HKSAR v. FUNG SIU CHEUNG, MICHAEL

HCCC 484/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 484 OF 2013

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT:

Background and the Facts

The defendant pleaded guilty to two counts of fraud and two counts of money laundering at the Eastern Magistrates’ Courts on 8 November 2013. He was committed to this court for sentence. This morning, he confirmed his plea before me and accepted the summary of facts.

The defendant joined Hong Kong Life Insurance Limited (“HK Life”) as Senior Accounts Officer in 2008. His duties included arranging cheque payments to claimants.

Since January 2012, the defendant applied for prolonged leave on personal grounds. During the defendant’s absence, the staff who took over the defendant’s work discovered that cheques had been issued to persons who were not entitled to any payments from HK Life. A report was therefore made to the police on 22 June 2012.

Eventually, it was found out that only about six months after the defendant joined the company, that is between 22 December 2008 and 16 January 2012, the defendant had submitted various reports to show that the persons named therein were entitled to be paid the amounts under various insurance policies when they were in fact not so entitled. As a result, 75 cheques were issued and a total of HK$66,110,000 and US$991,000 were paid to those persons. This is the subject matter of the first count.

In order to conceal the embezzlement of money, the defendant, between 4 August 2008 and 11 January 2012, made other false entries to give the impression that HK Life had more assets than it actually held, thereby causing the company to accept those entries as genuine entries. This is the subject matter of the second count.

In respect of the third count, the defendant, together with another person, dealt with a total sum of HK$4,547,000, knowing that such sum was the proceeds of the fraud referred to in the first count.

Similarly, in respect of the forth count, the defendant, together with another person, dealt with a total sum of HK$25,750,000, knowing that such sum was the proceeds of the fraud mentioned above.

Mitigation

The defendant is aged 37, married with one son aged 5. His wife is a housewife. The defendant is the only child of his parents; the father being a retired civil servant and the mother is a housewife.

In mitigation, Mr Li told the court that the defendant is a self-made man. Having completed his Form 5 education, the defendant had been an accounts officer for 10 years and through his hard work, he was appointed as Senior Accounts Officer in HK Life, earning about HK$20,000 per month. It was said that, however, the defendant indulged himself in gambling activities, including soccer betting and horseracing. As a result, he owed huge debts. In order to repay his debts, the defendant then perpetrated this fraud on his company.

Mr Li emphasised that the defendant had made charitable donations in the past and is a man of clear record. He only committed this offence because of his gambling problems.

Sentencing Considerations

This is a case involving a breach of trust. The defendant, being the Senior Accounts Officer of his company and having been entrusted with the important work of arranging for cheque payments, used false documents to obtain payments from his employer. In the course of doing so, other persons’ bank accounts were used. While the defendant’s scheme might not be a most sophisticated one, he did make false reports followed by making false journal entries in order to conceal his dishonest acts.

His acts were premeditated ones and the fradulent practice was carried out over a period of three years, which is a substantial period.

As mentioned above, the defendant also successfully caused his company to make a total payment of about HK$74 million. The loss was a huge one.

For an offence of theft involving a breach of trust, the Court of Appeal has laid down sentencing guidelines in HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776 and HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017. In a case involving HK$15 million or above, the range of sentence is 10 years or more.

Sentencing in this Case

Having considered the facts of this case, including the mode of commission of the offence, the duration over which the fraud was perpetrated, the defendant being the prime mover of the fraudulent scheme, the amount of money involved, etc., I consider a starting point of 11 years and 3 months to be appropriate for each of Counts 1 and 2.

In respect of the third and the fourth counts, I respectively take 4 years and 6 years as the starting points.

The defendant pleaded guilty and he would receive a one-third reduction for his plea. Other than this, there is nothing in the mitigation which would warrant any further reduction in sentence. The fact that the defendant pleaded guilty at an early opportunity and saved the court’s time in conducting a trial has already been taken into account when the court awards a one-third reduction in sentence in respect of a plea of guilty.

Therefore, for the first count, the defendant is to serve a term of 7 and a half years’ imprisonment; the second count, a term of 7 and a half years; the third count, a term of 32 months; and for the fourth count, a term of 4 years.

As all these counts arose from the same set of facts and after applying the totality principle, I order that all the terms are to be served wholly concurrently.

Therefore, the defendant is to serve a total term of 7 and a half years.