HKSAR v. LI HOI KIT

DCCC 249/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 249 OF 2017

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REASONS FOR SENTENCE

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1.  The defendant has pleaded guilty to a total of 22 charges. 21 of those are charges of “Fraud” (Charge 1 to 21) and the remaining charge is “Possession of a dangerous drug” (Charge 22).

THE FACTS

2.  The criminal activities of the defendant of these 21 counts of fraud spanned over a period of 6 months from May 2016 to November 2016.  He successfully swindled a total sum of $252,452. I do not consider it necessary to spend the time to repeat the facts of each of the 21 charges of fraud.  The defendant adopted more or less the same modus operandi in committing each of these offences.  I think it suffices to summarise the nature of the case as follows.

Charge 2 to 7, Charge 9 to 14 and Charge 16 to 20 (“the 17 Charges of Fraud”)

3.  Among the 21 charges of fraud, the above 17 Charges of Fraud concerned the defendant pretended to be individual seller and posted to sell mobile phones via different social media platforms.  The buyers (victims) were instructed to deposit the payment into a designated bank account or pay cash in person to the defendant.  However, the victims did not receive the mobile phones and subsequently lost contact with the defendant.  The customers suffered losses from $1,000 to $11,500, as the case may be.  They were supposed to be the deposit or the full sum paid for one to four mobile phones.  The defendant had committed the 17 Charges of Fraud in a span of five months, starting 14 June 2016 to 16 November 2016. The total sum amounted to $76,200.

Charge 1,8, 15 and 21 (“the 4 Charges of Fraud”)

4.  The 4 Charges of Fraud concerned the defendant befriended and pretended to his four friends that he had mobile phones which could be sold at a discounted price and deceived them in buying or investing in the sale of mobile phones.  The four friends (victims) were asked to deposit the payment into a designated bank account or pay cash in person to the defendant.  Upon getting the money, the defendant did not give them the mobile phones and lose contact.  For the 4 Charges of Fraud, the defendant met the four victims face to face.  They did not involve the use of the social media platforms.  It involved the ordering or investment of mobile phones ranging from $4,700 to $87,500.  The total sum involved in these 4 Charges of Fraud is $176,252.

5.  The defendant was later arrested by the police.  Under caution, he claimed that he had no money, so he deceived other people.

Charge 22 (“Possession of a dangerous drug”)

6.  Upon a body search conducted in the police station, a transparent re-sealable plastic bag containing 0.30 grammes of methamphetamine hydrochloride (commonly known as “Ice”) was found inside the defendant’s left sock.  He was charged with “Possession of a dangerous drug”.  He admitted that the Ice was for his self-consumption under caution.

PREVIOUS CONVICTIONS

7.  The defendant has 31 previous court appearances with a total of 38 convictions.  4 of the convictions were for fraud. 26 of the convictions were for theft.  3 of them were for obtaining property by deception.  2 were drug related.  His last conviction was for fraud on 4 February 2015 when he was sentenced to 8 months’ imprisonment.  He was last discharged from prison in September 2015. He committed the present offences 8 months after he was last released from prison.

MITIGATION

8.  The defendant is 41 years old.  He is single and unemployed now.  He finished primary two.  He was a catering worker before.  After he was released in September 2015, he intended to turn over a new leaf.  He found a kitchen job. However, he was dismissed in April 2016 due to redundancy.  Due to financial hardship, he fell back to committing crime.  He is remorseful for what he had done now.  Based on the police investigation on the bank transaction and the internet communication, the police discovered further offences.  Victims in Charge 2, 12 to 14 and 20 to 21 did not report to the police.  It was confirmed by prosecution that the defendant had volunteered the information during the police interview resulting in the crackdown of these offences.  He had been co-operative with the police since the arrest.

9.  The defence submitted that the present offences were not a ‘breach of trust’ offence as described in HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 778 and Ng Kwok Wing [2008]4 HKLRD 1017. It begged the court to take a global view of $252,452 and impose a sentence in the region of 1.5 to 2 years, lower than that as stipulated in these cases.

ENHANCEMENT OF SENTENCE

10.  In this case, the prosecution has made an application for enhancement of sentence for the 17 Charges of Fraud under the Organised and Serious Crimes Ordinance Cap 455 (“OSCO”), namely on the ground of the prevalence of the offences.  Notice of application was made to the court and the defendant in March 2017.

11.  The application was supported by WSIP Lo Pui Yan’s statement dated 15 March 2017.  The present case is an “E-auction” fraud where a buyer paid for the purchase via bank transfer, remittance or other electronic method but could not receive the goods eventually.

12.  The defence did not challenge the information contained in the statement.  However, the defence opposed the application for enhancement of sentence on the basis that the figures provided by the police shows that they are in a downward trend from 2014.  Therefore, it was argued that this is no longer prevalent as the figures have been reduced.

13.  According to the information provided by WSIP Lo, she summarzied the number of case and the amount of loss involved in “e-Shopping Fraud” from 2009 to 2016 in Annex A.  The figures show that there had been a steady rise from 2009 to 2014 and reached the peak in 2014 with 1479 of reported cases. However, the number of reported cases drops to 1354 in 2015 and that the figure is 1188 in 2016.  The amount of lost in 2014, 2015 and 2016 are HK$18.1M, HK$13.8M and HK$12.9M respectively.  

14.  In Annex B, it shows the number of case and the amount of loss involved in “e-Shopping Fraud” in the past 12 months in 2016.  It can be described that it shows a fluctuating figure for both the number of reported cases and the amount of lost.  The number of reported cases recorded at its highest at 122 in March 2016. However, there is a drastic drop in November 2016 with only 66 reported cases and involves HK$1.8M of loss.

15.  Finally, in Annex C, it makes a comparison of “e-Shopping Fraud” with the Technology Crime from 2009 to 2016.  We can see the highest proportion was reached to 28.6% in 2011 and dropped to the lowest to 15.2% in 2013.  From 2014 to 2016, the total number of reported cases has reached a plateau.  The percentage becomes stable at 21.8% to 20%.

16.  Enhancement of a sentence under OSCO should be used sparingly and carefully.

17.  In HKSAR v Chung Chi King CACC504/2001, the Court of Appeal said:-

“23. Ultimately in this case it is a question of interpreting the statistics to see whether a crime of this nature was prevalent at the time of the sentence.If there was such a substantial drop in the number of similar crime being committed, the conclusion on the evidence is simply that such a crime was not prevalent.

24. Furthermore, as a matter of statutory construction, the prevalence of the offence must be considered at the time of the sentence since the purpose of an enhanced sentence is to impose a deterrence on potential wrongdoers. Hence the time of the commission of the crime is irrelevant.”

18.  The evidence produced by the prosecution under section 27(2) showed that the offence peaked in 2014. The number of reported cases in 2016 had dropped 19.6% when compared to that of 2014. The amount of lost during the same period was also dropped from $18.1M to $12.9M. It plunged  28%.  Due to the decline in the number of reported cases from 2014, I am not satisfied and convinced the offences on statistics before me is a prevalent one.  There is no clear and cogent evidence of this being a fact.  Furthermore, there is no statistics showing from 2017 onwards though half a year of 2017 has passed.  Therefore, I have no idea what the statistics are from then to now. This is important information for the purpose of enhancement of sentence.

19.  I have reservation to enhance the sentences on the 17 Charges of Fraud that the prosecution is making.  Application is so refused.  I do not consider this is an appropriate case based on the information to enhance the sentence under section 27(2) of OSCO.

SENTENCING CONSIDERATIONS

20.  The defendant had adopted a simple but effective scam to cheat the customers and friends over a short period of time.  For 17 Charges of Fraud he faced, those were committed on the Internet.  The fraud is practised on the general public at large and the number of victims can be high.  It has undermined the confidence of the general public on internet shopping.  The offences themselves must have been carefully planned, involving the use of different internet platforms and different mobile phones with different SIM cards.  He successfully swindled $76,200 for the 17 Charges of Fraud in a short period of 5 months from 14 June 2016 to 16 November 2016.

21.  In HKSAR v Leung Yiu-fai (transliteration) CACC 100/2014, delivered on 1 November 2016.  The facts showed that in a period of 1 month and 5 days, the defendant committed 36 offences of e-auction fraud.  He received deposits into his bank account for the purchase of Ocean Park tickets advertised by him on the internet.  He did not make the tickets available to his customers afterwards.  His customers suffered losses from $650 to $6,340, as the case may be.  The total was $63,180.  The Court of Appeal commented that the starting point of 30 months is not manifestly excessive. It opined that these offences call for heavy deterrent sentence.  Even they did not involve large sums of money, their act is ruthless, disgusting and despicable. Deterrence is necessary even for the first offender. The fraud is practised on the general public at large and the number of victims can be high. The offences themselves have serious negative effects on Internet auction trading activities, and they seriously affect the interest of people acting in good faith in these activities. The people are generally difficult to get back their loss. The lower court can adopt a starting points of a sentence in the region of 3 to 4 years’ imprisonment even for those who are with clear record.

22.  For the 17 Charges of Fraud which involved $76,200, the defendant committed the offences alone.  He did not conspire with others.  After taking the case of Leung Yin Fai into consideration, I shall take a starting point of 30 months for each of the 17 charges having regard to the amount of money that has been lost by the victims.  Concurrent sentences shall be appropriate.  As the defendant’s criminal record is appalling, he is properly regarded as persistent offender.  I will add 6 months to the initial starting point to each charge.  Concerning the defendant’s voluntary confession to the police, it is in the public interest for the court to give him an additional discount as an encouragement: HKSAR v Hui Chi Tong CACC 414/2007. I am prepared to reduce his sentence for a further 3 months for each 17 Charges of Fraud.  I allow a one-third discount for his pleas of guilty.  The sentence is 22 months’ imprisonment.

23.  For the 4 Charges of Fraud, the defendant had befriended with his victims and deceived them in giving money to him in buying mobile phones at a cheaper price or for investment purpose.  The money involved was $176,252.  The amount is quite substantial.  I am of the view that there was premeditation on the part of the defendant.  There must be prior thought before he could tell this sort of lie to the victims. I shall take a starting point of 15 months for each of the 4 charges to be run concurrently.  As the defendant is a recidivist for dishonesty offence, I will add 6 months to the initial starting point to each charge.  It is in the public interest to encourage an offender to ‘own-up’ to his misdeed and to face the consequence. I am prepared to reduce his sentence for a further 3 months for each 4 Charges of Fraud.  I allow a one-third discount for his pleas of guilty.  The sentence is 12 months’ imprisonment.

24.  For the “Possession of dangerous drug” case, I was told that he possessed the drug for his own consumption. I sentence him to 6 months’ imprisonment.  Upon his plea, it is reduced to 4 months’ imprisonment.

25.  Having regard to the totality of sentence, I order that 8 months for the 4 Charges of Fraud and 2 months for the dangerous drug case to be served consecutively to the 22 months for the 17 Charges of Fraud, giving an overall total of 32 months’ imprisonment.