HKSAR v. ANNELLS DEBORAH

HCCC 80/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 80 OF 2015

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REASONS FOR SENTENCE

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Introduction

1.  The defendant, Ms Deborah Annells, on her own plea has been convicted of 45 offences of theft, one offence of possession of a false instrument, and one offence of fraud.  The offences involved the defendant misappropriating substantial funds, totalling over $31 million, which belonged to four of her clients.  Each of them entrusted the defendant with their financial affairs as a professional adviser.  Through blatant and repeated acts of dishonesty and deceit over a protracted period she systematically stole her clients’ funds.  Her conduct constituted a serious breach of trust and a gross abuse of her professional duties and responsibilities towards her clients who as a result suffered extreme hardship and despair.  Throughout this time she acted without any degree of regret or tinge of concern for the people who trusted and relied on her, both personally and professionally.

2.  The defendant faced 56 offences.  The 47 offences to which she pleaded guilty were Counts 2, 5, 7, 8, 10-18, 20-27, 29, 30, 32-53, 55 and 56.  All the Counts were for the offence of theft, except Counts 29 and 56 which were for the offences of possession of a false instrument and fraud respectively.  The remaining 9 offences, Counts 1, 3, 4, 6, 9, 19, 28, 31, and 54, were left on the Court file. 

3.  The enormity and seriousness of the defendant’s wrongdoing is reflected by the number of offences and the protracted period over which they took place, from June 2009 to April 2013.  It is, however, exacerbated by the fact that one set of offences took place after she had been arrested and on police bail pending investigation of other similar offences. 

4.  The agreed facts reveal that the defendant through a web of lies and deceit engaged in a sustained and serious abuse of trust in order to steal substantial sums of money from her clients and to conceal it from them.  If not for the actions of one of her senior employees, Mr Graham Moore, alerting the clients and the authorities of what was taking place, the situation could have been far more serious, although for some of the victims the chances of recovering some or all of the funds stolen seem remote while others who were able to take appropriate action have been more fortunate.

Case history

5.  The defendant was first arrested on 2 November 2011 for the offences which occurred between 2010 and 2011.  She was released on police bail pending further enquiries by the police until she was formally charged with 29 offences on 8 November 2013.  The charges laid are represented by Counts 1 to 29.  It was while she was on police bail that she committed the offences in Counts 30 to 56, from 19 March to 29 August 2013. 

6.  The defendant first appeared in the Magistrate’s Court on 8 November 2013 upon being charged with the 29 offences.  The case was adjourned to 26 February 2014 when she was charged with an additional 27 offences.  The charges laid then are represented by Counts 30 to 56.

7.  Throughout this time the defendant was on bail with conditions, one of which imposed a travel restriction on her.  On 11 April 2014, the defendant made application for variation of her bail conditions by seeking the removal of the travel restriction.  It transpired that the defendant produced a false document to the court, for which she was eventually prosecuted, for the offences of perverting the course of public justice, attempted fraud and possessing a false instrument.  The false document misrepresented her company’s financial position, in that it represented that the company had secured a lease for office accommodation, thereby giving the impression she had commercial ties to Hong Kong.  The false document was used to lift the travel restriction.  It should be noted that the defendant used false documents in relation to the present offences when she was pressed or confronted about missing clients’ funds.  See HKSAR v Annells [2016] 1 HKLRD 780.

8.  On 9 December 2015, the defendant was convicted of offences relating to the false document and sentenced to 4 years’ imprisonment.  She was sentenced to 3½ years’ imprisonment for perverting the course of public justice, 18 months’ imprisonment for attempted fraud of which 6 months were to be served consecutively, and 12 months’ imprisonment for possessing a false instrument, to be served concurrently. 

9.  In the meantime, there were a series of adjourned hearings in relation to the present case, primarily for the reason that the defendant was seeking legal aid.  Eventually, on 27 February 2015, the defendant’s case was committed to the Court of First Instance for trial. 

10.  On 25 June 2015, the case was fixed for trial commencing on 4 July 2016 with 20 days set aside and for a pre-trial review on 18 May 2016.  The prosecution case consisted of 30 witnesses of which four were from overseas, and over 6,000 pages of documentary exhibits. 

11.  At the pre-trial review hearing on 18 May 2016, the defendant was legally represented by counsel, Mr Paul Stephenson and the prosecution were represented by counsel, Mr John Marray and Ms Jennifer Fok.  A number of matters were discussed and arranged in preparation for the trial, including the proposed list of prosecution witnesses, four of whom were to come here from overseas, matters that could be agreed by the parties, and pre-trial applications. 

12.  A 2^nd pre-trial review was fixed for 10 June 2016 because the defence indicated that they may call expert evidence and apply to have evidence presented via live television link. 

13.  At the 2^nd pre-trial review on 10 June 2016, it was noted that there had been correspondence between the prosecution and the defence, where the defence advised that they would not call expert evidence but were still considering whether to make an application for evidence to be presented by live television link.  The prosecution in preparation for the trial had provided a detailed case summary, a summary of the evidence for the non-theft counts and the preparation of four core bundles of exhibits as requested by the Court on the previous occasion.  It was also mentioned that the defendant had indicated that she was prepared to plead guilty to certain counts on the indictment and that the matter was under discussion.  In light of this development and other matters that were still outstanding, a 3^rd pre-trial review was fixed for 15 June 2016.  It was on that occasion that it was confirmed that the defendant would plead guilty to the counts as accepted by the prosecution and that the parties would prepare a summary of facts for plea and sentence of the defendant to take place on 4 July 2016.

Agreed facts

14.  The defendant is a qualified accountant who specialised in tax.  In 2003, she set up AzureTax Group Limited in Mauritius to provide tax advice and secretarial services to clients.  Part of the group of companies were AzureTax Limited (AzureTax), which provided tax advice to clients and AzureTrustees Limited (AzureTrustees), which provided trustee services to clients. 

15.  AzureTrustees was incorporated in Hong Kong by the defendant in 2005.  She was director of the company and since November 2006 it was registered as a trust company in Hong Kong under the Trustee Ordinance, Cap 29.  The defendant was the person in charge of the group of companies which operated from Hong Kong (the Group). 

16.  AzureTrustees maintained two bank accounts at the Hong Kong and Shanghai Banking Corporation Limited (HSBC), one in the name of AzureTrustees Limited and the other in the name of AzureTrustees Limited – Client Account.

17.  In April 2007, Mr Graham Moore, a qualified accountant in the United Kingdom, was employed by the defendant as a tax advisor of AzureTax.  Later in July 2010, he was appointed as practice manager and in October 2010, he was made a director of AzureTrustees upon the defendant’s request.  During his tenure as a director of AzureTrustees, he uncovered a number of irregularities in the bank accounts of AzureTrustees and the client’s trust accounts.  As a result, he alerted the clients of his findings and reported the case to the police in September 2011.  In the following month he resigned.

18.  The offences to which the defendant has pleaded guilty involve four clients of AzureTrustees, namely Ms Helen Suzanne Gujadhur (Ms Gujadhur), Mr Anthony Simon Parker (Mr Parker), Ms Hilary Margaret Cordell (Ms Cordell) and Mr Edward Brian Nicol (Mr Nicol).  They had settled trusts with AzureTrustees and appointed it as trustee.  The beneficiaries of the trusts were the clients and their family members. 

19.  Between June 2009 and April 2013, the defendant misappropriated the funds under the trusts for her own use, namely to settle the operational expenses of the Group, such as payment of rental, payment of salaries for staff, legal fees and so on.  The monies that she misappropriated were variously transferred to various overseas accounts or to the accounts of other trust clients of AzureTrustees, or withdrawn as cash or paid to third parties.  

20.  The total amount involved in all of the theft counts was approximately HK$31,291,513.38^[1]. It consisted of US$1,505,959.27 for the Gujadhur offences, US$331,125 and GBP48,837.29 for the Parker offences, HK$5,198,757.57 for the Cordell offences, and GBP964,443.72 for the Nicol offences. 

21.  The defendant was first arrested on 2 November 2011 for the offences which occurred between 2010 and 2011, being the cases relating to Ms Gujadhur, Mr Parker and Ms Cordell.  She was released on police bail pending further enquiries by the police until she was formally charged on 8 November 2013.  It was during this period whilst she was on police bail that the offences relating to Mr Nicol were committed.

The Gujadhur offences – Counts 2, 5, 7 and 8

22.  Ms Gujadhur is a qualified barrister in England and Wales who runs a management company in Mauritius.  She first met the defendant in the late 1990s at an international conference, and thereafter the defendant would sometimes refer clients to her in Mauritius. 

23.  In 2005, she discussed with the defendant regarding the setting up a family trust to provide for the financial security of her children.  In September 2005, on the advice of the defendant, a trust was formed with AzureTrustees as the trustee.  Various bank accounts were opened by AzureTrustees for the trust.  Ms Gujadhur was not a signatory to the accounts as she entrusted that responsibility to the defendant who had full control over the accounts. 

24.  In September 2011, Ms Gujadhur asked AzureTrustees to provide her with a statement of funds held by the trust.  She was provided with a spreadsheet from Mr Moore and noticed that some of the trust funds were missing.  She immediately contacted the defendant about the matter who assured her that her funds were held on fixed deposits.  She requested the defendant to provide her with the relevant bank statements but she made excuses that she could not get them from the bank at the time.  

25.  Eventually, in October 2011, Ms Gujadhur came to Hong Kong and repeatedly requested the defendant to show proof of the whereabouts of the trusts funds but without success.  It was at this time that Ms Gujadhur instructed lawyers on her behalf to trace the missing funds and obtain relevant statements from the bank. 

26.  On 29 April 2013, Ms Gujadhur reported the matter to the police. 

27.  The funds stolen as reflected by Counts 2, 5, 7 and 8 had been dissipated by the defendant from 26 June 2009 to 11 October 2011 for her own use and unrelated to the trust set up for Ms Gujadhur.  The funds were variously used for the payment of rent and salaries of the defendant’s businesses and to various third parties.  The transactions were effected by the defendant signing a withdrawal slip for the transfer of the funds.

28.  The total loss suffered by Ms Gujadhur under Counts 2, 5, 7, and 8 was US$1,505,959.27.  The defendant did not return any of the funds despite repeated requests by Ms Gujadhur.

The Parker offences – Counts 10 to 18

29.  Mr Parker is a qualified solicitor who had worked in the Asia Pacific Region for most of his working life.  By way of referral in April 2005, he employed the defendant to set up a family trust.  AzureTrustees was made the trustee.  Various bank accounts were opened for the trust with the defendant or the subsidiary companies under the Group as the signatories having full control of the accounts.  Mr Parker was not provided with any bank statements relating to the bank accounts of the trust. 

30.  In October 2011, Mr Parker received an email from Mr Moore saying that he had resigned from AzureTrustees and that there had been improper payments made out of his trust bank account to AzureTrustees.  Mr Parker contacted the defendant about the matter who assured him that the funds were in the bank account.  He then made his own inquiries and found that the funds were not in the bank account as claimed by the defendant.  He then instructed solicitors to act on his behalf to retrieve his funds.  The defendant informed Mr Parker’s solicitors that she would transfer the money immediately but it did not happen.  Mr Parker further confronted the defendant about the matter and she told him that she had backers who would provide funds to her and that she had borrowed money in order to repay him. 

31.  On 23 March 2012, Mr Parker reported the matter to the police. 

32.  The funds stolen as reflected by Counts 10 to 18 had been dissipated by the defendant between 30 November 2009 and 4 October 2011 for her own use and unrelated to the trust set up for Mr Parker. 

33.  The funds withdrawn from the trust bank account were mainly cash withdrawals and payments to AzureTax. 

34.  Mr Parker suffered loss of US$331,125 and GBP48,834.29 (about HK$3,121,283) under Counts 10 to 18.  He recovered a sum equivalent to the monies stolen by the defendant in January 2012 after placing a third charge on her property in Hong Kong.

The Cordell offences – Counts 20 to 27

35.  Ms Cordell is a solicitor in Hong Kong.  Some 10 years ago she became acquainted with the defendant.  In July 2007, she set up a family trust with AzureTrustees as the trustee.  The trust held shares in a property company which was sold in July and August 2011.  As a result, a part payment of HK$6 million was paid to Ms Cordell’s solicitors.  It was agreed that the HK$6 million would be held by AzureTrustees and dealt with as instructed by her pending completion of the sale. 

36.  On 14 October 2011, Mr Moore contacted Ms Cordell and expressed his concern about the defendant’s handling of her funds. Two days later she confronted the defendant about the matter and demanded that AzureTrustees resign from the trust and return her funds.  The defendant insisted that AzureTrustees had the money but she could not produce any documents to support her claim.  Ms Cordell requested the defendant to attend the bank to check the account but she refused. 

37.  On 18 October 2011, Ms Cordell reported the matter to the police. 

38.  In another meeting a few days later, the defendant admitted that she had spent some of the trust money for her own use in order to settle legal fees for business interests in the United States.  She indicated that she was not able to return the money immediately and asked for time to do so. 

39.  Most of the funds held by the defendant on trust had been dissipated by her between 9 August and 18 August 2011 for her own use and unrelated to Ms Cordell’s family trust.  The funds were variously used by the defendant to pay for business and operational expenses.

40.  Ms Cordell suffered a loss of HK$5,198,757.57 under Counts 20 to 27.  She took civil action against the defendant and was only able to recover the full sum in stages by March 2013.

The De Neree offence – Count 29

41.  Mr Gerrit Van Der Wiele was a Dutch client of AzureTrustees and the beneficial owner of a trust managed by AzureTrustees.  Sometime in June 2011, Mr Van Der Wiele found that his trust monies in the total sum of approximately €1.1 million had not been paid into a bank account as instructed.  He instructed Mr Alex De Neree, a Hong Kong based solicitor to find out what had happened.

42.  On 7 September 2011, Mr Moore had a meeting with Mr De Neree.  During the meeting, Mr De Neree told Mr Moore that he had received a suspicious bank statement from the defendant and produced a copy of it to Mr Moore.  It was a blurred copy of the third page of a HSBC bank statement of AzureTrustees HSBC Account dated 23 July 2011.  The statement purported to show that a sum of €1.1 million had been transferred out from AzureTrustees HSBC Account on 6 July 2011.  Mr Moore checked this statement with the bank statement kept in the office and found that the two were different.  HSBC later confirmed that the statement received by Mr De Neree was forged in that the foreign currency transactions in July 2011 did not exist in the genuine version.

43.  A soft copy of an email from the defendant to Mr De Neree dated 10 August 2011 attaching the forged bank statement was recovered from the server of AzureTrustees.  In the email, the defendant told Mr De Neree that the HSBC account of AzureTrustees had €1,119,940.59 in the account and €1,110,000 had been debited.

44.  On 10 August 2011, the assistant manager of AzureTax was told by the defendant to scan the statement and email it to her.  She did as instructed.

45.  It should be noted that various payments were made by the defendant using Ms Cordell’s trust funds as mentioned before to Mr De Neree. 

The Nicol offences - Counts 30, 32 to 53, 55 and 56

46.  Mr Nicol is a United Kingdom citizen who had worked in Hong Kong and throughout the region for 36 years.  In early 2012, he and his wife retired and returned to the United Kingdom.  He had known the defendant for many years through her involvement in the British Chamber of Commerce. 

47.  In May 2012, he consulted the defendant about setting up a family trust which he did through AzureTrustees.  The trust was to provide a pension for him and his wife.  

48.  In March 2013, he transferred the total sum of GBP1,010,000 to the bank trust account held by AzureTrustees as a contribution for the pension trust.  The monies were to be transferred to an investment manager of the trust once the pension scheme had been finalised.  Soon after the transfer, Mr Nicol and his wife left Hong Kong to live in the United Kingdom. 

49.  Mr Nicol’s investment manager made inquiries of the defendant about the progress of the transfer between May and July 2013, and she responded by saying that she was still arranging the documents for the trust. 

50.  Mr Nicol was not concerned at this stage but later he read an article about the defendant in the South China Morning Post in late July 2013 which caused him some concern.  He immediately sent an email to the defendant who assured him that the money would soon be transferred to the account as arranged.  There followed repeated requests of the defendant as to the status of the funds who kept on giving dates for the transfer of the funds which did not take place. 

51.  On 19 August 2013, Mr Nicol sought the advice of a solicitor, Mr John Budge, to take action against the defendant.  Mr Budge spoke to the solicitor who acted for AzureTrustees.  He said that he was instructed by the defendant that the funds had been transferred.  He produced documents that had been given to him by the defendant, consisting of banking records purportedly showing that two sums of GBP500,500 had been transferred as advised.  Mr Nicol checked to see if the monies had been received in the bank account but they had not been received.  Eventually, it was uncovered that the documents were false and no transfers had taken place. 

52.  On 27 September 2013, Mr Nicol reported the matter to the police. 

53.  The whole of the GBP1,010,000 was stolen by the defendant.  As a result of the false representations by the defendant through the false documents, Mr Nicol was induced to believe that the two sums of GBP500,500 had been transferred as advised and therefore did not take prompt action against the defendant for recovery of the stolen funds. 

54.  The day after the monies had been deposited by Mr Nicol, between 19 March and 19 April 2013, the defendant dissipated the funds for her own use and unrelated to the pension trust of Mr Nicol.  As was the case with the other monies that were stolen by the defendant, they were used to pay business expenses of the defendant and there were also transfers to overseas accounts or to third parties as well as various cash withdrawals. 

55.  Mr Nicol and his wife suffered loss of GBP964,443.72 under Counts 30, 32 to 53, 55 and 56.  None of the monies stolen by the defendant have been recovered. 

The defendant’s mitigation

56.  The defendant is 57 years of age.  She was born in Singapore but was brought up and did her schooling in England.  She has a Bachelor’s degree in Economics and Accounting from the London School of Economics.  She became a Chartered Accountant in England in 1981 and a Chartered Public Accountant in Hong Kong in 1994. 

57.  As a practising accountant, the defendant specialised in tax.  It was through AzureTax and AzureTrustees that she provided services as a consultant in tax and trusts in Hong Kong since 2005.  Prior to the present offences she was a Fellow of the Institute of Certified Public Accountants, Hong Kong, Fellow of the Taxation Institute, Hong Kong, Fellow of the Society of Trust and Estate Practitioners, Hong Kong, and a Chartered Tax Advisor of the United Kingdom Charted Institute of Taxation. 

58.  The defendant was previously married but is now divorced. She has a 23 years old daughter whom she supports.  Her daughter is currently a student at the University of London.  She has elderly parents and a younger sister.  She has lived in Hong Kong most of her adult life and it would appear that Hong Kong is her home. 

59.  In mitigation, the defendant claims that her businesses experienced financial difficulties because of bad debts and that she used the funds to keep her businesses afloat.  She claims that Mr James Sutherland of Zetland was interested in buying out her businesses, AzureTax and AzureTrustees, and had the deal come to fruition she would have been able to restore the financial viability of the businesses and all the victims would eventually have been compensated and would have suffered no loss. 

60.  I have no hesitation to reject such mitigation. This is simply no justification for taking something that does not belong to you.  That is why we have the offence of theft.  Stealing someone else’s money in the hope of repaying it provides no mitigation whatsoever.  It does reveal however that the defendant has no concept of right or wrong.  Even now.

61.  The defendant also claims that there is no evidence that she paid the monies into her own private bank accounts in Hong Kong or elsewhere or that the monies were used for any other purpose other than to keep her businesses afloat.  She asserts that she personally did not profit from the wrongdoing. 

62.  Again I have no hesitation to reject such mitigation.  Whilst some of the funds were used to pay for the expenses or operations of her businesses, it was nevertheless for her personal benefit, as the businesses belonged to her.  There are instances where funds were either withdrawn in cash or transferred to third parties which are unlikely to be related to her businesses, and even if they were, it still remains that she misappropriated other people’s monies for her benefit.

63.  It is submitted that HK$1.5 million is held in a suspense account of AzureTrustees which could be used to partly reimburse the losses sustained by the victims.  I have no information before me to verify the credit balance, if any, of the account or if there is a credit balance whether this money could be used as suggested by the defendant.  The simple fact of the matter is that no restitution has been made to the victims by the defendant. 

64.  The defendant has submitted details of her relationship with the victims and her past and current involvement with the church and professional bodies.  In support, a number of testimonials from various friends and colleagues have been submitted on behalf of the defendant who talk of her friendship and charity work.  Given the nature and gravity of the defendant’s offending, her personal circumstances and professional history provide no meaningful mitigation. 

65.  I will bear in mind that the defendant is 57 years of age, although what if any impact this will have on her sentence has to be gauged against the gravity of the offending.  The only meaningful mitigation that can be advanced on the defendant’s behalf is her plea of guilty.  However, I should note that I do not consider that it was timely or that it reflects a genuine display of remorse on the part of the defendant.  As I have explained in my reasons, a substantial effort was undertaken to investigate this case and prepare it for prosecution.  It was just before trial that the defendant indicated her guilt after much preparation and organisation had been undertaken for the defendant’s case to go to trial.  It is therefore with some reluctance that I will give the defendant the customary one-third discount. 

66.  The defendant sought to submit in mitigation what appears to be justification for the offences that she has committed against the victims by referring to financial benefits and advantages that the victims received as a result of what she had done for them in investment dealings and in reducing tax liabilities.  Mr Stephenson withdrew this submission and correctly in my view.  I do not see this as being relevant at all to mitigating the crimes that the defendant has committed against the victims. The defendant stole the clients’ money, and just because she has made money for them in previous business dealings or in her professional capacity does not justify what she has done. 

67.  It is apparent from the mitigation submitted on behalf of the defendant that although she has pleaded guilty she displays an obstinate reluctance to acknowledge her culpability.  From the moment she started stealing the funds of her clients she lied and produced false documents to conceal the truth and this continued even in the face of a police investigation and later in criminal proceedings, where she employed the same device that she used against her clients with the court by producing false documents to have a travel restriction lifted so she could leave the jurisdiction.

Victim impact statements

68.  We sometimes overlook the impact that white collar crime has on its victims.  The term “victimless crime” that is sometimes used with white collar crime is far from the truth.  There is always a victim. The victim can be an individual or entity that has suffered loss and/or the community at large. 

69.  Following the defendant’s plea of guilty, I called for victim impact statements from the victims involved in this case. There were four principal victims but clearly there were other victims, such as the victims’ family members and related persons, who were also affected by the defendant’s criminal misconduct.  I wish to stress that as a matter of course in serious criminal cases the prosecution should ensure that a victim impact statement is obtained and provided to the court to assist it with understanding the impact that the offence or offences has had on a victim.

70.  All the victims, except Mr Parker, have submitted a victim impact statement.  Whilst I was not informed of the reason why Mr Parker did not wish to make an impact statement, it is understandable that in light of what he has gone through that he does not want to be affected by this matter any further. 

71.  Ms Gujadhur states that the defendant stole a huge amount of money from her and her family and her business partner.  She says that she has been unable to recover any of the stolen money which she explains she worked very hard over many years to build up.  As a result the future financial security of her and that of her four children is seriously in jeopardy.  She recounts how she entrusted the defendant to look after her family trusts and how she gave her total control of her trust funds.  Despite endless efforts to recover the stolen monies through lawyers, she has not been able to do so.  She said the defendant had been obdurate and uncooperative in her dealings with her when she sought to recover the stolen monies.  No restitution has been made by the defendant. 

72.  Ms Gujadhur said that after she discovered the loss in October 2011 she suffered huge personal anguish and stress.  She explains that she was initially in a state of complete disbelief as she had trusted the defendant to look after her affairs for several years.  When she confronted the defendant about the matter she said that she adopted an aggressive and uncooperative stance and refused to provide any information or material about her trust funds. 

73.  Ms Gujadhur engaged lawyers in an effort to try and recover the stolen funds.  She incurred substantial legal expenses but was unable to seek restitution from the defendant through the courts.  She explains that because she was based in Mauritius it was extremely difficult for her to conduct legal proceedings in Hong Kong.  It was upon the realisation that the defendant had no funds or assets, that she and her business partner gave up in their attempts to recover their money.  She said she did not want to throw good money after bad.  She recounts of the difficulties that she went through and the considerable time and effort she put into assisting the police investigation.  She said that she spent sleepless nights thinking of how she could have done things differently and not allow so much of her personal wealth to be stolen in this way. 

74.  Ms Gujadhur talks of her disdain for the defendant and of the harm that she had caused her and her family and her business partner.  She expresses her alarm that the defendant lied to her throughout this matter and yet had the temerity to tell her that she invested other funds for her successfully and made more than the losses she suffered. 

75.  Mr Nicol explains that the monies the defendant stole from him took him 30 years of hard work to earn.  He said it was intended to provide a pension for he and his wife.  As a result of the loss of slightly over GBP1,000,000, their ability to live how they had planned has been affected and now he has to continue to work.  He complains that the moment that he and his wife signed the trust documents, the defendant intended to steal their money from the very start and use it for her own purposes.  He also complains that the defendant has never shown them any remorse or offered any explanation about what happened or why.  He further says that the defendant was never cooperative and continued to lie to them while they worried and spent further money investigating and pursuing the defendant in seeking recovery of their money through the courts. 

76.  Ms Cordell is a solicitor and a single mother supporting three children.  She said that the emotional distress, time and money the defendant’s actions caused her and her family was considerable and lasted for many years.  She said that she had given her life savings to the defendant in order to form a trust to provide for her and her family in the future.  She too had worked hard her entire life to get the funds together which the defendant stole from her.  She summarised the impact the defendant’s actions had on her as follows:

“Distress that what I had worked so hard for had simply been taken

Disbelief that the professional and personal trust that had been placed in her had been so callously broken

Fear that this would impact the sale of our property in an unstable market, for the sale proceeds were my retirement and my children’s education fund

Deep anger that she repeatedly lied about what she had done, responded aggressively and showed no remorse

Confusion how a professional woman, holding so many respected positions within the business community could behave in such a way and against all professional standards

Utter dismay that notwithstanding the clearest evidence of criminality and malpractice, the Hong Kong Institute of Certified Accountants would take no steps against her; the Financial Secretary would not exercise his statutory powers to appoint an investigatory trustee; and the British Chamber of Commerce would allow her to remain as a member of the General Council and the Chair of the Financial Services Committee”

77.  She explained that for some three months she could not work and the only thing that she could think about was how the defendant had taken her money and brazenly and repeatedly lied.  It was difficult for her to come to terms with how a professional person with whom she was on friendly terms could do this to her and her family and not show any remorse.  She said that over the course of about two and a half years, but only through legal action, she recovered her funds.  She said that the defendant did not pay willingly and necessary legal action was required.  She said that the litigation took its toll on her emotionally and that she incurred additional legal costs that she could not recover.  She said that if the defendant had accepted that she had acted improperly, had told the truth, and sincerely apologised, then that would have helped a great deal but she did not. 

78.  Ms Cordell concluded by asking the Court to show leniency towards the defendant.  She said that the defendant had made many serious mistakes but from her point of view the most important thing was to make sure she could not do to others what she did to her.  She acknowledged that the defendant has a daughter and for her sake she asks the Court to temper justice with mercy. 

79.  It is a pity that the defendant does not have the understanding and magnanimity that Ms Cordell displays with abundance. 

80.  The statements from the victims reveal the extent of the hardship and anguish that each of them has gone through at the hands of the defendant’s greed and deception.  The suffering experienced by the victims was protracted and extremely upsetting once they discovered that their life savings had been stolen which they had to take legal action to get back. Two of the victims lost everything.  It must not be overlooked that the victims had to take legal action for recovery of the monies and assist in an extensive police investigation which would have been time-consuming and distressing for them. This whole incident has been a major disruption, if not a catastrophic blow, to their lives.  The trusts were to provide for the future financial security of the victims and their families and that was shattered by the defendant’s misdeeds.

Sentencing guidelines

81.  Nearly all of the offences to which the defendant has pleaded guilty are theft offences involving a serious breach of trust.  The Court of Appeal in HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776 held that the principles laid down in R v Clark (1998) 2 Cr App Rep 137 apply in Hong Kong.  In accordance with the bands set out in Clark, the Court provided the following guidelines:

“(a) over $15 million – 10 years or more;

(b) $3 million to $15 million – 5 to 9 years;

(c) $1 million to $3 million – 3 to 4 years;

(d) $250,000 to $1 million – 2 to 3 years;

(e) less than $250,000 – less than 2 years.”

82.  However, in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1018, the guidelines were revised to ensure that the terms of imprisonment of each band were consistent with each other.  The revised guidelines are as follows:

“(a) involving $15 million or more: 10 years or above;

(b) involving $3 million to $15 million: 5 to 10 years;

(c) involving $1 million to $3 million: 3 to 5 years;

(d) involving $250,000 to $1 million: 2 to 3 years; and

(e) involving $250,000 or less: below 2 years.”

83.  I should add that the maximum penalty for the offence of theft, contrary to section 9 of the Theft Ordinance, Cap 210, is 10 years’ imprisonment.  This needs to be borne in mind when addressing the guideline tariffs because it would appear that the Court of Appeal in putting forward the tariffs was taking into account that when large sums of funds are involved this would likely be as a result of multiple offences.

84.  The seminal case on sentencing for breach of trust cases is R v John Barrick (1985) 81 Cr App R 78.  The Court examined the approach to sentencing of cases that involve a person in a position of trust who had used that privileged and trusted position to steal or defraud others.  It stated that in determining sentence in breach of trust cases, the Court should have regard to the following matters: (i) the quality and degree of trust reposed in the offender including his rank; (ii) the period over which the fraud or the thefts have been perpetrated; (iii) the use to which the money or property dishonestly taken was put; (iv) the effect upon the victim; (v) the impact of the offences on the public and public confidence; (vi) the effect upon fellow-employees or partners; (vii) the effect on the offender himself; (viii) his own history; (ix) those matters of mitigation special to himself such as illness; being placed under great strain by excessive responsibility or the like; where, as happens, there has been a long delay, say over two years, between his being confronted with his dishonesty by his professional body or the police and the start of his trial; finally, any help given by him to the police. 

85.  The Court added that in these cases in general a term of immediate imprisonment is inevitable, save in very exceptional circumstances or where the amount of money obtained is small. 

86.  In cases of dishonesty, the offence is aggravated where the offender has abused a position of privilege and trust.  In the present case, the breach of trust was egregious for the following reasons:

(1) The trust reposed in the defendant was of that of a professional advisor and trustee who was given complete control and responsibility over the financial affairs and funds of the victim clients.

(2) The thefts were perpetrated on four victims over a prolonged period from June 2009 to April 2013.

(3) The multiplicity of offences, consisting of 45 theft offences.

(4) The total funds stolen were HK$31,291,513.38.

(5) The funds stolen were used to maintain the defendant’s business operations and other possible uses.

(6) Two of the victim clients have been able to recover the funds stolen but only after taking legal action. The other two have not been able to recover any of the funds stolen. Ms Gujadhur suffered a loss of US$1,505,959.27. Mr Nicol and his wife suffered a loss of GBP964,443.72.

(7) The defendant having stolen the funds embarked on a campaign of lies and deceit to conceal the thefts from the victim clients or their representatives.

(8) The offences will have a serious impact on the public and public confidence in that the defendant committed the offences in her capacity as a trustee which is regulated by the Trustee Ordinance, Cap 29. Under section 3A a statutory duty of care applies to a trustee when exercising the power of investment.

(9) The Nicol offences (Counts 30, 32-53, 55 and 56) were perpetrated after the defendant had been arrested by the police in relation to offences concerning the other victim clients and whilst she was on police bail.

Sentencing the defendant

87.  There are five distinct victims in this case and it is on this basis that I will consider the sentence to be imposed on the defendant.  I set out below the amount of the funds stolen in Hong Kong currency as most of the funds were either in US dollars or pounds sterling. The exchange rate as at the date of the offence was used for this purpose. 

88.  The first victim is Ms Gujadhur.  According to the offences, the defendant stole from Ms Gujadhur the sums of $3,780,763.12 on 26 June 2009 (Count 2); $3,501,000 on 8 October 2009 (Count 5); $1,721,060 on 28 July 2011 (Count 7); and $2,733,850 on 11 October 2011 (Count 8).

89.  The second victim is Mr Parker.  The defendant stole from Mr Parker the sums of $77,800 on 30 November 2009 (Count 10); $233,400 on 3 December 2009 (Count 11); $1,089,200 on 3 December 2009 (Count 12); $626,055.60 on 8 December 2009 (Count 13); $233,400 on 11 December 2009 (Count 14); $427,785.75 on 4 January 2010 (Count 15); $253,922.50 on 13 May 2010 (Count 16); $234,480 on 29 June 2011 (Count 17); and $28,731.15 on 4 October 2011 (Count 18).

90.  The third victim is Ms Cordell.  The defendant stole from Ms Cordell the sums of $270,000 on 9 August 2011 (Count 20); $12,510.81 on 10 August 2011 (Count 21); $99,819 on 12 August 2011 (Count 22); $235,927.54 on 12 August 2011 (Count 23); $80,680.22 on 12 August 2011 (Count 24); $300,000 on 12 August 2011 (Count 25); $1,599,820 on 18 August 2011 (Count 26); and $2,600,000 on 18 August 2011 (Count 27).

91.  The fourth victim is Mr De Neree.  The defendant produced a false bank statement to him in relation to monies held by the company on behalf of his client (Count 29). 

92.  The fifth victim is Mr Nicol.  The defendant stole from Mr Nicol the sums of $202,429.08 on 19 March 2013 (Count 30); $591,000 on 20 March 2013 (Count 32); $50,530.15 on 21 March 2013 (Count 33); $121,368.93 on 22 March 2013 (Count 34); $269,672.67 on 22 March 2013 (Count 35); $984,448.45 on 25 March 2013 (Count 36); $338,748.06 on 25 March 2013 (Count 37); $50,563.75 on 25 March 2013 (Count 38); $1,063,784.02 on 25 March 2013 (Count 39); $116,514.17 on 26 March 2013 (Count 40); $54,598.70 on 26 March 2013 (Count 41); $607,315.26 on 27 March 2013 (Count 42); $1,011,869.13 on 28 March 2013 (Count 43); $57,428.54 on 28 March 2013 (Count 44); $247,598.66 on 5 April 2013 (Count 45); $50,534.61 on 5 April 2013 (Count 46); $492,664.06 on 5 April 2013 (Count 47); $833,700 on 5 April 2013 (Count 48); $40,444.81 on 5 April 2013 (Count 49); $46,812.85 on 5 April 2013 (Count 50); $2,022,167.65 on 9 April 2013 (Count 51); $790,660.44 on 15 April 2013 (Count 52); $101,251.96 on 16 April 2013 (Count 53); and $1,350,005.81 on 19 April 2013 (Count 55). 

93.  The defendant also defrauded Mr Nicol by falsely representing through forged bank records that two sums of GBP500,500 had been transferred to the company in order to prevent him from taking action against her for recovery of the total sum of GBP1,010,000 (Count 56). 

Global approach

94.  In taking a global approach in sentencing the defendant, it is necessary to bear in mind that there are 45 theft offences and two offences involving the creation and use of false documents which occurred over a period of nearly 4 years; that 24 of the theft offences and one offence involving the creation and use of false documents occurred while the defendant was on police bail in relation to the investigation of the other similar offences; that the total sum involved was over HK$31 million of which some of the monies were recovered by two of the victims but only after taking legal action; and that the defendant in her professional and statutory positions committed the theft offences which constituted a serious and gross breach of trust. 

95.  According to the guideline tariffs for the theft Counts and taking into account the matters I have mentioned, including my comments in the preceding paragraph, I would adopt a starting point of 13 years and 6 months’ imprisonment.  This specifically includes an enhancement of 1 year and 6 months for the fact that the Nicol offences occurred while the defendant was on police bail.  I would reduce the starting point by one-third for the defendant’s guilty plea to 9 years’ imprisonment.  The two offences involving the creation and use of false documents, Counts 29 and 56, a starting point of 2 years’ imprisonment and 3 years’ imprisonment respectively is adopted which is reduced by one-third for the defendant’s guilty plea to 1 year and 4 months’ imprisonment and 2 years’ imprisonment respectively.  The sentences on Counts 29 and 56 are to run concurrently to each other and with the sentence on the theft Counts, thereby resulting in a total sentence of 9 years’ imprisonment.

Individual approach

96.  The following sets out the starting point imposed on each offence which is reduced by one-third for the defendant’s guilty plea.

The Gujadhur offences

97.  There are 4 counts of theft from 26 June 2009 to 11 October 2011 with a total sum of HK$11,736,673.12.  There was no recovery of the funds.  The sentences are:

Count 2: 5 years reduced to 3 years and 4 months.

Count 5: 5 years reduced to 3 years and 4 months.

Count 7: 4 years reduced to 2 years and 8 months.

Count 8: 4 years and 9 months reduced to 3 years and 2 months.

98.  Taking into account the totality principle, the sentences on Counts 2 and 5 and the sentences on Counts 7 and 8 will run concurrently with each other and the concurrent sentences on Counts 7 and 8 of 3 years and 2 months will run consecutively as to 2 years and 2 months to the concurrent sentences on Counts 2 and 5 of 3 years and 4 months, thereby resulting in a sentence for the Gujadhur offences of 5 years and 6 months’ imprisonment.

99.  On a global approach to these counts I would adopt a starting point of 8 years and 3 months’ imprisonment which I would reduce by one-third for the defendant’s guilty plea to 5 years and 6 months’ imprisonment.

The Parker offences

100.  There are 9 counts of theft from 30 November 2009 to 4 October 2011 with a total sum of HK$3,204,775.  The funds were recovered after legal action.  The sentences are:

Count 10: 1 year reduced to 8 months.

Count 11: 2 years reduced to 1 year and 4 months.

Count 12: 3 years reduced to 2 years.

Count 13: 2½ years reduced to 1 year and 8 months.

Count 14: 2 years reduced to 1 year and 4 months.

Count 15: 2 years and 3 months reduced to 1 year and 6 months.

Count 16: 2 years reduced to 1 year and 4 months.

Count 17: 2 years reduced to 1 year and 4 months.

Count 18: 9 months reduced to 6 months.

101.  Taking into account the totality principle, Counts 10 to 14 will run concurrently with each other and Counts 15 to 17 will run concurrently to each other and the concurrent sentences of Counts 10 and 14, and Counts 15 to 17 will run consecutively to each other and consecutively with the sentence of Count 18, thereby resulting in a sentence for the Parker offences of 4 years’ imprisonment.  

102.  On a global approach to these counts I would adopt a starting point of 6 years’ imprisonment which I would reduce by one-third for the defendant’s guilty plea to 4 years’ imprisonment.

The Cordell offences

103.  There are 8 counts of theft from 9 to 18 August 2011 with a total sum of HK$5,198,757.57.  The funds were recovered after legal action.  The sentences are:

Count 20: 2 years reduced to 1 year and 4 months.

Count 21: 6 months reduced to 4 months.

Count 22: 1 year reduced to 8 months.

Count 23: 2 years reduced to 1 year and 4 months.

Count 24: 1 year reduced to 8 months.

Count 25: 2 years and 3 months reduced to 1 year and 6 months.

Count 26: 3 years and 6 months reduced to 2 years and 4 months.

Count 27: 4 years and 8 months reduced to 3 years.

104.  Taking into account the totality principle, the sentences on Counts 20 to 26 will run concurrently with each other and consecutively as to 2 years for the sentence on Count 27, thereby resulting in a sentence for the Cordell offences of 5 years’ imprisonment.

105.  On a global approach I would adopt a starting point of 6 years and 3 months’ imprisonment which I would reduce by one-third for the defendant’s guilty plea to 5 years’ imprisonment.

The De Neree offence

106.  There is 1 count of possessing a false instrument on 10 August 2011.  The sentence is:

Count 29: 2 years reduced to 1 year and 4 months.

The Nicol offences

107.  There are 24 counts of theft from 19 March to 19 April 2013 with a total sum of HK$11,496,111.74.  There was no recovery of the funds.  The multiplicity of offences and that they were committed whilst the defendant was on police bail, having been arrested for similar offences, is a serious aggravation to the offences and I propose to enhance the sentences variously by 3 to 6 months.  The sentences are:

Count 30: 1 year and 6 months enhanced by 3 months reduced to 1 year and 2 months.

Count 32: 2 years and 6 months enhanced by 6 months reduced to 2 years.

Count 33: 6 months enhanced by 3 months reduced to 6 months.

Count 34: 1 year enhanced by 3 months reduced to 10 months.

Count 35: 2 years enhanced by 6 months reduced to 1 year and 8 months.

Count 36: 3 years enhanced by 6 months reduced to 2 years and 4 months.

Count 37: 2 years and 6 months enhanced by 6 months reduced to 2 years.

Count 38: 6 months enhanced by 3 months reduced to 6 months.

Count 39: 3 years enhanced by 6 months reduced to 2 years and 4 months.

Count 40: 1 year enhanced by 3 months reduced to 10 months.

Count 41: 6 months enhanced by 3 months reduced to 6 months.

Count 42: 2 years and 6 months enhanced by 6 months reduced to 2 years.

Count 43: 3 years enhanced by 6 months reduced to 2 years and 4 months.

Count 44: 6 months enhanced by 3 months reduced to 6 months.

Count 45: 2 years enhanced by 6 months reduced to 1 year and 8 months.

Count 46: 6 months enhanced by 3 months reduced to 6 months.

Count 47: 2 years and 4 months enhanced by 6 months reduced to 1 year and 10 months.

Count 48: 2 years and 9 months enhanced by 6 months reduced to 2 years and 2 months.

Count 49: 6 months enhanced by 3 months reduced to 6 months.

Count 50: 6 months enhanced by 3 months reduced to 6 months.

Count 51: 4 years enhanced by 6 months reduced to 3 years.

Count 52: 2 years and 9 months enhanced by 6 months reduced to 2 years and 2 months.

Count 53: 1 year enhanced by 3 months reduced to 10 months.

Count 55: 3 years and 4 months enhanced by 6 months reduced to 2 years and 6 months.

Count 56: 3 years reduced to 2 years (the starting point has been enhanced by 6 months for the aggravating factor of having been committed by the defendant whilst on police bail).

108.  Taking into account the totality principle, Counts 30, 32 to 50, and 52 and 55 will run concurrently with each other and consecutively with Counts 53, 51 and 56, thereby resulting in a sentence of 8 years and 4 months’ imprisonment. 

109.  On a global approach to these counts, I would adopt a starting point of 11 years’ imprisonment which I would reduce by one-third for the defendant’s guilty plea to 8 years and 4 months’ imprisonment.  I would make the sentence on Count 56 concurrent to this sentence.

110.  Taking into account the totality principle, the resultant sentences on the Gujadhur, Parker and Cordell offences will run concurrently with each other, thereby resulting in a sentence of 5 years and 6 months’ imprisonment of which 8 months will run consecutively to the resultant sentence of the Nicol offences of 8 years and 4 months, thereby resulting in a total sentence of 9 years’ imprisonment.  The sentence of the De Neree offence will run concurrently to this total sentence.  This accords with the total sentence applying the global approach.

The perverting offences

111.  As already noted the defendant is currently serving a total sentence of 4 years’ imprisonment for perverting the course of public justice, fraud and possession of a false instrument (the perverting case).  Taking into account the totality principle, the total sentences of 9 years’ imprisonment for the offences in the present case will run consecutively as to 6 years and 6 months to the sentence of the perverting case of 4 years, thereby resulting in a sentence of 10 years and 6 months’ imprisonment.  Looked at the other way, 1 year and 6 months of the 4 years’ imprisonment for the perverting case will run consecutively to the sentence of 9 years’ imprisonment for the present offences.

Disqualification as a director

112.  The prosecution seek an order that the defendant be disqualified from acting as a director or in a similar capacity pursuant to sections 168D and 168E of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32.  Section 168E empowers a court to make a disqualification order against a person where he or she is convicted of an indictable offence in connection with the management of a company (subsection (1)(a)) or of a company’s property (subsection (1)(b)) which involves a finding that he or she acted fraudulently or dishonestly.  Given the nature and seriousness of the offences and the violation of trust reposed in the defendant in a professional and corporate capacity, I make an order of disqualification as sought for the maximum period of 15 years.  The order is that the defendant shall not, without leave of the court, be a director of a company; be a manager of a company’s property; or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company for a period of 15 years from the date of this order.

Ethical duties and responsibilities

113.  A disturbing feature to emerge from this case is the attitude of the defendant, a tax accountant of some standing and position within the profession who as part of her resume has listed a number of professional bodies and organisations to which she belonged and was actively involved.  She has displayed throughout this case a complete lack of understanding or appreciation of her ethical duties and responsibilities in the various professional capacities she held.  This case is a reminder of the need for the relevant professional bodies to effectively ensure that its members are fully aware and reminded of such duties and responsibilities in their dealings with their clients.  It is not a case of ticking a box in acknowledgement of such duties and responsibilities but by making sure through effective monitoring and education that professionals are fully aware of their duties and responsibilities because of the privileged and trusted position that they are in.