HKSAR v. MORI YASUNARI

HCMA894/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

(Appellate Jurisdiction)

MAGISTRACY APPEAL NO.894 OF 2009

(ON APPEAL FROM ESCC 3920 OF 2009)

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REASONS  FOR  JUDGMENT

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1. The appellant was convicted after trial of one charge of ‘attempted fraud’.  He was sentenced to 9 months imprisonment.  He appeals against that conviction (having withdrawn his appeal against sentence).

The charge

2. The charge read :

“      Mori Yasunari, you are charged that between the 13^th day of August 2009 and the 19^th day of August 2009, at 23^rd Floor, Credit Suisse, Three Exchange Square, 8 Connaught Place, Central, Hong Kong, by deceit, namely by falsely representing that one purported banknote with face value of one million Euro dollars was a genuine banknote, and with intent to defraud, attempted to induce the staff of Credit Suisse to commit an act, namely to accept the said purported banknote as a genuine banknote and to open an investment account for you, which resulted in a benefit to you, or prejudice or a substantial risk of prejudice to the said Credit Suisse.”

Prosecution case

3. The prosecution case as summarised by the magistrate in his Statement of Findings is as follows (with my added emphasis to highlight the salient parts of the evidence) :

“      PW1 is a vice-president staff of Credit Suisse.  On 14 August 2009, the appellant and 2 friends (which included DW1—later called in the appellant’s case) met PW1 at his office.  It was indicated that the appellant wished to open a private trading account.  The appellant had said he dealt with the manufacture of towel machines for sushi shops, which are sold to two publicly listed companies in Japan.  A purported banknote (face value €1 million) was presented to PW1.  They asked that the banknote be cashed.  PW1 was also shown old German currency and what purported to be German government bonds.  He was asked whether these last-mentioned documents were genuine or not.  PW1 became suspicions at this time and requested to copy all documents—DW1 had said the appellant was his client.

       PW1 told the appellant that a detailed assessment had to be made to go through and open an account, and asked for his particulars to present to the bank—PW1 had mentioned to the appellant that the minimum balance for a new investment account is $US2 million.  PW1 told appellant and others they would be contacted later.  The matter was reported.

       PW1 contacted the appellant on 17 August 2009 to attend another meeting.  The appellant came to Credit Suisse office at 4pm with DW1.  The appellant produced photocopies of some purported euro (€) banknotes, old German currency and German Bonds to PW1.  The appellant told PW1 that he had confirmed the €’s as genuine through the Sumitomo Bank and Mitsubishi Bank in Japan.  When asked why he did not open an account in Japan, the appellant replied ‘As it is foreign currency it can not be used to open an account in Japan.  The Japanese bank had suggested opening an account in Singapore, Europe or Hong Kong.’  The appellant said that the proof of genuineness of the €1 million, as well as other original €1 million notes were in Japan.  When further asked if he had anything on him which proved the €1 million note was genuine, the appellant produced P7 which purports to be—Certificate of Authenticity (5 page document with the exhibits on file).

       The appellant further told PW1 that 3 Japanese staff would fly to Hong Kong that evening (17.8.2009) and he could supply the originals by Tuesday (next day—18.8.2009).  When asked if the Euros belonged to him (the appellant), he replied that if they were deposited into an account they did belong to him.  He said he would return 3% handling fee to the owners.  The appellant later said that if the opening of an account was successful, he, the appellant, would get 3%.

       In cross-examination PW1 said he had been asked to cash the Euros.  He had not been asked to verify the genuineness of the Euros.  PW1 agreed he had asked the appellant to show him the original of Euros of copies produced.  (As indicated one purported genuine euro, the subject of the charge, had already been produced by the appellant.)

       PW1 agreed he had been told by the appellant and DW1 that the notes were connected to the widow of a Taiwanese businessman who previously ran Evergreen company, and the descendants of the Royal Family.  PW1 said the appellant had told him he wanted to deposit all the proceeds, not just the 3% mentioned.  PW1 again disagreed the appellant had just asked him to verify the authenticity of the euros.  He did not,—PW1 further disagreed that everything had been produced at once.  He said it was only when he (PW1) asked if they were genuine, that the appellant had produced P7 (the 5 paged purported Certificate of Authenticity).  PW1 maintains at all times the appellant had said the euro note was genuine and could PW1 assist in opening an account with them.  PW1 said he did not misunderstand any of the conversation.

       PW2 is a director of Credit Suisse and the supervisor of PW1.  Like PW1, he too speaks fluent Japanese.  On the morning of the 18 August 2009 the appellant and DW1 again turned up at Credit Suisse.  PW2 met them.  The appellant and DW1 requested that the appellant wanted to open an account and deposit funds into it.  This was to be done with the purported Euro banknote.  One had already been furnished (subject of the charge) and the appellant said he had others, as well as German banknotes.  The appellant said he would be the owner of the account opened.  PW2 informed them matters had to be clarified first and asked the appellant to show what he had to open the account.  The appellant showed a purported banknote for €1 million (P1), as well as saying he had 8 kinds of certificate (P2 (1-8)).

       In cross-examination PW2 maintained the appellant had wanted to open an account with the €1 million purported banknote.”

Defence case

4. Turning to the defence case, the magistrate stated :

“      As previously agreed [the appellant] had a clear record.  He had started his own company in Japan with respect to towel dispensing machines, in 2005.  He had come to Hong Kong in August 2009.  He said someone in Japan had in their possession some euros andGerman marksand had asked him to verify their authenticity.  It was a person called Takeushi who he had met in Tokyo in April 2009.

       Takeushi had told him he possessed euros owned by a relative which he believed were genuine, but still wanted them checked in Hong Kong.  He was told the legal owner was a member of the Imperial family, and the marks were owned by the wife of a businessman who runs Evergreen.

       As the appellant had a company in Hong Kong, Takeushi had asked him to go to Hong Kong and check out the notes.  Takeushi told him he had tried to check the documents in Japan with Mitsubishi Bank but they would not change them in Japan.

       The appellant had contacted his friend, DW1, in Hong Kong (who owned Tai Fook Securities)and enquired about the documents.  The appellant arrived in Hong Kong on 14.8.2009 and contacted DW1 again.  DW1 told him he was not familiar with the notes and he (appellant) would have to check them out with a bank in Hong Kong.  The appellant said he only wanted to verify the authenticity of the €1 million he had.  He never intended to open an account with it.

       The appellant said at the meeting with PW1 on 14.8.2009 it was DW1 who did all the talking about checking the authenticity of the notes produced.  The appellant had produced copies of his documents for DW1 to photocopy.  The appellant disagreed with PW1’s evidence that the €1 million note was to be cashed.  He said again it was only shown to verify its authenticity.  PW1 said he had to check out the notes.  He said the euros might be usable.  The appellant was surprised.  DW1 told him to get all documents and come back on Monday—17.8.2009, which he did.

       PW1 had further questioned the appellant about the source of the Euro notes, and when told about the Imperial family and Evergreen, the appellant says it was PW1 who suggested that if the notes were genuine they should be put into an account.  It was the appellant who said he could not do that until the background and genuineness of the notes had been checked by the bank.  The appellant had never mentioned 3% of the funds would go back to the owner.  The appellant thought that probably the notes were genuine, but he did not know.

       The appellant was asked to come in the next day (18.8.2009) and on this occasion saw PW2.  PW2 had asked for the originals and the appellant had handed him the Authentication Certificate (P7).

       In cross-examination the appellant said he had not dealt with currencies before.  He was not sure what Takeushi did, but thought he was in a support group for politicians.  He had met him 2-3 times before he (appellant) came to Hong Kong.  When Takeushi handed him the euros the appellant was surprised at the huge amount at face value, but he trusted him.  The appellant further said he had contacted his own banks in Tokyo but they had told him Japanese banks are backward and might not check notes, and so DW1 suggested for him to check them with banks in Singapore or Hong Kong.

       He had been told the value of the Euro notes and believed they were valuable.  No security had been asked for by Takeushi to take the notes away.  Takeushi had told him the notes were valuable and genuine, but they were old and maybe expired and so that was the reason to check then.  The appellant was going to Hong Kong on business anyway and so Takeushi asked him to check the notes while he was there.

       Takeushi had asked him only to check out notes.  No commission had been discussed.  The appellant then gave evidence about his relationship with DW1.  He said he had first emailed a copy of the notes to him in Hong Kong from Japan.  He had never shown him the originals.

       The appellant was shown the €1 million note.  It has ‘Not Legal Tender’ on its face.  The appellant understood that to mean it is not a banknote.  The appellant says he understands simple English a bit, but cannot write it.

       DW1 gave evidence.  He is a vice-president of Tai Fook Securities in Hong Kong and knows the appellant as a customer.  He had been shown the notes by the appellant.  DW1 did not know if they were real or not.  They decided to check it out and DW1 suggested that perhaps a European bank could verify if they were genuine or not.

       When he and the appellant went to the bank on 14.8.2009, DW1’s role was as a translator.  He had introduced the appellant to PW1 and explained that the appellant had notes with him which he needed to get checked.  The appellant had taken out such notes and placed them on the table.  PW1 said he would check them out.

       Next on 17.8.2009 they went to Credit Suisse and saw PW1 again.  PW1 was more enthusiastic than at their first meeting on 14.8.2009.  PW1 thought the notes might have been checked and found to be genuine.  They were told to get the originals of all the notes.

       Next on 18.8.2009 the appellant and DW1 met PW2 at Credit Suisse.  PW2 explained to the appellant how to open an account.  DW1 and the appellant thought that odd as the notes should be checked first.

       In cross-examination DW1 said he had met the appellant 2-3 times before these events.  The appellant had told him he (appellant) was half sure the notes were genuine.  DW1 had been in the financial sector since 1984 and had seen foreign currency, although after 2000 he was not actively involved in euros.  He had only come across euros to €100, not €1 million.  The first thing DW1 had noticed were the words ‘Not Legal Tender’ appearing on the €1 million note.  He had also noticed the words ‘This Certificate is Backed and Secured By Confidence in the European Dream’.  DW1 thought that this meant it was not commonly used in the market—it might be some form of a bond.  He had pointed this out to the appellant.  DW1 thought that the euro note could be real.  He had never asked the appellant to view the original euros.”  (my emphasis)

Magistrate’s findings

5. In the end, the magistrate believed PW1 and 2 and disbelieved the appellant and his witness.  He found the account of the latter two a complete fantasy.

This appeal

6. The short point in this appeal is assuming what PW1 and 2 said in evidence is true and correct, was the appellant’s act more than merely preparatory to constitute an attempt?  Alternatively, can it be said that the magistrate had failed to resolve a discrepancy in evidence as to whether the appellant’s real intention was to cash the euros or simply open an investment account?  These are the main questions posed.

7. In my judgment, there is no difference between cashing the euros and opening an investment account.  It seems clear from the evidence that one cannot be done without the other.  This should not come as any surprise given the amount of money that the proposed transaction purportedly involved.  It also does not matter whether the appellant was initially aware of this requirement for even if he was not, that was certainly made known to him during his meetings with PW1, and yet he persisted in his action. 

8. I appreciate that for an investment account to be opened, a two week application period had to be gone through—and only if the euros in question were found to be genuine.  I do not however subscribe to the view that the presentation of the note was nothing more than an act in preparation.  On the contrary, it was for all intent and purposes a triggering act.  It would have brought the opening of the account to fruition if the bank were satisfied with the appellant’s bona fides.  I am satisfied that what he did was an attempt.

9. Finally, the obscure point is raised that when PW1 telephoned the appellant on 17 August, he had admittedly told the latter that the euros might be genuine, so the appellant, an innocent party to begin with, might have been misled into pursuing the matter, and yet the magistrate had wrongly neglected to consider this possible scenario when drawing his inference.

10.  In my judgment, this point has no merit.  It is true that PW1 said what he said to facilitate the appellant’s return to the bank but there is also no denying that the accepted evidence shows the appellant to be a very keen customer.  This, together with the fantasy story of how he came into the euros in question, leaves me no doubt as the correctness of the magistrate’s conclusion.

Judgment

11. The appeal is dismissed.