HKSAR v. Cheung Chi Hung

DCCC 318/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 318 OF 2017

-------------------------

-------------------------

-----------------------------------------

REASONS FOR SENTENCE

-----------------------------------------

1.The defendant was charged with 2 counts of conspiracy for an agent to accept advantages, contrary to section 9(1)(a) and punishable under section 12(1) of the Prevention of Bribery Ordinance, Cap 201 and sections 159A and 159C(6) of the Crimes Ordinance, Cap 200.

2.The defendant pleaded guilty and admitted the facts.  He was convicted accordingly.  The prosecution further applied for compensation pursuant to section 12(1) of the Prevention and Bribery Ordinance.  The defence conceded to the application and full compensation was made before sentence.

The facts

3.At all material times, the defendant was an assistant project manager of RNB Engineering Hong Kong Limited (RNB).  The defendant was responsible for supervising subcontractors, including obtaining quotations, recommending subcontractors to RNB and arranging for the release of project payments. 

4.In mid-2013, RNB secured a renovation project for refurbishing Yau Oi Commercial Complex in Yau Oi Estate (the Project).  The defendant was assigned by RNB as the supervisor of the Project.  The defendant was not allowed to solicit or accept any advantage from any subcontractor for recommending or assisting them to subcontract any works from RNB.

Charge 1

5.In May 2013, the defendant invited Yeung Chi Wai to submit a quotation for the electrical works of the Project.  In the course of which, the defendant asked Yeung to inflate the quotation from about $2mills to $2,942,550 because the defendant wanted to receive rebates from Yeung.

6.Yeung’s quotation was submitted by the defendant to RNB for approval. After further negotiation with RNB, Yeung agreed to reduce the quotation to $2,353,715 of which 15% (approximately $350,000) would be rebates for the defendant. 

7.RNB paid Yeung by instalments subjected to the invoices submitted by him.  On many occasion after the defendant had approved payments be made payable to Yeung, the two would arrange a meeting for cash rebates to the defendant.  Yeung had paid $299,000 cash rebates to the defendant on 13 occasions between January 2014 and January 2015.

Charge 2

8.In October 2014 the defendant invited Law Wai Yin to submit a quotation for the electrical wiring systems of the Project.  In the course of which the defendant asked Law to inflate the quotation from $370,830 to $474,280 and the differences would be returned to the defendant.

9.Law got the work.  After Law received project payments from RNB, the defendant would call him and arranged for the payment of cash rebates.  On 3 occasions between October 2014 and December 2014, the defendant met Law and collected a total of $180,000, of which $80,000 was cash rebate.  The other $100,000 was the price of raw materials the defendant sold to Law and was not subjected to any charge.

10.In March 2015, Yeung complained to RNB and ceased offering cash rebates to the defendant.  On 23 April 2015, the defendant resigned from RNB and was later arrested on 7 September 2015.

Mitigation

11.The defendant aged 47, married with two daughters (aged 4 and 14 respectively); the defendant and his wife were working, earning $37,000 and $30,000 per month respectively.  The defendant was the major source of family income, a caring and responsible husband and father.  The wife would encounter grave financial and child caring pressure should the defendant been sentenced to a long term imprisonment.    

12.The defendant claimed in his mitigation letter that he acted out of impulse because RNB did not realize the bonus scheme promised and he committed the offences to take back what he considered to be his share of profit.  He felt sorry for his wrong and was willing to return the bribe to RNB.  After taking instruction from the defendant, Mr Chow representing the defendant submitted that when the defendant first joined RNB in November 2009, it was promised that he was to have 15 – 20% sharing on the project he brought in, which would be around $400,000 to $600,000 per year.  However, an annual bonus of $100,000 was given instead since he joined the company.  As a result of which the defendant committed the offences. 

13.The defendant had a clear record.  After he resigned RNB in April 2015, he found his current job, also as project manager in August 2015.  The defendant pleaded guilty, he felt very remorse for his wrong, he was willing and ready to compensate RNB in full as applied by the prosecution.  He would not re-offend again.  The defendant has made full compensation to RNB during the adjournment and urged the court to give full weight on this mitigating factor.  

14.The defendant had several health conditions, sleep apnea syndrome (SAS), cardiac condition and degenerative lumbar spine disease.  He required regular medical management and on long term cardiac medication.  The defence urged for leniency and concurrent sentence as the offences related to the same project.

Reasons for sentence

15.All along the messages conveyed to the public, in regard to bribery and corruption offences, from the courts are clear.  The Court of Appeal in Secretary For Justice and PAU Chin Hung AndyCACC 267/2012re-confirmed the position:-

“Over the past decades, our courts have consistently emphasized that bribery and corruption offences are intolerable offences which warrant deterrent sentences.”

16.To mark the gravity of these offences, even in the case of a first offender, immediate custodial sentence is the norm; (R v Lai Yuk Kui [1981] HKLR 691; R v Chan Koon Kwok, Arthur [1990] HKLR 458) unless there is exceptional circumstances (Secretary for Justice v Tang Shu Cheong [2012] 5 HKLRD 458).

17.As the nature of corruption and bribery offences varies from case to case, there is no sentencing guideline on the length of the sentence.  However, using breach of trust cases as a reference, past cases shown that the Court of Appeal has taken the approach of imposing rather severe terms of imprisonment.

18.In PAU Chin Hung Andythe defendant was convicted after trial with two counts of “agent accepting an advantage” upon his own plea.  The amount involved was HK$1,119,001, the defendant had a clear record and had prepared a cashier’s order for full compensation.  The defendant was sentenced to 220 hours’ community service.  The Secretary for Justice applied for a review of sentence.  The Court of Appeal allowed the review, and with the view that the appropriate starting point is 4 years’ imprisonment.  However, since the defendant has fully complied with the Community Service Order and returned the advantages to his employer and that was an application for review, having considered other mitigating factors, the Court imposed a sentence of 3 years’ imprisonment.  

19.In AG v Leung Kin Wai [1996] 4 HKC 588, the defendant, a manager of a toy company, was convicted after trial on two counts of soliciting an advantage and five counts of accepting an advantage and was sentenced to 2 years’ imprisonment.  In respect of the offence of soliciting an advantage, he solicited from the manufacturer rewards totaling HK$490,000 based on the value of business turnover of the other party.  The Court of Appeal allowed a review of sentence and varied the total term of imprisonment to 3.5 years.

20.In HKSAR v Cheng Chong Shing [2003] 3 HKLRD 989, the defendant, a senior freight officer at an airline company, accepted HK$13,000 and HK$330,000 from two clients (X & Y) as reward for his showing favour to the clients in the reservation of cargo space.  He pleaded guilty to two counts of “accepting an advantage” in relation to X, two counts of “conspiracy to accept an advantage” and one count of “conspiracy to cause an agent to use a document with intent to deceive his principal” in relation to Y. 

21.The defendant in Cheng Chong Shing was sentenced by the trial judge to a concurrent 8 months’ imprisonment to charges related to X and a concurrent 2 years’ imprisonment to charges related to Y, making a total of 2 years and 8 months.  After his sentence he offered assistance to ICAC and testified against X whilst Y pleaded guilty.  The defendant then filed his appeal against sentence on ground of his post-sentence assistance to the authorities.  The Court of Appeal ordered all sentences to run concurrently and imposed a total sentence of 2 years’ imprisonment only to reflect his co-operation with the authorities and the fulfilment, as far as he has been able, of his promise to assist in bringing other offenders to justice.

22.The defendant in the present case initiated two conspiracies and solicited advantages at the expense of his employer.  Not only disregard the interests of his principle, abused the quotation system which design to ensure fairness to those participated but more important the impact of this kind of bribery and corruption activities could be serious, far-reaching and adverse. That is why for ages these have been regarded as crimes which are intolerable in a civilized society.

23.The defendant planned to get about $350,000 from Yeung and about $100,000 from Law through the conspiracies in due course, making a total of $450,000.  By the time this matter came into light, he has already received $299,000 from Yeung and $80,000 from Law, ie $379,000.  All the money came from the inflated quotations approved/accepted by RNB taken them to be genuine, in another word from the employer.  It was clearly a breach of trust and involved falsification.

24.For obvious reason, the defence made no submission that the present case was a technical breach.  I consider the overall criminality deserve a starting point of 3.5 years.  The appropriate starting point for charge 1 to be 3 years, while that for charge 2 to be 30 months.  The defendant indicated his plea on the Plea Day, he entitled to 1/3 discount.  

25.The defendant initiated the first conspiracy in September 2013, and started to receive cash rebate in January 2014 from Yeung.  With the first conspiracy worked well, he further initiated another similar conspiracy in October 2014.  I indicated to the defence that taking into the duration of the crime, the fraudulent element of the scheme, I do not consider the commission of the offences is an act out of impulse, nor the reason for the commission of the offences amount to any mitigating factor.  The defence did not pursue any further but reiterated the defendant was willing to compensate the employer.

26.The defendant was liable under section 12(1) of the Ordinance to return the cash rebate received to RNB.  Though the return to his employer the money unlawfully obtained would not constitute an exceptional circumstance for sentencing purposes, that the defendant returned it before sentence would justify a reduction of the length of the immediate custodial sentence by 4 months.  I consider and give full weight to this and reduce the sentence of each count by 4 months.

27.The medical material submitted shown that the defendant’s condition was stable and under control.  The defendant’s medical needs would be passed on to the Correctional Services Department and his needs would be looked after.  I do not consider his medical condition amount to any mitigating factor.

28.There was no change of the family background, at time the defendant decided to commit these serious crimes, he knew his family responsibility and the on-going needs of the children, that there might be financial and emotional impact to his wife and children do not amount to a mitigating factor that call for further deduction in his sentence.

29.I have also considered the mitigation letters submitted but I do not find there to be any mitigating factors that call for further deduction.

30.Though the two conspiracies related to the same project, they were separate transactions involving different contractors.  However, taking into account of the totality consideration, to reflect the overall criminality and to give effect to the reduction for the compensation made before the sentence, his sentence is to run partly concurrent and partly consecutive, making a total of 24 months’ imprisonment. 

Order

31.Charge 1  20 months’ imprisonment;

Charge 2  16 months’ imprisonment, 4 months consecutive with charge 1;

making a total of 24 months.

32.The CSD is to be notified that the defendant suffered from sleep apnea syndrome (SAS), cardiac condition and degenerative lumbar spine disease, on long term cardiac medication and his medical record is with the Tseung Kwan O Hospital.