COURT: A chain of Japanese-style restaurants by the name of Itamae Sushi operated in Hong Kong. They set up a series of seven individual companies to operate six restaurants in the chain. One of those companies was responsible for supplying food and equipment to each of the restaurants in the chain. The other companies operated the individual restaurants in the chain. The companies were set up between 2004 and 2006.
Tong Chi-ling (hereafter known as “the accused”) was employed as the manager of the accounting department of the chain of restaurants. His work included the recording of daily expenses of each branch and to receive the cash takings of each branch on a daily basis. He was not authorised to take cash directly from the branches but received it from the chief manager of the chain. The accused was, nevertheless, a person in a position of trust.
In 2007, the auditor of the chain asked the accused for documents concerning the chain in order to complete the audit. By mid-2007, the auditor was sufficiently concerned to report to a director of the chain of the restaurants that the accused had failed to provide the documents on request. A meeting was held, and shortly after that the accused left Hong Kong.
A subsequent investigation found that the accused had forged bank-in slips showing that the cash collected from the branches of each of the restaurants was deposited in the accounts of the companies. The deposits were less than the actual takings, and viewed as a total, the overall sum was $24,195,330.20, and the matter was reported to the police. The charges represent the theft of this total broken down into individual companies which held each of the six restaurants. That breakdown of the theft in each charge is as follows:
Charge 1
Between 5 August 2005 and 21 September 2007, the sum of $20,214,503.10 belonging to Joyful Gain Limited.
Charge 2
On 27 December 2006, the sum of $29,998.30 belonging to Sander Limited.
Charge 3
Between 8 January 2007 and 20 September 2007, the sum of $2,405,177.00 belonging to Smart Wave Limited.
Charge 4
Between 10 April 2007 and 17 September 2007, the sum of $1,272,405.10 belonging to Charm Gold Limited.
Charge 5
On 12 April 2007, the sum of $145,824.60 belonging to Perfect Plan Limited.
Charge 6
On 13 April 2007, the sum of $127,422.10 belonging to Wise Master Development Limited.
The accused was eventually located in July 2019. He was contacted by the police and he told them he would return to his address at a particular time, but in fact he was stopped and arrested when he was about to leave Hong Kong through the Lo Wu Control Point on 17 July 2019.
Following his arrest, he submitted to a video-recorded interview under caution and admitted as follows:
(1) He stole cash from the restaurant by pocketing the cash which was supposed to be deposited into the bank account for each restaurant.
(2) He concealed his act of theft by forging bank-in slips with a typewriter in his office. He concealed the stolen amounts by characterising them as expenses on the balance sheet. He used all the money in gambling.
(3) He explained the mechanics of how his defalcations occurred.
(4) He admitted that he had told one of the accounting staff in an email that he had stolen between 10 million and 20 million from the chain of restaurants.
(5) In the result, the accused was shown a series of bank-in slips and confirmed the forged nature of these, and that he had stolen a total of $24,195,330.20 from the restaurants.
Procedural History
The accused was put up before a magistrate following his arrest. In the result, on 11 January 2021, before Mr Tang Siu-hung, sitting as a permanent magistrate in the Eastern Magistracy, the accused pleaded guilty to the charges which appear in the record. The learned magistrate committed the accused to this court for sentence.
At a previous hearing in this court before me, the accused has confirmed his plea and confirmed his admission to the Summary of Facts which appear in the file. Accordingly, he is convicted.
Background and Mitigation
The accused is a 50-year-old permanent resident of Hong Kong. He has one previous conviction for theft. However, that occurred in 1988 and the accused was bound over for 12 months. I do not propose to take that into account in sentencing.
The accused has tertiary qualifications in accounting from Queensland University of Technology in 1992. He has further Hong Kong qualifications. He was employed by the chain of restaurants between year 2000 and 2007. He had a monthly salary of $17,000. Between 2016 and 2019, when he was arrested, he was working as a bus driver for KMB. There he had a salary of $25,000 when he was arrested.
The accused explained his conduct in taking the money. He said that he did this because he became financially stressed following the birth of his only child. Further, he had become a gambling addict and lost all the money in the casinos in Macau. These are explanations but hardly justifications.
After the accused left Hong Kong, he went to Shenzhen and lived there from October 2007. Clearly, he left to avoid the inevitable detection of his criminal conduct. Obviously, his former employers would also have an utterly unanswerable civil claim against him as well. He came back to Hong Kong in early 2016, being prepared to face arrest should that happen. To his complete surprise, he was not arrested. He then lived an unexceptional life in Hong Kong, and he lived with his son and he was driving a bus for KMB. However, when he was finally contacted by the police, once again he attempted to run. Plainly, facing up to responsibility was not exactly high on his agenda. He was, as I have noted, intercepted at the Lo Wu border place.
The accused is divorced. He had married in 2002 and the divorce occurred in 2019. They have one son aged 18.
Sentencing Principles - Theft Through a Breach of Trust, Guidelines
The crime of theft can be committed in a multitude of ways. The degree of seriousness varies. On any view, the theft in this case is a theft involving a breach of trust. Section 9 of the Theft Ordinance provides for a maximum penalty for theft of 10 years’ imprisonment. What has occurred in the instant case is a series of theft over a substantial period of time. Looking at the charges, some of them represent a series of takings over a long period of time and some represent a single taking on a particular day. Three of the charges make up the bulk of the money taken by the accused.
Appellate courts have provided guidance as to the proper approach to sentencing in theft cases involving a breach of trust. As a matter of history, we first see this in R v Barrick (1985) 81 Cr App R 78 (CA). That was followed for many years in Hong Kong. The guidelines in Barrick were revisited in R v Clark [1998] 2 Cr App Rep 137. In turn, the courts of Hong Kong followed Clark. An application of the Barrick and Clark guidelines appears in the case of Secretary of Justice v Chan Boon Ning CAAR 1/2002 where the chairman of a publicly listed company stole HK$81 million. That case was characterised as a breach of trust and the Court of Appeal held that a starting point after trial of 9 years was appropriate.
The guidelines in Barrick and Clark suggested a range of sentence by reference to the British pound. However, inflation, exchange rates and a recognition of the circumstances germane to Hong Kong motivated the establishment of guidelines set out in the Court of Appeal in HKSAR v Cheung Mee Kiu [2008] 1 HKC 113. Shortly after that, the Court of Appeal revisited the guidelines in Cheung Mee Kiu in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017. The amount stolen is an important component but only one component of the approach to sentence articulated in these decisions. What has been retained from Barrick is the consideration of a range of factors germane to sentencing in this kind of case.
In Barrick, Lord Taylor, CJ considered the kind of offender which fell for consideration under this heading. He observed:
“The type of case with which we are concerned is where a person in a position of trust, for example, an accountant, solicitor, bank employee or postman has used that privileged and trusted position to defraud his partners or clients or employers or the general public of sizable sums of money. He will usually, as in this case, be a person of hitherto impeccable character. It is practically certain, again as in this case, that he will never offend again and, in the nature of things, he will never again in his life be able to secure similar employment with all that means in the shape of disgrace for himself and hardship for himself and also his family.”
In many respects, it is almost as if Lord Taylor was writing that passage for the accused in this case. His Lordship also articulated a series of factors for consideration in the imposition of sentence as follows:
(i) the quality and degree of trust reposed in the offender including his rank;
(ii) the period over which the fraud or the thefts have been perpetrated;
(iii) the use to which the money or property dishonestly taken was put;
(iv) the effect upon the victim;
(v) the impact of the offences on the public and public confidence;
(vi) the effect upon fellow-employees or partners;
(vii) the effect on the offender himself;
(viii) his own history; and
(ix) those matters in mitigation special to himself, such as illness, being placed under great strain by excessive responsibility or the like; where that happens, where there has been a long delay, say, over two years between being confronted with his dishonesty by his professional body or the police and the start of the trial; and finally, any help given to him by the police.”
The guidelines articulated in Cheung Mee Kiu, Ng Kwok Wing, as far as the guideline for sentencing by reference to the money taken is as follows:
$1 million to $3 million - 3 to 5 years;
$3 million to $15 million - 5 to 10 years.
Self-evidently, the suggested sentences must be for the overall total of the amount taken because 10 years is the maximum sentence under section 9 of the Theft Ordinance and there are many cases of thefts of a great deal more than $15 million.
In HKSAR v Cheung Curtis Ka Kim [2018] 1 HKC 419 in which the Court of Appeal considered the accounts of making entries in certain documents by deception and theft in excess of 25 million, in that case, a sentence of 8½ years after a guilty plea was “not a day too long”. That involved a shameless taking which was characterised by Macrae VP as “an egregious example of selfishness and greed. It does not need much imagination to realise that at least two lives had been ruined by the applicant’s exploits.” Together with the shameless greed, the accused in that case had simply disappeared but when detected in the United States, resisted extradition for an excess of two years. Something of the order of 19 years elapsed between the criminal activity and his final conviction and sentence.
Counsel for the accused referred the court to HKSAR v Wong Chor Wo CACC 314/2006. In this case, the appellant stole a total of just over HK$20 million. The appellant was the chairman of a listed company. The Court of Appeal in its consideration of the appropriate sentence on the appeal applied the guidelines in Cheung Mee Kiu (above). It is noteworthy in this case that there were also false statement charges in connection with accounting matters. In giving the judgment of the Court of Appeal, Saunders J held that an overall term of 6 years was appropriate. However, a little later in his judgment, he observed that a sentence in excess of 6 years could well be justified. While the amount stolen is not the final determinant, there are significant differences between the amount stolen in Wong Chor Wo and the present case.
Mode of Sentencing
Where there is a multiplicity of offences before the court, the sentence should always be imposed for each individual sentence. Each offence required a sentence which properly reflected the criminality in its commission (see HKSAR v Chan Nai Keung & Ors [2008] 2 HKC 378. The individual sentences in such a case should, where appropriate, be adjusted for totality to reflect the overall criminality of the present case. That is especially important in a case where, as here, there has been a deliberate series of taking over a substantial period of time.
Pausing there, I should add that the accused having pleaded guilty at the earliest practicable opportunity is entitled to a discount from the sentence which would otherwise have applied of one-third.
Application of Guidelines to the Present Case
It is clear that the amount of money taken, just over 24 million, together with the degree of trust reposed in the accused are by far the most aggravating features, the defalcations covered up in a manner which was a shameless example of false accounting. The conduct was not one simple momentary act of mindless greed but a calculated series of taking over a substantial time period. There were no charges of false accounting. There is no evidence as to the impact of the takings on the restaurant chain. That could be an aggravating feature. It takes little imagination to see that that would have had a substantial impact on the restaurants. It is, perhaps, regrettable that there is no evidence of this, and accordingly, it is not something that I propose to take into account.
There has been no attempt at repayment, that is, as a result of the explanation for the series of defalcations to be as a result of a gambling habit.
There has been, as far as I can see, full admissions made, and those admissions were made in the face of an audit of the company. I do not see, for example, the defalcations unknown to the company were revealed by the accused. Nevertheless, in the circumstances, the full admissions made to the police are conceivably a tangible indication of remorse, so is the plea of guilty.
Although the court is required to sentence, evaluating the sentence for each of the separate charges, regard must be had to the total amount taken because it must be to this that the guidelines are referable.
Disposition
It seems to me that in the application of the guidelines, the appropriate sentences should be as follows:
|
Count/Amount stolen |
Starting point |
Sentence after discount |
|
Count 1 - $20,214,503.10 |
9 years |
6 years |
|
Count 2 - $29,998.30 |
6 months |
4 months |
|
Count 3 - $2,405,177 |
2 ½ years |
1 year and 8 months |
|
Count 4 - $1,272,405.10 |
2 years |
16 months |
|
Count 5 - $145,824.60 |
12 months |
8 months |
|
Count 6 - $127,422.10 |
9 months |
6 months |
As a totality, 10 years and 6 months is too large. I think that the correct combination of justice and mercy would produce a result where Counts 2, 4, 5 and 6 should be served concurrently with Count 1. 1 year of Count 3 is to be served concurrently with Count 1, and 8 months of Count 3 is to be served consecutively.
Would the accused please stand up? Accused, stand up, please. You have behaved disgracefully, absolutely disgracefully, and the very least sentence I can pass upon you is 6 years and 8 months.