HKSAR v. LI SUET YING

DCCC 980/2023

[2024] HKDC 659

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 980 OF 2023

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REASONS FOR SENTENCE

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1.  The defendant has been convicted on her own plea on one charge of fraud, contrary to Section 16A of the Theft Ordinance.

2.  The facts basically show that the victims themselves responded and wanted to cash out some cryptocurrency and in doing so they responded to an advert which allowed them to cash that money out and eventually they were defrauded of the money that they paid to the company that was going to do the cash-out.

3.  A more detailed examination of the facts show there were two victims in this case, PW1 and PW2.  They were cryptocurrency investors.  Between them they jointly owned about US$127,145.6 in the form of a cryptocurrency.  They had designed to have the same value as an underlying asset in US dollars.  The total underlying value at the material time was around $995,000. As I said, the victims wished to cash-out their cryptocurrency and they saw a post by a company called “Hot Node Crypto” on Instagram.  This company had an address in Tsim Sha Tsui in Cameron Road and purported to have an office there.  It also had an advertisement on Facebook.

4.  The victims came to an agreement and decided to cash-out their cryptocurrency, made some inquiries.  There was some toing and froing but eventually an agreement was made that they would be paid a million Hong Kong dollars in exchange for their cryptocurrency.  In the afternoon of 16 September, things were ready and the transaction could purportedly be proceeded with.

5.  When the victim, PW1, arrived at the office he was greeted by the defendant.  He took him to a room.  There was a safe inside the room.  Defendant took out a pile of what appeared to be $1,000 banknotes, put it on a table. The victim appeared to believe that this is one million dollars in Hong Kong dollars cash and so acting on that, a QR code was used to transfer what was US$127,146 to the company.  The defendant confirmed that money had been received after checking on her mobile.  Inevitably, the defendant left the room shortly after, purportedly to find a banknote counter leaving the victim with the banknotes.  The victim quickly established that out of the pile of banknotes only one of the notes was genuine.  The rest were counterfeit.

6.  The door was locked and the victim eventually had to be released by fire officers.  There was a safe in the office in which other counterfeit notes were found.  The computers inside that office were all fake, they were pretend devices.  The document files in the office contained blank paper.

7.  The defendant was identified by way of a palm print and also CCTV footage and was arrested on 14 January 2023, identified at an identification parade on 16 January 2023.

8.  The defendant in her antecedents showed that she is 37 years old now, she was 36 at the time of the offence.  She is educated to secondary level, including various jobs but basically as a salesperson.  When she was arrested she was unemployed.  I am told she was living with her parents.  She has one previous conviction in 2008 simply for theft for which she was fined.  It is a historic conviction now and is not relevant for the purposes of sentencing.

9.  The defendant has written a mitigation letter saying that she is remorseful and upset for her greediness in this offence.  She tells me she is being supported by her family and she wants to work either in beauty studies or making confectionary.  Her main mitigating factor is she has pleaded guilty and indicated a guilty plea in a timely fashion.  As far as the approach to sentencing is concerned, defendant has been convicted of fraud.

10.  There is no guideline sentence for fraud.  There are relevant factors that need to be considered.  They can be found in the case of HKSAR v Ho Ka Keung [2009] 1 HKC 88.  It has been said in respect of commercial fraud cases, well-established commercial fraud would attract, other than in exceptional circumstances, an immediate custodial sentence even for a first offender.  The length of the sentence is determined by reference to factors such as, but not exclusively, the nature of the fraud, the duration of the fraud, its sophistication, the role played by the convicted person, any effect it might have on the marketplace generally, any cross-border international implications and the nature and extent of the victim’s proprietary interest, the extent of any loss actually sustained.

11.  It said there should be flexibility in sentencing and factors included the role of the defendant in the hierarchy, their degree of involvement, the duration of the fraud and the amount of loss suffered by the victim are all relevant.

12.  This case involved a single transaction with one or two victims, lasted a short period of time.  Apart from the use of the fake banknotes, the act of deception is fairly simple, of limited sophistication.  The fraud was simply committed by the victim not receiving the payment they were promised.  Clearly there is no evidence of international cross-border features.  It is not what we call an internet fraud, the use of the internet was purely for communication between the parties.  The defendant is also, on the face of it, not the mastermind of this matter, she was simply an actor, from what I can see, playing a role.

13.  Courts have also considered in relation to fraud cases the guidelines contained in HKSAR v Ng Kwok Wing, which is a theft that involved a serious aggravating feature such as breach of trust and that gives a series of sentences relating to the financial loss incurred by the victims and for the financial loss of D1 to HK$3 million the sentence should range between 3 to 5 years’ imprisonment.  Of course this is not a breach of trust case but there are similarities, especially in relation to the amount of money involved.

14.  Taking all these factors into consideration, it is safe for me to determine an appropriate starting point for sentence for the defendant.  There is the money in respect to the victims are lost is lost, there is no reparation.  I consider an appropriate starting point for this defendant in this case is one of 36 months’ imprisonment.  She is entitled a full one-third discount which leads to a sentence of 24 months’ imprisonment on that charge.