HKSAR v. YUNG CHI LOK

DCCC1276/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1276 OF 2009

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Reasons for Sentence

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The charge

1.  The defendant appeared before me this morning and pleaded guilty to a single charge of conspiracy to defraud, contrary to Common Law and punishable under section 159C(6) of the Crimes Ordinance, Cap. 200.

2.  The particulars of the charge were that the defendant conspired with other persons to defraud such persons as might be induced to invest by dishonestly:

(a) falsely representing that the company was involved in a genuine Loco-London silver trading;

(b) inducing, causing or allowing the victims to invest money with the company;

(c) falsely representing that the money so given was invested in Loco-London silver trading;

(d) failing to invest the money so given;

(e) falsely representing that the monies given to invest had all been lost in the Loco-London silver trading; and

(f) appropriating the monies given to invest.

The facts

3.  The facts involved an alleged Loco-London silverscheme (“LLS”) involving a company called Rich Surplus Information System Limited (“Rich Surplus”). The defendant was the director of Rich Surplus. There were altogether six victims in this case, PW1-6.

4.  Between September 2000 and January 2001, these six victims were variously employed by Rich Surplus as office assistants. During their employment they were persuaded by other staff members to invest in LLS market through a company named Treasure On Investment Limited (“Treasure On”) of which other co-conspirators, namely Ho Ho-sam (“Ho”) and Kwong Kin-ho (“Kwong”) were directors.

5.  All of the six victims were told shortly after their investment that they had suffered substantial losses. In the end PW1 lost about $38,000; PW2 about $192,400; PW3 about $102,000; PW4 about $105,590; PW5 about $564,800; and PW6 about $155,000. Feeling that they might have been deceived, PW1 and PW2 made reports to the police on 25 September 2000 whereas PW4 made a report on 15 November 2000.

6.  The total sums of the losses were therefore in the sum exceeds $1,100,000.

7.  On 26 September 2000 and 23 November 2000, the police then raided the offices of both Rich Surplus and Treasure On and a large number of documentary exhibits were seized.

8.  The co-conspirators named in the charge including the defendant were arrested during these operations and they were released on police bail. The Defendant later however absconded and did not resurface until 13 October 2008.

9.  Before the defendant absconded, he had attended the ID parades together with other co-conspirators in this case and was identified by a number of victims. Among them, PW4 identified the defendant as the one who conducted the job interview of her at Rich Surplus. PW5 also identified the defendant as her supervisor at Rich Surplus.

10.  According to one senior treasury accountant of the Commercial Crime Bureau, after examining the records seized by the police, the treasury accountant gave the opinion that the practice of Treasure On was significantly different from the other normal bullion traders in Hong Kong. In particular, there were no trading or hedging activities between Treasure On and other traders which is common amongst normal traders.

11.  When the defendant was first arrested in 2000, he denied the offence under caution. Later he jumped police bail on 7 August 2001 and had been wanted since then. On 13 October 2008, the defendant turned himself in to the Kwun Tong Police Station. He was later interviewed in Shek Pik Prison on 17 March 2009. Under caution, defendant admitted the offence fully, adding that he was the one who set up Rich Surplus to deceive people.

Criminal record and personal background

12.  The Defendant is 35 years old. He had one similar criminal record in the case of DCCC1184/2000 (“the first case”), where for the offence of “conspiracy to defraud” and also with “failing to comply with a production order under OSCO”, he was at first sentenced to 7 years’ imprisonment. That sentence was however later appealed and the Court of Appeal reduced the sentence. As a result, the total sentence is now 6 years and 4 months for the two offences.

13.  As the defendant had absconded, what happened in that case was that the defendant was first actually sentenced in his absence and he only appealed the sentence after he returned to Hong Kong and began to serve his sentence. This morning I was supplied with a copy of the judgment by the Court of Appeal dated 26 February 2009 (CACC504/2001) in relation to his appeal. I can see from the judgment that in fact a very similar scheme was put in place whereas a company was set up and advertisements were placed which attracted innocent members of the public to seek and obtain employment with the company for jobs such as office assistants or cleaners, but once employed they were lured into making investment in trades that never took place and consequently lost substantial sums of money.

14.  As the Court of Appeal had pointed out, the scheme in that case was “calculated and prolonged”. It commenced in September 1998 and as the original trial judge found, the total losses in that case amongst the victims well exceeded HK$7 million. The trial judge further added that he was satisfied that even a larger amount had been lost by a victim who did not report it to the police.

15.  The judgment of the first case also revealed that the defendant was actually on bail pending trial, but after one of the pre-trial reviews, he absconded and the trial took place in his absence. In the same judgment, the Court of Appeal also recorded that when the defendant surrendered to the police on 13 October 2008 he said in an affirmation that he had come to the conclusion that he could not spend his rest of life running from the authorities.

16.  The defendant is still single. The family consists of his parents and two elder sisters. According to Ms Chan, solicitor for the defendant, he had already quitted his job in connection with the first case in April 1999 after the police had raided the premises. He was under investigation and put on police bail. However, he could not find a job. It was only during mid-2000 that he was approached by Ho, one of the co-conspirators in this case, the director of Treasure On, to recruit him to set up a company and that was why he committed this second offence.

17.  Ms Chan told me that the defendant was promised a salary of $20,000 and he was also told that he did not need to recruit staff as the first case and all he was needed to do this time was to set up and to run the company. During these years as he absconded, Ms Chan told the court that the defendant was just hiding and doing some odd jobs.

18.  Between 2004 and 2005 the father of the defendant was found to have suffered from many illnesses including a stroke, trauma, high blood pressure and dislocation of corneas, etc.The family members had repeatedly persuaded and urged the defendant to come back to Hong Kong and to surrender to the authorities. This he did in 2008 albeit a few years later.

19.  Ms Chan told the court also that the defendant recognized that there was the presence of many aggravating factors in this case, not to mention the fact that he committed the present offence whilst on police bail pending trial for the first case. However, Ms Chan submitted that he was not the mastermind of these offences and urged the court to bear that in mind when passing the sentence and also to take into account the fact that once surrendered, he had already begun serving his current sentence of 6 years and 4 months in the prison and asked the court to consider the question of totality when passing the sentence.

20.  In relation to the sentence of the co-conspirators in this case, I was informed by Mr Tam, the public prosecutor, that these people were already dealt with a few years ago in the District Court (DCCC362/2004). Except for two of the defendants who were only given suspended sentence, most of the other co-conspirators including one of the masterminds, Kwong, received 3 years’ imprisonment after pleading guilty. Mr Tam of course was correct when he pointed out to me that this was only for my reference and I was not in any way bound by the decision in that case.

21.  In sentencing, I have considered a number of authorities. In particular, Irelied on the case of HKSAR v Dos PassosCACC517/2001 which was decided very close to the time when this present case was committed. The Court of Appeal held that whilst it had recently adopted a starting point of 4 years’ imprisonment for those who participated in such schemes, it was apparent from the appeals in question that the starting point was to be revised upwards for those who masterminded the schemes or continued with the fraud even after a police investigation.The appropriate sentence also depended on the scale and duration of the operation and the amount of loss suffered by the victims. In that case the sum lost by the four victims was only $470,000. The original trial judge found that the company was set up for the purpose of fraud and the schemes had all the hallmarks of Loco-London gold or silver fraud scheme. After trial, the appellant was sentenced to 6 years’ imprisonment.In appeal, the Court of Appeal said that considering the role played by the appellant who continued with the fraud even after the police raid, a 4-year sentence was clearly inadequate to reflect his culpability. However, although he played an active role in the fraud, he was not a mastermind of the scheme, thus the sentence of 6-year imprisonment was manifestly excessive and was replaced with one of 5-year imprisonment.

22.  Applying the sentence in that case, in the present matter I took the view that although the defendant was not the mastermind as conceded by the prosecution, his role was also important and crucial, and the money involved in the present case was more than double than that of Dos Passos (supra.). I therefore took the view that a starting point of 5½ years is appropriate in this case.

23.  That, however, is not the end of the matter.The defendant committed the offence whilst on bail which is of course a very serious aggravating factor which calls for an enhancement of the sentence. I can do no better by quoting the authors of the Sentencing in Hong Kong(5^th Edition) concerning the dealing of the defendant while he committed the offence while on bail at p.109: “If an accused commits one offence while he is on bail for another, the sentence which results should run consecutively unless justice requires that they be partly concurrent (HKSAR v Hoang Thi Thu Huyen CACC195/2000).” In HKSAR v Yuen Gang Shing CACC303/1997, itwas said that the commission of any offence by an accused whilst on bail “is unquestionably an aggravating factor to be taken into account.” Behaviour of this type “indicates a heart which is already hardened” (see AG v Law Ying Cheung [1981] HKC 161, 163). The courts have a duty to protect the community from those who interpret the grant of bail as a licence to re-offend. That duty will only be discharged if the court imposes severely deterrent sentences upon those who abuse their freedom on bail (see R v Richards [1981] 2 NSWLR 464,465). For these reasons, I decided to add another 12 months to the 5½ years, making a total of 6½ years.

24.  The defendant pleaded guilty which is the only mitigating factor andfor that he would receive the customary one-third discount. The final sentence that he should receive in relation to this charge is therefore one of 52 months’ imprisonment.

25.  I have already mentioned the authority which says that if it concerns a case where an offender commits the offence while on bail, the sentence should be consecutive. I went on to consider whether as a question of totality, I should order, as suggested by the solicitor for the defendant, that part of the sentence should run concurrently. After serious consideration of the suggestion or submission, I decided that the sentences of both sentences should run wholly consecutive to each other.

26.  In this connection, I also refer myself to Sentencing in Hong Kong (5^th Edition) at p.106: In the case of R v Yau Kwok TungCACC17/1987, the Court of Appeal had already said that if the offences are separate and unrelated, there can be little dispute as to the propriety of consecutive sentence. In the English case of R v Hill[1983] 5 Cr App R (S) 214 it was held that it does not matter that the time between the commission of the offence is short. In HKSAR v Woo Chung HingCACC19/2002 it was said that even an accused has committed two discreet trafficking offences on different dates, as a matter of sentencing principle, consecutive sentences are called for. Finally, in AG v Shamsudin[1987] HKLR 826, it was held that provided that the offences are distinct, consecutive sentence may be appropriate notwithstanding that they share such common characteristics as fraud upon the same institution.

27.  Based on the above authorities, I decided therefore that the sentence that I should pass for this case should run wholly consecutively to the sentence that he is currently serving.