HKSAR v. Yim Wing Yiu

DCCC 1037/2018

[2019] HKDC 954

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1037 OF 2018

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Reasons for Sentence

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Charge

1.The Defendant pleads guilty to a charge of fraud. 

Facts

2.The Defendant was the assistant manager of Great Master Logistics Company Ltd (“GML”) in charge of the air-freight section of GML.  The Defendant was responsible for negotiating airfreight orders and awarding the orders to logistic companies. 

3.TSE Man-fung (PW3) was GML’s Air Operation Clerk and was the Defendant’s subordinate.  PW3 would, upon the Defendant’s instruction, prepare an airway bill and the airway bill showed, inter alia, an Airway Bill number which was assigned by the airline for the order.  GML was to be named as the shipper in the airway bill.  

4.After goods had been delivered to GML’s client, an invoice would be sent by the airline agent to GML for payment.  Having checked the accuracy of the invoice, PW3 would prepare a Cheque Requisition Form (“CRF”), submit the CRF, with the invoice attached, to the Defendant for verification and signature.  After the Defendant had approved and signed the CRF, the CRF and the invoice would be passed to senior for approval and signature.  The CRF and the invoice would then be sent to the accounts department for issuance of a cheque to the airline agent for payment.  The cheque would be sent to the airline agent by the accounts department, the Defendant or PW3. 

5.On 11 September 2013, the Defendant’s associate set up Air-Link Logistics Company Ltd (“ALL”) which engaged in logistics business. 

6.In January 2014, GML received from its clients four air-freight orders (“the 4 Orders”), respectively with Master Airway Bill No.: 307-3791-0913 (“Order 1”), 307-3791-0950 (“Order 2”), 307-3791-0924 (“Order 3”) and 307-3791-0902 (“Order 4”), for delivering goods to Lima, Peru.  The Defendant, who was responsible for handling the Orders, had falsely represented to GML that he had awarded the 4 Orders to ALL.  In fact, the Defendant had subcontracted the 4 Orders to Smart-Trans Logistics Ltd (“STL”) and the goods of the 4 Orders were delivered to GML’s clients in Lima, Peru by STL.

7.Between 3 January and 18 January 2014, ALL issued four invoices (“the Invoices”) to charge GML for delivery of the goods as follows:

(a) $327,604.80 for Order 1;

(b) $3,087.30 for Order 2;

(c) $656,588.80 for Order 3;

(d) $645,715.90 for Order 4.

8.The Defendant induced GML to pay ALL by submitting the Invoices to GML and arranging PW3 to process the payments to ALL.  On 28 January 2014, GML paid for all the Invoices in the total sum of $1,632,996.80 to ALL. 

9.As the Defendant had in fact awarded the 4 Orders to STL, STL issued invoices to GML for payment of the 4 Orders after goods were delivered to GML’s clients in Lima, Peru in the total sum of $1,632,996.80.  The Defendant, however, had kept the said invoices without submitting them to GML. 

10.In late January 2014, ALL paid for Orders 1 and 2 to STL the total sum of $330,692.10.  As to Orders 3 and 4, ALL only made a partial payment of $250,000 to STL and was unable to pay the outstanding amount of $1,052,304.70 to STL.

11.The Defendant was dismissed by GML in November 2014 with immediate effect for not disclosing his interest in ALL.     

12.As GML had failed to pay fully for Orders 3 and 4 to STL, STL lodged a civil claim against GML for the outstanding sum of $1,052,304.70 (“HCA 610/2014”).  As the Defendant insisted that Orders 3 and 4 were subcontracted to ALL, GML defended the claim made by STL.  The civil case was set down for trial. 

13.On 24 January 2017, the Defendant, who was about to give evidence in the civil action, told GML’s lawyer, CHANG Sai-tak (“PW2”), that he had in fact directly engaged STL to deliver the goods of Orders 3 and 4 and ALL had no involvement in the said two orders.  As a result, the case was settled and GML had to pay, which it then did, STL a total amount of $1,520,000, which included the outstanding payments of Orders 3 and 4 in the sum of $1,052,304.70 and costs in the sum of $467,695.30. 

14.CHEN Hsin-chieh (PW1), General Manager of GML, confirmed that GML would not have released the payments to ALL had they known that the Defendant had directly engaged STL to deliver the Orders. 

15.On 7 August 2017, the Defendant was arrested and admitted under caution his fraud perpetrated on GML and supplemented that:-

(a) He did not have any involvement in ALL initially and only referred clients to the proprietor of ALL, who was his friend, so as to avoid any conflict of interest as he was an employee of GML. He later involved in the operation of ALL because the proprietor of ALL had failed to manage ALL properly.

(b) He and the proprietor of ALL had borrowed money from a Mainlander for their business. He had made partial payment for Orders 3 and 4 in the amount of $250,000 to STL. STL then extended payment period for 2 months. He failed to fully pay STL for Orders 3 and 4 after 2 months because he had used part of the payments received from GML to repay the Mainlander’s loan.

(c) The amounts charged by ALL were the same as that of STL’s. This was a delaying tactics used by him to increase cash flow of his business.

(d) Although GML had paid ALL in full for the 4 Orders, ALL had failed to pay STL in full.

Mitigation

16.The Defendant is now 41 years old, of F. 5 education level.  He has a clear record.  He lives with his 74-year-old mother, 7-year-old daughter (who was left to his charge after his divorce), and his younger sister’s family. 

17.In April 2012, he and a friend set up a business to export cars and accessories. They suffered tremendous loss.  He could not repay the debts.  In August 2013 he had to file for bankruptcy.  Under the pressure to repay, he committed the present offence. 

18.After dismissal by GML, he joined the catering industry.  Presently he works as the manager of a café. 

Sentencing considerations

19.The Court of Appeal in HKSAR vCheung Mee Kiu[2006] 4 HKLRD 776 (later emended in HKSAR v Ng Kwok-wing [2008] 4 HKLRD 1017, [2008] HKCU 2056) sets out the guideline sentences for offences involving breach of trust as follows:

	(a)	For loss of over $15 million —	10 years or more;
	(b)	$3 million to $15 million —	5 to 9 years;
	(c)	$1 million to $ 3 million —	3 to 5 years;
	(d)	$250,000 to $1 million —	2 to 3 years;
	(e)	less than $250,000 —	less than 2 years.

Sentencing this Defendant

20.This was a simple but effective ploy victimizing GML and STL to enable ALL to go through insolvent junctures in its business.  He concealed the truth from GML from January 2014 to January 2017, up to the moment he was to give evidence in court.  GML and STL, both innocent parties, were brought to the trouble of litigation between themselves.  It goes without saying that both had to suffer the anxiety, time, and legal costs involved in a civil action which had to go for trial. 

21.On the mathematical scale, GML’s loss, in the total sum of $23,23,244.66, would point to a starting point of 4 years.  There is nothing to indicate that a lower starting point should be adopted.  I take it as the starting point.  He can have a one-third discount for his plea of guilty.  There is no other mitigating factor.  His sentence is 2 years 8 months.