HKSAR v. Wong Wai Yung

DCCC 579/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 579 OF 2017

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REASONS FOR SENTENCE

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1.In this case, the defendant, Wong Wai Yung, is convicted of one count of theft on his own plea and the facts.

2.The prosecution’s case, simply put, is that the defendant has stolen and sold electronic products belonging to his employer over a period of nine months and kept the proceeds of the sales.  They include 315 smartphones, 11 television sets, one washing machine, one television wall mount and one smartphone battery kit.  The total worth of the products was $1,046,095.

Facts

3.During the period between 27 June 2016 and 25 March 2017, the defendant was employed by LG Electronics Hong Kong Limited (the victim) as an assistant manager responsible for sales, order processions and logistics.  The victim sells electronic products, including washing machines, televisions, smartphones and accessories. 

4.To keep track of the victim’s stock and to control its movement, apart from the model number of each kind of product, each item of the stock was assigned a number unique to the item which, along with information of its availability and location, would be kept and updated in the victim’s computer system.  The products were housed in the victim’s own warehouse or those of DHL, a logistic partner responsible for actual delivery of the products.  After a product is paid for, the victim would issue written directions to DHL either to make direct delivery to the customer (ie direct order “DO”) or allow the customer to take delivery from one of DHL’s warehouses (ie goods handing out “GHO”).

5.Some of the products were kept in the victim’s own warehouse situated in Kowloon Bay.  The defendant had the power to direct stock to be transferred from the victim’s warehouse to those of DHL by sending a warehouse transfer order “WTO”. 

6.After a product is sold and paid for, a staff of the victim would make a sale record in the computer or send an email as delivery instructions to DHL. In both cases, the particulars would include the model number and the stock number of the product.  When an instruction was sent by way of email, the staff responsible would have to fill in the stock number manually.  In the latter case, the email must first be confirmed by the defendant or his supervisor. 

Showroom Products

7.The victim also sells the products displayed in the showrooms.  For such sale, the victim also required that payment to be made before delivery. Sometime between 19 December 2016 and 7 March 2017, the defendant sold products in the showrooms including 11 televisions, one washing machine, and one television wall mount.  He kept the proceeds in the sum of $66,399.41 for himself.

Goods in the Warehouse

8.On 29 occasions during the period between 27 June 2016 and 25 March 2017, the defendant caused the following orders to be made to DHL, effecting transfer of the victim’s products:-

(1) On 20 occasions by way of DO or GHO in the form of emails and by using unused stock movement sequence numbers obtained from the victim’s computer, the defendant caused a total of 351 smartphones and one smartwatch to be delivered to himself or to a mobile-phone shop, I-Generation in Mongkok.

(2) By way of WTO warehouse transfer order, the defendant caused 52 smartphones and one smartwatch to be transferred from DHL’s warehouse to that of the victim and signed to acknowledge receipt of the same. In addition, on nine occasions during the period between 25 November 2016 and 23 March 2017, the defendant made warehouse transfer orders WTO in the victim’s system. There was no real transfer.

Arrest and Admission

9.On 30 March 2017, the defendant made a full confession to his supervisor.  He also provided 41 copies of DO and GHOs together with a list of properties he had stolen from the victim.  He was arrested on 31 March 2017. 

10.Under caution by the police, the defendant further admitted:-

(1) Since June 2016, the defendant had been stealing the victim’s products by making up delivery orders, ie DO and GHO, to DHL.

(2) He used the victim’s computer to obtain the latest unused stock movement sequence number to make up the DO and GHO.

(3) To prevent his crime from being detected during the twice-a-year stocktaking in the warehouses, he used the warehouse transfer orders to move the stock amongst the warehouses to create a false impression that there was no abnormality.

(4) All the products stolen from the victim have been sold. He has spent all the proceeds.

The Victim’s Loss

11.Subsequent stocktaking based on the documents furnished by the defendant confirmed that the defendant had stolen from the victim a total of 315 smartphones and one battery kit for the smartphone.  Their total worth was $979,695.72.

12.In all, the victim’s total loss (including the unauthorized sales of showroom products) was in the region of HK$1,046,095.

Sentencing Consideration

13.This is a clear case of breach of trust.  By virtue of the trust bestowed on him by his employer, the defendant had access to the operation of the victim’s company, information in the computer system, and the defendant had systematically used those information to steal from his employer.

14.In the case of Cheung Mee Kiu, the Court of Appeal has set out guidelines for sentencing based on the loss to the victim.  The present case falls within the $1 million to $3 million bracket and warrants a sentence of 3 to 4 years. 

15.In this case, I note the following aggravating factors:-

(1) the defendant had carried out the theft in a period of nine months.

(2) It was not a simple case of theft. He had made use of the weakness in the victim’s administrative system to perpetuate his crime and later on to cover it. It was not a case of momentary impulse.

(3) The defendant made no attempt to repay his employer.

16.On the other hand, I do note that the defendant had made a full confession to his supervisor.  He was very co-operative in furnishing all the information relating to his theft. 

17.In the circumstances, I will adopt a period of 39 months as a starting point. 

Mitigation

18.I turn to consider the mitigating factors in the defendant’s background and counsel’s submission.  At 36 years old, the defendant is a relatively young man.  He had no previous record.  According to the letters from his family members, he was highly regarded by his parents and his colleagues.  These, however, are not really relevant mitigating factors.  The fact that he had a clear record is almost a prerequisite for his ability to commit the present crime for, if a person is known to have a convict or someone with previous dishonesty-related behaviour, he probably would not be allowed to occupy a place of trust to start with.  For the present offence, one’s clear record cannot amount to a valid mitigating factor.

19.Having reviewed all the circumstances of the case, I conclude that the only relevant mitigating factor is the fact that he pleaded guilty.  He is therefore accorded with a one-third reduction and sentenced to 26 months’ imprisonment.