HKSAR v. LI BIJUAN AND ANOTHER

DCCC804/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 804 OF 2012

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Reasons for Sentence

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1.  Before the court today are six charges of conspiracy to defraud (Charges 1 to 6) and one charge of conspiracy to possess false instruments. (Charge 7)

2.  You, 1st Defendant, have pleaded guilty to five of the charges of conspiracy to defraud, Charges 1, 2 and 3 which are against you alone and Charges 5 and 6 which are against you jointly with the 2nd defendant. 

3.  You, the 2nd defendant, have pleaded guilty to three charges of conspiracy to defraud, Charge 4 which is against you alone and Charges 5 and 6 which are against you jointly with the 1st defendant.

4.  Both of you have pleaded guilty to Charge 7, a charge of conspiracy to possess false instruments which is against you jointly.

5.  Both of you are visitors to Hong Kong from the mainland.  The only named co-conspirator in the charges of conspiracy to defraud is a man called Ah Kwai who appears to have been the originator and mastermind of the fraudulent idea which lies behind all these conspiracies. The idea which he put forward first to you, 1st Defendant, and with which you, the 2nd defendant, later became involved was that it would be possible to defraud finance companies in Hong Kong by opening bank accounts in Hong Kong in the name of mainlanders who own property in Hong Kong and then applying for property loans from finance companies in Hong Kong in the name of the owners of the properties using forged identity documents of those owners.  

6.  Initially, Ah Kwai offered you, 1st Defendant, HK$80,000 for taking part in this fraudulent activity.  The idea was first put into practice in around September 2011 in relation to a flat in Yat Tien Mansion, Taikoo Shing which was owned by a mainlander by the name of Zhang Jinlan but had been rented out.  Following a meeting in Hong Kong with Ah Kwai and another Chinese man at which you were given forged identity documents relating to Zhang Jinlan and a specimen of Zhang Jinlan’s signature, you, the 1st defendant, using these forged identity documents opened a bank account in Zhang’s name with the DBS Bank in Hong Kong.  The conspiracy to do this is the subject of Charge 1.

7.  You, 1st Defendant, then went to a finance company, Lei Shing Hong Credit Limited, with Ah Kwai and pretending to be Zhang Jinlan applied for a property loan of $5 million secured on the property. This conspiracy is the subject of Charge 2.

8.  The conspiracy was successful and after a set of forged title deeds was produced to the handling solicitors, $4,936,315 was paid into the DBS account you had opened in Zhang’s name, $4,836,161.65 of which was withdrawn over the following two months.  As at 28 May this year, a total of $353,424.66 in interest had been paid under the loan agreement but no capital had been repaid.

9.  Following the success of that operation, Ah Kwai suggested that you, the 1st defendant, impersonate Zhang Jinlan again and obtain a further property loan from another finance company secured on the same property.  You were promised $50,000 as a reward.  Again holding yourself out as being Zhang Jinlan, you applied for a loan of $1.2 million from the Freeway Finance Company Limited which was successful.  A cheque for $1,195,000 from the finance company was paid by you into the same DBS account, and over the following month, $1,274,571.20 was withdrawn from that account.  This conspiracy is the subject of Charge 3.  

10.  As at 11 May this year, a total of $14,000 had been paid to Freeway’s interest but no capital was repaid. 

11.  Up to this stage, you, the 2nd defendant, had not been involved but in early 2012, you too were recruited by Ah Kwai this time to impersonate a Mr Wang Yong, a mainlander who owned a flat in Heng Tian Mansion in Taikoo Shing.  You were introduced to the 1st defendant.  Pursuant to an agreement between you both, you, the 2nd defendant, used forged identification documents, in other words, a forged identity card and a forged passport bearing your photograph but in the name of Chen Zhongkai to rent the Heng Tian Mansion flat belonging to Wang Yong through Centaline Property Agency.  This agreement is the subject of Charge 4.

12.  Again by agreement between you, you both went to the DBS Bank where you, the 2nd defendant, opened a bank account in the name of Wang Yong using forged identification documents of Wang.  That agreement is the subject of Charge 5.

13.  Later, together you went to the Lei Shing Hong Credit Limited with the forged identity documents of Wang Yong where you, the 2nd defendant, impersonated Wang and applied for a property loan of $4.5 million secured against Wang Yong’s flat.  That agreement is the subject of Charge 6.

14.  A set of forged title documents was sent to the handling solicitors.  In order to complete the legal formalities in relation to the loan agreement, you, the 1st defendant, gave the 2nd defendant the forged identity documents of Wang to be taken to the solicitors’ firm when you, the 2nd defendant, produced the documents and claimed that you were Wang.  That agreement is the subject of the 7th charge.  The solicitors had already realised that the title documents were suspicious and had notified the police and when you arrived at the solicitors’ office, you were arrested. 

15.  These offences were part of a sophisticated operation.  They involved carefully planned attempts fraudulently to obtain very substantial sums of money from finance companies.  The offences involved forged identity documents, passports and two‑way permits as well as identity cards and forged title deeds.

16.  As far as you, the 1st defendant, were concerned, the attempts to impersonate Zhang Jinlan were successful, and Lei Shing Hong Credit Company lost $5 million and Freeway Finance Company lost $1.2 million.  None of that money has been recovered.  If the police had not been notified, the attempt to impersonate Wang Yong might well have resulted in Lei Shing Hong Credit Company losing a further $4.5 million.

17.  I come now to sentence.  I have listened to all that has been said on your behalf by your counsel and I take into account the letters that have been submitted to the court on your behalf.  I appreciate that your dishonesty in committing these offences will result in hardship to your families in the mainland. 

18.  I bear in mind that neither of you instigated or were the mastermind behind these offences, yet you both played central roles in their commission.  I bear in mind that the capital that was advanced by the finance companies was withdrawn by others rather than you.  I take into account that both of you are mature people who have never been in trouble with the law before either in Hong Kong or in the mainland from where you come.    

19.  The most significant charges to which you have pleaded guilty are those that relate specifically to the agreements to defraud the finance companies concerned.  They are Charges 2, 3 and 6.  The other conspiracies were agreements to do acts which were essential but ancillary to the conspiracies in those three charges.

20.  So far as Charge 2 is concerned, as a result of which the finance company lost $5 million, I consider that 5 and a half years’ imprisonment would have been the appropriate starting point if you, the 1st defendant, had been the mastermind who had personally received the whole of that sum.  I bear in mind that although you played a central role in this scheme in relation to Charge 2, you did so at the instigation of Ah Kwai.  I am prepared to accept that your only reward was the $80,000 promised to you by Ah Kwai and that, otherwise, you did not profit from the $5 million.  I therefore adopt a starting point of 4 and a half years on Charge 2.

21.  Insofar as the 3rd charge is concerned, I am prepared to accept that you did not receive any of the $1.2 million advanced by the finance company and had not yet received your promised reward of $50,000.  In such circumstances, I adopt a starting point of 2 and a half years’ imprisonment, 30 months.

22.  Insofar as Charge 6 is concerned, to which both of you have pleaded guilty, I am prepared to accept, as I have said, that the mastermind was Ah Kwai and that you would only receive a portion of the amount obtained from the finance company.

23.  I also bear in mind that thanks to the police being called in and no thanks to you, the finance companies suffered no loss.  Ultimately, you received no reward.  Had the situation been otherwise, I would have regarded a starting point of 5 years as being appropriate, but in view of the circumstances, I adopt a starting point of 4 years’ imprisonment.

24.  On the other charges, taking into account the roles you played, I regard a starting point of 2 and a half years’ imprisonment as being appropriate on each charge. 

25.  The most substantial mitigation in both your cases is the remorse that you have shown which is reflected in your pleas of guilty.  In those circumstances, you are entitled to the usual discount of one-third. 

26.  In the circumstances, I pass sentence as follows.  On Charge 1, the 1st defendant is sentenced to 20 months’ imprisonment.  On Charge 2, the 1st defendant is sentenced to 3 years’ imprisonment.  On Charge 3, the 1st defendant is sentenced to 20 months’ imprisonment.  On Charge 4, the 2nd defendant is sentenced to 20 months’ imprisonment.  On Charge 5, the 1st defendant is sentenced to 20 months’ imprisonment.  The 2nd defendant is sentenced to 20 months’ imprisonment.  On Charge 6, the 1st defendant is sentenced to 32 months’ imprisonment and the 2nd defendant also 32 months’ imprisonment.  On Charge 7, the 1st defendant is sentenced to 20 months’ imprisonment and the 2nd defendant to 20 months’ imprisonment.

27.  I have gone on to consider the appropriate total sentences you each should serve.  Insofar as you, the 1st defendant, is concerned, I am satisfied that the appropriate overall sentence in your case is 4 and a half years’ imprisonment.  I order that the sentence on Charge 1 run concurrently with the sentence on Charge 2.  I order that 9 months of the sentence on Charge 3 run consecutively to the sentence on Charge 2.  I order that the sentences on Charges 5 and 7 run concurrently with the sentence on Charge 6 but that 9 months of the sentence on Charge 6 run consecutively to the sentences on Charges 2 and 3.  That means you are sentenced to a total of 4 and a half years’ imprisonment.

28.  Turning to you, the 2nd defendant, taking into account all the circumstances, I am satisfied that the appropriate overall sentence in your case is 32 months’ imprisonment.  I order that the sentences on Charges 4, 5 and 7 run concurrently with the sentence on Charge 6, making a total of 32 months’ imprisonment.