HKSAR v. CHAN VALIANT

DCCC 688/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 688 OF 2010

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Reasons for Sentence

1.  The Defendant faced a total of 35 charges, namely 9 counts of attempted fraud, contrary to Section 16A of the Theft Ordinance, Cap. 210 and Section 159G of the Crimes Ordinance, Cap. 200 (counts 1, 2, 3, 9, 10, 14, 15, 28 and 31 on the indictment), 2 counts of possession of a false instrument, contrary to Section 75(1) of the Crimes Ordinance, Cap. 200 (counts 4 and 29 on the indictment), 2 counts of possessing equipment for making false instruments, contrary to Sections 76(1) and (2) of the Crimes Ordinance, Cap. 200 (counts 5 and 35 on the indictment), 16 counts of theft, contrary to Section 9 of the Theft Ordinance (counts 6, 7, 8, 11, 12, 13, 16, 17, 19, 20, 21, 23, 25, 26, 27 and 30 on the indictment), and 6 counts of fraud, contrary to Section 16A of the Theft Ordinance, Cap 210 (counts 18, 22, 24, 32, 33 and 34 on the indictment). He has pleaded guilty to 16 of those charges, namely 5 counts of attempted fraud (counts 1, 2, 3, 14 and 15), 2 counts of possession of a false instrument (count 4 and 29), 2 counts of possessing equipment for making false instruments (counts 5 and 35), 4 counts of theft (counts 11, 12,13 and 27), and 3 counts of fraud (counts 18, 22 and 33). The other counts on the indictment have been left on file, not to be proceeded with without leave of the court.

2.  The offences occurred between 16 June 2009 to 25 January 2010 and involve 4 lots of victims and a number of credit cards.  The ‘Summary of Facts’ were read out to the Defendant in open court and admitted by him consequent on those pleas of guilty.  His Counsel also confirmed that the ‘Summary of Facts’ was admitted by the Defendant.

3.  Facts admitted by the Defendant disclosed that at all material times  the Defendant  resided at Flat D, 1/Fl., Block 1, Hong Kong Garden, 100 Castle Peak Road, Sham Tseng while his mother lived at Flat C, 55^th floor, Block 2, Bellagio, 33, Castle Peak Road, Sham Tseng.  The Defendant had an adult resident card for Bellagio, where some of the victims of these charges also resided.

4.  Charges 1-5, 11-15, 18, 22 and 27 relate to police investigations following the Defendant’s arrest on 25 January 2010, whilst charges 29, 33 and 35 relate to police investigations following the Defendant’s arrest on 28 July 2009.  Charges 1-5, 11-15, 18-22 and 27 were committed whilst the Defendant was on police bail in respect of charges 29, 33 and 35.

5.  PW1, Mr. Lai Ka-ming, Dominic, has been a holder of a DBS platinum credit card 4518-3560-8835-1005 since 2009, with his registered address in Stubbs Road, and his mobile telephone number 9040-9229. On 7 January 2010, the Defendant, falsely claiming to be PW1, called the DBS hotline twice, firstly to request change of the mobile telephone number on their records from 9040-9229 to 6808-8120, and secondly to request a replacement credit card as the magnetic tape on the existing credit card was damaged.  The DBS hotline staff asked the Defendant to submit a written application. On 8 January 2010, DBS received a faxed handwritten application for a replacement credit card purportedly signed by PW1 and listing the contact telephone number as 6808-8120.  As the credit card number on the application was wrongly written, a DBS staff member called the telephone number provided, i.e. 6808-8120, and spoke to the Defendant and asked him to correct this mistake.  At about 4.49 p.m. on 9 January 2010, the Defendant faxed the corrected application form to DBS from the fax number 2496-2076, which was at a 7-Eleven shop situated at G/Fl., Lido Garden Shopping Centre, Castle Peak Road, Sham Tseng.  He paid for the fax transmission using his Octopus card, and was captured on CCTV in the 7-Eleven store at the material time.  PW2, Mr. Eric Tsui, the fraud control manager at DBS, was responsible to handle this application for a replacement credit card.  On 11 January 2010, he contacted PW1 at PW1’s original mobile telephone number, and confirmed with PW1 that he had not made any application for a replacement credit card. A report was then made to the police.  On 11 January 2010, the Defendant told DBS that he would send a male, Yau Ying-choi, Stanley, holder of HK ID Card. No. K365648(9) to collect the replacement DBS credit card.  In fact, the real Mr. Yau Ying-choi, Stanley, PW33, had lost his identity card bearing the number K365648(9).  On 20 January 2010, DBS received a faxed application for reissuing the personal identification pin for PW1’s DBS credit card.  On 21 January 2010, DBS called the mobile number 6808-8120 and told the Defendant the replacement DBS credit card was ready for collection on 25 January 2010 at the DBS Card Centre at 13^th floor, Millennium City Phase 6, Kwun Tong. At about 11.50 a.m. on 25 January 2010, at the said DBS Card Centre, an unknown male claiming to be Yau produced a written authorization notice purportedly signed by PW1 authorizing Yau Ying-choi, Stanley, HKID No. K365648(9), to collect the replacement DBS credit card in the name of PW1.  After signing the acknowledgement of receipt, the unknown male left the DBS Card Centre, covertly followed by PW6 DPC 54922, who kept the unknown male under surveillance.  The unknown male met up with the Defendant at the concourse of the Kwun Tong MTR Station, and went to the platform for trains travelling towards Tiu Keng Leng, and talked for about a minute.  Suddenly, they both hurriedly went back to the concourse, and PW6 lost sight of them.  Subsequently, at about 1.05 p.m. on 25 January 2010, police officers using a spare key obtained from the person-in-charge of Fu Wah Villa entered Room 203 thereat, where the Defendant was found alone inside.  He was seen to be using his mobile phone to activate the replacement DBS credit card in PW1’s name.  The replacement DBS Platinum visa card in the name of PW1 was recovered.  The Defendant had by deceit, namely by falsely representing that PW1 had applied for a replacement DBS Platinum Visa card, and with intent to defraud, attempted to induce DBS Bank to issue the replacement DBS credit card in PW1’s name, count 1 on the indictment.

6.  During the fax transmission at the Sham Tseng 7-Eleven store on 9 January 2010, the Defendant had also faxed a forged application letter to the Wan Chai delivery office, applying for holding mail service, with a forged HKID card copy in the name of PW1, and a forged water bill in the name of PW1.  The purpose of this forged application was to hold all mail sent to PW1’s address at Stubbs Road, count 2.

7.  On 19 January 2010, the Defendant sent an application via the internet to the Wan Chai delivery office to redirect all mails sent between 20 January 2010 and 19 March 2010 addressed to PW1’s Stubbs Road address to an address at Argyle Street in Mongkok.  The same mobile telephone number, 6808-8120, was left as a contact telephone number (count 3).

8.  On 20 January 2010, Ms. Ho Siu-nga, PW5, a postal inspector of Wan Chai Delivery Office visited PW1’s genuine address and found that the purported applications by PW1 to hold his mail and to redirect his mail to the Mongkok address were both bogus.  PW1 made a report to the police.

9.  On 21 January 2010, the Defendant called PW5 to ask about the progress of the applications for redirecting PW1’s mail – he was told he had to sign an application form, and he asked PW5 to fax the application form to a fax number he provided – PW5 informed the police of this fax number,  and the police were able to trace the address in Mongkok where this number was located, whilst PW5 stalled the faxing of the application form to the Defendant.  Police officers were deployed to the address, and at 3.07 p.m., PW5 faxed the application form to the fax number in Mongkok and the Defendant was seen by police officers to go to that address and he was given a document.  He then went to a nearby shop, where there was also a fax machine with number 3421-2174, and faxed the application back to PW5.  He then went to the 2^nd floor of the Fu Wah Villa in Mongkok.

10.  When the Defendant was arrested in Room 203 of the Fu Wah Villa, many exhibits were found with the Defendant inside Room 203. Amongst these was a ‘request for issue of duplicate tax return – individuals’ of 22 January 2010 for the years of assessment 07/08 and 08/09, purportedly signed by PW1, count 4.  There was also   2 USB thumb drives, a laptop computer, a number of mobile phone handsets, sim cards and memory cards.  These were examined and found to contain information and records of text and scanned image data files of genuine and forged documents such as bills, bank statements, land search results, property transaction documents e.g. assignment, mortgage deeds, etc.  containing owners’ signatures, notes of personal and financial data, credit card information and other such.

11.  Mr. Chu Chi-fai, PW10, and his wife, Ms. Fung Sze-man, lived at Flat F, 68^th floor, Block 2, Bellagio, the same building where the Defendant’s mother lived.  In the 2 USB thumb drives, image data files were found of documents such as bogus application forms, forged HK identity cards, holding mail request forms, bank statements, land searches etc. containing the information of PWs 10 and 11 (count 5).

12.  PWs 12, lived with his wife, PW13, and his daughter PW14 at Flat D, 62^nd floor, Block 2, Bellagio.  At about 8.26 a.m. on 5 September 2009, the Defendant sent by fax to the Bank of China Credit Card (International) Ltd. a BOC credit card application form for balance transfer purportedly made by PW13 to request a transfer of $20,000 from PW13’s BOC credit card account to a MEVAS Bank credit card account in the name of PW13. Data files of the image of this application form were found in the Defendant’s USB thumb drives.  PW 13 did not make, know about or consent to such application (Count 14). 

13.  At about 2.16 p.m. on 8 September 2009, the Defendant sent by fax to BOC a bogus letter of request for issuing a replacement BOC credit card for PW13 and a bogus request for change of correspondence address and telephone number.  Data files of images of these 2 documents were found on the Defendant’s 2 USB thumb drives (Count 15).

14.  Various image data files of mobile phone bills, bank statements of PW12 (6 mails), PW13 (11 mails), and PW14 (1 mail), were found in the Defendant’s USB thumb drives. PWs 12, 13 and 14 had not received such mails and did not know or consent to the Defendant taking their mails (Counts 11-13).  In the two USB thumb drives of the Defendant, there were other image data files (i.e. various bogus application forms, forged HK ID cards, bank statements, etc.) found to contain information of PWs 12, 13 and 14.

15.  At all material times, PW15, his wife PW16 and his daughter lived at Flat E, 65/Fl., Block 2, Bellagio.  Various image data files of documents relating to PW15’s family were found in the 2 USB thumb drives seized from the Defendant after his arrest on 25 January 2010, including BOC statements of PWs 15 and 16.

16.  In late August 2009, the Defendant fraudulently obtained from BOC a replacement mastercard in the name of PW15 without his consent or knowledge.  On 3 September 2009, the Defendant sent to BOC a forged ‘BOC Express Cash Card/BOC Credit Card Activation form’ purportedly signed by PW15, with a view to causing BOC to activate PW15’s replacement credit card, without PW15’s consent or knowledge.  An image data file of the forged  form was found in the 2 USB thumb drives of the Defendant.  On 3 September 2009, the BOC replacement mastercard in PW15’s name was used to make 3 purchases totalling $67,585 in the Tsuen Wan area.

17.  Other image data files found in the 2 USB thumb drives of the Defendant contained information of PW15 and/or PW16.  There were also data image files containing information of PWs 17 and/or 18.

18.  PW19, Mr. Ng Chi-wah, lived in Argyle Street in Mongkok.  On 31 October 2009, the Defendant, purporting to be PW19, called BOC credit card centre to make a false report of loss of a BOC Visa card in PW19’s name.  An image data file of an internet application form to the Hong Kong Post to redirect mails addressed to PW19 at his address to an address in Tung Choi Street in Mondkok were found in the 4GB USB thumb drive of the Defendant. There was reference to a Wu Hing Sang in the application – a data file of the forged ID card of Wu Hing-sang was found in the 2 GB USB thumb drive.  On 3 November 2009, the replacement credit card was sent and it was fraudulently used to make 6 purchases and 2 cash advances, totalling $109,501.

19.  PW20 and his family lived in Tsuen Wan.  He was a businessman.  To ensure sufficient cash flow to meet any contingency which might arise in his business, he and his wife re-mortgaged their flat in Tsuen Wan in July 2009.  They were granted a re-mortgage loan of $1,085,000. To facilitate the disposal of the loan, PW20 applied for a DSB Platinum Mastercard.  He was granted a credit limit of $113,000.  On 8 August 2009, DSB mailed the DSB Platinum credit card to PW20, but this was never received by PW20.  On 30 October 2009, this mastercard was activated, not by PW20 or with his authority.  17 purchases and 1 cash withdrawal was conducted using this credit card, and losses arising from its misuse totalled $635,912.

20.  In the 2 USB thumb drives seized from the Defendant, there were found the bogus service request form faxed to DBS, a bogus form bearing an image of a forged HK ID card of PW20 requesting to change his address and mobile phone no. to 6234-0201, the sim card of which was seized from the Defendant, and other such documents.  There was found from the notebook seized from the Defendant 2 pages containing entries of handwritten notes of PW20’s personal information, including phone numbers and relevant addresses, bank details and such.

21.  After his arrest on 28 July 2009, various physical documents or items were found as set out in paragraph 50 of the ‘summary of facts’.  The copy of the HK ID card in the name of PW21 was examined subsequently and found to be forged (count 29).

22.  A fraudulent application was made to DBS for a replacement credit card in the name of PW24.  DBS sent the replacement credit card to the false address provided on the form.  This card was fraudulently used between 16 and 17 June 2009 in 9 purchases totalling $70,774.  Deleted image data files were recovered from the hard drive of the Defendant’s computer in the name of PW24.

23.  The Defendant refused to say anything under caution.

24.  I have considered all that has been urged upon me in mitigation by Counsel on behalf of the Defendant including the contents of the Background Report and the 4 letters, from the Defendant’s mother and aunt, and 2 friends.  He comes from a middle class family background - his background is set out in detail in the Background Report and I don’t intend to rehearse the contents herein.  Suffice to say that he got mixed up in a bad crowd and resorted to taking dangerous drugs.  He is married, but he is separated from his wife who lives in U.S.A.

25.  His criminal record dates back to 1996, but he had no previous similar to the present offences. 

26.  In HKSAR v. Tu I Lang, CACC 464/2006, the Court of Appeal referred to the decision of R. V. Chan Sui To [1996] 2 HKCLR 128 at 134:

“8. It is true that in R. V. Chan Sui To [1996] 2 HKCLR 128 at 134, this court said in dealing with the range of sentences imposed for credit card offences in various cases cited to it :

“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 that 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 the circumstances.”

It is equally true that in a number of other cases involving the simple possession or use of a small number of credit cards, this court has approved starting point of sentences of three years’ imprisonment, where the operation involved can be fairly described as small scale.”

27.   The Court further said:-

“10. Where the facts of the offence point to a small unsophisticated operation, involving only one or a few forged cards uncomplicated by other evidence linking the offender to a larger operation, then a starting point of three years’ imprisonment or less would be appropriate.”

28.  Offences involving forged credit cards are all serious offences.  I need only to quote the judgment of Litton J.A. in R. V. Kwan Ying-ho, CACC 527/1992 that:-

“Credit card frauds have in recent years been an insidious poison in the community. It affects a large number of citizens. It erodes the credit card system and damages Hong Kong’s standing in the international community.”

29.  In HKSAR v. Cheung Ka-wo, Johnny, CACC 136/2001,  Stuart Moore, V-P, in dismissing an appeal on similar charges as herein where a starting point of 3 years’ imprisonment was used, said:-

“11. It is well known that in this jurisdiction severe sentences are given to those who commit offences of the kind with which we are presently concerned as a deterrent to others who are like-minded. One justification for this is that the integrity of the credit card system is highly important in this day and age and the confidence which people, as Mr. Madigan pointed out in the course of his argument, are entitled to place on this aspect of modern commercial life is necessarily eroded by others who attempt to beat the system by fraudulent methods.”

30.  The Defendant when      interviewed by the probation officer said that he met a casual friend ‘Stanley’ in a bar in March 2009.  Being unemployed and in need of a job, he accepted an offer from Stanley to draft letters for which he would receive $5,000 monthly.  He knew he was involved in commercial crime when he was asked to make purchases using other people’s credit cards.  He claimed to being ignorant, and not thinking about the consequences.  He was occasionally asked to activate the credit cards for which he received an extra $500 or $1,000.  He claimed that he had not pocketed the monies   himself, although he accepted his responsibility and therefore pleaded guilty.  Clearly, he is trying to minimise the role he played in these offences.  I do not accept that he only drafted letters and occasionally made purchases and activated cards.  The amount of image data files recovered from the thumb drives and computers clearly indicate a sophisticated operation, involving detailed and elaborate planning.  Some of the victims were residents of the building in which his mother lived, and to which he had access.  Although there is no evidence of an international dimension, the operation was not a small one.  The offences took place between June 2009 and January 2010.  The second lot of offences for which he was arrested on 25 January 2010 were committed whilst he was on police bail and under investigation for the offences for which he was arrested on 28 July 2009. 

31.  There were 4 lots of victims, and a total loss of $875,853, a substantial sum.  The potential for loss is the most important consideration.  While there is no evidence of syndication, clearly there were others involved – he had people that he used to collect the credit cards, and forged identity documents for them to use when they collected the cards. 

32.  The only mitigation of weight before me really are the Defendant’s pleas of guilty, which reflect his remorse.  There is little else. 

33.  On each of the attempted fraud counts, namely counts 1, 2, 3, 14 and 15, I take a starting point of 3½ years, discount this by one-third to reflect his pleas and sentence him to 2 years and 4 months’ imprisonment. 

34.  On each count of possession of a false instrument, namely counts 4 and 29, I take as a starting point 3 years’ imprisonment, discount it by one-third to reflect his pleas and sentence him to 2 years’ imprisonment. 

35.  On each count of possessing equipment for making false instruments, namely counts 5 and 35, I take as a starting point 3½ years’ imprisonment, discount it by one-third to reflect his pleas, and sentence him to 2 years and 4 months’ imprisonment. 

36.  On each count of theft, namely counts 11, 12, 13 and 27, I take as a starting point 3 years’ imprisonment, discount this by one-third to reflect his pleas, and sentence him to 2 years’ imprisonment. 

37.  On each count of fraud, namely counts 18, 22 and 33, I take as a starting point 3½ years’ imprisonment, discount this by one-third to reflect his pleas, and sentence him to 2 years and 4 months’ imprisonment. 

38.  These are all separate and distinct offences, committed over a period of time, and warrant consecutive sentences.  Also, some were committed whilst on bail, which I view to be an aggravating feature.  But I do bear in mind the totality principle of sentence.  I consider that a global sentence of 5 years’ imprisonment would be appropriate.  I therefore order that the sentences for the attempted fraud and fraud charges, namely 2 years and 4 months’ imprisonment, be served concurrently.  The sentence for possession of false instrument and possession of equipment for making false instruments be concurrent, but consecutive to the sentences for the fraud and attempted fraud charges.  1 year and 8 months of the sentence for the theft offences are to be concurrent with these sentences, and 4 months are to be consecutive.  That makes a total of 5 years’ imprisonment.