HKSAR v. HUNG YUNG CHUN AND ANOTHER

CACC453/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 453 OF 2009

(ON APPEAL FROM DCCC NO. 320 OF 2009)

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REASONS FOR JUDGMENT

Hon Tang VP (giving the reasons for judgment of the Court):

1.  The 1^st Applicant pleaded guilty to the 6^th and the 8^th charges at the District Court. Deputy District Judge J. Lam adopted three years’ imprisonment as the starting point for each charge. After giving the 1/3 discount for the 1^st Applicant’s guilty plea, he enhanced the sentence by 50% pursuant to the Organised and Serious Crimes Ordinance and imposed three years’ imprisonment on him for each charge. Taking into account the totality principle, Deputy District Judge Lam ordered that 9 months of the sentence imposed in respect of Charge 8 be served consecutively to that of Charge 6. The total term of imprisonment was 3 years and 9 months.

2.  The 2^nd Applicant Ko Tien Ping also pleaded guilty to the charges against her, namely, the 3^rd, 5^th and the 8^th charges. Deputy District Judge Lam also adopted three years’ imprisonment as the starting point for each charge. After giving the 1/3 discount for the 2^nd Applicant’s guilty plea, he enhanced the sentence by 50% pursuant to the Organised and Serious Crimes Ordinance and sentenced her to three years of imprisonment for each charge. Taken into account the totality principle, Deputy District Judge Lam ordered that 9 months of the sentences imposed in respect of Charges 5 and 8 be served consecutively to that of Charge 3. The total term of imprisonment was 4 years and 6 months.

3.  Both applicants applied for leave to appeal against sentence in person.

4.  At the beginning of the hearing, we reminded the applicants that we had the power to adjust the sentence upwards. Different sentences have been imposed in respect of this type of cases by the District Court. When this court pointed out that we might set down sentencing guidelines for this type of cases, the 2^nd Applicant indicated that she would like to think over it. After thinking it over, both applicants decided to proceed with the application. In the end, we ordered that the starting point for each of the offences be adjusted upwards to 4 years. 1/3 discount was given for the applicants’ guilty pleas, resulting in 32 months of imprisonment before enhancing it by 1/3 (i.e., 10 months) pursuant to the Organized and Serious Crimes Ordinance. Therefore, the sentence for each offence was 42 months’ imprisonment. We ordered that 9 months of the sentence imposed in respect of Charge 8 on the 1^st Applicant be served consecutively to that of Charge 6, making a total of 4 years and 3 months’ imprisonment.

5.  For the 2^nd Applicant, 9 months of the sentences imposed in respect of Charges 5 and 8 were to be served consecutively to the 42 months of Charge 3, bringing the total sentence to 5 years of imprisonment. We now give the reasons for the above sentence.

6.  The two applicants were respectively the 2^nd and the 3^rd Accused in DCCC320/2009.

7.  The 1^st Accused Chen Hung Jung was found guilty of Charges 1 and 5 after trial. Deputy District Judge Lam adopted 3 years’ imprisonment as the starting point for each offence before enhancing the sentence by 50% pursuant to the Organised and Serious Crimes Ordinance and sentenced Chen to 4 years and 6 months’ imprisonment on each count. Taking into account the totality principle, the court ordered that 9 months of Charge 5 be served consecutively to the sentence imposed in respect of Charge 1, bringing the total term of imprisonment to 5 years and 3 months. Chen then filed an application for leave to appeal against sentence but served a Notice of Abandonment on 20 April 2010. The court dismissed the application accordingly.

8.  As described in the Respondent’s skeleton submission, the facts related to each of the charges of the case are almost identical.  They are quoted as follows:

“The facts admitted by the applicants

6. …The victims in this case are all elderly aged from 58 to 70 years old. Between 4 November and 11 December 2008, they each received phone call(s) from someone who claimed to be his/her son seeking help as he was being detained or beaten up. Another unknown man then took over the phone right after and told the victim that the son had acted as a guarantor for others. Since the debtor had gone missing, the son had to repay the debt on his/her behalf. To make sure that the victim would not call the Police for help, that unknown man went further to ask the victim for his mobile phone number and called the victim immediately afterwards, telling him/her to go to a bank to withdraw cash immediately before going to Shun Tak Centre, Sheung Wan to hand over the money. When the victim arrived at the location for handing over the money, the applicants would show up to collect the money and then leave Hong Kong swiftly after obtaining the money.

7. In Charge 3, the 2^nd Applicant, on 4 November 2008, together with other co-conspirators, dishonestly induced Mr Chan Kwai Hing, aged 58 and his wife, aged 53, to hand over a total of HK$70,000 by falsely representing that Mr Chan’s son was being detained and he and his wife would have to pay money to secure the release of their son. They did as told and lost $70,000 in total. The 2^nd Applicant was one of the people who showed up to collect the money.

8.                 In Charge 5, Chen Hung Jung, the 2^nd Applicant and other co-conspirators, on 18 November 2008, dishonestly induced Mr Lam Kam Chuen, aged 69, to hand over HK$100,000 by falsely representing that Mr Lam’s son was being detained and he would have to pay money to secure his release. Luckily Mr Lam had the presence of mind to report the matter to the Police in time to avoid suffering any loss. At the location for handing over money the Police arrested Chen while the 2^nd Applicant escaped successfully. The 2^nd Applicant later returned to Hong Kong again and together with the 1^st Applicant committed the offence in Charge 8.

9.                 In Charge 6, the 1^st Applicant, on 3 December 2008, together with other co-conspirators, dishonestly induced Mr Lam Kwok Leung, aged 58, to hand over HK$300,000 by falsely representing that Mr Lam’s son was being detained and he would have to pay money to secure his release. Mr Lam did as told and handed the money to the 1^st Applicant who turned up alone and took the money before disappearing. Mr Lam lost all $300,000.

10.            In Charge 8, the 1^st and 2^nd Applicants together with other co-conspirators, on 11 December 2008, dishonestly induced Mr Cheung Wing Ming, aged 70, to hand over HK$200,000 by falsely representing that Mr Cheung’s son was being detained and he would have to pay money to secure his release. As instructed by the criminals, Mr Cheung handed over $200,000 to the 1^st Applicant. Fortunately the police officers who were conducting surveillance operation nearby acted in time and arrested the 1^st Applicant together with the 2^nd Applicant who was in the vicinity. Mr Cheung did not suffer any loss.”

9.  The 1^st Applicant is now 47 years old, a divorcee. He has two children with his ex-wife who is now looking after them. The 2^nd Applicant is 51 years old. She used to work in tea related industry. Both of them are Taiwanese residing on the mainland. They did not have any criminal record prior to this case.

10.  When passing sentence, Deputy District Judge Lam accepted the defence submissions and found that Chen Hung Jung and the two applicants were not the masterminds in this case. Their role was limited to that of a legman for the mastermind and they earned about $1,000 on each occasion. However, just as Deputy District Judge Lam has pointed out, “in this type of conspiracy to defraud, the masterminds often do the planning behind the scenes and rarely show their faces. They rely on other co-conspirators to provide assistance by being the frontman or making the move. Since the Police has been enforcing the legislation relating to money laundering to deal severely with people who lend their accounts to other people for use, the masterminds of fraud cases have to send someone to collect money from the victims.” “Although the three defendants were only responsible for the part of collecting money in the conspiracy to defraud, this however is a critical part, without which those who instructed them would not have succeeded in cheating money from the various victims.”

11.  Deputy District Judge Lam also accepted the evidence of Chief Inspector Williams and found that phone deception cases similar to the ones in the present case were “indeed prevalent”. This type of offence increased sharply in 2006. Between 2007 and November 2009, there was no obvious rising trend, however, the average daily occurrence rate was as high as 3.9 to 4.7 cases. Moreover, in view of the gravity of the offence, victims often suffer great amount of loss ranging from tens of thousands to hundreds of thousands. Deputy District Judge Lam was of the view that no deterrent effect against this type of offence could be achieved without enhancing the sentence. In the end, the court found that an enhancement of 50% was appropriate.

12.  Regarding the grounds for applying for leave to appeal, they may be summarized as below upon analysis:

The sentences imposed on the applicants are harsher than those on other people charged with money laundering

13.  As Deputy District Judge Lam has pointed out, since the Police has been enforcing the legislation relating to money laundering to deal severely with people who lend their accounts to other people for use, the masterminds of fraud cases have to send someone to collect money from the victims. One of the grounds of appeal the applicants relied on was that the sentences imposed on them are harsher than those on other people charged with money laundering. However, the so called “money laundering”, in general, refers to cases where the Prosecution preferred the charge of “dealing with property known or believed to represent proceeds of an indictable offence” against the defendants mainly because they may not be able to prove beyond reasonable doubt their direct involvement in a conspiracy to defraud. Also, in that kind of cases, although the defendants did not know that the property was obtained from proceeds of an indictable offence, they were convicted for dealing with property “believed” to be proceeds from an indictable offence. In the present case, both applicants pleaded guilty to conspiracy to defraud. The facts they had admitted also indicate their active participation in the scheme. Their acts were more serious than the ones in a general “money laundering” case.

The applicants knew nothing at all about the phone deception cases

14.  Both applicants claimed that before their arrest, they knew nothing at all about the phone deception cases. This claim is in contradiction with their guilty plea to conspiracy to defraud and is to be rejected. Moreover, both of them had come to Hong Kong on many occasions to take part in those acts of deception. The 2^nd Applicant even witnessed the arrest of her co-conspirator Chen Hung Jung when committing Charge 5. Therefore their professed ignorance of the crime committed by their co-conspirators is not to be believed at all.

Both applicants had a clean record

15.  When passing sentence, Deputy District Judge Lam made it clear that the starting point of the sentence to be imposed on both applicants was set on the basis that they were first offenders.

The 2^nd Applicant alleged that she had provided assistance to the Police

16.  Before being sentenced, the 2^nd Applicant wrote a letter to the Hong Kong Police and provided the names and addresses of two mainlanders and indicated that they were the masterminds of the case. However, the letter did not say how those two persons had instructed her to commit crime in Hong Kong, nor did it say that she would be willing to testify against them in court. Since the persons involved were mainlanders, upon receiving the letter from the 2^nd Applicant, the Hong Kong Police passed the information to the law enforcement agency on the mainland and explicitly invited the mainland law enforcement agency to inform the Hong Kong Police upon confirmation of any of the information therein. No confirmation has been received by the Police so far. Therefore, the 2^nd Applicant failed to prove that the information provided by her was of actual help to the law enforcement agencies in Hong Kong or on the mainland.

Deputy District Judge Lam should not have made the decision to enhance the sentence by 50%

17.  Deputy District Judge Lam has accepted the evidence adduced by the Prosecution and was satisfied that phone deception cases like this one were prevalent. Although the occurrence figure has come down from the peak in 2006, there was still an average of four similar cases daily up to the end of November 2009. Moreover, this type of deception cases accounted for more than 30% of all deception cases in Hong Kong from 2006 to the first three quarters of 2009. Based on the evidence in front of Deputy District Judge Lam, it was not unsafe for the court to find that phone deception cases were prevalent.

18.  The 1^st Applicant pointed out that there was no point to enhance the sentence of non-locals. Nevertheless, the main purpose for a court to enhance the sentence pursuant to the Organised and Serious Crimes Ordinance is to deter those who plan to commit the same type of offence. It has no direct relationship with the identity or nationality of the offender. Moreover, in HKSAR v Tan Meiyuan & Ors, CACC360/2008(unreported, 2 April 2009), the Court of Appeal pointed out that traveling to Hong Kong for the sole purpose of committing the crime was one of the aggravating features.

19.  As pointed out by the Respondent, Deputy District Judge Lam did not give a detailed explanation regarding the enhancement of 50%. However, reading the Reasons for Sentence as a whole, he seemed to have applied in this case the enhancement percentage applicable to street deception cases including “blessing gangs”, “panacea swindlers”, and electronic parts deception, etc.

20.  On street deception cases, the Court of Appeal has laid down guidelines in the case of Tan Meiyuan, setting the starting point at 3 to 3 ½ years’ imprisonment, followed by an enhancement of 50% to 4 ½ years’ imprisonment or more. In cases involving more than one incident, the court may order the sentence to be served consecutively, adding extra 6 months or above in the case of each such offence. In that case, after pleading guilty to three incidents of street deception, two of the defendants were sentenced to a total of 4 ½ years’ imprisonment. Among the three incidents, one involved a sum of about $180,000, another about $20,000, while the victim in another incident did not suffer any monetary loss. In the end, the Court of Appeal adopted 3 years’ imprisonment as the starting point, gave 1/3 discount for the guilty plea and then enhanced the sentence by 50%. As a result, the sentence for each offence was 3 years’ imprisonment. Having regard to the totality principle, 9 months of the sentence of the two remaining offences were to run consecutively, making the total term of imprisonment 4 years and 6 months.

21.  If a comparison is to be made between phone deception and street deception cases, the former is more serious than the latter. As pointed out by the Respondent, citing the present case as an example, the co-conspirators were obviously acting in an organized manner and each co-conspirator “performed his/her own function” according to the plan. They specifically recruited non-local residents to come to Hong Kong for collecting the money and picked the area near the Hong Kong and Macau Ferry Terminal as the money collection point for the obvious purpose of facilitating the money collecting co-conspirators to get away after the job was done to go into hiding on the mainland to avoid being arrested. Taking the example of various defendants in the present case, Chen Jung Hung (sic) and the two applicants all succeeded in committing many crimes in a short period of time. This highlights the difficulty the Police has in solving this type of cases.

22.  We agree to the following comments made by Deputy District Judge J. Chan, as he then was, in HKSAR v Yang Cheng Lin, DCCC494/2009 (unreported, 18 June 2009),

“18. …compare to street deception, victims of phone deceptions believed that their children were being detained, so that they, like victims in kidnapping cases, were under far greater fear and stress than those in street deception cases. Of course, in terms of monetary loss, just as in street deception cases, if the swindlers in phone deception cases were successful with their scam, the victims would lose all or most of their life savings. Therefore, the court is of the view that in a phone deception case where the facts are such as those in the present case, the sentence imposed should be higher than that in a common street deception case.”

23.  We are of the view that this type of phone deception case is more serious than a common street deception case and the court should adopt a higher starting point in sentencing for deterrence.

24.  Therefore, we are of the view that the appropriate starting point for this case should be 4 years’ imprisonment. On enhancement, we consider that an enhancement of 1/3 will do for now. However, should this type of cases become even more prevalent, the court may increase the rate of enhancement.

25.  The 1^st Applicant emphasized in court that the starting points the courts had adopted in phone deception cases were inconsistent. Therefore, the Respondent, in his submission, invited the Court to lay down sentencing guidelines for future phone deception cases with this case. He cited four similar cases recently dealt with by the District Court.

26.  In HKSAR v Sun Yen-tung and Anor, DCCC901/2008(unreported, 17 March 2009), Deputy District Judge Tallentire, as he then was, adopted 2 years’ imprisonment as the starting point and enhanced it by 1/3 pursuant to the Organised and Serious Crimes Ordinance.

27.  In the case of Yang Cheng Lin, Deputy District Judge J. Chan adopted 3 ½ to 4 years’ imprisonment as the starting point in the light of the seriousness of the facts before enhancing it by 50% or 60%.

28.  In HKSAR v Chang Chung-chih, DCCC509/2009 (unreported, 14 October 2009), Deputy District Judge Casewell, as he then was, adopted 4 years’ imprisonment as the starting point before enhancing it by 50%.

29.  In HKSAR v RONG Guoping, DCCC1260/2009 (unreported, 21 April 2010), Deputy District Judge G. Lam adopted 2 years’ imprisonment as the starting point and enhanced the sentence by 25%.

30.  As far as this type of phone deception cases is concerned, the sentence imposed on the two applicants by the learned judge was obviously too lenient. We are of the view that the general starting point for this type of phone deception cases should be 4 years’ imprisonment, we therefore adjust the starting point for each of the offences upwards to 4 years’ imprisonment. As the applicants had pleaded guilty, 1/3 reduction is given and brings the sentence down to 32 months' imprisonment. As mentioned above, the sentence is to be enhanced by 1/3 (i.e., 10 months) pursuant to the Organised and Serious Crimes Ordinance, and we order that 9 months of the sentence on each of the remaining charges be served consecutively. We hope that this judgment would serve as a guideline for similar cases in future.