HKSAR v. STANLEY LAWRENCE FREEDMAN AND ANOTHER

DCCC 810, 813, 934/2011
(consolidated) Part B

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 810, 813, 934 OF 2011 (consolidated) Part B

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REASONS FOR SENTENCE

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1.  I convicted D7 on two charges of conspiracy to defraud, charges 1 and 2 and D10 on charge 2. The charges relate to applications by two persons to become Racing members of the Hong Kong Jockey Club (the Club).

2.  The first charge, against D7 only, alleged that he conspired with Lam Wai Ming (PW5) and others to defraud the Hong Kong Jockey Club (the Club) by dishonestly submitting an application by PW5 for Racing membership of the Club which contained false information.  The application form was produced as Exhibit P7.

3.  The second charge was a similar charge of conspiracy against D7 and D10 and others in relation to an application by Chan Chi Chung (PW3) for Racing membership of the Club.  The application form was produced as P6.

Club Membership

4.  There are different types of membership of the Club.  They include voting membership, honorary voting membership, Full membership and Racing membership.  The Club is run by a Board of 12 Stewards which acts in a similar manner to the Board of Directors of a private company.

5.  At the material time the membership of the Club was about 22,000.  13,793 were Full members including stewards and voting members, 7,556 were Racing members and 632 were other members.  The number of voting members is capped at 200 which includes the 12 stewards.  When a voting member reaches the age of 70 he becomes an honorary voting member.  At the material time there were about 70 honorary voting members.

6.  To become a Racing member of the Club, an applicant has to submit an application form for Racing membership to the Club.  The application has to be proposed by a voting member or honorary voting member and seconded by another voting member or honorary voting member.  The application must be supported by three other members of the Club.

7.  To become a Full member of the Club an applicant who is a Racing member already has to submit an application form for Full membership to the Club proposed by a voting or honorary voting member of the Club.

8.  The Club makes it clear on the application forms for membership that it is concerned with upholding the Club’s integrity and that those sponsoring applications for membership must be able to vouch for their reputation and suitability for membership from their own personal knowledge of the applicants. The form states that they should be well-acquainted with the applicant and able to provide reference as to his good character.  They have to state on the application form, inter alia, that they have known the applicant personally for a specified period of time, the nature of their relationship and the reasons they regard the applicant as a suitable candidate for membership. 

9.  Those supporting membership applications are required to state how long they have known the applicant and the reasons they are able to support application.

10.  The Club does not allow its members to solicit or accept any advantage for sponsoring applications.

11.  D7 is an honorary voting member of the Club.  D10 is a Full member of the Club and, as such, can only support applications for Racing membership.

12.  The Club, which was incorporated in 1930, is one of the largest racing organizations in the world and the only authorized operator of horseracing in Hong Kong.  It is the largest taxpayer in Hong Kong and after payouts and expenses the surplus goes to the Club’s Charitable Trust which in the financial year 2009/2010 distributed donations totaling HKD1.5 billion.  The Club plays a substantial and important role in the public affairs of Hong Kong.

Charge 1

13.  In or around September 2009, PW5 was introduced by a friend of his to Mr Ng Ka Ki, Robert (Ng), a Full member of the Club, as a person who could assist PW5 in obtaining Racing membership of the Club.  Ng supplied PW5 with a Racing membership application form which had been issued by the Club to D7 and he was told he would receive a phone call from D7.  PW5 received a phone call from someone calling himself Freedman and went with his brother, PW6, who spoke better English, to the home of D7 whom he had not met before.  PW5 and D7 discussed their backgrounds and D7 completed and signed the section of the form to be completed by the Proposing Voting Member.  PW5 and his brother left with the signed form.  This was the only occasion on which he had met D7.  D7 falsely stated he had known PW5 for three years, that he had known his father and had friends in common.  He also falsely held himself out as being in a position to assess PW5’s suitability for membership.

14.  PW5, on the instructions of Ng, later went to the offices of Mr John Douglas Mackie (Mackie), an honorary voting member of the Club, in Central Plaza Wanchai in October 2009 and took with him P7.  PW5 met Mackie for the first time on that occasion and they exchanged background information.  PW5 went back a few days later and received P6 signed by Mackie at CB 82, as a Seconding Voting Member.  The prosecution alleged that many of the assertions made by Mackie were untrue.

15.  PW5 returned P7 to Ng and later received it back from Ng with page CB83 completed by three supporting Club members.  PW5 knew none of them.

16.  On 24 November 2009 PW5 submitted the form to the Club and on 26 January 2010 he was asked to go to the Club for interview.  Before going for interview PW5 was coached by Ng as to how he should answer any questions.

17.  PW5’s application for Racing membership was rejected.

Charge 2

18.  PW3, after discussions with his father, Chan Yuet Ming, PW4, about membership of the Club, found on his office desk a Racing membership application form Ex P6, CB 69.  Through the arrangement of a Mr Tang Kang Chung, Billy (Tang) in mid-January 2009 PW3 visited D7 at D7’s residence with P6 in his possession to get assistance with completing P6.  PW3 and D7 discussed their backgrounds.  PW3 left P6 with D7 and returned to collect it one week later, again on the instructions of Tang.  PW3 collected P6 from D7 and the section to be completed by a Proposing Voting Member of the Club, page 2 of the form, CB71, had been completed by D7 with false information.  PW3 had only met D7 on the two occasions he visited his residence in January 2009.

19.  In mid- February, PW3, through the arrangement of Tang, went to the office of D10, a Full member of the Club.  They had never met before.  D10 had taken P6 with him with a view to securing the support of D10 for his membership application.  PW3 left his office without D10 completing the relevant section of P6.

20.  PW3 again met D10 one week later at the Eaton Hotel coffee shop and D10 completed the section of the form to be completed by the first supporting member on page 4 of the form, CB73.  The prosecution alleged that the information supplied by D10 in his own hand-writing was false.  It was alleged that on that occasion, D10 again solicited laisee from PW3.

21.   It was alleged D10 supplied PW3 with the name card of Dr Ho Wai Tak, David, PW12, a voting member of the Club with a view to PW12 completing the section of the form to be completed by a Seconding Voting Member.  Subsequently, PW3 visited PW12 at his clinic where he met PW12 for the first time.  PW12 signed and wrote in the appropriate part of the form falsely stating, inter alia, that he had known PW3 for one and a half years at page 3 of P6, CB72.  PW12 told the court that he had relied on an assertion by D10 that PW12 had met PW3 for lunch some time previously.

22.  PW3 submitted P6 to the Club on or about 13 March 2009 and became a Club racing member later that year.

23.  D7 and D10 were arrested by ICAC officers in November 2010 and August 2011 respectively.

Criminal Records

24.  Both defendants have clear records.

Mitigation - D7

25.  I was told in mitigation that D7 is aged 84 and has been in very poor health for a number of years.

Medical Reports

26.  Various medical reports were submitted.

27.  These reports disclose that in 1998 the defendant suffered from colon cancer and gallstones resected.  In 2000 he was diagnosed with ischaemic heart disease with bypass surgery.  In 2001 he suffered from chronic obstructive lung disease.  In 2005 he was found to be suffering from low grade urinary bladder infection and underwent surgery in 2005 and 2008.  In 2008 he suffered inguinal hernia which was repaired.

28.  His current medical condition shows that he has difficulty swallowing solid food which has to be blended.  He has chronic nasal drip which causes gagging.  He suffers from chronic respiratory and coronary disease which restricts his mobility, walking and outdoor access.  He suffers from chronic insomnia and chronic prostatism.

29.  A report from the Queen Elizabeth Hospital described as being frail, a little hard of  hearing, weak on his legs, short of breath on mild exertion and that his memory is an issue.  For court attendance it recommended a wheelchair to aid his mobility and to avoid shortness of breath and that medical support be on standby in case medical attention was required.

30.  Because of D7’s medical problems I acceded to a request from his counsel that D7 be excused attendance during the course of the trial.

Concerning the offence

31.  It was pointed out that there was no evidence of D7 having had any benefit as a result of his involvement in these offences.  I was referred to the evidence of PW12 who said that the voting members of the Club were under pressure from the Club to put forward candidates for Racing membership.

32.  It was urged upon the court that these offences were very much at the lower end of the scale for offences of this kind.

D10

33.  D10 is 64 years of age and has a clear record.  He is a musician.

34.  I was supplied with a report from the OTIC Hearing and Speech Centre which stated that in 2011 D10 had a profound hearing loss in his right ear and grossly severe loss in his left ear.

35.  I was told that this condition has led to a severe loss of confidence and rendered him tentative and unsure.  I was told that the condition had caused him to age prematurely and has affected his ability to deal with the outside world.  He has become isolated and lonely.  I was informed that this situation has been exacerbated by the stress of these proceedings which have now been hanging over him for a number of years.

36.  I was informed that notwithstanding this loss of confidence, D10 has voluntarily assisted the Hong Kong Blind Union.  A letter from that group states that they very much appreciate his contribution to their Chinese Music Group.  A very moving letter was submitted to the court written by a visually impaired lady in which she describes D10 as her beloved singing coach mentor.  She states that having been visually impaired since childhood she lived her life in darkness and despair until meeting D10 who introduced her to the world of Cantonese Opera where she rediscovered confidence and the meaning of life.  She states that D10 devotes much of his time and energy to helping the blind and strives to make the world a better place for them.  I have also been supplied with a reference letter from the Chairman of the Wang Kwong Chinese Orchestra which has received support and valuable contributions from D10.

37.  With regard to the offence I accepted that D10 is a Full member of the Club rather than a voting member and as such only able to support applications for Racing membership.

38.  I also took into account that D10 introduced PW3 to PW12, voting Club member with a view to PW12 seconding PW3’s application.  I was sure that D10 was aware that PW12 had never met PW12 previously and therefore would only be able to support PW3’s application by making declarations which D10 knew would be untrue.

39.  I was also informed that D10 had offered to plead guilty to the charge 2 if the prosecution agreed not to pursue two related charges of soliciting advantages from PW3 in respect of which  he was acquitted.

The offences

40.  There is no sentencing tariff for offences of this kind.

41.  D7 and D10 deliberately attempted to mislead the Club into accepting for Racing membership applicants whom they had just met.  There was a conspiracy to defraud the Club.

42.  D7 is an honorary voting member of the Club, there are only 270 honorary voting and voting members of the Club.  They form a small and very influential part of the Club.  The Club makes is very clear in the application forms that they rely on these voting members to supply accurate information concerning the integrity and suitability of persons applying for Racing membership.  As I stated in my reasons for judgment the actions of the defendants compromise the Club’s integrity and cause it to act in a manner contrary to its interests.  They are contrary to public interest and risk economic loss to the Club.

43.  D10 is a Full member of the Club.  However he introduced PW3 to PW12, a voting Club member, knowing that any declarations made by PW12 in relation to PW3 would be false.  D10 knew that PW12 would not be in a position to vouch for the integrity of PW3.

44.  In my view custodial sentences are required for offences of this type.

45.  The two defendants were the last of several persons to appear before the courts in charges related to fraudulent applications for membership of the Club.  However, it was stressed that these two defendants were the only defendants to be convicted of offences which did not allege that they received any benefit as a result of their actions.

46.  Also in relation to D10 I was reminded that, as a full member of the Club, he was not able to propose or second an application for Racing membership, he could only support such an application although he was instrumental in introducing PW12 to second PW3’s application.

47.  In all the circumstances, I have decided that in relation to D7, because of his age, medical condition and the fact that there was no suggestion he had benefited from his involvement in the offences that the inevitable prison sentence can be suspended.  I sentence him to concurrent sentences of 9 months imprisonment suspended for 2 years.

48.  D10 is not a voting club member and to that extent his culpability must be less than that of D7.  I take in to account that he offered to plead to Charge 2 if the prosecution agreed not to proceed with the two charges of bribery on which he was acquitted.  I take into account that he received no benefit.  I take into account his clear record and medical condition.  I sentence him to 6 months imprisonment suspended for 2 years.

49.  If you reoffend in the next two years the suspended sentence will be activated and would usually be ordered to run consecutively to any other sentence that the court might impose.