HKSAR v. CHEUNG LAI KUEN AND OTHERS

CACC 274/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 274 OF 2001

(ON APPEAL FROM DCCC 1027 OF 2000)

______________

______________

_______________

J U D G M E N T

_______________

Hon Mayo VP (giving the judgment of the Court):

1. Five defendants were charged in the District Court with a conspiracy to defraud.

2. The particulars of the offence were that:

"Cheung Lai-kuen, Choy Ka-ki, Lay Wah-chuen, Chong Sau-ha and Yiu Ka-man, on divers days between the 17th day of September, 1998 and the 29th day of December, 1998, in Hong Kong, conspired together and with another person or other persons to defraud such persons as might visit the office of Eternal Art Ltd by dishonestly and falsely representing to such persons -

(a) that Eternal Art Ltd ('the agency') was a genuine modelling agency;

(b) that they were suitable for a modelling job;

(c) that 'the agency' had a modelling job available and on offer to them;

(d) that they would earn many thousands of Hong Kong dollars remuneration from modelling work;

(e) that HK$27,600 was required to be paid to 'the agency' as a genuine management fee or as a genuine deposit to secure their attendance for modelling work;

(f) that the HK$27,600 would be returned to them by 'the agency' in due course or would not be used by anyone; and

(g) that their credit cards, bank cards and their PIN codes are required by 'the agency' for a purpose other than withdrawing or transferring funds from their relevant bank accounts."

3. D1, D2, D4 and D5 all pleaded guilty to the charge. D3 was convicted after trial before Deputy Judge Dufton.

4. D1 was sentenced to 2 years 4 months' imprisonment, D2 to 1 year 4 months' imprisonment, D3 to 2 years' imprisonment, D4 to 1 year 10 months' imprisonment and D5 to 1 year 7 months' imprisonment.

5. D3 seeks leave to appeal against his conviction and D1 and D5 seek leave to appeal against the sentences imposed upon them.

D3's application

6. The conspiracy in question involved a bogus modelling agency.

7. It was the prosecution case that the defendants operated a modelling agency trading under the name "Eternal Art".

8. The modus operandi was that so-called talent scouts would approach members of the public in the street and inquire if they were interested in becoming models.

9. If the people approached expressed an interest they would be invited back to the business premises which had been leased by the company.

10. It would be represented to these people that if after being interviewed they were considered to be suitable candidates they could become models and then earn substantial fees for modelling work. Needless to say none of the modelling engagements referred to ever materialised.

11. The victims were required to pay $27,600 to Eternal Art for what was described as being management fees, which would include various expenses.

12. For this purpose they were required to hand over their credit cards or cash cards and divulge details of their relevant PIN numbers. Moneys were then withdrawn from the accounts.

13. This was notwithstanding the fact that representations had been made to the effect that deductions would only be made from their salaries in due course.

14. Nineteen witnesses gave evidence concerning the way they had been defrauded of moneys.

15. No attempt was made by D3 to deny that the scheme was a fraudulent one. The defence that he ran was that he only became aware of the fraudulent nature of the scheme after he had been arrested.

16. The most important prosecution witness was D2. She gave evidence that D3 had attended numerous meetings when the affairs of the business had been discussed and she had said that there could be no doubt whatever that he was fully aware of the nature of the activities of the company. The whole scheme was based on lies.

17. Over and above this D2 gave evidence that she had personally taken a number of the victims to D3 to be interviewed and this was corroborated by the evidence of some of the victims.

18. D2 also gave detailed evidence concerning the way in which the fraud would be perpetrated.

19. She said that D3 was held out in two capacities. One was as a tutor of models and the other was purporting to be a client who was looking for models.

20. He would conduct interviews which would last approximately 30 minutes and then prepare a report on his assessment of the interviewee. These were invariably framed in favourable terms.

21. It was subsequent to these interviews that the victim would be informed that they were successful and were accepted. A photo shoot would then be arranged so as to confer some measure of spurious credibility to the activities.

22. D3 went into the witness box. He said that he had about ten years relevant experience in the field.

23. In November 1998 he heard of Eternal Art through a friend who said that they were looking for employees.

24. He contacted D1 and was interviewed. He was offered a job as a modelling teacher which he accepted. The salary was to be $6,000 per month.

25. One of his duties was to interview prospective candidates who wished to obtain modelling assignments. He did this on a number of occasions and prepared reports on them.

26. Initially the reports were objective and included assessments which contained critical comments. D1 had then pointed out to him that the critical remarks were hurtful to the interviewees and that in future these observations should be omitted. It was for this reason that the reports had been so favourable.

27. He denied attending meetings when the affairs of the company had been discussed. He also distanced himself from D2.

28. As earlier indicated he denied any knowledge at the time that the business was fraudulent.

29. The Judge carefully weighed and considered all of the evidence. He also stated that he had exercised particular caution regarding D2's testimony both on the basis that she was an accomplice and that she had a conviction for a previous offence of a similar nature.

30. He was however satisfied that the prosecution had proved its case against D3 at the appropriate level.

31. In his homemade grounds of appeal the only ground advanced by D3 was that the evidence given by the witnesses was incredible.

32. Before us he did not add any matters which were of any substance.

33. The evidence of the witnesses was not incredible.

34. The Judge gave cogent reasons why he accepted the prosecution evidence and rejected D3's.

35. His conviction was in no way unsafe or unsatisfactory and this application is dismissed.

36. The application is devoid of any merit and we order that three months of the time during which he has been in custody pending determination of this appeal is not to count towards the total sentence which he will serve.

D1 and D5's applications for leave to appeal against their sentences

37. In the agreed facts the nature of the scam was outlined in a similar way to that described in this judgment.

38. However it is also indicated that 38 victims were involved and that their individual losses ranged from $3,000 to $55,000. The total amount obtained from the fraud was $725,800.

39. It was also accepted that D1 was one of the main instigators of this conspiracy and assumed a prominent role.

40. Not surprisingly the Judge was satisfied on the facts that it was a well-planned and organised operation on quite a large scale.

41. Also having regard to the prevalence of the offences he considered that deterrent sentences were called for.

42. For D1 he adopted a starting point of 3½ years' imprisonment.

43. He regarded the fact that this offence was committed while D1 was on bail in respect of another offence of a similar nature to be an aggravating factor and added three months to the starting point.

44. He then gave D1 the usual one-third discount for her plea and gave a further discount of two months for her offer to give evidence against her co-accused. This offer was not taken up.

45. In her homemade grounds of appeal D1 refers to her remorse and to the charitable work which she has done. She also says that the sentence was too severe.

46. Her charitable work cannot weigh heavily in the balance in a case as serious as this. The Judge carefully considered all relevant factors and it cannot be said that he erred in any way.

47. Having regard to all of the circumstances the sentence imposed was not unduly severe. It was neither manifestly excessive nor wrong in principle. D1's application is dismissed.

48. D5 assumed a lesser role than D1. She was however a manager and assumed an active role. The Judge adopted a starting point of 2½ years and added 3 months as the offence had been committed while she was on bail. She was given the usual one-third discount for her plea and a further 3 months for the assistance she gave the authorities.

49. Mr Ross represented her on this application.

50. There were two grounds of appeal.

51. The first was that having regard to the discounts given to other defendants the discount given to D5 was inadequate.

52. Mr Ross submitted that she had been the first defendant to make a statement to the police and that in all probability this would have been an important factor in persuading the other defendants to plead guilty.

53. The fact that her offer to give evidence was not accepted was in no way her fault.

54. D2 had been given a 6-month discount and D5 should have been given a similar discount.

55. This submission appears to overlook the fact that it is always open to the prosecution to decide what evidence to call. There may be any number of reasons why they decided to call D2 as a witness rather than D5.

56. What the Judge has to consider in the final analysis is what in fact happened. D5 did not give evidence and was not entitled to as great a discount as D2.

57. D5 did get some credit for being the first defendant to make a statement to the police. She was given a discount of 3 months whereas D1 and D4 who also indicated a willingness to give evidence were only given a discount of two months.

58. This ground of appeal cannot succeed.

59. In the other ground of appeal complaint is made that by adding 3 months to the sentence on account of it having been committed while D5 was on bail and ordering that the sentence be served consecutively to the other offence she was convicted of D5 was being punished twice for the one offence.

60. This is not so. As was pointed out by the Judge the other offence was entirely separate and distinct from this case.

61. Committing the present offence while on bail was simply an aggravating factor pertaining to this offence. It demonstrated a blatant disregard of the law. It has not been demonstrated that the Judge was in any way in error in his approach to the totality principle.

62. This ground also cannot be sustained. This being the case this application is also dismissed.