HKSAR v. Lau Wai Yee

DCCC 95/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 95 OF 2016

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Reasons for Sentence

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1.The defendant has pleaded guilty to one charge of theft. The particulars are that the defendant between 1 April and 29 July 2011 stole a chose in action, a sum of HK$4 million-odd owed to Hong Kong Honor Changhua International Company Limited by the Bank of China, it being property that belonged to the said Hong Kong Honor Changhua International Company Limited, hereinafter referred to as "Honor".

2.The defendant is the only staff member of this company Honor and was based in Hong Kong.  The owners of Honor were mainland Chinese businessmen.  This business was set up as a cross-border frozen meat business.  Honor only had bank accounts in Hong Kong with the Bank of China. 

3.This company purchased meat from overseas and shipped the meat to Hong Kong for temporary storage.  The payments for the meats were first financed by the Bank of China.  When Honor found buyers for the meat in mainland China, Honor would make payment to the bank to redeem the meat, so to speak, and sell it on.  The ultimate purchaser would pay Honor directly.

4.As the owners and victims were based in mainland China, they needed a staff member in Hong Kong to deal with payments and transactions of money, to deal with the bank and the purchasers and ultimately arrange shipping of the meat to buyers.  The defendant was the only staff member in Hong Kong and responsible for all of those duties I have just described. 

5.The defendant had worked for the victim since 2006 and had become a trusted employee.  One of the victim arranged that the defendant would keep blank, pre-signed cheques because he was unable to come to Hong Kong regularly.  The defendant also had the passwords for telephone banking specific to Honor's bank account.  The victim entrusted the defendant with all financial matters and accounts.  In fact, the victim did not even have a password to the accounts and relied on the defendant to provide updated financial situations.

6.Before 2010, the defendant would on a monthly basis prepare a handwritten monthly account.  The defendant would provide this account along with monthly bank statements of all Honor's accounts to the victim in mainland China.  Therefore, on a monthly basis, the victim could check the financial situation of Honor when compared to the transactions done.

7.Towards the end of 2010, the defendant stopped sending PW1 bank statements.  The victim asked her to resume sending them but she ultimately did not.  Because of the trust he placed in the defendant, the victim did not insist and was unaware of the company's financial situation from the end of 2010.  He had not seen any bank statements since the end of 2010. 

8.The reason the defendant did not keep him informed was because she was siphoning off the company's money.  The charge specifically refers to a sum of HK$4 million-odd. 

9.In July 2011, the defendant admitted to the victim she had stolen $5.9 million.  In August 2011, the defendant told the victim she had stolen $6 million-odd but she had made some restitution and lowered the stolen amount to $4.9 million-odd.    

10.This theft came to light when Honor did not have sufficient funds for a transaction worth $7 million in mid-July 2011. The reason for this was that the defendant had stolen and depleted the company's accounts.  The company no longer had sufficient funds to cover the purchase of the meat from the bank.  The victim fired the defendant on 29 July 2011 when the theft was revealed.

11.The victim and his partner, his own brother, then on three separate occasions recorded the defendant on audiotape admitting the offence.  On the first occasion, on 1 August 2011, the defendant is heard admitting that she had stolen more than $6 million-odd but that she had made some repayments and the outstanding sum should be $4.9 million-odd.  She is heard promising she would repay another $2 million within days.  That clearly was not paid.  

12.On the second occasion, she was recorded on 9 November 2011, some three months later, again admitting that she had stolen money from Honor a total of $4.9 million-odd where she proposes to repay that amount by instalments of $200,000 at a time. 

13.On the third occasion, about one month later, on 13 December 2011, the defendant asks for more time to make repayment by instalments.  Full payment is demanded by June 2012, a six-month time period.  The defendant also agrees to sign an IOU note to evidence the fact she had stolen money from the company and was going to repay it.  An IOU dated 9 December 2011 was signed by the defendant at the victim's request.  That IOU states that a sum of $3.3 million was still outstanding and to be repaid by the defendant.  That would indicate some restitution had been made. 

14.The victim could not ultimately find certain business transaction documents.  Those referred to a period of between April and July 2011.  I am sure that would have made calculating what was actually stolen difficult but, clearly, the victims accepted that there was still $3.3 million outstanding.

15.The victim then went to the police several months later in March 2012.  I am sure that is because the money promised to be repaid was not forthcoming.

16.The defendant was arrested in August 2013 after a period of investigation by the police.  She admitted the thefts in two video-recorded interviews.  She was charged with this offence in January 2016. On the first possible occasion, she indicated her plea would be one of guilty.

17.There is a chronology of the police investigation submitted and setting out what happened and their difficulties leading to the file ultimately being submitted for legal advice late in 2015. That chronology is marked MFI1.

18.In the video-recorded interviews, the defendant makes a full confession and readily admits stealing money from the company.  She told the police that she had lost all that money gambling.  The way the company had been set up in Hong Kong with only her in charge of the accounts made it all too easy for her to steal the victim's money.  Clearly, the victim had misplaced his trust.

19.Mr Kwok has said all he can in mitigation on behalf of the defendant.  The defendant is 52 years old, married with a daughter studying at university.  I have had a letter from the defendant expressing her remorse.  She obviously is sorry she has disappointed her own family as well as apologising to the victim.  At the time of the offence, she had a clear record.  Since the offence, she has been declared a bankrupt.

20.I have been referred to certain authorities in the written mitigation, and in a breach-of-trust scenario, the Court of Appeal has set out guidelines.  I have referred myself to the authority of HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776 as well as HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017.  The latter authority does not enhance the guidelines set out in Cheung Mee Kiu but adjusts them.  The Court of Appeal guideline is of the view that where between 3 to $15 million is stolen, a 5-to-10-year starting point would be appropriate.  This tariff band is a guideline.  The courts are not strictly bound by them mathematically but nor should the lower courts stray far from those guidelines.  How much money is stolen is relevant but not the only factor considered in sentencing. 

21.Other relevant factors here is that some restitution has been made.  The outstanding loss to the victim is now $3.3 million, a significant amount of money and worth, according to the guidelines, a 5-year starting point. 

22.I also take into account the factor that this offence was not a singular occasion.  Clearly, from the facts and the bank account transactions, there was systematic stealing over a period of time. 

23.Another factor relevant is the defendant's genuine remorse demonstrated by her plea and letter. 

24.Mr Kwok has also asked me to consider the fact there has been a delay in bringing this plea to court.  The defendant was arrested in August 2013 but was not charged until January 2016. 

25.The Prosecution's explanation and chronology is acceptable.  There is a long period of time between those dates but I accept it was not due to the negligence or ineffective police investigation.  The delay comes from matters out of their control.  For example, there were 15 bank accounts to examine forensically which takes an inordinate period of time. Moreover, they chased up vital documents required which ultimately were not found.  However, at the end of the day, I will take into account this mitigating factor when sentencing.

26.Defendant, please stand up.  Over $4 million was obviously stolen.  The Prosecution has been unable to determine the exact amount stolen by the defendant but, according to the particulars of the offence, the defendant admits it was $4 million-odd.  I will take for this offence a starting point of 5 years' imprisonment.  I take that factor I have just referred to into account.  I also in coming to this starting point take into account the fact some restitution has been made.  The ultimate loss accepted is $3.3 million. I also take into account mitigation put forward and the defendant's previous clear record. 

27.For the defendant's plea, she is entitled to a discount of one-third from that starting point.  After that discount is applied, the sentence should be one of 3 years and 4 months.  I am going to reduce that sentence by another 4 months to reflect the delay in bringing the case to court.  After that deduction is applied, for this offence, the defendant is sentenced to 3 years' imprisonment.  Do you understand that sentence?

DEFENDANT: Yes.