HKSAR v. Lai Mei Tan, Jenny and Another

DCCC 1083/2021

[2023] HKDC 639

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1083 OF 2021

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REASONS FOR VERDICT

1.  D1 faces 3 charges of "Fraud" (Charges 1, 3 and 4). D2 faces a charge of "Conspiracy to defraud" (Charge 2). They both pleaded not guilty to the respective charges.

The Prosecution Case

General issue

2.Wenxin.Xinyangmaojian Investment (HK)  Limited ("WXI")  was incorporated in Hong Kong on 30 October 2013 with Ling Chun Mui (D2)  being its sole director[1]. On 24 October 2014, D2 also became its sole shareholder[2]. On 6 July 2017, Ling Yuen Mei became WXI's sole director.  According to Exhibits P77 and P78, Ling Yuen Mei and Ling Chun Mui have the same Hong Kong Identity Card number.

3.On 31 October 2016, D1 and her husband Sum Wan Piu, Paul jointly applied for a mortgage loan in the sum of $5.5 million from Hang Seng Bank Limited ("HSB")  in respect of a residential unit situated at Bonham Road jointly owned by them[3]. In this mortgage loan application, D1 made representation to HSB that she had been employed by WXI as a sales manager earning a monthly income of $50,000 since June 2016[4].  The prosecution alleges that this is a false representation.  This is Charge 1.

4.Upon D1's request, D2 signed a letter dated 13 April 2018 which bears the letterhead of Xenin.Xinyangmaojian Investment (HK)  Limited ("XXI")  stating that D1 had been employed by XXI as a sales manager with a monthly salary of $50,000 since 1 June 2016[5]. The prosecution alleges that this letter contains material false information and that D2 signed and issued this letter knowing that D1 would use it to apply for loan(s)  from commercial lender(s).  This is Charge 2.

5.On 13 June 2017, D1 applied to be a member of Promise (Hong Kong)  Co., Limited ("Promise").  D1 made representation to Promise that she had been employed by WXI as a merchandising officer earning a monthly income of $48,500 since June 2016[6].  Based on the information provided by D1, Promise granted her 2 revolving loans respectively on 13 June 2017 and 2 March 2018.

6.On 25 April 2018, Madam Lau (PW4), a Loan Officer of Promise, contacted D1 to promote the latest loan offer.  D1 indicated to PW4 that she would like to borrow $300,000.  On the same day, D1 attended a Promise branch to meet with PW4.  D1 informed PW4 that there was no change in her employment status, income or other relevant information.  She also presented to PW4 the XXI letter signed by D2 dated 13 April 2018 and other supporting documents[7].  The prosecution alleges that D1 made a false representation to Promise in respect of her 3^rd loan.  This is Charge 3.

7.On 28 May 2018, D1 applied for a personal loan in the sum of $450,000 from Easy One Finance Limited ("Easy One").  Her application was handled by Mr. Chung (PW6), a Senior Loan Processing Officer of Easy One [8]. In this loan application, D1 made representation to Easy One that she had been employed by WXI as a sales manager earning a monthly income of $50,000 since June 2016[9]. The prosecution alleges that this is a false representation.  This is Charge 4.

8.All 3 loans in relation to Charges 1, 3 and 4 have been repaid in full before D1 was arrested by the ICAC[10].

Special issue

9.The prosecution seeks to rely on D1's video recorded interview (Exhibit PP104)  which contains admissions that she was not a sales manager of WXI and that she did not receive a monthly salary of $50,000.

10.D1's counsel Mr. Chan objected to the production of Exhibit PP104.  He submitted his written grounds of objection.  I need not repeat them here.

11.The prosecution called ICAC Senior Investigator Wong and former Assistant Investigator Ma (PWs 10 and 11 respectively)  to give evidence.  They accounted for the arrest of D1 and all the events leading up to her video recorded interview.  They all denied the allegations of improper conduct put to them by Mr. Chan.

The Defence Case

Special issue

12.D1 elected to give evidence but did not call any witness.

13.She basically repeated the allegedly improper conduct of PW10 as stated in the Grounds of Objection prepared by Mr. Chan. I will deal with her evidence in the subsequent paragraphs.

General issue

14.D1 elected to give evidence but did not call any witness. In gist, D1 gave her version that she was invited by D2 to work as a sales manager of WXI because D1 could refer friends and relatives to purchase tea leaves and antiques from D2. D1 has also pointed out bank records which she claimed to be payments of salary and commission by D2.

15.D2 elected not to give evidence or call any witness. This is her right; I drew no adverse inference against her in this regard.

Assessment and Analysis of Evidence

Special issue

16.The burden of proof is on the prosecution to prove the voluntariness of D1 in relation to Exhibit PP104beyond reasonable doubt.

17.D1 has a clear record. I have directed myself on her good character accordingly.

18.I have carefully assessed the evidence of all witnesses (including D1 herself)  and observed their demeanour in the witness box. I find PWs 10 and 11 honest and reliable. I accept their evidence in full. In my view, none of the allegations against PW10, even if true, amount to any threat or oppression against D1.

19.D1 kept repeating that she was in fear, but was unable to elaborate on what she was afraid of. Even in her own evidence, she was unable to say what consequences PW10 had told her that she might face, if she did not "confess" or "cooperate". Furthermore, if D1 was so afraid of PW10 and just wanted to say whatever pleases him, it would have been reasonable for her to directly ask PW10 what he wanted her say. But she said she did not. She also agreed that PW10 did not tell her what he wanted to her say. Mr. Chan complained that PW10's questions and the way he asked his questions amounted to cross-examination. I simply disagree. PW10 was merely telling D1 what the allegations against her were, which was a fair and proper way to conduct an interview with a suspect.

20.I have watched the video recorded interview. D1's replies and her demeanour did not show a hint of involuntariness during the interview. She has denied involvement or claimed no knowledge of matters far more than making admissions.

21.Based on the reasons stated above, I am satisfied beyond reasonable doubt that D1 gave her replies and answers in the video recorded interview voluntarily. I see no reasons for exercising my discretion to exclude any of them. I rule that Exhibit PP104, its transcript and its certified English translation are all admissible. They will form part of the prosecution evidence.

General issue

22.The burden of proof is on the prosecution to prove each element of the offence beyond reasonable doubt.

23.I bear in mind D1's and D2's clear record. I have also reminded myself that each defendant's admissions can only be used against herself and not the other co-defendant.

24.In order to succeed in this case, the prosecution must prove beyond reasonable doubt that during the offence period, D1 was not a sales manager of WXI and that she did not earn a monthly salary of $50,000. At first glance, D1's admissions seem to be sufficient.

25.On the other hand, there is undisputed evidence that D2 has reported to her Mandatory Provident Fund ("MPF")  service provider that D1 was employed by WXI from June 2016 to December 2017 with a monthly income of $50,000[11]. The respective monthly contributions by employer and employee were duly made[12].

26.I accept that MPF contributions may not be conclusive evidence of employment. I also understand that MPF contributions could for whatever reason be used as proof of a concocted employment. If that was the case, the alleged employer would no doubt attract unnecessary and unwanted liabilities arising from the concocted employment (in the capacity as an employer).

27.In the present case, I do not see any reason why D2 would "cook up" 19 bogus monthly MPF contribution for the benefit of D1. Genuine employer contribution in a total sum of $28,500 was made. Even if D2 wanted to assist D1 with her loan application(s), contribution of a few months would do the trick. There is no need to go all 19 months. Furthermore, based on common sense, unless the employee's monthly income is true, there is no advantage for D2 to falsely report $50,000, a figure which would attract the maximum amount of employer contribution, to the MPF service provider. Reporting a lower figure would no doubt result in a lesser amount of employer contribution.

28.According to D1 in her video recorded interview, her income from WXI was at most about $10,000 in total[13]. I cannot think of any reason why D2 would inflate D1's income to $50,000, a figure which could only be to D2's detriment in every aspect, especially potential employment disputes.

29.As there is conflicting evidence within the prosecution case, I am inclined to accept the evidence which is advantageous to both defendants. In other words, I should proceed on the basis that D1 was possibly employed by WXI from June 2016 to December 2017 with a monthly income of $50,000.

30.With this finding of fact, the prosecution has failed to prove Charge 1 against D1 beyond reasonable doubt. Accordingly, I find her not guilty of Charge 1.

31.Regarding Charge 2, I find that there is insufficient evidence proving the conspiracy between D1 and D2. I accept D2's counsel Mr. Tracy's submission that the wording of Exhibit P22 is unclear. Arguably, it could be said to be a proof of employment (albeit past employment)  instead of a proof of current income. In relation to the date of Exhibit P22, D2 has already explained in her video recorded interview that it was her oversight. She did not pay attention to the date when she signed the letter[14].

32.On this basis, I find D2 not guilty of Charge 2.

33.Regarding Charges 3 and 4, I do not find D1's evidence credible or reliable. The so-called bank deposits (as proof of her income)  were made by her and the numbers do not tally. Her evidence in court is completely different from her video recorded interview. She claimed that she told lies in her interview (when most of which were exculpatory)  out of fear. I do not believe a word of her evidence in court.

34.As a juror, I find there is cogent and convincing evidence that WXI had ceased to operate in December 2017[15]. D1 was not employed and could not have been employed by WXI with a monthly income of $50,000 in April 2018[16]. In other words, her loan applications to Promise and Easy One contained material false representations. The prosecution has proved Charges 3 and 4 beyond reasonable doubt. Accordingly, I find D1 guilty of both charges.