HKSAR v. Leung Wai Kin

CACC 64/2024, [2025] HKCA 279

On Appeal From [2024] HKCFI 857

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 64 OF 2024

(ON APPEAL FROM HCCC NO 182 OF 2023)

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REASONS FOR JUDGMENT

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1.The applicant (who was D3) pleaded guilty at committal proceedings on 10 July 2023 in the Magistrate’s Court to two charges of conspiracy to defraud (Charges 2 and 3 respectively), contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200. He had been jointly charged with D1 and D2, who also pleaded guilty at the same time. All three defendants were duly committed to the High Court for sentence.

2.The applicant was sentenced on 1 March 2024 by Anna Lai J in the High Court to an overall sentence of 4½ years’ imprisonment and now seeks leave to appeal against sentence.

Summary of facts

3.The events in Charge 2 took place between December 2017 and May 2019. D2 took out a high-coverage critical-illness policy and a medical insurance policy from AIA International Limited (“AIA”) with D1, who was an insurance agent with AIA. The two of them agreed to make false claims by arranging a cancer patient to falsely pose as D2 and to attend medical examinations and treatment. D1 and D2 agreed to share equally any compensation obtained from AIA, after deducting the costs incurred. They then recruited middlemen to look for suitable cancer patients for the scam.

4.In November 2018, through the introduction of a middleman called Tse Wai Yip, and another middleman known at that time as “Joe Sir”, D1 and D2 came to know the applicant, who was suffering from follicular lymphoma. The applicant agreed to pose as D2 in his medical examinations and treatment for a reward of HK$130,000. All of the medical fees incurred by the applicant in his 37 medical consultations were paid by D1. As a result of the false claims submitted by D2 through D1, AIA approved the critical-illness claims and paid out HK$8,834,862.50 in compensation to D2. This formed the subject-matter of Charge 2.

5.Furthermore, AIA also paid HK$987,036.41 to D2 as reimbursement for the medical expenses incurred by D3 in his 37 medical consultations. This formed the subject-matter of Charge 3.

6.The total amount of loss suffered by AIA in respect of Charges 2 and 3 was, therefore, HK$9,821,898.91.

7.Bank records revealed that upon receiving the compensation from AIA, D2 paid HK$6,930,000 to D1, and D1 transferred HK$32,000 to the applicant. The overall benefits received by the applicant included the said HK$32,000 as well as the medical examinations or treatment amounting to HK$987,036.41. Thus, the total overall benefit received by the applicant was just over HK$1 million.

Mitigation

8.At the time of mitigation, the applicant was a decoration worker earning about HK$10,000 per month. He was 42 years of age, married with a young daughter[1]. The applicant was first diagnosed with follicular lymphoma in 2017. He had recovered by the end of 2017 following treatment[2]. However, the applicant suffered a relapse in 2018[3]. He was advised at the time that he required targeted treatment but the funding scheme under the Social Welfare Department would only cover some of the medical expenses[4]. At this juncture, the applicant was approached by Joe Sir with a scheme, in which the applicant agreed that he would pose as D2 in order to obtain the medical treatment he required. The applicant was eventually given HK$32,000 as a reward for his participation in the scheme[5].

9.It was said by counsel on behalf of the applicant (not Mr Davies, who now appears for the applicant) that the applicant was genuinely remorseful[6], and was willing to pay some partial restitution to AIA. However, the offer of restitution was not made until February 2024[7]. Although the amount was not significant compared with the overall loss suffered by AIA, it represented the whole of the applicant’s savings and was characterised by his counsel as “a gesture of sincerity”[8].

10.His counsel further suggested that the applicant was acting under duress at the time, given the circumstances of his cancer and the fact that the applicant was in dire need of medical treatment[9]. He was suffering severe financial hardship when he committed the offences, which were said to be out of character for him[10].

11.It was further submitted that the applicant had provided useful assistance to the authorities by giving a non-prejudicial statement, making a full and frank disclosure of events in the present case and implicating others[11].

Reasons for sentence

Circumstances of the applicant

12.The judge said she would ignore the applicant’s two previous convictions but declined to treat him as a man of positive good character, notwithstanding his record of service to the community[12]. Nor did she accept that the applicant had been under any duress in entering into the conspiracy[13].

13.In relation to the issue of restitution, the judge noted that the offer of recompense was not made by the applicant until February 2024. She was of the view that although late restitution still amounted to mitigation, the offer of HK$32,000 restitution was “trivial” against the loss suffered by AIA and the benefit received by the applicant[14].

14.The judge considered the applicant’s offer of assistance to the authorities but held that, given that the information supplied by the applicant was not critical to the present case and no actual prosecution had yet been brought as a result of this assistance, she would not give any reduction in sentence for this factor at that stage[15].

Starting point

15.The judge considered that whilst D2 and the applicant had played a lesser role than D1, they had each played an essential role, otherwise the scheme in Charges 2 and 3 would not have succeeded[16].

16.The judge considered the different roles played by D1, D2 and the applicant, the long period of time over which the fraud was carried out, and the breach of trust by D1. Noting that there were no specific guidelines for conspiracy to defraud, she considered, amongst other things, the circumstances of the case, the complexity of the scheme, the amount of money involved, the different levels of culpability of each accused and the small partial restitution by the applicant[17].

17.The judge considered that Charge 2 involved HK$8.8 million, whilst charge 3 involved HK$987,000; the total loss suffered by AIA being HK$9.8 million and the benefit received by the applicant being about HK$1 million[18].

18.Having considered the different roles played by D1, D2 and the applicant, the judge adopted a starting point of 6½ years’ imprisonment for Charge 2 in respect of the applicant; and 2½ years for Charge 3, six months of which was to be served consecutively to Charge 2[19]. She gave the applicant a full one-third discount and then a further 2 months’ reduction for the small partial restitution, making a final sentence of 4½ years’ imprisonment[20].

Grounds of appeal against sentence and the respective arguments

19.Two grounds of appeal against sentence have been advanced by Mr Davies on the applicant’s behalf. First, it is argued that the starting point taken by the judge was too high (Ground 1); secondly, it is complained that the judge did not give the applicant any credit for his assistance to the authorities (Ground 2).

20.In respect of Ground 1, it was argued that there was no breach of trust on the part of the applicant, yet an insufficient distinction was made between D1 and the applicant, bearing in mind the significant difference in amount received by each man and the fact that D1 (unlike the applicant) was clearly in breach of trust of his employers AIA.

21.In response, Ms Parwani for the respondent accepted that the commission of the offences by the applicant did not involve a breach of trust and that a slightly lower starting point should have been adopted. However, she submitted that this difference was already appropriately reflected in the sentence imposed by the judge. The starting point taken for the applicant was already 13.3% lower than that of D1.

22.In his supplemental written submission, the applicant relies on the case of HKSAR v Wong Ka Wai [2018] HKCA 541, at [21] and submits that the judge erred in failing to consider the applicant’s actual knowledge of the extent and the value of the fraud. It is said that the applicant was unaware of the details and the extent of the fraudulent scheme.

23.The respondent submitted that the applicant must have known what he was receiving from the conspiracy. The starting point in respect of Charges 2 and 3 cannot be criticised as too high, nor was the final sentence manifestly excessive.

24.In relation to Ground 2, the ICAC took a non-prejudicial statement (“NPS”) from the applicant on 11 October 2023. In a subsequent statement, dated 18 January 2024, from ICAC Investigator Chow Wan-lung, he noted that:

(1)  The applicant provided full and frank information in respect of the criminal involvement of Joe Sir and himself[21].

(2)  The information was of practical use for a potential prosecution against Joe Sir. Legal Advice would, however, be sought from the Department of Justice to consider any appropriate charge(s) against Joe Sir[22].

(3)  The applicant undertook to be a witness testifying against Joe Sir in any future court proceedings[23].

25.Mr Davies contended that, since the applicant had provided the authorities with useful information, and had offered to testify against his co-conspirators, he should be entitled to a reduction in sentence.

26.Ms Parwani countered that the approach adopted by the judge[24] was entirely proper. There was already sufficient evidence against D1 and D2 in respect of Charges 2 and 3, and it was not a case that without the applicant’s assistance, D1 and D2 would not have pleaded guilty. In respect of Joe Sir, the information provided by the applicant had not up until the present day led to any prosecution or chain of enquiry so as to point to other potential offenders.

Consideration

27.I consider that if the starting point for Charge 2 in respect of D1 was 7½ years’ imprisonment, whereas in respect of the applicant it was 6½ years’ imprisonment, it is reasonably arguable that insufficient distinction was made between the roles of the two men. D1 was clearly the architect and mastermind of the entire conspiracy and was in clear breach of trust of his employers AIA. Moreover, he was the main beneficiary of the scheme, dishonestly obtaining millions of dollars for himself. The applicant came into the conspiracy because he was suffering from cancer, he was not in breach of trust (although he must have known that D1 was), and all the money he received went on his own medical treatment. It is reasonably arguable that the judge did not properly assess the relative culpability as between the applicant and D1. Accordingly, I am prepared to grant leave on Ground 1.

28.It is clear that both D1 and the applicant gave a witness statement implicating Joe Sir, who was actually a named co-conspirator in Charges 2 and 3; that the information the applicant provided was believed by the ICAC to be “of practical use for a potential prosecution” against him; and that he undertook to be a witness against Joe Sir in any subsequent court proceedings. However, it seems that no proceedings were taken against Joe Sir (whose full name is now known) by the Department of Justice, which is perhaps a little surprising, given that Joe Sir was himself a named co-conspirator in the two charges. Nevertheless, an appellate court does not normally get involved with these decisions of prosecuting authorities, unless there is something justifying it in doing so on the face of the papers before the Court.

29.Here, there is an ICAC statement confirming the practical utility of the applicant’s witness statement, as well as information from D1, which tied in with what the applicant was saying. Yet there was no further prosecution. I am prepared to give leave on Ground 2 as well.

30.However, for the purposes of Ground 2, I will order that the Sivan proceedings conducted by the judge between 9:46 and 10:04 am on 28 February 2024 be transcribed and placed before the Court, as well as any judgment in those proceedings if not in transcript form. The Court will then decide to whom, when and how the transcript and judgment (if any) will be communicated for the purposes of the appeal.

31.I also suggest that the Court will be interested in the applicant’s current prognosis. To that end, it would have been wise for the defence to place an updated medical report before the Court at some stage. Since it may be difficult for them to do so whilst the applicant is in custody, I shall order that an updated medical report from the prison authorities be placed before the Court at the appeal in relation to the applicant’s current medical prognosis.

Ms Audrey Parwani SPP, of the Department of Justice, for the Respondent

Mr Oliver Davies, instructed by Vitus Lawyers, assigned by the Director of Legal Aid for the Applicant