HKSAR v. LEI KOK YAU

DCCC 352/2023

[2024] HKDC 331

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 352 OF 2023

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REASONS FOR SENTENCE

The defendant faces 5 charges of "Conspiracy to defraud" (Charges 1, 3, 5, 7 and 9)  and 5 charges of "Money laundering" (Charges 2, 4, 6, 8 and 10; alternative to Charges 1, 3, 5, 7 and 9 respectively). He pleaded guilty to Charges 2, 4, 6, 8 and 10 (and accepted by the prosecution). I made no order as to Charges 1, 3, 5, 7 and 9.

2.  On numerous occasions within 3 days, the defendant went to pick up money from victims of telephone scams.

Summary of Facts

Charge 2

3.  About 8:00 p.m. on 7 December 2022, Madam Tam (PW1)  received a phone call from a male voice who pretended to be her son (Male 1).  Male 1 claimed that he was arrested by the police and would require $70,000 as bail money.  PW1 agreed with Male 1 to meet his legal assistant to hand over the bail money.

4.  At 10:00 a.m. and 11:00 a.m. on 8 December 2022, more phone calls took place between PW1 and Male 1.

5.  About 4:00 p.m. on the same day, the defendant showed up at PW1's home at Hoi Fu Court, Mongkok, claiming to be a legal assistant.  PW1 handed over $70,000 cash to the defendant.

6.  About 8:00 p.m. on the same day, PW1 called Male 1 to see if he was released.  Male 1 told PW1 that an extra $180,000 would be required.  PW1 agreed.

7.  About noon on 9 December 2022, the defendant arrived at PW1's home again and collected $180,000 cash.

8.  This was a telephone scam.

Charge 4

9.  About 11:00 a.m. on 8 December 2022, Madam Dai (PW2)  received a phone call from a male voice who pretended to be her son-in-law (Male 2).  Male 2 claimed that he was arrested by the police and would require bail money.

10.  About noon on the same day, PW2 handed to a male named "Ah Shing" (who claimed to be a friend of PW2's son-in-law)  $155,000 cash at Tat Chee Avenue, Kowloon Tong.

11.  About 12:30 p.m. on 9 December 2022, PW2 received another phone call from Male 2, claiming that an extra $150,000 would be required for his bail money.

12.  About 2:30 p.m. on the same day, PW2 handed to the defendant (who claimed to be Ah Shing's brother)  $150,000 cash outside Wellcome supermarket at Broadview Garden, Tsing Yi (Wellcome).

13.  About 3:30 p.m. on the same day, PW2 received a phone call from Male 2, claiming that an extra $100,000 would be required.

14.  About 4:00 p.m. on the same day, the defendant collected $100,000 cash from PW2 outside Wellcome.

15.  On 10 December 2022, PW2 reached her real son-in-law and discovered that this was a telephone scam.

Charge 6

16.  About 7:15 p.m. on 8 December 2022, Madam Liu (PW3)  received a phone call from a male voice who pretended to be her son (Male 3).  Male 3 claimed to have changed his phone number to 6882 8087.

17.  About 9:30 a.m. on 9 December 2022, PW3 received a phone call from Male 3 claiming that he was detained and required bail money.

18.  About 10:15 a.m. on the same day, PW2 handed to the defendant (who claimed to be "Chan Cheung", a friend of PW3's son)  $50,000 cash outside Golden Plaza, Mongkok.

19.  About 11:00 a.m. on the same day, PW3 received another phone call from Male 3, claiming that he would need extra bail money.

20.  About noon on the same day, PW3 handed to the defendant $150,000 cash outside Golden Plaza.

21.  About 1:45 p.m. on the same day, PW3 reached her real son and discovered that this was a telephone scam.

Charge 8

22.  About 1:00 p.m. on 9 December 2022, Madam Lam (PW4)  received a phone call from a male voice who pretended to be her grandson (Male 4).  Male 4 claimed that he was being detained and would require $20,000 as bail money.

23.  About 4:15 p.m. on the same day, PW4 handed to the defendant (who claimed to be a colleague of PW4's grandson)  $20,000 cash at her home at Ha Kwai House, Kwai Chung Estate.

24.  About 15 minutes later, PW4 reached her real grandson and discovered that this was a telephone scam.

Charge 10

25.  About 10:00 a.m. on 9 December 2022, Madam Siu (PW5)  received a phone call from a male voice who pretended to be her son's friend (Male 5).  Male 5 claimed that PW5's son was being detained and would require $100,000 as bail money.

26.  About 2:30 p.m. on the same day, PW5 handed to an unknown male (who claimed to be "Ah Hong")  $100,000 cash at the McDonald's restaurant, Charming Garden Phase 1, Tai Kok Tsui.

27.  About 3:30 p.m. on the same day, PW5 received another phone call from Male 5, claiming that an extra $100,000 would be required.  At this point, PW5 discovered that this was a telephone scam.

28.  The Police was alerted.  A controlled delivery was arranged at the same McDonald's restaurant.

29.  About 6:00 p.m. on the same day, the defendant arrived at the McDonald's restaurant, telling PW5 that he was a friend of Ah Hong.  PW5 handed over the money to him.

Arrest and admissions

30.  As the defendant was heading towards the exit of the restaurant, PC 21307 arrested him.  Under caution, the defendant claimed that he was instructed by a friend of Ah Wah to collect cash from an elderly person.

31.  In his video recorded interviews, the defendant admitted that he was introduced to the job through a friend's friend.  He did not know the nature of the job but agreed to do it. He was promised a reward of $1,000 to $1,500 for every completed task.  The defendant subtly perceived that the tasks involved fraud, though he was not explicitly told so.  Regarding Charges 2, 4, 6, 8 and 10, he admitted that he went to the respective places on the respective dates to collect the respective sums from the respective elderly persons.  On each occasion, he was told which identity to adopt.

Identification parades

32.  Identification parades were held on 13 December 2022.  Both PW2 and PW3 identified the defendant as the person who collected money from them.

Mitigation & Sentence

33.  The defendant is 26 and has a clear record.  He resides with his parents and 2 elder brothers in a public housing unit in Tin Shui Wai.  Defence counsel Mr. Wong informed me that the defendant completed F.6 in 2015.  He has held different jobs after leaving school.  In mitigation, Mr. Wong submitted that in 2022, the defendant applied for a 1-year Foundation Diploma course in Social Work.  His parents sponsored his school fees, but the defendant spent the money on gambling.  He therefore resorted to foolish ways to earn some quick money.

34.  The prosecution has applied for an enhanced sentence pursuant to section 27(2)(c), (d)  and (e)  of the Organized and Serious Crimes Ordinance (Cap.455)  on the basis of prevalence; the nature and extent of harm caused to the community; and the nature and extent of the total benefit gained by anyone from the present offences.  Mr. Wong did not object to the application for enhancement.

35.  I bear in mind the Court of Appeal's decision in HKSAR v Xu Mai Qing CACC 464/2005, whereas Yeung JA (as he then was)  held "Under section 27(11)  of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences[1]."

36.  I have read the witness statement of DCIP Tang dated 26 January 2024.  I am satisfied that in 2022, telephone deception cases were prevalent in Hong Kong in terms of the number of cases as well as the total value of monetary loss.

37.  The "By Hand" mode phone deception cases always involve someone picking up the money left behind by the victim at a public place or collecting the money directly from the victim.  Hence, the money collection portion is part and parcel of any type of phone deception ("Guess Who", "Pretend Officials" or "Detained Son").  Although the "collector" may or may not have knowledge of the underlying phone deception, the circumstances under which he/she picks up or collects the money are usually peculiar and would thus arouse his/her suspicion about the legality of his/her collecting act and/or the nature of the money collected.  That is the reason why the "collector simpliciter" is usually charged with a money laundering offence (instead of deception).

38.  There is clear and cogent evidence before me that the "By Hand" mode phone deception is still widespread and commonly being practised in Hong Kong today.  The court must send a clear message to the general public that people who play the role of "collector" will receive severe punishment, so that there is a deterrent effect.  When there are fewer or no willing "collectors", the "By Hand" mode phone deception method would fail.

39.  The defendant claimed that he did not take part in or had any specific knowledge of the underlying phone deception; however, the scam would have been meaningless without a willing "collector".  Given the role played by the defendant, the amount involved and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 20%.

40.  The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[2]

41.  In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33.  I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

42.  In SJ v Ngai Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[3]

43.  In the present case, the defendant admitted that he went to the respective places on the respective dates to collect the respective sums from the respective elderly persons.  For the purpose of sentencing, I accept that the defendant probably had no specific knowledge of and did not take part in the phone deception against the 5 victims.  To this extent, his culpability is perhaps less than the perpetrator(s)  of the underlying phone deception[4].

44.  I have borne in mind the amount of money involved in each charge.  I adopt a starting point of 2.5 years' imprisonment for each charge. 

With the timely guilty plea, the sentence is reduced to 20 months. Apart from this, I see no other mitigating factors which warrant any further reduction. With the 20% enhancement, I sentence the defendant to 24 months' imprisonment each for Charges 2, 4, 6, 8 and 10.

45.  Bearing in mind the totality principle, I consider a global starting point of 3.5 years' imprisonment appropriate for all 5 charges.  With the timely guilty pleas, the overall sentence becomes 28 months.  With the 20% enhancement, the overall sentence becomes 33 months' imprisonment. Hence, I order:  (i)  3 months in Charge 4 to run consecutive to Charge 2; (ii)  3 months in Charge 6 to run consecutive to Charges 2 and 4; and (iii)  Charges 8 and 10 to run concurrently,  but 3 months in Charges 8 and 10 to run consecutive to Charges 2, 4 and 6.