DCCC 1195/ 2008

DCCC 1195/ 2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1195 OF 2008

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Reasons for Sentence of D2

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The charge

1. D2 pleads guilty to a charge of conspiracy to use false instruments, contrary to sections 73, 159A, and 159C of the Crimes Ordinance, Cap. 200.  The Particulars of Offence stated as follows:

D1, D2, and D3, between May 2008 and 9 September 2008, in Hong Kong, conspired together and with persons unknown to use false instruments which were, and which they knew or believed to be false, namely twenty pieces of counterfeit credit cards, with the intention of inducing somebody to accept them as genuine, and by reason of so accepting them to do or not to do some act to his own or other person’s prejudice.

The facts of 5 September 2008

2. D1, D2, and a person called “Paul” went to a travel agent, GSTL, to purchase three round-trip Korean Air tickets for D1, D2, and D3 respectively for 10 September 2008 to depart Hong Kong to Rome via Seoul.     

The facts of 9 September 2008

The arrest of D1, D2, and D3

3. D1 checked in at the counter.  He waited for D2 to arrive.  After D2 arrived and checked in at the counter, D1 and D2 went to the departure gate together.  Later, the police stopped them for enquiry on suspicion of possession of counterfeit credit cards.  They were arrested. 

4. D3 checked in at the counter.  D3 then went to use an ATM machine.  After that, he used a notebook computer (“Computer”, later seized as an exhibit), which he had brought along.  Later, the police stopped D3 near the departure gate for enquiry on suspicion of possession of counterfeit credit cards.  He was arrested.   

The body search on D1

5. The body search on D1 yielded:

(1)   Ten counterfeit credit cards in his name;

(2)   One Korean Air boarding pass in his name to Seoul;

(3)   One Korean Air boarding pass in his name to Rome;

(4)   One itinerary issued by GSTL addressed to him;

(5)   Cash Euro $1,400;

(6)   Cash HK $300;

(7)   One NOKIA mobile phone with one “3” SIM card (no. 6430-3654);

(8)   One “3” SIM card (no. 6901-3407).

The body search on D2

6. The body search on D2 yielded:

(1)  Ten counterfeit credit cards in her name;

(2)  One Korean Air boarding pass in her name to Seoul;

(3)  One Korean Air boarding pass in her name to Rome;

(4)  An itinerary issued by GSTL addressed to her;

(5)  One NOKIA mobile phone with one “CSL” SIM card (no. 6390-0383);

(6)  One “3” SIM card (no. 6097-1307).

The body search on D3

7. The body search on D3 yielded:

(1)  The Computer;

(2)  One Korean Air boarding pass in his name to Seoul;

(3)  One Korean Air boarding pass in his name to Rome;

(4)  An itinerary issued by GSTL addressed to D3;

(5)  Cash Euro $300;

(6)  Cash US $705;

(7)  One HTC mobile phone with one SIM card (no. 5192-5361);

(8)  One NOKIA mobile phone with one SIM card of a China mobile phone number.

The admissions by D2

8. Subsequently, D2 said:

(1)  He met Paul through a friend;

(2)  Paul offered to pay her 10% of the value of the fraudulent purchases for a job of using counterfeit credit cards abroad;

(3)  She agreed to take up the job because she wanted to earn money to repay her credit card bills;

(4)  To discuss using counterfeit credit cards in Italy she met up with Paul and D1;

(5)  She went with Paul and D1 to purchase the air-tickets to Rome;

(6)  On 9 September 2008, she and D1 went to Shenzhen each to collect 10 counterfeit credit cards from a person called “Long”;

(7)  She would take those 10 counterfeit cards embossed in her name to Rome.

The potential for loss

9. There were 8 VISA credit cards among the 20 counterfeit credit cards.  The issuer’s potential loss per VISA card is about US$3,000.  The total for 8 could have been US $24,000 (equivalent to HK $187,200).

10. There were 12 MasterCards among the 20 counterfeit credit cards.  The issuer’s average potential loss per MasterCard is about US$1,300.  The total for 12 could have been US $15,600 (equivalent to HK $121,680).

D2’s personal circumstances

11. D2 is now 38 years of age.  She has a clear record.  She is single.  She lives with her parents and younger brother.  She was educated up to F.2 level. She had done various unskilled jobs.  She was unemployed before arrest.  She committed the present offence to earn quick money for her medical expenses.  She claims to have tumours in her ovary and uterus.  Upon her request, I have ordered a medical report of her conditions.  Benign tumours are found.  They pose no immediate hazard to her health.      

The principles of sentence

Options in sentencing credit card fraudsters

11.     There are no sentencing tariffs for credit card fraudsters but the customary sentence is imprisonment.  In HKSAR v Cheung Ka-wo CACC No 136/2001 Stock JA pointed out that：

11．It is well known that in this jurisdiction severe sentences are given to those who commit offences of the kind with which we are presently concerned as a deterrent to others who are like-minded.  One justification for this is that the integrity of the credit card system is highly important in this day and age and the confidence which people, as Mr Madigan pointed out in the course of his argument, are entitled to place on this aspect of modern commercial life is necessarily eroded by others who attempt to beat the system by fraudulent methods.

Determining the length of imprisonment

12. In HKSAR v Chan Sui-to [1996] 2 HKCLR 128, 131, the Court of Appeal held that a sentencing judge would need to consider 5 factors before deciding the level of sentence, although Yang CJ went on later to say that this was not intended to be an exhaustive list.  These factors were as follows: 

“	1.	The size of the operation e.g. whether it involves large sums of money, whether it concerned a large number of persons or forged credit cards.
	2.	The planning that has gone into perpetrating the fraud, whether it is elaborate or simple, whether technical skills were used, and to what extent.
	3.	Whether there is an international dimension.
	4.	Whether the accused played a major role, e.g. running a syndicate, engaging in actual manufacture, organising the use of forged cards, or whether he is a mere ‘cog in the wheel’ as a courier or a custodian or keeper.
	5.	Whether there is a plea of guilty.

The factor of “Potential for losses”

13. In HKSAR v Yau Wai Chun CACC 417/ 2000 Stuart-Moore VP raised the issue of “potential for losses” as reflecting the degree of culpability.  That case dealt with a medium-sized operation.  He referred to Chan Sui-to (supra) and said:

10．In R v Chan Sui-to and Another [1996] 2 HKCLR 128, where some guidance was given in regard to sentencing in cases involving the fraudulent use of credit cards, the court stated at page 134A:

"Allowing for the different facts and the varying degrees of culpability, it is impossible to formulate a set of principles of sentencing from those decisions. We think however it would be helpful to the courts if they were guided by some criterion. We would therefore suggest that an accused who plays 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 sum of money involved is of course only one of the factors to be taken into account. It is not even the most significant factor."

11. As a corollary to this, the court stated in HKSAR v Ng Swee Thiam and Others [2000] 1 HKLRD 772 at 778, that it was the "potential for losses" which was the most important consideration in that case. This, it should be said, will often have relevance, as it does in the matter presently before us. It has long been recognised in Hong Kong that those who indulge in fraud of this kind can expect to be given severe sentences as it erodes the confidence which people are entitled to have in a society where great dependence is placed on the credit card method of payment. (See: Attorney General v Chan Piu-sang and Another [1994] 1 HKCLR 211).

Examples of sentence

14. In HKSAR v Bin Kei Chi & Anor CACC 181/2005, the two applicants pleaded guilty to, among other charges, the joint possession of 25 false credit cards.  It was a medium-sized operation with an international element.  The sentencing judge took a starting point of 6 years’ imprisonment.  It was reduced to 4 years due to his plea of guilty.  The Court of Appeal upheld the sentence.  

15. In HKSAR v Kita Yashushi & Anor CACC 470/2006, each of the two applicants pleaded guilty to the charges of using a false credit card to purchase a Rolex watch (the charge of using a false instrument), which purchase was verified by a false passport (the charge of using a false passport), and possessing 3 false credit cards and the false passport.  The Court of Appeal regarded that the starting points should have been:

(1)   3 ½ years for using the false credit card;

(2)   18 months for using the false passport; and

(3)   3 ½ years for possessing the 3 credit cards and the false passport.

Taking in account the pleas of guilty, the sentences became 28 months, 12 months, and 28 months respectively.  The 28 months’ sentences were to run concurrently but 4 months of the 12 months’ sentence was to run consecutively to the other charges.  Each applicant was sentenced to 32 months in total.

The sentence I pass

16. Applying the 5 non-exhaustive factors laid down in Chan Sui-to (supra), our present case reveals the following features:

(1)     There were 20 counterfeit credit cards.  The potential loss in our present case amounted to HK $308,880, namely HK $187,200 for 8 VISA Cards + HK $121,680 for 12 MasterCards.  Allowing for the upward adjustment of price level from Chan Sui-to (supra) which was decided on 22 June 1996, it can be classified as “a medium-size operation”.  There were at least 5 people, namely D1, D2, D3, Paul and Long;

(2)     The planning was not sophisticated;

(3)     There was an international element involving the collection of the counterfeit credit cards in Shenzhen, and the shopping in Rome;

(4)     D2’s role was not essential but active;

(5)     There is a plea of guilty.

17. Our present case falls within the band of 5 to 6 years’ imprisonment suggested in Chan Sui-to (supra).  I take a starting point of 5 years’ imprisonment for D2.  I reduce it by one-third because of the plea of guilty.  There are no other mitigating factors.  I sentence her to 3 years and 4 months’ imprisonment.