HKSAR v. LEONG WA CHONG

DCCC 285/2019

[2019] HKDC 1726

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 285 OF 2019

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Reasons for Verdict

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1.  The defendant faces alternate charges of using a false instrument, contrary to section 73 of the Crimes Ordinance, and possession of false instruments, contrary to section 75(1) of the same ordinance. Those false instruments are a foreign currency dollar account deposit form in the amount of, US$666,600,000,000 that is purportedly issued by the Hong Kong and Shanghai Banking Corporation. The second one is a transaction advice also purportedly issued by the Hong Kong and Shanghai Banking Corporation.

2.  This defendant and the 1st defendant on the indictment, who has absconded, are said to have presented these documents to HSBC (Hong Kong and Shanghai Banking Corporation) with the intention that that bank accept them as genuine, and then the bank to act on those documents to their own prejudice.  There is no dispute and there can be no doubt that these documents are forgeries.  They are false instruments within the definition of the Crimes Ordinance.  The defendant himself says he did not know or believe these documents to be false instruments.

3.  The details of the prosecution case and their evidence are that the offence was committed on 28th September of 2018.  The 1st and 2nd defendant were in the main branch of HSBC (that is, the bank) in Queen’s Road Central.  They arranged to see a Mr Ho.  He was the first prosecution witness.  He is the client account manager of a person named “Hu Jie”, or “Hu Jie”. 

4.  Mr Ho’s evidence was that at 1400 hours, 2 pm, two men (that is, the 1st and 2nd defendant) came to see him as declared friends of the client Hu Jie.  Although he was (that is, Mr Ho) Mr Hu’s client account manager, he had never seen or dealt with the affairs of Mr Hu before.  He said one of the two males was this defendant.  He said they spoke.  They both spoke, he said. 

5.  One man, whom the first prosecution witness could not recall which, produced two pieces of paper.  They were the deposit form and the transaction advice, the false instruments referred to in the indictment.  They appeared to Mr Ho to be, firstly, a remittance advice from a Mr Zhou crediting Hu Jie on 21st September 2018, and, secondly, a notice of receipt of money in the sum of US$666,600,000,000. 

6.  PW1 (that is, Mr Ho) said that they said the amount of money, or this amount of money, was to be deposited into Mr Hu’s account.  He reiterated it was to be deposited.  He, Mr Ho, was requested to execute it.  One of the men said this - he could not recall which of the men, he said they wanted the money deposited to Mr Hu’s account.  They claimed to be friends of Mr Hu and worked for him.  Mr Ho said their transaction was mainly about depositing this money into Mr Hu’s account.

7.  PW1 formed the view the documents were false simply by looking at them.  He reported the matter to his manager, who eventually reported the matter to the police. 

8.  Besides the evidence of the conversation and the meeting between Mr Ho and the two men, the other evidence in the case was a video recorded interview of this defendant. 

9.  In essence, the defendant said in his interview that they (that is, the two men) went to see HSBC to see PW1 because they wished to verify the authenticity of the two documents, and the 2nd defendant had known the 1st defendant for some time.  The 2nd defendant said he heard a conversation between Mr Hu and a Madam Wong about converting the US$666.6 billion on behalf of a Mr Zhou.  He had offered to help. 

10.  He had met a person called “Mr Hu” and been given the two documents.  He had passed them to the 1st defendant, and the 1st defendant returned the documents to him, asking him if had checked their authenticity with HSBC, and Madam Wong had told this defendant that Mr Ho was Mr Hu’s relationship manager and Hu had promised that there would be a luxury mansion in reward for this work.

11.  There was no dispute in the evidence that the two relevant documents were false instruments.  They contained obvious errors on their face.  For example, the word “information” is misspelt.  The word “of” is missing.  The dates of the two documents differ, although they are supposed to refer to the same transaction.  Also, of course, there is the inherent incredibility of the sums referred to in the document.

12.  I have noticed the defendant has a clear record.  He did not give or call evidence, but no adverse inference can be drawn from those decisions.

13.  As far as the law is concerned, the burden of proof remains on the prosecution at all times and the prosecution must prove the charges they bring beyond reasonable doubt.  Where the prosecution relies on an inference to be drawn, as they do in this case, it must be the only available inference that can reasonably be drawn from the evidence called.

14.  The defendant has a clear record.  This is relevant to his propensity to commit an offence of this nature and the credibility of anything said by him.

15.  As far as the 1st charge is concerned, the prosecution must prove the defendant used the false instrument.  The intention required is this:  at the time he knew or believed the false instruments were false and he did it with the intention of inducing the staff of the bank, HSBC, to accept them as genuine and, by that acceptance, to do some act to their own or another’s prejudice.  This is a double requirement of intention.

16.  If the second alternate charge is considered, the prosecution must establish the false documents were under the 2nd defendant’s control.  The remaining mens rea elements are the same as in the 1st charge.

17.  It was submitted that the 2nd defendant, the defendant in this case, acted as a kind of errand boy.  Someone had to go to the bank to see if the transactions shown in the two documents had gone through.  The defendant had told the police that he did not know the documents were false.  It is said he was naïve and foolish but not dishonest.  He did not and could not know or believe that the documents were false and so the intention cannot be made out.

18.  As far as the resolution of the issues is concerned, I find as follows, that although the defendant’s video recorded interview puts forward that the 1st and 2nd defendant went to HSBC (that is, the bank) to verify the documents, Mr Ho, who is the only live witness of that conversation, never even mentioned the possibility there had been any verification.  Mr Ho’s evidence as to what the two men were doing was requesting the deposit to be made and Mr Ho was requested to execute it.  That is the only live evidence received by the court on the issue. 

19.  It was put in cross-examination the money should be transferred into Hong Kong dollars or were to be transferred into Hong Kong dollars.  Mr Ho said that did not happen.

20.  I fully accept Mr Ho’s account of what happened, that the two men came to him and asked that the documents be executed, to request the deposit of the money to be made to Mr Hu’s account.  It is clear there was no request for verification or a transfer into Hong Kong dollars.  What actually happened could only be found from Mr Ho’s evidence.

21.  The other significant part of the evidence are the documents themselves.  They are obviously false on their face.  They are obviously part of a scam.  I cannot see how anyone could consider them to have any authenticity. 

22.  Besides the obvious errors on the face of the document, there is also the sum of money involved:  US$666.6 billion.  That, by my calculation, is a sum that would be over US$200 billion higher than the Hong Kong foreign currency reserves of the Hong Kong and Shanghai Banking Corporation.  They would not have sufficient liquidity to honour this.  It is in fact larger than the entire foreign currency reserves of the Hong Kong Special Administrative Region.  It is an obvious forgery. 

23.  When the defendant says he was unaware of this, he must be lying.  There can be no other explanation.  These two men, the 1st and 2nd defendant, took these obviously false documents to the Hong Kong and Shanghai Banking Corporation and asked them to act on it.  As I said already, they must have known the documents were false instruments.

24.  The only purpose of producing them would be to induce the staff of the bank to accept them as genuine.  That is the only intent that could be inferred from this act and one must intend also, by producing them, to intend the bank does some act to its prejudice.  The necessary intent must be inferred from their actions.  It is clearly proved to a criminal standard; that is, beyond all reasonable doubt. 

25.  It is not necessary to establish who actually made the request, as Mr Ho’s evidence was that they supported, the two men, supported each other in their application.  It was clearly evidenced as a joint enterprise.

26.  Clearly, given the nature of the documents, it was always likely that any bank would query them, but that does not alter the proof of the actions and the intentions of the defendants.  Their approach was foolish and ill-fated. 

27.  Nevertheless, the prosecution have proved that their acts were fully within the definition of the 1st charge.  The prosecution has proved each and every element of the charge against the defendant.  He will be convicted. 

28.  Having made that decision on the 1st charge, there is no need to bring in a verdict on the 2nd charge.