HKSAR v. NG SWEE THIAM AND OTHERS

CACC 475/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 475 OF 1998

(ON APPEAL FROM HCCC 107 & 245/1997)

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. At the outset of the trial before Deputy Judge Jackson (as he then was) D1 and D3 pleaded guilty to various offences.

2. The Judge postponed sentencing these applicants until the conclusion of the trial of D2. In his judgment in relation to D2's application for leave to appeal against his conviction Stuart-Moore, VP gave a detailed description of the nature of the involvement of all of these men in what can best be described as a very serious fraud relating to credit cards. This being the case a general outline of the roles assumed by these men will suffice for present purposes.

3. D1 pleaded guilty to two offences of possessing equipment for making false instruments contrary to s. 76(1) of the Crimes Ordinance, Cap. 200 being counts 2 and 5, four offences of possessing false instruments, contrary to s. 75(1) and (2) of the Crimes Ordinance being counts 3, 6, 7 and 8 and to one offence of possessing a forged travel document, contrary to s. 42(2)(c)(i) and (4) of the Immigration Ordinance, Cap. 115 being count 9 and to one offence of contravening a condition of stay, contrary to s. 41 of Immigration Ordinance, Cap. 115 being count 10.

4. D3 pleaded guilty to one offence of possessing equipment for making false instruments jointly with D1 being count 2 and to one offence of possessing false instruments jointly with D1 being count 3 and one offence of making a false statement to an immigration officer, contrary to s. 42(1)(a) and (4) of Immigration Ordinance, Cap. 115 being count 11.

5. D1 was sentenced to 6 years imprisonment on counts 2 and 5 and 3 years 4 months imprisonment on counts 3 and 6. He was sentenced to 2 years imprisonment on count 7 and 6 months each in respect of counts 8, 9 and 10. The sentences imposed on counts 2 and 3 were to be served concurrently as were the sentences on counts 5 & 6. However it was ordered that 2 years of the sentence imposed on count 6 should be served consecutively to the sentences imposed on counts 2 and 3. The sentence imposed on count 7 was to be served consecutively to the other sentences. The sentences imposed on counts 8, 9 and 10 were to be served concurrently with the other sentences thus giving a total of 10 years imprisonment to be served altogether.

6. D3 was sentenced to 6 years imprisonment on count 2 and 3 years 4 months imprisonment on count 3 to be served concurrently. On count 11 he was sentenced to 6 months imprisonment to be served consecutively thus giving a total of 6 years 6 months imprisonment altogether.

7. Both men seek leave to appeal against the sentences imposed upon them.

8. At the conclusion of D2's trial he was convicted and sentenced to 9 years imprisonment on counts 1 and 4 to be served concurrently. These offences related to conspiracies to commit forgeries, contrary to ss 71 and 159A of the Crimes Ordinance, Cap. 200. The time frame for the conspiracy in count 1 was from 1st September 1996 to 8th October 1996 and for the conspiracy in count 4 was 1st October 1996 to 11th December 1996.

9. He was also convicted on the 3rd and 6th counts of being in possession of false instruments contrary to s. 75(1) of the Crime Ordinance, Cap. 200. For this he received a sentence of 5 years imprisonment 2 years of which were to be served concurrently with the conspiracy counts thus making a total sentence of 12 years imprisonment. He seeks leave to appeal against these sentences.

10. D1 and D3 were both charged with these conspiracies and the prosecution accepted their pleas of not guilty. Count 2 was an alternative count to count 1 and count 5 was an alternative to count 4.

11. To understand all of this better and to enable it to be seen in its correct context it is necessary to outline what occurred.

12. Police officers undertaking surveillance duties on 8th October 1996 saw D3 coming out of a flat in Tsuen Wan. They apprehended him and took him back to the flat where a search was conducted.

13. Equipment was found which was consistent with the production of forged credit cards. There was a huge quantity of items associated with the manufacture of false credit cards including 2 rolls of gold and silver tin foil 44 base credit cards which were not embossed or encoded and papers bearing credit card account numbers.

14. There was also equipment for the purpose of encoding account information onto false credit cards and also significantly Point Of Sale ("POS") equipment which enabled approval to be given to transactions in relation to the false credit cards.

15. A computer software programme was installed in a notebook computer containing over 34,000 credit card numbers of various credit card institutions. Considerable controversy surrounded this programme. Mr. Reading, S.C. for the respondent conceded that while some of the numbers were valid others were invalid and still others fictitious. It does however appear that the programme enabled an operator to encode credit card account information onto magnetic strips on the base of credit cards.

16. This would enable a transaction to be authorised if it was made through a cloned mobile telephone to a credit card centre.

17. This factory or operation has been described as being unique. One such feature being the existence of the POS equipment which is normally unavailable in Hong Kong.

18. 18 credit cards purporting to be genuine credit cards were found in the factory while a large number of cards were found to be in the process of being made up.

19. D3 was the only defendant to be arrested in connection with the Tsuen Wan raid.

20. A raid was conducted on premises at Tuen Mun on 11th December 1996. The flat which was raided was occupied by D2 and his family. D1 occupied one of the rooms in the flat. Very similar equipment was found in this flat to the equipment found in the Tsuen Wan flat. The number of accounts in the computer programme was in excess of 39,000 and most of the numbers were the same as those found in the programme at Tsuen Wan.

21. Miss Remedios represented both D1 & D3 before us. It was her contention that the starting point of 9 years adopted by the Judge on the s.76(1) charges was manifestly excessive.

22. She submitted that the Judge had adopted the same starting point in relation to these offences as he had for the two conspiracies committed by D2 which had been conducted over a period of time.

23. We do not consider there to be merit in this submission. It is clear from s.76 that it envisages more than simple possession of the equipment. It includes possession with the specific intention to make false credit cards.

24. Once it is established that a defendant has this intention it is unrealistic to differentiate his criminality from that of a person who is engaged in a conspiracy to do the same thing.

25. Miss Remedios also argued that on the basis of the facts which had been agreed it was not possible to say that the present offences were very different from those considered in R. v. Chan Sui-to and Wong Siu-mei unreported being Crim. App. 115 of 1996.

26. After considering a number of cases involving credit cards Yang, C.J. who delivered the judgment of the court said at p. 13:

"Allowing for the different facts and the varying degrees of culpability, it is impossible to formulate a set of principles of sentencing from those decisions. 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."

27. It has to be said immediately that there are significant differences between that case and the present one.

28. Although it was not possible to obtain any accurate idea of the proportion of invalid or fictional account numbers in the computer programmes which have been referred to it is apparent that there was an enormous potential for losses.

29. In his summing-up at pages 61 and 62 of the appeal bundle the Judge commented on the expert evidence given by the representative of Mastercard:

"He then dealt with the account details taken from the computer at Tsuen Wan. He said that there was approximately 20,000 of them relating to Mastercard, and that he received 4,701 replies to his inquiries about these accounts, which replies confirmed that, of the 4,701, 1,198 had been fraudulently used on no fewer than 6,517 occasions to the amount of some US$3.69 million."

and then when dealing with the 3,503 accounts (that is 4,701 minus 1,198) which were not fraudulent he went on to say:

"The witnesses was (sic) asked to estimate the potential loss that might be generated to Mastercard from all the account information gathered at both Tsuen Wan and Tuen Mun, and he estimated at about US$5,000 for each of the 3,503 accounts. He said that 4,701 accounts were identified in the computers at both premises, 1,198 of which had been used fraudulently."

30. While it may be the case that these applicants were not directly involved in all of these accounts it is nonetheless true to say that this operation as a whole had a potential to generate losses of a very large order.

31. There was further evidence which differentiated this operation from the one referred to in Chan Sui-to. This was the fact that the POS machine was being used which was indicative of a highly sophisticated operation.

32. There can be no doubt that a much higher starting point was called for in the present case.

33. What all of this seems to indicate is that the guidelines referred to in Chan Siu-to may need to be amplified.

34. The question of the amount of losses which may be proved may pale into insignificance when consideration is given to the potential for losses in the future.

35. In the present case the only limit on the extent of losses to be incurred was the capacity to produce and use the false cards and the amount of time before the miscreants were caught.

36. It is this potential for losses which is the most important consideration. It may well be the case that it is not a simple matter to lay down any hard and fast rule of thumb in determining appropriate sentences in individual cases. What can however be said with certainty is that this was a much more serious case than Chan Sui-to and that much heavier sentences were fully justified.

37. Mr Grounds for D2 accepted that it was a serious case. However having regard to the facts which have been outlined he argued that the reality of the position was that there was one overriding conspiracy and not two separate ones. This being the case there should not be any question of consecutive sentences being imposed in relation to the conspiracies. He also accepted the position earlier indicated in this judgment that it was right to equate the criminality of substantive offences under s. 76 with the conspiracy.

38. It was however his main contention that even for a conspiracy as serious as this one a starting point of 12 years imprisonment was manifestly excessive.

39. The other matters he prayed in aid were D2's willingness to agree much of the evidence thus shortening the trial and the evidence to the effect that D2 was now attempting to turn over a new leaf and lead a constructive life in the future. Unfortunately when dealing with a crime as serious as this the personal characteristics of defendants can have little bearing on the sentence to be imposed.

40. There is however considerable merit in the contention that for sentencing purposes the conspiracies should be treated as one conspiracy. Such an approach is more likely to produce a just result.

41. The question which then has to be considered is what is the proper starting point. After anxious consideration we have come to the conclusion that having regard to the very serious implications of these offences the correct starting point is 10 years imprisonment. Adopting this as the starting point the sentences which should have been imposed on these applicants were as follows:

D1. The starting points for counts 2 and 5 should have been 10 years. He was entitled to the usual 1/3 discount reducing the sentences to 6 years 8 months imprisonment both of which are to be served concurrently.

42. The correct starting points for counts 3 and 6 namely for possessing false instruments was 3 years imprisonment which are reduced to 2 years for the pleas. Both of these should amongst themselves be served concurrently and should be concurrent to the sentences imposed on counts 2 and 5.

43. Count 7 related to possession of forged travellers cheques, count 8 to forged immigration chops, count 9 to a forged passport and count 10 to overstaying. None of these offences formed part of the s. 76 charges that is counts 2 and 5 which are equated with the conspiracy. We see no reason to interfere with the sentences imposed by the Judge of 2 years imprisonment consecutive for count 7 and 6 months for counts 8, 9 and 10 all to be served concurrently with the other charges.

44. This makes a total sentence of 8 years 8 months imprisonment for D1.

D2. For counts 1 and 4 being the conspiracy counts he is sentenced to 10 years imprisonment which are to be served concurrently. For counts 3 and 6 the possession charges he is sentenced to 5 years imprisonment both of which are to be served concurrently with counts 1 and 4. The total sentence is accordingly 10 years imprisonment.

D3. He was only guilty of the part of the conspiracy which related to the Tsuen Wan Factory. He accordingly gets a reduction of 2 years from the 10 years starting point which has been adopted. From this he gets the usual 1/3 discount which leaves a sentence of 5 years 4 months. He was sentenced to 3 years 4 months imprisonment on count 3 concurrent with the sentence on count 2 and 6 months consecutive on count 11 for making the false statement to an immigration officer. We see no reason to interfere with these sentences.

45. The total term of imprisonment for D3 is accordingly 5 years 10 months.

46. The application is accordingly allowed and treating it as the appeal it is ordered that the sentences above indicated will be substituted where appropriate for those ordered by the Judge. To this extent the appeal is allowed.