HKSAR v. CHAN CHEUNG-HING, ALAN

DCCC629/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 629 OF 2012

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

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

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

Reasons for Sentence

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

1.   The defendant pleads guilty to one charge of conspiracy to obtain property by deception, contrary to section 17(1) of the Theft Ordinance, Cap. 210, and sections 159A and 159C of the Crimes Ordinance, Cap. 200, Charge 1, and one count of failing to surrender to custody as shall have been appointed without reasonable cause, contrary to section 9L(1) and (30) of the Criminal Procedure Ordinance, Cap. 221, Charge 2.

2.   In January 2008 a team of police officers were tasked to investigate a case involving a number of fraudulent applications for credit cards and the subsequent use of such cards in the purchase of high end merchandise by a syndicate since 14 September 2007. 

3.   The investigation was commenced pursuant to complaints lodged by various local banks that a number of credit cards had been used to purchase a vast quantity of high end products within a short period after they were authenticated by purported cardholders.  Those purported cardholders subsequently defaulted payment to the bank in respect of transactions with the credit cards.  When the relevant banks tried to locate the purported cardholders it was discovered that the information furnished in the application forms, including the applicant’s names, identity card particulars, addresses and proof of income were all false.  The purported applicants and users of those credit cards remain untraceable and the banks suffered financial losses.

4.   Police enquiries revealed that a number of the problematic credit cards were originally sent by the relevant banks to the applicants’ addresses stated in their application forms.  However, the letters enclosing the credit cards had, in fact, been delivered to different addresses.  That was achieved by applications to the Hongkong Post Office for re-direction of mail in the names of the applicants to different addresses. Through the collaboration of the banks and police some controlled credit cards were issued to enable the police to monitor the movements of those cards.  One of those controlled credit cards was a DBS Visa Card in the name of Madam So Chui-ha and numbered 4760-7340-6419-1006 (‘Card 1’).

5.   On 20 February 2008 a police officer was deployed to pose as a staff member of the Tsuen Wan Post Office.  At about 9.40 am a male person named Li Man-biu (‘Li’) attended the post office and requested to collect a letter from DBS to Madam So Chui-ha and enclosing Card 1.  Li produced a mail collection card in respect of the letter, his own identity card and a photocopy of Madam So’s identity card. 

6.   Staff of the post office completed the formalities and handed to Li the letter from DBS.  Police officers then followed Li discretely and kept him under observation.  That afternoon Li and Chan Ka-leung (‘CKL’) met in Mong Kok.  After receiving the envelope containing Card 1 from Li the two of them parted.  CKL then walked along Nathan Road, and he was seen discarding some papers at the rubbish bin.  Those papers were retrieved and confirmed to be torn pieces of the latter from DBS Bank in respect of the issuance of Card 1.  CKL then entered into a sauna parlour.  A team of police officers attended the sauna parlour for a licence check and CKL’s identity was revealed.

7.   Later that afternoon CKL left the sauna parlour and met up with Wong Heung-law, Stella (‘Stella’).  The two of them sat and chatted for a while before CKL handed Card 1 to Stella.  Stella and CKL left together and went to a Sa Sa shop in Mong Kok where Stella used Card 1 to purchase cosmetics valued at $168.  Police officers retrieved the sales receipt and CCTV from the Sa Sa shop after CKL and Stella left. 

8.   CKL and Stella then went to the Great Shanghai Watch Company in Causeway Bay where Stella tried to purchase a watch valued at $38,000 with Card 1.  That transaction failed because the credit limit on Card 1 was only $2,000.  CKL and Stella then went to a Watsons shop and Stella tried to purchase some household goods valued at $103.80 with Card 1. That transaction also failed and Stella paid cash for the goods.  The police seized the receipt and CCTV after CKL and Stella left the shop.

9.   CKL and Stella parted company and Stella returned to her residence in Shek Lei Estate.  The police checked records of the Housing Authority and ascertained the identity of Stella. 

10.   On 26 February 2008 CKL went to the Kowloon Central Post Office at about 1 pm.  He approached the staff and submitted a completed mail redirection form where he requested to redirect the mail of three persons, including Mr Tsang Chi-hang and Mr Yuen Ka-mun.  The staff completed the formalities and checked the photocopies of the Hongkong Identity Cards produced by CKL in respect of those three persons.  CKL then paid the redirection fees and his application was accepted.  CKL then left the post office and discarded some torn papers into a rubbish bin outside.  Police officers retrieved the papers and found that they were torn pieces of photocopies of Hongkong Identity Cards of Tsang Chi-hang and Yuen Ka-mun.

11.   In the afternoon of 5 March 2008 police checked the rubbish bin at the lift lobby of Yen Dack Building into which CKL was seen discarding some papers.  As a result torn pieces of mail addressed to Madam Chiu Suk-kuen were found. 

12.   On 19 March 2008 CKL and Stella were seen having a meal together in Shek Lei Estate at about 5.15 pm.  Stella was seen practising the signature of Chiu on a piece of napkin.  That napkin was retrieved after CKL and Stella left. 

13.   CKL and Stella later went to a supermarket in Shek Lei where Stella used a Bank of East Asia credit card issued to Madam Chiu Suk-kuen and numbered 4384-3701-1136-0900 (‘Card 2’) to purchase household goods valued at $380.  The two of them then boarded a taxi and went to Tsim Sha Tsui where they joined Chong Chik-cook (‘Chong’).  The three of them had a chat after which Stella and Chong went to a Fortress shop in Hankow Road and bought a mobile telephone valued at $3,180 with Card 2. 

14.   Stella and Chong then went to a Chanel shop on Canton Road where Stella purchased two bags valued at $22,400 with Card 2.  They left the shop and reunited with CKL who was standing outside.  Chong handed over the bag of goods from the Chanel shop and some receipts to CKL. CKL then went up to a VIP shop with Chong and Stella, where CKL sold the goods. 

15.   On 20 March 2008, CKL, Stella and Chong entered the Cartier shop at the Peninsula Hotel where Stella purchased a number of ornaments valued at $25,050 with Card 2.  The receipts and CCTV were seized by the police after they left the shop.  That evening CKL sold the goods from Cartier to the VIP shop.

16.   On 25 March 2008, CKL went to Yuk Lun House in Choi Wan Estate and opened the letterbox to Room 2113 with a key.  He took out a letter from the letterbox, opened it, tore up some paper and discarded them into a litter bin.  Police officers later retrieved the torn papers and found that they were part of a letter from American Express.  The letter was addressed to Miss Ng Wai-ling and enclosed an American Express card no. 3771-115602-01006 (‘Card 3’). 

17.   That evening CKL, Chong, Wan Ho-Man (‘Wan’) and Chan Wai-fan (‘CWF’) were seen together in Ocean Centre.  CWF and Chong entered a Fortress shop and purchased a Nokia telephone valued at $3,600 with Card 3, while CKL and Wan loitered outside the shop.  CWF and Chong then went to an LV shop in Harbour City and CWF purchased three wallets valued at $12,000 with Card 3.  Thereafter CKL took the bags with all the good purchased and handed them over to the person in charge of the VIP shop.

18.   On 26 March 2008, Chong and the defendant were seen making a purchase of two wallets valued at $8,550 at the LV shop in the Peninsula Hotel Shopping Arcade.  Payment was settled with a Wing Lung Bank visa card issued in the name of Tsang Chi-hang, and numbered 5156-6720-3003-5163 (‘Card 4’).  In the meantime CKL was waiting outside the shop.  Chong and the defendant then went to an LV shop in Harbour City where they bought three wallets valued at $11,450 with Card 4.  The goods were handed over to CKL who sold them at the VIP shop. 

19.   Chong and the defendant then went to the LV shop in Pacific Place and purchased three wallets valued at $10,950 with an American Express card issued in the name Tsang Chi-hang and numbered 3763-9506041-01009 (‘Card 5’).  Chong and the defendant then went to the Admiralty MTR station and handed the wallet to CKL.  The three of them then took the MTR to Causeway Bay.  Chong and the defendant went inside the LV shop in Leigh Gardens and purchased three wallets valued at $36,000 with Card 5.  Subsequently all those goods were sold to VIP shop by CKL.

20.   On 27 March 2008 the police observed two further instances of fraudulent use of Card 5.  CKL and the defendant purchased three wallets valued at $11,600 from the LV shop in the Landmark and CKL soon disposed of them at the VIP shop. 

21.   In the afternoon of 7 April 2008 CKL and Wan joined up with Chan Shuk-ching in Admiralty (‘CSC’).  CSC, in the company of Wan and CKL, purchased a pack of chewing gum valued at $123 from a Watsons shop nearby using a Dah Sang Bank visa card issued in the name of Madam Chiu Suk-kuen, number 4918-5747-1454-3003 (‘Card 6’).  Later they went to a Fortress shop and purchased two iPods valued at $8,000 with Card 6. 

22.   That afternoon, after handing the two iPods over to Wan, CKL went to the LV shop in Pacific Place with CSC.  CSC purchased two wallets and a key bag valued at $10,350 with Card 6.  They then went to the Chanel shop and the Cartier shop in the same shopping mall and purchased respectively a wallet valued at $3,700 and a necklace valued at $11,550 with Card 6.  Later they went to the VIP Shop whilst Wan took the two iPods to a shop in Mong Kok for resale.  While CKL was in the course of selling the items form the LV shop, Chanel and Cartier to the VIP Shop the operation turned overt. 

23.   CKL and CSC were arrested inside the VIP shop.  The defendant was arrested in early April 2008, but he claimed to have no recollection of the transactions made with Cards 4 or 5.  The defendant was then positively identified by the police officers who observed the transactions and the sales lady in one of the LV shops.  During one of the video recorded identification parades the defendant said several times that he was only acting as a purchaser for others. 

24.   The police recovered some of the items purchased on the same day at the VIP shop.  They also found in CKL’s possession a notebook which recorded the personal and other particulars of individuals whose names had been used by him in making fraudulent credit card applications.  In the VIP shop the police also found the seized invoices and receipts in respect of some of the goods purchased with the six credit cards. 

25.   The police searched a letterbox in Yen Dack Building and found two further newly issued credit cards obtained by fraudulent means.  The police also searched Wan’s residence and found 160 copies of Hong Kong identity cards relating to 32 persons, six invalid identity cards, three credit cards issued in the names of other persons, two USB memory sticks containing images of copies of false bank statement and the number of false bank statements.  At Stella’s residence the police found seven pieces of paper containing personal particulars of 19 persons, some of which have been used for fraudulent applications for credit cards. 

26.   Subsequent enquiries revealed that the six credit cards were all applied for and obtained by fraudulent means. Applications were made to banks and financial institutions and were approved. Personal particulars and addresses not belonging to any of the abovementioned persons were furnished by the purported applicants and false documents were submitted as proof of income and addresses.  The approved credit cards were sent to addresses arranged by CKL and arrangements were made for the authentication and for signatures of the purported card holders to be appended on those cards. 

27.   Between 20 February and 7 April 2008 Cards 1 to 6 were used on a total of 20 occasions.  The total amount involved in 18 successful transactions was $168,051.  The defendant, together with the six co-conspirators, including CKL, Wan and Stella were charged and brought up to court on 30 September 2009 for mention.  The case was adjourned to 29 October that year for transfer papers and all seven defendants were granted bail.  The defendant failed to attend court as ordered. 

28.   The defendant arrived in Hong Kong from Zhuhai on 17 April 2012 and was arrested.  He explained, under caution, that he had absconded because he was afraid of going to jail.  He was now very remorseful and wanted to turn over a new leaf.

29.   The defendant is 55 years old.  He was educated to Form 1 level and used to work as a sales person in hairdressing products and a driver.  At the time of arrest he was a driver in China.  He was divorced.  He had two sons aged 15 and 20, both full-time students.  The defendant contributed $4,000 to them each month. 

30.   The defendant has been convicted on nine previous occasions for 16 offences, three of which were similar to Charge 1 and one of which was similar to Charge 2.  The other six co-conspirators were dealt with in the District Court on 9 April 2010 under case no. DCCC 1191/2009. Counsel submitted the reasons for sentence in that case.  He conceded that the sentence in that case was not binding on the court in the present case. However, he submitted that the defendant was only physically involved with the use of two of those cards, Cards 4 and 5, and the total value of goods physically obtained by the defendant was $67,450.

31.   The defendant was originally going to be a defendant in DCCC 1191/2009 and would have been dealt with by the same judge in the same way if he had not absconded.  Counsel submitted that CKL, who was the ringleader with four similar previous convictions, only receive a sentence of 1 year and 9 months for the same charge.  He submitted that the defendant’s culpability was far lower than that of CKL and that should be reflected in the sentence.  He submitted that the defendant’s role was more similar to that of CSC and CWF who were sentenced to 1 year and 6 months and 1 year and 2 months respectively.

32.   Counsel further submitted that the defendant would lose part of his discount and would receive further punishment as a result of his abscondance, and the defendant was truly remorseful. Counsel conceded that the case of Chan Sui To CACC 115/1996, was binding on this court. Although the defendant was a repeat offender and the facts of this case fall squarely within the example suggested by the Court of Appeal in that case, Counsel urged the court to consider a downward adjustment because of the defendant’s remorse and minor and non-essential role in the operation. 

33.   In passing sentence I have fully considered all the matters put forward by counsel on defendant’s behalf.  I am aware of the sentences passed on the other defendants by the District Court in 2010.  The court, in DCCC 1191/2009, was clearly aware of Chan Sui To supra. The court also found that this was a medium sized and systematic operation. However, the court did not adopt the suggested starting point in Chan Sui To. I am sure that the learned judge in that case has good reasons, but they are not stated in his reasons for sentence. 

34.   This court’s primary concern is to impose an appropriate sentence to reflect the criminality of this defendant’s behaviour.  I cannot be expected to tailor the defendant’s sentence to the sentence given by another court.  See Cross & Cheung Sentencing in Hong Kong 6th Edition, pages 221-223. 

35.   I wholly disagree that the defendant’s role in this operation was minor or non-essential.  No matter how many credit cards CKL can obtain, no benefit could be derived from those cards if there were no card users. 

36.   I find that the defendant played an active and essential role in the operation.  There is no dispute that this was a credit card fraud syndicate with a medium sized operation.  The sum involved was over $168,000.  There were six credit cards.  The operation was organised, although there was no international element. 

37.   The facts of this case fall squarely within the example given by the Court of Appeal in Chan Sui To supra. The court in that case suggested that the appropriate starting point is five to six years’ imprisonment, without any aggravating factors.  Even a small scale operation with no international element, no aggravating factors involving a few thousand dollars would normally call for a starting point of 3 year’s imprisonment.  There would be an upward adjustment for a repeat offender.

38.    There is no evidence that the defendant knew how CKL obtained the credit cards, but he definitely knew that they were obtained illegally and he was not entitled to use them.  He knew that he was purchasing high valued goods with the credit cards.  Despite that he used the credit cards repeatedly within that short space of time.  He may not know each and every member of the syndicate, but it was evident that he knew that there was a number of persons involved.  It would be evident to anyone that the goods would be resold for profit. 

39.   I see absolutely no reason why I should not adopt a suggestion in Chan Sui To.  Further, the defendant has three previous convictions imposed on two separate occasions.  He is a repeat offender, which is an aggravating factor.  Although the defendant has only physically dealt with two of the credit cards he was involved in a conspiracy involving all six credit cards.

40.   In all the circumstances I adopt a starting point of 5 years’ imprisonment for Charge 1.  Despite what counsel had urged upon me and in view of Charge 2, I do not propose to reduce the discount for the defendant’s guilty plea.  After giving the defendant full credit for his guilty plea the sentence for Charge 1 is reduced to 14 months.

41.   The defendant has one similar previous conviction similar to Charge 2.  The previous sentence clearly had no deterrent effect.  He has absconded for over two years.  However, I take into consideration that the defendant had returned to Hong Kong voluntarily. 

42.   I adopt a starting point of 4½ months’ imprisonment.  I give the defendant full credit for his guilty plea.  The sentence for Charge 2 is reduced to 3 months.

43.   The two offences are separate and distinct.  Charge 2 was committed whilst on bail for Charge 1.  Technically the sentences should be wholly consecutive.  However, I take into consideration the principle of totality.  I order that 2 months of Charge 2 be served consecutively to Charge 1.

44.   That makes a total of 42 months.