HKSAR v. LEE WAI TONG AND ANOTHER

DCCC103/2012 & 104/2012
(Consolidated)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NOS. 103 & 104 OF 2012 (CONS)

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Reasons for Sentence

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Introduction

1.  D1 and D2 appeared before me this afternoon and pleaded guilty to a single charge of conspiracy to defraud.  They both admitted the Summary of Facts and were convicted accordingly.

Facts

2.  According to the amended Summary of Facts which both defendants admitted, they conspired together with Cheung Shiu-hung, (“Cheung”), Yan Hei-yee, Eva (“Yan”) and the other co-conspirators to impersonate existing PCCW Mobile (“PCCW”) customers by using forged ID documents, namely forged acknowledgments of applications for a Hong Kong Permanent Identity Card (“false ID document”) and thereby obtaining smart phones or tablets from PCCW Mobile with only part-payment.

3.  Between 26 April and 1 May 2011, 21 PCCW branches in Hong Kong received a total of 36 fraudulent applications and as a result, the company gave away a total of 36 smart phones and tablets.  Those 36 false ID documents bore the photos of D1 and D2, Cheung and Yan and also an unidentified male but contained genuine personal particulars of existing PCCW customers.

4.  According to the facts, the defendants and the others had apparently  made use of the promotion launch by PCCW for their qualified existing customers and took advantage of the loopholes of the terms of the promotional agreement.  Under the promotional plan, if a customer is willing to sign the new contract for 2 to 3 years, PCCW will actually give away a brand new mobile phone or tablet to the customer for free.  All that the customer is required to do is only to pay for the monthly fee for the first month by cash, which is about HK$400 to HK$500, and then the customer can take home the mobile phone with or without the tablet and the new SIM card.  No address proof or bank documents was required to be produced during subscription.

5.  By producing to the salesperson these false ID documents bearing their photos and supplied genuine personal particulars of each customer on each occasion, both defendants and the other co-conspirators subscribed to the new service plan and successfully obtained the new smart phones and tablets from PCCW by pretending to be qualified existing customers.

6.  In summary, D1 obtained 17 smart phones and tablets worth HK$82,472 on 13 occasions between 29 April and 1 May 2011, whilst D2 obtained 7 smart phones and tablets worth HK$34,410 on 7 occasions within the same period.  The remaining 12 smart phones and tablets valued at HK$58,134 were obtained fraudulently by Cheung, Yan and the unidentified male.

7.  D1 was arrested on 3 December 2011.  Under caution, D1 admitted that he was recruited by a male friend in the Mainland to make the said fraudulent purchases of the mobile phones with 10% monetary reward of market value for each phone or tablet obtained.  D1 provided his photograph to this male, who later prepared the forged ID documents for D1. All the mobile phones and tablets were handed to this male after each transaction.  D1, claimed that he earned a total of about HK$8,500 in the scam.

8.  D2 was arrested on 8 December 2011.  D2 admitted under caution that he was recruited by a male called “Hang” in Hong Kong.  He gave his photos to Hang for making false ID documents.  He also returned the mobile phones and the tablets to Hang after each transaction and received a cash reward of HK$500.  D2 claimed that he earned HK$3,500 from the three day scam.

Criminal Records and Mitigation

9.  In the past, D1 had a total of eight items of convictions, with two similar offences involving dishonesty which took place much earlier than his robbery charges, for which he was sentenced to probation as well as detention centre.  His last conviction was “possession of an obscene article for the purpose of publication”, which was convicted in 2009, for which he was sentenced to 8 months’ imprisonment.

10.  D2 had only one conviction but it is highly similar to the present offence in that he was convicted with “possession of false instruments” as well as “using a false instrument” in the District Court in 2011.  For both charges he was sentenced to a total of 24 months’ imprisonment.

11.  D1 is now aged 37.  Although he is still single but according to the mitigation put forward by Mr Tsang, his lawyer, he in fact has been co-habiting with a woman in Shenzhen.  The woman had a son in the previous marriage and also the woman is now pregnant and expecting a baby in the coming August.  D1 only had Form 2 education standard and he has been working as a delivery worker, earning an income of about $7,000 to $8,000 per month.

12.  In mitigation, Mr Tsang informed the court that because the son of the co-habitee had been injured in a car accident last year and therefore D1 had borrowed about RMB100,000 from a person in the Mainland. This person had demanded repayment from him and as he was unable to pay, this person then turned to him and asked him to commit the present offence. 

13.  Mr Tsang also submitted to the court a letter of mitigation written by D1 showing that he was very remorseful.  Mr Tsang also stressed that D1 was co-operative with the police and admitted the offence frankly after he was arrested.  Mr Tsang told the court that D1 and D2 are only foot soldiers in the scheme and they are in no way was a mastermind behind the scheme.

14.  As for D2, he is 21 years of age.  He had Form 3 education level and he was still single.  Shortly before the offence was committed he was unemployed for a few months. 

15.  In relation to the last conviction in the District Court concerning “possession and using of a false instrument”, Mr Tsang told the court that in fact D2 was asked by the very same person Hang to commit these two offences as well as the present offence. 

16.  D2 committed the present offence out of greed and economic reasons only.  In light of the fact that he is now serving a 24 months’ imprisonment starting from 24 August 2011, Mr Tsang properly asked the court to take into account the principle of totality when passing the sentence and asked that the sentence that I am going to pass in relation to the present charge to run at least partly consecutive to the present sentence that he is receiving.

Sentencing Considerations

17.  The present case involves, as it were, a scam of elaborate planning and sophistication to deceive different PCCW salespersons in different PCCW shops all over Hong Kong within a few days to give away brand new smart phones or tablets under their promotional plan to attract their existing customers to subscribe to new service plans. 

18.  Forged ID documents were prepared and produced by each defendant in each transaction so that the fraudster could assume the identity of the genuine customer and even genuine personal particulars of the individual customer was provided which clearly indicated that this group of fraudsters must have access to some confidential customer information of PCCW with the assistance or collusion by PCCW staff in the matter. 

19.  As said, of the total 36 fraudulent transaction, D1 took part in 13 transactions while D2 took part in seven transactions. 

20.  According to the facts, PCCW stated that their total loss amounts to about $320,000 which includes the value of the mobile phones and tablets less the first month’s service fee that have received but including the service charges already incurred by the service plans newly subscribed as a result of the fraudulent applications 

21.  Clearly, the present case is a systematic fraud perpetrated by a group of fraudsters to take advantage of the promotion launch by the mobile phone company and the loopholes in their verifications of the identity of the individual customer doing a transaction. 

22.  Although both defendants were not the masterminds of the scheme, they were recruited as foot soldiers and willingly allowed themselves to be used to take part in the scams for a financial reward.  Their participation was essential to the execution of the frauds and to that extent, they each played an important role in the conspiracy. 

23.  The court is sympathetic to the co-habitee of D1 but family circumstances play no part in a serious offence like this.  The court can never accept economic reasons for committing crimes.

24.  Offences of this kind must be deterred to protect the interests of the community.  The court is anxious to see to it that normal business promotional activities in Hong Kong will continue and not be affected or even stifled so that the interests of the consuming public as a whole would not be jeopardised. 

25.  Although the amount involved for each defendant in this case is by no means substantial, they cannot be said to be small.  D1 obviously played a more major role in terms of the numbers of transactions he was involved as well as the amount of the loss he caused to PCCW individually.

26.  Taking into account the overall circumstances of the case and the personal circumstances of each defendant, I would adopt 2 years as the starting point for D1 and 18 months for D2 to distinguish their roles.  The only mitigation is their early plea, for which a full one-third discount will be given in each case.

Order

27.  D1 is sentenced to 16 months’ imprisonment. 

28.  D2 is sentenced to 12 months’ imprisonment, of which 8 months is to run consecutively to his current sentence.