HKSAR v. LEUNG YIU FAI

DCCC 1097/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1097 OF 2015

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Reasons for Sentence

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1.  The defendant has pleaded guilty to a total of 19 offences. 16 of those are offences of fraud and 3 of those are offences dealing with property known or believed to represent the proceeds of an indictable offence. The offences were committed over a fairly short period in early 2015, dating between January and June of that year.

2.  The 16 offences of fraud relate to what can be described and is described as Internet fraud which involves the defendant advertising the tickets for such matters as concerts on an Internet platform requiring the purchaser to transfer money into a bank account.  The money is usually transferred to the bank account, and the tickets are never received. In such a transaction, the transaction is done remotely so that the vendor and purchaser are in contact only through the means of the relevant social medium that they operate the transaction under.  And I said there were 16 of those transactions involving concert tickets with values ranging between a thousand dollars and in one case some $27,000 when 12 tickets were ordered.  It can be found in Charge 7.

3.  The three remaining charges of dealing with property or the proceeds of an indictable offence relate to linked transactions in Charges 5, 7 and 16 where money that had been obtained and placed into the bank account through the fraudulent sale of the tickets was used to purchase other goods, and in this case a game disc, a guitar and a tablet PC.

4.  The amount of moneys involved involves over between fifty to sixty thousand dollars.  The value of the guitar that was obtained is $24,000, the tablet in the region of $5,000.

5.  The defendant’s antecedents show that he has been involved in similar offences in the past.  In 2011, for offences of theft and fraud, he received community service orders.  More recently, in 2014, he was sentenced to a term of 36 months’ imprisonment for offences of fraud.  The case was subject to appeal by the defendant which was unsuccessful.  In that case, the offence was described as an Internet auction fraud, and the relevant loss in those cases was some $60,000.  So there are similarities between the instant offences and those for which the defendant received a sentence of 3 years’ imprisonment in 2014.  The defendant is currently still serving that sentence of imprisonment, and I am told his earliest date of discharge will be 22 February 2017.

6.  The defendant is now aged 35.  He is educated to secondary-school level.  He has employment in the construction industry and also in sales for various Internet providers and smartphone providers and described himself as a computer technician in 2015.  He has a family, both mother and father, and also siblings.

7.  I have received some letters of recommendation from the defendant concerning public service rendered to him to the Tin Shui Wai Resident Service Association.

8.  As far as the offences are concerned, there is an application by the prosecution to enhance the sentence under the provisions of the Organised and Serious Crimes Ordinance, and there is an application dated - I think I have that - an application dated 24 December.  In fact, I have a more recent one dated 6 January 2016 under the Organised and Serious Crimes Ordinance, Cap 455 where it indicates the prosecution intend to furnish information to court pursuant to section 27(2) of that set of ordinance relating to the prevalence of the specified offence.

9.  I have a recent statement from Lo Pui-yan who is a woman senior inspector of police of the cyber technology team of the Cyber Security and Technology Crime Bureau which is before the court to show the statistical prevalence of the offences for which the defendant has been convicted and the prosecution’s application that such offences are prevalent and that the sentence should be enhanced in respect of them.

10.  I will summarise the information contained in the statement as follows.  The information is summarised in draft form in three annexes that are produced.  The first annex, annex A, deals with the number of cases and the amount of loss involved in the auction fraud from 2009 to 2016.  This shows by my summation a clear rising trend from 2009 to 2014 with the number of reported cases over 1,400 in 2014; since then, an amount lost of over 18 million.  Since then, there is a declining trend through 2015 and through to January to September of this year.

11.  The annex C deals with the number of reported auction fraud technology crime from 2009 to 2016 where we can see that the highest figures were both achieved in 2014 and 15, but in the first ‑‑ January to September of 2016, there is a reduction from those figures but, as I say, we are not through the year yet but which show what I think would be described as a plateauing of the total number of reported cases. 

12.  Finally, annex B does show the number of cases and the amount of loss involved in the auction fraud in the last 12‑month period as a snapshot from September 2015 to 2016 which shows a fluctuating figure for both through those months with a slight increase or an increase in August to September.    

13.  Of course, to increase a sentence for any reason by way of enhancement is an exceptional power granted to the court, and the assessment of such a situation must be made at the time of sentence. Prevalence has been considered to mean basically an increase in trend in a number of cases and the amount of money involved, like a case that deals with these matters is the HKSAR v Chung Chi King CACC 504 of 2001. As I said, it is an exceptional power and the court must be sure that they are dealing with an offence that is prevalent at the time that the sentence takes place.

14.  I find that a consideration of these statistics cannot lead me to that conclusion.  So I do not consider this is an appropriate case based on the information that I have of the trends in sentencings 2014 to 16.  Taking on a more broader figure is that this is not a suitable case for the enhancement of sentence under section 27(2) of Cap 455.

15.  However, one must also consider, when determining what the appropriate length of sentence should be for these offences, the nature of the crime that we are dealing with.  The bulk of the offences, the 16 offences involving the money obtained for the concert tickets, can be properly described as a fraud committed on the Internet, and such offences do have their own special features which make them perhaps more serious.  The fraud is practised on the general public at large, and the number of victims can be high.  The offences themselves have serious negative effects on Internet auction trading activities, and they seriously affect the interest of people acting in good faith in these activities.  They are offences that are easy to imitate and easy to put into practice if one simply has the right technology.  They are offences which are suitable for a deterrent approach in sentencing.

16.  As I indicated earlier, there is no face-to-face interaction between the perpetrator of the offence and the victim.  It is easy for the offenders to use false identities, and it is hard to uncover these offences and to prosecute.  It is easy for the offender to cover his tracks by the use of false identity and for non-traceable communications devices, and the loss of the victims is difficult to recover.

17.  In offences involving such fraud to the public, the court can and have adopted a stringent deterrent approach.  These kind of offences, even when they do not involve large sums as losses, can involve starting points of sentence in the region of 3 to 4 years’ imprisonment.  And then an example is HKSAR v Liang Yaqiong & Others [2009] 1 HKLR 334.  In this case, the defendant himself has a number of previous convictions for these particular kinds of offences, and it would be easy to say for him that previous sentencing has at this stage not appeared to deter his criminal activities.  And an illustration of that: the defendant in fact committed these offences whilst he was on court bail in respect of the matters which were on appeal from 2014, and yet the defendant despite that went on and committed these number of offences within that period.  The offences themselves must have been carefully planned, involving the use of different Internet platforms and also different devices and different SIM cards.

18.  Having regard to this, one must of course determine a starting point for sentence for each of these individual offences. Having regard to the factors that I have set out, I consider that the appropriate starting point for sentence in respect of each of the offences - and I do not think it is necessary to distinguish between them - should be one of 3 years’ imprisonment.  

19.  The defendant has pleaded guilty and at this stage is entitled to a full one-third discount from sentence.  That will lead to a sentence of imprisonment in each of Charges 1 to 16, 20, 21, 23 of 2 years’ imprisonment. 

20.  I do have to look at the question of overall totality both in relation to these offences and also to the other set of offences that the defendant is currently serving a sentence for and arrive at a total sentence which is what I would describe as realistic in the circumstances, having regard to the actual amount of money that has been lost by the victims. 

21.  I consider that in respect of these offences, the court should order that the sentences are to be served concurrently, giving an overall total of 2 years’ imprisonment.

22.  Having regard to the fact the defendant is currently serving a sentence of imprisonment and will be serving that sentence into February of next year which is some months yet, and I consider that the appropriate overall length of sentence should be served as follows: that 18 months of these sentences should be served consecutively to his existing sentence and the balance concurrently.