DCCC 1271/2011 & 811/2012
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CRIMINAL CASE NOS 1271 OF 2011 & 811 OF 2012 (CONS)
Reasons for Sentence
1. There are three defendants on the indictment. The 1st and 2nd defendant appear before me today and the 3rd defendant has absconded.
2. The 1st and 2nd defendants pleaded guilty to a charge of conspiracy to make false instruments, contrary to sections 71, 159A and 159C of the Crimes Ordinance.
3. They have admitted that they, together with the 3rd defendant, who has absconded, between 1 July 2009 and 28 February 2010 inHong Kong, conspired together for D1 to make false instruments – namely, letters of proof of funds and availability of credit facilitiespurportedly issued by Falcon Private Bank Limited – with the intention that he or another shall use them to induce somebody to acceptthem as genuine and, by reason of so accepting them, to do or not to do some act to his own or any other person’s prejudice.
4. At the material time, D1 worked at the Falcon’s Bank Hong Kong branch. He issued false letters or documents which showed falseproof of funds and availability of credit facilities in the name of D2 and D3.
5. For example, a letter dated 30 July 2009 stated that Falcon Bank had unrestricted credit facilities of €3 billion for D2 and anotherletter dated 23 November 2009 issued to D3 of Precision Planning Group Corporation, confirming that D3 has €500 million cash depositwith Falcon Bank. Those letters issued by D1 were false.
6. After internal investigations were conducted by Falcon Bank, D1 was immediately laid off.
7. D1 was arrested on 11 August 2010. He made extensive admissions in respect of this offence.
8. Also found at his residence were three foreign currency account withdrawal forms of the Hang Seng Bank in the amounts of US$0.5 million,US$1 million and US$1.5 million.
9. On 19 August 2010, D2 was arrested at the Shun Tak Control Point when he was leaving Hong Kong.
10. A body search was conducted on him and found in his possession were a USB storage device which contained a copy of a Falcon Banktear sheet stating that Precision has a portfolio of nominal value of €5 billion and a copy of a proof of funds stating that Precisionhas €5 billion on certificate of deposit with Falcon Bank.
11. D3 was arrested on 6 October 2010 and, at his residence, many documents were found which related to Falcon Bank and one of them statedthat Precision had assets of approximately US$14 billion.
12. D1, D2 and D3 were in e-mail correspondence with each other which related to the false documents.
13. D2 had, in fact,given instructions with sample false letters to D1. D1 had followed the instructions and printed the false lettersand handed them to D2.
14. It was revealed upon further investigation that D2 had an account with Falcon Bank, but between 5 June 2009 and 25 January 2010 therewas no money and no transactions on the account. D3 also had an account there in the name of Precision since September 2008 and ithad a balance of approximately US$178 and had no other transactions.
15. In simple terms, this was a case whereby D1 was never authorised by Falcon Bank to issue any proof of funds and availability of creditfacilities under Falcon Bank’s name and the letters of Falcon Bank relating to D2 and D3 and signed by D1 were, therefore, false.
16. Mr Andrew Bruce, SC, counsel for D1, has made full and thorough mitigation on his behalf today and I have taken into account allthat Mr Bruce has had to say. Mr Kwong Chi-ho solicitor for D2 has made full and thorough mitigation for D2 and I have also takeninto account all that he has said on his behalf.
17. I turn to deal with the background of the 1st defendant.
18. D1 is 42 years of age, married with two young children. He has a clear record. He is a Form 5 graduate and since graduating he hadbegun his career in a bank. As can be seen from his antecedents, he has worked for various banks and, as I have heard from Mr Bruce,he climbed steadily up the ladder and became a trusted, diligent worker.
19. I have had letters of good character submitted to me by the 1st defendant’s former colleagues and seniors at the banks, which generallyspeak of the 1st defendant as being energetic, well-disciplined, hardworking and an honest business professional. He is also consideredto be a good family-orientated husband and father. As is expected from his colleagues, this was a shock to them when they foundout what he did.
20. The defendant’s wife has also written a very heartfelt letter to the court to which I have taken into account.
21. As Mr Bruce has said, the steady climb up the ladder that the defendant had made from leaving school over the years has come to abitter and steep fall because of this offence.
22. Mr Bruce has said it was difficult for even the defendant to understand why he let himself into this, but perhaps the underlyingcause was because of debt. The bait of money put before him by D3 was a corrupting influence which D1 foolishly agreed to do.
23. There is no evidence however whatsoever of D1, in fact, receiving any monies at all.
24. I turn now to deal with D2.
25. The defendant is 45 years of age and Malaysian. I am informed that he moved to Hong Kong with his family shortly before being arrestedfor this offence. He is married with two children. He is a financial consultant.
26. The defendant has two previous convictions which occurred at one appearance at court. That was in December 2012, to which the defendantwas sentenced to 3 years’ imprisonment for possession of a false instrument. That case refers as DCCC 1270/2011.
27. I am informed by Mr Kwong that when the defendant was arrested for this offence, other false instruments were found in his possession,that is in his wallet and at his home. He was then charged for those two offences.
28. Mr Kwong has said the reason why the defendant became involved in this offence was because of D3’s influence. D3 had persuadedhim to become a director of one of D3’s companies and had induced him to become involved in this offence.
29. I am informed that before the defendant came to Hong Kong, he was a licensed financial consultant in Singapore and continued withthe financial business when he came to Hong Kong.
30. Mr Kwong has submitted that D2 has played a lesser role than that of D3. Mr Kwong supports that by saying that there were only abouteight to nine e-mails between D1 and D2 whilst there were a huge number of e-mails between D1 and D3.
31. Mr Kwong has asked me to take into account his previous sentence when considering the sentence I pass upon him for this charge.
32. The use of these false instruments in this case was a very serious matter. D1 was at that time working in Falcon Bank and was ina trusted position. He was, of course, able to get Falcon letterhead and/or Falcon stamps.
33. D2 and D3 had asked him to provide false documents as to their financial positions. These proof of funds were in huge, massive amounts. No doubt the banking system around the world, particularly in Hong Kong, looks to these banking documents as genuine documents. The use of them clearly would be for the prejudice of others and would the falseness of them obviously undermines the banking systemin Hong Kong
34. D1, in my view, can be considered in a more serious position than that of D2 because D1 was a bank officer in a position of trust.
35. For D2, I do not consider that he is playing a more minor role than that of D3. It matters not how many e-mails passed between him andD1. The charge is one to which all three defendants conspired to make false instruments.
36. Defendants, had I convicted you after trial, I would have imposed a sentence of 3 years’ imprisonment.
37. However, in view of your position, D1, and the aggravating factor of this being a breach of trust, I would increase starting pointto one of 3½ years.
38. D2, I turn to deal with you first.
39. D2, you have pleaded guilty to this offence; this shows your remorse. I give you full credit for your plea of guilty and reducethat term of 3 years by one-third to a term of 2 years’ imprisonment.
40. You have been sentenced just last month to a term of 3 years’ imprisonment.
41. I take into account the principle of totality when sentencing you today for this offence and what sentence you are already serving.
42. In those circumstances, I order 1 year of the present term to run concurrently and 1 year to run consecutively to your present termof imprisonment, which would make a total of 4 years, including your previous sentence.
43. D1, as I have heard in much detail from Mr Bruce, and of which Mr Poots, counsel on fiat, has confirmed, from the very outset youindicated your early plea of guilty.
44. You have, I am informed, given assistance to the authorities, much in terms of your admission and more.
45. As a result of your assistance provided to the authorities, D2 was charged with this present offence. You then were prepared togive evidence for the prosecution.
46. At the start of the trial yesterday, to which was to be a trial in respect of the 2nd defendant, you were still prepared to giveevidence against the 2nd defendant.
47. However, today, the second day of trial, the 2nd defendant pleaded guilty. It is likely and in high probability that his plea ofguilty comes as a result of your assistance that you were to provide to the prosecution.
48. I am informed that the prosecution accepts that all you have assisted them in is the truth.
49. In view of your considerable assistance you have provided to the prosecution, I intend to take that into account when sentencingyou and give you a larger discount than the usual one-third discount on a plea of guilty.
50. In light of the assistance you provided, I consider a 45 per cent discount to be appropriate and you shall, therefore, be sentencedto 23 months’ imprisonment, having taken a starting point of 3½ years’ imprisonment.