R. v. CHAN SUI TO and Another

IN THE COURT OF APPEAL

1996, No. 115
(Criminal)

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H E A D N O T E

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Credit card frauds.

Sentencing guidelines.

Played an active but not necessarily a key role - medium size operation between $50,000 and $150,000 - with no elaborate planning and equipment - without an international dimension - seven years after trial.

IN THE COURT OF APPEAL

1996, No. 115
(Criminal)

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J U D G M E N T

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Hon Yang, C.J.:

1. The applicants, D1 and D2, seek leave to appeal against their respective sentences.

2. They were convicted on their own pleas and sentenced as follows:

D1 - Counts 3 and 6: Possessing false instruments - six years on each count.

- Count 5 : Possessing equipment for making false instruments - six years.

- Counts 4, 7 and 9 : Possessing false instruments - 18 months on each count

3. The sentences were ordered to run concurrently; the totality of sentences is therefore six years.

D2 - Counts 11 to 15 : Obtaining property by deception - three years and three months on each count.

- Counts 16 and 17 : Using a forged Hong Kong Identity Card - four months on each count.

- Count 18 : Possessing a false instrument - three years and three months.

4. The sentences on Counts 11 to 15 and 18 were ordered to run concurrently; the sentences on Counts 16 and 17 were ordered to run concurrently, but consecutively to the concurrent sentences of three years and three months. The totality is therefore three years and seven months.

5. D2 through her counsel complains that the starting point of five years adopted by the judge was too high, and that the judge had taken an erroneous and/or far too serious a view of D2's overall criminality. It is urged that D2's personal participation in the criminal enterprise was not essential to its operation, that all the deceptions occurred on the same day, and that D2 was a person of good character and was very much under the influence of her co-habitee D1.

6. D1 admitted the summary of facts, the gist of which is as follows.

On 21 April 1995, D1 was arrested as he came out of an apartment described as "the factory". He had on his person four counterfeit credit cards, which formed the basis of Count 3. Also found on him were 12 false Telecom phonecards with credit card information encoded on them. This formed the basis of Count 4. In the factory from which D1 was seen to have emerged, the police found an encoder, an embosser, other machinery, tipping foils, base cards, and other items stated in Counts 5, 6 and 7. D1's fingerprints were found on the embosser and a box containing various cards. Also found were 384 credit card accounts data written on various sheets of paper. The equipment and items formed the basis of Count 5. Found on the premises were also 43 counterfeit credit cards (Count 6) and 23 false phonecards (Count 7). There was one Hong Kong identity card, in the name of Yau Chi Shing which was embossed on a Diners' Club counterfeit credit card. It was in D1's possession at the time of his arrest. In addition, he had in his possession 11 false phonecards which had been encoded with credit card data (Count 9).

7. D2 admitted the summary facts as follows:

1. A 66 year old lady, Lam Mui, had lost her identity card on 23 April 1993 in Shenzhen.

2. In the middle of February 1995, a Mr Wong Yick Man, had brought to the Service Department of Pacific Link Communications Ltd, called Pacific Link, on Nathan Road, Mong Kok, a mobile telephone of service number 90840785 for commencement of service via Pacific Link. Pacific Link required the mobile telephone to be left there for examination before service could be effected and a receipt was given to Mr Wong. On 23 February 1995, D2 brought along the receipt to Pacific Link in order to obtain the telephone. Pacific Link staff, Ms Leung required to see the receipt and D2's Hong Kong identity card. D2 then produced the receipt, together with a Hong Kong identity card in the name of Lam Mui but with D2's photograph substituted therein and the year of birth altered from 1927 to 1967. Following D2's payment of the required fee, Ms Leung gave the telephone to D2. On that occasion, Ms Leung has made a photocopy of the Hong Kong identity card : Count 16.

3. Some time between 23 February 1995 and 31 March 1995, the said mobile telephone was disconnected. On 31 March 1995, D2 went to the said Pacific Link Office requesting re-connection of the telephone and again Ms Leung required to see and photocopy a Hong Kong identity card from D2 and to retain the telephone for re-examination. D2 produced the same Hong Kong identity card as mentioned in paragraph two above. The telephone was re-connected for service on 3 April 1995 : Count 17.

8. Counts 11 to 15 concerned a shopping spree by D2 on 20 April 1995 in Metroplaza Kwai Chung, New Territories, where she used a forged credit card to make purchases from various shops. The items obtained included a handbag, wallets, ladies' clothes, Cartier glasses frames and toilet articles, to the total value of some $16,019.10.

9. Count 18 involved a forged Diners' Club credit card.

10. Sentences were passed after a Newton inquiry.

11. Adopting a starting point of an overall sentence between eight and nine years in respect of D1, the judge reduced it to six years to reflect his guilty pleas. He found that D1 was directly involved in the running of the credit card factory.

12. The judge found D2 to be merely a courier of counterfeit credit cards. She allowed herself to be influenced by D1 and agreed to make the numerous dishonest purchases with a false Diners' Club credit card. Her handwriting appeared in the books in the factory where manufacture of forged credit cards took place. She therefore knew what went on and she knew D1's role in running the factory. Taking into account her clear record and guilty pleas, the judge assessed her overall criminality and came to the view that a sentence of five years' imprisonment after trial would have been appropriate, and he reduced it to three years and three months.

13. A number of authorities were cited to us to indicate the level of sentences for credit card frauds. It is not easy to reconcile the sentences, but in general we apprehend that a sentencing judge would need to consider various factors including:

1. The size of the operation e.g. whether it involves large sums of money, whether it concerned a large number of persons or forged credit cards.

2. The planning that has gone into perpetrating the fraud, whether it is elaborate or simple, whether technical skills were used, and to what extent.

3. Whether there is an international dimension.

4. Whether the accused played a major role, e.g. running a syndicate, engaging in actual manufacture, organising the use of forged cards, or whether he is a mere "cog in the wheel" as a courier or a custodian or keeper.

5. Whether there is a plea of guilty.

14. In considering whether large sums of money were involved, we would suggest that, at the present cost of living, amounts up to $50,000 may be considered relatively small, amounts from $50,000 to $150,000 medium, and amounts above that may be considered large.

15. We now look at some of the authorities, bearing in mind the factors suggested above. It goes without saying that the five factors mentioned above are not intended to be an exhaustive list.

16. The Queen v. Lee Wing Keung (1990) Crim. App. 76 was an application for leave to appeal against sentence imposed by the District Count. Silke, V.-P. noted (at p.2):

"On his plea of guilty the trial judge sentenced him to a totality of 5 years' imprisonment imposing, respectively, first: for possession forged identity cards - 2 years' imprisonment; second: for the uttering of a forged document, that was the identity card of Lee - 3 years' imprisonment; third: for the uttering of a forged die, that was the 6th October offence using a forged credit card - 2 years' imprisonment; fourth: uttering a forged die, that was the second attempt to purchase goods at China Resources - 2 years' imprisonment; fifth: the possession of the 9 forged credit cards - 3 years; imprisonment."

17. It was noted that the scheme was not a very sophisticated one. On 6 October 1989, the applicant went to the Chinese Arts and Craft Ltd and purchased two gold coins for $8,225.70 by the use of a forged American Express credit card. On the 8th he went to the same emporium and attempted to buy a Rolex watch for $16,616.50 by means of a credit card bearing a different number. He also produced a forged identity card.

18. The police found nine forged credit cards on him. The trial judge approached sentence on the basis of totality making the sentence on the third charge consecutive to the other sentences. On the basis of his original starting point, he had reached a totality of six years. He then considered that totality and thought it to be too high. He reduced the overall sentence to five years. The applicant's application for leave to appeal against sentence was refused.

19. In The Queen v. Wong Fu Keung (1991) Crim. App. No. 5, the applicant was convicted after trial of possession of forged dies and of handling stolen goods. The dies were for the purpose of producing forged credit cards and sentenced to four years' imprisonment. The Court found that he was on the verge of embarking on a spending spree involving the use of the credit cards. His application for leave to appeal against sentences was refused.

20. In The Queen v. Kwai Ying Ho (1992) Crim. App. 527 the Court of Appeal had to consider the sentence of four years and nine months passed by the District Court on the applicant on his own plea for conspiracy to defraud the Citibank by the use of credit cards. Some $380,000 was involved. The trial judge having erroneously taken into consideration a number of factors, the sentence was reduced to three and a half years.

21. In The Queen v. So Chung Kwong (1993) Crim. App. 455, the applicant was convicted after trial and sentenced to concurrent sentences of two years' imprisonment on each of the three charges, namely, conspiracy to obtain property by virtue of forged documents, conspiracy to defraud, and possession of implements of forgery. The applicant was a member of a syndicate which would obtain and supply credit card information and pay for the production of forged credit cards. He was involved in the use of the forged cards but not the production. The intention of the syndicate was to use forged credit cards through their various members in Hong Kong and Malaysia. In October 1991, the applicant had led a number of fellow-members to Malaysia and used forged credit cards in obtaining $600,000 worth of goods and cash advances in that country. After this he had been to Malaysia with others on two occasions for the same purpose. The judge found him to be a ringleader in the organisation though he did not take part in the manufacture of the cards. Taking into account the careful, detailed and effective planning of the enterprise, together with its international ramifications, the Court of Appeal did not find the six years' imprisonment imposed on the applicant to be unduly severe.

22. In The Queen v. Lau Kwok Hung and another (1993) Crim. App. No. 99, the applicant Lau was convicted after trial of two conspiracies involving forged credit cards. In the first one, Lau joined a conspiracy which was engaged in the manufacture of credit cards in Malaysia and their use in Hong Kong. Initially Lau purchased the cards but later became "much more involved". As to the second conspiracy, the conspirators bribed the staff of hotels and businesses to provide details of credit card holders to be used in the manufacture of counterfeit cards. Lau was sentenced to five and a half years on the first conspiracy and one year on the second conspiracy. The judge found Lau to have been involved in a syndicate and that he was both a user and a supplier, if not a manufacturer, of forged credit cards. Lau's application for leave to appeal against sentence was refused.

23. It may be considered that So Chung Kwong and Lau Kwok Hung have been dealt with leniently. They both pleaded not guilty and played an active role in the fraud. Both had a Malaysian connection in what may be described as large scale operations.

24. In Attorney General v. Chan Yet Wai and 2 others (1993) Application for Review No. 14, again this was a case of credit card frauds, including obtaining property by deception, possession of false instrument and conspiracy to defraud. The obtaining occurred over a period of 12 days and the items obtained consisted of jewellery of a total value of $122,000. The conspiracy charge was that he had been engaged in a buying spree with his co-conspirators on one day and obtained goods to the value of $20,000. He had clearly played an active role. In dealing with the first respondent who had pleaded guilty, the Court of Appeal considered a starting point of six years' imprisonment to be appropriate. In the light of his pleas of guilty, the Court took the view that an overall sentence of four years' imprisonment to be appropriate.

25. In The Queen v. Hui Kwok Ho (1994) Crim. App. 174, Hui was convicted after trial of conspiracy to obtain property by virtue of forged credit cards. His application for leave to appeal against his sentence of four years' imprisonment was refused by this Court. The facts were that he and his co-conspirators went to a jewellery shop on two days in June 1992, used five forged credit cards to obtain jewellery to the total value of $151,200. Giving judgment of the Court Macdougall, V.-P. said at p.3:

"The sentence is entirely consistent with sentences passed in other cases of credit card fraud and approved by various divisions of this court."

26. In Attorney General v. Chan Piu Sang and Chung Kwok On [1994] 1 HKCLR 211, the respondent Chan was convicted on his own plea to possessing two forged credit cards at the Oliver's Delicatessen with intent to defraud. He was also in possession of four forged credit cards intending to use them and "to induce somebody to accept them as genuine and by reason of so accepting them to do some act to that person's or another person's prejudice." The other respondent Chung was also convicted on his own plea for having in possession of one forged credit card with intent to defraud. He also pleaded guilty to attempt obtaining property by deception, namely, a quantity of brandy valued at $12,872.60 at the Oliver's Delicatessen by means of the forged credit card. In respect of Chan, the Court of Appeal held that allowing for his plea an overall sentence of four years was appropriate. In respect of Chung, the Court took into account his plea, his entirely clear record and that he was very close to release from imprisonment, an overall sentence of two years was appropriate. This sentence seem about right.

27. In The Queen v. Wong Pui Kei (1995) Crim. App. No. 622, the applicant, a police constable, had pleaded guilty to a charge of conspiracy to defraud and a charge of accepting an advantage contrary to section 4(2)(a) of the Prevention of Bribery Ordinance. He was sentenced to consecutive terms of two and a half years' imprisonment on the first charge and six months on the second charge. The period of conspiracy was from 1 to 25 March 1994. It involved the use of false credit cards, stolen credit cards and stolen identity cards to obtain goods and services. The applicant's role was to act as driver well knowing that counterfeit cards were to be used. His application for leave to appeal against sentence was dismissed.

28. In The Queen v. Wong Tse Kan and another (1995) Crim. App. No. 465, D1 and D2 pleaded guilty before Patrick Chan, J. of the possession of articles designed or adapted for making false credit cards with the intention that they should be used as genuine cards contrary to section 76(1) of the Crimes Ordinance, Cap.200. The judge adopting a starting point of eight years in each case, sentenced each to five and a half years' imprisonment. The judge found that they were merely caretakers or keepers of the credit cards and the equipment necessary for producing forged credit cards on behalf of an operation for the production of credit cards on a large scale. The Court of Appeal reduced the starting point from eight to seven years, and reduced the sentence on each from five and a half years to four years.

29. It may be thought that five and a half years for a caretaker who pleaded guilty is a very heavy sentence, though it was a large operation.

30. Allowing for the different facts and the varying degrees of culpability, it is impossible to formulate a set of principles of sentencing from those decisions. We think however it would be helpful to the courts if they were guided by some criterion. We would therefore suggest that an accused who plays an active but not necessarily a key role in a medium size operation involving between $50,000 and $150,000, with no elaborate planning and equipment, and without an international dimension, should receive a sentence of five to six years after trial. Sentences may be adjusted upwards or downwards according to circumstances.

31. The sum of money involved is of course only one of the factors to be taken into account. It is not even the most significant factor.

32. We would say that D1 was operating a medium size operation.

33. D2's conduct was not essential to D1's operation. Her criminality was therefore less serious.

34. Applying our guideline, we think the totality of the sentences on D1 should be four years before plea. D2's conduct was not essential to D1's criminal enterprise. Her culpability was less serious. The totality of sentences on D2 should be three years before plea.

35. After giving credit to their pleas, we would impose the sentences as follows:-

For D1 : Charges 3, 5, 6 - three years on each charge
             Charges 4, 7, 9 - 18 months on each charge
             These sentences to run concurrently.

For D2 : Charges 11 - 15 & 18 - two years on each charge
              Charges 16 & 17 - four months on each charge
              These sentences to run concurrently.

36. We accordingly allow the application, treat the hearing of the application is hearing of the appeal and allow the appeal to the extent indicated.