HKSAR v. DOS PASSOS ANTHONY JOSEPH

CACC 517/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 517 OF 2001

(ON APPEAL FROM DCCC NO. 448 OF 2001)

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J U D G M E N T

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Cheung JA: (giving the judgment of the court)

The applications

1. The applicant was convicted after trial in the District Court by HH Judge Line of the offence of conspiracy to defraud. He was sentenced to six years' imprisonment. He now applies for leave to appeal against sentence.

The particulars of the charge

2. The particulars of the charge were that the applicant conspired with others to defraud such persons as might be induced to give them money to invest, by dishonestly,

(a) false representing that such person was genuinely employed by Full Fair International Limited ("the Company");

(b) false representing that the Company was genuinely involved in trading or investing;

(c) inducing, causing or allowing such person to invest money with the Company;

(d) false representing that money given to invest was invested in a genuine and existing investment;

(e) failing to or not investing the money given to invest;

(f) false representing that the money given to invest had all been lost in the investment; and

(g) appropriating the money given to invest.

The facts

3. The facts revealed that in December 1999 the police raided the office for the Company. Three women who had answered advertisement for jobs there were persuaded by the employees and manager of the Company to invest in gold. The judge found that the Company was set up for the purpose of defrauding members of the public. He found that the scheme had all the hallmark of loco London gold or silver fraud schemes. After parting with their money the victims quickly lost their investment. After the police raid, the Company kept on trading and a fourth victim was also defrauded. The four victims lost $470,000.

4. The applicant claimed that he was merely a trainee manager in the Company and did not deal with the four victims. In relation to the fourth victim, his case was that he had by that time left the Company and he had been wrongly identified as being dealing with her. The judge found that the applicant's case turned on credibility. He had no hesitation in accepting the evidence of the victims and that the applicant had played the role each described. He described it as "scene setter and boaster of big money for big clients with PW1; helpless man in a jam with an investor's account for PW2 and the effective handler of the whole transactions for PW3 and PW4." Given the inference that the Company was set up for fraud, the judge held that the applicant knowingly joined in the conspiracy to defraud.

Sentence

5. The ground of complaint of Mr. Suen is that the sentence of six years' imprisonment is manifestly excessive. He said the usual sentence for loco London gold or silver fraud schemes is four years' imprisonment.

6. In some recent appeals this Court adopted a starting point of four years' imprisonment for those who participated in such fraud schemes. However, it is apparent from a reading of those cases that the four-year starting point is to be revised upwards for those who are master minds of the scheme or those who continued with the fraud even after the police investigation. Furthermore, the appropriate sentence for this type of offence also depends on the scale and duration of the operation, and the amount of loss suffered by the victims.

7. In HKSAR v. Chiang Chun Wai & another (CACC No. 11 of 2001) the two applicants together with five other defendants were convicted of the offence of conspiracy to defraud. The sentencing judge adopted a starting point of four years and reduced it by four months in view of the clear record of the applicants. All the other defendants received four years' imprisonment. The police had conducted a raid on the premises in which the fraud was carried out. The other five defendants continued with the fraud after the raid. The 1st applicant did not take part in the subsequent fraud and the 2nd applicant only joined in the conspiracy after the police raid. A warning bell was clearly sounded by Stuart-Moore, VP when he said that:

“ We consider, in view of the value of the losses and the sophisticated nature of this fraud, that those who played a part in both phases of the conspiracy were fortunate to have received sentences of only four years. Those who enter into heartless and cruel scams of this kind, and who are prepared to fleece gullible and blameless victims of as much of their hard-earned savings as they can lay their hands on, should expect to receive heavy sentences, not merely as punishment for the offence but as a deterrent to others with a similar mind."

8. In view of the role played by the applicants, this Court reduced their sentences to three years and two months.

9. In HKSAR v. Lau Chung Yee and another (CACC No. 420 of 2000), the two applicants together with five other defendants were charged with conspiracy to defraud. Again the offence is that of a loco London gold or silver fraud in which victims who answered advertisements for employment in a company were cheated of their savings. The 1st applicant received three years and nine months' imprisonment and the 2nd applicant received four years' imprisonment in respect of the conspiracy charge. Woo, JA stated that:

“ We take the view that a starting point of 4 years cannot be criticized for heartless and cruel scams of this kind, where gullible people, innocently seeking jobs, are deliberately enticed into parting with their hard-earned and sometimes life savings. The Court reduced the sentences of D5 and D6 in CACC 11/2001 not because the sentences of 4 years' imprisonment for them were inappropriate, but because of their lesser participation than the other applicants in the two-phased conspiracy in that case. As expressed by the Court, we say again that a starting point of 4 years for participants in such conspiracies is necessary and appropriate both for punishment and deterrence. For the mastermind, of course, a much heavier sentence should be imposed."

10. Far from being a ruling that only a four-year imprisonment will be imposed in cases of this type, this Court had clearly stated in that decision that a heavier sentence would be imposed in appropriate circumstances.

11. In HKSAR v. Chung Chi Kin (CACC No. 504 of 2001), the applicant together with ten others were charged with conspiracy to defraud. The same type of fraud was perpetrated. On conviction the applicant was sentenced to three years and nine months' imprisonment. This Court was only concerned in that case with the application for leave to appeal against conviction. The question of sentence was not the subject of discussion by this Court.

12. In the most recent decision of this Court in HKSAR v. Cheung Kwok Kuen and others (CACC No. 171 of 2001) five applicants together with eleven other defendants were convicted of the offence of conspiracy to defraud. Again a similar scheme of fraud was practised. The case involved 69 victims who parted with over $25 million to the fraudsters who carried the fraud over a 19-month period.

13. The 1st applicant there was described as the financial controller of the scheme who laundered the proceeds of the fraud. This Court found that the 1st applicant played a major role in the conspiracy. He was also convicted of a second charge of dealing with money which represented the proceeds of an indictable offence. This Court substituted the six-year imprisonment for both offences to one of eight years' imprisonment. Taking into account the maximum sentence allowed under the District Court Ordinance, a seven-year imprisonment was imposed.

14. The 2nd applicant played a slightly less role than the 1st applicant in that he was involved in a far smaller proportion of the proceeds of fraud. His sentence of six years was affirmed.

15. The 4th applicant had been at the premises throughout. He was the person to whom most of the 16 victims who referred to him paid their money. The 6th applicant was directly involved with nine victims. Their involvement was slightly less than the 2nd applicant and their sentences of five years and eight months' imprisonment were affirmed.

16. For the 9th applicant a four-year imprisonment was adopted which was reduced to three years and eight months for her clear record. This Court was of the view that the starting point of four years for her role was not open to criticism and her ultimate sentence veered on the side of leniency. This Court found that there was no merit in her application for leave to appeal against sentence and an order was made for two months' loss of time.

The present application

17. In the present application, considering the role played by the applicant who continued with the fraud even after the police raid in December 1999, a four-year imprisonment is clearly inadequate to reflect his culpability. However, although he played an active role in the fraud, the judge had not found him to be the master mind of the scheme. Furthermore, the present fraud was not in the same scale as the one in HKSAR v. Cheung Kwok Kuen. Considering the circumstances of the case, in our view a five-year imprisonment is more appropriate than the six years imposed by the judge which clearly is manifestly excessive.

Other grounds

18. There are two other grounds that called for comment. Mr. Suen had argued that the judge did not give a discount for the clear record of the applicant. As this Court had observed in HKSAR v. Cheung Kwok Kuen, in offences of this type where criminal acts are repeatedly being committed, it is wholly artificial to describe an offender as having a clear record even though technically this may be correct. In our view no further discount should be given in respect of the clear record of the applicant. As a matter of fact the applicant had a previous conviction when he was a teenager of tampering with motor vehicle and failing to produce proof of identity on demand. However, these are very different and minor offences. We, like the judge had treated him as someone without a previous conviction.

19. The second complaint is that another defendant tried together with the applicant was only sentenced to four years' imprisonment for his role in the conspiracy and there was disparity in their sentences. The other defendant had since abandoned his application for leave to appeal against conviction and sentence. It is clear from the Reasons for Verdict, the other defendant played a lesser role in the conspiracy. He was involved with two of the victims only. While the applicant was the manager of the company, he was merely an employee. Furthermore, there is no evidence that this defendant had taken part in the conspiracy after the police raid. In the circumstances, the disparity in their sentences is clearly justified.

Conclusion

20. Accordingly, we will, therefore, allow the application and treat it as an appeal. We will allow the appeal and reduce the six-years imprisonment to five-years imprisonment.