HKSAR v. Yeung Shu Pui

DCCC 1122/ 2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1122 OF 2008

Reasons for sentence

The charges and the facts

1.The Defendant pleads guilty to 3 charges of theft (2nd, 4th, and 6th charges) and 2 charges of using a false instrument (7th and 8th charges). 

2.He was the sole proprietor of a manufacturing company, Hang Fung Technology Manufacturing Company (“HFT”).  Three overseas customers ordered video tapes from HFT.  They paid by irrevocable letters of credit.  He used false shipment documents to deceive the banks into paying HFT under the letters of credit.  He shipped bricks instead of video tapes.  He received and stole the equivalent of HK$190,233.31 in December 1995 (2nd charge), HK$172,605.66 in January 1996 (4th charge), and HK$79,380.61 in February 1996 (6th charge).

3.In February 1996, he also presented a false Certificate of Inspection (7th charge) and a false Bill of Lading (8th charge) to the bank.  The bank was deceived into paying HFT the equivalent of HK$476,943.00 under the letter of credit.   

4.The victimized customers lost HK$919,161.92 in total.  

Arrest and investigation of the Defendant

5.The Defendant left Hong Kong for Macau in February 1996.  He returned to Hong Kong from China in June 2008.  When under arrest, he said that he knew it was wrong to cheat and he had only pocketed and spent one hundred odd thousand dollars out of the proceeds.  He acted upon the instructions of two people whom he had met in Mongkok to set up HFT for video tape trading and open bank account in its name.  He only received $8,000 per month as salary.  He was then given the money, and told to go to China in February 1996 because HFT was in trouble.  He was asked not to return to Hong Kong.  

Mitigating factors put forward

6.His counsel puts forward the following mitigating factors:

(1) His minor role in the plot;

(2) The plea of guilty;

(3) The saving of overseas witnesses’ attendance in court.

Sentencing principles

Sentencing in fraud cases

7.There are no tariff sentences.  His counsel refers me to the case of HKSAR v Cheung Mee Kiu CACC 99/2006 for comparison.  Cheung Mee Kiu gives the sentencing guidelines on fraud involving breach of trust.  He submits that had the Defendant been in breach of trust for the amount of HK $919,161.92, he would have been in the band of “$250,000 to $1,000,000  -  2 to 3 years’ imprisonment”.  He therefore contends that as our present case does not involve breach of trust, it warrants a lower or at least no higher band of imprisonment.

8.I do not find this contention plausible.  There is no hard and fast rule for sentencing fraud cases not involving breach of trust.  The factor of breach of trust is only an aggravating factor.  I can envisage cases which warrant a sentence higher than Cheung Mee Kiu in light of other aggravating factors despite the absence of breach of trust.  Cases with very sophisticated planning which result in serious harm or loss to others shall be a ready example.

9.In short, Cheung Mee Kiu can offer no assistance in our present case.

Saving of overseas witnesses’ attendance in court

10.HKSAR v Lam Tze-leung [2006] 2 HKC 295 is a case in point to answer this submission in our present case.  In that case the applicant was convicted of 7 counts of accepting advantage as a credit manager in the bank.  He, together with his seniors, approved the application for release of money under various letters of credit which he knew were not backed by any goods.  One of the companies submitting such application had 136 letters of credit.  The applicant contended that his admissions of such fact had significantly shortened the length of trial and reduced the issues for the jury’s determination.  Having acknowledged that formal admissions had been made, Stock JA said, at 316:

Finally, in relation to sentence, it is suggested that the trial judge erred in failing to give any discount for the applicant’s admissions of fact which, it is said, significantly shortened the length of the trial and reduced the issues for the jury's determination.  Whether a limitation of issues constitutes a mitigating factor and, if so, to what extent, is again case-specific.  We have studied the admitted facts upon which this ground depends.  They contain admissions of the immigration records of the applicant; the date upon which he and others were on leave from the Bank; a list of letters of credit issued in favour of the various beneficiaries and an admission that none of those letters of credit was backed by a transaction in goods.  There are other admissions all of a formal nature.  It would, we think, have been an exercise in tactical folly for this applicant to put the prosecution to proof of the fact that the letters of credit were not backed by genuine transactions. 

The Defendant’s personal circumstances

11.The Defendant is 57 years of age.  He is now in his second marriage.  He has a 22-year-old son from his first marriage and an 11-year-old daughter from his second marriage.  His parents are both 85 years old.  As his antecedent statement reveals, he was educated up to P5 in Hong Kong.  He started his work life at the age of 14 as an engineering apprentice, and then a worker manufacturing engine in the dockyard.  He was unemployed between 1994 and 1996.  One can reckon it was during this unemployment period that he was approached to set up HFT.  

12.He was bound over for fighting in a public place back in 1977.  I treat him as of clear record.

The sentence I pass

13.I accept that the Defendant was not the mastermind of the plot.  However, his role was not in any sense minor.  He got quite a handsome reward.  The plot required ample planning and careful execution.  He was the one to execute it at the frontline.  I take the respective starting points as follows:

(1)   The 2nd charge which involved HK$190,233.31 in December 1995:

9 months;

(2)   The 4th charge which involved HK$172,605.66 in January 1996:

9 months;

(3)   The 6th charge which involved HK$79,380.61 in February 1996:

6 months;

(4)   The 7th and 8th charges together involved HK$476,943.00 in February 1996:

15 months each concurrent. 

14.I reduce each of the terms by one-third due to the plea of guilty and the virtually clear record.  I regard it futile for the defence to confront the overseas customers so as to dispute that bricks were shipped instead of video tapes.  According to Stock JA in Tam Tze-leung (supra), no discount should be given in such circumstances.  There are no other mitigating factors.  The terms are as follows:

(1)   The 2nd charge:

6 months;

(2)   The 4th charge:

6 months;

(3)   The 6th charge:

4 months;

(4)   The 7th and 8th charges together:

10 months each concurrent. 

15.As the 4 incidents took place on different dates and did not form a single transaction, the terms shall be consecutive.  However, on totality, I make the adjustment as follows;

(1)   The 2nd charge:

6 months;

(2)   The 4th charge:

6 months, 3 months of which consecutive to 2nd charge, the other part concurrent with other charges;

(3)   The 6th charge:

4 months, 2 months of which consecutive to 2nd and 4th charges, the other part concurrent with other charges;

(4)   The 7th and 8th charges together:

10 months, 5 months of which consecutive to 2nd, 4th and 6th charges, the other part concurrent with other charges.

16.The total length is 16 months’ imprisonment.