HKSAR v. POON CHUN KEUNG PATRICK

DCCC 96/2021

[2022] HKDC 999

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 96 OF 2021

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REASONS FOR SENTENCE

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1.  Mr Poon has been charged with 6 charges of Conspiracy to defraud, all contrary to Common Law and section 159C(6)  of the Crimes Ordinance, Cap 200. Particulars are generally that he, on 6 different occasions, each of which took place between 1 June 2016 and a future date lying somewhere either in the month of June or August 2016, in Hong Kong, conspired with a person known as Ah Gau, to defraud a total of 3 named banks, by dishonest means, in each case:-

(a)  Falsely representing to one of those banks that an application for credit card(s)  was made by a certain named person;

(b)  Submitting false documents to the bank to support the application; and

(c)  Inducing the bank to issue the credit card(s)  in name of that person.

2.  Originally, the matter was listed before me for a permanent stay of proceedings application.  However, after taking instructions, Mr Wong on behalf of Mr Poon told me that the defence will not make the application after all.

3.  Thereafter, Mr Poon pleaded guilty to Charges 1, 3, 5 and 6 and not guilty to Charges 2 and 4 before me.  Prosecution applied to leave the latter two charges on file.  I acceded to the application and duly ordered that Charges 2 and 4 be left on court file not to be proceeded with without the leave of this court or the Court of Appeal.

Facts admitted by Mr Poon

Charge 1: fraudulent cards in the name of Chan Ka Yeung (CKY)

4.  On 9 June 2016, Standard Chartered Bank (SCB)  received an online application for a Visa credit card and a UnionPay credit card from a person purportedly known as CKY.  Copy of a HKID card and of a Citibank account statement relating to account number 61658458 (both purportedly relating to the person CKY)  were faxed to SCB in support of the application.  Believing wrongly that the application was genuinely lodged by CKY, SCB approved the application and issued the two credit cards in the name of CKY.

5.  Bank records showed 2 spendings totaling MOP231,000 were made in Macau by someone using the UnionPay credit card on 6 July 2016.  There was no spending made with the Visa credit card.

Charge 3: fraudulent cards in the name of Cheung Yat Keung (CYK)

6.  On 9 July 2016, SCB received an online application for a Visa credit card and a UnionPay credit card from a person purportedly known as CYK.  Copy of a HKID card and of a Citibank account statement relating to account number 63381412 (both purportedly relating to the person CYK)  were faxed to SCB in support of the application.  Believing wrongly that the application was genuinely lodged by CYK, SCB approved the application and issued a Visa credit card and a UnionPay credit card in the name of CYK.

7.  Bank records showed 2 spendings totaling MOP265,356 were made in Macau by someone using the UnionPay credit card on 13 August 2016.  Repayment by cash deposit of HK$12,000 via an ATM machine was made on 26 September 2016.  There was no spending made with the Visa credit card.

Charges 5 and 6: fraudulent cards in the name of Chan Ching Fat (CCF)

8.  On 25 July 2016, Fubon Bank (Fubon)  received an application for a Visa credit card by fax from a person purportedly known as CCF.  Copy of a HKID card and of a Citibank account statement relating to account number 61662458 (both purportedly relating to the person CCF)  were faxed to Fubon in support of the application.  During inspection, Fubon found this to be a suspicious application and reported the case to the police.

9.  Upon police’s request, Fubon approved the application and issued an inactivated Visa credit card in the name of CCF (Charge 5).

10.  On 22 July 2016, Hang Seng Bank (HSB)  received an application for a Visa credit card from a person purportedly known as CCF.  Copy of a HKID card and of a Citibank account statement relating to account number 61662458 (both purportedly relating to the person CCF)  were faxed to HSB in support of the application.  Believing wrongly that the application was genuinely lodged by CCF, HSB approved the application and issued a Visa credit card in the name of CCF.

11.  Bank records showed 2 spendings totaling MOP255,310 were made in Macau by someone using the Visa credit card on 13 August 2016.

Arrest

12.  On 27 September 2016, Mr Poon was arrested with one Cho in Tsuen Wan. Mr Poon under caution said he was paid by Ah Gau with a few thousand dollars (each time)  to collect cards; that this time, he asked Cho to help him collect it, and he will pay Cho one thousand dollars; that thereafter he will pass the card to Ah Gau.

Cautioned interviews

13.  In the VRIs, Mr Poon admitted under caution that:-

(a)  He came to know Ah Gau in a bar a few months ago; that he was usually contacted by Ah Gau by phone;

(b)  Ah Gau asked for an address that could be used and will pay him in return; he therefore provided his mother’s address to Ah Gau;

(c)  Each time he passed cards to Ah Gau, he would be given HK$5,000;

(d)  He also promised to help Ah Gau to fax documents to designated numbers, including bank statements and HKID photocopies; each time he would be given HK$300 to 400; he did not know the reasons behind it and to where/whom they were faxed and he never asked;

(e)  He would attend Fotomax shops and 7-11 convenience stores to fax documents;

(f)  He promised to help collect letters at designated addresses, within the Tsuen Wan area; sometimes he would be asked to unseal letters and he would find credit cards and bank letters therein; he never activated the cards;

(g)  He had faxed CKY’s credit card application form, HKID photocopy and Citibank statement to SCB from Fotomax; the documents and designated fax number were given to him by Ah Gau;

(h)  He had collected an SCB letter (purportedly containing a PIN code)  addressed to CYK at his (Mr Poon’s)  mother’s address; he took a photo of it and sent it to Ah Gau via a mobile phone app; he had not used the card; he intended to pass it to Ah Gau but had not met up with Ah Gau yet for doing so;

(i)  Ah Gau gave him a copy of CCF’s HKID at a wet market; he had faxed it;

(j)  He had attended No 79 Chung On Street, Tsuen Wan, to collect letters (which contained the credit cards under Charges 5 & 6)  upon the request of Ah Gau;

(k)  So far, he received about HK$10,000 for helping Ah Gau; and

(l)  Cho was broke; so he asked Cho to help collect CCF’s letter at the post office on the date of arrest, and promised to give him HK$1,000 in return.

House search

14.  On the date of arrest, a house search was conducted at Mr Poon’s residence in Sha Tsui Road, Tsuen Wan.  The following were found and seized:-

(a)  A Citibank statement with the name of CYK (for account number 63381412);

(b)  A letter issued by SCB to CYK purportedly containing a PIN code pertaining to the two credit cards under Charge 3;

(c)  A Citibank statement with the name of CKY (for account number 61658458); and

(d)  An HKID photocopy purported to be of CKY.

Falsity of the supporting documents presented to SCB, Fubon and HSB

15.  Citibank confirmed that all the accounts stated in the Citibank statements concerned in this case did not exist at the material times.

16.  The Immigration Department confirmed that all HKID photocopies concerned in this case were false documents.

Loss caused to SCB and HSB

17.  The fraudulent credit cards in this case had been used to spend a total of MOP 751,666 (ie around HK$732,747.13).  After deducting the repayment of HK$12,000 mentioned previously, the total loss suffered by SCB and HSB was HK$720,747.13, which is now regarded as bad debt.  The total credit limit for the fraudulent cards (not including the Fubon credit card which had been inactivated before issue)  was HK$738,000.

Criminal record

18.  Mr Poon has 4 previous convictions the first 3 of which were related to dangerous drugs.  The most recent one, recorded in February 2022, relates to Gambling for which he was fined.

Antecedents

19.  Mr Poon is aged 58 (52 at the time of the offences), educated to F3 level, a casual renovation worker.  He is not a drug addict and has no mental problem but is suffering from sciatica (back pain).  Mr Poon is single.  Before being placed in custody by me, he lived in Castle Peak Road, Kwai Chung.

Mitigation

20.  Mr HY Wong of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Poon.  The following is a summary of the mitigation submissions.

21.  Due to Covid-19, Mr Poon is now only working as a casual decoration worker but could only work 1 or 2 days in a month and is relying on CSSA of around $2,000 odd per month.  He was sentenced to 6 years’ imprisonment for his drug-related convictions in 2017.  He completely served his sentence and was released at the end of September 2020.

22.  The background to those drug offences is that after his first arrest on 27 September 2016 in relation to the offences subject of the present charges (“fraud offences”), his residence was searched as a result of which dangerous drugs were found.  He made full confessions in relation to the drug offences as well as the offences subject of the present charges.

23.  Two days after arrest, Mr Poon was charged with the drug offences.  He pleaded guilty to those charges in the Magistracy and was committed for sentence in the Court of First Instance (HCCC 294/2017)  to 6 years’ imprisonment on 7 December 2017.

24.  With remission for good behavior, Mr Poon had completely served his sentence by 26 September 2020.  Throughout this time, as far as he was concerned, nothing was heard in relation to the fraud offences.  That is so until 21 December 2020 (nearly 3 months after he completed his sentence for the drug offences), when he was re-arrested for the fraud offences.  As could be seen from the Chronology of Events prepared by the prosecution (a document dated 25 August 2022), for some reasons, the case file was only submitted to the Department of Justice (DOJ)  for legal advice in relation to the present offences in September 2019, some 3 years after Mr Poon was arrested.  The case file was re-submitted for further legal advice in September 2020 and by that time Mr Poon has been released or was about to be released from prison. Whatever reasons there were for this length of time, they cannot be laid at the door of Mr Poon.

25.  In any event, as far as the fraud offences are concerned, there was no further investigation to be made after March 2017, and certainly not after December 2017 when Mr Poon was sentenced in the Court of First Instance [Judge’s note: this is contrary to what the prosecution says as per the Chronology of Events], as he had right from the beginning admitted his involvement in the fraud offences.  Yet, the present charges were only brought nearly 3 months after he had completely served his sentence for the drugs offences.  There was no reason why the present charges could not be brought at the time, or shortly after the time when Mr Poon pleaded guilty to the drugs offences.  Now that Mr Poon had completely served his sentence for the drugs offences, it is particularly harsh on him as he was on way to join the mainstreams of society after serving his sentence but is now facing the possibility of being sent back to prison.  Mr Poon is justifiably aggrieved.

26.  Mr Wong urged the court when passing sentence to give Mr Poon considerable discount for the undue delay and history of the matter.

27.  Mr Wong added that Mr Poon committed the present offences out of greediness.  It was also submitted given the history of the matter, despite the fact that Mr Poon had asked a date to be fixed for legal argument on stay of proceedings, full 1/3 discount ought to be given, or failing that, 25% discount be given because the pleas were not too late.

28.  On the court’s query as to whether the recruitment of Cho to participate in a small part of the criminal activities with a promise to pay Cho a reward of HK$1,000 on completion (see paras 9 & 10 (xii)  of the Amended Summary of Facts)  constituted an aggravating factor, Mr Wong submitted that Cho was not named as a co-conspirator and what Mr Poon did should not add too much to his own culpability.

29.  Although there is no medical proof to support Mr’s Poon claim of suffering from sciatica, Mr Wong submitted that Mr Poon was walking with a stick and he walked slowly.

30.  When asked what starting point he would suggest for one charge of conspiracy to defraud, after some hesitation, Mr Wong replied 3 years, adding that Mr Poon was not the mastermind.  Mr Wong asked the court to consider totality when sentencing for all 4 charges putting emphasis on the relatively short period covering all 4 offences.  Mr Wong suggested a global starting point of 45 months for all 4 of the present charges.

31.  When asked what would be the appropriate aggregate sentence (on pleas of guilty)  when the drugs offences and the present offences were considered together (on a without delay basis), Mr Wong said 7 years’ sentence would be about right on the application of the principle of totality.  In other words, Mr Wong was in effect saying there needed only an addition of one more year to the 6 years’ imprisonment imposed by the Court of First Instance for the drugs offences in order to cover the whole lot (on pleas of guilty basis).

32.  Mr Wong invited the court to take the exceptional course of suspending the sentence for the present offences in the unusual circumstances of the case.

33.  When asked what plans Mr Poon had to rehabilitate himself upon the earlier release and how it was disrupted by the “delay” assuming it was unreasonable, Mr Wong simply repeated Mr Poon was trying to establish himself to join the main streams of society.

34.  As regards the question of what additional stress Mr Poon might have suffered as a result of the unreasonable delay, if any, Mr Wong was not able to produce any psychological report on what mental stress Mr Poon might have been suffering under, but asserted Mr Poon must have suffered some stress when faced with the prospect of going back to prison after release.

Prosecution’s short explanation of the lapse of time before charge

35.  Prosecution gave an explanation as to why it took so long to charge Mr Poon.  The following is a summary.

36.  Whilst the initial arrest in September 2016 related to the fraud offences, the drug offences came as an offshoot after the house search on the same day.  The result was Mr Poon was charged with trafficking in and possession of drugs two days later.  Instead of passing the drug matter to a specialized unit, the arresting team from the CCB held on to it and carried on the investigation in relation to it.  It was submitted that the resources and emphasis of the team were directed to that aspect because of the urgency once a person has been charged.  It was submitted that that explanation certainly applied to the initial lapse of time during the subject period.

37.  Prosecution accepted there was some delay not attributable to Mr Poon but submitted that the police and the DOJ had already worked quite hard in the processing of this case.

38.  It was also submitted there was only a gap of 3 months from Mr Poon’s release from prison for the drugs offences to when he was arrested and charged with the present offences; it was also questionable if Mr Poon had any plan to rehabilitate himself which could be said to have been disrupted.

39.  Apart from referring to the Chronology of Events dated 25 August 2022, the prosecution also referred to a one-page document simply called “Chronology” (undated)  which was submitted to and considered by a sentencing court in DCCC 1100/2020 in relation to one Fung (named as D on the document)  who was arrested on the same day as Mr Poon as part of the operation.  She was in the event convicted on her own plea of a much less serious offence of (simple)  possession of a false instrument.  By use of this document, prosecution emphasized that the investigation of this case involved a fraud syndicate, 6 banks, 18 fraudulent credit card applications, overseas merchants (which implied existence of a cross-border element), numerous victims some of whom emigrated to other countries and could only be reached by emails; that the investigation of the case included:-

(a)  The taking of statements from victim(s);

(b)  Obtaining numerous bank records for victims;

(c)  Conducting enquiries with the overseas merchants where the fraudulently applied credit cards were used;

(d)  Forensic examination of numerous digital devices;

(e)  Fingerprint examination on different exhibits; and

(f)  Checking whether victims’ details were misused to apply for credit cards with other banks.

40.  This undated Chronology could be found at page 11 of the present defendant’s Defence Bundle of Documents for Stay Proceedings.

Sentence

41.  I have been provided by the prosecution with a document entitled “Prosecution’s Chronology of Events” which dealt with a history of the case from the moment the police received a report of the fraud offences in August 2016 until a time in February 2022 when the case was re-fixed to 1 September 2022 (before me)  the latter due to General Adjournment of Proceedings period.

42.  In that document, the following information, inter alia, was provided:-

(a)  Mr Poon, together with 4 others, was arrested in September 2016. On the same day, dangerous drugs were found in his home;

(b)  Mr Poon was charged with offences related to dangerous drugs two days later;

(c)  However, Mr Poon was not re-arrested and charged with the present charges until December 2020, ie almost 3 months after he was released from prison for the dangerous drugs convictions.

43.  So, between initial arrest and subsequent charging, a period of about 4 years and 3 months has elapsed.

44.  The defence alleged there was inordinate delay in charging Mr Poon for the present offences.

45.  From the document provided by the prosecution, it appears that the investigation of the present offences took about 3 years before the file was submitted to DOJ for seeking legal advice in September 2019.

46.  Thereafter in January 2020, ie after about 4 months, legal advice directed that further investigation be conducted.

47.  Then, in September 2020, presumably after further investigation, the police resubmitted the case file to DOJ for seeking further advice.  Meanwhile, Mr Poon was released from prison at the end of September 2020.  Legal advice was obtained in October 2020.

48.  During November and the early part of December 2020, police approached the Correctional Services Department in order to obtain the updated address and contact number of Mr Poon and finally managed to arrest and charge Mr Poon on 21 December 2020 with the present charges.

49.  Thereafter, Mr Poon went through the court process involving transfer to the District Court, various adjournments for Mr Poon to seek legal advice, for negotiations with the prosecution, for change of legal representation, for fixing a date for stay application and finally for re-fixing a date due to General Adjournment of Proceedings.

50.  Thus, it can be seen that the period before charge could be divided into two parts.  The first part relates to the initial investigation which took about 3 years.  The second part relates to the time taken to render the initial legal advice, to conduct further investigation and to render the final legal advice, and the time taken to locate Mr Poon for the purpose of re-arrest and charge.  That took about 15 months.

51.  I am of the view that the first part (about 3 years)  took a bit too long even taking into account the explanation of the prosecution as regards the dangerous drugs aspect of the case and the diversity of the investigation as emphasized by the prosecution with reference to the undated document known as “Chronology”.

52.  As regards the second part (about 15 months), given the aftermath of the social unrest of 2019 and the onset of the Covid pandemic in 2020, I am not satisfied there was any significant delay under the circumstances, let alone unreasonable delay.

53.  In conclusion, bringing the two parts together, there was some delay before charge and there was a degree of unreasonableness in it.

54.  However, even, as I have found, where there was unreasonable delay, that alone is not a mitigating factor (see generally Cross & Cheung’s treatment of the topic in Sentencing in Hong Kong, 10^th Ed pp 452-456).  What must be present is unreasonable delay not attributable to the defendant coupled with some effect on him/her, such as significant additional stress or disruption in his/her attempt to rehabilitate him/herself in the meantime.  It has even been suggested (though not applicable in the present case)  that delay caused by dilatory or neglectful conduct by the State may result in a discount if the court thinks it an appropriate means of marking its disapproval of that conduct.

55.  Here, even under invitation, Mr Wong was not able to point to any evidence of significant additional stress or of disruption in Mr Poon’s attempt to rehabilitate himself, either of which as a result of the unreasonable delay in prosecution.

56.  On the contrary, as regards the latter aspect, Mr Poon committed a further offence of Gambling in a gambling establishment after his last release from prison.

57.  In my judgment, for these reasons, the “mitigating factor” on the ground of unreasonable delay in prosecution failed to assist Mr Poon.  In the circumstances, a suspended sentence is out of the question.

58.  However, that is not to say that I am unsympathetic to the plight of Mr Poon in having to face the possibility of imprisonment again after his earlier release and after a span of 6 years has elapsed since the date of the offences.  I will give him certain credit in the sentences to be imposed as an exercise of mercy.

59.  On the matter of discount for pleas of guilty, I note that there is no record of Mr Poon indicating a plea of not guilty when a date was first fixed on 5 October 2021 for stay of proceedings application.  Being in the nature of a legal argument, no doubt legal representatives played a part in advising Mr Poon to go ahead (initially)  in such an application.  I do not think Mr Poon should be punished for initially choosing to go ahead with the application.  I bear in mind only police witnesses would be involved in opposing the application though in the end there was no need to call any of them.

60.  As such, I will exercise my discretion to grant Mr Poon the full 1/3 discount despite the fact that the stay of proceedings application was abandoned without starting only on the first day of a two-day hearing set down for that purpose.

61.  As suggested by Mr Wong, I will adopt an initial starting point of 3 years’ imprisonment for each charge of Conspiracy to defraud (see HKSAR v Lam See Chung, Stephen [2013] 5 HKLRD 242).  In taking this starting point, I have ignored the fact that where there were spendings, they were made in Macau, not Hong Kong.  There are altogether 4 charges spanning over a period of about 2 months.  The total potential loss to the banks is HK$738,000 with the actual loss being HK$720,747.13 which could not be said to be insignificant.

62.  As regards Mr Poon’s recruitment of Cho to help collect CCF’s letter at the post office with a promise to pay Cho a reward of HK$1,000, this constitutes an aggravating factor.

63.  However, it is unclear whether the letter relates to Charge 5 or Charge 6 (both relate to CCF).  For convenience, I will attach the aggravating factor to Charge 5.  The choice is partly based on the fact that the issue of the one credit card by Fubon under this charge is a police controlled issue which might explain the arrest.  Alternatively, if I am wrong on this choice, the aggravating factor would in any event apply to Charge 6.  There is no real difference in the matter of sentencing.

64.  Now Mr Wong suggested a global starting point of 45 months for all 4 charges covering 6 credit cards (including one inactivated card issued by Fubon under Charge 5).  I agree that it would be about right if there had been no aggravation.  However, since there is an element of aggravation in Charge 5, 46 months as a global starting point would in my view be more appropriate. However, the global starting point for all 4 charges falls into insignificance when compared with what is the next topic in this sentencing exercise.

65.  Now the most important question in this sentencing exercise is: if the drugs offences and the present offences were considered together in totality, what would have been the appropriate aggregate sentence (on plea basis).  Mr Wong suggested 7 years, ie one year in addition to the 6 years’ prison term imposed by the Court of First Instance for one count of trafficking in dangerous drugs and one count of possession of a dangerous drug.

66.  An examination of the Reasons for Sentence of the drugs case HCCC 294/2017 dated 7 December 2017 will reveal that the Court there dealt with trafficking in a cocktail of 9.67 grammes of pure ICE, and 252.56 grammes of pure NNDMA (starting point for which should be 60% of that for an equal amount of ICE); and possession of 1.39 grammes of ICE.

67.  The Court of First Instance adopted a starting point of 9 years for the trafficking and a starting point of 18 months for the possession.  Because of the pleas, the sentences were respectively reduced by 1/3 to 6 years’ imprisonment for trafficking and 12 months’ imprisonment for possession.  The sentences were ordered to be served concurrently.

68.  The first thing to note was the drugs were discovered on a house search on the day of and after the arrest of Mr Poon for this case.  In all likelihood, the day of commission of those two offences would be stated as the day of arrest ie 27 September 2016.  There is no reason therefore, save under the principle of totality, to make the sentences for those offences run concurrently with the sentences for the present offences.

69.  When considering totality, a significant factor must be the total degree of criminality involved.  Here, the two types of offences are completely different.  One would not normally encounter this mix of offences in the same defendant. Both types are serious offences in their own right although given the amounts and types of dangerous drugs involved, the trafficking offence would seem to be the most serious here.

70.  I am of the view that if a single court was to sentence Mr Poon on a single occasion for all of the offences committed by him, the global starting point would not be less than 12 years.  This has taken into account the aggravation aforesaid and totality.  On a plea of guilty to all of the charges, this would reduce the sentence to 8 years.  In other words, for the present offences, Mr Poon would have to serve an additional period of two years.

71.  However, since Mr Poon has finished serving the earlier sentence, I accept that he must necessarily feel a sense of grievance if he is to be sent back to prison, and this especially so after a period of 6 years has elapsed since the commission of those offences for which he is to be sentenced now.

72.  As a consequence, I will give him a handsome discount of 3 months globally after plea (this is equivalent to a slashing of 4½ months from the starting point before plea)  so he would only need to serve an additional term of one year 9 months in order to clean the slate.  This I achieve by knocking off 3 or 5 months, as the case may be, from each of the sentences on the 4 charges (see below).

73.  There are no other mitigating factors that I can see which will help reduce the sentence further.

74.  I will therefore adopt the following starting points and impose the following sentences.

(Mr Poon, please stand)

75.  For Charge 1, the starting point is 3 years; after giving the 1/3 discount and knocking off 3 months thereafter, I sentence Mr Poon to one year 9 months’ imprisonment.

76.  For Charge 3, the starting point is 3 years; after giving the 1/3 discount and knocking off 3 months thereafter, I sentence Mr Poon to one year 9 months’ imprisonment.

77.  For Charge 5, the starting point is 3 years 3 months because of the aggravation; after giving the 1/3 discount and knocking off 5 months thereafter, I sentence Mr Poon to one year 9 months’ imprisonment.

78.  For Charge 6, the starting point is 3 years; after giving the 1/3 discount and knocking off 3 months thereafter, I sentence Mr Poon to one year 9 months’ imprisonment.

79.  Because of the unusual circumstances of this case, I order that all sentences to be served concurrently.