HKSAR v. LI FU WAI AND ANOTHER

DCCC 131/2018

[2018] HKDC 1379

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 131 OF 2018

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REASONS FOR SENTENCE

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1.  The first defendant pleaded guilty to one count of “attempting to use a false instrument”, contrary to section 73 and 159G(1) of the Crimes Ordinance, Cap 200 (charge 1) and one count of “possessing false instruments”, contrary to section 75(1) of the Crimes Ordinance (charge 2). The first defendant pleaded not guilty and the second defendant pleaded guilty to a joint charge of “possessing equipment for making false instruments”, contrary to section 76(1) of the Crimes Ordinance (charge 3). In addition, the second defendant pleaded guilty to one count of “using a false instrument”, contrary to section 73 of the Crimes Ordinance (charge 4), two counts of “forgery”, contrary to section 71 of the Crimes Ordinance (charges 5-6) and one count of “possessing a false instrument”, contrary to section 75(1) of the Crimes Ordinance (charge 7). Upon the prosecution’s application, charge 3 as against the first defendant is to be left on court file and not to be proceed with without the court’s leave.

Facts

2.  On 6 May 2017 at about 19:40 hours, the first defendant went to the “Fortress” shop situated at 146-152 Fuk Wah Street, Sham Shui Po (“Fuk Wah Street Fortress”) to purchase three iPhones in the sum of HK$21,860.50 by producing a Bank of Communications Mastercard credit card as particularized in charge 1 (“Card 1).  However, the transaction was unsuccessful.  Staff of Fuk Wah Street Fortress made inquiry with the card centre and was told that the card number did not match with the bank’s record.  Thus, a report was made to the police.  Police officer later arrived for investigation and arrested the first defendant.  Under caution, the first defendant said, “the card was given to me by my friend Ah Fai for buying mobile phones.” (charge 1)

3.  Upon search, the first defendant was found in possession of two other credit cards as particularized in charge 2 (“Cards 2 and 3”).  The first defendant claimed they were both counterfeit cards.  The first defendant was thus arrested for the offence of “possessing false instrument”.  Under caution, the first defendant said, “the cards were counterfeit, Ah Fai gave them to me.” (charge 2)

4.  On 7 May 2017 at about 00:40 hours, the police conducted a house search of the first defendant’s premises in Shek Kip Mei Estate, Sham Shui Po (“the Premises”) and the following items were found:

(i) One unsealed paper box containing one skimmer and 26 blank cards inside;

(ii) Another unsealed paper box with a tipping machine on top;

(iii) One embossing machines, with one Agricultural Bank of China credit card and one Bank of Communications credit card on top, both in the name of Law Chi Fai and 1 blank card inside; and

(iv) One laptop with accessories.

5.  At about 00:55 hours, the second defendant came to the Premises and asked to see the first defendant for collection of the laptop.  Upon search of the second defendant, it was found from the second defendant’s sling-bag a iPhone 7 Plus and two receipts issued by the “Fortress” shop situated at 195-199 Nam Cheong Street, Sham Shui Po (“Nam Cheong Street Fortress”) and two other receipts issued by the “Fortress” shop situated at 47-51 Shan Tung Street, Mongkok (“Shan Tung Street Fortress”).

6.  Suspecting the second defendant was related to the first defendant’s Fuk Wah Street Fortress incident, the second defendant was cautioned for the offence of “using false instrument”.  Under caution, the second defendant explained that (i) he was asked by his friend to go to the Premises to collect the laptop from the desk, (ii) the second defendant had only seen the first defendant once and he knew the Premises had computer for making counterfeit credit cards, and (iii) the second defendant wanted to collect the computer for inputting and transmitting credit card numbers data.

7.  The second defendant was arrested for the offence of “making false instrument”.  Under caution, the second defendant explained that his Big Brother asked him to come to collect the computer and bring it to his Big Brother in Mongkok.  Regarding the iPhone in the sling-bag, the second defendant explained that he had obtained a counterfeit credit card from his Big Brother and he had used it to buy the iPhone from Nam Cheong Street Fortress on 6 May 2017 after 18:00 hours.  After the purchase, the second defendant would collect the computer from the Premised and then hand over both the computer and the iPhone to his Big Brother in Mongkok.

8.  A further body search on the second defendant was conducted and the following items were seized:

(i) A passport in the name of “WANG Zichuan”;

(ii) One Nokia mobile phone;

(iii) One iPhone 5;

(iv) One iPhone 7 Plus;

(v) Two invoices from Nam Cheong Street Fortress; and

(vi) Two receipts from Shan Tung Street Fortress.

9.  In subsequent video-recorded interview, the first defendant confirmed his prevision admissions under caution.  He met Ah Fai three years ago and was asked if he wanted to earn quick-money by purchasing iPhones with counterfeit credit cards.  Ah Fai also offered to give him 1/3 of the goods purchased as reward.  The first defendant agreed to the plan as he was owing a lot of debts.  He gave the Premises address to Ah Fai and later on the machines were brought to the Premises on 5 May 2017.  On 6 May 2017 at about 19:00 hours, the first defendant visited Fuk Wah Street Fortress trying to buy the three iPhones with forged credit card but was unsuccessful.  He was arrested by police.  He did not know Wang Zi Chuan.

10.  In subsequent video-recorded interviews, the second defendant stated that he had a company selling wood products in Guangdong.  At that time, he was in financial difficulties.  He got connected with a “Big Brother”.  Later on, he was asked by the Big Brother to buy mobile phone with credit cards.  Upon the instruction, the second defendant obtained machines for making forged credit cards and brought these machines to Hong Kong.  He was taught how to use the machines.  In testing the machine, he had transferred his younger brother’s genuine credit card data onto one of the second defendant’s own China Construction Bank credit card which had not been in use for some time.  He used the machines to make Cards 1-3 at the Premises.  He also made the cards as particularized in Charge 6 and arrange to have them delivered to Manila as instructed.  Later, he used the counterfeit credit card ended with the digits “1319” (Card 3) to purchase an iPhone 7 at a Fortress shop.  For each iPhone, he would receive 10% of the value as reward. 

11.  Investigation reveals the iPhone purchased by the second defendant with Card 3 is valued at HK$7,288.

12.  Immigration Department record showed that the second defendant arrived in Hong Kong on 5 May 2017 at about 18:57 hours.

13.  The 35 material credit cards were examined by the Government Laboratory, and all cards were found to be forged, except the card as particularized in charge 7 which had genuine card surface data but forged data in magnetic tape.

14.  Examination of the machines and the laptop show they can be used to make forged credit cards. 

Mitigation

15.  The first defendant is aged 58 and divorced.  He worked as a public light bus driver at the time of the arrest.  He has 4 criminal conviction records, all of which are not similar to the present offences.  His last conviction was in 1997.

16.  In mitigation, it was submitted that in relation to charge 1, no loss was caused to victim company as the attempt to use the forged credit card was unsuccessful.  It was further submitted that the usual starting point was 3 years.  For charge 2, it was submitted that this offence adds some culpability to charge 1.  Counsel for the first defendant referred to HKSAR v Mah Kah Loon, CACC 209/2013 and submitted that an additional 6 months might be added to the sentence for charge 1.  Given the first defendant’s guilty plea, he was entitled to the usual 1/3 discount.

17.  The second defendant is aged 37, married with 2 children and lived with his family in the Mainland prior to the arrest.  He was running a wood product business at the time of the arrest.  His parents are suffering from various illnesses and require regular treatment.  He has a clear record in Hong Kong. 

18.  In mitigation, it was submitted that the second defendant came to Hong Kong two days prior to his arrest.  He committed the present offences due to financial difficulties.  Upon arrest, he made full admissions and was cooperative.  He indicated his intention to plead guilty at the first available opportunity.  While he was involved in the manufacture and use of forged credit cards, it was submitted that he was not the mastermind of the operation. Counsel for the second defendant suggested even if the court was minded to regard the operation as a medium-sized operation, this case fell within the lower end of medium-sized operation.  Further, it was submitted that there was minimal international dimension as the second defendant was only instructed to post 2 forged cards to Manila.  Counsel referred to R v Chan Sui To & Anor [1996] 2 HKCLR 128 and HKSAR v Shum Chung Wai [2002] 2 HKLRD 81 and submitted that the global starting point for all the offences would be around 6 years.

Sentence

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

20.  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.  Further, the Court of Appeal suggested that an accused 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 five to six years after trial.  Sentences may be adjusted upwards or downwards according to circumstances.  The Court of Appeal further pointed out that the sum of money involved is only one of the factors to be considered and is not even the most significant factor. 

21.  It is well settled that the potential for loss is the more important consideration (see HKSAR v Ng Swee Thiam & Ors [2000] 1 HKLRD 772).  This is in fact one of the factors considered by the Court of Appeal in HKSAR v Shum Chung Wai when it upheld the total sentence of 4 years imprisonment after plea in a case in which the appellant was found with stolen items of mail, 2 identity card relating to another person, 8 stolen credit cards, 4 false credit cards and equipment capable of altering information on credit cards. 

22.  As far as the first defendant is concerned, he is convicted of possession of 2 forged credit cards and attempting to use another forged credit card.  Although no actual loss was caused, I cannot ignore the potential for loss, in particular, 3 forged credit cards were involved.  In considering the appropriate starting point, I bear in mind that the first defendant has no previous conviction for a similar offence.  In the circumstances, I consider the appropriate starting point for each of charges 1 and 2 is 3 years.  Given the first defendant’s guilty plea, the sentence for each of charges 1 and 2 is reduced to 2 years.  Apart from the guilty plea, there is no other mitigating factor justifying further reduction of sentence.  Taking into account the totality principle and the fact that the possession of the 2 forged credit cards adds to the culpability of the offence in charge 1, I consider a total sentence of 2 years and 6 months to be sufficient to reflect the criminality of the first defendant.  I therefore order 6 months of the sentence of charge 2 to run consecutive to the sentence of charge 1.  I hereby sentence the first defendant to a total sentence of 2 years and 6 months.

23.  Regarding the second defendant, he is convicted of 5 offences.  He was involved in arranging delivery of the machines for making forged credit cards to Hong Kong.  He learnt how to use the machines and thereafter manufactured 5 forged credit cards in Hong Kong with the credit card information provided to him.  He used one of the forged credit cards to make purchase.  The other forged credit cards made by him were supplied to the first defendant and other unknown persons for use.  He also arranged delivery of 2 forged credit cards to Manila as instructed.  All these happened within 1-2 days of his arrival in Hong Kong. Although the amount of actual loss caused is not high, given machines were involved, forged credit cards were manufactured, other blank cards were found which indicate there is a high likelihood that additional forged credit cards might be manufactured had the police not stopped the operation, the potential for huge loss cannot be ignored.  Further, all these show there is some degree of planning.  There is also an international dimension in that the second defendant was approached and also taught how to use the machines in the Mainland while he was tasked to manufacture and supply the forged credit cards for use in Hong Kong and send out some of the forged credit cards to Manila.  I therefore consider the operation to be a medium size operation.   

24.  In my view, the second defendant, although not a mastermind of the operation, played a major role in the operation.  In the circumstances, I consider the appropriate global starting point for all the charges 3-7 should be 6 years’ imprisonment.  Given the second defendant’s guilty plea, the sentence for each of charges 3-7 be reduced to 4 years’ imprisonment. 

25.  Although I have sympathy for the difficulties faced by the family members of the second defendant, family hardship is not a valid mitigating factor in serious offences like these.  Apart from the second defendant’s guilty plea, there is no other factor justifying further reduction of sentence.  

26.  Taking into consideration the totality principle, I consider the total sentence of 4 years is sufficient to reflect the criminality of the second defendant.  In the circumstances, I order the sentences for charges 3-7 to run concurrently and hereby sentence the second defendant to a total sentence of 4 years’ imprisonment.