HKSAR v. ZHOU YANGYU

DCCC 970/2017

[2018] HKDC 571

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 970 OF 2017

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REASONS FOR SENTENCE

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1.  The defendant faces three charges.  The 1^st charge is using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap 200; the 2^nd charge is possessing false instruments, contrary to section 75(2) of the Crimes Ordinance; the 3^rd charge is possession of equipment for making a false instrument, contrary to Section 76(1) of the Crimes Ordinance. 

2.  He pleaded guilty to the three charges and was so convicted. 

3.  According to the agreed Summary of Facts, the defendant was intercepted in the street by police together with another male surnamed Yeung at around noon on 25 May 2017. 

4.  Upon search, two counterfeit credit cards were found inside the defendant’s pockets and inside Yeung’s rucksack, the following were found:-

(a) A laptop with a mouse and a mouse pad;

(b) An optical disc player;

(c) A magnetic card reader;

(d) A CD disc;

(e) Two mini-CD discs;

(f) Six security devices;

(g) Three membership cards; and

(h) Two head-cleaning cards.

5.  The defendant was arrested and under caution, he admitted that the two counterfeit credit cards and the contents in Yeung’s rucksack all belonged to him; and that he had intended to use the credit cards to shop earlier.  It was later revealed that shortly before on the same day, the defendant had used the counterfeit China Minsheng Bank UnionPay credit card on him, attempting to buy powdered formula and some ginseng totally HK$3,036, but the transaction did not go through, despite the said Minsheng card being swiped on the credit card machine, and the defendant later snatched the card back and left the store. 

6.  According to Mr Liu of the Operation Support Department of UnionPay Hong Kong, who had examined the credit cards and the membership cards seized, the card face of the two counterfeit credit cards was genuine but the data on the magnetic strip on each of these two cards belong to a different visa account.  As for the three membership cards found in the rucksack, they are all counterfeit credit cards, not bank cards, and data on the magnetic strip belong to two different Bank of Communications UnionPay accounts. 

7.  Mr Lo, TSD examiner, examined contents of the rucksack.  Two software programmes were found inside the harddisk of the laptop, and inside the two mini-discs.  Now, data on magnetic cards could be read and written by the two programmes when wiped through the magnetic card readers seized from the rucksack.  The magnetic card reader was found to be a device that reads data from magnetic cards to computer and writes data from computers to magnetic cards. 

8.  CSTCB also examined the exhibits and confirmed that the two programmes were found inside the laptop seized, with the creation date being 22 April 2017.

9.  The defendant’s movement record show that he entered Hong Kong the night before at 10:50 pm. 

10.  In the video-recorded interview conducted on the same day, the defendant, through the Putonghua interpreter, admitted that the five counterfeit credit cards belonged to him and the cards and all content of rucksack were all given to him by other people in mainland.  He admitted the laptop was used for forging credit cards.  Someone in the mainland would send some sequences of numbers to the computer, which would then be written onto the counterfeit credit cards using the magnetic card reader. 

11.  He also admitted having tried to purchase powder formula and ginseng from a shop using one of the counterfeit cards but the transaction was not successful. 

12.  He had come to Hong Kong via Shenzhen on the day before, and he had made the unsuccessful attempt using the counterfeit credit cards in the morning.  He said he then met up with Yeung and passed to Yeung his own rucksack.

Mitigation

13.  The defendant has a clear record. 

14.  He is aged 27 and single. 

15.  He was born in Shanghai and received university education in Shanghai. 

16.  At the time of arrest, he is a civil servant in Shanghai earning 4,000 renminbi per month.

17.  His parents are divorced and he was raised by his mother, a retired teacher now. 

18.  The defendant wrote a letter to this court, saying that he is now remorseful for his misdeeds.  He says he does not dare to tell his mother of the present offence and that he has now lost his job.  He asks for leniency. 

Discussion

19.  It is accepted that credit card offences are serious offences, and must be deterred. 

20.  In paragraph 34 of the judgment in the case of HKSAR v Sun Chun Lei CACC 476/2002, it reads the case of R v Wong Fu Keung Crim App 5 of 1991 and R v Kwai Ying Ho Crim App 527 of 1992, the following respective comments were made:-

“It is a matter of notorious fact that illegal use of credit cards has become widespread. Those who are engaged in this type of activity can expect to be dealt with severely by the court.”

“Credit card frauds have in recent years been an insidious poison in the community. It affects a large number of citizens. It erodes the credit card system and damages Hong Kong’s standing in the international community.”

21.  In the case of R v Chan Sui To & Anor CACC 115/1996, the Court of Appeal says that a sentencing judge must consider various factors, including:-

(1) The size of the operation, for example, whether it involves large sums of money or whether it concerns a large number of persons or forged credit cards;

(2) The planning that has gone into perpetrating the fraud, whether it’s elaborate or simple, whether technical skills were used, and to what extent;

(3) Whether there is an international dimension;

(4) Whether the accused played a major role, for example running a syndicate, engaging in actual manufacture, organising the use of forged cards or whether he is a mere “cog in the wheel” as a courier or a custodian or keeper;

(5) Whether there is a plea of guilty.

22.  Here, the defendant was intercepted when Yeung was carrying the rucksack for him, with the equipment for making of false instruments.  According to the defendant, some other male gave him the counterfeit credit cards and the equipment in the rucksack in Shenzhen.  He came to Hong Kong in a night, and immediately in the morning of the day after, he committed the offences in question. 

23.  This court noted that there is no actual financial loss resulting from the commission of these offences. 

24.  Although the number of counterfeit credit cards are not substantial but with the equipment that the defendant possessed at the time of offence, and as submitted, the supply from mainland to him of sequences of numbers to the computer, which could be then written onto the counterfeit credit cards using the magnetic card reader, the data on these counterfeit credit cards can always be changed.  The potential loss for use of these counterfeit credit cards can be substantial both in their present form or potentially in the varied form. 

25.  The data sent to the computer, the supply of counterfeit credit cards and the equipment for making false instruments all came from somewhere across the border.  This supports the findings that the defendant is part of a syndicate in mainland with a sizable operation involving manufacture and distribution of credit cards for use outside mainland, at least for use in Hong Kong. 

26.  For the purpose of sentencing in this case, even acknowledging our one country two systems, “international” element is present.

27.  Further, the fact that he came to Hong Kong in the evening and committed the offence in the morning of the next day, coupled with his admission that he had obtained the cards from mainland, is yet another aggravating feature in sentencing.  No doubt he has come to Hong Kong for the purpose of commission of these offences and not just that he committed the crime as a visitor. 

28.  In the case of HKSAR v Li Kunwei CACC 47/2016, at line 9 of paragraph 20 of the judgment, it says that, and I quote,

“In the HKSAR v Tan Hong Sheng (Unrep. CACC 238/2005) a strong Court held at paragraph 26, in relation to the pick- pocketing of a mobile phone by a visitor to Hong Kong:

‘The fact that the applicant and his co-accused committed the offence the very next day after they arrived in Hong Kong from the Mainland, contrary to the applicant’s submission, is indeed a most serious aggravating factor, as rightly identified by the judge.’

In HKSAR v Sandagdorj Altankhuyag [2014] 1 HKC 206, the court observed at paragraph 17:

‘It is one thing to commit crime whilst visiting Hong Kong: it is quite another to come to Hong Kong in order to commit crime.’”

29.  In the case here, had the defendant not been arrested, there is no doubt that he would use the other counterfeit credit cards, and would result in significant financial loss from the use of these cards. 

30.  On evidence before this court, I find the defendant being heavily involved in this cross-border operation involving the making of false instruments and using of forged documents, and that he did elicit the help of Yeung in carrying his rucksack; that he acted in concert with some other from the mainland, the syndicate appears to be well-organised, with clear division of labour; with “international” element involved; that although no actual loss is suffered by the retailers or the credit card companies, and despite his clear record and having considered all that was being said on behalf of the defendant, I consider the only valid mitigating ground is his timely guilty plea, for which he is entitled to a full one-third sentencing discount. 

31.  As for the case of Tu I Lang CACC 464/2006, referred to me by defence counsel, the same can easily be distinguished from our present case here.  Here, the defendant possessed also the equipment for making forged instruments and according to him, someone from mainland would supply him with sequences of numbers to the computer which could then be written onto counterfeit cards using the magnetic card reader that he has.  The defendant here is clearly heavily involved, as I have said earlier, to this sophisticated syndicate with “international” element, whereas in the two cases quoted to me, the judge found that there is no international element and also that the operation in that case is of a small scale. 

Charge 1

32.  Considering the aggravating factors aforesaid, the appropriate starting point for Charge 1 is 3 years and 3 months. After the full one-third discount, the defendant is sentenced to 2 years 2 months.

Charge 2

33.  The defendant possessed the two counterfeit credit cards and three membership cards in circumstances as aforesaid, when he had equipment of converting these five cards into five different counterfeit credit cards from time to time.  Coupled with the “international” element and the other aggravating factors as aforesaid, the appropriate sentencing starting point here is 3 years and 6 months.  And after the one-third discount, the defendant is sentenced to 2 years and 4 months. 

Charge 3

34.  The defendant possessed the machines and implements particularised in the charge and in circumstances when there is supply of data from other persons in the mainland and with the possession of five counterfeit cards possessed, which by reason of the use of the data and the machinery these card can, from time to time, be converted into different counterfeit credit cards, giving rise to potential substantial loss to retailers and credit card companies if used.

35.  Appropriate sentencing starting point for this offence, in the circumstances, is 4 years and 6 months and after a one-third discount, the defendant is sentenced to 3 years.

36.  In view of the proximity in time and the nature of these offences, the sentence in the three charges shall run concurrently. The sentence imposed on the defendant, in my view, is just and proportionate to his culpability and I so sentence him to 3 years’ imprisonment.