HKSAR v. CHAN KWONG FAI AND OTHERS

DCCC 800/2023

[2024] HKDC 1660

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 800 OF 2023

________________________

________________________

________________________

REASONS FOR SENTENCE

________________________

1.  In this part of the proceedings, this court is tasked with the sentencing of three defendants in respect of a total of nine charges. All of them are convicted upon their plea and their admission of facts.

2.  D1 is convicted on four counts of conspiracy to defraud, contrary to Common Law and punishable under section 159C of the Crimes Ordinance, Cap 200 (Charges 4 to 7).

3.  D2 is convicted of six counts of conspiracy to defraud (Charges 1, 2, 4, 6, 8, and 9)  and one count of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organised and Serious Crimes Ordinance, Cap 455.

4.  D4 is convicted of one count of conspiracy to defraud. All the charges are related to a series of telephone fraud which had took place in the early part of September 2022.

Charges 1 and 2 (against D2)

5.  These charges involved the same victim, a woman age of 60 (‘V1’). On 8 September 2022, V1 received a call from a stranger representing himself to be her son-in-law and gave her a new contact phone number.

6.  The next day, V1 received a call from the said impersonator, claiming to have been detained by the police and needed $80,000 for bail money. V1 was instructed to deposit the money in a certain bank account, but she did not know how to carry out the task.

7.  The male then instructed her to pass on the money to a male outside an MTR station. At 11:55, V1 gave the money to a stranger (another defendant in this proceedings in Charge 2). At about noon of the same day, the impersonator called and asked for more money, instructing her to pass $120,000 in cash to a woman outside the same MTR station. V1 did as told and gave the money to D2.

8.  At 1425 hours, the impersonator called again, asking yet for another $100,000. V1 agreed and passed the money on to D2 outside the MTR station at about 4 pm.

9.  It was only on the next day that she learned from her son-in-law that she had been defrauded. Under caution, D2 admitted to having instructed another male to collect $80,000 from V1 on one occasion, and did so herself on the other two.

Charge 4 against D1 and D2

10.  On 6 September 2022, a 71-year-old woman (‘V2’), received a call from a man representing himself to be her nephew. On 12 September 2022, the impersonator called again and left her with a new phone number.

11.  The next day at about 1 pm, V2 received a call from the said impersonator asking for money. V2 stated that she only had $12,000, whereupon the impersonator told her a man called Lee Wai would come to collect it. On 13 September 2022, after calling V2 for her address, D1 turned up, representing himself to be Lee Wai, and took the money.

12.  On 14 September 2022, the same person called V2 asking for another $20,000. She refused as she had no more money to lend. She only learned that she had been scammed after having been so informed by the police.

13.  D1 admitted under caution that he took the money from V2 by pretending that he was a friend of V2’s nephew. The police also found a script of what to say to perpetuate the scam in D1’s cell phone. D2 admitted he instructed D1 to collect the money.

Charge 5 against D1 and D2 [1]

14.  On 13 September 2022, an 87-year-old woman (‘V3’), received a call from a male representing to her that her son had been held for a $40,000 debt and asked her to repay on his behalf. On 14 September 2022, the same male called V3 asking her for her address in order to collect the money.

15.  D1 arrived at 11:30 am at V3’s address and took the $40,000 from V3. Later in the day, V3 learned that she had been scammed.

16.  D1 admitted under caution that he took the money from V3. The police also found a script of what to say to perpetuate the scam in D1’s cell phone.

Charge 6 against D1 and D2

17.  On 13 September 2022, a 78-year-old man, V4, received a call from a man representing himself to be his nephew asking to borrow money. He then called again telling V4 that a friend of his would meet him at the roundabout at Sam Mun Tsai to collect money.

18.  V4 did as instructed and handed the money, $20,000, to D1 before he came to the knowledge that he had been scammed.

19.  D1 admitted under caution that he took the money from V4. The police also found in D1’s cell phone a script of what to say to perpetuate the scam. D2 also admitted under caution that she instructed D1 to collect the money.

Charge 7 against D1 and D2 [2]

20.  On 13 September 2022, a 69-year-old woman (‘V5’), received a call by a man claiming to be her son-in-law. He told her that he had been arrested and asked her not to tell anyone.

21.  The next day at about 10 am, the same man called V5 again saying that he needed money for the bail and asking her how much money she had. V5 told him that she could raise $80,000. The impersonator then told her that his friend would meet her in the shopping mall to collect the money.

22.  V5 went to the shopping mall and handed the money over to D1. She learned that that she was scammed only after speaking to her daughter.

23.  D1 admitted under caution that he took the money from V5 by pretending he was a friend of her son-in-law.

24.  The police also found a script sent by one Ah Kit for what to say to perpetuate the scam in D1’s cell phone. D2 also admitted under caution that she instructed D1 to collect the money from V5.

Charge 8 against D2 and D4

25.  On 14 September, a 69-year-old man (‘V6’), received a call from a man representing himself to be his nephew and left him with a new contact number.

26.  At 10 am the next day, the same male called again asking to borrow money to settle a dispute. V6 stated that he only had $30,000. The male then said he would send a friend to take the money.

27.  At about 1 pm, V6 handed the money to D4 as instructed. At about 2 pm, V6 received another call from the same person asking to borrow more money. As V6 had no more money, he turned to his brother (‘V7’), who agreed to lend $30,000 to his supposed nephew. At about 4 pm, V7, the brother of V6, handed the money over to D4.

28.  On 16 September 2022, the said impersonator called V6 again asking to borrow yet more money. V6, who by then had learned that he had been scammed, tasked the caller with naming his nephew and his nephew’s father, whereupon the call was terminated by the caller.

29.  D4 was formally identified by V6. He also admitted under caution that he took the money from V6 and V7 under D2’s instruction by pretending that he was a friend of their nephew. The police found a script of what to say to perpetuate the scam in D4’s cell phone. D2 admitted to have instructed D4 to collect the money.

Charge 9

30.  On 15 September 2022, a 71-year-old woman received a call from a man representing himself to be her grandson, telling her that he had been arrested and needed money. The victim then stated that she only had $20,000. The impersonator then told her that he would send a friend to her home to collect the money the next day.

31.  At about noon the next day, the victim was instructed to hand over the money at the MTR station. She waited for an hour before a man came up claiming to be a friend of the victim’s grandson and took the money. Under caution, D2 admitted to have instructed another person to collect the money.

Charge 14 against D2

32.  Upon her arrest on 16 September, the police found cash of $345,369 in her handbag. Under caution, D2 stated that $85,000 of the same belonged to her friend, $35,000 was what she earned from the scams and the rest had been collected from the victims of the scam.

33.  D2 also made the following admissions:-

(a)  It was her friend Ah Sun who supplied her with names and telephone numbers of the people she would collect money from.

(b)  She subsequently learned that the money collected were from elderly citizens who had been scammed into believing that their relatives had got into trouble and needed money for bail.

(c)  She knew that the money collected were obtained by illegal means.

(d)  She had done so for about 20 to 30 times since early September 2022. The total sum stolen was about $800,000 to $900,000.

(e)  She was instructed by Ah Sun to use the money to purchase cryptocurrency.

(f)  She had also enlisted other people including D4 and her husband, D1, to collect money for her.

Discussions

34.  All the charges were related to a species of telephone deception. The victims usually are gullible / unsophisticated and in most cases, senior citizens. They would receive calls from someone pretending to be a relative in distress asking for financial assistance.

35.  After the unsuspecting victims were taken in and hastily withdrew the money and handed over to a person as instructed. It was only later that the victim realised that it was a scam but by then the fraudsters had made off with the money and could not be traced.

36.  The offences had been committed within a span of three weeks in September 2022. It is not clear whether the victims were targeted or selected at random, but the fraudulent operations involved a premeditated plot. There were more than one participant, each playing a different role in an organised way of carrying out the scam. Several telephone calls were made to ensure that the victims had let their guards down. The persons collecting the money was sometimes given a transcript for the purpose of convincing the victim to part of their money.

37.  Admittedly, the ploys were identical, not particularly sophisticated and the method of execution rather crude, but they were targeting at the most vulnerable and gullible members of the society, preying on their trusting nature and the concern for their loved ones.

38.  In some cases, the money swindled out of the victims represented a substantial part, if not all, of what they had at their disposal. Therefore, the amounts involved per se are not a significant indicia of the severity of the offence.

39.  In some cases, even after the victim had been taken advantage of, but sensing that he or she could be further exploited, the fraudsters were not beneath further squeezing him or her into giving up more money. This callousness rendered the crimes particularly despicable.

40.  Apart from suffering financial losses, the victims have been put to considerable stress out of concern for the well being of their loved ones. Such fraudulent plans of naked greed are not only illegal, they are morally reprehensible and should be severely punished.

The roles of the defendants

41.  In this case there was no evidence to show that D1 and D4 played an active part in the plotting of the scheme. The facts admitted did not suggest that D1 had been involved in the planning and organizing of the crime. Both defendants contended that they collected money from the victims upon instructions and for a fee. Both were given transcripts which they could use to convince the victims to part of their money.

42.  I accept that they were not masterminds of the criminal operation. However, the part they played not only enabled the masterminds to evade apprehension, it was also a critical part without which the fraudsters could not have succeeded.

43.  All the charges involved phone deceptions, which are more serious than street deceptions and warrant a higher starting point in sentencing for the purpose of deterrence.

44.  The Court of Appeal laid down a sentencing guideline of 4 years’ imprisonment for similar cases, see HKSAR v Hong Yung Chun and Another, CACC 453/2009. There were two defendants in the Hong Yung Chun case and the facts of the offences are similar to the present: all involved bogus phone calls to the victims.

45.  The Court of Appeal took the view that the appropriate starting point should be 4 years.

Enhanced application

46.  The prosecution furnished a statement by a Chief Inspector in support of an application for enhancement of sentence for all charges in the present case pursuant to section 27(2)  of the Organised and Serious Crimes Ordinance.

47.  The Chief Inspector set out in his statement in detail, his office academic qualifications, training and experience in processing criminal intelligence, conducting strategic analysis and monitoring crime trends, investigating prevalent crime and disseminating the respective crime trends to other police formations and units.

48.  None of the defence lawyers took any issue of his qualification as an expert and I accept him as such. The Chief Inspector explained that the present case falls within the police category of guess-who, a species of telephone deception cases, which have been steadily on the rise in numbers and the accumulated monetary loss by the victims.

49.  Guess-who deception cases increased from 487 cases in 2021 to 1,540 cases in 2022. In 2023, the number came up to 2,237 and 1,920 victims suffered from monetary loss. He was of the view that the crimes are “of obvious concern to the society in terms of the harm caused to the community and their rampancy.”

50.  Having studied the information provided, I am satisfied that the Chief Inspector has the expertise, experience and access to police statistics to furnish information and make the observations as he did. As a normal citizen, the undersigned has come across numerous news reports of telephone deception cases both in the internet and the printed press. It does not take an expert to conclude that such crimes not only affected the immediate victims, they are also rampant, morally repugnant and damaging to the social fabric. I therefore decided to enhance the sentence by one-third.

The sentence of D1

51.  D1 is convicted of four counts of conspiracy to defraud, Charges 4 to 7, carried out during the period between 13 and 14 September. The four victims have been defrauded into parting a total sum of $152,000.

52.  By stating that he was totally unaware of the crime, under caution, D1 apparently contended he did so under the instructions of his wife, D2. I note that all the crimes have been committed within a short span of time, all involved elderly victims, and D1 had acted on transcript in order to gain the victim’s confidence.

53.  It is impossible for him to blithely stating that he was unaware of what had been going on. Nonetheless, I accept he was not the mastermind and did not play an active part in the coordination and organising. Therefore, I adopt 4 years as a starting point for each of the charges.

Mitigation

54.  D1 is 42 years old, educated up to Form 3. He married D2 in 2021 in the mainland. He has no children and both his parents had passed away. He has 16 previous convictions.

55.  In his letter to court, he stated that he committed the present offences because he was under financial pressure to pay for his father’s medical expenses incurred. From 2011 to 2022, D1 had managed to accumulate 14 previous convictions, some of which involved offences of dishonesty. They were all of a minor nature and I would not consider this relevant fact in the present sentencing exercise.

56.  On the other hand, I would not be able to exercise any discretion in his favour by reason of his age and the absence of previous convictions. Having considered his mitigation, I found the only relevant part is his plea of guilty. Therefore, the sentence for each count is reduced to 32 months.

57.  Furthermore, by the reasons stated above, I am satisfied that the offences he committed have been prevalent and causing direct harm to the victims and great harm to the society. So much so, the sentence should be enhanced by one third up to 42 months for each count.

58.  Technically, each offence had been committed independently and was distinct from each other. Taking into consideration of the totality principle, I would order 3 months of Charges 5, 6, and 7 to run consecutive to Charge 4, making a total of 51 months.

The sentence of D2

59.  D2 is convicted of six counts of conspiracy to defraud ie Charges 1, 2, 4, 6, 8, and 9, and one count of dealing with property knowing or reasonably believed to be a proceeds of an indictable offence (Charge 14).

60.  For the conspiracy to defraud charges, there were in all six different victims and the total amount involved was $412,000. D2 had either personally collected the money or had instructed other defendants to collect them.

61.  She had also admitted to have carried out the scam under the instructions by a mastermind, and she had also been instrumental in disposing of the money obtained. Thus, D2 may not be the ultimate mastermind. She had played a more important and crucial role than her co-defendants.

62.  I also note that there was no evidence that she had disclosed details about the mastermind. Although this is not an aggravating factor, it is definitely not a redeeming feature in assessing her criminal liability. Having considered the authorities, I consider that her culpability warranted a higher starting point of 51 months. This is reduced to 34 months to reflect her guilty plea.

63.  For the reasons stated above, I would enhance her sentence by one-third, making a starting point of 45 months for each count.

64.  For Charge 14, D2 admitted that the cash, $354,369, were obtained by defrauding senior citizens and she had done so 20 to 30 times since early September 2022. The ill-gotten gain were used to purchase cryptocurrency, presumably in order not to leave a money trail leading to the main culprit.

65.  I consider that this is a more serious offence. I will adopt 60 months’ imprisonment as a starting point. It is reduced to 40 months to take into account of her guilty plea. For the reason already stated, this is enhanced by one third to 53 months.

66.  After taking into account the totality principle, I order 2 months of the sentence for Charges 1, 2, 4, 6, 8 and 9 to run consecutively to that of Charge 14. Making D2’s total sentence to be 65 months.

The sentence of D4

67.  D4 in this case was convicted of one count of conspiracy to defraud. The facts revealed that he was under the instructions of D2 to collect money from the victims in a total sum of $60,000. For the reasons already stated, although there is no evidence to suggest that he was the mastermind, he played a crucial role and his culpability is not much less than the others.

68.  I will adopt 48 months as a starting point, reduced to 32 months to take into account of his guilty plea and increased by one-third to be 42 months.

69.  I have considered his mitigation as forwarded in the written submission by his counsel. D4 is 35 years of age, he was born in Hong Kong. He was married but had long separated. D4 had a drug trafficking offence in the past. It is of a different nature and I would not consider them as relevant in the present sentencing exercise.

70.  In all, I do not consider what had been stated on his background is relevant for reducing his sentence. Having considered the matter as a whole, I would order him to be sentenced to 42 months’ imprisonment.