HKSAR v. To Ah Sin

DCCC 291/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 291 OF 2013

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REASONS FOR SENTENCE

1.The defendant stands convicted after trial of one charge of fraud, contrary to section 16A of the Theft Ordinance, Chapter 210.

2.In summary between the 8 June 2004 and the 31 July 2010 the defendant concealed from the Social Welfare Department the existence of eleven bank accounts, two securities accounts, five insurance policies and the income from three part time jobs with three different companies.  Disclosure of the assets alone would have resulted in the defendant being ineligible for Comprehensive Social Security Assistance (“CSSA”) for the whole of this period and therefore the defendant was overpaid the sum of HK$589,134.97.  Full particulars of the conviction are set out in the reasons for verdict delivered on the 30 September.

3.In passing sentence I have carefully considered everything said on behalf of the defendant by Miss Chong together with the mitigation letters from the defendant and her daughter and the content of the background and medical reports.  

4.The Court of Appeal in the Secretary for Justice v Leung Wai Kei [2007] HKCLRT 206 considered the appropriate sentence for offences involving the obtaining of public assistance funds by deception.  Whilst accepting that society does not tolerate any act of defrauding public funds by dishonest means the Court of Appeal did not endorse the view that an immediate custodial sentence should be imposed on each and every person guilty of defrauding public funds.

5.The Court of Appeal at paragraph 27 went on to say that: “Each case presents its own facts and each defendant has his own circumstances, and it would go against sentencing principles to lay down a hard-and-fast rule of adopting immediate imprisonment as a starting point.” The Court of Appeal then listed seven factors to be considered in determining whether a severe sentence is to be imposed. 

6.The seven factors are:

(1) whether the defendant pleaded guilty;

(2) the amount involved and the length of time over which the offence was committed;

(3) the circumstances leading to the offence there being an obvious difference between a legitimate claim which became false due to a change of circumstances and a claim which was false from its inception;

(4) the purpose for which the money has been used with the use of the money for providing household necessities more readily attracting the court’s sympathy than spending the money on luxuries;

(5) the defendant’s character and previous record;

(6) circumstances specific to the defendant, such as illness, disability, family difficulties, etc; and

(7) whether the defendant has voluntarily repaid, in whole or in part, the amount that has been overpaid.

7.The defendant having been convicted after trial no credit for a guilty plea can be given nor can credit be given for repayment, nothing having been repaid.  The offence was committed over a period in excess of 6 years and involves a substantial sum of money in excess of half a million dollars.  Although due to the prosecutions failure to get the banking evidence in order the period of the fraud had to be shortened by almost two years I accept there is no evidence the claim was fraudulent when the defendant first started receiving CSSA in 1998.  This was a time shortly after the death of her husband when the two children of the family were both very young. 

8.I am told the CSSA was used to bring up the children.  This however must be viewed in the light of the fact that the amount of assets held by the defendant during this period would have resulted in the defendant being ineligible for CSSA.  As shown by the monthly summary in the Re-Assessment Report (exhibit P20) the highest amount of savings held by the defendant each month ranged between $293,299.54 and $2,206,579.38 with savings over $1 million held for 17 months and savings over $2 million held for 23 months.  Whilst I accept the amount of savings fluctuated according to the price of the stocks and shares held by the defendant the amount of assets held by the defendant were substantial and a far cry from the situation where a recipient of CSSA has very little or no assets or income. 

9.I take into account the defendant has no previous convictions.  This however must be viewed in context that this is not a single isolated offence but an offence which was committed over a period of 6 years.  On the other hand credit is to be given for the community work undertaken by the defendant as shown by the various letters and certificates submitted to court.

10.I take into account that the defendant has undergone five operations since 1996, two this year relating to cancer of the cervix.  The medical report from the Kwong Wah Hospital submitted by the defence reveals that after the defendant’s last operation in July this year post-operative course was uneventful and the pathology report showed adenocarcinoma in situ of cervix, margin clear.  My understanding is that the operation was successful and the cancer removed.  The defendant is now required to follow-up in the Gyne-Oncology Clinic at the Kwong Wah Hospital, her next appointment being in November.

11.In determining sentencing guidelines for offences involving fraud on public assistance the Court of Appeal in Leung Wai Kei at paragraph 46 adopted the principles in R v Stewart (Livingstone) [1987] 1 WLR 559 that:

(1) The court should first consider whether a custodial sentence is necessary;

(2) If a custodial sentence is appropriate, the court may consider imposing a community service order in lieu of imprisonment or suspending the sentence;

(3) In cases involving some intentional and persistent fraud, an immediate custodial sentence is justified.

12.Where a defendant is convicted after trial and an immediate custodial sentence is warranted, the appropriate terms of imprisonment as set out in Leung Wai Kei are less than 9 months where the amount involved is less than $50,000; 9-15 months where the amount involved is between $50,000 and $100,000; 15-24 months where the amount involved is between $100,000 and $200,000; and over 24 months where the amount is over $200,000.

13.A starting point of 2½ years imprisonment was adopted in HKSAR v Ma Kim Hung CACC 33/2002 for defrauding the sum of $258,892 over a period of 3½ years.  The defendant in that case had concealed two bank accounts in his name in which were assets of $288,317.  Had the defendant disclosed his assets he would have been ineligible for assistance in the same way the defendant in the present case would have been ineligible had she disclosed the assets in her bank accounts.  Given the length of time over which the offences were committed; the amount of money involved and the fact that it was a deliberate deception from the very beginning, the Court of Appeal said that a starting point of 2½ years' imprisonment was not manifestly excessive.  

14.Having reduced the sentence by 10 months for the plea of guilty and 2 months for delay in bringing the prosecution the trial judge imposed a sentence of 18 months imprisonment.  On appeal the Court of Appeal was urged to consider substituting either a suspended sentence or a Community Service Order to take into account the delay in bringing the prosecution and the fact the defendant, who was 67 and had a clear record, had made full restitution before he was arrested.

15.The Court of Appeal were satisfied an immediate custodial sentence was amply justified there being no escaping from the fact that for over 3½ years the defendant deliberately and methodically embezzled a very large sum of money from the Social Welfare Department. The Court of Appeal did however further reduce the sentence to 9 months imprisonment.  Although Ma Kim Hung is a decision prior to Leung Wai Kei the case isreferred to in Leung Wai Kei and is in my view consistent with the guidelines given where an immediate custodial sentence is warranted. 

16.Taking into account that:

(i) the defendant concealed eleven bank accounts and two securities accounts which for over 40 months had between $1-2 million in savings; five insurance policies and part-time work which in the case of Sam Lung was over a period in excess of two years and was actually being undertaken when Review Forms were signed where the defendant declared she had no job and said that if there was other income apart from CSSA payments she would inform the Social Welfare Department;

(ii) over a period of 6 years and 2 months the defendant fraudulently obtained the sum of HK$589,134.97; and

(iii) had the defendant disclosed her assets she would not have been eligible for any CSSA payments,

I am satisfied that the offence is too serious for the imposition of community service and that a custodial sentence is necessary. In all the circumstances I am satisfied the proper starting point after trial is 2 years and 9 months imprisonment. Taking into account the claim for CSSA was not fraudulent from inception and the clear record of the defendant together with her community work I reduce the sentence to 2 years and 6 months imprisonment.

Delay

17.Delay in bringing an offender to justice is a mitigating factor which may be taken into account in sentence.  All the circumstances must be looked at including whether the offender has acknowledged guilt; the size of the investigation and whether the time taken to bring the case to court was longer than necessary (see for example HKSAR v Cheung Suet Ting CACC 226/2009 and HKSAR v Chiu Chi Wing CACC 243/2012).

18.Mr Haddon-Cave has supplied to the court a chronology of the major events.  The Social Welfare Department began investigation in March 2009 and first interviewed the defendant in June 2010.  The matter was referred to the police in November of that year. The defendant was arrested on the 5 February 2012 and placed on police bail. The defendant was released from that bail in October and re-arrested and charged on the 2 March this year.  Sentence today is over 3 years after the defendant was first interviewed by the Social Welfare Department and almost 1 year and 9 months since she was first arrested.

19.Due to the large number of bank accounts, insurance policies and part-time work involved over a very long period of time investigation by both the Social Welfare Department and the police was clearly considerable.  However in my view there is nothing in the chronology which appears to justify the taking of over 13 months from arrest to charge, in particular considering the police had already been investigating the case for 15 months.  The matter could reasonably have been brought to court earlier than it was.  

20.In Ma Kim Hung delay was taken into account in reducing the sentence.  A delay of over 2½ years was said to be inexcusable where the appellant had admitted the offence and had made full restitution before arrest (see paragraph 23 of the judgment).  The circumstances are however very different to the present case where there has been no plea of guilty and no restitution, not even an offer of restitution.

21.Miss Chong submits the defendant has been under tremendous pressure since arrest which may well have exacerbated her medical condition.  Although at no time has the defendant ever acknowledged guilt taking into account the delay in charging the defendant during which period the defendant was at one stage released from bail, I am satisfied some credit should be given in sentence for this delay (see HKSAR v Wong Ka Wah CACC 260/2006).  In the circumstances I reduce the sentence by 2 months imprisonment to 2 years and 4 months imprisonment. 

22.I am satisfied there are no exceptional circumstances warranting suspension of the sentence.  Although there is no mention of cancer in the medical report prepared by the medical officer at Tai Lam Centre for Women I am told by Miss Chong that the defendant did tell the medical officer about her operations for cervical cancer.  The report states that the prison services are able to take adequate care of the defendant.   

23.Notwithstanding the sympathyone has with anyone suffering from serious illness, in particular cancer, I am satisfied in the circumstances of this case the health of the defendant does not amount to exceptional circumstances to either suspend the sentence or reduce an otherwise appropriate sentence (see for example HKSAR v Tse Tat Fung & others CACC 167/2008 at paragraphs 359-366). 

24.Clearly the correctional services are at present in a position to take care of the defendant.  There is nothing placed before me to suggest that the correctional services are unable to provide the appropriate care.  Whilst I sincerely hope that the cancer does not return if the health of the defendant deteriorates whereby the correctional services can no longer properly take care of the defendant she can petition the Chief Executive for clemency.

25.The defendant is convicted and sentenced to 2 years and 4 months imprisonment.