soccer matches, he accrued debt, including credit card debt and borrowing from finance companies. His family was disturbed by debt collectors and had to move house because of that. Because he was unable to meet his debts, he applied for bankruptcy and was declared bankrupt in June of 2009. His parents were unaware of his financial woes till his arrest for the present offence. They had repaid some $350,000 of his debt.

23.  The defendant has also received counselling for his gambling. In paragraph 9 of the background report, the defendant had told the interviewing officer that he committed the offences out of greed. Also, he sought to maintain his record of good sales performance in the company. He expressed regret for what he had done.

24.  I have before me also a letter in mitigation written by Chan Fuk-sang, the pastor of Kwai Fong Christian Assembly House and the defendant’s pastor seeking leniency on behalf of the defendant, as well as one from the defendant himself. I have considered the contents of both letters.

25.  I am told that since his arrest and his being bailed out, he has been in steady employment and has effectively turned his life around. The letter of employment that has been produced indicates that this is a permanent job with good prospects.

26.  The major features of mitigation were the defendant’s pleas and co-operation with the police. I have also borne in mind his previous clear record.

27.  The offences here are serious offences involving a breach of trust. The courts quite rightly take a very serious view of offences involving a breach of trust and the need for deterrent sentences. The defendant was employed by PCCW at the material time as an accounts manager. In respect of Charge 1, he deceived a corporate client of PCCW to sign blank documents which he subsequently used to subscribe for additional mobile telephone service plans in the name of that corporate client without his knowledge, for which he received commission as well as misappropriating the complimentary mobile telephones given by PCCW to corporate clients who subscribed to the plans. He arranged for someone to pose as the proprietor of the corporate client to speak to his supervisor when she wanted to speak to the corporate client because of the large number of mobile phone service plans involved.

28.  In respect of Charges 2 to 16, he fabricated the agreements and the supporting documents as well as using false chops of the alleged corporate clients on the application forms. Again, he received commission and misappropriated the complimentary mobile telephones.

29.  For Charge 17, when the alleged corporate client made inquiries, he forged an agreement for mobile telephone services. All this required a degree of organisation and planning and involved the use of false documents and false company chops and involved some sophistication.

30.  The offences were committed over a period of approximately seven months. The amount of money involved is not inconsiderable. The total commission defrauded from PCCW was $34,058.60 and the total value of the misappropriated mobile phones was $301,020. I accept that there is no international dimension involved here.

31.  I am told that there has been no restitution and restitution is unlikely, as I said, in view of the defendant’s current financial situation.

32.  In sentencing the defendant, I bear in mind the guideline laid down in HKSAR v Cheung Mee Kiu CACC99 of 2006. For offences involving a breach of trust for amounts of $250,000 to $1 million, the appropriate sentence is 2 to 3 years’ imprisonment; and for amounts less than $250,000, the sentence should be less than 2 years.

33.  Having taken all these matters into account in respect of the fraud charges, I propose to take a starting point of 2 years and 3 months; and for the forgery charge, 2 years and 6 months. I propose to reduce the sentences by one-third to reflect the guilty pleas entered by the defendant.

34.  In respect of Charges 1 to 16, I sentence the defendant to 18 months’ imprisonment on each charge; and in respect of Charge 17, I sentence the defendant to 20 months’ imprisonment.

35.  These are all separate and distinct offences and warrant consecutive sentences. However, I do bear in mind the totality principle of sentence. I order that the sentences on Charges 1 to 16 run concurrently, and 8 months of the sentence on Charge 17 run concurrently with the sentence of Charges 1 to 16, and 12 months run consecutively. That is a total period of imprisonment of 30 months, i.e. 2 years and 6 months.