HKSAR v. Huang Xiaoxiong

HCCC 68/2019

[2019] HKCFI 2943

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 68 OF 2019

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Transcript of the Audio Recording

of the Sentence in the above Case

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COURT:

This matter was originally listed for a three-week trial on 19 November 2019, which happens to be today’s date, and was the subject of a case management hearing on 17 July 2019, but the defendant ultimately pleaded guilty to all three counts on 17 September 2019, no doubt upon the advice of new counsel. This was a wise decision.

At that time, Ms Huang, you pleaded to three counts of theft, contrary to section 9 of the Theft Ordinance, Cap 210 arising out of your employment with Weixing (Hong Kong) Limited. That was a subsidiary of a parent company on the mainland of China. You joined the company in 2010 on a salary of HK$15,000 and were effectively just one of three members of staff, the others being a director and the sales manager. You were therefore responsible for everything else which included the financial accounts and the management of the company in Hong Kong. The company manufactured buttons which it sold to companies on the mainland and internationally.

The company had a number of bank accounts with the Industrial and Commercial Bank of China over which you had everyday control because you possessed the company chop and you were the one to raise withdrawal slips which you then had authorised by a director of the company. You commenced stealing from the company in April 2015. It was by chance that one of the directors of the company found out that you had been defrauding the company when, in 2017, he instructed you to remit monies from Hong Kong for the purchase of a business in Bangladesh and there were insufficient funds to meet that commitment.

Initially, you were able to disguise your fraud but eventually the loss of funds was discovered. Over a period of one year and nine months you had transferred varying sums of money to six other entities amounting to HK$2,456,206.68 under Count 1, US$2,762,624.24 under Count 2 and RMB3,324,299.15 under Count 3. In all there were 124 transactions identified and they were all significant sums of money. The very first transaction was for US$6,799.32 in April 2015.

By December 2015, you had made nine dishonest transactions that month alone for over US$60,000. That was a lot of money for someone on HK$15,000 per month. You were already out of control. You continued to steal from the US dollar account into April 2016 when at the same time you commenced stealing from the Hong Kong dollar account as well and by July 2016 you were also taking funds from the company’s RMB account. Huge sums of money each time which you tell the court you were gambling away.

In order to carry out these thefts you forged signatures, set up company accounts in innocent third-party names and used companies operated by money transfer businesses to transfer money into your personal accounts in China. Those transfers revealed the complexity of your dishonest activity, indicating that you had the intelligence and the wherewithal to be thoroughly deceptive in the way you handled your own affairs and totally disregarded the effect it would have on others.

What is surprising is that when you were first taxed about it on 10 July 2017, you actually admitted your dishonesty and told your boss that you had stolen some HK$28.3 million which you had simply gambled away in Macau. But immediately after that meeting you returned to the office and disposed of (or secreted) the company accounts because when he went into the office on 11 July, he could not find any books of account at all. On arrest, only a very small part of those accounts was discovered.

As is your right, Ms Huang, you remained silent upon arrest and interview. That is your right but you get no credit for that. Thereafter, you sought to fight the allegations against you which, finally on 17 September 2019, some 14 months after arrest, you admitted. You cannot avail yourself therefore of any suggestion that you had been full and frank with the police or that you saved precious resources and public expense by your plea. Quite the opposite, considerable expense was undertaken in prosecuting you and you have caused further difficulty by removing company accounts, which have never been returned. You have never indicated where they are. Even today, you suggest that those documents miraculously disappeared and you do not know where they are. You deserve very little credit for the plea you entered at a very late stage.

You are now 35 years old and were born and educated on the mainland. I note you have a Masters of Arts in Economics from a United States university. Although that was a short course, I presume you have a high standard of English. You also have a Masters in Business Administration from what was then, I am told, called Peking University. The MBA was undertaken after you joined the victim company in 2010.

You came to Hong Kong in fact in 2006 to join your husband who is a Hong Kong resident. I note that you have been divorced from your husband since you were arrested and detained, yet he has written a warm letter in support to the court because he knows the effect that your imprisonment has had on your son. But your actions up to 17 September showed no remorse. You now say you are remorseful but you have still not explained what you did with the company accounts and though we have an indication of your visits to Macau, there is no proof you gambled all of the monies away.

I note that some of the monies went to the mainland and you have not proved what happened to those monies. I understand they were transferred into further accounts. Ms Wong on your behalf suggests that they too were used to gamble. I do not accept that. There would be no need to transfer monies to the mainland at all unless you simply wanted to employ them for your own use. The exhibits do indicate that you are likely to have gambled at least some of the money away as you travelled to Macau frequently during the relevant period although more frequently in the latter half of 2016 than in 2015 when this all commenced or in 2017. And given the pattern of your theft, I am not convinced at all that it went into casinos. It is a great deal of money. It is the equivalent of approximately HK$27,799,505 at today’s rates.

I have been referred to R v Barrick [1985] 81 Cr App R 78, which is now grossly out of date. I have also been referred to HKSAR v Cheung Mee Kiu, CACC 99/2006 and R v Clarke [1998] 2 Cr App R 137, which, with respect, may both also be considered to be out of date. Cheung Mee Kiu adopted the Clarke guidelines and affirmed that for thefts of over HK$15 million, 10 years or more was an appropriate sentence although I note that at that time the exchange rates again were significantly different; hence, the $15 million connotation.

Perhaps of more importance is the acceptance by everyone that the circumstances of the offence and the offender will vary considerably from case to case. For cases such as this with a substantial breach of trust, a substantial prison sentence is the norm in the absence of exceptional circumstances. There are no such exceptional circumstances here. The total figure stolen will of course prove to be a useful baseline upon which to work but it is not the only reference point. The court should also consider the quality and degree of trust reposed in the offender by the victim; the period over which the theft has been perpetrated; the means of the theft and the manner in which the monies are disposed of; whether there was any recovery; the effect upon the victim; the impact of the offending upon the public and the industry in which the offender works and the degree of cooperation of the offender. Against those and other criteria pertinent to the case at hand, the court must also clearly consider the victim’s circumstances.

This offending was perpetrated by somebody in whom the victim company placed total trust. There was essentially no one else in the office in Hong Kong who could see what the defendant was doing and the company trusted her to handle very substantial sums of money. She is an intelligent and well-educated woman. She abused the trust placed in her and went about an intricate, dishonest scheme in order to cover up her thefts, deceiving others in the process. And all for greed. The hard-earned cash of other men and women at every level of this industry, which would have resulted in a new business venture and employment in a country badly in need of new investment, was put at risk by reason of the wholly selfish desires of the defendant.

This was a prolonged series of thefts and there has been no suggestion that the defendant suffers from any form of addiction, simply that she got herself into debt and carried on foolishly believing she could gamble her way out of it. She has no excuse for what she did. Whilst of previous good character, she was only in her mid-30’s when she carried out these crimes and does not stand in the same shoes as someone who commits an offence for the first time in their 50’s or 60’s when faced with overwhelming difficulties not of their own making.

By comparison, the defendant in Cheung Mee Kiu was 61 years old at the time of her offending. Her business had collapsed because of the economic downturn through no fault of her own and the offences were a misguided attempt to salvage the business she and her family had run for 40 years. She had not disposed of the goods entirely but pawned them. And as a result, some of the stolen items were in fact recovered. That is not the case before the court today.

The maximum sentence for theft under section 9 of the ordinance, Cap 210 is 10 years. Under Count 1 you stole HK$2,456,206.68. The sentencing range falls into Band 3 of Cheung Mee Kiu. For between HK$1.25 million and HK$3.125 million, the suggested range of sentencing is 3 to 4 years’ imprisonment. Taking into account the intervening financial market since 2006, I nevertheless consider the correct starting point under Count 1 for stealing HK$2,456,206.68 should be 3 years and 9 months’ imprisonment.

The starting point for Count 2 for stealing US$2,762,624.24 falls into Band 1 and will attract the maximum sentence of 10 years’ imprisonment.

The starting point for Count 3 under Band 2 for stealing RMB3,324,299 should be in a range of between 5 to 9 years. I consider 5 years’ imprisonment to be the correct starting point.

There is also the issue of the late plea by which the defendant forfeited her right to a full one-third discount. She pleaded guilty to all three counts after the matter was listed for trial and after the first case management hearing but seven weeks before trial, saving the cost of a trial, if not the considerable expense of the investigation. In accordance with HKSAR v Ngo Van Nam, CACC 418/2014 at paragraph 214, the defendant may receive a discount of between 25 and 20 per cent. I consider in all the circumstances of this case that a figure closer to 22 per cent is more appropriate in the circumstances of this case.

There is also the issue of totality, not just the total amount stolen over 21 months, which was in the order of HK$28 million but also the correct sentence to reflect the culpability of this defendant.

On Count 1, you will go to prison for a period of 3 years. 1 year of that sentence will be served consecutively to the sentence I am to pass on Count 2. Under Count 2, you will go to prison for a period of 7 years and 10 months. That makes a total of 8 years and 10 months’ imprisonment under Counts 1 and 2. On Count 3, you will go to prison for a period of 3 years and 11 months but 1 year of that will be served consecutively to Counts 1 and 2 which makes a total of 9 years and 10 months’ imprisonment.