HKSAR v. CHAN WAI KIN

CACC 237/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

criminal APPEAL NO. 237 OF 2005

(ON APPEAL FROM HCCC NO. 20 of 2005)

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J U D G M E N T

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Stuart-Moore, VP (giving the judgment of the Court):

Background

1.  On 27 April 2005, the applicant (D2 in the court below) pleaded guilty before Deputy Judge M Poon in the Court of First Instance to the 2^nd count of an indictment alleging that he conspired with his two co-defendants (D1 and D3) to use 3 false Visa cards with fraudulent intent, contrary to sections 73, 159A and 159C of the Crimes Ordinance, Cap. 200.  The judge, after reports had been provided, sentenced the applicant on 20 May 2005, at which time he was then aged 25, to 32 months’ imprisonment.  He now seeks leave to appeal against sentence on the basis that the starting point of 4 years taken by the judge was manifestly excessive.  Mr Hemmings, having also represented the applicant in the earlier proceedings, submitted that a 3-year starting point would have been appropriate.

The facts

2.  The applicant’s movements on 17 May 2004 were being monitored by police.  In short, he was observed with D1 and D3 on a shopping spree in Tsim Sha Tsui using the counterfeit credit cards.  They also had the use of a car to travel from one destination to another.  Their journey had begun in Mongkok where D3 paid the restaurant bill on a false Visa card having earlier tried to utilise another false Visa card to do so.  When they arrived at Tsim Sha Tsui, the applicant went into the Hyatt Regency shopping arcade where he bought 3 items valued together at $13,563 in a Dunhill shop using an Orix Visa card.  D1 was in the shop while he did this and, meanwhile, D3 made a purchase using the counterfeit card in her possession at the HMV store nearby.  After these events, the 3 conspirators met up and went to a Montblanc shop in Harbour City where the applicant, using the same card as before, purchased 4 items for $11,620 and D3 bought 5 items for $18,144 on the counterfeit Visa card she was carrying.  As they left the shop, they were arrested in possession of the property they had fraudulently acquired.  When their car was searched, the Dunhill items were also recovered. 

3.  Later, when D1’s house was searched, a variety of items were found including 30 counterfeit credit cards, a magnetic stripe card-encoder and a computer with other material used to encode information to and from the magnetic stripes on false credit cards.  Enquiries revealed that a number of the cards found at D1’s address had been used in fraudulent transactions but it is right to emphasise that the applicant’s plea of guilty was limited to a conspiracy involving the 3 Visa cards found in the possession of the conspirators at the time of their arrest.

4.  In interview, the applicant admitted that he would be paid a 10 per cent reward based on the value of the goods he had obtained.

Sentencing

5.  When sentencing, the judge referred to the applicant’s troubled background and to the fact that she had been invited to distinguish this case from those where the motivation stems from greed.  It had been suggested that the applicant had been driven to act dishonestly out of desperation.  The judge went on to refer to the material factors to be considered in cases of this kind which are set out in R v Chan Sui-to & Anor [1996] 2 HKCLR 128 at 131 and also the sentencing guidelines at 134 saying amongst other things:

“	I first deal with Charge 2. Three forged credit cards were involved. Goods and services obtained amounted to HK$44,000 odd.
	According to criteria laid down in the case of Chan Sui To, this amount is just slightly less than the amount which qualifies for the lower end of a medium-sized operation.
	However, courts have also indicated that the sum of money actually involved is only one of the factors and not the most significant factor. Courts must not lose sight of the fact that these sort of cases beat the credit card system by fraudulent methods and create potentially large-scale losses to banks and credit card companies. The courts have always indicated that deterrent sentences are called for to deter others who are like-minded.
	Whilst I note the defendants were not charged with any obtaining offences, the credit fraud conspiracy was indeed perpetrated, carried out and completed.” (Appeal bundle pp. 3-4)

The applicant was accorded the usual discount of a third to reflect his plea of guilty.

The application

6.  In Chan Sui-to & Anor, an authority on which Mr Hemmings relied in these proceedings to demonstrate that too high a sentence had been imposed, it appears that the 1^st appellant, who was sentenced to 6 years’ imprisonment after pleading guilty to a number of charges, had emerged from what was described as a “factory” for making false credit cards and telephone cards.  He was arrested in possession of 4 counterfeit credit cards, 23 false Telecom phonecards and a false identity card.  Inside the factory, police discovered, amongst other things, the data relating to 384 credit card accounts, an encoder, an embosser and other machinery associated with manufacturing false credit cards of which 43 such cards were found as well as 23 more false phonecards.  The judge found that the 1^st appellant had been “directly involved in the running of the credit card factory”.

7.  In the guidelines given by the court in Chan Sui-to & Anor, it was held that a person who played “an active but not necessarily a key role in a medium-size operation involving between $50,000 and $150,000, with no elaborate planning and equipment, and without an international dimension, should receive a sentence of 5 to 6 years after trial”.  Somewhat curiously, the court in that case, having gone on to say that the sum of money involved is only one of the factors to be taken into account and “is not even the most significant factor”, and having concluded that the 1^st appellant was operating a medium-sized operation, went on to state:

“Applying our guideline, we think that the totality of the sentences on D1 should be 4 years before plea”.

This starting point, at a time when the policy of giving a one-third discount had not yet been fully implemented, was reduced to 3 years’ imprisonment to reflect the guilty pleas.

8.  As Mr Hemmings (who represented the 1^st appellant in Chan Sui-to & Anor) readily accepted in the course of his most able submissions, no reason emerges from the judgment in that case for the failure of the court to follow its own guideline tariff of “between 5 and 6 years” (before giving credit for a plea of guilty) for a medium-sized operation.  Although Yang CJ stated that the guidelines he had just announced “may be adjusted upwards or downwards according to circumstances”, we have not been able to understand either the contradiction which is apparent from the court adopting a 4-year starting point or the court’s reason for imposing such a modest sentence for offences of considerable gravity.

9.  However, the principles which were not intended to be exhaustive and the guidelines applicable to sentencing in cases where there has been fraudulent use of credit cards (as opposed to the actual outcome of the appeal in Chan Sui-to & Anor) continue to provide valuable assistance.  By contrast, we are rarely assisted by being given illustrations of sentences which have been imposed in similar cases to have come before this court even though they may have been set at a lower level where, to take just one of the examples provided to us by Mr Hemmings, namely, HKSAR v Cheung Ka-wo, Johnny, CACC 136/2001 (unreported), the Court of Appeal has merely dismissed an appeal against sentence.  Such a decision is case specific and will not generally provide any useful guideline to an appropriate sentence in other cases of the same or a similar kind.

10.  Returning to the present case, it is apparent that the applicant’s activities were only curtailed by a highly efficient police surveillance operation.  As this court said in HKSAR v Ng Swee Thiam & Ors [2000] 1 HKLRD 772, it is the potential rather than the actual loss incurred which gives rise to the consideration of the greatest importance for sentencing purposes.  Here, the applicant, who did not come before the court with an entirely clear record, had been operating as part of an active syndicate engaged in passing counterfeit credit cards where, but for the arrest of himself and the other perpetrators, there would plainly have been a sizeable loss.  The judge may have chosen a starting point at the high end of the sentencing range for a relatively limited conspiracy of this kind, but we do not incline to the view that it was manifestly excessive.

11.  Accordingly, the application is dismissed.