HKSAR v. CHAN PAK YIN AND OTHERS

DCCC 778/2020

[2021] HKDC 1621

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 778 OF 2020

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REASONS FOR SENTENCE

1.  D1 to D4 are jointly charged with 3 offences of "Conspiracy to defraud" (Charges 1 to 3). D3 and D4 are also jointly charged with an offence of "Possession of dangerous drugs" (Charge 4)  and an offence of "Possession of apparatuses fit and intended for the inhalation of a dangerous drug" (Charge 5).

2.  D1 to D3 pleaded guilty to Charges 1 to 3.  D4 pleaded guilty to Charges 3 to 5.  The prosecution applied to leave Charges 1 and 2 against D4, and Charges 4 and 5 against D3 in the court file; not to be proceeded against them without leave of court.  I granted the application.

Summary of Facts

Background

3.  About 7:30 p.m. on 17 February 2020, Mr. Chu (PW4)  parked his private car at Chatham Road South, Tsim Sha Tsui.  He returned around 4:00 a.m. on 18 February 2020 and found a window of his car broken.  Amongst other things, a cheque book of PW4's account with Chiyu Bank ("the Stolen Cheque Book")  was found missing from the car.  PW4 reported loss of the Stolen Cheque Book with the bank and closed the relevant account on the same day.

Charge 1

4.  Mr. Tsang (PW1)  was the operator of GIA Watch & Jewellery Limited ("GIA"), which engaged in the sale of Rolex watches in Tsim Sha Tsui ("Shop 1").

5.  On 8 March 2020, PW1 received a WhatsApp message from someone using mobile phone number 5499 1274 ("SIM 1")  with an account name "Ken" about the purchase of a Rolex watch.  After negotiation, PW1 agreed to sell the watch to Ken at $548,000.  Both parties agreed to complete the transaction around 1:00 to 2:00 p.m. on the following day.  Ken agreed to deposit the purchase price in full into GIA's account with Hang Seng Bank ("Account 1").

6.  About 8:23 a.m. on 9 March 2020, PW1 received a WhatsApp message from Ken requesting to collect the watch at 12:15 p.m. by Ken's assistant.  PW1 then asked Ken for the full name, HKID card number and mobile phone number of his assistant.

7.  About 11:11 in the same morning, PW1 received a WhatsApp message from mobile phone number 5318 0551 ("SIM 2"), claiming to be Ken's assistant and that he would collect the Rolex watch.  Ken then sent PW1 a photo of a HKID card bearing the name "CHAN Ka-sun" (E1)  and a photo of a letter from "WONG Ka-chun" authorizing CHAN Ka-sun to collect the Rolex watch.

8.  About 1:34 p.m. on the same day, D1 arrived at Shop 1 to collect the Rolex watch on behalf of Ken.  PW1 asked D1 for his HKID card but D1 claimed that he did not have it with him. Instead, D1 sent a photo of E1 to PW1 via WhatsApp.  About 1:41, PW1 received from Ken a photo of a deposit receipt purporting to show that Ken had deposited cash in the sum of $548,000 into Account 1 at 1:40 p.m. on 9 March 2020.

9.  Since D1 was unable to produce his HKID card, PW1 refused to hand over the Rolex watch to him.  PW1 also began to grow suspicion on Ken.  PW1 then checked the records of Account 1 by online banking and discovered that the sum which Ken claimed to have deposited was by cheque instead of cash.

10.  About 1:45 p.m. on the same day, D1 claimed that he needed to use the washroom and left Shop 1.  Ken later informed PW1 via WhatsApp that he no longer wished to purchase to watch. PW1 alerted the Police.

11.  In a formal identification parade held on 13 March 2020, PW1 identified D1 as the person who went to Shop 1 requesting to collect the Rolex watch on behalf of Ken.

12.  PW1 subsequently retrieved the cheque deposited by Ken (E2); it was a blank cheque originated from the Stolen Cheque Book.  The Police later found D2's left thumbprint on E2.

Charge 2

13.  Mr. Tang (PW2)  operated "Basel One Jewellery & Watch", which engaged in the sale of Rolex watches in Tsim Sha Tsui ("Shop 2").

14.  About 11:55 p.m. on 8 March 2020, PW2 received WhatsApp messages from someone using SIM 1 with an account name "Ken" about the purchase of different models of Rolex watches.  Eventually, Ken made his pick and PW2 agreed to sell the watch at $279,000.  Both parties agreed to complete the transaction around 2:00 p.m. on the following day.  Ken agreed to deposit the purchase price in full into PW2's HSBC account.

15.  About 11:00 a.m. on 9 March 2020, Ken informed PW2 via WhatsApp that he would send his assistant to Shop 2 to collect the watch.

16.  About 1:44 p.m. on the same day, PW2 received voice calls from phone number 5420 8204 ("SIM 3"). Claiming to be Ken's assistant, the caller told PW2 that he would collect the watch at Shop 2.  PW2 later discovered that there were missed calls made from SIM 2 to his phone.  PW2 called back SIM 2.  The person who answered the call claimed to be Ken's assistant and told PW2 that he would attend Shop 2 later.

17.  About 2:09 in the same afternoon, D1 arrived at Shop 2 requesting to pick up the Rolex watch on behalf of his boss.  PW2 informed Ken that his assistant had arrived; whereas Ken claimed that he would arrange for his accounting staff to deposit the purchase price.

18.  About 2:37, Ken informed PW2 that he could not make the deposit since there were some problems with PW2's bank account.  PW2 asked Ken to pay cash at Shop 2.  Ken refused claiming that he would arrange for his accounting staff to deposit the money at a bank counter.  PW2 grew suspicion and took a photo of D1.  D1 later claimed that he needed to use the washroom and left Shop 2.

19.  In a formal identification parade held on 13 March 2020, PW2 identified D1 as the person who went to Shop 2 requesting to collect the Rolex watch on behalf of Ken.

Charge 3

20.  Madam Tang (PW3)  worked at "Alpha Watch & Jewellery", which engaged in the sale of Rolex watches in Tsim Sha Tsui ("Shop 3").

21.  About 8:04 a.m. on 8 March 2020, PW3 received WhatsApp messages from someone using SIM 1 with an account name "Ken" about Rolex watches.  On 9 March 2020, Ken made his pick and agreed to buy the watch at $280,000.  Ken claimed that he would arrange for his colleague to collect the watch and would deposit the full purchase price in cash into PW3's HSBC account ("Account 2")  by bank transfer.

22.  About 2:14 p.m. on 9 March 2020, PW3 learned about the incident in relation to Charge 1 from her WhatsApp contacts.  She alerted the Police because she recognized SIM 1 being the phone number used by Ken to contact her.  About 2:26 in the same afternoon, Ken sent a photo of a HKID card bearing the name "CHAN Ka-sun" (E3)  to PW3 telling her that the said person would collect the Rolex watch on his behalf. E3 and E1 were later on found to be the same image.

23.  About 3:13 p.m. on the same day, D1 arrived at Shop 3 claiming to be Ken's assistant and requesting to collect the watch.  About 3:26, PW3 received from Ken via WhatsApp a photo of an HSBC deposit slip purporting to show that cash in the sum of $280,000 was deposited into Account 2.  At the same time, police officers arrived at Shop 3 and detained D1 for enquiry.

24.  Having checked the records of Account 2, PW3 discovered that the sum which Ken claimed to have deposited was by cheque instead of cash.  The cheque was bounced later.  PW3 subsequently retrieved the cheque deposited by Ken (E4); it was a blank cheque originated from the Stolen Cheque Book.  The Police later found D2's left thumbprint on E4.

Controlled delivery and arrest

25.  DSIP Tang made enquiries with D1 at Shop 3.  D1's phone rang during the enquiries.  He told the Police that it was Ken's call asking him to deliver the Rolex watch to Mongkok MTR Station.  D1 agreed to assist the Police in a controlled delivery.

26.  Meanwhile, PW3 was instructed by the Police to inform Ken via WhatsApp that she had received his payment.  PW3 then gave a paper bag containing an empty watch box (collectively "the Bag")  to the Police for D1's delivery.

27.  About 4:35, near Exit C at Mongkok MTR Station, D1 handed the Bag to D2.  Police officers arrested both D1 and D2.  Under caution, D2 claimed that he was asked by "Ah Wai" to collect the watch.  Upon search, 2 mobile phones (one containing SIM 2)  were found on D1; and 1 mobile phone was found on D2.

28.  During the investigation, D2 received a call from SIM 3.  He told the Police that someone had just instructed him to pass the Bag to another man.  D2 agreed to assist the Police in a controlled delivery.

29.  D2 called back the person at SIM 3, who then told D2 to go to Mongkok New Town Mall to make the delivery.  D2 took the Bag there.  During his journey, police officers saw D3 observing D2.  They arrested D3.  Upon search, a mobile phone and a key card to Room 1211, Kowloon Harbourfront Hotel, Hung Hom ("the Room")  were found on D3.

30.  With D3's consent, the Police inspected his mobile phone.  They found some dialogues between D3 and D4 and a photo of a card containing details of Shop 3.

Seizure of exhibits from the Room (Charges 4 and 5)

31.  According to the hotel's record, D4 became a registered occupant of the Room on 28 February 2020.  D3 was registered as an additional occupant on 8 March 2020.

32.  About 7:35 p.m. on 9 March 2020, the Police searched the Room and seized the following items :-

(a)  On a table in the living room: a laptop computer (containing files of the HSBC deposit slip received by PW3; an image of the HKID card of "WONG Ka-chun"; an image of D1's HKID card; an image of D4's HKID card; an image of a HKID card which is the same as E1 and E3; and a series of images purporting to be bank drafts with GIA, PW1 and PW2 as payees); a photocopy of a HKID card which is the same as E1 and E3; 2 pieces of paper which contained the contact details of Shop 1 (with D3's fingerprints); and some printed copies of purported bank drafts with Shop 1, PW2, PW3 as payees (with D4's fingerprints);

(b)  On the sofa and near the television set: the card cover of SIM 1; and a printer with a copy of a bank draft with PW2 as payee;

(c)  On a desk in the bedroom: 1 plastic bag which contained 0.45 gramme of a crystalline solid containing 0.45 gramme of methamphetamine hydrochloride (E7); 1 glass tube shaped as a bulb at one end which contained 0.04 gramme of a solid containing methamphetamine hydrochloride (E8); 1 glass tube shaped as a bulb at one end which contained 0.06 gramme of a solid containing methamphetamine hydrochloride (E9); 1 glass tube shaped as a bulb at one end (E10); and a one-piece set up consisting of 2 glass bottles bridged by 1 glass tube and each glass bottle had 1 opening (one of the glass bottles was inserted with 1 plastic tube fitted into the plastic straw outside the glass bottle)  which contained 14 millilitres of a liquid containing traces of methamphetamine (E11). E8 to E10 could be fitted into E11 to form an inhaling device; and

(d)  Inside an unlocked safe in the bedroom: 1 glass bottle with 2 openings (one of which was inserted with 1 plastic tube)  which contained 13 millilitres of a liquid containing traces of methamphetamine (E12).

E8 to E12 were apparatuses fit and intended for inhalation of methamphetamine. D4 now admits that he had possession of E7 to E12 on 9 March 2020.

Arrest of D4

33.  D4 was arrested on 13 March 2020 in Sham Shui Po.  He remained silent under caution.  A mobile phone was found on him.

D1's admissions

34.  D1 admitted that in the forenoon on 9 March 2020, D2 asked him to meet up in Mongkok.  When they met, D2 gave him a mobile phone containing SIM 2 ("the Work Phone")  and instructed him to collect a Rolex watch in Tsim Sha Tsui.  D1 then received WhatsApp messages from Ken through the Work Phone asking him to collect a Rolex watch at Shop 1.

35.  As requested by Ken, D1 took a photo of his own HKID card and sent it to Ken by WhatsApp using the Work Phone.  Ken later sent D1 a photo of a HKID card bearing D1's photo but with particulars of another person.  Ken asked D1 to memorize the personal particulars which appeared on that HKID card.

36.  D1 admitted he knew that D2 and Ken were making use of some dishonoured cheques with a view to inducing the respective proprietors of Shops 1 to 3 to pass the respective Rolex watches to him.

D2's admissions

37.  D2 admitted that he met a person named "Ah Wai" about half a year ago.  On 8 March 2020, Ah Wai used SIM 3 to call D2 asking him to go to Mongkok in the next morning.  Ah Wai also asked D2 to recruit one more person, so D2 brought in D1.

38.  About 8:30 a.m. on 9 March 2020, D2 met Ah Wai in Mongkok.  Ah Wai gave him a mobile phone and 2 SIM cards (one being SIM 2).  D2 inserted SIM 2 into that mobile phone and gave it to D1 around 9:00 a.m. on the same day.  D2 also inserted the other SIM card into his own mobile phone.

39.  Later, Ah Wai used SIM 3 to call D2 asking him to collect a watch at Exit C of Mongkok MTR Station around 4:00 p.m. on the same day.  D2 was arrested by the Police after collecting the Bag from D1.

D3 and D4

40.  D3 admitted his mobile phone number under caution.  D4 remained silent under caution.

Examination of mobile phones seized from D1 to D3

41.  The WhatsApp records contained in the Work Phone showed that D1 had been discussing the events which took place at Shops 1 to 3 with someone named Ken who was using SIM 3.  Ken was giving instructions to D1 all along.

42.  The WeChat records contained in D2's mobile phone showed that D2 had asked D1 to meet up in Mongkok in the morning on 9 March 2020.  The WhatsApp records contained in D2's mobile phone showed that D2 was in contact with someone named Ken who was using SIM 3 in relation to the collection and delivery of the Bag.

43.  The WhatsApp records contained in D3's mobile phone showed that D4 had asked D3 to monitor D1 for the collection of the watch from Shop 3 as well as giving instructions to D3 in relation to the collection of the watch from D2.

CCTV footage

44.  CCTV footage of Shops 2 and 3 captured the respective incidents described by PWs 2 and 3.

45.  CCTV footage of Hang Seng Bank and HSBC captured D2 depositing the cheques related to Charges 1 and 3 (namely E2 and E4).

46.  CCTV footage of Kowloon Harbourfront Hotel captured D3 and D4 going to and leaving the 12^th Floor every day between 29 February and 9 March 2020.

Mitigation

D1

47.  He is 16 and has a clear record.  His counsel Ms. Yip informed me that D1 was only 15 when he committed the present offences.  He has studied up to F.3 level.  In 2019, D1 enrolled in a 4-year Building Engineering Services programme at the Vocational Training Council.  He has completed the first 2 years.  He now works full-time for an air-conditioning systems contractor of the MTR Corporation 5 days a week, and attends classes on Wednesdays.

48.  In mitigation, Ms. Yip submitted that D1 committed the present offences out of momentary greed and foolishness.  D1 has a supportive family; his parents are still young (aged 40 and 36 respectively)  and both have stable jobs.  Ms. Yip stressed that D1 has been co-operative with the Police throughout, which led to the arrest of D2. He also gave an NPS and was accepted by the prosecution to give evidence against D2 at trial.  Ms. Yip also submitted that D1 has completed half of his vocational training programme, and has been gainfully employed for 1 year and 3 months with a stable income.

D2

49.  He is 19 and has a clear record.  His counsel Mr. Lau informed me that D2 was 17 when he committed the present offences.  Similar to D1, D2 has also studied up to F.3 level.  After leaving school, D2 has worked different jobs and enrolled in a 3-year hair styling course.  He, however, did not complete the course due to lack of interest.  In May 2021, he became an apprentice at a fire engineering company earning $750 per day.

50.  In mitigation, Mr. Lau submitted that D2 was used by other adults as a courier in the present case.  He has been co-operative with the Police throughout, which led to the arrest of D3.  With his usual fairness, Mr. Lau accepts that credit should be given to D1 for leading to D2's guilty pleas.  Mr. Lau stressed that D2 has shown his remorse by pleading guilty to all 3 charges, even though his plea indication came a bit late.

D3

51.  He is 31 and has 7 conviction records (which included 3 "Theft" offences and 1 "Robbery" offence).  D3 was released from prison on 25 February 2020 and he committed the present offences in early March 2020.  His counsel Ms. Lee informed me that D3 is single and resides with his parents.  D3 has studied up to F.2.

52.  In mitigation, Ms. Lee submitted that D3 did not know D1 or D2.  Although he was introduced to D4 through some friends, D3 barely knew D4.  Ms. Lee explained that after his release from prison, D3 had real difficulty in finding a job owing to his conviction records, the social unrest and the pandemic.  As a result, he was disappointed and started to hang out with his friend "Ho Chai" in the Room.  Ms. Lee submitted that D3 was lured into becoming a courier in the present case by Ho Chai.  Attracted by the free room and board as well as a reward of $700, D3 foolishly agreed to play a part in this scam.

D4

53.  He is 33 and has 10 conviction records (which included 1 "Theft" offence, 1 "Robbery" offence, 10 "Burglary" offences, 11 deception/fraud-related offences and 2 "simple possession" offences).  His counsel Mr. Shaw informed me that D4 is divorced.  He has a 10-year-old daughter with his ex-wife and a 6-year-old son with his girlfriend.  His daughter now resides with her maternal grandmother.  Unfortunately, D4's girlfriend passed away in 2015.  His son now resides with D4's mother (aged 60).  Prior to his arrest, D4 was a self-employed tattoo artist earning $25,000 per month.  He contributed $15,000 each month on supporting his children and mother.

54.  In mitigation, Mr. Shaw explained that the Room was rented by D4's female friend Tung.  D4 used the Room to provide tattooing service to his clients.  Owing to the pandemic, D4's business dropped substantially.  As a result, he agreed to help one of his clients, Ho Chai, to print certain documents in return for a reward of $5,000. Mr. Shaw submitted that D4 has learned his lessons.  He has shown genuine remorse by pleading guilty to the charges.

Sentence

55.  I will deal with D3 and D4 first.

56.  Although Charges 1 to 3 do not involve the Barrick type of breach of trust, I find the sentencing guidelines laid down by the Court of Appeal in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 nevertheless relevant. In my view, such guidelines are simply a yardstick. For cases which are not of the Barrick type, the court may still follow the guidelines in Ng Kwok Wing or impose a sentence which is higher or lower than the guidelines, depending on the facts of each case.

57.  The present case is not a cybercrime, which normally deceives victims of their money directly online. Images of misleading deposit receipts were sent to the victims by phone in order to deceive their goods. I also accept that the syndicate did not target at elderly people or people with certain vulnerabilities. Although images of forged HKID cards were involved, I do not consider the scam to be a sophisticated one. The most crucial deceptive element was each misleading deposit receipt.

58.  D3 and D4 both denied being the mastermind. For the purpose of sentencing, I need not determine who played a lesser role. As revealed in the Summary of Facts, what each culprit did is clear. They might have played different roles, but they each contributed to the planning and/or execution of the scam and are equally culpable. There is no need to distinguish their roles or to apportion their culpability.

59.  Based on the scam employed in the present case, I consider the seriousness of this case commensurate with the sentencing guidelines in Ng Kwok Wing. Hence, I will follow those guidelines. I am aware that none of the attempts to deceive a Rolex watch was successful. Thus, PWs 1 to 3 suffered no financial loss. I will adjust the starting points accordingly.

60.  The sum involved in Charge 1 was $548,000. According to Ng Kwok Wing, for $500,000, the starting point is 2.5 years' imprisonment. I consider it appropriate for this charge.

61.  The sum involved in Charge 2 was $279,000. According to Ng Kwok Wing, for $250,000, the starting point is 2 years' imprisonment. I consider it appropriate for this charge.

62.  The sum involved in Charge 3 was $280,000. The appropriate starting point for this charge is 2 years' imprisonment.

D3

63.  He is no stranger to theft-related offences, but has no conviction of deception/fraud-related offences. On the other hand, he committed the present offences in just 10 days after his release from prison. I consider it an aggravating factor. I will increase the starting point of each charge by 3 months.

64.  For Charge 1, I adopt a starting point of 33 months' imprisonment. With the timely guilty plea, the sentence is reduced to 22 months. Apart from this, I see no other mitigating factors which warrant any further reduction. I sentence D3 to 22 months' imprisonment.

65.  For Charge 2, I adopt a starting point of 27 months' imprisonment. With the timely guilty plea, the sentence is reduced to 18 months. I sentence D3 to 18 months' imprisonment.

66.  For Charge 3, I adopt a starting point of 27 months' imprisonment. With the timely guilty plea, the sentence is reduced to 18 months. I sentence D3 to 18 months' imprisonment.

67.  The total sum involved in Charges 1 to 3 is approximately $1.1 million. According to Ng Kwok Wing, for $1 million, the starting point is 3 years' imprisonment. PWs 1 to 3 suffered no financial loss but D3 re-offended shortly after his release from prison, I consider a global starting point of 3 years' imprisonment appropriate for all 3 charges. With the timely guilty pleas, the overall sentence is reduced to 24 months. To achieve this, I order the sentences to run in the following manner :-

(i)  1 month in Charge 2 consecutive to Charge 1; and

(ii)  1 month in Charge 3 consecutive to Charges 1 and 2.

D4

68.  For Charge 3, he has a long history of theft-related offences and deception/fraud-related offences, which puts him in the repeated offender category. I will increase the starting point by 3 months. Hence, I adopt a starting point of 27 months' imprisonment. With the timely guilty plea, the sentence is reduced to 18 months. Apart from this, I see no other mitigating factors which warrant any further reduction. I sentence D4 to 18 months' imprisonment.

69.  For Charge 4, at most a total of 0.55 gramme of ICE is involved. D4's last similar conviction took place over 10 years ago. I adopt a starting point of 12 months' imprisonment. With the timely guilty plea, the sentence is reduced to 8 months. I sentence D4 to 8 months' imprisonment.

70.  For Charge 5, the usual sentence is 3 months' imprisonment after plea[1]. I have no reason not to follow it. Hence, I adopt a starting point of 4.5 months' imprisonment. With the timely guilty plea, the sentence is reduced to 3 months. I sentence D4 to 3 months' imprisonment.

71.  Bearing in mind the totality principle and the nature of the 3 offences, a global starting point of 33 months' imprisonment is appropriate for Charges 3 to 5. With the timely guilty pleas, the overall sentence is reduced to 22 months. To achieve this, I order the sentences to run in the following manner :-

(i)  Charges 4 and 5 concurrent; and

(ii)  4 months in Charges 4 and 5 consecutive to Charge 3.

D1 and D2

72.  D1 is only 16; and D2, 19. Both are under 21, which means imprisonment should be the last resort in terms of sentencing. As a general principle, rehabilitation (rather than punishment)  plays an important role in reforming young offenders. I cannot overlook their need for rehabilitation. I am also aware that both of them have experienced some in-born learning difficulties when they were young[2], which probably contributed to their poor academic performance through no fault of their own.

73.  Pre-sentencing reports indicated that both are fit for detention in a Rehabilitation Centre or a Training Centre. Both are also suitable for a Community Service Order. The Young Offender Assessment Panel recommended a Community Service Order for long duration for both D1 and D2.

74.  Based on the materials before me, I accept that D1 and D2 were both used as foot soldiers by the major players who orchestrated the fraud in this case. Their culpability is probably the least within the syndicate.

75.  D1 is half way through his vocational training and has a stable job with positive comments from his employer. I am inclined not to disrupt his training and employment as it might do him more harm than good by placing him in a correctional institution. D2 also received favourable comments from his current employer. Likewise, I am prepared to give him one last chance.

76.  I agree with the comments made by the Young Offender Assessment Panel and will follow their recommendations. I consider a Community Service Order to be an appropriate and just punishment for D1 and D2 at this moment.

[Requirements of Community Service Order explained. D1 and D2 understood and are willing to comply.]

I sentence D1 to 160 hours of Community Service each for Charges 1 to 3; and D2 to 200 hours of Community Service each for Charges 1 to 3.