CRIMINAL CASE NO. 181 OF 2012
COURT: The defendant has pleaded guilty to a total of five counts of theft and one count of money laundering.
The facts are that he was employed in 1992 by Taifair Securities which is a securities trading company as an office assistant and no doubt through his hard work he rose to become a settlement officer by 2009. I am told that even by 2009 his salary was very low, together with bonuses he was earning about $13,000 a month. When the defendant suddenly went absent from his company in August of 2009, an investigation by the company revealed there was a shortfall of securities and a report was made to the police.
The defendant apparently left Hong Kong and only returned in 2011 when he voluntarily gave himself up to the police. It is clear from the facts, which have been expertly drafted by Mr Wong that the defendant had unlawfully manipulated the computer system of the company to transfer securities held by Taifair for its clients by either transferring the shares of one client to a dormant account or adding new or additional shares to the dormant account of the client and which shares were physically held by Taifair Securities, and it is through the dormant accounts the defendant then speculated on the share market with the stolen shares.
He also withdrew shares from Taifair’s account with the Hong Kong Securities Clearing Company and either transferred it into his own name and sold them or he would transfer them to dormant accounts and, using forged signatures on delivery notes, subsequently would transfer those shares into his account which would subsequently be sold. He also, during this period, with his intimate knowledge of the computer system of the company, would send false account statements to account holders to cover up his actions.
It is also clear that through the lax control within the Taifair Company the defendant was able to manipulate the dormant accounts and to obtain the highest level of access to the computer system in order to alter the stock records and effect transfers. Of course, this does not excuse or dilute the seriousness of what the defendant had done but it does go some way to explain why the defendant was tempted to do what he did.
In count 1 the defendant had stolen 60,000 shares and transferred the shares to his own name which were subsequently sold for approximately $3.13 million. The theft in the 2nd and 4th counts, the shares were cleared through his friend Lai’s dormant account and then transferred to the defendant’s account and subsequently sold for $4,239 and also $60,676 respectively. He had also forged the signature of the account holders in the delivery notes. Now, in the 3rd count, again the defendant had watched, through his friend Lai’s account, the shares he stole and then transferred them to himself and then sold them for approximately $61,500.
And in the 7th count of theft, the defendant had used the account holder’s money to buy shares in China Molybdenum and deposited it in a dormant account and then transferred to his own account which were subsequently sold for approximately $434,742.
Count 6 is the money laundering charge where the defendant used his friendship with his friend Lai and got Lai’s consent to use his dormant share account for his own share trading and subsequently persuaded Lai to open the DBS Bank account for the defendant’s use. And in the period of two years between April 2007 and 2009, a sum of about $13 million was going from the share account to the DBS account and back again.
The defendant also manipulated the computer system to credit 200,000 Sinopec shares in March 2008 and 80,000 shares of China Tracker to add it to his friend, Lai’s share account in November 2008 and these were subsequently sold for approximately $1.26 million and $744,423 respectively.
Now, all these facts the defendant did confess under caution to and gave a detailed account.
The defendant is aged 37 and has a clear record and from the letters in mitigation submitted by Mr Chung on his behalf it was clear that the defendant had been a devoted son to his parents. He came from a simple family, a very close-knit family. Until this unfortunate period in his life he had been a responsible young man and did much voluntary work to assist the community as evidenced by letters from the pastor.
It is clear that, as I have said, the temptation of so much money within his reach proved too much for him. I accept that the defendant is remorseful, he voluntarily surrendered to the police and his plea did save the court’s time of some 30 days which had been set down for trial. However, I also have to weigh in the balance the fact that Hong Kong’s financial and securities trading systems have to be protected and sentences of deterrence have to be given in order to deter those tempted to do the same thing.
There is also the breach of trust element though Mr Chung pointed out it was what he calls a low level breach of trust. Nevertheless he took advantage of his knowledge and the lax control of the company and was able to therefore manipulate the system to his advantage.
These offences took place over a period of two years and there was some degree of planning and sophistication though I agree with Mr Chung, it is not the most sophisticated of its kind.
The total amount involved in the five theft charges comes to a sum of $3.86 million so I consider that a total starting point should be in the region of 5 to 6 years and I will adopt the 5 year starting point because of the defendant’s - this is a first offence and for all the other reasons I have already stated.
I will therefore, in relation to the theft sentences, sentence in the following way. For the 1st count the starting point will be one of 5 years reduced to 3 years and 4 months because of his plea. On the 2nd count six months will be reduced to 4 months because of his plea. On the 3rd count 12 months will be reduced to 8 months. On the 4th count 12 months reduced to 8 months and on the 7th count 24 months reduced to 16 months. Now, the sentences in counts 2, 3, 4, 7 will be concurrent to the sentence in count 1, thus giving a total of 3 years and 4 months.
As for the money laundering count which is count 6, I consider that an appropriate starting point should be one of 7½ to 8 years overall but I will again adopt the lower starting point for reasons I have already given and consider that 7½ years is appropriate. This is following the case of HKSAR v Yeung Chu 2010 3 HKLRD at page 339. And with the starting point of 7½ years it would be reduced to 5 years because of his plea.
Now, I have to consider the totality principle and having considered all the facts in relation to this case and the overall criminality, I therefore sentence in this way. For the theft counts 1 to 4 and count 7, the total sentence is 3 years 4 months. Count 6 is 5 years and I would order that 3 years of that 5 years be served consecutively to the 3 years 4 months and the remainder will be served concurrently thus giving a total overall sentence of 6 years and 4 months.