HKSAR v. Au Keng Fai

DCCC745/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 745 OF 2012

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Reasons for Sentence

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1.Defendant has pleaded guilty to one charge of conspiracy to use false instruments, contrary to sections 73, 159A and 159C of the Crimes Ordinance, Cap.200.

2.The offence took place between 1 February 2007 and 28  February 2011.  The particulars of the charge are best described and explained when repeating the facts of this case.

The facts

3.The defendant was employed by Chun Yip Plastics Limited for a long period of time between December 2001 and April 2011.  He was employed as a clerk.  In May 2010 one of the owners of this company set up a new company known as CY Industrial (Hong Kong) Limited.  The defendant went to work there.

4.The owner of CY Industrial (Hong Kong) Limited was the father of a company set up in Macau known as Chun Yip Plastics Limited (Macau Commercial Offshore).  As this Macanese company had no office, the staff of CY Industrial (Hong Kong) Limited would assist this Macanese company with paperwork. 

5.In February 2011 during an audit it came to light that there were four bogus payments made to a Suda International Express Company Limited by CY Industrial (Hong Kong) Limited.  Four invoices were uncovered and were purportedly on paper approved by the defendant’s superior.  This Mr Yung confirmed after sight of these invoices that his signature had been forged.  Mr Yung confronted his subordinate, the defendant.

6.The defendant admitted that he had forged Mr Yung’s signature on those four invoices.  He admitted that he had induced CY Industrial (Hong Kong) Limited to pay the four invoices and the amounts within to Suda.  He admitted that he had pre-arranged with Suda that from the payment he would receive 82 per cent whereas Suda would receive 18 per cent.

7.In short, he conspired with staff members of Suda to issue invoices to the victim company where in fact there was no genuine transaction.  In this scheme herein lies the conspiracy to use false instruments.

8.Once this matter came to light, the defendant made a full confession; in fact, he signed a confession letter before surrendering himself to the police.  A full investigation then proceeded where many more bogus invoices were uncovered involving not only CY Industrial (Hong Kong) Limited but also Chun Yip Plastics Limited and the Chun Yip Plastics Limited office in Macau. 

9.In short, all three companies I have referred to earlier can be described as having been victimized by this scheme.

10.These invoices that were purportedly approved by the victim companies were issued by three companies under the Suda umbrella. 

11.Under caution, the defendant further admitted that this scam with Suda’s help had been going on since 2007.  On a monthly basis, the defendant would fabricate a false delivery request to Suda.  Suda would then prepare a fake invoice for the defendant.  The defendant would forge his superior’s signature on the invoice and produce a fake delivery note.  The defendant would submit these documents to the accounting staff of the victim companies and money would be paid directly to Suda’s bank account.  Suda would keep 18 per cent and transfer the balance 82 per cent to the defendant’s bank account.

12.From the three victim companies, the defendant stole over that period of time a total of $2,447,882.  A detailed breakdown is set out in the Statement of Facts.

13.With his 82 per cent, the defendant pocketed just over $2 million.  However, the significant figure is the victim’s actual loss. 

14.The best mitigation today is the defendant’s plea of guilty.  He does have one minor previous conviction; it was a long time ago in 1999.  Besides that, he has led a law-abiding life.

15.He is 31 years old, married with a young child. I have been told that he has been supporting two families, his own including his parents as well as his parents-in-law.  Whilst he worked with the victim companies, his salary was and had remained at $10,000 a month which was not enough to sustain so many people as the main breadwinner, plus, it seems, he started to dabble in dangerous drugs.

16.The facts of this case show a classic breach of trust by an employee.  The relevant authority that sets out guidelines for these types of cases is HKSAR v Cheung Mei Kiu [2006] 4 HKLRD 776.  In that Court of Appeal authority, the guidelines were later adjusted by HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017.

17.What is relevant to the defendant here is that the Court of Appeal has found where there is a monetary loss of between $1,000,000 to $3,000,000, a 3 to 5-year term of imprisonment as a starting point would be appropriate.  Mathematically speaking, the starting point in this case should be 4 years and 6 months.

18.Other relevant factors would be that there has been no restitution possible and that the scam was not a one-off but took place over a number of years. 

19.Defendant, please stand up.  After considering the facts of this case, the loss suffered by the different victim companies, the mitigation put forward on the defendant’s behalf, his background, his lack of a similar criminal record and his plea today, I will find appropriate a starting point for this offence of 4 years’ imprisonment. 

20.Defendant is entitled to a discount of one-third for his plea today.  Ultimately, the defendant is sentenced to 2 years and 8 months for this offence.  Do you understand that sentence?

DEFENDANT: Understand.