HKSAR v. LEUNG TSZ WAI

DCCC 654/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 654 OF 2015

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Reasons for Sentence

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1.  The defendant pleads guilty to one charge of fraud, Charge 1, and another charge for using a copy of false instrument, Charge 2.

2.  It was a fraud practised on a bank in an application for a personal loan.  Impersonating himself as a person known as Cheung See-king Kenneth, the defendant successfully obtained a loan of HK$1.2 million without producing an original ID Card.  Astonished by the lax security of the Standard Chartered Bank, “SCB”, I find it necessary to set out the facts in detail.

Charge 1

3.  On 16 May 2013, Siu Kin-san “PW1”, a manager of SCB, received a phone call from a male asking for a loan of HK$800,000.  PW1 asked the male to meet at Quarry Bay MTR Station on 20 May 2013.

4.  On 20 May 2013, at the MTR Station, PW1 met the defendant who identified himself as Mr Cheung and said that he wished to apply for a loan of HK$800,000.  PW1 filled in the personal instalment loan application form for the defendant.  The defendant provided PW1 with a copy of the Hong Kong ID Card bearing number K421724(1) (“the ID Card copy”).  PW1 found the photo on the ID card copy matching the defendant.  The name as appeared in the ID card copy was Cheung See-king Kenneth (“張仕景”).  The defendant told PW1 a false address and that he was employed as a manager earning an annual income of HK$1.44 million.  PW1 asked the defendant to supply income and address proofs as soon as possible.

5.  On the following day, PW1 received via the fax machine of his office a copy of the bill statement issued by EC Telecom to Cheung See-king Kenneth and a copy of the Assessment of Income Tax issued by the Inland Revenue Department.  Having received the documents, PW1 informed the defendant that SCB could offer a loan of HK$1.2 million to him and the defendant agreed.  PW1 then passed the application form and the supporting documents to the Loan Approval Department of SCB for further processing.  All the documents provided by the defendant were false.

6.  On 22May 2013, the loan application was granted.

7.  On 31 May 2013, upon the instruction of the defendant, PW1 transferred the loan of HK$1.2 million to a bank account held with DBS (Hong Kong) Limited (“DBS”) number 2740251713 (“the DBS account”).

Charge 2

8.  On 29 May 2013, Yu Chun-him Jonathan (“PW2”), a manager of DBS, received a phone call from a male requesting to open a bank account.  PW2 met the defendant at a café on the same day.  The defendant passed an original Hong Kong ID Card with the name of Cheung See-king Kenneth and ID Card No  K421724(1) for PW2 to check.  The defendant completed the application form and provided a copy of the Hong Kong ID Card and a copy letter from AXA Insurance Company to Cheung See-king Kenneth as address proof.  The DBS account was therefore opened for the defendant.  

9.  SCB later found out the fraud of the defendant. The defendant was arrested on 7 June 2015.  Under caution, he stated that he was employed by a male and a female to use forged documents to apply for a loan and to open a bank account.  The forged Hong Kong ID Card copy was provided by the male and female before he met the bank staff at MTR station.  He did not fax the bill statement and the assessment of income tax to the SCB.  He only received a sum of HK$2,000 to HK$3,000 as a reward.

10.  In respect of Charge 2, he met a bank staff of DBS in a café for opening of a bank account.  He provided to DBS staff a copy of a Hong Kong ID Card and copy letter issued by AXA Insurance Company.  The documents were supplied by the male and the female fraudsters before he met the bank staff.  

11.  HK$279,991 was recovered from the DBS account and HK$920,000 had been withdrawn from it.

12.  The defendant is aged 37, single. He has a criminal record for four offences, two of which being conspiracy to defraud.  Mr Law, Government Counsel for the prosecution, draws my attention to three judgements on sentencing.

13.  In mitigation, Mr Lee, solicitor for the defendant, informs the court that the defendant is living with his parents and his younger sister together with her two sons.  The defendant is the sole breadwinner of the family.  At the time of the offences, he was in financial difficulty to support the family of six and the medical expenses of his father who was suffering from liver cancer.  He was paid HK$3,000 by the man and woman fraudsters referred to in the Summary of Facts to commit the crimes.

14.  The defendant did not himself withdraw the money from the DBS account.  He only acted on the instruction of the two fraudsters to open the account and apply for the loan.  Mr Lee refers to me the case of HKSAR v Tai Chi Wai CACC 84/2010.  Accepting that wholly concurrent sentences for the two charges is not appropriate, Mr Lee asks the court to take into account the principle of totality and order partly consecutive sentences.

15.  In the mitigation letter written by the defendant,  he said he committed the offences because his father was suffering from liver cancer.  He needed money for the medical expenses of his father.  He was offered a reward of HK$100,000 to commit the crimes, however, he only received HK$3,000.  He says he is now very remorseful.

16.  There is no tariff on the offence of fraud.  The factors in considering of the sentence would include the amount of money being deceived, the period over which the fraud was perpetrated, the sophistication of the fraud and the effect on the victim. 

17.  This was a serious fraud on the bank.  By using forged income and address proofs, falsely representing himself as another person, the defendant successfully obtained a loan of HK$1.2 million from SCB.  I accept that the defendant was not the mastermind of the plan, he perpetrated the crimes on the instruction of two fraudsters and only received a reward of HK$3,000.  He did not withdraw the money from the DBS account.  However HK$920,000 had been withdrawn by the fraudsters which would unlikely be recovered.  The deception would not have been achieved without the participation of the defendant.

18.  I have considered the cases referred to me by both parties.  In my judgement, the case cited by Mr Lee with a background very different from the present case and concerning a very different amount of money is not of much assistance to this court.

19.  In Li Bijuan, CACC 432/2012 the first case cited by the prosecution, the applicant in the appeal, impersonating her as a property owner, used false identity and documents to obtain mortgage loans.

20.  The trial judge, in one of the charges, took 2½ years’ imprisonment as a starting point for Charge 3 which involved a deceived mortgage loan of HK$1.2 million.  On appeal, the Court of Appeal said it was not demonstrated that the individual sentences or the total sentence imposed on the applicant was manifestly excessive.

21.  The amount deceived in this case was also HK$1.2 million, and the deception on SCB, being a single transaction fraud, in my view, was not a very sophisticated scheme.  SCB should also bear responsibility when they adopted a lax security in granting an unsecured loan as much as HK$1.2 million without seeing the original of the ID card and documentary proofs of the applicant.

22.  I take 30 months as the starting point of Charge 1.

23.  The two cases cited by Mr Law relating to Charge 2 also have different facts from the present case.  Ye Furen HCMA 1008/2009 involves a mainlander defendant.  In Lau Kam Ling HCMA 223/2010,, the defendant, a Hong Kong resident, used the forged ID card to apply to a credit information provider for a credit report.

24.  It is noted that while the Summary of Facts, at paragraph 7, admitted by the defendant discloses that the defendant passed the original false ID card to the bank staff for checking, Charge 2 only alleges the using of a copy of a false instrument.  Upon clarification by the court, Mr Law confirms that it is the basis of the prosecution case that the defendant used a copy of the ID card.  I should therefore sentence the defendant on this basis only.  

25.  There is no tariff for a Hong Kong resident using a forged Hong Kong ID Card or copy of it.  In my view, the seriousness of the offence would primarily rest on what was the purpose of the ID card, or copy of it, being used.

26.  The photo-copy of the ID card was obviously used to open an account to receive the proceeds of the deception practised on SCB.  The defendant must know about it and that HK$1.2 million dollars would be deceived. On the other hand, the account might also be used by the fraudsters to facilitate other crimes and deal with proceeds of crimes.

27.  I use 18 months’ as the starting point.

28.  The defendant has two previous similar convictions for conspiracy to defraud.  I am afraid that I cannot treat the defendant’s financial difficulties or the fact that his father, at the time of the offences, was suffering from a serious disease as mitigating factors.  The only effective mitigating factor in this case is the defendant’s plea of guilty for which he will get a one-third discount.

29.  With this reduction, the defendant is sentenced to 20 months’ imprisonment on Charge 1; and 12 months’ imprisonment on Charge 2.

30.  The last question is totality.  The two charges relate to two separate offences.  Having considered the principle of totality, I order that 4 months out of the sentence on Charge 2 to run consecutively to the sentence on Charge 1 and the rest to run concurrently. The total term of imprisonment is 2 years’ imprisonment.