HKSAR v. LI TIANBAO AND ANOTHER

CACC 89/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 89 OF 2012

(ON APPEAL FROM DCCC NO. 855 OF 2011)

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BETWEEN

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JUDGMENT AND
  REASONS FOR JUDGMENT

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Hon Yeung VP and McWalters J (giving the Judgment and the Reasons for Judgment of the Court):

Introduction

1.  The applicants Li Tianbao (Li) and Lam Shak-kuen (Lam) appeared before Deputy District Court Judge Sham (as he then was) (the judge) on a charge of conspiracy to defraud (the 1^st charge) and a charge of using false instruments (the 2^nd charge).  They pleaded not guilty to the charges.

2.  On 8 February 2012, the applicants were convicted as charged.  Li was sentenced to 5 years’ imprisonment on the 1^st charge and a concurrent sentence of 2 years’ imprisonment on the 2^nd charge.  Lam was sentenced to 4 years and 10 months’ imprisonment on the 1^st charge and a concurrent sentence of 1 year and 10 months’ imprisonment on the 2^nd charge.

3.  The judge did not distinguish the respective roles of Li and Lam in the conspiracy, but took the view that Lam deserved to be given a discount of two months because of his relatively good character.

4.  Both applicants sought leave to appeal against conviction and sentence.  Li subsequently abandoned his application for leave to appeal against sentence.

5.  In the course of the hearing, Lam, through his counsel, Mr Peter Duncan SC, also abandoned his application for leave to appeal against conviction on the 2^nd charge and his application relating to conviction on that charge was dismissed.

6.  We were only concerned with (1) Li’s application for leave to appeal against conviction on both charges; (2) Lam’s application for leave to appeal against conviction on the 1^st charge; and (3) Lam’s application for leave to appeal against sentence.

7.  At the end of the hearing, we dismissed Li’s application for leave to appeal against conviction.  We reserved our judgment on Lam’s application for leave to appeal against conviction on the 1^st charge and his application for leave to appeal against sentence.

8.  We indicated that we would deliver our judgment and hand down our reasons in due course and this we now do.

The Prosecution Case and Evidence

9.  The victim (Liu Qiang) was a developer of wind power in Qingdao, Shandong PRC and he needed financial support for his wind power plant.  It was the prosecution case that the applicants intended to defraud the victim of HK$ 8.5 million, initially succeeding in getting RMB 2.5 million from him, by falsely representing to the victim that Li would deposit US$ 1 billion into his account with Hong Kong Bank (HSBC) to facilitate him in obtaining a bank loan for his wind power plant.  This fraud was the subject of the 1^st charge.

10.  In order to carry out the conspiracy to defraud offence it was necessary to have someone pose as an employee of the Hong Kong and Shanghai Banking Corporation (“HSBC”) at the Central headquarters.  The prosecution alleged that this role was performed by the 2^nd applicant and his conduct in doing so is the subject of the 2^nd charge which alleged that the applicants had used the following false instruments to deceive the victim:

(1) A staff card of HSBC in the name of Lincon Lin (P6);

(2) A bank statement of HSBC in the name of the victim (P4);

(3) A statement of HSBC in the name of Li (P10);

(4) A draft of Proof of Funds issued by HSBC; and

(5) A draft Confirmation of Funds And Authority As Signatory To Block/Reserve Funds relating to an account of HSBC in the name of Li.

11.  Much of the prosecution evidence was admitted under S65C of the Criminal Procedure Ordinance together with the relevant documents.

12.  It was accepted that after his arrest, Li was found to have the forged HSBC statement (P4) and two mobile telephones and Lam was in possession of the forged HSBC staff card (P6) and a mobile phone.

13.  From a rucksack in the possession of Li’s girlfriend, the following documents were found:

1. The contract between Li, the victim and Wei Bing (Wei) (P9);

2. A forged HSBC statement in Li’s name (P10);

3. A copy of the victim’s passport;

4. A copy of the victim’s PRC ID card;

5. A copy of the victim’s bank card;

6. A memorandum relating to the victim’s request for verification of the alleged transfer of US$ 1 billion (P14);

7. A draft of “Proof of Fund” purportedly issued by HSBC (P15); and

8. Some other documents.

14.  In a locked suitcase belonging to Li, the following documents were also found:

1. A forged HSBC statement in Li’s name which is an exact copy of P10 (P25);

2. Information sheets relating to Li;

3. A Joint Venture Agreement;

4. A draft confirmation of fund relating to Li’s HSBC account (P28); and

5. Two mobile telephones.

15.  It was agreed that P3, P4, P10, P15, P25 and P28 were all forged documents.  Li’s account with the bank had in fact been closed and there was never any deposit of US$ 1 billion in his account.  Li’s fingerprint appeared on P9.

16.  The victim, when giving evidence, said he needed US$ 100-300 million for his wind energy project and in early April 2011 in a finance talk, he met Wei who told him that Li had funds that could be used to assist him to obtain a bank loan.  The three of them then met and they agreed that Li would provide the victim with US$ 1 billion that could be used as collateral to enable him to obtain a bank loan and in return for the use of these monies the victim would pay Li a fee of HK$ 8.5 million.

17.  A tripartite contract (P2) (the contract) was executed between the victim, Li and Wei on 8 May 2011.  The underlying objective of the contract was to assist the victim in securing a loan from a bank in order to finance his energy project.

18.  Under the contract, the victim had to make a down payment of RMB 2.5 million (HK$ 3 million) on 8 May 2011; Li would deposit US$ 1 billion into the victim’s account with HSBC by noon on 9 May 2011 and produce documentary proof thereof; the victim would then have to immediately pay the balance of HK$ 5.5 million; and if Li could not perform by 11 am on 9 May 2011, Li would return RMB 2.5 million and Wei would compensate the victim HK$ 6 million.

19.  Under Clause 4 of the contract, the victim could not himself verify the deposit of the US$ 1 billion into his account with the bank and it had to be done by way of bank-to-bank confirmation.  The victim said he waited for Li to take him to HSBC to confirm the deposit of US$ 1 billion in his account.

20.  Pursuant to the contract, the victim paid RMB 2.5 million to Li through inter-bank transfers when they were in a hotel in the Mainland and Li confirmed receipt of the money.

21.  According to the victim, Li subsequently showed him 3 documents indicating that he had the US$ 1 billion fund and that the US$ 1 billion had been deposited into the victim’s account with HSBC.  The 3 documents were “Deposit Transaction Statement”, “Certificate of Balance” and “Confirmation of Fund” (P3).  Copies of P3 were sent to the victim by e-mail.

22.  On 18 May 2011, the victim, Li and Wei went to the main branch of HSBC for the purpose of having a bank-to-bank confirmation of the deposit of US$ 1 billion. Wei waited downstairs and the victim and Li went up to the 5^th floor where there were two officers from Credit Suisse for the bank-to-bank-verification and confirmation.

23.  The victim said he had applied for a loan from Credit Suisse and had made an appointment with its officers to check his bank accounts as he must have the collateral before he could obtain the credit from Credit Suisse.

24.  About an hour later, Lam arrived at the 5^th floor.  He was wearing a forged staff card of HSBC in the name of Lincon Lin (P6) and was dressed like a HSBC staff.  He greeted Li who then passed the victim’s passport to him.  Lam went away for an hour and came back with a brown envelope containing the document (P4).  Li took P4 out from the envelope to show to the victim.  The document purported to verify and confirm the deposit of US$1 billion into the victim’s account.

25.  When reading the document (P4) with Li, the victim noticed that Lam appeared nervous and that his staff card (P6) was different from those of other HSBC staff.  Lam tried to walk away and a Credit Suisse officer asked him if he was a staff of HSBC.  Lam did not answer and the victim then grabbed hold of him to prevent him from leaving and there was a commotion.

26.  The security guards of HSBC were alerted and the matter was brought to the attention of the police.  The applicants and Wei were arrested.

27.  It was not disputed that Lam was not a staff member of HSBC and that there was never any payment of US$ 1 billion by Li into the victim’s HSBC account.

28.  However, the prosecution conceded that there was no evidence against Li and Lam that either of them had used documents 3 to 5 as set out in paragraph 10 hereof.  The prosecution only relied on the forged HSBC staff card (P6) and the bank statement of HSBC in the name of the victim showing a deposit of US$ 1 billion in his account (P4).

29.  Upon their arrest, Li was found to be in possession of P4 and Lam was wearing P6.

30.  Li denied the offence and Lam said he was recruited by an unknown person to act as a staff member of HSBC to hand over some documents to the victim for a reward of $5,000.

31.  Li was interviewed by the police on four separate occasions on 18 and 19 May 2011.  In the 1^st interview, Li denied knowing the victim or having any business with him.  He said he did not know any staff member of HSBC and he was just asked by Wei to go there and when he was there, Wei and Lam were already present.

32.  Li said he did not know what to do at HSBC, but a staff member took some loan documents and called out his name for the passport before returning a statement to him.  He said he had no account with HSBC and he did not receive any money from the victim.

33.  In the 2^nd interview, Li claimed that he had only known Wei casually for less than two weeks and that he did not know the victim or any staff of HSBC.  He said he went to the main office of HSBC because he had been entrusted by a friend to take a statement of his account for a mortgage loan on behalf of Liu Qiang (the victim) whom he did not know.  He said he was never told what he should do and he only went along without knowing why.

34.  In the 3^rd and 4^th interviews, Li was asked about the locked suitcase found in the possession of his girlfriend, Jenny Chiu, when she was moving out of the hotel room after Li’s arrest.

35.  He admitted ownership of it and provided a password for opening it.  He also admitted that the suitcase contained a forged HSBC bank statement in relation to an account held under his name.  He said he did not know English and could not read those documents.

36.  Li further admitted that various documents found in Jenny Chiu’s rucksack, including the contract which had his fingerprint, a photocopy of the victim’s PRC identity card, a forged HSBC statement and an unsigned draft “Proof of Fund” purportedly issued by HSBC in relation to his account and belonged to his company which were kept in the drawers of his hotel room.  Also found in Jenny Chiu’s rucksack were photocopies of Li’s passport, his bank card for his HSBC account and two original memoranda in Chinese relating to Li’s request for verification of the US$ 1 billion-deposit.

37.  Two mobile phones were seized from Li and one of them contained (i) a text message dated 21 April 2011 relating to a number referred to as the bank account number of Liu Tie Ying at China Merchants Bank (the payee nominated by Li for partial payment of the initial RMB 2.5 million down payment according to the victim); and (ii) another text message dated 18 May 2011 at 1125 hours relating to a purported arrangement to get and return a passport in HSBC at 1210 and 1230 hours respectively.

38.  When interviewed under caution, Lam said a Mr Leung called him on his mobile phone, but he did not know him and could not recall his telephone number.  He said it was his business partner who introduced him to Leung, but he had never met Leung.  Lam reiterated that Leung called him on 18 May 2011, asking him if he wanted to make some money and he was asked to go to the main branch of HSBC at 11 am.

39.  Lam said that at the bank, Leung called and approached him to hand him some documents contained in an envelope and a staff member card.  He also said Leung directed him to put on the staff member card and to go up to the 5^th floor to submit the document and that he would be given $5,000.  He said he did not know what the documents were as they were inside an envelope.

40.  Wei was not available to give evidence at trial. He left Hong Kong on 20 January 2012 and returned to Hong Kong on 31 January 2012.  However, he could not be located during the hearing. In his statement, he denied any involvement in the scam, and claimed that he only acted as a middleman.

The Defence Case

41.  Li did not give evidence, but applied for a stay of the proceedings on the ground that as Wei was not available as a witness, he could not have a fair trial.

42.  Lam on the other hand claimed not to have anything to do with the fraud as he only acted as a messenger.

43.  In his evidence, Lam said on 18 May 2011, he received a call from his business partner Mr Tsang, having consulted a doctor for his diabetic problem.  Mr Tsang told him to go to Central to help out a Mr Leung by taking a document upstairs.  He said he was not given much detail.

44.  When he reached the ground floor of the main branch of HSBC, someone identifying himself as Leung approached him, putting on him something like a pass and then telling him to go to 5^th floor to get a document.

45.  According to Lam, Leung told him it was a pass and he did not look at it.  When he went up to the 5^th floor, someone waved at him and then gave him a passport to take downstairs to Leung. When waiting for Leung, he looked at the pass and discovered his photo on it.  He said he called Tsang to find out what was going on as the pass was a staff card of HSBC and Tsang then admitted that he had given Lam’s photo to Leung.

46.  Lam said he was not willing to do it, but Tsang asked him to go up to help Leung one last time and promised him a fee of $5,000.

47.  Lam also said he felt dizzy as his blood glucose level was low and he wanted to have something to eat.  Leung returned after 20 minutes and gave him a brown envelope to take to the 5^th floor to hand to Li.  According to Lam, after he handed the envelope to Li, Li opened it and gave the document to the person next to him and the document was handed over to two other people who grabbed his hand and asked him about the document.

48.  A commotion started when Lam said he was only a messenger delivering the document, yet he was prevented from leaving and the security guard came and he was arrested by the police.

The Judge’s Findings

49.  The judge pointed out that Wei just stated in his statement that he knew nothing about the fraud against the victim.  He said Li had once shown him some documents indicating that Li had US$ 1 billion in his account at the bank and when he knew that the victim needed funds for his company, he just introduced him to Li.

50.  The judge referred to criticism of the victim’s evidence, but he rejected the criticism.  The judge took the view that the victim was a “witless dupe” and that the fraudsters realized that he was gullible and could sell him anything.  The judge considered that the victim, as a mainlander, might have a different way of doing things which a Hong Kong person would frown upon and would easily fall for the tall tale of the fraudsters.  The judge concluded that the victim was telling the truth and that he had been swindled out of RMB 2.5 million.

51.  The judge pointed out that the fraud alleged by the prosecution involved convincing the victim that US$ 1 billion would be deposited into his account.  The judge emphasized that in Li’s locked suitcase, there was a draft confirmation of fund relating to his account with HSBC indicating that a US$ 1 billion deposit had been made.  The judge took the view that Li must be aware if there had indeed been such a deposit into his account.

52.  The judge concluded that Wei would not have assisted Li and that Li had not been handicapped by the absence of Wei as a witness.  The judge therefore rejected the application by Li for a stay of the proceedings.

53.  The judge emphasized that P4 indicated a balance of US$ 1 billion in the account of the victim and the purpose of the visit to HSBC was to check the victim’s bank balance.

54.  Given that false instruments were used and Lam impersonated a HSBC staff, the judge concluded that the victim must have been deceived.  The judge concluded that both Li and Lam were involved and that they were a knowing party to the fraud.

55.  The judge emphasized that it was pre-arranged for Lam to impersonate a HSBC staff with the use of a fake staff card which was inconsistent with the suggestion that Li believed that there had been a genuine transfer of US$ 1 billion into the victim’s account.

56.  The judge rejected Lam’s evidence that he was only a messenger who knew nothing of the fraud as if he was just a messenger there was no need for him to impersonate a HSBC staff by wearing the forged staff card.

57.  The judge also rejected Lam’s evidence that he did not know the nature of the documents (P4) contained in the envelope as it must be expected that he would be able to answer questions relating to the documents if the victim were to ask those questions, which he was reasonably expected to ask and that Li and Lam were there to convince the victim that he had the money in his account.

58.  The judge concluded that both Li and Lam were parties to the fraud to swindle the victim of HK$ 8.5 million by falsely representing to him that Li would deposit US$ 1 billion into his account to facilitate the obtaining of a business loan from a bank when the US$ 1 billion was never deposited and was never intended to be deposited.

59.  The judge also concluded that the victim did pay Li RMB 2.5 million and rejected Li’s suggestion that he did not receive the money.

60.  On the charge of using false instruments, the judge pointed out that the purpose of the visit to HSBC was to show the victim that he had the money in his account and he must have been shown a document similar to P4.  Further P4 was recovered from Li after his arrest and that the forged staff card which was carried by Lam was one of the instruments of fraud.

61.  The judge concluded that the victim was indeed shown P4 and as both P4 and P6 were forged documents and that both Li and Lam were acting in concert.  The judge was satisfied that both charges against Li and Lam had been proved and he therefore convicted them accordingly.

Grounds of Appeal of Li

62.  Mr Andrew Bruce SC, for Li, rested his grounds mainly on the suggestion that the judge should not have acted on the evidence of the victim because he was not a credible witness.  In so far as the prosecution case depended on a number of critical facts which required reliance on the victim as a witness of truth, it was suggested that the conviction against Li was not safe.

63.  Mr Bruce suggested that the judge was wrong to have relied on the purported bank and e-mail records because they were not produced from a source independent from the victim and were therefore unreliable.  Mr Bruce pointed out that the e-mail address shown in the documents found in Li’s locked suitcase was fundamentally different from that on the e-mail at P3.

64.  Mr Bruce emphasized that the victim was the holder of an advanced tertiary degree in business and was the CEO of a group of companies in the Mainland for some years, yet he claimed that Credit Suisse was prepared to grant a loan of US$ 720 million for his wind energy project without any business plan or profit and loss statement and that as he had to put up collateral of US$ 1 billion, he was looking for someone to put up the collateral for him.  Mr Bruce suggested that the victim’s evidence was not reliable or believable.

65.  Mr Bruce suggested that the victim’s evidence on a number of important matters was suspicious, including his assertion that officers of Credit Suisse would accept the victim’s story in the absence of any investigation of his proposal and would go to HSBC to check the balance of his account before deciding if the loan would be granted to the victim.

66.  Mr Bruce emphasized that the victim did not mention in his witness statements the attendance at HSBC by Credit Suisse officers.  Mr Bruce suggested that the business arrangement as suggested by the victim was commercially unreal and in particular his suggestion that someone would just put into his account US$ 1 billion was odd.

67.  Mr Bruce pointed out the discrepancies in the victim’s evidence when he initially said the loan from Credit Suisse was for five years, yet the contract (P2) only provided that the US$ 1 billion would be available for 13 months and the victim had to retreat to the assertion that the loan from Credit Suisse was on a year by year basis. Mr Bruce suggested that the alleged loan from Credit Suisse was not believable as it was commercially unreal and this reflected badly on the credibility of the victim.

68.  Mr Bruce argued that the judge was wrong to hold that the identity of the bank said to be granting the loan to the victim was not material.  Mr Bruce also suggested that the judge was wrong to rely on the bank records produced by the victim in connection with his purported transfer of RMB 2.5 million on the instruction of Li. Mr Bruce pointed out that there was no evidence to support the victim’s assertion on those matters.

69.  Mr Bruce emphasized that some of the documents produced by the prosecution contained discrepancies.  Mr Bruce argued that the judge was wrong to find the existence of the required proximity between Li and Lam and the alleged conspiracy.

70.  On the charge of using false instruments, Mr Bruce argued that the charge again depended on the veracity of the victim’s evidence and as he was not a credible witness, the charge had not been proved.

71.  Mr Bruce suggested that there was no evidence to show that Li was able to read English and was in a position to know that the staff card of HSBC (P6) and the bank statement in the victim’s name (P4) were false documents.  In any event, Mr Bruce suggested that the evidence was insufficient to show that Li had used the bank statement (P4) to defraud the victim.

Grounds of Appeal of Lam

72.  Mr Peter Duncan SC argued only on the 1^st charge and he suggested that there was no evidence to show that Lam was involved in the fraud at all or had dealt with any of the false documents prior to 18 May 2011, i.e. the day when he appeared at the main branch of HSBC.  He emphasized that there had been a meeting between Li, Wei and the victim prior to 18 May 2011, but there was no evidence that Lam was present in any of those meetings and there was no evidence of any contact between Lam and any of the other co-conspirators.  Mr Duncan said P4 did not have Lam’s fingerprints on it.

73.  Mr Duncan suggested that when Lam was in possession of the staff card of HSBC (P6), he might only be a mere messenger and might not be aware of the essential objective of the alleged conspiracy.

74.  Similar to Mr Bruce, Mr Duncan also suggested in his written submissions, but did not further argue in court that the victim was not a credible witness and that his evidence on the contract, the need to physically appear to check his own bank account and his transfer to RMB 2.5 million were questionable.  Mr Duncan submitted that the victim’s evidence should not be accepted at all in the light of the many inexplicable areas.

75.  Mr Duncan argued that the judge had erred in rejecting the evidence of Lam when there was no objective evidence to show that he could have had any prior knowledge of the alleged conspiracy.  Mr Duncan emphasized that Lam had to attend the West Kowloon Clinic before meeting up with Li and the others on 18 May 2011 and if he was truly a co-conspirator, he would have skipped the medical appointment which was not an urgent one and would have spent all his time in dealing with what must be a major conspiracy.

Discussion

76.  We read through the evidence of the victim because of the suggestion that his evidence was unreliable.  We bore in mind Mr Bruce’s repeated emphasis that the victim, with his education and background, would not have believed the suggestion that he would be provided with the collateral of US$ 1 billion to enable him to obtain a loan of US$ 720 million from Credit Suisse.  We took into consideration the various alleged shortcomings of the victim’s evidence as identified and highlighted by Mr Bruce to support his contention that the contract made no commercial sense.

77.  The same points had been argued before the judge and it was not our intention to re-try the case and to decide on the credibility of the witnesses.  The judge saw and heard the witnesses giving evidence and was in the best position to make a decision on their credibility and reliability.

78.  The Court of Appeal should “act with the greatest caution before interfering with the District Judge’s finding if, having regard to the whole of the evidence, such findings appear reasonable”. (Per Blair-Kerr J in R v R E Low [1961] HKLR 13)  This is especially the case, “if that conclusion has been arrived at on conflicting testimony by a tribunal which saw and heard the witnesses.” (See the dictum of Viscount Simon in the House of Lords in Watt or Thomas v Thomas [1947] AC 484 at 486, cited with approval in the judgment of Sir Thomas Eichelbaum in the Court of Final Appeal in Wishing Long Hong v Wong Kit Chun (2001) 4 HKCFAR 289 at p 294 F-G)

79.  The victim had given very detailed evidence on how he was defrauded of RMB 2.5 million.  He might well have been naïve, but he did, in accordance with the contract, arrange to meet Li and others with a view to verifying the deposit of US$1 billion into his HSBC account on 18 May 2011. There could be no other reason for the victim to attend the main branch of HSBC on that day.

80.  Under the contract signed by the victim, Li and Wei, Li agreed to put up US$ 1 billion and deposit such an amount into the victim’s HSBC account and the victim agreed to pay a fee of HK$ 8.5 million to Li, with HK$ 3 million (RMB 2.5 million) to be paid on 8 May 2011.  A copy of the contract was found in Li’s possession.

81.  Li was also in possession of forged documents showing that he had a sum of US$ 1 billion deposited with HSBC.  There was a declaration in his name that he had a deposit of US$ 1 billion with HSBC, which was earned from his business in commercial and financial trading.

82.  A copy of P4, which was shown to the victim, indicated that there was a ledger balance of US$ 1 billion in his HSBC account and an identical copy of the document was found in Li’s possession.

83.  There was no explanation as to why Li was in possession of so many forged documents which were all consistent with the victim’s allegation that those documents were used to defraud him.  Instead, what Li told the police in the interviews was nothing but a blatant lie.

84.  Li, together with Wei went to the main branch of HSBC on 18 May 2011 with the victim and the clear purpose of the visit was to convince the victim that a deposit of US$ 1 billion had been made into his account pursuant to the contract.  Lam was arranged to impersonate a HSBC staff and he produced a forged document with a view to convince the victim of the deposit of US$ 1 billion into his account.  There could be no other reason for Li to appear with Wei and the victim at the HSBC branch on 18 May 2011.

85.  The text messages recovered from Li’s telephone were consistent with the victim’s evidence that he had remitted RMB 2.5 million to two China Merchants Bank accounts in Shenzhen held by Li and a Mr Liu Tieying as instructed by Li.

86.  Whether Li was able to read English, only he could tell and he chose not to give evidence.  In any event, whether he was able to read English or not, on the evidence, he must be fully aware of the falsity of the documents, including the forged staff card of HSBC (P6).  On the evidence, Li clearly had arranged for Lam to impersonate a HSBC staff as part of the scheme to defraud the victim.

87.  In our view, on the evidence, in particular the undisputed documentary evidence, the judge was perfectly entitled to accept the evidence of the victim and act accordingly.

88.  The evidence against Li on both charges was overwhelming.  The inference that Li was a party to defraud the victim in the manner as suggested and that he was also a party to the use of the forged staff card of HSBC and the forged bank statement in the name of the victim with a view to defraud the victim was inescapable, particularly when there was no evidence from Li to explain, contradict or challenge the prosecution evidence against him.

89.  We did not find the conviction against Li on both charges in any way unsafe or unsatisfactory.  Li’s application for leave to appeal against conviction was therefore dismissed.

90.  The allegation against Lam was that he conspired with Li and others between 1^st February 2011 and 18 May 2011 to defraud the victim and that he used false instruments which he knew or believed to be false on 18 May 2011.  The particulars of the 1^st charge of conspiracy to defraud were:

(a) falsely representing that (Li) would deposit one billion dollars United States currency into (the victim’s) bank account…held with HSBC to facilitate (the victim) to obtain a business loan from HSBC;

(b) falsely representing that (the victim) should pay a sum of HK$ 8.5 million to (Li) as a reward for the said deposit; and

(c) thereby causing and inducing (the victim) to part with RMB 2.5 million.

91.  Lam’s involvement in this fraud first came to light when he appeared at the main branch of HSBC on 18 May 2011 when he met the victim and Li.  He was then wearing a forged staff card of HSBC and was dressed like a HSBC staff.  He took the victim’s passport to another person and he returned with P4 in an envelope after an hour. When Li was reading P4 with the victim, Lam appeared to be nervous.  When he was asked if he was a staff member of HSBC, Lam did not answer.  Lam admitted that he was told beforehand that he could make some money by appearing at HSBC.

92.  The fact that Lam was wearing a forged HSBC staff card clearly was inconsistent with his suggestion that he was just a messenger when he attended HSBC on 18 May 2011. Furthermore, the fact that a forged HSBC staff card was ready on 18 May 2011 for the use by Lam must necessarily mean that Lam had provided a copy of his photograph to the fraudsters prior to that day.

93.  On the evidence, the judge was entitled to conclude as he did that it was no coincidence that Li met up with Lam at the HSBC and that the rendezvous with Lam had been arranged in advance.  We fail to see the significance of the fact that Lam visited a doctor in the morning before his attendance at the main branch of HSBC.  The two are not mutually exclusive.  The judge was also right to take the view that Lam was assigned the role to play a HSBC staff by wearing a fake staff card and that he must have a purpose to serve for doing that.  The judge was right to reject Lam’s claim that he was an innocent party.

94.  Rejecting Lam’s evidence was one thing, whether the prosecution evidence was sufficient to establish the 1^st charge against him was another.

95.  There is no doubt that Lam played a role in carrying out the conspiracy.  That is not in dispute.  But in doing what he did, was he, with full knowledge of the unlawful agreement, intending to carry it out or was he just a pawn of the conspirators with no greater knowledge of what was happening other than that some form of cheating or fraud was taking place.

96.  It is true that there was no evidence to show that Lam was involved in any of the incriminating events or transactions before 18 May 2011 and that the first time he arrived on the scene was when he appeared at HSBC on 18 May 2011 to meet the victim.  This is hardly surprising since, given the role he was required to play, it would not be possible for him to be involved in any other contact with the victim.  But the fact that Lam appeared at the bank at a pre-arranged time, was dressed like a bank employee, was wearing a false staff card of the bank and was required to pretend to hand over to a person a document that purportedly was a bank document, establishes beyond doubt that he must have known that he was assisting others to cheat someone.  But was there evidence to show that Lam was aware of the nature and full extent of the fraud that was particularised in the charge?

97.  There was no direct evidence of Lam’s knowledge of and participation in the unlawful agreement that was particularised in the 1^st charge.  That knowledge and participation could only be inferred.  Determining what inferences are available on the evidence requires an understanding of what the unlawful agreement was and how the conspirators planned to carry it out.  In a nutshell it was a fraud by which the conspirators would obtain HK$ 8.5 million from the victim in return for their allowing him the use of US$ 1 billion for a period of one year.  The HK$ 8.5 million fee was to be paid in two instalments – one was an up-front payment of RMB 2.5 million (HK$ 3 million) and the other a final payment of the balance of HK$ 5.5 million upon proof of the deposit into the victim’s account of the US$ 1 billion.

98.  As it was a fraud there never was going to be US$ 1 billion paid into the victim’s account, but, and this was obviously crucial to the success of the fraud, the conspirators had to convince the victim that the deposit had, in fact, been made.

99.  In order to do this they had to achieve two things.  First, they had to prevent the victim from accessing his bank account and secondly, they had to control the information he received about his account. Preventing the victim from accessing his account was achieved by Clause 4 of the contract, operating in conjunction with, it must be said, the gullibility of the victim.  Controlling the flow of information to the victim about the financial state of his account and specifically persuading him that US$ 1 billion had been deposited into it was achieved by having Lam pose as an HSBC staff member.

100.  Placed in the overall context of how the fraud was to be carried out it can readily be seen just how important Lam’s role was to the success of the fraud.  He was no mere messenger of the conspirators nor was he posing as just a messenger of HSBC.  He was posing as a “Customer Relationship Manager” of HSBC and his role was to obtain and provide to a customer of the bank confidential financial information relating to that customer’s bank account – a customer whose account was expected to have US$ 1 billion in it.

101.  If a person intends to pose as an employee of a particular organisation whose staff have to dress in a certain way, then the poseur has to look the part.  Here there was a particular look for HSBC staff, namely, for males, a dark suit, and so Lam had to attend the bank wearing a dark suit.  Of course, it goes without saying that not only could the conspirators not take the chance of Lam not wearing the required clothes for his role, they could not take the chance that he would not be available or would be unwilling to perform the role.  So for the conspirator’s plan to succeed they had to know, at the very least, that they had a willing participant who knew that:

(1) He had to attend the bank at a certain time dressed in the clothes needed to play the role of an HSBC employee;

(2) The type of staff he had to play was a Customer Relationship Manager; and

(3) He had to hand to another person a document purporting to emanate from the bank.

102.  But in our view it goes beyond this.  Given the nature of the fraud and given the role that Lam was required to play he would have had to know that the person to whom he was giving the document was a customer of the bank and that the document in the envelope was a forged bank statement relating to that customer’s account.  Playing the role of a Customer Relationship Manager who was giving a customer a copy of his bank statement would require that Lam have basic knowledge of the contents of the statement.  After all, he is the person who has just gone and obtained it.  Furthermore, the success of the fraud depends upon the victim being convinced that the deposit has been made.  Convincing the victim of this will be by means not only of the forged document but also of the persuasive acting of Lam in producing it and being able to answer any queries in relation to it.  It is inconceivable that he could be expected to carry out this role without knowing the details of the conspiracy.

103.  There is also the evidence of the victim that when Lam first arrived at 5^th floor of the bank he greeted the 1^st applicant.  This shows at the very least that he recognized the 1^st applicant, and therefore that the 1^st applicant must have been previously known to him.  Then, when Lam reappeared an hour later the first thing he did was to again greet the 1^st applicant.  It is noteworthy that none of the victim’s evidence was challenged by Lam whose counsel chose not to cross-examine him.

104.  When this direct evidence that Lam was known to the 1^st applicant is combined with the inferences that can be drawn from the role played by Lam in the conspiracy we are of the view that the only reasonable inference that can be drawn is that Lam was a party to this conspiracy.

Sentence

105.  The sentence of 4 years 10 months’ imprisonment is not manifestly excessive for a fraud of this level of sophistication.  The judge was also correct in not distinguishing between the roles of the different conspirators.  Although the sentences for the two offences were ordered to be served concurrently, we should say that the sentence of 1 year and 10 months on the 2^nd charge of using a false instrument, far from being manifestly excessive, is in fact a very lenient sentence as recognized by Mr Duncan.

Conclusion

106.  Li’s application for leave to appeal against conviction was dismissed.  Lam’s application for leave to appeal against conviction on the 2^nd charge was dismissed, and his application for leave to appeal against conviction on the 1^st charge is also dismissed.

107.  We also dismiss Lam’s application for leave to appeal against sentence.