Public Prosecutor v Lee Koon Fook

• Jurisdiction: Singapore
• Judge: Wong Keen Onn
• Judgment Date: 29 April 2005
• Neutral Citation: [2005] SGDC 100
• Court: District Court (Singapore)
• Published date: 31 May 2005
• Year: 2005
• Plaintiff Counsel: Eddy Tham (Deputy Public Prosecutor)
• Defendant Counsel: Loh Lin Kok (Loh Lin Kok)
• Subject Matter: Criminal Law,Offences,Documents,Falsification of accounts,Falsification of payment vouchers by company's chief executive officer to conceal drawdowns from money paid to company by its customers for the purpose of a class action suit against credit card companies,Sentence,Section 477A Penal Code (Cap 224, 1985 Rev Ed)
• Citation: [2005] SGDC 100

29 April 2005

District Judge Wong Keen Onn

The Charges

1. This is an appeal by the accused against the sentence of 2 weeks’ imprisonment imposed upon him. The Accused faced 12 charges of section 109 read with Sec 477A of the Penal Code. On 25 January 2005, the accused pleaded guilty to two of these charges, which are out below as reference:

“DAC 45211/2004 (Exhibit P1)

You, Lee Koon Fook (M/56 years old) are charged that you, between 1 October 2003 and 31 December 2003, in Singapore, did by intention aid, abet one Tey Mun Siong to falsify payment vouchers in the possession of JC Capital International Pte Ltd (“the Company), with the intention to defraud by disguising payments to directors of the Company as expenses of the Company, to wit, whilst being a Director of the Company, signed a false payment voucher for the amount of $14,950.00, being payment of Invoice No.1013 for money owed to Yeo Contractor and Trading, when the said $14,950.00 had in fact been paid to the directors, and you have thereby committed an offence under section 109 read with section 477A of the Penal Code, Chapter 224”.

and

“DAC 45218/2004 (Exhibit P2)

You, Lee Koon Fook (M/56 years old) are charged that you, between 1 October 2003 and 31 December 2003, in Singapore, did by intentionally aid, abet one Tey Mun Siong to falsify payment vouchers in the possession of JC Capital International Pte Ltd (“the Company), with the intention to defraud by disguising payments to directors of the Company as expenses of the Company, to wit, whilst being a Director of the Company, signed a false payment voucher for the amount of $17,149.00, being payment of Invoice No.1013 for money owed to Yeo Contractor and Trading, when the said $17,149.00 had in fact been paid to the directors, and you have thereby committed an offence under section 109 read with section 477A of the Penal Code, Chapter 224.

2. Upon his conviction on these two charges, accused consented to ten other similar charges under s 477A read with s 109 Penal Code to be taken into consideration for the purposes of sentencing.

The Facts

3. The accused admitted to the statement of facts without qualification. The facts revealed that the accused was a director of JC Capital International Pte Ltd (“JC Capital”) since May 2003. On two occasions between October and December 2003, the accused intentionally aided one Tey Mun Siong, who is not a director of the company, to falsify two payment vouchers amounting to $14,950 and $17,149 as payments to contractors in order to disguise these payments to directors of JC Capital. At the material times, the accused was aware that these false invoices were done to cover-up the payment vouchers that were raised to make payments for Class-action Suit bonus to directors. The facts as stated in the Statement of Facts (Exhibit B) are reproduced as follows:

“Statement of Facts

1. The accused is one Lee Koon Fook, also known as Jocky Lee, NRIC No. S1057388B, male, age 56.

2. The accused was a business consultant employed by JC Capital International Pte Ltd (“JC Capital”) since May 2003. The accused reported to one Tey Mun Siong, age 45, also known as Justin Tey, NRIC No. S2613490J. Justin Tey is the founder of JC Capital.

3. In October 2003, the accused was offered directorship by Justin Tey after he (Justin Tey) was adjudged a bankrupt on 25 July 2003. The accused was appointed as a director on 31 October 2003. The accused was also promoted to be the Chief Operating Officer of JC Capital.

4. The General Manager of JC Capital was one Foong Wai Keong, also known as Benny Foong, NRIC No: S7439967C, male, age 30. Benny Foong was appointed as a director on 30 April 2003.

5. Although Justin Tey withdrew as director of JC Capital, both Benny Foong and the accused continued to report to Justin Tey.

6. The business of JC Capital was to attract debtors of banks and credit card companies, who could not pay their dues, to make payment to JC Capital who will in turn make payment to the creditors. JC Capital would also liaise with the creditors for a more favourable repayment plan. A one time initial fee of 3% of the total debts owed is charged while a monthly management fee of 15% is charged based on the monthly repayment made by the debtor to JC Capital.

7. Whenever a customer makes payment, Margaret Mei Yue Lan, NRIC No. S7029065J, the Accounts Manager, would deposit them into the first DBS bank account of JC Capital, known as Accounts 1. After deducting the necessary fees mentioned above, the remaining would be transferred to the second DBS bank account, known as Accounts 2. Repayment to the credit card companies or banks would be made out from Accounts 2.

8. Customers who signed up with JC Capital had to sign an agreement whereby it was stated that payments made by them, net of fees, would be deposited into Accounts 2, a clients’ account. In 2003, the accused had the understanding that funds in Accounts 2 belonged to the clients of JC Capital and therefore its funds could not be used for JC Capital’s own purposes and expenses.

Class Action Suit Bonus

9. JC Capital was a client of a law firm M/s Asia Law Corporation (“ALC”). ALC had on occasions provided general legal advice to JC Capital and had conducted a workshop for JC Capital staff on matters relating to litigation procedure and bankruptcy.

10. In early 2003, Benny Foong and Leow Tze Ping, also known as Zac Leow, another director of JC Capital, had a discussion with Lim Ker Sheon, a lawyer, of ALC. Benny Foong and Zac Leow had wanted to know whether the 24% per annum interest charged by many credit card companies run contrary to the Unfair Contract Term Act, in a climate of low interest rates. As each individual client of JC Capital could not afford the legal fees, the idea of a class action suit was discussed.

11. At a subsequent meeting, Lim Ker Sheon advised the directors (including the accused) and Justin Tey, that legal costs could exceed $100,000 if such a suit was to be commenced. However, thereafter, there was no further instructions given to Lim Ker Sheon on this matter.

12. In October 2003, a meeting involving the Benny Foong, Justin Tey, Jason Chang (another Director of JC Capital) and Zac Leow was held and it was agreed that JC Capital would commence amassing resources for the class action suit. Clients who wanted to opt into the Class Action Suit would be charged a fee of $2,500 each. Since it was expected that the clients could not pay the $2,500 in one lump sum, it was agreed that the $2,500 would be met from the monthly contributions of these clients which ranged from $127 to $1600. Zac Leow was tasked by Justin Tey to brief this procedure to the sales staff, which he did so accordingly. Clients who had opted in were asked to sign a letter of intent. The Letters of Intent had stated that the $2,500 would be used to fund “administrative and legal processing fees” for their class action suits. The Letter of Intent did not describe what constituted “administrative” fees. Thereafter any monies paid up by the clients were deposited into the Accounts 2 of JC Capital.

13. Between October 2003 to November 2003, a total of at least 130 clients signed up for the Class Action Suit scheme. In this same period, Justin Tey instructed for bonuses to be paid out from the contributions paid by the clients to the directors, called Class Action Bonus. It was also decided internally that from the monthly contribution of each client, 1% is set aside as sales commissions for sales staff, 20% is set aside for the legal fees and the remaining 79% is set aside for the Class Action Suit Bonus with nothing left from the monthly contribution to discharge the debt owing by the client to the banks. A total of $84,381.00 was paid out as Class Action Bonus out of a total of $85,233 collected from the clients. In all, the accused received $1,792 as Class Action Suit Bonus. The bonuses were paid out before any steps were taken by JC Capital to initiate any class action suit.

Facts relating to DAC 45211 of 2004

14. Between October 2003 to December 2003, Justin Tey informed Benny Foong and the accused that there was a need to cover up the payment of the Class Action Suit Bonus because it was paid out from Accounts 2, a clients’ account. Justin Tey then instructed Benny Foong to issue false payment vouchers to cover up for the actual payment vouchers raised to make payment for the Class Action Suit Bonus.

15. In end November 2003 or early December 2003, Justin Tey handed over a blank invoice to Benny Foong. The invoice had the name “Yeo Contractor and Trading” stamped on it. Justin Tey then instructed Benny Foong to fill in all fields, such as the description and amount in the invoice but that the amount of the invoice had to be $14,950. Justin Tey also instructed Benny Foong to hand over 60% of the $14,950 which was $8,970 to him when the cheque had been cleared.

16. Benny Foong then instructed another person to fill in the columns for “Messrs”, “Quantity”, “Description”, “Unit Price”, “Amount” and “Total Amount”. The invoice was made out to appear that Yeo Contractor & Trading had sold $14,950 worth of office furniture to JC Capital, which in fact was not true. Investigations revealed that Yeo Contractor & Trading was using another format when issuing invoices and that this false invoice did not originate from them.

17. Thereafter, Benny Foong handed over the invoice to Margaret Mei and instructed her to prepare a payment voucher for $14,950 in favour of Yeo Contractor & Trading to make it appear that JC Capital was making payment to Yeo Contractor and Trading. Benny Foong signed in approval column of the payment voucher.

18. Thereafter, Margaret Mei handed over the payment voucher, together with the false Yeo Contractor and Trading invoice, to the accused for his signature and the accused signed on the approval column of the payment voucher. At the time of signing, the accused was aware that the payment voucher was...