HKSAR v. YUNG WING CHI

DCCC 561/2017

[2018] HKDC 230

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 561 OF 2017

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Reasons for Sentence

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1.  The defendant pleaded guilty to 2 charges of Evasion of liability[1] and one charge of Fraud[2].

Summary of Facts

2.  The defendant joined a Fung Shing Steel company as a clerk in June 2009. She resigned in October 2010.

3.  After her resignation in October 2010, the defendant repeatedly contacted a Ms Fung Po-yi who joined the company at around the same time, seeking to borrow some money from Ms Fung.

4.  The defendant claimed that she needed money for her divorce proceedings with her husband who owned a sportswear company.

5.  Ms Fung started to lend money to the defendant since November 2010 by way of online or inter-bank transfers and ATM deposits.

Charge 1

6.  As at 12^th September 2011, the defendant had on 17 occasions borrowed a total sum of $33,253 from Ms Fung.

7.  On 12^th September, the defendant telephoned Ms Fung and told her that she had deposited a check in the amount of $100,000 into Ms Fung’s Bank of China account as repayment of the money borrowed, plus interests.

8.  A check drawn from an account with Bank of China 012-831-00040424 was in fact deposited into Ms Fung’s account but had bounced.

9.  Subsequent investigation revealed that the account had already been closed by the bank on 13^th January 2010 due to returned cheques and overdraft of bank charges.

Charge 2

10.  Despite the bounced check, Ms Fung continued to lend money to the defendant.

11.  As at 9^th March 2012, the defendant had on 39 different occasions borrowed a total of $87,953 from Ms Fung.

12.  On 9^th March, the defendant contacted Ms Fung again and said that another check of $500,000 had been deposited into Ms Fung’s account, being payment for the money owed together with interests and compensation for her loss from the late repayment.

13.  Just like the first check, this check was also issued from the said Bank of China 012-831-00040424 account. For the same reason, it also bounced.

14.  From 28^th November 2010 to 17^th September 2012, the defendant had borrowed a total of $203,253 from Ms Fung on 73 different occasions.

Charge 3

15.  Sometime after 17^th September 2012, the defendant proposed a new repayment plan.

16.  The defendant claimed, falsely, that she would receive a substantial amount of funds of up to $10,000,000 from her divorce proceedings, but that the funds were being frozen in an HSBC account because she and her husband were being investigated by the Independent Commission Against Corruption.

17.  The defendant claimed that only a third person could assist in retrieving the money from the frozen account.

18.  The defendant promised to pay Ms Fung extra money if she was willing to help her out. Ms Fung, unfortunately, fell for the defendant’s deception and agreed to so help. The defendant told Ms Fung that the staff of HSBC will be contacting her soon.

19.  In mid-September, a certain Fiona Chu contacted Ms Fung via an online chat service, MSN, claiming to be a staff of HSBC. Fiona Chu said that in order for Ms Fung to be able to access the money in the frozen account, Ms Fung would have to settle the administrative fees first.

20.  Ms Fung was then instructed to deposit the administrative fees and guarantee money into the defendant’s bank account with Bank of China.

21.  Ms Fung followed the instructions each time and made the various deposits but was told on every occasion that she had missed the payment deadline and so was not able to access the money in the frozen account.

22.  Ms Fung contacted the defendant about the matter and the defendant told her that a lawyer Mr Cheung will contact Ms Fung to sort the matter out.

23.  In late-November 2012, a person claiming to be Mr Cheung started to contact Ms Fung through another online chat service, LINE.

24.  The Mr Cheung claimed that he was assigned by the defendant to handle the assets to be claimed from the defendant’s husband.

25.  Mr Cheung told Ms Fung that she had to settle her own insurance charge and administrative fees before Ms Fung could retrieve the money in the frozen account.

26.  Up to around March 2013, Ms Fung, as directed by the said Mr Cheung, had deposited around $344,250 into the defendant’s Bank of China account.

27.  Ms Fung, predictably, did not receive any money from the frozen account.

28.  Meanwhile, a person claiming to be Peggy Chau contacted Ms Fung via WhatsApp. She said she was responsible for the defendant’s account with HSBC and reminded Ms Fung to continue to deposit the administrative fees.

29.  In June 2013, a person Rachel Tsang claimed to be Peggy Chau’s supervisor contacted Ms Fung. She told Ms Fung that the balance of the defendant’s account stood at $20,000,000 but that it was still frozen. Ms Fung needed to continue to pay the administrative fees.

30.  From April to October 2013, Ms Fung had transferred a total of around $800,000 into the defendant’s Bank of China account.

31.  Up to November 2013, Ms Fung had made 200 deposits into the defendant’s Bank of China account. Ms Fung had asked her husband and her daughter to make some of the deposits for her. By that stage, Ms Fung had to seek financial assistance from them.

32.  A total of $1,243,434 was deposited into the defendant’s said Bank of China account.

33.  In mid-January 2014, Ms Fung tried to borrow money from relatives in order to settle the administrative fees. She was however told that bank staff would not normally contact clients via social media apps. Ms Fung felt suspicious and reported the matter to the Police.

34.  The defendant was arrested on 29^th January 2014.

35.  The defendant confessed in the subsequent video recorded interviews that she had invented the characters of bank staff and lawyer to trick Ms Fung into depositing the money into the defendant’s Bank of China account.

36.  The defendant claimed she acted alone, posing as Fiona Chu, Peggy Chau, Rachel Tsang and lawyer Mr Chueng. She had used up all the money she had gotten from Ms Fung.

Previous convictions

37.  The defendant is of previously clear record.

Mitigation

38.  A background report was prepared on the defendant.

39.  The defendant is 32 years old. She is married.

40.  According to the defendant’s mother and elder sister, the defendant’s father is an avid gambler who frequents local mah-jong parlours and Macau casinos. The gambling has always been a source of financial and emotional stress for the family ever since the defendant was a child.

41.  Mr Ng for the defendant told the court in mitigation that some of the money that the defendant had received from the victim were given to the defendant’s father to help him with his gambling debts. Mr Ng does not have instructions as to how much had been given.

42.  The defendant’s parents are divorced but they still live under the same roof so that they can look after the father during his prolonged period of cancer treatment.

43.  The defendant’s father wrote to the court, blaming himself for asking the defendant for money for gambling.

44.  The defendant’s husband also blames his extra-marital affairs for putting the defendant under long term psychological stress.

45.  The defendant’s former employer informed the court that the defendant has always been hardworking, polite and has good relationships with her colleagues.

46.  Apart from the occasional amount given to her father, the defendant claimed to have spent all the money she had received from the victim on luxurious handbags and cosmetics, and cannot compensate the victim at all.

47.  According to the Probation Officer, the victim now owes her relatives over $100,000, being money that the victim had borrowed as a result of having fallen for the defendant’s fraud.

Sentencing considerations

48.  The maximum sentence on conviction upon indictment for the offences of evasion of liability and fraud is 10 years’ and 14 years’ imprisonment respectively.

49.  The defendant had evaded the repayment of a total of $121,206, and had defrauded Ms Fung of $1,243,434.

50.  As charged, the total monetary loss suffered by Ms Fung is $1,364,640.

51.  The fraud in charge 3 was perpetuated over a period of around 14 months. It was a daring fraud committed by the defendant.

52.  It can be reasonably envisaged that Ms Fung must have suffered a lot of anxiety over the incessant demands from the defendant posing as the different characters for her to pay out more and more money.

53.  Towards the end, Ms Fung had run out of funds and had to resort to her husband and daughter as well as relatives for help. This would have added to her anxiety because now those closest and dearest to her were also involved. Ms Fung is now left with the problem of repaying her friends and relatives from whom she had borrowed.

54.  What the defendant did was despicable. She had exploited the compassionate and trusting nature of Ms Fung.

55.  The defendant had planned her fraud and it was executed with some sophistication, with the defendant using three different social media communication applications to avoid revealing her true identity when posing as the four different characters.

56.  I do sympathize with the defendant’s father’s gambling habit and her relationship with her husband. However, I cannot see how those matters could have contributed to her commission of the present offences.

57.  The fact that her father asked her for money, or that she was having a troubled relationship with her husband cannot be excuses for her defrauding a totally innocent third party of a significant sum of money over a 14 month period. I find that these personal circumstances do not amount to mitigating factors.

58.  I find that, despite the defendant’s previously clear record, a term of imprisonment is the only proper sentence under the circumstances.

Sentences

59.  For the first charge, I will adopt a starting point of 18 months’ imprisonment, discounted to 12 months’ imprisonment upon the defendant’s guilty plea.

60.  For the second charge, I will adopt a starting point of 21 months’ imprisonment, for the higher amount evaded, discounted to 14 months’ imprisonment upon the defendant’s guilty plea.

61.  For the third charge, I will adopt a starting point of 3 years’ imprisonment, discounted to 2 years’ imprisonment upon the defendant’s guilty plea.

Totality

62.  The 3 charges are inter-related but cannot be said to be of a single transaction. The defendant had been borrowing money that she was not able to repay. In order to hold off Ms Fung, the defendant issued the two checks which were dishonoured.

63.  The defendant however kept on borrowing money after each of the 2 checks had been dishonoured. The second check was issued 6 months after the first cheque had bounced.

64.  As for the fraud, the defendant used the fact that she owed money to Ms Fung and the fact that Ms Fung wanted to be repaid to manipulate Ms Fung into paying out over a further $1.2 million.

65.  Taking a step back, I find that a proper global starting point for the 3 charges would be that of 3 and half years’ imprisonment, which is 28 months’ imprisonment after plea.

66.  To achieve that sentence, I order that 2 months of each of the sentence in charge 1 and 2 be served consecutively to the sentence in charge 3, the balance concurrently.

67.  The total final sentence is, therefore, 28 months’ imprisonment.

68.  Pursuant to s.73(1) of the Criminal Procedure Ordinance, Cap.221, I order the defendant to pay to the victim Ms Fung Po-Yi Shirley compensation for her loss, in the amount of $1,364,640, being the total amount as charged in the three offences that the defendant had pleaded guilty to.

69.  Pursuant to s.73(3), I order that part of the compensation be paid out of the money paid into court by the defendant as her cash bail, which is $20,000.

70.  The defendant had indicated through her counsel that she does not object to the making of the said orders.