HKSAR v. Lee Ming Kwan

CACC000288/2003

CACC 288/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 288 OF 2003

(ON APPEAL FROM DCCC 1153 OF 2002)

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Coram: Hon Stuart-Moore VP and Lunn J

Date of Hearing: 14 May 2004

Date of Judgment: 14 May 2004

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J U D G M E N T

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Stuart-Moore, VP (giving the judgment of the Court):

Background

1.On 30 May 2003, the applicant, aged 62, was convicted on sixteen charges following a trial in the District Court before Deputy Judge C.P. Pang and sentenced to a total of four years and nine months' imprisonment. He now seeks leave to appeal against sentence.

2.Five of the charges (1, 5, 12, 14 and 15) on which the applicant was found guilty related to his use of false instruments, contrary to section 73 of the Crimes Ordinance, Cap. 200. The eleven remaining charges were each in relation to dealing with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) of the Organised and Serious Crimes Ordinance, Cap. 455. These offences were committed over a period of about a year between April 1996 and May 1997.

3.In short, the false instruments were used to obtain letters of credit for which there were no underlying transactions. Three companies were involved either in applying for, or as the beneficiaries of, the four letters of credit obtained in this way. These were Goldease Development Limited ("Goldease"), Vast Base International Limited ("Vast Base") and Goldease (Tianjin) Commercial Co. Ltd ("Goldease (Tianjin)"). The applicant was a director of each of these companies. The applicant was arrested in May 2001 after Goldease (Tianjin) had failed to make the repayment which was owing to a Mainland bank.

4.When the applicant's home was searched, the company chops for Vast Base and Goldease were found together with documents relevant to the obtaining of letters of credit including a cargo receipt, a negotiation application and a draft of exchange, some of which bore some similarity to the false instruments itemised in the charges. Also found were two blank bill of lading forms matching those used to obtain three of the letters of credit. These bore a company name which had been falsely applied to them and one of them also carried the mark of a fake chop.

5.Much of the prosecution's case was undisputed including the falsity of the documents used to obtain the letters of credit and the fact that the applicant had presented the documents at the bank. The applicant's own account at trial, in which he denied knowledge of the falsity of these documents, was rejected as a "pack of lies".

6.In sentencing, the judge stated that "the offences were a calculated series of commercial frauds in which the defendant was a key participant, whose participation was essential to the success of the frauds". He took the view that even if the applicant had not been the prime mover, he must have been one of the lieutenants who was very much trusted by the prime mover. The judge rejected the suggestion that monies withdrawn by the applicant were for the repayment of loans and found that the applicant had obtained a substantial personal benefit from the frauds.

7.Using a starting point of five years, and somewhat generously giving a discount of three months for the applicant's background and personal circumstances which we observe included a twelve-year sentence for trafficking in dangerous drugs many years ago, the judge arrived at the sentence of four years and nine months. In our opinion, there were no grounds for discounting the sentence.

The application

8.The matters raised in this application by Mr Paul Leung for the applicant effectively amounted to a submission that the applicant's role had been misconstrued. In his written submission, in particular, he made the point that the role played by the applicant was one which effectively could have been done by anyone and that there had been, contrary to the judge's findings, nothing sophisticated about the disposal of the proceeds. It was contended, therefore, that the applicant's sentence was manifestly excessive because he had been wrongly assessed to have had a role which was larger than the one actually played by him.

9.Today, Mr Leung drew our attention to the precise nature of the charges and he submitted that the sentence, for such offences, was far too long.

10.All we need say in regard to these submissions is that the evidence revealed the applicant's hand at work at almost every stage of the fraudulent activities covered by the charge sheet. In saying this, we are grateful to Mr William Tam who, like Mr Leung, also appeared in the court below, for his meticulous assessment of the evidence. In particular, the applicant, aside from his substantial participation in signing and submitting the false documents, also had a significant involvement with the three companies which were concerned with the applications for letters of credit. Furthermore, the evidence revealed that he had handled the proceeds and, arising from the eleven occasions covered by the offences brought under section 25 of the Organised and Serious Crimes Ordinance, he had, as the judge realistically concluded, personally benefited. In combination, the sums involved were considerable.

11.The total value of the proceeds fraudulently obtained as a result of the letters of credit which were issued was approximately HK$62.3 million, out of which the prosecution were able to prove that the applicant had utilized for himself proceeds worth about HK$1.8 million, although we were reminded that it had been the applicant's case that he had only used $900,000 for himself. The banks, we were informed, have suffered losses totalling approximately US$7.65/HK$59.5 million. Only HK$2.8 million was repaid on two of the letters of credit. None of the other money has ever been recovered.

12.The judge in the court below was reminded of what this court decided in HKSAR v Cheung King [2001] 3 HKLRD 68. There, the appellant, who pleaded guilty to a conspiracy to defraud involving a single letter of credit in the amount of US$891,000 (approximately HK$7 million), was described as "small fry" who had been used by others to make the false documents which supported the bogus transaction. Ultimately, the bank had suffered no loss. A four-and-a-half-year starting point was described as appropriate and we should perhaps add that the fact that the appellant in that case ultimately had her sentence reduced to two years' imprisonment was because of entirely separate reasons which were to do with serious errors in the approach of the sentencing judge.

13.The gravity of any case of this kind will inevitably be dependent upon its own particular facts. In the matter presently before us, the sentence imposed was one which fell at the lower end of the range to be expected in cases of this kind.

Conclusion

14.Accordingly, this application is dismissed.

Representation:

Mr William Tam, SGC, of the Department of Justice, for the Respondent.

Mr Paul Leung, instructed by Messrs Yaddy Cheung & Co., for the Applicant.