HKSAR v. LI YUANHONG AND ANOTHER

DCCC472/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 472 OF 2009

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Reasons for Sentence

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The Charge 

1.  Both defendants pleaded guilty to a single joint charge of conspiracy to defraud. It was a street deception involving ‘fake electronic parts’.

The Facts

2.  The prosecution case was that the victim, a woman of 41 years of age, was accosted in the street in Shamshuipo by D2 who asked her to unload some goods for him and promised $200 to her; in the meantime, D2 also asked D1, who pretended to be a passer-by, for his help in the same matter. D2 showed an electronic component to D1 saying that these were the goods they were supposed to unload, D1 then said the thing, worth $200 a piece, could be used in computers to prevent radiation, and asked that he be given a piece instead of money as the reward for the unloading job.

3.  D2 then went away pretending to bring the truckload of goods toYen Chau Street for unloading. Both D1 and the victim made their way to Yen Chau Street where they were approached by another man asking for the direction to an electronic company, D1 asked the third man if he knew anything about electronic components, the third man answered that they were used in computers to prevent radiation and each cost about US$ 40. The third man asked if D1 could sell him the components, D1 said he had to check with somebody first, the third man left D1 with his name card and then went away.

4.  D2 returned and told the victim and D1 that they were not needed for the job anymore, D1 offered to buy from D2 8,000 pieces of the components but D2 said he had only 5,000; D1 then suggested to the victim they could buy from D2 the 5,000 pieces and resell them to the third man at a higher price, the victim agreed but said that she had only $16,000. D2 then accompanied the victim to get the money from her place. Eventually, the victim paid D2 $16,000 and got 100 pieces from D2 who told her to look for the third man in Yen Chau Street, the victim did as she was told but there was no sign of any of the 3 men.

5.  The case was reported to the police, having examined the components by expert, it was found that they were electrolytic capacitors and the retail price was $1 a piece.

Mitigation

6.  Both defendants have a clean record. In mitigation, the court was told that D1, a farmer in the Mainland, was married with 4 children, the elder daughter was married and the rest were all at secondary school. Regarding D2, he is also a farmer, and married with a 3-year-old son. D2 had to support his elderly paralyzed father who suffered a stroke few years ago.

7.  Defence Counsel submitted that both defendants were not the masterminds; they were recruited by the third man to pull the job for monetary reward. Each defendant is willing to compensate in the sum of $8,000 to cover the loss of the victim.  

8.  In relation to the prosecution’s application for enhancement of sentence under Section 27 of the Organized and Serious Crimes Ordinance on the ground of the crime being prevalent, Counsel for D1 raised no objection, however, D2’s counsel submitted that looking at the statistics provided by the police, the trend for fake electronic goods seems to be up and down over the past years, it was argued that it was not proved beyond all reasonable doubt this type of offence was prevalent. In addition, judging from the figures provided, the losses to society were not substantial, so the enhancement should not be that much.

Reasons

9.  On the fact before the court and from what I heard in mitigation, it is clear that you came here for no good purposes- you were here with the sole intention to cheat others.

10.  The trick you employed is no novel and has been going on for years. You people used almost worthless electronic parts claiming to be valuable items, and staged a show in the street to lure the victims into believing that money could be made from it; they rose to the bait for the obvious reason that they were simply greedy and stupid, but I do not think they should be punished for that, what they need is the protection by the law.

11.  As can be seen from the statistics, the detection rate of such crime is pretty low, and coupled with the fact that there is always one born every minute that makes your trick work. In my view, people like you should be severely dealt with- the longer it takes for you to see the streets again, the safer our society will be. The ultimate sentence should carry sufficient deterrence so that any like mind people would think twice before they embark on the same course.

12.  As far as the defendants’ mitigation is concerned, apart from their guilty pleas, there really aren’t any other strong mitigating factors.

13.  For the offence of conspiracy to defraud, I take 3 years as starting point, reduce it to 2 years to reflect their pleas, and I further reduce the sentence by one month to 23 months for each defendant to take into account the compensation they made to the victim (each defendant is ordered to pay compensation to the victim the sum of $8,000 and the money has been paid into court today).

14.  Their good character in the sense of having no previous conviction does not justify a further reduction of the sentence, the Court of Appeal in So Yat Chun & others CACC 403/2002 said clearly that additional discount for the good character of the applicant should not be given for the reason that the element of good character, as mitigation, has been subsumed into the one-third discount for the plea.

15.  On the information supplied to the court by the prosecution in support of its application for enhancement under Section 27 (11) of the OSCO, from the statement of DSIP Close I set out the relevant information in the following chart showing the trend:

Year	Street Deception (SD)	SD Losses (HK$ Million)	Fake Electronic Parts (FEP)	FEP Losses HK$ Million)
2003	576	26.78 M	66	6.99 M
2004	479	28.32 M	51	3.077 M
2005	393	21.099 M	38	1.585 M
2006	218	14.53 M	23	0.729 M
2007	262	13.5 M	13	0.336 M
2008	207	5.1 M	41	1.91 M
2009 (Up to 31/03)	20	0.834 M	6	0.145 M

16.  It is true to say starting from 2003 up to 2007, the number of reported cases involving fake electronic parts was declining steadily, but there was a sharp jump in 2008 from the previous year of 13 to 41 cases, and the losses resulting from such crime has increased from 0.336 million in 2007 to 1.91 million in 2008.

17.  DSIP Close says in his statement (Paragraph 16) “During the 51 months, from 1^st January 2005 to 31^st March 2009, 121 victims have fallen prey to ‘Fake Electronic Parts ’street deception. Of the 121 victims, only seven were fortunate to have suffered no loss in the event. For the remainder (114), their losses amounted to a total of approximately HK$ 4.71 million. The financial harm sustained in the community is considered to be substantial and cases continue to occur particularly in 2008 which recorded a 215 % increase in ‘Fake Electronic Parts’ street deceptions from 2007.”

18.  The number of cases over the years may have dropped, however, the crime seems to have made a comeback in 2008; 6 cases recorded for the first quarter of 2009, there is no room for complacency, the court should nip the crime in the bud by handing down appropriate sentence. Looking at the situation as a whole, and I do not think it has died down at all. On the information supplied to the court, I have no doubt in my mind that street deception involving ‘Fake Electronic Parts’ was and still is prevalent.  

19.  I have not lost sight of what was said by the Court of appeal in Xu Maiqing CACC 464/2006, the court, after stating that “Whilst the number of street deception cases might have decreased since its peak in 2002, it was still widespread and was still commonly being practised in 2005”, went on to say that “Under Section 27(11) of OSCO- what the prosecution has to prove is the prevalence of the offence, not the increase in number of such offences. ”

20.  On the information before me, I am satisfied that such crime is prevalent and I see no valid grounds to reduce the usual enhancement rate of 50 %, therefore, the sentence of 23 months is increased by half to 34.5 months. So each defendant is sentenced to a term of 34.5 months imprisonment.