R. v. YIP MOON KWAN and Others

IN THE COURT OF APPEAL

1994, No. 220
and 1994, No. 210
(Criminal)

- Headnote -

Sentencing for offences of conspiracy to forge and conspiracy to utter forged banknotes. When this court stated in R. v. Chow Tin-wah [1991] 1 HKLR 68 that "on a charge of forging or uttering, a proper starting point, where the face value of the forged notes is substantial, is six years" it had in mind a sentence of six years' imprisonment where the face value of the counterfeit notes is more than minimal, and that the sentence would increase in accordance with the value of the banknotes and the scale of the illegal operation. It was never intended that in very serious cases a starting point of six years' imprisonment would be appropriate.

The counterfeiting operation in the present case is the largest in Hong Kong that has come to the attention of the court. An overall sentence of 13 years' imprisonment was upheld in respect of an applicant who was convicted after trial of conspiracy to forge and of conspiracy to utter forged US$100 and US$20 banknotes. The statutory maximum sentence for each offence is 14 years' imprisonment.

IN THE COURT OF APPEAL

1994, No. 220
and 1994, No. 210
(Criminal)

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J U D G M E N T  O F  T H E  C O U R T

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Macdougall, V.-P.:

1. The first, second and third applicants were jointly indicted on two pairs of counts. The first pair consisted of the first and second counts. The first count alleged that the first two applicants conspired together and with Kriangsak Lerdmaleewong alias Ma Kwok-leung ("Ma") and other persons to forge documents, namely US$100 and US$20 banknotes, with intent to defraud. The second count alleged that the same two applicants also conspired with Ma and other persons unknown to counterfeit currency notes, namely US$100 and US$20 banknotes with intent that such be passed or tendered as genuine.

2. The second pair of counts consisted of the third and fourth counts. Of these the third count alleged that the second and third applicants and one Hussain Syed Ashfaq ("Ashfaq") conspired together and with Leung Bing-wing ("Leung") and others to utter forged notes, namely US$100 and US$20 banknotes knowing them to be forged and with intent to defraud. The fourth count alleged that the second and third applicants and Ashfaq conspired together and with other persons to deliver US$100 and US$20 banknotes to other persons knowing the same to be counterfeit and intending such other persons to pass or tender the same as genuine.

3. The first applicant pleaded guilty on the first day of trial to the two counts on which he was indicted and was sentenced to concurrent terms of four years' imprisonment. The second and third applicants were convicted after trial on the counts on which they were indicted.

4. The second applicant was sentenced to 11 years' imprisonment on each of the first pair of counts and to 7 years' imprisonment on each of the second pair. It was ordered that the sentences on the first two counts be served concurrently, that those on the third and fourth counts also be served concurrently, but that 2 years of the concurrent sentences on the latter two counts be served consecutively to the concurrent sentences on the first pair of counts, thus making an overall sentence of 13 years' imprisonment.

5. The third applicant was given concurrent sentences of 7 years' imprisonment on each of the second pair of counts.

6. The first and second applicants now apply for leave to appeal against sentence only, the second applicant having abandoned his application for leave to appeal against conviction at the commencement of the hearing before this court.

7. The third applicant, who has applied for leave to appeal against both his conviction and the concurrent sentences of 6 years' imprisonment that were imposed on him, applied through his counsel, Mr Wright, to have the hearing of his applications adjourned to a date to be fixed. This application was granted.

8. The fourth applicant, Ma, who had originally been named in the indictment as a defendant, pleaded guilty to the second count at the earliest opportunity available to him. His name, therefore, did not appear as a defendant on the amended indictment which was before the lower court at the trial of the other applicants. He was sentenced to 8 years' imprisonment. His application is for leave to appeal against sentence only.

9. The facts of the case that are relevant for the purpose of these applications for leave to appeal against sentence are as follows. In April or May 1992, the second applicant approached Leung, who subsequently became a prosecution witness, told him that he had access to counterfeit United States of America banknotes and asked him to find some customers to buy them. Leung in turn approached the third applicant, a man whom he had known for some time, and entered into an agreement with him that, for every counterfeit banknote the third applicant could sell for HK$120, they would share the profit of $20 between them, it having already been arranged between the second applicant and Leung that the second applicant wanted HK$100 for each banknote that was sold. Eventually Leung received between US$400,000 and US$500,000 in counterfeit banknotes from the second applicant and handed them to the third applicant for distribution. Leung testified that he made a profit of some $50,000 to $60,000 on those transactions until he was eventually arrested.

10. A raid on a factory premises at Fo Tan which were rented by the second applicant resulted in the discovery of machinery, plates and equipment that had been used to print counterfeit banknotes in large quantities. Two envelopes containing 25 and 83 US$100 counterfeit notes respectively were found in the drawer of a desk in the factory. Moreover, hundred of thousands of counterfeit notes that had emanated from this factory had been circulating throughout Asia and the United States of America in 1992 and 1993. A vast quantity of counterfeit banknotes, a large proportion of which were in an incomplete state, was also found at the factory.

11. The originators of the enterprise were the second and fourth applicants. The fourth applicant's function was to assemble the plates, to provide and adapt the machinery and equipment necessary for the production of the counterfeit banknotes and to produce and supervise the production of such banknotes as were required by the conspirators responsible for their distribution. Although the factory in Fo Tan was the primary location for the production of the counterfeit notes, a residential premises in North Point was used by the fourth applicant to further refine the manufacturing process and so improve the quality of the finished product.

12. A search of the North Point premises revealed 756 counterfeit US$100 banknotes, photographic positives and negatives of US$100 banknotes and various other articles associated with the counterfeiting of banknotes.

13. The first applicant assisted the fourth applicant on about four occasions to print counterfeit notes.

14. Mr Spicer, who appeared for the first and fourth applicants in this court but not in the court below, submitted that, since the maximum sentence for each of the offences of which the fourth applicant was convicted is fourteen years' imprisonment, the starting point of 11 years' imprisonment which the judge selected was too high. He made no complaint about the discount of three years that the judge granted on account of the applicant's plea of guilty.

15. Mr Spicer drew our attention to the decision of this court in R. v. Chow Tin-wah [1991]1 HKLR 68 and sought to rely on the following passage at page 69 of the judgment:

"We have been referred to a number of cases of which three appear to us to be of relevance. They are The Queen v. NGAN Chun-yee (1984) Crim.App. No. 137, The Queen v. KOO Pui (1985) Crim.App.No. 469 and The Queen v. MO Chun-hung (1986) Crim.App.No. 321. These cases, we are satisfied, indicate that on a charge of forging or uttering, a proper starting point, where the face value of the forged notes is substantial, is six years."

16. While he fully accepted that this court has not seen fit to hand down guidelines such as those applicable to drug offences, he submitted that it followed from the above passage that a sentence not greatly in excess of six years' imprisonment would have been appropriate after trial in the case of the fourth applicant. However, since he had pleaded guilty at the earliest opportunity, a discount for that plea would have substantially reduced that sentence. We will deal with this submission when we turn to the submissions made on behalf of the second applicant.

17. As for the first applicant, Mr Spicer submitted that the disparity between the sentence of 4 years' imprisonment imposed on him and that of 3 years' imprisonment passed on Leung, who also pleaded guilty, was not justified and resulted in unfairness to the first applicant.

18. We find no substance in this contention. Leung gave valuable evidence for the prosecution, whereas the first applicant gave evidence for the other applicants, who were convicted. The difference in the sentences imposed on the first applicant and Leung was therefore entirely justified. This was a very large operation. Notwithstanding the fact that the judge accepted that the part played by the first applicant was minor, we think that the sentence passed on him was neither manifestly excessive nor wrong in principle.

19. Mr McNamara, who appeared for the second applicant in this court but not in the court below, complained that the starting point of 11 years' imprisonment which the judge adopted was too high and that no allowance had been made for the fact that the applicant is aged 47 and had a clear record prior to the commission of the present offences.

20. He further submitted that the sentences passed for the two conspiracies to forge banknotes should have been made concurrent with those imposed for the two conspiracies to utter those notes. To illustrate his point he sought to draw an analogy between these two forms of illegal activity and those of manufacturing and of distributing a dangerous drug.

21. The analogy, however, works against the contention that both offences form part of a course of criminal activity and are therefore punishable by a single sentence or two concurrent sentences. On the contrary, a person who manufactures a dangerous drug and then trafficks in that drug by distributing it, engages in two different types of criminal activity and is subject to a more severe punishment by the imposition of consecutive sentences than a person who does no more than merely manufacture the drug.

22. The same sentencing result occurs where a person not only counterfeits banknotes but also utters them by distributing them to the public. This is so whether that person is convicted of both of these substantive offences or of conspiracies to commit them.

23. Two members of this court were members of the court which gave the decision in Chow Tin-wah. When we said that "on a charge of forging or uttering, a proper starting point, where the face value of the forged notes is substantial, is six years" we had in mind a sentence of six years' imprisonment where the face value of the counterfeit notes is more than minimal, and that the sentence would increase in accordance with the value of the banknotes and the scale of the illegal operation. It was never intended that in very serious cases a starting point of six years' imprisonment would be appropriate.

24. Where an offender is convicted of several offences it is the overall length of sentence that is passed by the court, not the length of each individual sentence, with which an appeal court is primarily concerned.

25. The overall sentence of 13 years' imprisonment passed on the second applicant for his involvement in a conspiracy to counterfeit banknotes and a conspiracy to utter them is by no means excessive. The counterfeiting operation in the present case is the largest in Hong Kong that has come to the attention of this court.

26. The judge clearly took into consideration the relative degrees of involvement by passing overall sentences that differed in severity according as to whether the offender was involved in the conspiracies to counterfeit, the conspiracies to utter or both. He also gave due credit to those applicants who pleaded guilty.

27. We are unable to find any error in the sentencing process which he adopted. All three applications for leave to appeal against sentence are therefore refused.