HKSAR v. Lam Yuk Ming, Anita

DCCC484/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 484 OF 2016

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REASONS FOR SENTENCE

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1.The defendant pleads guilty to two charges of theft, contrary to section 9 of the Theft Ordinance, Chapter 210, Laws of Hong Kong.

Facts

2.These two offences occurred between 19 May 2014 and 15 September 2015.  The defendant was employed during this period of time as a clerk in a solicitors’ firm which was the victim particularized in the two charges (“the Firm”).  She had been in that employment since 1994.  There were two partners in the Firm.  They were Mr. Lam and Mr. Lo.  The defendant was responsible for carrying out basic clerical work for them.

3.The Firm had opened two bank accounts to hold monies deposited by its clients with the Firm.  These two clients’ accounts were set up in the Industrial and Commercial Bank of China (Asia) Limited (“ICBC”) and the Hang Seng Bank (“HSB”).

4.All monies held by the Firm and the disbursements paid on behalf of each of its clients would be recorded in a Client Statement List of that client.  A designated file reference number would be assigned for proper record of the money flow.  The initials of the handling clerk would appear at the end of the designated reference number to identify the clerk who handled the transactions.

5.When the money of a client was to be used, the handling clerk had to first of all prepare a Client’s Account Cheque Payment Voucher (“payment voucher”) in which he or she had to specify the purpose and the amount of the payment, as well as the account from which the money was to be transferred out.  The handling clerk then signed in the “drawn by” column of the payment voucher and passed it to the handling solicitor who had to sign in the “approved” column if he approved the payment.  The payment voucher would then be sent to the accounting department of the Firm for processing.  If the client’s money was to be transferred between files, an Internal Transfer Voucher (“transfer voucher”) had to be completed in the same manner,

6.As a clerk of the Firm, the defendant was responsible for completing the payment voucher and transfer voucher for each of the files she had handled.  The files handled by her were designated with a file reference number ended with her initials “/lym”.

7.On 17 September 2015, when Mr. Lam instructed a clerk to prepare a draft bill for one of his clients whose file had been handled by the defendant, he discovered that HK$60,000 were transferred out of the client’s account without his endorsement.  He also noticed that a transfer voucher had been made for the transfer of HK$60,000 into the account of this client from the account of another client whose file was also handled by the defendant with the “approved” column in the transfer voucher purportedly signed by him, but he had never authorized such transfer. 

8.Upon further checking, Mr. Lam discovered more problematic transactions drawn out by the defendant and paid to unknown parties without his authorizations.

9.The defendant explained to Mr. Lam upon the latter’s enquiries that she had made a mistake in completing the vouchers.  She promised to repay all the monies that had been taken.  Nevertheless, her employment was terminated by the Firm on 18 September 2015 with immediate effect.

10.After the defendant had been dismissed, Mr. Lam and his partner Mr. Lo discovered further problematic transactions in the files handled by the defendant.

11.Problematic transactions concerning the Firm’s account with ICBC were particularized in the Summary of Facts prepared by the prosecution and admitted by the defendant.  In summary, between 19 May 2014 and 9 September 2015, as a result of 49 unauthorized transactions, the defendant had caused cheques to be issued by the Firm and drawn out money from the Firm’s account with ICBC, as a result of which the defendant had stolen a credit balance in the total sum of HK$1,352,894 owed by ICBC to the Firm (Charge 1).

12.Likewise, problematic transactions concerning the Firm’s account with HSB were particularized in the Summary of Facts prepared by the prosecution (except the two sums of money paid to Wong Wing-lai on 13 May 2015 and 6 July 2015) and admitted by the defendant.  In summary, between 10 September 2014 and 15 September 2015, as a result of 25 unauthorized transactions, the defendant had caused cheques to be issued by the Firm and drawn out money from the Firm’s account with HSB, as a result of which the defendant had stolen a credit balance in the total sum of HK$1,267,318 owed by HSB to the Firm (Charge 2).

13.In other words, through these 74 unauthorized transactions, the defendant had stolen credit balances owed by these two banks to the Firm in the total sum of HK$2,620,212.

14.These 74 unauthorized transfers were made to DBS Bank, Standard Chartered Bank, Hong Kong Bank, SHK Finance Limited, Li Wai-ho, Busycourt Limited, and Pearl Eagle Ltd.

15.Mr. Li Wai-ho was a practicing barrister.  His chambers were rented in the name of Busycourt Limited.  He lived in a flat in Academic Terrace, Pokfulam Road, and he rented this flat from Pearl Eagle Limited since 15 July 2015 at a monthly rental of HK$23,000.

16.14 of the unauthorized transfers between 8 August 2014 and 8 July 2015 in the total sum of HK$928,527 were made to Mr. Li personally. 

17.2 of the unauthorized transfers on 26 June 2014 and 13 May 2015 in the total sum of HK$118,283 were made to Busycourt Limited.  Busycourt Limited confirmed it had received these two sums of money for Mr. Li’s share of rental payments for his chambers.

18.One unauthorized transfer on 15 September 2015 in the sum of HK$23,000 was made to Pearl Eagle Limited which confirmed that it had received this sum of money as rental payment for Mr. Li’s residential premises in Academic Terrace.

19.The defendant had therefore caused a total of HK$1,069,810 to be paid to Mr. Li for his personal use and benefit.

20.SHK Finance Limited confirmed the total sum of HK$53,402 transferred from the Firm’s account with the ICBC on 4 occasions (on 17 October 2014, 18 November 2014, 16 December 2014 and 23 March 2015) were deposited by the defendant for repayment of her mortgage loan.

21.The remaining 53 unauthorized transfers for the total sum of HK$1,497,000 were made to either DBS Bank, Standard Chartered Bank or Hong Kong Bank.

22.The defendant was arrested by the police on 11 November 2015.

23.In a subsequent video-recorded interview, the defendant admitted that she had embezzled money from the two clients’ accounts of the Firm.  The modus operandi used by her was that she mixed the false payment or transfer vouchers with the genuine ones, and handed all of them to either Mr. Lam or Mr. Lo for approval and signature.  For the cheques issued to DBS Bank, Standard Chartered Bank and Hong Kong Bank, the monies were spent for her personal use, while for the cheques issued to SHK Finance Limited were for repayment of her mortgage loan. For the cheques issued to Mr. Li and Pearl Eagle Limited, she admitted that the monies were for Mr. Li’s personal use, and that she stole the money from the Firm to support Mr. Li.  The defendant maintained that Mr. Li did not know the source of the money.

Criminal record

24.The defendant has a clear criminal record.

Personal and family background

25.The defendant was born in Hong Kong.  She is now 51 years old.  She received education up to Form 5.  She started working at the age of 19.  She had worked in two solicitors’ firms before she started working for the victim in 1994, and her monthly income was HK$18,000 at the time of her dismissal.  Since February 2016, she started working for a Madam Hung who was the licence keeper of a Tin Hau Temple with a monthly salary of HK$12,000.  She is single.  Her father had already passed away.  Her mother is now living in a home for the elderly.  She has one elder brother.

Mitigation

26.Mr. Egan, learned counsel for the defendant, stressed that this was a tragic case. He pointed out that the defendant had an unblemished character for greater part of her life, and that she had worked faithfully and diligently for each of her employers including the victim for whom she had worked for 21 years.  He said that the defendant was acting completely out of character, and that everyone was shocked to learn that she had committed these offences.  Mr. Egan said that the defendant committed these offences because she had a mid-life crisis.  She felt that her life was passing by and hence she borrowed from financial institutions to “spice up her life” a little bit. 

27.Mr. Egan further said that the Firm was in fact willing not to report the matter to the police if the defendant was able to make full restitution but unfortunately the defendant was unable to do so.  Nevertheless, the defendant had already repaid to the Firm a total sum of HK$1.4 million which was made up of HK$1.07 million monetary repayment and forfeiture of the victim’s share of contribution to the defendant’s mandatory provident fund in the sum of HK$330,000.  Of the HK$1.07 million repayment to the Firm, half of the money was in fact repaid before the defendant was charged, and the remaining half was paid through the defendant’s solicitors afterwards.  Unfortunately, the defendant is unable to make further repayment.

28.As to the fact that the defendant stole to make payments to Mr. Li Wai-ho, Mr. Egan informed me that the defendant did not wish to say anything that might embarrass Mr. Li.  Mr. Egan could only say that Mr. Li was much younger than the defendant, but stressed that Mr. Li had in fact repaid all the money received from the defendant because the HK$1.07 million repaid by the defendant to the Firm in fact came from Mr. Li.

29.Mr. Egan submitted that the defendant was extremely remorseful for what she had done.  He pointed out that she had already lost everything she had strived for in the last 51 years, and that it would be impossible for her to be re-employed in the legal profession since she had now lost the trust of the whole profession.  Mr. Egan submitted that there was no need to impose a deterrent or retributive sentence on the defendant, but the element of rehabilitation had to be born in mind. He produced a letter written by Madam Hung, the current employer of the defendant, who stated that the defendant had become not only her employee but also her friend, and that despite the defendant’s conviction, she was willing to employ the defendant again after she had served her sentence.  Mr. Egan accepted that a prison sentence was inevitable but asked this Court to be as lenient as possible. 

Reasons for sentence

30.It is beyond doubt that the defendant had breached the trust reposed in her by her employers when she committed these two offences.  Although the defendant was employed only as a clerk in the solicitors’ firm and her monthly salary was only $18,000, it was clear that the two partners of the victim solicitors’ firm had reposed a lot of trust in her, otherwise, they would have checked the payment or transfer vouchers more carefully and discovered the dishonest acts of the defendant, and would not have signed on the “approval” column of the vouchers. 

31.The defendant had perpetrated the offences over a period of about 16 months, and she had caused unauthorized payment of monies out of the clients’ accounts on 74 occasions.  Her dishonest acts were clearly not the result of a momentary error of judgment.  She also did not put the money to use for any charitable purpose but to use the money to “spice up her life” (whatever that term means) when she was facing a mid-life crisis.  The facts revealed that she had spent nearly $1.07 million on Mr. Li.  It is not for me to speculate why she had done so when her monthly income was only $18,000 with mortgage of her own to discharge, and why Mr. Li as a practising barrister would have accepted such large sum of money within a period of just about 13 months from a clerk of a solicitors’ firm. She was at the time of the offences clearly living a life beyond her means, but nearly half of the money stolen was not for her own use, but for the personal benefit of another person.  I will take this illogical act on the part of the defendant as evidence to show that she had lost the power of thinking rationally at the time when she committed these offences. 

32.I had not lost sight that the defendant had made partial restitution.  However, it is also clear from counsel’s submissions that she is unable to repay the remaining $1.2 million, at least not in the near future. Further, when the clients of the Firm learned of the incident, the possibility that they would not form a good impression of the Firm could not be ruled out.  In other words, in addition to the monetary loss, the Firm’s reputation has been adversely affected as well.  On the other hand, there was no other aggravating factor.  I am told that the defendant had not forged signature of the handling solicitors.

33.Taking all these factors into consideration, in particular, the nature of the offences committed by the defendant that they involved breach of trust and confidence, the only viable sentencing option is imprisonment even though the defendant has pleaded guilty and has a clear record.

34.As to the quantum of sentence, the Court of Appeal has provided guidelines on the appropriate range of sentence based on the amount stolen in the case of HKSAR v Cheung Mee Kiu[1] which was fine-tuned in the case of HKSAR v Ng Kwok Wing[2].  The guidelines as fine-tuned have been consistently followed since then[3].

35.According to the guidelines, if the stolen amount was between HK$ 1 to 3 million, the appropriate range of sentence was from 3 years to 5 years. 

36.In the present case, the defendant committed the two offences in the same period of time while she was in the employ of the Firm.  That two charges were laid was simply a reflection of the fact that monies in two different bank accounts had been stolen.  Hence, the more appropriate way to approach sentencing is to add up the sums stolen in these two charges, determine the appropriate sentence globally, and then order the two sentences to run concurrently.

37.The total sum of monies stolen by the defendant was a little bit more than HK$2.6 million.  I shall also take the length of time and the number of occasions when the defendant misappropriated the clients’ accounts of the Firm into consideration.  A strict mathematical application of the guidelines would have resulted in a starting point of 4 years and 6 months (i.e. 54 months) for the overall sentence.  Since I have accepted that the defendant had for whatever reason failed to think rationally when she committed these offences, I shall adopt a slightly lower starting point of 4 years and 3 months (i.e. 51 months).

38.The defendant has pleaded guilty.  She is entitled to be given one-third discount of her sentence.  In addition, she had already repaid $1.4 million, which was about 54% of the total amount of money stolen.

39.In HKSAR v Leung Shuk Man[4], the appellant pleaded guilty to a charge of theft and another charge of attempted theft.  She had repaid all the money she had stolen before charge. The Court of Appeal held that she was entitled to be given 50% discount of the sentence because of the restitution as well as her guilty plea.

40.In the present case, the defendant’s overall sentence will be reduced to imprisonment for 30 months, which is slightly less than 42% discount of the starting point, in light of her guilty plea and the partial restitution.

41.For these reasons, the defendant is sentenced to serve a term of imprisonment for 30 months for each of the two charges.  The sentences are to run concurrently.