HKSAR v. CHIK HOI FUNG ALEX AND OTHERS

DCCC 496/2019

[2020] HKDC 393

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 496 OF 2019

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Reasons for Sentence

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1.   This is a fraud case with three defendants. The 1st defendant pleaded guilty before me to all but four charges (Charges 10, 12, 16 and 17) on a charge sheet consisting of 17 charges. Charges 1 and 2 are fraud charges, contrary to section 16A of the Theft Ordinance, Cap 210. The remaining 11 charges are conspiracy-to-defraud charges, contrary to common law and punishable under section 159C(6) of the Crimes Ordinance, Cap 200.

2.   The 1st defendant pleaded not guilty to Charges 10, 12, 16 and 17.  Those charges have been left on the court file as requested by the prosecution.  Those charges have been left on the court file, not to be proceeded with unless there is leave of this court or the Court of Appeal. 

3.   The 2nd defendant pleaded guilty to all the charges she faced (Charges 7, 9, 11, 13, 14, and 15) consisting of six charges of conspiracy to defraud.  She was jointly charged with the 1st defendant. 

4.   The 3rd defendant pleaded guilty to all the charges she faced (Charges 4 and 8) consisting of two charges of conspiracy to defraud.  She was jointly charged with the 1st defendant. 

The Facts: Charges 1 and 2

5.   The facts have been admitted by all the defendants.  This was a fraud with planning.  The 1st defendant with an accomplice, a wanted person, advertised false employment and induced two groups of female victims to hand over their personal documents such as their Hong Kong identity cards, proof of address, ATM cards, and in some cases a $100 application fee for the purposes of facilitating this employment.  They then made an excuse and disappeared with all of these original documents. 

6.   In the week between 5 April 2018 and 13 April 2018, 10 victims, PWs 1 to 10, saw a job advertised on a Facebook page hosted by D1 under a false name.  They contacted the 1st defendant and were all invited to an interview on 13 April 2018 where they met the 1st defendant and his accomplice.  They were each given an application form to fill in and asked to hand over those original documents.  All but one prosecution witness handed these men their documents.  They were told they had to be photocopied nearby but in reality the 1st defendant and his accomplice vanished.  The victims reported the scam to the police.  These are the facts of Charge 1. 

7.   In the week between 17 April and 28 April 2018, six other victims, PW11 to 16, fell for the same scam after seeing false employment advertised by the 1st defendant under a false name.  On 28 April 2018, the six victims attended an interview and were tricked into handing over their original documents to the 1st defendant.  When he did not return from supposedly photocopying their documents, the police were called.  These are the facts of Charge 2. 

8.   The purpose of tricking these victims into handing over their bank cards, ID cards and proof of address was for the 1st defendant and his accomplice to use them to impersonate the victims to commit fraudulent offences.  These included; A, applying for loans from financial institutions; B, withdrawing money from the victims’ own bank accounts; C, applying for credit cards in the victims’ names; and D, opening bank accounts to facilitate the loan frauds.

9.   The 1st defendant employed young women, including the 2nd and 3rd defendant, to impersonate the victims in order to commit fraudulent offences.  On 12 different occasions, young women were employed to go to and defraud financial institutions. 

10.   The 2nd and 3rd defendant participated in a conspiracy to defraud on eight of those occasions.  There were also instances where those personal documents were used to make online loan applications but none were successful.  After the 1st defendant had fraudulently obtained all the victims’ personal documents in Charges 1 and 2, he committed those other 11 fraudulent offences between April and June 2018.

Charge 3

11.   On 24 April 2018, someone used the personal details and stolen documents belonging to a victim of Charge 1 to apply for a credit card with AEON Credit Services (Asia) Company Limited (“AEON”) through its online application system.  The application was approved and on 30 May 2018, an unknown woman went into an AEON credit centre, impersonated the victim to collect that credit card.  She presented the victim’s original Hong Kong identity card.  On the same day, that credit card was used and $4,988.50 was spent. 

Charge 4

12.   This charge is against both the 1st and 3rd defendant.  The facts are similar to Charge 3.  The personal details and stolen documents belonging to a victim of Charge 1 were used to apply for a credit card.  On 21 May 2018, because the application was successful, the 3rd defendant went to an AEON credit centre and impersonated that victim to collect that credit card.  The 3rd defendant presented the victim’s original ID card. On that same day, the 3rd defendant applied to AEON to link that credit card account to four Octopus cards.  Between 25 May and 10 June 2018, this credit card was used to the amount of $23,920. 

Charge 5

13.   On 26 April 2018, an unknown woman presented a stolen ID card and bank statement belonging to a victim of Charge 1 to staff in a Hang Seng Bank branch and impersonated that victim.  She closed that account and withdrew the balance of $3,332.36.  The bank complied with that request to do just that, not knowing that the woman was an imposter. 

Charge 6

14.   On 3 May 2018, an unknown woman went into a branch of Promise (Hong Kong) Company Limited (“Promise”) and applied for a $100,000 loan, impersonating a victim of Charge 2 using her personal details and stolen documents.  The loan was approved and the 1st defendant admitted he received a reward of $20,000 from this fraudulently obtained loan. 

Charge 7

15.   This charge is against both the 1st and 2nd defendant.  The facts are similar to Charge 6.  On 25 May 2018, the 2nd defendant went into a branch of Promise and applied for a $60,000 loan, impersonating a victim of Charge 2 using her personal details and stolen documents.  An initial loan of $10,000 was approved because of a lack of income proof.  The 2nd defendant returned the same day with further forged documents in that same victim’s name and again applied for a loan.  An additional $30,000 loan was approved and credited to a Citibank account in the name of that victim. 

16.   The 2nd defendant had previously opened a Citibank account by impersonating the victim using that same victim’s personal details and stolen documents.  This Citibank account was then used to facilitate that fraudulent loan. 

Charge 8

17.   This charge is against both the 1st and 3rd defendant.  On 4 June 2018, the 3rd defendant went into a branch of Public Finance and applied for a loan using the same stolen documents, forged documents and personal details used in Charge 7.  She applied for a $36,000 loan and filled in a form and signed a signature impersonating another.  The loan application was not successful as a staff member found a document suspicious.

Charge 9

18.   This charge is against both the 1st and 2nd defendant.  On 4 June 2018, AEON received an online loan application made in the name of a victim of Charge 2.  On the same day, 2nd defendant went into an AEON credit centre and presented the stolen documents taken from that victim as well as a forged income proof purportedly issued by the Shangri-La Hotel to that same victim.  The 2nd defendant applied for a $30,000 loan and it was granted.  Cash was given to the 2nd defendant. 

Charge 11

19.   This charge is against the 1st and 2nd defendant.  On 8 June 2018, the 2nd defendant went into a China Construction Bank branch and applied to open a bank account and obtain an ATM card. The 2nd defendant presented to the staff the personal details and stolen documents of a victim of Charge 2.  The 2nd defendant was asked to deposit $1,000 into that new account.  She received a passbook of that new account and was told she had to wait for the ATM card.  The 2nd defendant then withdrew $900 from that new account and left. 

Charge 13

20.   This charge is against both the 1st and 2nd defendant.  On 8 June 2018, the 2nd defendant went into an AEON credit centre and presented the personal details and stolen documents from a victim of Charge 2.  The same victim’s documents were used in Charge 11.  She applied for a $50,000 loan and presented the China Construction Bank branch passbook, subject of Charge 11, for the purposes of facilitating the loan.  That China Construction Bank account was clearly opened to facilitate fraudulent loans. This loan was rejected because the income proof looked suspicious.

Charge 14

21.   This charge is against the 1st and 2nd defendant.  On 12 June 2018, the 2nd defendant went into an AEON credit centre and presented the personal details and stolen documents of a victim from Charge 1.  Impersonating that victim, the 2nd defendant applied for a $40,000 loan but it was not approved.

Charge 15

22.   This charge is against the 1st and 2nd defendant.  On 12 June 2018, the 2nd defendant went into a Hang Seng Bank branch and impersonated a victim of Charge 2 by presenting her stolen Hong Kong identity card.  She made enquiries about a new ATM card because that had purportedly been lost earlier but in fact had been stolen by the 1st defendant.  The 2nd defendant also enquired about the bank balance.  The bank staff told her that the new ATM had already been issued and had already been used.  The bank staff were suspicious and became more suspicious when they noticed the 2nd defendant did not sign a signature that resembled that of the account holder.  The 2nd defendant then requested to change her signature and phone number in relation to the bank account.  The bank staff reported their suspicions to the police who arrested the 2nd defendant in the bank premises. 

Arrests

23.   The 1st defendant was arrested on 22 June 2018 and made a full admission.  He admitted deceiving the victims of Charges 1 and 2, tricking them into handing over their personal documents which were to be later used to defraud banks and financial institutions.  He said he was not the mastermind and was paid on a per-job basis.  He is friends with the mastermind.  He made a full admission of receiving rewards for successful credit card applications and loans. 

24.   The 1st defendant said that he asked his friend’s girlfriend, the 2nd defendant, to impersonate victims for a financial reward.  He also asked her to open a bank account by impersonating a victim of Charge 2 (Charges 11 and 13).  He asked her to impersonate victims to apply for loans.  The same applies to the 3rd defendant.  She committed these offences at the request of the 1st defendant. 

25.   The 2nd defendant, who had been arrested on 12 June 2018 by the police in the Hang Seng Bank branch, made a full admission as well.  She said her boyfriend had asked her to assist his friend, the 1st defendant.  She agreed to do that at his request.  She admits the facts behind all the six charges. 

26.   The 3rd defendant, after her arrest, also made full admissions to the police.  She agreed that she picked up a credit card fraudulently obtained in Charge 4 and received $3,000 as a reward.  She admitted that the 1st defendant had taken her to a branch of Public Finance and asked her to impersonate a victim of Charge 2 and apply for a loan.  That is Charge 8.

Mitigation

27.   The 2nd defendant and the 3rd defendant have clear records but the 1st defendant has four previous convictions.  In 2008, he was sent to a training centre for an assault with intent to rob when he was 16 years old.  In 2011, he was convicted of two charges of trafficking in dangerous drugs and served a term of imprisonment.  In 2014, he was sentenced to 2 years’ imprisonment for a burglary offence. 

The 1st Defendant

28.   He was about 25 years old when he committed these offences between April and June 2018.  I have heard full mitigation put forward on his behalf.  I have heard that he comes from a broken family and had a difficult upbringing as an adolescent.  He was raised by his grandmother.  He did later live with his mother but then lived on his own from when he was about 18 years old.  I have heard he completed secondary education and passed the Estate Agents Authority Examination.  He worked for about two years until November 2017 as an estate agent, financially supporting his grandparents every month.  He has completed an eight-month hairstylist course whilst on remand.  He has not wasted his time.  He hopes to work as a stylist after his release from prison.

29.   His best mitigation is his plea of guilty.  He frankly admitted his involvement when he was arrested and indicated his plea of guilty at the earliest opportunity.  I have been asked to consider the fact that he was not the mastermind of the scheme but assisted, for which he was rewarded. 

30.   Defence counsel has added the aggregate loss of all the charges to be about HK$200,000.  It was also submitted that the duration of the offences was not particularly long, about three months. 

The 2nd Defendant

31.   The 2nd defendant was 17 years old at the time of these offences.  Her best mitigation is her plea of guilty and she indicated her plea at the earliest opportunity.  She was persuaded by her boyfriend at the time to assist the 1st defendant.  She now regrets committing these offences and in fact received no financial reward.  She lives with her parents and has their full support.  She is now a full-time student studying a hotel management and catering course.  She is also a talented dancer and is a trainee in a semi-professional dance company which may lead to a career. 

32.   Defence counsel has stressed on behalf of the 2nd defendant that out of the six offences she has committed, only two resulted in real financial loss, a total of $70,000. 

33.   I have received many letters on behalf of the defendant from her brother, parents, employer and a friend, as well as the vice principal of her old school and a priest from a church.  I can see from those letters that the 2nd defendant is very remorseful.  She loved her first boyfriend who betrayed her.  He declared undying love but then disingenuously forced her to commit this offence by telling her she was just helping out.  She had no idea until after the event how serious the consequences were.  She wanted to please him. 

34.   She has ambition, continues to study, continues to pursue her dreams as a dancer and also works to financially assist her family to better herself and her future.  All those who write for leniency on her behalf stress how this was truly out of character and committed because she was foolish in not wanting to disappoint her boyfriend. 

35.   Despite her arrest, she has continued to try her hardest in everything she does.  Her family are clearly very supportive and decent loving parents.  A member of the church has spoken highly of her family.  The 2nd defendant’s vice principal from her old school explains that she was a kind and hardworking teenager who always found time for charitable work.  She clearly believed the 2nd defendant acted out of character.  Her employer says that she has always worked hard and is prepared to continue to employ her.  Lastly, she is prepared to compensate the loss to victims, a total of $70,000.  There would be restitution. 

The 3rd Defendant

36.   The 3rd defendant was 16 years old at the time of these offences and was already by then a single mother of a young baby.  I have heard full mitigation put forward on her behalf and her plea of guilty is her best mitigation.  It came at the earliest opportunity and I have been told that she was a diligent student but was not very successful in her studies.  She became pregnant at the age of 15, much to the disappointment of her parents.  The father of her child is not a responsible person and she made the decision to give birth and keep her baby. 

37.   It would appear that she has little support as a young mother but, despite that, loves her child immensely and wants to be a good mother.  She signs up for as many courses as possible offered by the Social Welfare Department to ensure she is a good mother to her son.  She has to rely on CSSA payments for daily expenses including milk powder, nappies and all her baby’s needs.  She has little assistance at home with childcare and little opportunity to earn her own money.  She was offered $3,000 from an old acquaintance to assist the 1st defendant.  She is now very remorseful. 

38.   It has been stressed that she too fully co-operated with the police like the others.  In fact, the 3rd defendant was willing to assist the prosecution in any way.  She bears full responsibility for her actions.  Her only worry now is her son and she is very concerned what would happen to him if she was sent to prison. 

39.   All defence counsel have said all they can on behalf of all the defendants. 

Sentence

40.   Fraud and conspiracy to defraud are serious offences.  There are no sentencing tariffs for offences of this nature because the factual basis of individual cases can vary greatly.  The sentencing court has a wide discretion. 

41.   I have been referred to HKSAR v Dai Chi Wai [2011] 4 HKLRD 534.  The facts in that case are quite different but the following factors the Court of Appeal found relevant to sentence would apply here.  What is relevant to sentence is the sophistication and size of the fraudulent scheme.  The court should consider the number of victims and targeted financial institutions.  The length of time the scheme is perpetrated is important.  Of course, the amount of money obtained or lost by the fraudulent scheme is very relevant.  What is also very relevant is each individual defendant’s involvement and role in the scheme. 

42.   In this case, the amount of money involved in total was the loss of just over $202,000.  Despite the number of charges, the loss suffered in total is not a large amount.  Not all institutions targeted suffered loss.  For example, some of the applications for loans were not successful.  Victims include financial institutions and the victims of Charges 1 and 2.  I take into account that the scheme took place over about three months.  I also have no evidence that the 1st defendant was the mastermind but he played a pivotal role in Charges 1 and 2, defrauding the initial victims. 

43.   This scheme took some planning and organisation.  It also included some forged documents to further the scheme.

The 1st Defendant

44.   Because of all the above factors I have just referred to, I am satisfied that the appropriate individual starting point of each of the charges you face should be 3 years and 6 months.  You pleaded guilty at the earliest opportunity and you are entitled to a discount of one-third. 

45.   The offences subject to the charges were separate and distinct but in considering sentencing, I take into account the principle of totality.  I also take into account that Charges 1 and 2 can be deemed separate and distinct from the rest of the charges of conspiracy to defraud. 

46.   You are sentenced, in Charges 1 and 2, to 2 years and 4 months’ imprisonment.  For Charges 3 to 9, 11, 13 to 15, I also sentence you to 2 years and 4 months’ imprisonment.  All charges will be served concurrently except 6 months of Charge 3 which will be served consecutively to Charge 1.  Therefore, the 1st defendant is sentenced to a total of 2 years and 10 months’ imprisonment. 

The 2^nd and 3^rd Defendant

47.   The 2nd and 3rd defendant I find to have much less culpability than the 1st defendant.  Their roles were very different to his.  I accept that they were young girls both taken advantage of by others and persuaded to help to commit these offences.  Both have good mitigation I can take into account.  They were very young when these offences were committed.  Before I consider the appropriate sentence, I will adjourn for reports.  I will adjourn further mitigation and sentence pending a probation officer’s report and a community service order report for both 2nd and 3rd defendant.  Bail will be extended on the same terms until that day.