HKSAR v. FONG WAI CHUNG

DCCC 81/2018

[2018] HKDC 1024

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 81 OF 2018

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REASONS FOR SENTENCE

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1.  The defendant pleaded guilty to 3 counts of “conspiracy to defraud”, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap. 200 and 7 counts of “fraud”, contrary to section 16A of the Theft Ordinance, Cap. 210.

Facts

2.  On 6 January 2017, the police mounted a covert operation in Kwun Tong.  At about 2:30 pm, the Defendantwas seen entering Apple Store at APM, Kwun Tong.  It was later revealed that the defendant had used an American Express credit card in the name of “FONG Lai-kuen” (“FONG”) as particularized in charge 5 (“Card 5”) to purchase two iPhones.   

3.  At about 3:30 pm on the same day, the defendant was intercepted by the police.  Upon search, the two iPhones, the relevant receipts, a MI smartphone, cash of HK$19,000, Card 5 and another American Express credit card in the name of FONG as particularized in charge 4 (“Card 4”) were found in the defendant’s possession.  The defendant was then arrested and cautioned.  Under caution, the defendant admitted that the two credit cards were in the name of his sister and that he had applied for the credit cards in her name.  He further revealed that he had forged documents for the said applications and that his sister knew nothing about the credit cards.

4.  House search was conducted and a notebook (“the Notebook”) and two letters issued by American Express to FONG were found.  

5.  The Notebook was written with the number of the credit cards as particularized in charges 1 and 2, the names, identity card numbers, addresses and personal particulars of “WONG Ping-on” (“WONG”) and “Kevin”. 

6.  In subsequent video-recorded interviews, the defendant admitted under caution that in July 2016, he met a male known as “Ah Fei” in Shenzhen. “Ah Fei” engaged him to use the information of others to apply for credit cards and to use the credit cards to make purchases in Hong Kong. In return, he would receive 30% of the price of the purchased items as a reward.  He was then given an American Express credit card as particularized in charge 6  (“Card 6”) in the name of “LOW Wing-lok” (“LOW”) and used that card to make purchases of coupons.  Thereafter, he handed over the coupons to a male in Mong Kok and received around HK$9,000 as reward (charge 6).  Subsequently, “Ah Fei” provided him with particulars of “Kevin LEUNG” (later known to be “LEUNG Ying-fun”(“LEUNG”)) and his bank statements.  He then used these documents and successfully obtained two American Express credit cards in LEUNG’s name as particularized in charge 1 (“Card 1”) and charge 2 (“Card 2”) and used these two cards to make purchases. In return, he received cash of around HK$18,000 to HK$20,000 as reward (charges 7 & 9).  After he used forged documents and successfully obtained Cards 4 and 5, he used the same to make purchases and resold the items purchased with Card 4 for HK$13,000 (charges 8).  In late December 2016, Ah Fei sent him documents and he used the same to make an online credit card application in the name of WONG.  An American Express credit card as particularized in charge 3 (“Card 3”) was subsequently issued. However, he had not yet collected Card 3. At the time of arrest, he had with him cash of HK$19,000.  The money was the proceeds he received for selling the iPhones he purchased with Card 4 and for giving the iPhones he purchased with Cards 1 and 2 to “Ah Fei”. 

7.  Investigation revealed that Cards 1-2 and 4-6 were used to makes purchases in a total sum of around HK$144,000 on various dates at various locations as particularized in the Summary of Facts.

8.  Photographic images of one of the cards and bank statements of LEUNG and WONG and WONG’s HKID card were retrieved from the MI smartphone.  SMS messages in relation to some of the applications for credit cards were also retrieved from the smartphone.

9.  The purported holders of Cards 1 to 6 were subsequently located.  All of them confirmed that they had no knowledge of the applications for the relevant credit cards and that some of the information set out in the relevant application forms was false.  However, they confirmed that the HKID copies submitted for the relevant applications were genuine. 

10.  CCTV of all the relevant shops captured the defendant making purchases in relation to charge 6. 

Mitigation

11.  The defendant is aged 34, married with his wife staying in the Mainland.  Prior to the arrest, he worked as a casual delivery worker earning about HK$7,000 to 8,000 per month.  He lives with his father and elder sister.  He contributes HK$3,000 per month for the family expenses.  He has 9 criminal conviction records, 8 relate to offences involving dishonesty.

12.  In mitigation, it was revealed that the defendant’s mother had a stroke in July 2016, as a result of which the defendant borrowed money from relatives for the treatment of his mother. Unfortunately, the operation was unsuccessful and his mother passed away in July 2016.  He committed the present offences in order to repay the loan from his relatives.  Counsel for the defence submitted that the charges are interrelated.  Counsel refer to the case of HKSAR v Tu I Lang, CACC 464/2006 and submitted that a starting point of 3 years would be appropriate given the amount of loss was not huge, the operation was not sophisticated, no international element was involved and the defendant acted alone for most of the offences.  Counsel agreed that the potential loss should be considered and reflected in the sentence.

Sentence

13.  Credit card offences are serious and must be deterred.  Offenders would expect to be punished by a substantial term of imprisonment.

14.  In R v Chan Sui To and anor [1996] 2 HKCLR 128, the Court of Appeal laid down the various factors to be considered in sentencing this type of offence, which included the size and planning of the operation, whether there is any international dimension and the role played by the defendant. 

15.  In HKSAR v Mak Chun Kong CACC 446 of 2013, the applicant was convicted after trial of one count of conspiracy to defraud which involved the applicant and others to apply for credit cards from two banks using false information.  As a result, a total of 11 credit cards were issued and used to obtain cash advances and to pay for goods and services in the sum of around HK$520,000.  The trial judge adopted a starting point of 5 years and 9 months and discounted it by 3 months for the applicant’s agreement of most of the prosecution case.  In dismissing the appeal against sentence, the Court of Appeal discussed the principles applicable to conspiracy to defraud of this nature and stated at paragraph 61:-

“… In sentencing the offender for his criminal conduct, a court always looks to the consequences of that criminal conduct. Here, the criminal conduct was the forming of a conspiratorial agreement to defraud two banks by dishonestly causing them to issue credit cards so that they could be used to fraudulently obtain goods. The applicant and Tam formed that agreement and then they committed a number of acts pursuant to it. But the offence of conspiracy is not concerned with the execution or carrying-out of the agreement, but rather with its formation. But when it comes to sentencing an offender for being a party to that unlawful agreement, all that was done pursuant to that unlawful agreement and the harmful consequences to any victims from that which was done will of course be relevant to that offender’s culpability. So long as the act is pursuant to the previously formed agreement, then it becomes part of the culpable conduct of the conspirators for which they should be sentenced. …”

16.  In HKSAR v Chan Yuk Kwan, CACC 26/2001, the applicant’s wife was an estate agent.  He obtained from his wife photocopies of identity cards of other persons to apply for credit cards.  He used a vacant flat as the correspondence address for the applications.  Two men helped him steal bank statements which were altered to tally with the names on the applications as income proof.  The two men also passed him tax assessments whose names were altered for the applications to the banks. He obtained 8 credit cards.  These cards were used either by himself or the two persons who operated with him, and the losses occasioned to the banks over a period of 4 months amounted to HK$148,000.  The Court of Appeal considered that a total sentence of 4 years’ imprisonment before plea would adequately reflect the overall criminality of the applicant.

17.  In HKSAR v Chow Fu Keung, CACC 525/2000, the applicant conspired with another person to defraud a number of banks and credit card companies to obtain credit cards by making false representations on his address and occupation.  A total of 13 credit card companies were subject to false applications made by the applicant.  He opened a bank account at Citibank and created a shell company to assist in the scheme of deception.  4 credit cards were eventually obtained and a total sum of around HK$138,000 was outstanding on these cards at the date of the applicant’s arrest.  The Court of Appeal considered a starting point of 5 years’ imprisonment appropriate.

18.  In the present case, the defendant was involved in the application of the credit cards with false information and the use of the credit cards.  A total of 5 credit cards were obtained and the offences were committed over a period of 6 months.  The total loss caused so far is around HK$140,000.  The defendant played a key role in what I see as a small-size operation.  Although the defendant submitted the online applications and use the credit cards by himself, I do not consider he was acting alone as he was part of the operation of “Ah Fei” in the obtaining and subsequent using of credit cards.  

19.  The defendant has 8 previous convictions relating to offences involving dishonesty.  It is apparent from his record that he kept on committing offences involving dishonesty shortly after his release from prison.  His last conviction was in 2014.  According to the antecedent statement, he was last released from prison on 3 June 2016.  He then committed charge 6 of the present case on 19 July 2016.  It is clear that the defendant was not deterred by the previous sentences.  In the circumstances, I opine a heavier sentence should be imposed. 

20.  For each of charges 1-5, each concerned with one application for credit card.   False information was used.  All 5 applications were received and approved by American Express with credit cards issued.

21.  In view of the above authorities and the circumstances of the case, I consider the appropriate starting point for each charge is 3 years.  It is enhanced by 3 months for the defendant being a repeated offender.  Given the defendant’s plea, the sentence for each charge is reduced to 26 months’ imprisonment.

22.  For charges 6-10, one credit card was involved and used in each charge and the value of properties obtained ranged from around HK$14,000 to HK$48,000.  I consider the appropriate starting point for each charge is 3 years’ imprisonment. Again, it is enhanced by 3 months for the defendant being a repeated offender.  Given the defendant’s plea, the sentence for each of charges 6-10 is reduced to 26 months’ imprisonment.

23.  Apart from the plea, I do not see other mitigating factor justifying further reduction of sentence.

24.  Taking into consideration the totality principle, I consider a total sentence of 35 months is sufficient to reflect the criminality of the defendant.  In the circumstances, I order that 1 month of the sentences for each of charges 2-10 to run consecutive to the sentence for charge 1, making a total sentence of 35 months.  The defendant is therefore sentenced to 35 months’ imprisonment.