HKSAR v. WAN KWUN HO

DCCC 2/2024

[2025] HKDC 1615

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 2 OF 2024

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REASONS FOR SENTENCE

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1.  The Defendant pleads guilty to one charge of Fraud, contrary to s.16A of the Theft Ordinance, Cap. 210 of the Laws of Hong Kong.

2.  The particulars of the charge states that between 19 day September 2022 and 18 June 2023, both dates inclusive, in Hong Kong, the Defendant by deceit representing to the staff of a wine trading company (herein referred as the Company) that a total of HK$4,417,950.90 was paid into the account of the Company, with intent to defraud, induce staff of the company to part with 2075 bottles of wine, which resulted in Defendant‘s benefit, or in prejudice or a substantial risk of prejudice to that company.

Facts

3.  Between the dates as stated in the particulars of the charge, Defendant by using his full name and a name called “Wendy Kwok” placed 101 orders with the company via WhatsApp for purchasing 2075 bottles of wine, the total value being HK$4,417.950.90.  In the course of those purchases, the Defendant sent 95 screenshots of his purported FPS remittance records to the Company to induce the Company to believe the purchase price of those 101 orders had been transferred into the Company’s HSBC bank account.  As a result, the Company arranged Defendant to collect the 101 orders from the wine cellar of the Company situated in Central. 

4.  It was subsequently discovered on 20 June 2023, upon conducting an audit check, that the Defendant’s purported FPS remittances were non-existent and the 95 records that Defendant sent to the Company were all false.  Case was reported to the police one day later.

5.  On 24 June 2023, Defendant placed another order, under the name of Wendy Kwok via WhatsApp with the Company for purchasing 65 bottle of wine.  After placing the order, Defendant sent a screenshot of his purported FPS remittance record to the Company.  The Company confirmed that no money was received from Defendant as alleged in the remittance.  Police was contacted and an arrangement for the Defendant to collect his order were made. 

6.  Defendant was arrested on the same day, i.e. 24 June 2023, when he attended the Companies’ wine cellar in Central to collect his order.

3 video-recorded interviews were conducted with Defendant and he stated under caution that :

(a) He lent around 1,000,000 RMB to his friend Sze Hin Lui, who lived overseas, between 2016 to 2018;

(b) Starting from September 2022, Sze started to order wine from the Company. Sze would send him screenshots of the remittance records and Defendant would use them to collect Sze’s order from the Company. Upon collecting he would pass those wines to various person in Hong Kong according to Sze’s instructions;

(c) He discovered that Sze was defrauding the Company in October or December 2022 as he noticed that the remittance amount as shown on the screenshots was substantially higher than the remittance limit. Nevertheless, he continued to help Sze as he wanted his loan to be repaid by Sze as soon as possible. At the end, Sze had repaid HK$380,000. Defendant knew that he was greedy and he realised he was wrong;

(d) His mother’s name was Wendy Kwok and he had no idea why Sze used her name to place orders. His mother had no involvement in the fraud;

(e) The false remittance records found on his mobile phone were all sent to him by Sze and he believed Sze used some sort of software to make those records; and

(f) Between September 2022 and June 2023 he had collected around 100 orders for Sze from the Company wine cellar in Central.

7.  Defendant’s mobile phone was examined and there existed WhatsApp chat records between him and the Company.  The records showed that Defendant had placed 101 orders with the Company and sent 95 false FPS remittance screenshots to them.  It was further discovered from the trash album of the Defendant’s phone a total of 17FPS remittance screenshots, 6 of them were genuine and each of them showed that Defendant transferred HK$11 into a bank account that had a similar account number to the Companies’ HSBC account.  The rest of the screenshots were false.

8.  Further examination of Defendant’s mobile phone revealed WeChat chat records between him and a user called “雨花石”. On 27 May 2023, Defendant sent a FPS remittance screenshot to that user via WeChat and asked him/her to alter the remittance amount from HK$11 to HK$117,334.50.  That user asked Defendant to pay 60 RMB and he agreed.  On the same day, that user sent an altered FPS remittance screenshot to Defendant upon his instructions.  The WhatsApp records found in Defendant’s mobile phone confirmed that Defendant sent the said altered remittance screenshot to the Company on 27 May 2023. Then on 28 May 2023, Defendant again requested that user via WeChat to alter another remittance record screenshot from HK$11 to HK$41,220.40 for him.  He then sent the altered FPS remittance screenshot to the Company on the same day.

Personal background and mitigation

9.  Defendant was unrepresented when plea was taken before me.  He indicated he would instruct counsel to advance the mitigations on his behalf.  I then adjourned the case to accommodate his counsel’s diary and called a background report for consideration before sentencing. Defendant’s counsel, Mr. Shah, who appeared at the adjourned hearing, confirmed Defendant’s guilty plea.

10.  Defendant is 29 years old and he has a pair of twin daughters at the age of 5. He and his twin daughters are living with his father and mother. His father is suffering from hammolytic anemia and salmonella septicaemia and required constant medications, whereas his mother has depression with anxiety symptoms and recent examinations revealed degenerative changes in vertical and lumbar spine. The twin daughters both have issues of speech delay.

11.  Defendant completed his secondary education in Hong Kong and went to USA in 2016 for tertiary education.  During the time of his study in USA, he engaged in cryptocurrency trading and reselling of luxury products and he claimed that his earning was approximately HK$2,000,000 to HK$3,000,000 per year at that time. He returned to Hong Kong, without obtaining any accreditation, in around 2020 and set up a seafood and fruit company, earning approximately HK$50,000 to HK$100,000 per month.  At the same time, he started to develop a relationship with Ms. Su, a married customer of his mother in the mainland and Ms. Su gave birth to a pair of twin girls in August 2020. However, the relationship turned sour due to Defendant’s financial arrangement with his uncle and business.  Eventually Ms. Su left the care and custody of the twins to the Defendant and returned to China to reunite with her husband in 2023.

12.  Defendant has a clear record.

13.  Mr. Shah submitted that the fraud is not sophisticated as all the FPS remittances left a paper trial back to the Defendant himself.  The offence does not involve any element of breach of trust.  Further it was submitted that the Company carried a lax attitude in verifying the authenticity and accuracy of the FPS remittances, which as a result gave further opportunities for the Defendant to perpetuate his crime.

14.  Mr. Shah stressed that Defendant was not the mastermind as the fraudulent scheme was introduced to him by Sze.  He only wanted Sze to return the money to him.

15.  Mr. Shah referred this court to a number of District court cases, namely, HKSAR v. Peter Raymond Baird DCCC 242/2011, HKSAR v. Chiu Raymond Kar Lok DCCC 122/2014, HKSAR v. Foo Shyang Yeong [2020] HKDC 844 and HKSAR v. Ngan Kwok-Kwan DCCC 881/2011 for sentencing of fraud charges.

16.  As to the discount of guilty plea, Mr. Shah accepted that Defendant was not entitled to a full one third discount of his plea.

17.  Defendant’s parents, aunts, cousins, pastor and his fellow church members had provided letters to the court. In gist, they described Defendant as a filial son and a responsible and caring father. They all asked for the court leniency in sentencing the Defendant.

Reasons for sentence

18.  There are no sentencing guidelines for offences of fraud.  The maximum sentence is 14 years’ imprisonment.

19.  This is not a breach of trust case, nor the Defendant was shown to be in a position of trust.

20.  Although the Defendant did not place the purchase orders via internet platforms, the transactions were completed by using instant messaging software.  In Secretary for Justice v. Chung Pui-kit Billy [2023] HKCA 496, the Court of Appeal emphasised that internet fraud has become a serious problem because of its magnitude and prevalence, and the court should deter offender of internet fraud and other persons from committing similar offences and protect the community from this criminal conduct.

21.  The Defendant used 95 false FPS remittance records to defraud the Company.  The offence spanned for a period of nearly 9 months.  The WeChat records in his mobile phone clearly showed that he gave specific instructions to a person to create those false FPS remittance records for him to deceive the Company.  I rejected his explanations that all those records were provided by Sze to him. 

22.  Regarding the reasons for the commission of the offence, as revealed in the background report, Defendant claimed that Ms. Su, whom he met after he returned to Hong Kong, transferred 1 million RMB to Sze for the purchase of luxury items but he failed to do so.  He worked with Sze in order for Sze to return money to Ms. Su.  His explanation was in stark contrast with what he said under caution that he personally lent 1 million RMB to Sze in 2016 to 2018.  I had grave reservation whether the alleged loan of 1 million RMB or even Sze truly existed.

23.  I accepted that the fraud was not sophisticated but there existed a certain degree of planning.  Defendant’s role cannot be considered as minimal.

24.  In relation to the authorities referred to by Defendant’s counsel :

(i) In Peter Raymond Baird, the Defendant, by his company, agreed to buy a consignment of diamonds from the victim. The contract sum would be secured by a standby letter of credit issued in the name of the Defendant’s other company, P, and US$700,000 for the standby letter of credit would be deposited by the victim into P account as an escrow agreement, which would be held for 14 days. Defendant knew that P would not procure a standby letter of credit. P withdrew over US$600,000 from the fund. Defendant managed to induce the victim not to take any action within the 14 days to recover the deposit in escrow. Eventually no money could be removed by the victim. The Defendant was convicted after trial and the trial judge took starting point of 3 years and 6 months’ imprisonment.

(ii) In Chui Raymond, the Defendant was charged with 5 counts of Fraud. He induced HSBC by using false documents to grant loans totalling HK$7.675 million over a period of about 2 weeks. The ultimate loss of HSBC was HK$5.675 million because the defendant had HK$2 million in HSBC as security against his loan. The judge took a starting point of 3 years and 3 months’ imprisonment for each charge and reduced to 3 years as the Defendant had a clear record.

(iii) In Foo Shyang Yeong, the Defendant pleaded guilty to a charge of fraud for the purported sale of goods resulting a loss to the victim purchaser for nearly US$600,000. The court took a starting of 3 years and 6 months’ imprisonment.

(iv) In Ngan Kwok-Kwan, the Defendant pleaded guilty to one count of fraud for the purported sale of 10,000 tons of nickel ore to the victim company. The victim agreed to settle the payment by remittance on sight of a certificate of shipment which the defendant forged. The victim suffered a loss of around HK$4.5 million. The court took a starting point of 3 years and 9 months’ imprisonment and reduced that to 42 months to reflect the Defendant’s clear record.

25.  Taking into account all the circumstances of the present offence, the Defendant’s personal background including his clear record and the mitigations advanced, I am satisfied that a starting point of 3 years and 8 months’ imprisonment is appropriate.

26.  Defendant indicated his plea by letter 2 days before the trial date.  In HKSAR v. NGO Van Nam [2016] 5 HKLRD 1, the Court of Appeal stated that for cases tried in District Court, subject to the overriding discretion of the judge in sentencing, a defendant who gives the court or the prosecution an indication of a plea of not guilty at the Plea Day after which the trial dates are fixed, who then indicated to the court or the prosecution before the first day of trial that he wishes to plead guilty, is to be afforded a discount between 25% and 20% of that taken as the starting point for sentence.  In determining the appropriate discount to be afforded to the defendant in those circumstances, the judge will have regard to the time at which the indication was given and to all the other relevant circumstances.

27.  Defendant was legally represented in the District Court before the case was fixed for trial.  He then acted in person all along.  Though he only indicated his guilty plea at a very late stage of the proceedings, I am prepared to give him 25% discount for his guilty plea. 

28.  Thus the Defendant is sentenced to 33 months’ imprisonment.