HKSAR v. Tai Chun Lun and Others

DCCC 771/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 771 OF 2016

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REASONS FOR SENTENCE

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Charges

1.Today’s hearing is for the sentencing of D2, D3 and D4.

2.D2 pleads guilty to one count of conspiracy to defraud, that is Charge 2.

3.D3 pleads guilty to Charge 3, fraud.

4.D4 pleads guilty to Charge 4, conspiracy to defraud.

Facts

5.Hong Kong International Terminals Limited (‘HIT’) operated 12 berths at Kwai Chung Container Port.  They subcontracted the stevedoring services to Pui Kee Stevedore Company Limited (‘Pui Kee’).  The director of Pui Kee was Fok Chi‑keung.  He and his two sons, Fok Sai-man and Fok Sai-tung, oversaw the daily operation.  Pui Kee had been providing services to HIT since the year of 2000.  (It is said that after the present offences had come to light, Pui Kee was dissolved in 2014.)

6.Pui Kee had to provide manpower to assist HIT’s operation.  At the material times, Pui Kee had about 10 foremen including all the defendants.  These foremen were responsible for deploying workers.

7.HIT engaged a company, MLCL, to provide container repair service.  Pui Kee was to provide one front-loader operator and one checker on each occasion to facilitate MLCL’s operation.  The checker would control the traffic in the repair area and assist MLCL’s staff to give instruction to the front-loader operator, who was to move the containers around the area.

8.The manpower required of Pui Kee for the aforesaid service was uncertain.  HIT officers would inform Pui Kee’s foreman the number of checkers required in a daily operation deployment form.  The Pui Kee foreman responsible for the job would then return a daily duty roster called ‘daily duty sheet’ recording the names of the checkers assigned to the job and the work locations.  The daily duty sheets were then sent to HIT.

9.HIT would verify the said record with Pui Kee every half month.  Then HIT would calculate the service charges to be paid to Pui Kee.

10.It transpired that Pui Kee had not provided that many checkers as reported to HIT.  That means HIT had paid Pui Kee more than they had to.

Charge 2 (against D2 only)

11.Between 15 March 2011 and 19 July 2013, D2 made 78 false records on the daily duty sheets.  He put down the names of 12 former colleagues or colleagues on leave, claiming falsely that those workers had worked on those 78 occasions as checkers.

12.Those false reports made HIT pay Pui Kee $35,208 more.

13.D2 was arrested in June 2014.  He told police that he acted on the instruction of another foreman called Fok Kam-fai in order to cover up the short supply of checkers.  He said on those 78 occasions, only front-loader operators were provided.  The front-loader operators would take up the checkers’ duties as well or checkers already working elsewhere would be summoned to help.  D2 said the boss, Fok Chi-keung, and his two sons were all aware of the practice.

Charge 3 (against D3 only)

14.Between 9 April 2011 and 16 February 2013, D3 made 30 false records on Pui Kee’s daily duty sheets.  He filled in the names of six former colleagues or colleagues on leave as checkers on duty.

15.As a result, HIT paid Pui Kee $13,710 more.

16.D3 was arrested in June 2014.  He told police that the daily duty sheets were falsified to cover up the short supply of checkers.

Charge 4 (against D4 only)

17.Between 16 February 2011 and 12 July 2013, D4 made 104 false records on Pui Kee’s daily duty sheets.  He put down the names of 13 former colleagues or colleagues on leave as ‘ghost’ checkers.

18.As a result, HIT paid Pui Kee $46,379 more.

19.D4 was arrested in June 2014.  He gave the same explanation as D2’s (see paragraph 13).

20.The prosecutor confirms that D1 to D4 were the only foremen charged due to their admission made to the investigators.  The named co-conspirators had not been charged.

Record

21.All the defendants have clear records.

Mitigation

22.The common ground of all the defendants is that they were not the originator of the crime.  The malpractice had been going on for some time with its start untraceable.  They and other foremen were simply acting on the boss’s instruction to make false entries on the daily duty sheets. The defendants themselves gained no benefit at all.

23.Pui Kee was dissolved after the matter had come to light in 2014.  The defendants no longer worked for that company or for the Foks.

D2

24.D2 is aged 54.  He is living with his wife and no children.  The wife is not working.  D2 also has to look after his 19 year old nephew who has come from China to study here.

25.Prior to his arrest in 2004, D2 had worked for Pui Kee for 20 years.  He was promoted to the foreman grade in 2004.  Counsel says D2 was under pressure from the boss and his colleagues to conform.  He merely followed the boss’s instruction in order to smooth out the working operation.  He was not aware of the serious consequence.

D3

26.D3 is aged 42.  He is a married man with no children.  He started working for Pui Kee in 1997 and was promoted to the foreman grade in 2003.

27.Counsel says the working conditions at the container ports was not attractive so there was always a short supply of workers.  The adversity was aggravated by the much-publicised strike in mid-2012.

28.Counsel says D3 just followed the company’s instruction to put down those false names on the daily duty sheets. He gained nothing from that.

D4

29.D4 is aged 53.  He is married and has two daughters.  He is the sole breadwinner of the family.

30.D4 joined Pui Kee in 1995.  He was promoted to the foreman grade in 2008.

31.After quitting Pui Kee in 2014, D4 had worked as a cross-border driver.  The present job conveniently allows him to take care of his fragile father in China about twice a week.

32.Counsel says D4 committed the offence out of misguided loyalty.  He did what he was instructed to do and what others had been doing all along.  He made no personal gain.

33.D2, D3 and D4 all have relative, friends or colleagues writing to mitigate for them.  In general, these middle-aged men are described as hardworking, generally righteous, caring and helpful persons.

34.There are some cases cited to me regarding sentence.

35.Needless to say, each case is to be decided on its own facts.  It is however worthy to mention a similar case submitted by D4’s counsel, that is CACC 430/2003, HKSAR v Chan Kin Yan.  That defendant was a sales manager.  She pleaded guilty to 10 counts of forgery for fraudulently describing some ordinary customers as special customers on the sales documents.  Only special customers could enjoy special price quotes.  The difference of sale price would be reimbursed by the goods supplier when the defendant’s employer made such claim to the supplier on the ground that the goods were sold to special customers.

36.That defendant was not the originator of the scam which actually had been perpetrated for some time and also by others.  She was just doing what others in her company had been doing.  She conformed to the malpractice under pressure in order to reach sales targets.  She did not pocket the difference of the sale prices.  The incidental personal gain was just a few hundred dollars of commission but it was not for that she perpetrated the forgery.

37.The defendant’s misdeeds came to light.  The sales fell through but the employer had bought the subject equipment from the supplier already.  The sentencing judge considered that the defendant’s misdeed had caused the employer $1 million.  He sentenced the defendant to 15 months’ imprisonment on each of those 10 charges. All sentences to run concurrently.

38.The appellate court however viewed that case as one of exceptional circumstances.  The appellate judges’ opinion was that a suspended sentence or community service order was suitable.  Since the defendant had been detained for 5 months already, the appellate court ordered the sentence to allow for her immediate release.

Community service order report

39.In this case, all defence counsel urged me to consider that there are special circumstances which justify leniency.  They submit that immediate imprisonment is not the only sentencing option. They asked me to consider imposing community service order on the defendant.

40.In light of the special circumstances of the case, I call for community service order reports in each defendant’s case.

41.The reports for D2 and D4 are favourable.  The two probation officers respectively recommend D2 and D4 to perform 180 to 240 hours of community service.

42.A third probation officer is responsible for D3’s case.  He suspects D3 of cheating in public housing application some years ago.  He therefore does not consider D3 to be a suitable candidate for community service.

43.That probation officer has actually referred his suspicion to the Housing Department for investigation.  After four weeks, the Housing Department replies by memo that they have received an explanation from D3 and they are still investigating into the case. No conclusion has been reached so far.

44.Counsel for D3 says the probation officer had only one interview with D3 for 15 minutes and then he embarked on his own investigation to find D3 suspicious of making fraudulent housing application.  Counsel maintains D3’s explanation as given to the Housing Department.  Counsel also criticises the probation officer for failing to investigate into the other aspects of D3 to see whether D3 is a suitable character to perform community service less the housing problem or suspicion.

45.To a great extent, I agree with counsel’s submission or criticism of the community service report prepared by the probation officer in D3’s case.  The alleged suspicion is not proven yet, so the benefit of doubt must be given to D3.

46.Apart from that unproven suspicion, D3 is not in a different situation from the other defendants.  I am minded to treat all defendants equally.

Sentence

47.This is an exceptional case.  The defendants only acted out of misguided loyalty.  Over a period of time when there was a short supply of checkers, the defendants put down the names of some ‘ghost’ checkers on the daily duty sheets.  They did not originate such malpractice; it had gone on for quite some time.  It is said that other foremen did the same. Apparently, all acted under the boss’s instruction.

48.While each defendant falsified the work record a number of times over a period of time, they did not do it on a daily basis but only when there was a short supply of checkers.

49.The defendants apparently conformed to an already existing malpractice for fear of going against the boss.  They only executed what they were instructed to do with a view to smooth things out.  It is unfortunate that they failed to see the serious consequence. But it cannot be ignored that they made no personal gain themselves.

50.In June 2014, arrests were made.  D1 to D4 made admission.  As a result of their own admission, they became the only ones being charged.  Now they are convicted upon their own plea.

51.There was a gap of 26 months between the arrest in June 2014 and the time the defendants were charged in August 2016.

52.The prosecutor has helpfully filed a chronology of events.  Obviously, investigation of such kind took time.  The investigators or the Department of Justice as legal advisors cannot be blamed. Yet the fact remains that the defendants had been left in anxiety for 26 months before they were charged in August 2016.  Since then, another 8 months had lapsed so it is almost 3 years from the defendants’ arrests in June 2014 to now.  Their offences went back even earlier to 2011 - 2013.

53.Pui Kee closed down in 2014.  The defendants no longer work for that company or the Foks.  There is no likelihood of their reoffending.

54.These defendants, apart from the present stigma, are responsible breadwinners for their families and have previous clear records.  Since their arrests, they seem to have moved on with their life.

55.Each defendant, apparently of only modest means, is willing to compensate HIT.  I, however, take the view that they did not gain anything from their misguided misdeeds. Pui Kee did.  It is easy for HIT to go after Pui Kee or the Foks for compensation.  I am therefore not minded to make any compensation order against these defendants.  In fact, the prosecutor has not sought for such order.  All parties agree that any pursuit of compensation should be left to HIT to go after the right person.

56.Community service order is recommended for D2 and D4 in the range of 180 to 240 hours.  These two defendants understand the meaning of such order and are willing to comply with the order.  I will impose a community service order of 180 hours for D2 in relation to Charge 2 and for D4 in relation to Charge 4.

57.Community service order is not recommended for D3 because of the probation officer’s suspicion in relation to his allegedly fraudulent housing application.  However, that suspicion is not proven at this stage. I must give D3 the benefit of doubt.  His case is then no different from that of D2 or D4.

58.D3 understands the meaning of community service order and is adamant that he can comply with it.  I therefore order D3 to be put on community service order of 180 hours with respect to Charge 3.