Ex-sales clerk gets three years and two months for $720,000 purchase orders fraud

2017-10-25


A former sales clerk of a packaging and labour protective materials supplier (Company A), charged by the ICAC, was today (October 25) sentenced to three years and two months’ imprisonment at the District Court after being convicted of defrauding six local food manufacturers of purchase orders worth about $720,000 and using false purchase orders.

The defendant, 34, was found guilty of eight charges – six of fraud, contrary to Section 16A(1) of the Theft Ordinance, and two of using a false instrument, contrary to Section 73 of the Crimes Ordinance.

In passing the sentence, Deputy District Judge Ms Merinda Chow Yin-chu said the numerous dishonest acts of the defendant constituted a serious breach of trust.

She added that the court had to impose a custodial sentence on the defendant to reflect the seriousness of his offences which lasted a long period of time.

The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.

The court heard that at the material time, the defendant was employed by Company A, a supplier of packaging and labour protective materials. He was tasked to liaise with six local food manufacturers and process their purchase orders.

Company B was a motor oil trading company owned and operated by the defendant’s family. Company B had no business links with Company A and the defendant was not its employee.

The court heard that between October 2011 and January 2013, the defendant falsely represented to the six local food manufacturers that Company A was renamed as Company B, and that Company A had no supply of blue gloves.

Believing in what the defendant said, the six local food manufacturers placed orders for plastic bags, blue gloves and labour protective materials with Company B rather than Company A and subsequently settled payments with Company B.

As a result, business totalling about $720,000 had been diverted from Company A to Company B, the court heard.

On September 5 and October 9, 2014, the defendant respectively used two false purchase orders worth $75,600 in total and purportedly issued by Company A to induce a plastic bag supplier of Company A to accept them as genuine.

In fact, Company A did not place those orders with the supplier and authorise the defendant to issue the two purchase orders concerned.

The court also heard that Company A had never changed its name to Company B. Company A could supply all the products involved in the transactions between Company B and the six local food manufacturers at the same price and of the same quality.

Had the six local food manufacturers known that Company A did not change its name to Company B or that Company A was able to supply the packaging and labour protective materials concerned, they would have continued to place orders with Company A.

Company A had rendered full assistance to the ICAC during its investigation.

The prosecution was today represented by prosecuting counsel Bernard Chung, assisted by ICAC officer Keith Chu.
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