COURT: You were a senior partner in an international law firm. You were in a position of great trust and because of that trust you were able to have access to enormous sums of other people’s money and for a period of 4 years you betrayed that trust and fraudulently plundered their accounts.
In the execution of your fraud, you dealt with a staggering $8 billion. The total loss to your victims was something in the region of HK$572 million. That you were able to get away with it for so long is in part a reflection of the degree of trust that was placed in you.
The mode of your fraud was simple. You used a dormant client’s ledger account to receive transfers of money from the accounts of two other clients and from the escrow accounts of some 92 people who trusted you with their money in order that you invest it for them. The transfers were carried out on your instructions by trusting accounting staff. You then caused them to make disbursements from the dormant account. Cash was sometimes taken and payments were made to casinos and to your own companies.
The flowchart shows 423 receipts into the dormant account and 947 transfers from it, of which 840 reflected payments back to the accounts from which they had come to keep the frauds alive. The balance of 107 transactions accounts for the $572 million loss.
No charge you face mentions the actual sum that you dishonestly got away with. Charge 1 reflects a sum of just over $300 million which is the whole amount that you fraudulently moved from the two client accounts between March 2009 and March 2011. Charge 2 refers to the $8 billion that was the total of all the sums paid into the dormant account and is charged as money laundering between May of 2007 and June of 2011. Charge 3 reflects the disbursement of that $8 billion from the dormant account.
The loss to the two clients was $83 million. The loss to the investors was $489 million, giving the total of $572 million.
Your firm has reimbursed the two clients in full. The investors have not been compensated and 17 of them have sued the firm for a sum of $686 million. A huge loss may fall on your partners or the investors, or may partially fall on both. The potential exists for your partners to be jointly and severally liable.
There were seven of them and I am told that there is insurance cover in place for your fraud. If the insurer should pay out, then in the end I suspect it will be the public who will bear at least some of the damage by increased premiums being passed on, through increased fees.
How does a man get through at least $550 million of other people’s money? The answer in your case was gambling, so the money has gone forever, lost in the casinos of Macau, wasted in the pursuit of your own pleasure. A feature of your conduct was the relentless prosecution of the fraud over four years. An intelligent man such as yourself must have appreciated that the damage grew with the passage of time and your criminal resolve and application were remarkable.
I will accept that when you commenced your fraud in relation to the investors you did not foresee the eventual extent of it all but it is to be noted that you then had a choice. You chose fraud rather than face your own gambling losses. You would have been a man with some assets and an enviable lifestyle, the envy of many, if not most Hong Kongers.
Rather than damage your own lifestyle you fraudulently exposed others to the losses that you then had. By the time you turned your attention to the accounts of the two clients nearly two years after the commencement of the investment fraud, you cannot but have appreciated the increased gravity of the situation you were creating.
Features that aggravate breach of trust cases are well known and you attract nearly all of them. The sums involved were colossal. The quality and degree of trust were of the highest. The period of the fraud ran into years. The money taken was wasted in gambling. The betrayal and its effects on your partners was deep and its effects are ongoing involving insurers and litigation involving amounts substantially in excess of the direct losses. The scale of your depredations was such that the public confidence cannot but have been shaken. Anyone learning of your case will ask themselves just how could you have been allowed to get away with it for so long.
I will not forget that you made immediate admissions and co‑operated with the investigation. I recall particularly that you have behaved decently since the matters came to light. I have read the letter you wrote to me and I have noted its dignified apologies. I note that your character was such that others have written on your behalf expressing their disbelief that you could have behaved in this way and that they ask for lenience.
It does not need me to tell you of the shame you have brought on yourself and your profession. It does not need me to tell you that you have to face a sentence of imprisonment at the very top of the scale and you will know, following the guideline case, that sentences of 10 years or more after trial will follow in breach of trust cases, and the 10 years will follow where the amount taken is in excess of $15 million. That is just some 2.7 per cent of the losses you caused.
What is the top of the scale? The so-called white collar crime sentences have rarely, if at all, exceeded 15 years after trial. Is that enough in your case?
I am conscious of the dangers of comparing sentences for different types of crime but remember that sentences must be seen to have some sensible fit into the sentencing of the general criminal calendar. I am also conscious our courts are full of fraud cases and the criminal courts cannot be seen to be soft on them. There must be no perception that the rich and privileged are treated any differently.
If you were to leave this court after your pleas of guilty with a sentence of no more 10 years no one would think your sentence stood out from those habitually passed here, yet your crimes are truly outstanding in their gravity. Even on pleas of guilty I judge 10 years insufficient to meet the extraordinary features of your case.
I judge that the public simply will not put up with such conduct and will rightly expect severity. I judge that a sentence of no less than 12 years is called for. Even then I expect there will be many where you are going who will see the gap between the enormity of your crime and their own sentences as bewildering.
I appreciate that such a sentence would yield a global starting point of 18 years after trial and that such can be said to go too far beyond the sentences passed to date. It makes me pause. However, for a case as bad as yours, I do not feel constrained by any perceived ceiling of a global 15‑year starting point. Outstanding cases must attract outstanding sentences.
I will countenance, albeit with some difficulties, a starting point of 18 years for the whole course of your crimes, and I emphasise the plural. The individual starting points for each charge will be within the conventional bracket of starting points for fraud of the most serious kind.
The question in your case is one of totality. The realistic choice of overall sentence is one between 10 and 12 years’ imprisonment. I have judged it should be the latter for what is acknowledged to be Hong Kong’s worst ever case of embezzlement.
After the one-third discount for your pleas of guilty, the total sentence will be one of 12 years’ imprisonment. I will achieve that result by taking starting points for each individual charge of 12 years and pass sentences of 8 years on each charge. The sentences on Charges 2 and 3 will run concurrently to one another but they will only commence to run after the expiry of 4 years of the sentence on Charge 1, making the total sentence 12 years.