HKSAR v. Lau Shuk Wai

HCCC 219/2026

[2026] HKCFI 5816

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 219 OF 2026

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REASONS FOR SENTENCE

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1.The Defendant pleaded guilty in the Magistracy to one count of theft, and was committed, on 22 June 2026, to the Court of First Instance for sentence. The Defendant confirmed her plea and admission to the Summary of Facts before me, and her conviction was duly recorded.

2.Particulars of the Charge are that the Defendant, between 21 August 2019 and 13 May 2024, both dates inclusive, in Hong Kong, stole a chose in action,[1] namely, a total sum of $10,030,000 Hong Kong currency in the account numbered 012-777-0-000730-l (hereinafter “the Company Account”)  held by Eware Networks Limited (hereinafter “the Company”)  with the Bank of China (Hong Kong)  Limited, the property belonging to the said Company. 

3.At the hearing on 22 September 2026 (i.e. the original date set down for sentence)  the Court invited the parties to consider the issue of whether the Court should impose a “Criminal Bankruptcy Order” under section 84A of the Criminal Procedure Ordinance (Cap. 221)  (“CPO”)  and invited submissions on that issue.  As will be noted below, the Prosecution had originally given notice of an application for a “Compensation Order” under section 73 CPO to be imposed.  However, subsequent to that notification, the Prosecution agreed with the Defence that the Defendant appeared to have lost all the stolen monies in this case through gambling.  Thus, the Defendant has no means to satisfy any potential compensation order.  The Court therefore invited the parties to make submissions on the imposition of a Criminal Bankruptcy Order which will be dealt with below. 

FACTS

4.The facts admitted can be summarized as follows. 

5.The victim Company is an IT consultancy with its registered office at Kwun Tong.  The Company was incorporated by PW1 and her husband on 6 December 2000 and its business was to provide network communication technology to enterprises. 

6.It opened the Company Account for its operations.  The Company Account consisted of one HKD current account (hereinafter “the Current Account”).  Both PW1 and her husband were the authorized signatories of the Company Account. 

7.The Defendant was employed as an accounting clerk of the Company in 2005.  Her duty was to oversee all financial and accounting related matters of the Company. She was authorized to access the e-banking system of the Company Account and hence she was given its login details, namely, the username and password. There was a total of 5 staff members in the Company including the Defendant. Among all the staff members, only the Defendant was authorized to access the e-banking system of the Company Account.  Yet, such authorization was limited to the reading of its transaction details.  She was not authorized to make any bank transfers or amendments therein. 

8.During routine operation, the Defendant made payments for miscellaneous daily expenditures for the Company as pre-payments.  The amount involved normally ranged from several hundreds to several thousands.  Thereafter, the Defendant made applications to the Company for reimbursements.  The Company repaid the Defendant the reimbursements by cheques.  It was the practice that the Defendant prepared the cheques on which the amount had already been written for PW1 and her husband to sign.  The Defendant then cashed out the cheques by depositing them into her personal bank accounts. 

9.In addition, the Defendant was required to print the monthly bank statements of the Company Account from the e-banking system every month for PW1’s verification.  However, PW1 was so busy and she trusted the Defendant so much that she did not log in to the e-banking system of the Company Account nor check with the monthly bank statements provided by the Defendant. 

10.On 10 June 2024, the Company changed its accounting system.  PW1’s husband was unable to log in to the e-banking system of the Company Account.  PW1 therefore made enquiries with the Defendant who however made various excuses to avoid PW1. 

11.The incident came to light on 13 June 2024 when the Defendant, upon being questioned about the login of the e-banking system of the Company Account, suddenly confessed to PW1 that she had altered the amounts of cheques issued to her for reimbursements.  The Defendant also elaborated how she altered the cheques:- she first wrote down the correct amount on the cheque for PW1 to verify and sign.  After the cheque was signed, she then altered the cheque by adding one more figure and English number word at the beginning of the original amount on the cheque in order to inflate the amount of the cheque.  She then deposited the altered cheque into her personal bank accounts.

12.In addition, she further altered the monthly bank statements of the Company Account and produced the same to PW1 for checking in order to cover up her thefts. 

13.Upon further checking, PW1 discovered that there were discrepancies in the remaining balances of the Company Account shown on the monthly bank statements provided by the Defendant and those downloaded from the e-banking system.  She further discovered that a total of 171 cheques issued to the Defendant between 21 August 2019 and 13 May 2024 for reimbursements had been altered in the way that the amount on each cheque was falsely inflated by adding one more figure and English number word at the beginning of the original amount on the cheque.  The original true aggregate amount of the 171 cheques issued should be HK$656,483.79, whereas the actual aggregate amount of the 171 falsified cheques was HK$10,686,483.79.  In other words, the falsely inflated amount that was misappropriated totaled HK$10,030,000. 

14.The case was reported on 16 June 2024.  Subsequent investigation revealed that the 171 falsified cheques drawn from the Company Current Account were all deposited into the personal bank accounts of the Defendant held with the Bank of China (with 114 cheques)  and HSBC (with 57 cheques).  The Annex attached to these reasons lists out the details of the 171 false cheques and the relevant fraudulent transactions in question. 

15.In addition, PW1 produced a total of 32 monthly bank statements of the Company Account (which were provided by the Defendant)  to the police as exhibits.  Upon analysis, 20 of the 32 monthly bank statements from the Bank of China account had been altered spanning from February 2020 to May 2024.  In particular, alterations were made to 44 transactions as well as the remaining balances under the Current Account of the relevant monthly bank statements. 

16.On 17 June 2024, the Defendant was arrested at her residence in Ma On Shan and cautioned for the offence of "Theft".  Under caution, she stated that she had lost the money in gambling.  She repeated the same in a subsequent video-recorded interview. 

17.The computer used by the Defendant in the office of the Company was also seized and sent for forensic examination, 9 monthly bank statements of the Company Account were retrieved therefrom.  2 out of those 9 bank statements (for February and March 2020)  were altered in terms of transaction amounts as well as the remaining balance under the Current Account.  These two statements were also identical to those provided to PW1 by the Defendant. 

PREVIOUS CONVICTION

18.The Defendant is of clear record. 

DEFENDANT’S BACKGROUND AND MITIGATION

19.Mr. Clement Lau, counsel for the Defendant, provided the Court with written submissions for mitigation. 

20.In summary, the Defendant was 38 years old at the time of the offence.  She lost her father when she was 6 and was raised by her mother.  She had been a committed Christian and had been responsible for caring for her family. 

21.It is said that the offence marked a departure from her character and arose in the context of her gambling difficulties for which she is deeply remorseful. 

22.The Defendant, her husband and sisters, together with members of her church had provided mitigation letters to the court which have been considered. 

23.Mr. Lau informed the Court that the Defendant is remorseful for the offence and pleads for leniency.  Her remorse is shown by her timely guilty plea. 

SENTENCING

24.The maximum sentence for theft upon conviction on indictment is 10 years’ impris­onment: s.9 of the Theft Ordinance. 

25.Typical breach of trust cases relate to situations where a person is, by virtue of the trust reposed in him, authorised to deal with property belonging to another and, in abuse of that trust, dishonestly misappropriates that property.  In such case, immediate imprisonment is almost inevitable, save in very exceptional circumstances or where the amount of money obtained is minute: see Archbold Hong Kong 2026 para. 22-14. 

ANALYSIS

26.As reiterated by the Court of Appeal in HKSAR v Tung Chi Ho (CACC 258/2024; [2026] HKCA 1152)  the sentencing Court should follow the 4-step process when sentencing an offender, applying HKSAR v Wong Yun Fat [2017] 4 HKLRD 59 para.40 and HKSAR v Herry Jane Yusuph[2], namely:-

(1)  Step 1: Consider the role and culpability of the offender in the commission of the offence, follow the applicable sentencing guidelines in determining a “starting point for sentence”;

(2)  Step 2: Consider the applicable aggravating factors to determine whether the “starting point for sentence” is to be enhanced to arrive at a “notional sentence after trial” or an
“eventual starting point” – if no aggravating factors are applicable to justify enhancement, then the “notional sentence after trial” would be the same as the “starting point for sentence”;

(3)  Step 3: Consider the applicable mitigating factors and reduce the “notional sentence after trial” accordingly by percentage terms and/or specific term reductions;

(4)  Step 4: Consider totality and impose the final sentence.

Step 1: role and culpability of the offender and the applicable guidelines

27.For theft involving breach of trust, the case of HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 sets out the applicable guidelines as revised from HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776:-

(a)  involving $15 million or more: 10 years or above;

(b)  involving $3 million to $15 million: 5 to 10 years;

(c)  involving $1 million to $3 million: 3 to 5 years;

(d)  involving $250,000 to $1 million: 2 to 3 years; and

(e)  involving $250,000 or less: below 2 years.

28.This case would fall under the “5-10 years” range. 

29.The amount involved was HKD10,030,000.

30.I shall adopt 7 years and 6 months as the “starting point for sentence” at this step before I come to the aggravating factors. 

Step 2: Aggravating factors

31.The second step involves the identification of aggravating factors which are applicable to the facts of this case. 

32.As explained by the English Court of Appeal in R v Barrick [1985] 81 Cr App R 78 at pp 81-82 per Lord Lane CJ, the sum involved was not the only factor to be considered in a case involving breach of trust.  His Lordship said:

“The following are some of the matters to which the court will no doubt wish to pay regard in determining what the proper level of sentence should be: (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 on fellow-employees or partners; (vii)  the effect on the offender himself; (viii)  his own history; (ix)  those matters of mitigation special to himself such as illness; being placed under great strain by excessive responsibility or the like; where, as sometimes happens, there has been a long delay, say over two years, between his being confronted with his dishonesty by his professional body or the police and the start of his trial; finally, any help given by him to the police.”

33.In this case, I find the following aggravating factors to be present:-

(1)  The fact that the offence required careful planning and execution on the part of the offender in order to avoid detection for many years;

(2)  The offence period was substantial, lasting from 21 August 2019 and 13 May 2024 – i.e. almost 5 years in duration.

(3)  The offence was not a “one-off” incident, but involved numerous times when falsified cheques were created by the offender;

(4)  The offender created further false documents in the form of bank statements for the sole purpose of deceiving her employer and covering up her acts of stealing;

(5)  The offender was put in a position of trust in that she was the only staff member authorized to access the e-banking system for the Company Account, and that she was entrusted to create cheques and print out bank statements for the employer.

34.As stated by Keith JA in HKSAR v Sim Ka-wing [2001] HKCU 498 (CACC 450/2000):-

“10. Breach of trust is, of course, regarded as an aggravating feature in cases of dishonesty. But it is so regarded because the offender would have abused the trust reposed in him. That trust may have involved an employee being trusted with his employer’s money or valuables, or being placed by his employer in a position whereby the dishonest employee could defraud his employer or his employer’s customers or clients. The point is that the offender is, to use the word of Lord Lane CJ in Barrick (1985)  7 Cr App R (S)  142, in a ‘privileged and trusted’ position. It is that position of privilege and trust that he abuses…”

35.On any view, as fairly accepted by Mr. Lau, the circumstances of this case and the aggravating features are very serious.  Therefore I shall enhance the 7 years and 6 months “starting point for sentence” by 18 months imprisonment.  Resulting in 9 years imprisonment by this step. 

Step 3: Mitigating factors

36.I find that the only mitigating factor applicable to this case is the Defendant’s guilty plea, which was entered into at the earliest opportunity and therefore she is entitled to the full one third discount. 

37.However, I do not accept that any further reduction is warranted as suggested by counsel for the admission or confession made by the Defendant in this case.  In this regard, Mr. Lau relies on the sentencing judgement of HKSAR v Lau Ka-ho [2021] HKCFI 1276 for the proposition that in that case, the Court accepted that without the defendant’s confession to the employer, the defendant could avoid detection for some further time and that the Court appeared to have accepted this voluntary confession as a “material mitigating factor”. 

38.In Lau Ka-ho,the learned Judge gave a 55% discount on each of the sentence imposed on each charge (including the customary one third discount for timely plea).  Although the Judge was not prepared to accept that the defendant would have been able to avoid detection altogether, he accepted that the defendant would have been able to avoid detection for some further time “but for his confession” .  This factor taken together with the fact that the defendant had made full restitution to the victim company and that constitutes another significant mitigating factor apart from his timely plea, resulted in the overall 55% discount. 

39.The same cannot be said for the present case, there is no restitution whatsoever by the Defendant in this case.  Furthermore, it was not the case that the Defendant’s actions would remain undetected or would be undetected for some further substantial period of time but for her confession.  Her crime was uncovered due to a change of the Company’s accounting system and when the Defendant was being questioned about the login of the e-banking system of the Company Account.  It was only when confronted, in such context, that the Defendant confessed to her crime.  Her crime would have been exposed in any event, irrespective of her confession.  Therefore, no further reduction can be afforded to the Defendant on account of her confession. 

40.The sentence is thus reduced to 6 years imprisonment on account of her guilty plea. 

Step 4: Totality

41.In my judgment, this is a fair, just and balanced sentence in all the circumstances of the offence and offender for the reasons stated above. 

COMPENSATION ORDER

42.As alluded to above, the Prosecution, by letter dated 21 September 2026, invited the Court to consider imposing a compensation order pursuant to section 73 CPO.  However, in doing so at the hearing of 22 September 2026, Miss Lau (for the Prosecution)  informs the Court that the police’s own investigation has revealed that the Defendant lacked the means to satisfy the compensation order and that the monies stolen were likely to have all been lost through gambling, which is consistent with the Defendant’s admissions. 

43.This was consistent with Mr. Lau’s instructions that the bank accounts now held by the Defendant had little or no assets, and that the Defendant has no other assets available to satisfy any compensation order.  In this connection, both parties confirmed that no Newton hearing or inquiry with the Defendant on the issue of the “lack of means” was required, and the parties are content to make submissions on the basis that the Defendant lacked the means to satisfy any compensation order. 

44.A “Compensation Order” compensates the victim in a summary way, which avoids the need for civil proceedings.  It is a substitute for the sum a civil court might be expected to order a defendant to pay to a plaintiff: Attorney General v Lau Chiu Tak [1984] HKLR 23. 

45.Once the prosecution has proved that the damage or loss has resulted to the aggrieved person or victim from the offence of which the defendant has been convicted, the court, in determining the amount of compensation, “does not have to consider the exact amount of loss on the basis of civil claims, but should act in a common sense way in a practical and general situation”: HKSAR v So Siu Yuen [2023] 1 HKLRD 1479 – see Archbold Hong Kong 2026 at 5-367. 

46.As helpfully set out by His Lordship Alex Lee J in HKSAR v Kiu Mei Ling & Ors [2019] 2 HKLRD 991 §22, the imposition of a compensation order does not affect the punishment which the court is required to impose for the offence.  It is imposed in addition to the substantive penalty.  While a willingness to make compensation to the victim may stand an accused in good stead as evidence of remorse.  However, a compensation order is, strictly, one which is independent of the sentencing exercise. 

47.In HKSAR v Chan Nai-keung and Ors [2008] 2 HKC 378 at 397, the Court of Appeal cited with approval the principles explained in R v Miller [1979] 68 Cr App R 56 at 57-58, by Pain J.  They can be summarised as follows:-

(1)  a compensation order is not an alternative to a sentence;

(2)  A compensation order in terms of money should be made only where the legal position is quite clear;

(3)  In making a compensation order the Court must have regard to the means of the defendant.

(4)  The compensation order must be precise. It must be related to an offence in respect of which the defendant has been convicted or to an offence which he has asked to have taken into account. It must specify the amount and if there is to be payment by instalments it must specify the instalments – only if this is done can the loser’s rights at Civil Law be adequately protected.

(5)  The compensation order must not be oppressive. The Court has to bear in mind that a prisoner who has just been discharged from jail is very often short of money. He must not be tempted to commit further offences to provide cash in order to bring his compensation order up to date.

(6)  On the other hand, there may be good moral grounds for making a compensation order including the order for payment by instalments to remind the defendant of the evil he has done. This may apply particularly in the case where a non-custodial penalty is imposed and the compensation which is appropriate is a sum which is not too great.

(7)  Finally, a compensation order must be realistic. An order for payment by instalments over a long period is to be avoided.

48.No burden is imposed upon the prosecution to establish that the accused has the capacity to pay the compensation: R v Johnstone (1982)  4 Cr App R (S)  141.  The prosecution will, of course, advise the court of any losses suffered by a victim and of any claim for compensation, but it is the accused who is best placed to advise the court on the issue of means.As a general rule, the court should not make a compensation order against an of­fender without means on the assumption that the order will be paid by other persons, such as relatives or friends: see R v Mortimer [1977] Crim L R 624 (CA). 

49.As rightly pointed out by Mr. Lau, counsel for the Defence, a compensation order will be inappropriate where it is clear that the Defendant has no means to comply with such order.  Therefore, I decline to make such order in this case. 

CRIMINAL BANKRUPTCY ORDER

50.During the course of argument, the Court raised with the parties whether in the circumstances when a Compensation Order should not be imposed, the Court should consider imposing a Criminal Bankruptcy Order under s.84A of the CPO.  That is because a Criminal Bankruptcy Order may, in part, redress some of the loss suffered by the victim and alleviate some of the costs or necessary procedure a victim have to encounter by starting a civil claim against the defendant for the loss suffered. 

51.The Court brought to the attention of the parties HKSAR v Leung Ka-kin HCCC 70/2024; [2026] HKCFI 2845, where the Prosecution, upon hearing the defendant’s evidence that he had no means to comply with a compensation order, withdrew its application for such order but instead applied for a Criminal Bankruptcy Order under s.84A CPO (which was unopposed). 

52.Subsequently, in the present case, the Prosecution notified the Court by letter dated 8 October 2026 of its intention to withdraw its application for a compensation order but instead applied for a criminal bankruptcy order. 

53.Section 84A of the Criminal Procedure Ordinance provides that:-

Criminal bankruptcy orders

84A. Criminal bankruptcy orders against convicted persons

(1)  Where a person is convicted of an offence before the court and it appears to the court that—

(a)  as a result of the offence, or of that offence taken together with any other relevant offences, loss or damage (not attributable to personal injury)  has been suffered by one or more persons whose identity is known to the court; and

(b)  the amount, or aggregate amount, of the loss or damage exceeds $150,000

the court may, in addition to dealing with the offender in any other way (but not if it makes a compensation order against him under section 73), make an order, to be called a criminal bankruptcy order, against him in respect of the offence or, as the case may be, that offence and any other relevant offences.

54.One of the intended purposes of a Criminal Bankruptcy Order is to provide a legal mechanism to assist victims of crime to recover losses suffered from a convicted offender.  As set out in Schedule 1 of the Bankruptcy Ordinance (Cap.6), the imposition of a criminal bankruptcy order can result in various consequences, including: (i)  the validation of victims as “creditors” – thus anyone specified in the order as having suffered loss or damage is legally treated as a creditor, allowing them to claim their share from any recovered criminal assets; (ii)  it may also serve to prevent further asset dissipation – for example by triggering bankruptcy administration, it allows a trustee in bankruptcy to unearth, freeze, and “claw back” hidden or transferred assets that the offender attempted to shield. 

55.Given these features of a Criminal Bankruptcy Order which may assist the victims of crime who suffered losses as a result of the offence, the Court can make such order on its own initiative or upon application by the Prosecution as part of the sentencing process.  However, such order cannot be made in conjunction with a compensation order.  The two orders are fundamentally different.  Firstly, a compensation order acts as a direct order requiring the defendant to pay a specific amount of money to a particular victim.  Therefore the victim is able to avoid the need of civil proceedings to recover losses (or damages); secondly, the “means” (or ability)  of the offender to comply with a compensation order must be considered in assessing its appropriateness. 

56.On the other hand, a Criminal Bankruptcy Order does not provide the victim with any “direct” compensation.  The order legally treats the offender as a debtor against whom grounds exist for the Official Receiver or a victim to present a bankruptcy petition: see paragraph 2 Schedule 1 of the Bankruptcy Ordinance. 

57.The person specified in a criminal bankruptcy order as having suffered loss or damage of any amount shall be treated for the purpose of any ensuing proceedings pursuant to a bankruptcy petition under para.2 of Schedule 1 or s.112 of the Bankruptcy Ordinance as a creditor for a debt of that amount provable in the bankruptcy of the person against whom the order was made: see paragraph 3 Schedule 1 of the Bankruptcy Ordinance. 

58.The order does not of itself render the accused bankrupt, but it does provide con­clusive proof of an act of bankruptcy upon which a criminal bankruptcy petition can be based without proof of insolvency.  Upon the defendant’s adjudication the Officer Receiver becomes his trustee and all property vests in him: R v Michel (1984)  6 Cr App R (S)  379 and see paragraphs 5 and 7 of the Schedule 1 of the Bankruptcy Ordinance (Cap.6). 

59.Of significance is the “clawback” provision with respect to dispositions of property or any interest in property made by the bankrupt on or after the relevant date[3] (as specified in the order), either by way of gift or for an under-value: see paragraph 8 of Schedule 1 of the Bankruptcy Ordinance.  This is a mechanism available to the Official Receiver to “claw back” assets which the offender may have dissipated to others after the commission of the offence.  Therefore, whilst the “lack of means” of the offender is a significant consideration in deciding whether or not to impose a compensation order, this “means” factor is not a bar to the imposition of a criminal bankruptcy order. 

60.In summary, a Criminal Bankruptcy Order can act as a gateway to standard civil bankruptcy proceedings.  It also has the potential to freeze and claw back the debtor's (the offender’s)  overall assets / estate and empowers an Official Petitioner or trustee to gather all available assets for distribution among creditors. 

61.In the present case, the Defendant has been convicted of theft of around HKD10 million.  As a result of her theft, loss has been suffered by the victim Company whose identity is known to this Court. 

62.The aggregate amount of the loss far exceeds HK$150,000.  None of the stolen monies were recovered nor any compensation has been received.  No compensation order has been made.  Therefore, I am satisfied that the conditions under section 84A(1)  CPO have been met. 

63.Further, the Court is informed that the Defence does not object to the imposition of a criminal bankruptcy order in this case.  Therefore, I make a Criminal Bankruptcy Order against the Defendant as per the terms of the draft order provided by the Prosecution which are agreed by the Defence. 

64.The order shall specify the following particulars pursuant to section 84A(3)  CPO:

(a)  the total amount of loss resulting from the Offence is HK$10,030,000;

(b)  the person who has suffered that loss was the company Eware Networks Limited between 21 August 2019 to 13 May 2024 (both days inclusive);

(c)  the amount of loss suffered by Eware Networks Limited was HK$10,030,000; and

(d)  the earliest day on which the offence was committed was 21 August 2019.

FINAL SENTENCE

65.Accordingly, the Defendant is sentenced to 6 years imprisonment for the offence. 

66.I also make a Criminal Bankruptcy Order pursuant to section 84A of the Criminal Procedure Ordinance as stated above. 

Ms Margaret LAU, SPP of Department of Justice, for the HKSAR

Mr Clement LAU, instructed by Cheng & Ng, assigned by DLA, for the Defendant

ANNEX