HKSAR v. CHOW SHUK HAN CELIA

DCCC 1166/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1166 OF 2016

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Reasons for Sentence

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1.  This case involves a plea to 24 charges. All are fraud charges bar one. Charge 10 was using a copy of a false instrument. In this case, the defendant induced four victims to give her large amounts of money on the false pretence of investing either on their behalves or investing together with her.

2.  PW1, who is the victim of Charges 1 to 10, met the defendant in 2002.  They became very close friends.  PW1 confided in her. PW1 believed the defendant when she over the years spun her a web of lies. 

3.  The defendant told PW1 that her father-in-law had an investment account with South China Securities.  She convinced PW1 that meant he got favourable prices and made good profit.  PW1 believed this company did not deal with normal retail clients.  She was impressed.  The defendant convinced PW1 that the money she invested through her father-in-law’s account could make huge annual returns, as much as 20 per cent in a year.  She convinced her on many occasions to add to her first or initial investment of $400,000.  Hence there were nine charges of fraud where PW1 is concerned.

4.  The schemes she was induced into investing in included investments through this South China Securities account, as well as other high-return, allegedly short-term investments, a property in Fotan and even giving or lending the defendant money for what she described as legal expenses for her father-in-law’s probate action.  These frauds went on for seven years.

5.  Sometimes the defendant did periodically give PW1 money, telling her it was returns from her investment. 

6.  However, by 2011, PW1 became suspicious and asked the defendant to account for all her investment over seven years.  The defendant stalled PW1 on several occasions.  She even showed her a forged letter allegedly from Sino, stating PW1 had the ownership of a Palazzo property.  This false instrument is the subject matter of Charge 10.

7.  Over the years, PW1 suffered a total loss of $6,984,812. 

8.  PW1 kept chasing the defendant to account for her money.  At one point defendant gave her a cheque of $5 million, which bounced in June 2011.  When that happened, PW1 made a report to the police.

9.  PW2 is a victim and the charges that concern him are Charges 11 to 18.  He is what I refer to as the second victim.   He is a male who met the defendant and assumed from appearances and her conversation that she was a wealthy, savvy woman.  They often played mah-jong together. 

10.  In December 2007, the defendant convinced PW2 to invest in some shares, saying she could get preferential rates to buy shares. From December 2007 to June 2010, the defendant defrauded PW2 on eight occasions.  On six occasions, she conned him into giving her money to buy shares on his behalf.  On the other two occasions, she convinced him to hand over money to buy an investment property with her as partners. 

11.  Over that period of time, PW2 lost a total of $817,593. 

12.  Charges 19 to 23 were frauds perpetrated on the third victim, PW3.  PW3 was a woman who met the defendant in 2006 playing mah-jong.  They became friends and often socialised together.  She believed the defendant was very wealthy from her many designer handbags and talk of owning many properties in Hong Kong.  She believed the defendant when she said she would help PW3 make investments with good returns. 

13.  The defendant convinced her to part with a total of $650,250 on five occasions, hence charges 19 to 23.  PW3 believed she was buying shares through the defendant as well as investing in a property in Macau and Tseung Kwan O.  PW3 believed she was investing in these properties together with the defendant.  PW3 even borrowed money to make these payments to the defendant.

14.  PW4 - Charge 24 relates to the fourth victim. He also met the defendant through mah-jong and a mutual friend.  He, like the others, believed from appearances the defendant was wealthy and an astute investor.  He was conned by the defendant into handing over $72,133 he believed was put towards investing in a property with the defendant. 

15.  The total loss that all four victims suffered add up to $8.524 million.

16.  The defendant surrendered to the police in October 2011.  By then, at least three victims had already made a report to the police. 

17.  Under caution, the defendant did tell the police she had no access to a stockbroker’s account nor owned any actual property, but where details of the victims and their losses were concerned, she remained silent.

18.  The defendant was also made subject of a bankruptcy order in 2011.

19.  There was never any shares purchased on behalf of the victims nor were any properties purchased for the victims nor was there an investment account at South China Securities available to the defendant. All four victims were scammed by a very persuasive woman.

20.  The Prosecution has provided the court with statements.  They are victim-impact assessment statements which are useful when it comes to sentencing. 

21.  I will not repeat the details, but, to summarise, PW1, who has since emigrated from Hong Kong, suffered great stress and distress as a result of these frauds perpetrated on her by the defendant she believed to be her best friend.  She now mistrusts people in general, even other friends. The huge amount of money she gave to the defendant was essentially for her pension and future.  On reflection she believed that the defendant befriended her in 2002 with the intention of bleeding her dry of her money.  Clearly there has been a detrimental impact on PW1, other than her financial loss. 

22.  This also applies to the second victim, PW2. He gave the defendant his savings and even borrowed money from a financial company to make the investments the defendant convinced him to make.  He then had to reluctantly borrow money from family members to repay that finance company.  His relationship with his own family has been affected.  He became depressed after it was revealed that the defendant was a fraud and he had lost that money.

23.  PW3 confirmed that the money she lost came from her savings as well as borrowing money from a relative to give to the defendant.  She too has lost confidence in people in general after she had been scammed by the defendant. 

24.  PW4 also confirmed that what he lost to the defendant was his savings.

25.  I have heard mitigation in full.  Mr Iu has said all he can say on behalf of the defendant. 

26.  The defendant is now 41 years old.  She is married.  She has no children in this marriage.  She was not working during the time of these frauds, between 2006 and 2011.  Prior to this case, she had a clear record.

27.  I have received a letter from the defendant, considered its contents.  She expresses her remorse and asks for mercy.

28.  On the last occasion, I adjourned to today for a psychologist’s report.  She gave further background detail to the psychologist.  She came from a poor family and had four half-siblings from her mother’s first marriage.  She had an uneventful childhood and adolescence.  She married in 2008. 

29.  Her father in 2003 was diagnosed with liver cancer and died in 2007.  She needed money to help her father pay for medical expenses and at that time, knowing PW1 was wealthy, instead of asking her to lend her some money, she scammed PW1 instead.  When PW1 became suspicious or reluctant to hand over more money, the defendant turned to find other victims, those being PW2 to PW4.

30.  The defendant has said she paid for her father’s medical expenses, but I note the year he passed away.  These scams continued long after he passed away. 

31.  She admitted that when she was given money by the victims she would go to Macau and gamble with that money.  She says she hoped she would regain or win money to repay the victims, but obviously that did not happen.  Despite this admission, she denies a gambling problem or addiction.

32.  In 2011 she was uncovered as a con woman and, according to the report, then contemplated suicide and she had to receive psychiatric treatment and did before surrendering to the police.  The report does not diagnose any psychological issues existing now.  In fact, the report concludes with the defendant committing the offences out of greed. 

33.  In short, having considered all the facts of this case, the report at hand, and having heard mitigation, the defendant is a fraudster who befriended people with the aim of scamming them.  She was a predator and a successful one.

34.  These frauds are not breach of trust offences, in the strict sense of the word or the strict sense of the definition, but actually are no less serious than such offences.  She set out to gain the trust of victims, put herself forward as a wealthy, investment-savvy woman and succeeded in convincing them to hand over large sums of money.

35.  It has been put forward in mitigation that the delay in bringing a prosecution is a factor I should take into account. 

36.  These frauds took place over six years:  2004 to 2010.  The defendant surrendered to the police in October 2011 and was charged almost exactly five years later. 

37.  From the facts, one can see that there were many transactions to investigate.  The money trail would have been laborious.  There were many accounts to look into, including at least eight bank accounts.  There were many people who were interviewed because they had handled money given to the defendant by the victims.  The police also had to investigate if there were any property purchases, share purchases, even going so far as engaging the Treasury accountant to help.  Legal advice was obtained on at least two occasions.  The prosecution even filed a production order with the Inland Revenue Department to check the defendant’s background.

38.  Whether this is a factor I should take into account leads me to look at the chronology prepared by the prosecution, MFI-1. Mr Iu does accurately point out that there are gaps between dates in this chronology, but I can accept that not every action taken is included in this chronology.  There would have been other work put into this investigation that was not described in this chronology. 

39.  I accept that delay in prosecuting or delay in charging an arrested person can be a mitigating factor.  Delay can be a strain on an arrested person waiting for the result or action to be taken by the police in prosecution, but at the end of the day it is the defendant’s crimes that necessitated such a thorough investigation.  I do not see any obvious gaps where the police were inert or did nothing.  Financial frauds take time to investigate due to their nature often involving banks and financial institutions.

40.  After considering submissions made by the defence and MFI-1, as well as the complexity of the facts of these 24 charges, I do not place weight on this mitigation and will not reduce the starting point because of a delay in bringing a prosecution against the defendant.

41.  As far as tariff is concerned, I quote from HKSAR v Ng Tik Ki Chaneki, CACC 68/2011:

“Frauds such as this take on an almost infinite variety of shapes, seeking to inflict all manner of harm. Often, as in the present case, they involve the exploitation of the victim’s trust. For such reasons, in respect of crimes of fraud, there is no sentencing tariff as such.”

42.  Defendant, please stand up.

43.  I take into account here the facts of each charge.  As I have made it clear, I group them into four groups of charges according to the victims for the purposes of sentencing.  The loss suffered by each victim is very pertinent to sentence.  PW1 in particular lost nearly $7 million.  I repeat, where all four victims are concerned, the total loss is $8.52 million. 

44.  In my view, it is an aggravating factor how long the defendant perpetrated the frauds on each victim.  PW1 was scammed over a period of seven years; PW2 and PW3 about two and a half years.  What is also relevant is the impact on the victims, in particular here PW1 and PW2. 

45.  I have also taken into account mitigation put forward, the psychologist’s report, the defendant’s previous clear record, and her plea in this case.

46.  I do note that her emotional problems and suicidal ideas came after she realised she was in deep trouble and about to be arrested.  Her reasons for scamming PW1 to 4 do not deserve any sympathy. 

47.  I am satisfied that a global approach and a starting point of 4 years should apply to those frauds perpetrated on PW1.  I find fraud charges 1 to 9 as well as Charge 10, using a false instrument, all attract a starting point of 4 years’ imprisonment. 

48.  For Charges 11 to 18, which relate to the second victim, I find a global approach and overall starting point of 2 years and 9 months appropriate for each of those charges. 

49.  The same applies for Charges 19 to 23, those that concern PW3, the third victim:  again, a starting point of 2 years and 9 months. 

50.  The last charge, Charge 24, the charge involving PW4, the fourth victim, I take a starting point of 2 years’ imprisonment.  

51.  The defendant has pleaded guilty and is entitled to a discount of one-third for all those charges. 

52.  After that discount is applied:

(1) for Charges 1 to 10, the defendant is sentenced to 2 years and 8 months;

(2) for Charges 11 to 18, the defendant is sentenced to 1 year and 10 months;

(3) the same for Charges 19 to 23; the defendant is sentenced to 1 year and 10 months;

(4) for Charge 24, the defendant is sentenced to 1 year and 4 months.

53.  I take into account the totality principle.  I find, looking at the defendant’s criminality on the whole, for all 24 charges, against the four victims, an overall sentence of 4 years is appropriate.

54.  Therefore:

(1) I order 7 months of Charge 11 to run consecutively to Charge 1;

(2) I order 6 months of Charge 19 to run consecutively to Charge 1;

(3) I order 3 months of Charge 24 to run consecutively to Charge 1;

(4) all other sentences will run concurrently to Charge 1.

55.  Therefore, a total sentence of 4 years’ imprisonment is imposed.

COURT: Do you understand, defendant?

DEFENDANT: Understood.