HKSAR v. Leung Wai Kin

CACC 64/2024, [2025] HKCA 777

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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Hon Macrae Acting CJHC (giving the Reasons for Judgment of the Court):

1.The appellant (D3 at trial) was granted leave by the Single Judge on 14 March 2025 to appeal against his sentence of 4½ years’ imprisonment imposed on 1 March 2024 in the High Court by Anna Lai J (“the judge”). The sentence followed his pleas of guilty at committal proceedings on 10 July 2023 to two charges of conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200, which became Counts 2 and 3 on an indictment. The grounds on which leave was granted were essentially that the starting point taken by the judge was too high (Ground 1); and, further, that the judge did not give the appellant any credit for his useful assistance to the authorities (Ground 2).

2.The complaint under Ground 1 was that the judge did not properly assess the relative culpability as between the appellant and D1 and D2, bearing in mind that D1 was not only the architect and mastermind of the scheme, as well as its principal beneficiary, but also, unlike the appellant, in a trust relationship with his employer, AIA International Limited (“AIA”). Ground 2 complained that the judge had failed to give any credit for the appellant’s assistance to the ICAC by way of a non-prejudicial statement (“NPS”), which the prosecution considered to be of practical use, even though no prosecution ultimately resulted.

3.On 20 August 2025, having heard argument from the parties, the Court allowed the appellant’s appeal against sentence and indicated that we would hand down our reasons for so doing in writing in due course. These are our reasons.

The facts

4.D1 was an insurance agent employed by AIA. The fraud involved submitting false claims under a high-coverage ‘critical illness’ medical insurance policy, which D2 took out with AIA through the agency of D1. D1 and D2 subsequently looked for a patient, who was suffering from cancer, to pose as D2 and attend medical examinations and receive treatment, so that D1 and D2 could share equally any compensation obtained from AIA under the policy, after deducting the costs incurred.

5.In November 2018, through the introduction of two middlemen, known as Tse Wai-yip and “Joe Sir”, D1 and D2 came to know the appellant, who was suffering from follicular lymphoma. The appellant agreed to pose as D2 for various medical examinations and treatment in return for a reward of HK$130,000, as well as having all his medical fees incurred in what turned out to be 37 subsequent medical consultations paid by D1. AIA duly approved the subsequent critical illness claims submitted by D2 through D1, and paid out a total of HK$8,834,862.50 in compensation to D2. This formed the subject-matter of Count 2. AIA further reimbursed D2 the sum of HK$987,036.41 for expenses incurred in the 37 medical consultations undertaken by the appellant. This formed the subject-matter of Count 3.

6.The total loss suffered by AIA in respect of Counts 2 and 3 was, therefore, HK$9,821,898.91. Bank records revealed that upon receiving the money from AIA, D2 paid out HK$6,930,000 to D1, and D1 transferred HK$32,000 to the appellant. The overall benefits received by the appellant 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 appellant was just over HK$1 million.

Mitigation

7.The appellant was a 42-year-old decoration worker, earning about HK$10,000 per month. He was married with a daughter. He had first been diagnosed with follicular lymphoma in 2017, but recovered following treatment. In 2018, he suffered a relapse, and according to medical advice he required specific targeted cancer treatment; however, funding through a Social Welfare Department scheme would only cover part of his medical expenses[1]. The appellant was then approached by Joe Sir, whom he had known at work since 2000, with a proposal that the appellant should pose as D2 in order to obtain the medical treatment he needed. The appellant agreed to the proposal and was eventually given HK$32,000 as a reward for his participation in the scheme[2].

8.It was submitted that the appellant was genuinely remorseful[3], and had offered to pay partial restitution of about HK$32,000 to AIA about a month before the sentencing hearing[4]; although the amount was not significant compared with the overall loss suffered by AIA, it represented the whole of the appellant’s savings and was characterised by the defence counsel as “a gesture of sincerity”[5]. It was further contended that the appellant was experiencing considerable financial hardship at the time: he was in obvious need of medical treatment and had acted out of character because of his dire financial circumstances.

9.It was also submitted that the appellant had made full and frank disclosure of all relevant events in his NPS, and had implicated others, in particular Joe Sir[6], who had inveigled the appellant into committing the offence. Such information would have been useful to the authorities and the appellant undertook to give evidence should Joe Sir be prosecuted[7].

Reasons for sentence

10.Although the judge ignored the appellant’s two previous convictions, she declined to treat the appellant as a man of positive good character in respect of his record of service to the community; nor did she accept that the appellant had been acting under any duress of circumstance in entering into the conspiracy[8]. As for the offer of compensation, the judge observed that the appellant did not make the offer until February 2024, commenting that the amount offered was a “trivial amount” when set against the ultimate loss suffered by AIA of some HK$9.8 million and the benefit the appellant had actually received[9].

11.Furthermore, having considered the appellant’s assistance to authorities, the judge held that the information supplied was not critical to the present case; moreover, no actual prosecution had yet resulted. Accordingly, it was not appropriate to give any further reduction at the stage of sentence, although the judge did comment that the appellant could bring the matter before the Court of Appeal in due course, if his assistance actually materialised[10].

12.As for the contention that the appellant and D2 had played a lesser role than D1, the judge commented that their roles were nevertheless essential for the fraud to be carried out[11]. Moreover, the fraud had been carried out over a long period of time, and there was a breach of trust by D1. Observing 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 relatively minor partial restitution of the appellant[12].

13.Since the total loss suffered by AIA was some HK$9.8 million and the benefit received by the appellant was about HK$1 million, the judge adopted a starting point of 6½ years’ imprisonment for Count 2 and 2½ years’ imprisonment for Count 3, ordering that 6 months of the sentence on Count 3 was to be served consecutively to Count 2. Giving the appellant a full one-third discount and a further 2 months’ deduction for his minor partial restitution, the judge imposed a total sentence of 4½ years’ imprisonment on the appellant.

Grounds of appeal

14.In respect of Ground 1, Mr Davies on behalf of the appellant argued that there was no breach of trust on the part of the appellant and an insufficient distinction had been drawn between D1 and the appellant: the amount received by each of them was significantly different, yet D1 was clearly in a position of trust with his employer. However, the appellant’s sentence was only about 10% lower than that of D1, and a mere 8% lower than that of D2.

15.He argued that the appellant had played a relatively minor role in the fraud. He had received free medical treatment and very little monetary reward, but was unaware of the details and extent of the fraudulent scheme, including the actual loss suffered by AIA.

16.In respect of Ground 2, it was pointed out that the appellant had provided a NPS on 11 October 2023, which ICAC Investigator Chow Wan-lung, in his statement/report dated 18 January 2024, had characterised as: (1) providing full and frank information in respect of the criminal involvement of Joe Sir[13] and himself; and (2) being of practical use for any potential prosecution against Joe Sir, in which the appellant undertook to be a witness.

17.Mr Davies suggested there was an anomaly if the principal culprit and mastermind, who would normally be more heavily involved in a crime, were to receive a significant reduction in sentence for his assistance, whilst a lesser participant were to receive no reduction because his information had already been disclosed and related by the principal culprit. If, as in this case, D1 received an overall 45% reduction in sentence for his assistance and guilty plea, it would be unfair if the appellant received no reduction at all, whilst nevertheless revealing everything he knew.

Respondent’s submissions

18.In respect of the starting point, Ms Parwani, on behalf of the respondent, submitted that the appellant must have known what he was receiving from the conspiracy. The starting point adopted already appropriately reflected the fact that the appellant’s commission of the offences did not involve a breach of trust. The judge had correctly noted that the defendants’ positions were different, but emphasised that D2 and the appellant had nevertheless played essential roles in the scam.

19.The appellant participated in 37 medical examinations or treatments over a prolonged period of two years. These were not fraudulent: the claims for compensation were. The appellant would have realised he was attending private consultations and the significant value of his lengthy medical treatment. Furthermore, it would have been obvious from his reward and actual benefit over such a long period that this was a large-scale scam. The overall starting point adopted in relation to the appellant for both counts was 9.67% lower than that of D1, which could not be said to be wrong in principle.

20.As for the appellant’s assistance to the authorities, the respondent submitted that it was not appropriate to compare the level of discount given to D1, given that D1 had provided assistance resulting in the prosecution and conviction of two other defendants, which were the subject of Counts 4 to 6. According to the timeline of proceedings, it was only after D1, D2 and the appellant’s pleas of guilty that the appellant had given his NPS to the ICAC. Such assistance had to be of practical use, and the consideration should be the assistance rendered at the time of sentencing. The information provided up until that stage did not lead to any prosecution or chain of enquiry in respect of other potential offenders, and legal advice had at that stage yet to be sought on potential charges against Joe Sir. Given such sequence, the judge’s approach could not be faulted.

21.As a matter of history, in August 2023, the Department of Justice recommended no charge to be laid against the person known as Joe Sir. The appellant did not in his NPS implicate any further persons or provide information which led to other criminal prosecutions.

Discussion

22.It should be firmly understood that insurance fraud is a very serious crime, which affects not only the insurance companies themselves, who risk substantial losses, but also the rest of the community to whom those losses are invariably passed on by way of higher premiums. Such higher premiums can make life extremely difficult for those who are required to obtain insurance in order, for example, to obtain a loan or a mortgage, or who simply need the financial protection which insurance is supposed to offer. Where a breach of trust is involved, such frauds are even more serious and consequential.

23.Although the appellant received the benefit of about HK$1 million in terms of reward and free medical treatment over a 2-year period, we acknowledge that he was not himself in a direct trust relationship with AIA. By contrast, the principal defendant, D1, was in clear breach of trust of his employer, while D2 very much aided and abetted that breach, knowing full well that D1 was defrauding his employer using himself as the vehicle for the fraud. The appellant’s position, however, was somewhat more attenuated, although he too must have appreciated that he was deriving a substantial benefit from the fraud upon AIA, that D1 was the trusted agent of AIA and that he himself was pretending to be AIA’s ostensible client D2.

24.Nevertheless, whilst the appellant was essential to the success of the scam, a greater distinction should, in our judgment, have been drawn between the roles of D1 and D2 on the one hand and the appellant on the other. The appellant was a genuine cancer patient requiring obvious medical intervention and his involvement in the fraudulent scheme, which he was invited to join but did not engineer, was undoubtedly motivated more by need than greed on his part, whereas D1 and D2 were motivated purely by dishonest enrichment for themselves.

25.If D1 received an overall starting point in respect of Counts 2 and 3 of 7 years and 9 months’ imprisonment[14], and D2 received an overall starting point for the same counts of 7 years and 6 months’ imprisonment[15], and assuming that those starting points are appropriate, then the 7-year starting for the two counts in the respect of the appellant was not a sufficient distinction for his role in the fraud. We would have assessed his role in the conspiracy and the overall reward he received in the circumstances as deserving of a starting point of 5 years’ imprisonment, which we would achieve by adopting a starting point of 5 years’ imprisonment in respect of Count 2, and 2 years’ imprisonment in respect of Count 3, the two terms to run wholly concurrently with each other, since they arose out of the same incident and criminality.

26.The next question we must address is the appropriate discount to be adopted, given the appellant’s timely pleas of guilty and other mitigating factors available to him. This question engages Ground 2 and the extent of the appellant’s practical assistance to the authorities. We spent a considerable time at the hearing reading the appellant’s NPS (running to 35 pages in translation), which had been given to the ICAC on 11 October 2023, as well as other material available to the prosecution, which had been seen by the judge, so as to better understand what assistance the appellant had actually given, whether it was information the prosecution already knew, or whether it added to what they already knew so as to forge a new line of enquiry. We concluded that the appellant had given assistance which was of practical use and, although Ms Parwani seemed reluctant to characterise it as such in light of the advice given within the Department of Justice as to the sufficiency of evidence and viability of prosecution, even she eventually had to accept that it was “worth something”.

27.We have already noted that ICAC Investigator Chow Wan-lung, in a statement/report dated 18 January 2024, had described the information provided in the NPS of the appellant as of practical use. However, the same officer had a day earlier in another statement/report, which the judge had also seen, said the same of D1’s assistance in his NPS. In the earlier statement/report of 17 January 2024, Mr Chow concluded:

“With the evidence of both D1 and D3 (the appellant) (who had also given a NPS statement), the ICAC considered that there is evidence to support charge(s) against [Joe Sir]. Legal advice will be sought from the Department of Justice to assess the criminalities of [Joe Sir].”

28.Whilst we accept that it is not normally the function of this Court to second guess a decision of the Department of Justice to prosecute or not to prosecute, nor should the Court be readily drawn into an examination of the prosecuting authority’s decision-making process, since it will not generally have access to all the evidence, information or intelligence to which the Department is privy, it is clear that ICAC thought there was a case to be pursued against Joe Sir and carefully set out the reasons why. The two statements of ICAC Investigator Chow Wan-lung are exemplary in their detail as well as even-handed in their assessment of the strength of any potential prosecution against Joe Sir.

29.We would also point out that if D1 was credited with rendering assistance, which resulted in the prosecution of two other defendants (who ultimately pleaded guilty), then he must himself have been regarded by the prosecuting authority as a credible witness. As to whether Joe Sir should have been prosecuted, as the ICAC evidently anticipated, we would observe that Joe Sir was in fact a named conspirator in both Count 2 and Count 3. It might seem rather surprising, therefore, that despite the prosecution including his name as a conspirator in the indictment, the Department of Justice did not consider the evidence sufficient to prosecute him despite the NPS of both D1 and the appellant and the confident expectation of the ICAC in a viable prosecution.

30.We accept that while the sufficiency of evidence is primarily a matter for the Department of Justice, and that such an assessment may sometimes be difficult to make in the context of a conspiracy, it should also be recognised that the appellant’s NPS only came about on 11 October 2023, more than two years after his arrest on 15 September 2021. We have said before that if a defendant wishes to assist the authorities, the sooner he does so the better. As the Court in HKSAR v Mohammad Fakhrul Alfaqih Bin Saadon[16]said:

“…we wish to emphasise that any information or assistance that is given to the authorities is much more likely to be credited as of practical use the sooner it is given after a defendant’s arrest. There will then be less scope for adding to or adulterating the information from other sources, and more reason to think that such information is original and genuine.”

See also HKSAR v Ilmayanti (Dewi)[17]. In the present case, the 2-year delay would, in the event of a contested trial, inevitably have opened the appellant up to cross-examination as to why he had waited so long before giving the information he did.

31.Be that as it may, we agree that the appellant did do his best to assist the prosecution, however late in the day, and that it was worth some consideration in sentence. We would assess the appropriate discount for his timely plea in conjunction with his assistance to the prosecution at about 38%. If such percentage discount is applied to the overall starting point of 5 years’ (or 60 months’) imprisonment, then the resulting sentence should have been just over 3 years and 1 month’s imprisonment. We would then honour the judge’s further reduction of 2 months, which she gave for the appellant’s attempt at some restitution, thus bringing the resulting overall sentence to 2 years and 11 months’ imprisonment.

32.Finally, at the hearing of the leave application, the Court called for an updated medical assessment of the appellant’s condition and his likely prognosis. These have been provided to the Court. The result is that the appellant is in remission and at present shows no signs of the recurrence of his cancer. His prognosis is said to be good with a life expectancy of “more than 10 years if there was no lymphoma high grade transformation”[18]. The appellant’s current date of discharge under his existing sentence is 28 February 2027.

33.For the above reasons, the appellant’s appeal against sentence is allowed to the extent that his overall sentence is reduced from 4½ years’ (or 54 months’) imprisonment to 2 years and 11 months’ (or 35 months’) imprisonment. So as to explain the breakdown of the individual sentences, we make clear that the overall sentence of 2 years and 11 months’ (or 35 months’) imprisonment is comprised of fully concurrent terms of 2 years and 11 months’ (or 35 months’) imprisonment on Count 2 and 1 year and 1 months’ (or 13 months’) imprisonment on Count 3.

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 Appellant