HKSAR v. Chan Tak Yeung

DCCC919/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 919 OF 2011

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Reasons for Sentence

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1.The defendant pleads guilty to two counts of obtaining pecuniary advantage by deception.

2.In mid-2008, the defendant and his wife bought the property named in Charge 1 at $3.7 million.  They paid 30 per cent of the price as deposit and had the remainder, i.e., 70 per cent, mortgaged with GE Capital (Hong Kong) Limited.  The mortgage loan was thus $2.59 million.  In the course of his application for a mortgage, the defendant falsely claimed to GE that he was employed by Tin Ma Repair Centre at a monthly salary of $75,000.  Based on the information supplied by the defendant, GE granted the loan.  This is the subject matter of Charge 1.

3.In June 2009, the defendant and his wife bought another property, i.e., the one named in Charge 2.  The price was $1.55 million.  The defendant paid 30 per cent as deposit and had the remaining 70 per cent mortgaged with Wing Lung Bank.  The mortgage loan was thus $1.085 million.  The defendant claimed to Wing Lung Bank that he was employed by Tin Ma Repair Centre at a monthly salary of $28,000 and at the same time he was also employed by Tin Ma Telecom at a monthly salary of $23,000. Based on such information, Wing Lung Bank granted the defendant’s application.

4.In court, I am told the defendant had made no default on his monthly repayment to both institutions.  However, ICAC investigated the defendant in relation to a vice establishment case.  In the course of such investigation, ICAC also found out that the defendant had made false claims to GE and Wing Lung Bank concerning his mortgage applications. 

5.The defendant was later charged for all these matters but due to the progress of the investigation, his case had been split into two parts.  First, the defendant was charged with conspiracy to keep a vice establishment and laundering money.  He was brought to court on these two charges in August 2010.  Subsequently the defendant pleaded guilty to these two charges on 20 May this year.  He was sent to prison for 2 years on the conspiracy to keep a vice establishment charge and he was sent to prison for 20 months on the money laundering charge, 8 months of which was to run concurrently with the other term.  In effect, the defendant was given a total of 36 months’ imprisonment on 20 May this year for those two charges. That case was DCCC969/2010.

6.The prosecution needed much time in getting evidence from the banks relating to the two false claims charges and the defendant was only brought to the court for the two deception charges on 19 August 2011.  At first he pleaded not guilty. 

7.The defendant is now almost aged 49.  Before ICAC arrested him for all the said matters, he only had one previous record, in 1993 for burglary.

8.Defence counsel says although the defendant traded in vice business, he has been a good family man.  He supports his family of four altogether including his wife and two children.  The son is now studying in UK and will start his university soon.  The younger daughter is a student in Hong Kong. 

9.Counsel submits that if these two deception charges can be brought to the court earlier and dealt with those charges in DCCC969/2010, altogether the defendant would probably get concurrent sentences or most of the sentences concurrent with the other terms he was given in that case.  Counsel says this is because the money laundering charge actually touches on nearly all of the defendant’s properties.  Understandably, the defendant had used some of his money earned from his illegal business to buy his properties including the two named in the charges.  He also paid his mortgage repayments with his illegal earnings.

10.Counsel says the government have now forfeited almost all of the defendant’s wealth which he earned by illegal means, that includes some millions of cash and several properties of the defendant, including the two named in the charges.  The defendant has raised no objection to the forfeiture.  I am told that the banks have already sold the two properties at no losses.

11.The prosecutor confirms that is the situation. He has also handed up a chronology of events to explain why the defendant’s case has been split into two parts.  Having studied that chronology and heard counsel’s submission, I accept that the prosecution surely required time to investigate from the bank.  Thus there has been no undue delay in the present case, but I also agree with defence counsel that if the present two deception charges could have been brought before the judge in DCCC969/2010, the judge certainly would have regard to all the circumstances in imposing the punishment for these two deception charges. 

12.There is indeed a nexus between the money laundering charge and these two deception charges.  It is understandable why the defendant deceived the two institutions in such a way.  He was working in an illegal business.  Though he had much income, he could not produce any good proof to the banks to substantiate his mortgage applications.  He thus had to resort to deception.

13.I agree with defence counsel that the two institutions were not at any risk in the circumstances.  The defendant had paid 30 per cent deposit for each property, the property market in these years was on constant rise, so the properties were worth more than the mortgage value. If the banks had to resell the properties they would suffer no losses, and that is actually the case here.  In fact, the defendant had means to repay the mortgage loans, he never defaulted in repayment. 

14.I am sure it was never his intention not to repay the banks.  Nevertheless, deceiving a financial institution is always a serious offence.  Mortgage lending is a significant business for each bank or financial institution.  They trust the applicants will be truthful to them, thus anyone deceiving any bank or financial institution for any amount of mortgage or loan must be punished.  In normal circumstances, the punishment would be immediate imprisonment.

15.Having regard to all the circumstances of the case, I would adopt 18 months’ imprisonment as the starting point for Charge 1.  The mortgage loan involved in that charge was $2.59 million.

16.The 2nd charge involved a lesser amount, only $1.085 million.  For this charge I would adopt 12 months’ imprisonment as the starting point.

17.I give the defendant one-third discount for his plea of guilt on both charges.  Thus, on Charge 1, I would impose a term of 12 months’ imprisonment, and on Charge 2, 8 months’ imprisonment.

18.As said, I agree with defence counsel that there is some nexus between these two charges and the money laundering consideration in DCCC969/2010.  In the circumstances, I think it is appropriate for me to make a large part of the two terms I impose on the defendant to run concurrently with the terms he has been given by the judge in DCCC969/2010.

19.I would order that only 2 months’ imprisonment of each Charge 1 and Charge 2 in this case to run consecutively to each other and consecutively to the terms the defendant is now serving for DCCC969/2010. In effect, the defendant is only given 4 months’ imprisonment for these two charges.