HKSAR v. Leung Chi Yuen

HCCC 218/2017

[2018] HKCFI 1190

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 218 OF 2017

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT:

Mr Leung, you pleaded guilty on 3 July 2017 before the Eastern Magistrates Court to one count of theft contrary to section 9 of the Theft Ordinance, Cap 210. The summary of facts was read out to you at that time and was read out to you again on 19 September 2017, when you confirmed that plea.

This offending took place between 24 May 2010 and 27 November 2015, a period of some five years, when you were employed by Brio Electronic Commerce Limited in their accounts department. Brio was a company which provided electronic trading services and one of those services was a provision of an e-platform to traders with which they provided import and export information to the Department of Customs and Excise.

Those services were provided under the name of eeTDEC. Customers of eeTDEC were required to deposit funds from which charges could be deducted when services were rendered. Part of your responsibility was to receive payment and deposit them in the appropriate account. Some of those payments were in the form of cheques and those cheques were dishonestly paid by you into an account in the name of ECTDE, a company incorporated by you some nine months after you were employed by Brio and for which you were the sole director.

You used the company account with the Nanyang Commercial Bank to deposit the cheques rightly due to eeTDEC to the value of $29,576,832.28. Having made those deposits, you then withdrew the same and gambled it away. At the time the account was closed in December of 2015, it had only HK$1,515 in it.

You were arrested and cautioned on 7 December 2015. You said that you had set up the ECTDE account in order to run an independent business, which didn’t come to fruition, and you said that it was because of financial difficulty in 2011 that you began your dishonest scheme. But we can see that you set up the fraudulent account with the Nanyang Commercial Bank in May 2010 and the deposits which you dishonestly paid into that account in 2010 amounted to $713,267.17. You clearly were not telling the truth about that; this bank account was set up in order to defraud Brio. In all, you deposited 1,802 cheques into the Nanyang Commercial Bank account belonging to your company which should have been paid into an eeTDEC account.

You are 44 years of age and are qualified as an accountant with an Advanced Diploma in Accounting. You have two other matters of dishonesty on your criminal record; they include 24 previous convictions for theft, 23 of which were in 2002 when you were 29 years of age and were employed within the accounts department of a trading company since January of 1991. Between June 1999 and March 2000, you cashed cheques properly belonging to two companies without authority. You pleaded not guilty to those charges and you were convicted after trial. On 1 August 2002 you received a period of imprisonment from the District Court of 3½ years on each count concurrently and you were discharged from prison on 2 June 2004.

You went on to be employed as a general manager of a shipping company. Between 2006 and 2008 you stole $4,282,174.81 from that company. You were arrested in August 2008 and prosecuted, but you absconded on the first day of trial before the District Court which was scheduled to be in February 2011. You were already working for Brio at that time and had commenced stealing from that employer as well. You were only arrested once more for the 2006-8 offences when the Brio matter came to light in December 2015. That is why you were not dealt with in a timely manner for that offending.

It was only in June of 2016 that you were before the District Court once more, when, upon a plea of guilty this time, you received 4 years, 4 months’ imprisonment for one count of theft, with a further 6 month sentence for one count of failure to surrender to custody. That was to run concurrently, save as to 4 months, and you were therefore to serve a total of 4 years and 8 months’ imprisonment. You are still serving that sentence. You are due to be released on 17 January 2019.

The system you employed between 2006 and 2008 was not similar to the one before me today. On the last occasion, you employed quite an intricate scheme of false accounting, involving a number of false documents. On this occasion, all you had to do was steal the choses in action, represented by the physical cheque, and deposit it into an account with a very similar name, which, because of lax oversight by Nanyang Commercial Bank, allowed funds which should have gone to eeTDEC to go to ECTDE.

Mr Leung, employers rely upon the honesty and integrity of their accounts teams to operate their businesses. The crime you were able to perpetrate was carried out because of the positon of trust you had been placed in by Brio. It is only a matter of drafting that the offence before the court today is recorded as one offence, because it actually reflects a series of 78 dishonest transactions over a two year period, just as your previous offending reflects a dishonest course of action over a prolonged period.

I note that you had originally pleaded not guilty to that previous offending and only pleaded guilty once you had been apprehended for this offence. Your offending history suggests that you are totally incapable of leading an honest life and you should never be allowed to be in a position where you can be trusted with finance of any sort. I have therefore invited the prosecution to make an application to have you disqualified from being allowed to be a director of a company as you used a company to perpetrate this fraud and you may very well do so again.

Mr Yuen, on your behalf, originally suggested on instructions, that you stole from the company to feed a gambling addiction, but that is not supported by the two psychiatric reports before me. You are not an addict, you are simply a thief who chose to spend his ill-gotten gains by gambling. You simply threw away the money which you had stolen, and as it wasn’t your money, you kept on doing so until you were caught.

According to HKSAR v Ng Kwok Wing [2008] 4 HKLRD, following HKSAR v Cheung Mee Kiu CACC 99/2006, for theft involving breach of trust as this is, involving amounts between $3 million to $50 million, the starting point after trial should be in the range of 5 to 10 years’ imprisonment. This is an offence involving over $29 million, and it comes after two previous appalling and calculated series of dishonesty as a person in a position of trust in two other firms, and a period of imprisonment, which one would have hoped would have brought it home to you that this kind of dishonesty does not pay. The maximum sentence is one of 10 years.

This was completely pre-meditated. You set up this company as an instrument of fraud and you systematically stole from your employer. Mr Yuen asked that I consider the principle of totality; I will do so but that principle is first and foremost applicable to persons who are serving a sentence of imprisonment for offences occurring around the time of other offences for which a judge must sentence. HKSAR v Leung Ting Fung and another CACC 109/2014, that is not the case here.

You are currently serving a sentence of imprisonment because you absconded from appearing before the District Court in 2011. These matters, and those matters are not part of the same pattern of offending, save for the fact that they were clear breaches of trust by you acting in a capacity where you had control over company accounts, they are wholly dissimilar. They were separated by a period of at least two years, and the matters for which I am to sentence you today were committed whilst you were on court bail and had absconded.

The victims are wholly different, and the amount of money which you dishonestly squandered was almost six times greater than previously. The purpose of the totality principle is to achieve a just and balanced sentence that will not punish the defendant twice for the same conduct, and will not be crushing to him. However, it does not apply simply to address the rehabilitative needs of the offender; it must also sit comfortably with other sentencing principles which include the need to punish an offender for his misdeeds.

Section 68 of the Criminal Procedure Ordinance, Cap 221 allows the court to impose a sentence of imprisonment at any time during or on the expiration of a term of imprisonment a defendant is already serving. But you are due to be released on 17 January 2019 having served a sentence of 4 years and 8 months. I have stood back and tried to take a global view by considering what sentence I would pass if both matters were to be considered today. I have taken into account the guidelines in Cheung Mee Kiu; $29 million is a very large sum of money but in today’s market it is perhaps not as large a sum as it would have appeared to be in 2006 at the time of that authority.

As with sentencing in trafficking in dangerous drugs, the court cannot simply take a mathematical approach; if I did so, then you would be going to prison for 10 years which is the maximum sentence for this offence. I think it is appropriate to consider whether this is the worst sort of offending within this category, and even though you are a thoroughly dishonest man, I can think of situations which might warrant a more severe approach, such as someone in a position of trust similar to your own who steals money from the vulnerable or the sick or the young and who leaves them without any financial redress, and who are not in a positon to check your references and properly assess whether you should be employed in a position of trust.

In my view, the appropriate starting point for sentence, if I had dealt with both matters today, would be 8 years and 3 months for the matter before me, and 6 years for the matter already sentenced. Not taking into account at this stage any aggravating matters, that would make a starting point, cumulatively, of 14 years and 9 months which is manifestly excessive. Taking all of my above observations into account, I consider that the appropriate overall sentence if I were to sentence both today, would be one of 11 years. If that had been the case, subject to a one-third discount, then this court would have passed a term of imprisonment of 7 years and 4 months.

Committing offences whilst on bail is an aggregating feature, the defendant also failed to attend his trial; this represents a serious disregard for the law which is mirrored by the facts of your offending and which show a serious disregard also, for others, and for the trust and confidence reposed in you. I consider these an aggravating feature and would enhance the notional starting point by 6 months for each, but to be served concurrently with each other. That would add just 4 months, after discount, to this notional 7 years and 4 months I have mentioned, and that makes a notional total, after discount, of 7 years and 8 months.

To achieve that notional figure, I have considered that the defendant has already served 1 year and 10 months in prison, which I will deduct from my notional sentence; that makes 5 years and 10 months’ imprisonment.

Given that the appropriate starting point for the single count before me is one of 8 years, 3 months, and 6 months for the aggravating feature of committing this offence whilst on bail, if you receive one-third discount from 8 years and 9 months, you will go to prison for 5 years and 10 months to be served concurrently with the period of imprisonment you are currently serving.

Under sections 168D and E of the Companies (Winding Up and Miscellaneous Provision) Ordinance, Cap 32, I have the power to disqualify you from being a director of a company, being a manager of a company’s property, or being in any way, whether directly or indirectly, concerned or take part in the promotion, formation or management of a company where you have been convicted of an indictable offence which involves acting fraudulently or dishonestly. The maximum period for which I can disqualify you is one of 15 years and I will do so.