HKSAR v. CHAN SIU MAN AND ANOTHER

DCCC 930 & 1442/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 930 & 1442 OF 2009

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REASONS FOR SENTENCE

1.  I convicted D1 of all 5 charges after trial. D2 was convicted jointly with D1 of charge 1 after trial. The first three charges were bribery charges. The fourth and fifth charges concern fraud.

Charges 1-3

2.  Charges 1-3 are charges of Conspiracy to offer an advantage to an agent contrary to section 9(2)(a) and punishable under section 12(1) of the Prevention of Bribery Ordinance cap. 201 and sections 159A and 159C of the Crimes Ordinance. 

3.  The first three charges concern three bodybuilding athletes (D2, Lam Man Shing and Wong Kwong-sun) conspiring individually, with their coach Ho Ling Kwong (Ho) and D1, the Chairman of the Hong Kong China Bodybuilding Association (HKCBBA) to offer bribes to the Secretary General of the Asian Bodybuilding and Fitness Federation (ABBF), Paul Chua (an agent) so as to have their suspensions from competition as a result of being tested positive for banned substances be shortened or lifted.  

4.  The amounts of bribes agreed to be offered to Paul Chua to unlawfully lift the athletes suspensions from competition were:-

i. In charge 1, relating to D1 the Chairman, D2 an athlete, with their coach, Ho an amount of US$10,000. The period of the conspiracy was between January 2006 and December 2006.

ii. In charge 2, relating to D1, an athlete Lam Man Shing their coach Ho an amount of between HK$100,000-HK$200,000. The period of the conspiracy was between January 2006-May 2009.

iii. In charge 3, relating to D1, an athlete Wong Kwong Sun (Wong), their coach Ho an amount of US$10,000. The period of the conspiracy was between May 2006 and April 2007.

Charges 4 and 5

5.  Charge 4 is an offence of Conspiracy to defraud contrary to Common Law and punishable under section 159(c) of the Crimes Ordinance.  D1 had conspired with the athlete Lam to defraud the Hong Kong Sports Institute (HKSI) by dishonestly representing that Lam was a full time athlete when he was in fact a part time athlete.  Relying on and believing the declaration that Lam was a full time athlete, Lam received a government grant of HK$600,000 between 2007-2009. 

6.  Charge 5 is an offence of Fraud contrary to section 16A of the Theft Ordinance cap. 210.  D1 had by deceit falsely with intent to defraud represented in the Annual Return of the HKCBBA for the financial year 31 March 2007 that the expenses therein were genuine when in fact they were not.  By so doing he induced a staff member to accept the Annual Return as genuine and not demand a return of the Leisure and Cultural Services Department (LCSD) subvention granted to the HKCBBA.  The LCSD subvention granted and paid to HKCBBA for the financial year 2006/2007 was HK$252,981. The false expenses D1 claimed were genuine in nine false receipts were in the total amount of HK$299,748.40. 

Facts of Charges 1 - 3

7.  Three bodybuilding athletes representing Hong Kong (D2 Chan Yan-to, PW2 Lam Man-shing and PW3 Wong Kwong-sun) were found to have taken banned drugs whilst participating in a competition in Korea in October 2005.  As a consequence and in accordance with the rules and regulations the ABBF suspended D2 and Wong from competition for two years from 7 October 2005, as this was their first offence for doping, and Lam was suspended for life as this was his second offence. 

8.  On top of the suspensions imposed on the athletes the ABBF fined HKCBBA (not the athletes) a sum of US$3,000 per athlete, a total of US$9,000 as this was the HKCBBA second violation by one of its athletes.

9.  The athletes anxious to compete in the then upcoming Doha Asian Games (Doha Games) in December 2006 and D1 and their coach Ho supporting their eagerness to do so agreed to offer bribes to Paul Chua so that he as agent of ABBF, would shorten or lift their suspensions to enable them to compete in the Doha Games.  The bribes were disguised as additional “fines” or as fines for the purposes of lodging an appeal. 

10.  The money for the bribes were paid by the athletes either from their own pockets or money was directly taken by D1 from the government grants received by the athletes from the HKSAR government through the Hong Kong Sports Institute (HKSI).

11.  In the present case not only had the athletes agreed to offer bribes they had acted upon their offer and paid to D1 the agreed sums to uplift their suspensions.  Those sums as agreed were sums suggested by D1.

12.  Athletes Lam and Wong paid part of the bribe money by cheques to D1 or to HKCBBA.  Some cheques that were left blank were deposited into either, a company connected to D1 (SoloTour) or D1’s wife’s bank account.

13.  Government grants of about HK$90,000 belonging to D2 were held by HKCBBA.  D2 therefore did not have to hand over any money to D1.  D1 did not give any of these government sums to D2.  D1 kept this money as D2’s payment of the bribe money of US$10,000.

14.  Lam received from the HKSI government subventions paid to him for the years 2006-2009 in the form of Individual Athletes Support Scheme (IASS) in the amount of HK$420,000.  D1 did not give any of the IASS to Lam.  D1 had kept these sums as Lam’s part payment of the bribe money. 

15.  Wong received from HKSI total sponsorships of HK$30,000 Sports Aid Foundation Fund (SAFF) between 2006 and 2007.  D1 did not give any of these sums to Wong.  D1 kept this money as part payment of the bribe money. 

16.  Pursuant to the athletes agreement to offer and their actual payments made the athletes D2, Lam and Wong had their suspensions lifted.  All three athletes competed in the Doha Games in December 2006.  

17.  I rejected D1’s case that there was a legitimate appeal made by him on behalf of the three athletes to shorten their suspensions on compassionate grounds.  I rejected D1’s case that resulted in a decision made by a Special Appeal Committee ABBF allowing the reduction of the suspension period imposed upon payment of an increased fine from US$3,000 to US$4,000 each per athlete.  I disbelieved HKCBBA had legitimately paid to ABBF a sum of US$12,000 for the up-lifting of the suspension.  Payment of money was prohibited to up-lift any term of suspension. 

18.  The total sums D1 received from the athletes was about HK$596,400 (for D2 was about HK$90,000 (All from his HKSI grants), Lam HK$443,000 (IASS of HK$420,000 and cheques of HK$24,000) and Wong US$8,000 or HK$62,400 (cheques in the amount of $32,400 and SAFF of HK$30,000). 

19.  From the evidence it is clear that President Pui had paid the US$12,000 HKCBBA paid to ABBF as the “increased” fine to up-lift the suspensions.  Therefore none of the athletes’ money received by D1 was used to pay this ‘disguised’ fine.   

20.  Corruption offences are serious offences which warrant immediate custodial sentences.  Mr. Justice Stuart- Moore said in the Secretary for Justice v Kwan Chi Cheong (2009) 4 HKLRD 273 at paragraph 16 and 17

“The Prevention of Bribery Ordinance provides the sanctions necessary to deal with breaches of this kind. The Ordinance was intended to be draconian in its effect. Bribery, whether in its acceptance or by the offering of an advantage, is an evil which can strike at the heart of commercial and public life if it is left unchecked. A punishment that fails to deter will produce all the wrong signals just as sentences which act as a deterrent will reinforce this community’s efforts to rid itself of corruption.

For these reasons, even the first offender charged with an offence of corruption under the Ordinance, unless it is merely a technical breach, must usually expect a deterrent sentence. This will almost invariably involve a sentence of immediate imprisonment.”

21.  And at paragraph 20 when referring to a Community Service Order imposed on the defendant not being an appropriate sentence,

“This precisely highlights what may happen when the courts dilute the strength of many years’ firm resolve when dealing with cases of corruption, and instead impose sentences that fail to deter. It would be most unfortunate if it was not generally understood in the community that dire consequences will ensue where corruption is established.

22.  The case of Secretary for Justice v Li Cheuk Ming (1999) 1 HKLRD 63 was also referred to in Kwan Chi Cheong.  The court as far back as 11 years ago set out that offences of bribery and corruption were serious offences which warranted an immediate custodial sentence unless there were exceptional circumstances.  I do not find in this case before me there are any exceptional circumstances.  Chan CJHC as he then was said :-

“However, bribery and corruption have been for ages regarded as crimes which are intolerable in a civilised society. They are cancerous activities in a healthy and sound society and their impact to the entire society could be serious, far-reaching and adverse. They must be eradicated quickly and thoroughly, otherwise they would spread to the whole community like a prairie fire that never burns out and the consequence is disastrous.”

23.  Deterrence must be the message sent in the present corruption case. 

24.  The athletes involved were accomplished, high achieving medallists in the sport of bodybuilding.  D2 ranked at the upper end of his category.  They represented Hong Kong in many international competitions.  The athletes’ participation in the international competitions were subject to the rules and regulations and sanctioning of the ABBF, predominately administered by Paul Chua. 

25.  It was necessary for the athletes to be members of the HKCBBA for them to represent Hong Kong.  They were under the direct management of D1 being Chairman of HKCBBA. 

26.  D1 was close to Paul Chua the Secretary General of ABBF, a highly influential man in the sport of bodybuilding and with the power and position to alter the penalties imposed on the athletes.   By casual conversations with Paul Chua, D1 was able to successfully and wrongfully shorten the suspensions of the athletes. 

27.  As observed in my verdict the appeal grounds made by D1 on behalf of the athletes were baseless.  If athletes who were found with a urine sample that contained a prohibited substance would be able to reduce their suspensions on the compassionate grounds put forward by D1 on behalf of the three athletes be accepted, then the fight against the use and penalties for use of drugs in sport would be otiose. 

28.  D1 has caused serious damage to the HKCBBA, the sport of bodybuilding and its reputation by intentionally and audaciously ignoring legitimate and obligatory bans on the athletes and by corruptly paying for their suspensions to be reduced and then taking the athletes to competition despite their bans. 

29.  D1 used the athletes as money making machines for himself and Paul Chua to profit unlawfully from their serious misdeeds.  He capitalised on their desire to compete and their goal to achieve medals at any cost.  Knowing the athletes were not affluent, he covered up their drug violations from the HKSI so that they and he could apply for government grants. He used their improper receipt of grants into offering corrupt large sums to line his own and Paul Chua’s pockets. 

30.  As Chairman of HKCBBA and Assistant Secretary and Chairman of Judges Committee of ABBF D1 shamelessly and deliberately disregarded all rules and regulations for his own and Paul Chua’s self gratification.  D1’s corrupt acts undermined all the objectives of the regulatory body and intention of keeping the sport free of athletes who used drugs.  The consequences of his corruption led to the three athletes competing in the prestigious Asian Games in Doha. 

31.  D2, though not qualified to compete won a gold medal at the Doha Games.  D2 was thereafter recognised as one of Hong Kong’s supreme and must successful athletes.  D2 knew that he was ineligible to compete in Doha yet up until the time of trial he continued to deny that he was found positive for a prohibited substance at the Korean Games.  Although I accept that he was under the control of D1, it is apparent that he did nothing but go along with the suggestion of D1 to satisfy his goal to compete.  Within a month of being suspended in Korea he competed in Shanghai.  Not all the blame for D2’s participation can be wholly shifted to D1. 

32.  As a result of the athletes, D1 and coach Ho’s corruption the athletes did not lose their placing or ranking or forfeit or return the medals at the Korean Games as a result of being found positive.  The athletes wrongly continued to receive grants by HKSI when in fact they were ineligible because they were found to have taken drugs. 

33.  The two offences of charge 4 and 5 concerned D1 dishonestly deceiving HKSI and LCSD on the government grants granted. 

34.  Charge 4 – conspiracy to defraud

35.  D1 and Lam dishonestly stated that Lam was a full time athlete when he was a part time athlete.  By dishonestly claiming that Lam was a full time athlete Lam was entitled to more funds than a part time athlete.  As a result between the years of 2007-2009 HKSI paid Lam HK$600,000.  Over those two years Lam then gave to D1 but paid into HKCBBA’s account half of the amount of HK$306,000. 

36.  Charge 5 – Fraud

37.  HKCBBA received HK$252,591 from the Leisure and Cultural Services Department (LCSD) for the financial year 2006/2007 upon the application by D1 on behalf of HKCBBA.  At the end of the financial year D1 was to submit to the LCSD an audited annual return to account for the actual expenditure for the financial year with supporting documents.  D1 submitted 9 false receipts amounting to HK$299,748.40 which he claimed were genuine expenses when in fact they were not. 

38.  D1 managed and ran the HKCBBA as Chairman.  The affairs of the HKCBBA were under his control.  D1 knew HKCBBA could receive LCSD government subventions.  He deliberately lied the LCSD that the money he received had been spent on expenses there were never incurred. 

39.  HKCBBA did not collect subscriptions from its members.  It appears that HKCBBA did not receive much or any income otherwise than from its government subventions and sponsorships from the President Mr. Pui.  D1 also used Lam to dishonestly cheat HKSI so he could receive half of Lam’s share. 

40.  On the facts of the case it can be seen D1 was the main person withdrawing HKCBBA’s funds from its bank accounts.  It was an admitted fact that between 20 October 2005 to 21 May 2008 most of the monies in the bank accounts of HKCBBA were withdrawn by D1 including 78 cheques which amounted to HK$2,211,207.70.  

41.  Although the sums cheated from HKSI and LCSD were deposited into HKCBBA bank accounts I am not convinced that much of the sums were used for the benefit of the HKCBBA by D1.  

42.  D1 is 40 years of age, married with a 5 year old son.  Apart from being the Chairman of the HKCBBA he was a director of company supplying food supplements earning about HK$30,000 a month.  I have received good character reference letters from his wife, his family members, other respected members of the society and athletes. 

43.  D2 is 43 years of age.  He is married with a 20 year old son.  He has been a dedicated athlete for 8-9 years.  As a result of the time and devotion to training to become a top athlete he had not been employed for those years.  Recently he has been employed as a personal training.  His wife had been the main bread winner of the family. 

44.  The defendants both have clear records.  They have suffered a great fall from grace.  I consider the behaviour of these two defendants in relation to the bribery offences to be grave in that it flouts the root of the intention of sport to eliminate competitors who are found to have used drugs.  The use of banned drugs in sport is forbidden.  The cover-up by D1 and the athletes in the present case of their use paints a bleak, damaging and distrustful picture of these athletes and the associations involved. 

45.  D1 was greedy and dishonest.  I believe he was carrying out his corrupt and fraudulent acts more for the benefit of himself than the athletes.  Regrettably there was a complete lack of integrity which ought to characterise all aspects as a Chairman of HKCBBA, Assistant Secretary and Chairman of Judges Committee of the ABBF.  

46.  I accept that D2 was a member of an association HKCBBA which was corrupt and badly managed.  I however do not accept Mr. Oliver Davies submissions that D2 was denied the right of a “proper appeal” because there was no other option open to him.  D2 knew the rules he knew what had to be done. 

47.  Much of the blame can be put on D1’s shoulders for the athletes’ participation in this corrupt reduction of their suspensions but the athletes entered into this agreement with the knowledge that what they were doing was improper.

48.  I do consider that D2’s involvement in the offence was largely as a result of the suggestion of D1.  D1 was the mastermind, proposer and beneficiary of this crime.  The athletes in their hunger to compete complied and agreed to participation in these corrupt acts.  In those circumstances I consider D2’s punishment should be less than that of D1’s.

49.  The bribery offence warrants stiff penalties to be imposed to send a clear message to those that corruption in sport and in internationally recognised high profile sport will be severely punished. 

50.  The offences which D1 committed in charges 4 and 5 were frauds committed against Government departments.  They are serious offences and the only appropriate sentence must also be of deterrence.  

51.  The offences for charges 1-3 involve a total amount of HK$350,000 and involve three different athletes (although as observed the actual amount received by D1 was more HK$596,400). I however sentence D1 on the figure laid out in the charges.  For charge 4 it was an amount of HK$600,000 and for charge 5 an amount of HK$252,591.  The total amount of money involved in charges 1 – 5 being approximately HK$1.2 million.  The offences are separate and distinct.  Taking into account the principle of totality for D1 I consider a sentence of 3 years imprisonment to be appropriate. 

52.  I impose the following terms of imprisonment:-

53.  D1

54.  Charge 1 - 2 years

55.  Charge 2 - 2 years

56.  Charge 3 – 2 years 

57.  Charge 4 – 2 years 6 months

58.  Charge 5 – 2 years imprisonment

59.  6 months of charge 1 is to be served consecutively to charge 4 and the remainder of the sentences are to be served concurrently to each other. 

60.  D2

61.  Charge 1 – 16 months imprisonment.