Introduction

In many corruption cases, false or fabricated documents are often used as a tool by the offenders to deceive others so as to obtain certain benefits or advantages. Section 9(3) of Prevention of Bribery Ordinance (Cap. 201) (the “PBO”) specifically deals with this type of corruption offences. To illustrate the application of this section 9(3) of the PBO, we set forth below two recent convicted cases concerning ICAC’s charge against corrupt offenders.

Prevention of Bribery Ordinance

s.9(3) of the PBO provides that:

“Any agent who, with intent to deceive his principal, uses any receipt, account or other document—

(a)   in respect of which the principal is interested; and

(b)   which contains any statement which is false or erroneous or defective in any material particular; and

(c)   which to his knowledge is intended to mislead the principal,

shall be guilty of an offence.”

Any person guilty of such offence shall be liable on conviction on indictment to a fine of $500,000 and to imprisonment for 7 years, and on summary conviction to a fine of $100,000 and to imprisonment for 3 years.

ESCC 114/2017

The defendant in court case ESCC 114/2017 is the Chief Telecommunication Officer of the Hong Kong Police Force (“HKPF”). At the time when he was a Telecommunications Engineer of the HKPF, he was eligible to join the Home Financing Scheme, provided that he and his spouse may not receive more than one housing benefit at any one time, irrespective of the provider of such benefit. At the relevant time, the defendant was already married, yet he falsely declared his marital status as “single” when he submitted a statement on housing and housing related benefits in support of his application for a down payment loan for purchasing a property and a monthly allowance to repay the mortgage loan of the property. Further, the defendant deliberately omitted to provide information about the housing benefits which his wife has received from her employer simultaneously.

The government, having misled by the defendant’s deliberate act of submitting false information and concealing his marital status, granted him the down payment loan and monthly allowance totalling over HKD1.9 million.

Subsequent ICAC enquiries revealed the offence by the defendant, who was then charged with s. 9(3) of the PBO for using the false document to defraud the government of the housing loans and allowance. The defendant pleaded guilty to such charge and was sentenced to nine months’ imprisonment, which was suspended for two years.

It was particularly noted by the magistrate in sentencing that senior officials like the defendant defrauding the government normally deserved custodial sentences, as it was ruled in the present case.

It is worth noting that the false statement was made in 1997 and given that there is no time bar for criminal offence, the ICAC and Department of Justice can still pursue this matter after more than 20 years.

KCCC 3310/2017

In another recent court case KCCC 3310/2017, the defendant was also charged with s.9(3) of the PBO, the context was in a property management company (the “Company”) posted to a private residential estate (the “Estate”). The defendant was a property manager in the Company who was responsible for overseeing the management affairs of the Estate. In early 2016, while the defendant was arranging to purchase festive flowers for Chinese New Year for the Estate, he requested the gardening service contractor of the Estate (the “Contractor”) to issue a quotation of HKD25,000 for festive flowers which were in fact supplied by another supplier. The Contractor issued such quotation to the Company in accordance with the defendant’s instructions and later received a cheque from the Company as order payment. The Contractor subsequently deducted from the HKD25,000 their actual fees and returned HKD21,180 to the defendant.

Likewise, the case was investigated by the ICAC which later charged the defendant for using false documents with intent to mislead the Incorporated Owners of the Estate. As of the date of writing this article, the defendant was remanded in the custody of the Correctional Service Department pending sentencing of the case.

Even though the defendant was a property manager of the Company and not that of the Estate, given that he was acting for the Estate in the course of procuring the festive flowers, the defendant is an agent of the Estate (principal) and s.9(3) of the PBO still applies and gives the ICAC jurisdiction to investigate this matter.

Conclusion

It was obvious that the agents in the two cases above used documents (a) which their principals were interested, (b) contained false statements and (c) which to their knowledge were intended to mislead their principals with a view to obtaining certain benefits. From these two cases, we can see how s.9(3) of the PBO may operate and be applied by the ICAC to combat corruption transactions that involve deceiving false documents in different contexts.

Depending on the circumstances of the cases, such as the money amount involved and the seniority and position of the agent committing the offence, the penalty for such offence could be as severe as custodial sentence in addition to being ordered to pay back the amount of any advantage received by the agent.

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Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.