HKSAR v. CHU WAI LAM

HCCC 338/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 338 OF 2014

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT: On 1 August 2014, the defendant pleaded guilty at the Eastern Magistrates’ Court to the following offences:

(1) Possessing false instruments, contrary to section 75(1) of the Crimes Ordinance, Cap 200.

(2) Possessing equipment for making false instruments, contrary to Section 76(1) of the Crimes Ordinance.

(3) Trafficking in a dangerous drug, contrary to section 4(1)(a) and (3) of the Dangerous Drugs Ordinance, Cap 134.

The Summary of Facts admitted by the defendant provides as follows (and I shall quote it in full):

“1. On 10 September 2013 at around 2.12 pm, police officers who were conducting an operation saw the defendant (male/aged 56) giving a packet to a male (“AP”) inside the Tsim Sha Tsui MTR station. The defendant left and was intercepted. He was arrested for the offence of using a false instrument. Under caution, he said “Ah Sir, all the counterfeit credit cards are made by me. It has nothing to do with other people.”

2.  The packet which the defendant gave to the AP was later seized and found to contain one American Express card, three MasterCard cards and one Visa card.

3.  A search of the defendant’s residence in Sai Wan Ho produced various items including 623 Visa cards, 456 MasterCard cards, 111 American Express cards, 228 blank plastic cards (with no details on its surface), one embossing machine, one card tipping machine, two card printers, two encoders, one card writer, four packets containing a total of 49,594 “Dove hologram” stickers and two packets containing a total of 12,764 “Twin-globe hologram” stickers.

4. The house search also produced:

(a) Two plastic bags containing suspected dangerous drugs (later confirmed to be a total of 55.25 grammes of a crystalline solid containing 52.93 grammes of methamphetamine hydrochloride).

(b) A glass bottle containing four plastic bags of suspected dangerous drugs (later confirmed to be a total of 110.24 grammes of a crystalline solid containing 105.77 grammes of methamphetamine hydrochloride).

(c) A glass bottle containing suspected dangerous drugs (later confirmed to be a total of 33.97 grammes of a crystalline solid containing 32.68 grammes of methamphetamine hydrochloride).

(d) An electronic scale, a lighter, a stack of transparent resealable plastic bags, and a transparent glass bottle.

5. The defendant was arrested for possession of a dangerous drug. Under caution, he said, “Sir, the drugs are for my own consumption”.

Examination of the items seized from the defendant’s residence

6. The Visa cards, MasterCard cards and American Express cards seized from the defendant’s residence were examined by a forensic scientist.

7. The 623 seized Visa cards and 456 seized MasterCard cards when compared with the relevant standard control cards revealed discrepancies in the design details of the hologram, in the printing quality of the Visa/Master Card logo and in the design details of the signature panel. The seized Visa and MasterCard cards were found to be devoid of Ultra-Violet fluorescent printing as exemplified in the control cards. Spelling mistakes were also found on the MasterCard cards. These Visa cards and MasterCard cards were confirmed to be forged.

8. 53 of the 111 seized American Express cards when compared with the relevant standard control card revealed discrepancies in the design details of the American Express logo, in the background printing and in the signature panel. They were found to be devoid of Ultra-Violet fluorescent printing as exemplified in the control cards. Spelling mistakes were also found. These 53 American Express cards were confirmed to be forged.

9. Three of the 111 seized American Express cards, when compared with the relevant standard control card revealed discrepancies in the design details of the background printing and the Ultra-Violet fluorescent printing. These three American Express cards were confirmed to be forged.

10. Spelling mistakes were found on both sides of the remaining 55 American Express cards. However, in the absence of the corresponding control specimens for comparison, the authenticity of these 55 American Express cards could not be determined.

11. The seized “Dove hologram” and the “Twin-globe hologram” stickers were examined and compared with those on the relevant standard control credit cards. The design details of the hologram on all the seized stickers were different from that of the control cards. All these seized hologram stickers were forged.

12. The seized embossing machine was found to be capable of embossing raised alphanumeric and symbol entries on a plastic card. The embossed entries on the five credit cards seized from the AP, four of the Visa cards and one of the American Express cards seized from the defendant’s residence had been prepared with this embossing machine.

13. The seized card tipping machine was a hot stamping machine. It was found to be capable of hot pressing-and-transferring foil to the raised parts of the embossed alphanumeric entries on a plastic card with the use of other items such as the seized embossing machine.

14. One of the seized card printers was capable of printing colour/monochrome images/text on plastic card. Microscopic examination revealed that entries on the ribbon inside this card printer matched the corresponding entries on four of the credit cards seized from the AP, four of the American Express cards and three of the Visa cards seized from the defendant’s residence in terms of the design details and printing defects. The entries on these cards had been prepared by the ribbon inside this card printer.

15. The two encoders seized from the defendant’s residence were functioning properly. One of these encoders could read, write, erase, and re‑write data to a card with magnetic stripe. The other one could read data from a card with magnetic stripe.

Suspected forged credit cards seized from the AP

16. The packet which the defendant gave to the AP on 10 September 2013 was found to contain one American Express card, three MasterCard cards, and one Visa card. Details including a set of account number and a person’s name were printed on each of these cards.

17. The Visa card and the three MasterCard cards when compared with the relevant standard control cards revealed discrepancies in the design details of the hologram and the signature panel. The MasterCard/Visa logos of these cards were inferior in printing quality when compared with that of the control card. These cards were also found to be devoid of Ultra-Violet fluorescent printing as exemplified in the control cards. Spelling mistakes were found on two of these MasterCard cards. All these cards were confirmed to be forged.

18. Spelling mistakes were found on both sides of the American Express card. However, in the absence of a control specimen for comparison, the authenticity of this card could not be determined.

Potential Loss

19. Mr Brian Chan Wai-hung, a Senior Special Agent at the Security Department of American Express International Inc, responsible for investigating fraud cases related to this company, examined the 111 American Express cards seized in this case. He confirmed that if any of these cards were encoded and embossed with a valid card account number, it could be used successfully with a potential loss of US$5,000 on each card.

20. Mr Chan Wai-yip Michael, an investigator employed by Visa International, responsible for all security matters within the Asia Pacific region relating to Visa products, examined 621 Visa cards seized in this case. He confirmed that the potential loss for each of these counterfeit Visa cards could not be determined because the concerned banks were all from overseas and the amount of credit limit would vary for each card.

The defendant’s video-recorded interviews

21. A total of three video-recorded interviews were conducted with the defendant. Under caution, he said, inter alia, that:

(a) He was a retired civil servant.

(b) He made forged credit cards at home in Sai Wan Ho.

(c) He had been making forged credit cards on his own for about two years.

(d) After receiving information through the internet, he would choose a white coloured blank card and emboss it with the information that he had received. He would also print the background colour and the logo on the forged card to make it look real. After making the forged card, he would deliver it to someone or to a particular location in accordance with the instructions that he had received.

(e) The defendant communicated with the people who sent him information for making forged credit cards by using QQ, ie, a social network website. The defendant would be paid for his services.

(f) On 10 September 2013, he gave five forged credit cards to the AP at the Tsim Sha Tsui MTR Station. The defendant had been instructed by a person known as “Ah Cat” to make these forged credit cards, which were to be given to the AP. The defendant did as told.

(g) The seized card tipping machine was used for foil stamping forged credit cards.

(h) The seized embossing machine was used for embossing words on the surface of forged credit cards.

(i) One of the seized computers was for operating the card printer while the other one was for operating the card writer which was used for imprinting information onto the forged credit cards.

(j) The seized card printers were for printing colours onto the surface of the forged credit cards.

(k) The seized card writer was for imprinting information onto the magnetic stripe of the forged credit cards.

(l) The seized hologram stickers were to be affixed to the forged credit cards to make them look real.

(m) The seized bottles of liquid were nail polish remover for wiping off wrong information printed on the forged cards.

(n) The seized blank cards were materials for making forged credit cards.

(o) The seized credit cards were made by the defendant. Some of them were semi-finished products with some of the design details such as the logo missing.

(p) The defendant had bought the seized dangerous drugs for his own consumption. He had earlier encountered a person named Ah Lung at a park. The defendant bought the seized drugs over a period of time from Ah Lung who sold drugs at a cheaper price. Ah Lung charged the defendant $5,500 per ounce.

(q) The female who was found at the defendant’s residence would also consume the seized drugs.

(r) The electronic scale found at his home was for checking the weight of the drugs that he had bought.

(s) The lighter and the transparent glass bottle were used by the defendant for smoking dangerous drugs.

(t) The transparent resealable plastic bags were for containing cards that he had made.

(u) The defendant had a drug habit. Sometimes he took, ie, two - three grammes and sometimes he only took half or one gramme.

22. The total quantity of the dangerous drugs seized from the defendant’s residence was 199.46 grammes of a crystalline solid containing 191.38 grammes of methamphetamine hydrochloride.

23. In September 2013, the seized dangerous drugs had an estimated retail value of HK$126,059.

24. The defendant now admits that he was trafficking in all the dangerous drugs seized in this case.”

By way of personal background, the defendant is 59 years of age. He was born in Hong Kong in December 1956. The defendant has received education up to secondary Form 5 level. At the time of his arrest, the defendant was unemployed. The defendant worked as a clerk in the civil service. He retired with a pension in 1996. The defendant had previously opened a restaurant in Shenzhen, which closed down in around 2005. He lost most of his savings as a result. The defendant is divorced. At the time of his arrest, the defendant was living with his girl-friend.

The defendant has three previous convictions for conspiracy to defraud. Those convictions were recorded in 1997, with the defendant sentenced to concurrent sentences of 4 months’ imprisonment.

By way of mitigation, Mr Chan Ka-sing submitted on behalf of the defendant that he is remorseful, and his guilty plea has saved the time of the court. A short mitigation letter dated 8 December 2015 written by the defendant was submitted to the court, in which the defendant promised not to offend again.

Dealing firstly with the 1st and 2nd Charges, in R v Chan Sui To [1996] 2 HKCLR 128 at 131F-H, the Court of Appeal held that for credit card frauds, a sentencing judge would need to consider various factors including:

(1) The size of the operation, for example, whether it involves large sums of money, whether it concerned a large number of persons or forged credit cards.

(2) The planning that has gone into perpetrating the fraud, whether it is elaborate or simple, whether technical skills were used, and to what extent.

(3) Whether there is an international dimension.

(4) Whether the defendant played a major role, for example, running a syndicate, engaging in actual manufacture, organising the use of forged credit cards, or whether he is a mere “cog in the wheel” as a courier or a custodian or keeper.

(5) Whether there is a plea of guilty.

At page 134A of Chan Sui To (supra), the Court of Appeal further held that:

“...We think however 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 circumstances.”

Bearing in mind, (i) the number of forged credit cards found to be in the defendant’s possession; (ii) the nature of the equipment seized for the making of forged credit cards; (iii) the potential to generate losses by the use of the cards; (iv) the presence of an international element (see: paragraph 20 of the Summary of Facts); and (v) the role played by the defendant, by engaging in actual manufacture of the forged credit cards, in my view, the starting point for sentence on the 1st and 2nd Charges after trial should each be 6½ years’ imprisonment.

As regards the 3rd Charge, as the offence was committed on 10 September 2013, the applicable guidelines are those set out in Attorney General v Ching Kwok Hung [1991] 2 HKLR 125.

In Ching Kwok Hung, it was held by the Court of Appeal that for trafficking in between 70 and 300 grammes of methamphetamine hydrochloride, commonly known as the ‘Ice’ drug, the proper sentence after trial should be 10 to 14 years’ imprisonment.

In my view, based on the narcotic involved in the 3rd Charge, the starting point for the 3rd Charge should be 12 years’ imprisonment.

By way of mitigation, Mr Chan Ka-sing initially submitted on instructions that as much as half of the ‘Ice’ drug, the subject matter of the 3rd Charge, was intended for self‑consumption. The defendant allegedly bought the drug in large quantity to get a bulk discount.

In this regard, I note the guidance given by the Court of Appeal in the case of HKSAR v Wong Suet Hau [2002] 1 HKLRD 69, where at page 79B-C, Stuart-Moore VP held as follows:

“Having regard to the dangers of the abuse of this avenue of mitigation, the judge should look with the greatest care at all the surrounding circumstances in order to decide whether or not to accept the contention.”

In the circumstances of this case, I indicated to Mr Chan Ka-sing that I was not prepared to accept the defendant’s mitigation in this regard without hearing evidence from the defendant. Mr Chan sought a short adjournment to seek instructions, and at the end he told the court that the defendant would withdraw his mitigation in this regard.

Accordingly, I am not inclined to give any discount for the defendant’s unproven claim that part of the drug was for the defendant’s self-use.

On the other hand, the defendant has given considerable assistance to the authorities since his arrest. The defendant gave evidence for the prosecution in DCCC 780 & 880/2014. That case involved, inter alia, charges of conspiracies to make and use false instruments, ie, the forged credit cards manufactured by the defendant. The defendant gave detailed accounts of how he came to know “Ah Cat”, how Ah Cat gave him instructions to manufacture forged credit cards; as well as the manufacture and delivery process of the forged credit cards. In his Reasons for Verdict, the trial judge described the defendant as an honest and reliable witness. The trial judge expressly accepted his evidence as being truthful.

In these circumstances, I am of the view that the defendant is entitled to an overall discount of 50% from the starting points (including the one-third discount for his timely guilty pleas) [See: Z v HKSAR (2007) 10 HKCFAR 183, paragraph 23].

Accordingly, the defendant is sentenced to:

(1) 3 years and 3 months’ imprisonment on the 1st Charge;

(2) 3 years and 3 months’ imprisonment on the 2nd Charge; and

(3) 6 years’ imprisonment on the 3rd Charge.

Finally, I have to stand back and consider the “totality” of the punishment. In my view, a total sentence of 8 years and 9 months’ imprisonment is appropriate in the present case. I consider that such a sentence is proportionate to the defendant’s overall culpability whilst at the same time being fair to him. I note that both sets of offences are serious offences calling for deterrent sentences.

To achieve that result, I order that the sentences on the 1st and 2nd Charges are to run wholly concurrently with each other. 6 months of the sentence on the 3rd Charge are to run concurrently with the sentences on the 1st and 2nd Charges, with 5½ years to run consecutively. This gives rise to a total sentence of 8 years and 9 months’ imprisonment.