HKSAR v.PONG YIP KEE

DCCC 620/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 620 OF 2004

----------------------

----------------------

---------------------

Reasons for Sentence

---------------------

1.  Defendant, you have pleaded guilty to two charges of conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance. You have pleaded guilty to a further charge of failing to surrender, contrary to section 9L of the Criminal Procedure Ordinance.

2.  This case involves in the first two charges to which you have pleaded guilty to, Charges 1 and 2, a mortgage fraud.  In respect of the 3rd charge but which is the 5th charge on the indictment that relates to you absconding after being granted court bail.

3.  The prosecution brought their case against you in 2004.  The case was set down for trial on 29 October 2004.  However, you absconded from trial and disappeared until you were arrested on 26 September this year, 2013, when you returned to Hong Kong from Shenzhen.  The total period of absconding was about 8 years 11 months.  The date of the offences was however some 10 years ago now, committed between 1 June 2003 and 22 July 2003.

4.  The conspiracy to defraud charges involve application for a mortgage in respect of the purchase of a property.  At that time the developer, Goodwill Properties Limited, was offering for sale property at Vision Court, No 286 Prince Edward Road West.  You were involved as you were the purchaser.  However, in applying for a loan, mortgage loan for this property, you had submitted false bank statements and a tax return so that you could obtain the mortgage.

5.  You had submitted false letters of employment and false bank documents to support your income.  The reason why you were involved in these offences was because at that time, in early 2003, the property market needed some generation of funds, and therefore the developers were offering incentives for people to purchase property.  The incentives were that if you purchased a property, you would only be required to put down a very minimal amount, in this case HK$10,000.  And after securing a mortgage from the bank, in this case the Bank of China, and from the developer itself, you were then given a cash rebate in the sum of $130,000.  You therefore participated in these offences to receive the cash rebate.

6.  You had participated in this offence with other persons concerned whom you have mentioned in the video-recorded interview with one Mr Wong Kin-shing and one Mr Cheng Koon-wah.  Mr Wong had informed you that he had purchased two flats in April and May 2003 earning $100,000 each without having to pay any money.  He then said he would arrange all the documents with you and a Mr Cheng would assist you to arrange these documents.  You then left the arrangements to Mr Wong and Mr Cheng and purchased the property.

7.  Mr Cheng provided you with a letter saying that you were an employee of one company called Wonder Point Holding Limited when you were not an employee there.  Fortunately, during the processing period of the mortgage, it was discovered there were other applications for mortgages involving the use of instruments with contents similar to the documents you had submitted.  Your application was therefore subject to scrutiny.  So after you had signed the facility letter for the mortgage, you were arrested immediately on 22 July 2003.  As I have mentioned, thereafter you absconded from trial.

8.  I am informed by the prosecution and have been given a table to inform the court that at that material time in 2003 there were many other defendants in the same position as yourself who had been charged with either conspiracy to defraud, using a false instrument or obtaining property by deception.

9.  Miss Jessie Sham for the prosecution told me this was a scheme set up by the mastermind, one Mr Chan, who recruited people like yourself through others to purchase property and gain the rebate and the property.  Mr Chan was convicted after trial in Case No DCCC 784/2004 and sentenced to imprisonment for 7 years.  

10.  The table shows the defendants in various cases being sentenced for similar offences involving similar facts, of sentences ranging from, as I see it on this table, between 8 months and up to 7 years.

11.  I have had submitted to me two cases which have both recently been decided upon also with the defendants who absconded like yourself, they are DCCC 16/2011 HKSAR v Cheng Koon Wah.  In that case the defendant himself, Miss Sham has pointed out, is the co-conspirator in your case, but the facts in DCCC 16/2011 are not similar nor is the defendant involved with this property at Vision Court but he is involved with two other properties.  He obtained two mortgages for two separate properties, one of them the bank suffered no loss.  There the court took a starting point of 21 months after trial and eventually sentenced him to 18 months’ imprisonment for those three offences.

12.  In another case, DCCC 16/2011, the defendant was sentenced on 16 May 2011.

13.  In DCCC 742/2012, HKSAR v Lam Wa Luen, the sentence date was 4 February 2013.  The court took a starting point of 2 years’ imprisonment after trial and reduced it to 16 months to reflect the plea of guilty. 

14.  I am aware of the various sentences set out in the table by Miss Sham and your solicitor, Mr Lam, is also aware of them.  He has asked me to impose a sentence at about the same range as those two last cases I mentioned in Cheng Koon Wah and Lam Wa Luen for the mortgage frauds.

15.  In respect of the charge of failing to surrender to custody, he has submitted to me the case of HKSAR v Lam Kin Chung CACC27/2007.  In that case the defendant there had absconded for 9 years and 4 months, and the Court of Appeal upheld a starting point of 9 months’ imprisonment after trial and a reduction to 6 months after a plea of guilty. 

16.  Mr Lam has submitted that that case is slightly different from the present case in that that defendant did not surrender to the authorities but was arrested on the street.  I am told that you absconded from trial as you went to China to look after your sick father who had Alzheimer’s, and after he passed away in August this year you then came back to face the authorities and surrendered yourself. 

17.  Defendant, you are 58 years of age, have one previous conviction for possession of dangerous drug to which you were fined in 1980.  That conviction is now spent.  You had gainful employment in Hong Kong from 1975 to 2003 as a construction worker, interior decorator and driver.  However, shortly before you committed this offence, you became unemployed.  Needing funds to support yourself, your ailing father, mother and sister who is a psychiatric patient, you were led into commission of this offence for some easy quick money. 

18.  This was an offence of fraud.  It was a well-executed scheme and planned carefully in advance.  There was a group of you who were involved.  I accept that you did not know other members of that group save for Mr Wong whom you say also did the same thing.  It transpired that the man who had given you the false documents, Mr Cheng, was also a purchaser of these properties in this mortgage fraud.  You were therefore part of a large mortgage scam.  The scheme was dishonest in that you cheated the banks and the developers by using false instruments such as employment letters and bank statements in order to obtain mortgage loans.

19.  Although it was mitigated on your behalf that you had only received $100,000 from the rebate and $30,000 would go to Mr Cheng, in the end if this worked out successfully, you would have been the owner of a property and having paid not a single penny.

20.  This is a very serious commercial fraud and obviously attracts an immediate custodial sentence. 

21.  Defendant, having looked at the previous sentences the other defendants received and I note that there should not be any disparity of sentence, but each case must be decided on its own facts.  In this case the mortgage loan to which you had applied for totalled $2,630,000.  The first mortgage loan in Charge 1 was $1.841 million.  The second mortgage loan was $657,500, that is in Charge 2. 

22.  I note also at this stage that the Bank of China nor the developer Goodwill Properties Limited made any losses as the mortgage application was not approved as a result of the early discovery of the incident. 

23.  Your strongest mitigating factor is of course your plea of guilty.  Had I convicted you after trial, given the amount of the mortgage loan of $2.63 million, I would have taken a starting point of 21 months’ imprisonment.  Giving you full credit for your plea of guilty, I reduce that term to one of 14 months’ imprisonment.  That applies for both Charges 1 and 2, and those charges will run concurrent to each other. 

24.  I turn now to Charge 5, the failing to surrender charge.  I take a starting point of 9 months’ imprisonment, giving you full credit for your plea of guilty, that term shall be reduced to 6 months’ imprisonment.  As you also came back to Hong Kong surrendering to the authorities, I reduce that term to a further 5 months’ imprisonment. 

25.  Charge 5 and Charges 1 and 2 are two separate and distinct offences.   In those circumstances I order 2 months of Charge 5 to run consecutive to Charges 1 and 2.  Therefore, the total term of imprisonment to which you shall serve is 16 months’ imprisonment.