HKSAR v. Lee Che Tat
Read the full judgment text of DCCC 667/2021 on BabelCite. This District Court judgment was delivered on 14 January 2022.
1. Mr Lee pleaded guilty before me to 14 charges of Fraud, contrary to section 16A of the Theft Ordinance, Cap 210.
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DCCC 667/2021 [2022] HKDC 74 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 667 OF 2021 ________________________
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________________________ REASONS FOR SENTENCE ________________________ 1.Mr Lee pleaded guilty before me to 14 charges of Fraud, contrary to section 16A of the Theft Ordinance, Cap 210. 2.The particulars of those charges are that he, during period A, in Hong Kong, by deceit, namely by falsely representing to AIA International Limited (formerly known as American International Assurance Company (Bermuda) Limited) (“AIA”) that B (the policyholder of insurance policy/ies numbered C) had applied for D under the said insurance policy/ies and had signed the relevant documents for making such application(s), and with intent to defraud, induced AIA to commit acts or make omissions which resulted in prejudice or a substantial risk of prejudice to AIA and the said policyholder, namely E under the said insurance policy/ies in the total amount of F. 3.For Charge 1, the particulars are:-
4.For Charge 2, the particulars are:-
5.For Charge 3, the particulars are:-
6.For Charge 4, the particulars are:-
7.For Charge 5, the particulars are:-
8.For Charge 6, the particulars are:-
9.For Charge 7, the particulars are:-
10.For Charge 8, the particulars are:-
11.For Charge 9, the particulars are:-
12.For Charge 10, the particulars are:-
13.For Charge 11, the particulars are:-
14.For Charge 12, the particulars are:-
15.For Charge 13, the particulars are:-
16.For Charge 14, the particulars are:-
Facts admitted by Mr Lee Charge 1 17.PW7 came to know Mr Lee in 1999 and later subscribed an insurance policy with AIA through Mr Lee. She paid cash to Mr Lee for settling the insurance premiums. She had never applied for any loans or made any withdrawals under the insurance policy. 18.During the charge period between 2004 and 2007, unbeknown to PW7, Mr Lee made 3 loan applications and one withdrawal application with AIA under the said insurance policy by forging PW7’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policy and another insurance policy. Pursuant to the said applications, AIA provided loans and issued a payment from the savings under the said insurance policy held by PW7 in the total amount of USD2,948.56, which was used for paying insurance premiums without PW7’s authorization, while Mr Lee misappropriated the cash paid to him for his own use. Charge 2 19.PW8 came to know Mr Lee in 1992 and later subscribed two insurance policies with AIA through Mr Lee. He had never applied for any loans or made any withdrawals under the said insurance policies. 20.Sometime in 2004, PW8 lent a sum of money to Mr Lee. During the charge period in August 2004, unbeknown to PW8, Mr Lee made 2 loan applications with AIA under the said insurance policies by forging PW8’s signature on the relevant application forms. Pursuant to the said applications, AIA provided loans under the said insurance policies in 2 sums of USD2,456.47 and HKD15,000, which were issued by way of cheques payable to PW8 and passed to Mr Lee (as PW8’s insurance agent) for handling. Mr Lee subsequently deposited the cheques into PW8’s bank account and told PW8 that the deposited sums were his payment of the money lent to him by PW8. Charge 3 21.PW3 came to know Mr Lee in 1997 and later subscribed 3 insurance policies with AIA through Mr Lee. He had transferred money into Mr Lee’s personal bank account for settling the premiums for the said insurance policies. He had never applied for any loans or made any withdrawals under the said insurance policies. 22.During the charge period between 2004 and 2006, unbeknown to PW3, Mr Lee made 3 loan applications and 2 withdrawal applications with AIA under the said insurance policies by forging PW3’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies as well as other insurance policies. Mr Lee also made one loan application with AIA under one of the said 3 insurance policies by forging PW3’s signature on the relevant application form, with the instruction that the sum be paid by way of a cheque payable to PW3. 23.Pursuant to the said applications:-
24.On 14 September 2016, Mr Lee further applied to change PW3’s contact address with AIA to his own address by forging PW3’s signature on the relevant application form, so as to prevent PW3 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW3’s insurance policies. Charge 4 25.PW14 subscribed an insurance policy with AIA through Mr Lee. He had paid cash to Mr Lee for settling the premiums for the said insurance policy. He had never applied for any loans or made any withdrawals under the said insurance policy. 26.During the charge period between 2006 and 2018, unbeknown to PW14, Mr Lee made 5 loan applications with AIA under the said insurance policy by forging PW14’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policy. Pursuant to the said applications, AIA provided loans under the said insurance policy held by PW14 in the total amount of USD8,259.80, which was used for paying insurance premiums without PW14’s authorization, while Mr Lee had misappropriated the money paid to him by PW14 for his own use. 27.On 25 June 2013 and 20 August 2018, Mr Lee further applied to change PW14’s contact address with AIA to his own addresses by forging PW14’s signature on the relevant application forms, so as to prevent PW14 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW14’s insurance policy. Charge 5 28.PW9 came to know Mr Lee in 2006 and later subscribed 2 insurance policies with AIA through Mr Lee. He had paid cash to Mr Lee for settling the premiums for the said insurance policies. He had never applied for any loans or made any withdrawals under the said insurance policies. 29.During the charge period between 2009 and 2019, unbeknown to PW9, Mr Lee made 8 loan applications with AIA under the said insurance policies by forging PW9’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies. Pursuant to the said applications, AIA provided loans under the said insurance policies held by PW9 in the total amount of USD3,981.70, which was used for paying insurance premiums without PW9’s authorization, while Mr Lee had misappropriated the money paid to him by PW9 for his own use. Charge 6 30.PW6 was PW7’s mother. She subscribed an insurance policy with AIA through Mr Lee, while the premiums for the insurance policy had been paid by PW7 to Mr Lee on her behalf. PW6 had never applied for any loans or made any withdrawals under the said insurance policy. 31.On 18 February 2010, unbeknown to PW6, Mr Lee made a loan application with AIA under the said insurance policy by forging PW6’s signature on the relevant application form with the instruction that the sum applied for be used for settling the premiums for the said insurance policy. Pursuant to the said application, AIA provided a loan under the said insurance policy held by PW6 in the total amount of USD391.25, which was used for paying insurance premiums without PW6’s authorization, while Mr Lee had misappropriated the money paid to him by PW7 for his own use. Charge 7 32.PW15 was introduced to Mr Lee by her then boyfriend PW16 (now her husband and also victim of Charge 13) in 1993. She later subscribed two insurance policies with AIA through Mr Lee, while the premiums for the insurance policies had been paid by PW16 on her behalf. PW15 had never applied for any loans or made any withdrawals under the said insurance policies. 33.During the charge period between 2010 and 2017, unbeknown to PW15, Mr Lee made 4 loan applications and 2 withdrawal applications with AIA under the said insurance policies by forging PW15’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies. Pursuant to the said applications, AIA provided loans and issued payments from the savings under the said insurance policies held by PW15 in the total amount of USD8,137.20 which were used for paying insurance premiums without PW15’s authorization, while Mr Lee had appropriated the money paid to him by PW16 for his own use. 34.On 22 July 2015, D further applied to change PW15’s contact address with AIA to his own address by forging PW15’s signature on the relevant application form, so as to prevent PW15 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW15’s insurance policies. Charge 8 35.PW10 was introduced to Mr Lee by his (PW10’s) sister PW12. He then subscribed an insurance policy for the benefit of his son PW11 (under 18) with AIA through Mr Lee. The premiums for the insurance policy had been paid by PW12 to Mr Lee on PW10’s behalf. Neither PW10 nor PW11 had applied for any loans or made any withdrawals under the said insurance policy. 36.On 30 March 2011, unbeknown to PW10 and PW11, Mr Lee made a loan application with AIA under the said insurance policy by forging PW10’s signature on the relevant application form with the instruction that the sum applied for be used for settling the premiums for the said insurance policy. Pursuant to the said application, AIA provided a loan under the said insurance policy in the total amount of USD707.43, which was used for paying insurance premiums without PW10 or PW11’s authorization, while Mr Lee had misappropriated the money paid to him by PW12 for his own use. Charge 9 37.PW17 joined AIA and had become acquainted with Mr Lee. After she had resigned from AIA in 2012, her 2 insurance policies held with AIA were managed by Mr Lee. She had lent money to Mr Lee on a number of occasions when Mr Lee told her that he was in financial difficulty. She had never applied for any loans or made any withdrawals under the said insurance policies. 38.During the charge period between 2011 and 2017, unbeknown to PW17, Mr Lee made a total of 21 loan applications and 2 withdrawal applications with AIA under the said insurance policies, as well as an application for the surrender of one of the said insurance policies, by forging PW17’s signature on the relevant application forms with the instructions that the sums be paid by way of cheques payable to PW17. Mr Lee also made a loan application and 5 withdrawal applications with AIA under the said insurance policies by forging PW17’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies and other insurance policies, as well as for taking out new insurance policies with AIA. 39.Pursuant to the said applications:-
40.On 1 March 2013, Mr Lee further applied to change PW17’s contact address with AIA to his own address by forging PW17’s signature on the relevant application form, so as to prevent PW17 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW17’s insurance policies. Charge 10 41.PW13 came to know Mr Lee in 2000 and later subscribed 3 insurance policies with AIA through Mr Lee. He had paid cash to Mr Lee for settling the premiums for the said insurance policies. He had never applied for any loans or made any withdrawals under the said insurance policies. 42.During the charge period between 2011 and 2018, unbeknown to PW13, Mr Lee made 10 loan applications with AIA under the said insurance policies by forging PW13’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies as well as other insurance policies. Pursuant to the said applications, AIA provided loans under the said insurance policies held by PW13 in the total amount of USD8,990.80 and HKD2,408, which were used for paying insurance premiums without PW13’s authorization, while Mr Lee had misappropriated the money paid to him by PW13 for his own use. 43.On 5 March 2018, Mr Lee further applied to change PW13’s contact address with AIA to his own address by forging PW13’s signature on the relevant application form, so as to prevent PW13 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW13’s insurance policies. Charge 11 44.PW5 held 2 insurance policies with AIA which had been managed by Mr Lee as his insurance agent. He had paid cash to Mr Lee for settling the premiums for the said insurance policies. He had never applied for any loans or made any withdrawals under the said insurance policies. 45.During the charge period between 2011 and 2017, unbeknown to PW5, Mr Lee made 6 loan applications with AIA under the said insurance policies by forging PW5’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies as well as other insurance policies. Pursuant to the said applications, AIA provided loans under the said insurance policies held by PW5 in the total amount of USD4,386.70 and HKD55,092, which were used for paying insurance premiums without PW5’s authorization, while Mr Lee had misappropriated the money paid to him by PW5 for his own use. Charge 12 46.PW2 came to know Mr Lee in 1997 and later subscribed an insurance policy with AIA through Mr Lee. He had paid cash to Mr Lee for settling the premiums for the said insurance policy. He had never applied for any loans or made any withdrawals under the said insurance policy. 47.During the charge period between 2011 and 2018, Mr Lee made 2 loan applications and a withdrawal application with AIA under the said insurance policy by forging PW2’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policy as well as other insurance policies. Pursuant to the said applications, AIA provided loans and issued a payment from the savings under the said insurance policy held by PW2 in the total amount of USD4,643.56, which were used for paying insurance premiums without PW2’s authorization, while Mr Lee had misappropriated the money paid to him by PW2 for his own use. Charge 13 48.PW16 was a former schoolmate of Mr Lee and subscribed 6 insurance policies with AIA through Mr Lee. He had paid cash to Mr Lee, and had also transferred money to Mr Lee’s personal bank account and issued cheques in favour of Mr Lee, for settling the premiums for the said insurance policies. He had never applied for any loans or made any withdrawals under the said insurance policies. 49.During the charge period between 2011 and 2019, unbeknown to PW16, Mr Lee made a total of 10 loan applications and 6 withdrawal applications with AIA under the said insurance policies, as well as an application for the surrender of one of the said insurance policies, by forging PW16’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies as well as other insurance policies. Pursuant to the said applications, AIA provided loans and issued payments from the savings under the said insurance policies held by PW16 in the total amount of USD32,978.98, which were used for paying insurance premiums without PW16’s authorization, while Mr Lee had misappropriated the money paid to him by PW16 for his own use. 50.On 31 March 2015 and 23 May 2017, Mr Lee further applied to change PW16’s contact address with AIA to his own address by forging PW16’s signature on the relevant application forms, so as to prevent PW16 from receiving any letters from AIA and discovering the unauthorized applications that he had made under PW16’s insurance policies. Charge 14 51.PW4 was daughter of PW5 (victim of Charge 11). She held 2 insurance policies with AIA, while the premiums for the insurance policies were paid by PW5 to Mr Lee on her behalf. She had never applied for any loans or made any withdrawals under the said insurance policies. 52.During the charge period between 2012 and 2016, unbeknown to PW4, Mr Lee made a loan application and a withdrawal application with AIA under the said insurance policies by forging PW4’s signature on the relevant application forms with the instructions that the sums applied for be used for settling the premiums for the said insurance policies. Pursuant to the said applications, AIA provided a loan and issued a payment from the savings under the said insurance policies held by PW4 in the total amount of USD1,368, which were used for settling insurance premiums without PW4’s authorization, while Mr Lee had misappropriated the money paid to him by PW5 for his own use. Discovery 53.The offences were discovered when PW16 (victim of Charge 13) made an enquiry with AIA about his insurance policies and discovered that applications for loans and withdrawals were made under his insurance policies without his knowledge. PW16 lodged a complaint with AIA, and the matter was referred to PW1, Senior Manager of AIA, for investigation in May 2019. Upon enquiry by PW1, Mr Lee admitted that he had misappropriated the money paid to him by his clients and had forged his clients’ signatures to apply for loans and withdrawals under his clients’ insurance policies for settling their insurance premiums. PW1 then made a police report. Arrest and cautioned statement 54.On 13 June 2019, Mr Lee surrendered himself to the police station and was arrested by the police. In the subsequent cautioned VRI, during which Mr Lee was shown the application forms for each of the above fraudulent applications made under PW2 to PW10 and PW13 to PW17’s insurance policies, Mr Lee admitted that he had forged the relevant policyholder’s signature on each of those application forms. Summary 55.The 14 offences of fraud committed by Mr Lee spanned over a period of almost 15 years (between August 2004 and March 2019) concerned a total of 29 insurance policies held by 14 different policyholders. The total amount involved in the fraudulent applications for loans, withdrawals and policy surrender was approximately HKD1.07 million. Criminal record 56.Mr Lee has a clear record. Antecedents 57.Mr Lee is aged 52 (35 to almost 50 at the time of the offences), educated to secondary school level, now working as a security officer. Mr Lee is married and is living with his wife, son and daughter in private housing in Shatin. Mitigation 58.Mr Lee is unrepresented and mitigated on his own behalf. 59.Mr Lee handed up a total of 12 mitigation letters (all in Chinese) written respectively by himself, his ex-supervisor, ex-colleagues, friends, and clients. His own mitigation doubles up as a set of mitigation submissions and will be dealt with separately. The other mitigation letters generally speak of Mr Lee as a person who is courteous, truthful, responsible, caring and loving to his family, helpful to juniors, upright, and diligent. These persons all asked for a lenient sentence for Mr Lee so that he may turn over a new leaf. 60.The following is a summary of Mr Lee’s mitigation letter cum mitigation submissions. 61.Mr Lee lives with his wife, son (21) and daughter (10), parents-in-law and bother-in-law. Mr Lee’s mother passed away when he was 10; father passed away when he was 27. Mr Lee formed his own family about 2 years after his father died. 62.Mr Lee started working at 18 (year 1987) and joined the insurance field when he was 23 (year 1992) and stayed in the field until 2019 for almost 27 years. He joined AIA in 2002 and left in 2019 because of this case. During this lengthy period, he had taken part in charitable activities organized by AIA. 63.The turning point of his life came in 1997 when the financial storm struck. He had to sell the matrimonial home, a negative asset, in 1999, but was still in debts. The housing rent and other family expenses placed an enormous financial pressure on him to this day. He had also been subsidizing his wife’s beauty parlour business which was not making any profit. 64.In the past 10 odd years, he had forged client’s signatures from time to time. The matter came to light in May 2019 when a client made enquiry with AIA and himself. He admitted his misdeed and turned himself in at the police station and surrendered all the related information to AIA and the police. He disclosed everything to the police to show his genuine remorse. He realized he had made a big mistake and is willing to bear the legal consequences. He asks for a chance and a lenient sentence. 65.During the offences period, he had intermittently repaid the stolen funds into the insurance policies. He did it by means of taking out further loans and making further withdrawals of savings under his clients’ insurance policies and also sometimes using his own money which he claimed came from year-end bonuses and extra commissions. He had not intended to permanently take away the proceeds but only wanted to solve his financial difficulties temporarily from time to time. He agreed with the colloquial phrase of using 6-7 lids to cover 10 buckets so as to allow the cycle of offences to carry on. In the past 10 odd years, his hardship did not enable him to repay the loans. 66.He had already suffered some loss such as losing his “clients’ commissions” accumulated over 17 years and he could not continue to work in the same field. His current income as a security officer is a lot less than previously. Because of a change of job natures, his chance of re-offending is very low. 67.Mr Lee has submitted a number of bilingual certificates to show his participation in various charitable activities. He has also produced his Site Staff Assessment Report as a security officer for the past 2 years. 68.He has produced two newspaper cuttings instancing how two other courts have dealt with cases of wholly different fact matrices. Sentence 69.The maximum sentence in the offence of fraud is 14 years’ imprisonment. There is no sentencing tariff. 70.It is clear to this court that Mr Lee was living above his means throughout this long period of time. Instead of trying to earn some additional income from say a part-time job, he chose to steal. 71.I am convinced that at no time did Mr Lee try to compensate the victim. His motive for putting back money into the insurance policies was so that his game of frauds could carry on unnoticed. 72.The offences committed by Mr Lee are very serious and cut into the integrity of the insurance industry. They also involved breaches of trust both towards the employer and towards the clients where trust is a central feature of the insurance profession. A deterrent sentence is undoubtedly called for. 73.In such cases, a clear record counts for little in terms of mitigation. 74.I take into account the number of offences spanning over almost 15 years and the large number of victims involved and the total amount of just over $1M misappropriated. I take into account the damaging impact of these frauds on the integrity of the insurance industry. On the other hand, I also bear in mind the manner in which these frauds were exercised was not too sophisticated. 75.Everything considered, I feel I am justified in taking a global view of the matter in this case. After taking into account the principle of totality, I adopt a global starting point of 5 years’ imprisonment. 76.Mr Lee pleaded guilty in good time and is therefore entitled to the full 1/3 discount. I cannot see any other mitigating factor of weight to warrant a further discount. 77.I impose the following sentences. (Mr Lee, please stand) 78.For each of Charges 1 to 14, Mr Lee shall go to prison for 20 months. 79.From each of the sentences on Charges 2 to 14 except Charge 9, 1½ month is to run consecutively to one another among themselves, and this is to run consecutively to 2 months of the sentence on Charge 9. This interim result is to run consecutively to the sentence on Charge 1, making an aggregate sentence of 40 months’ imprisonment.
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