HKSAR v. WU ZHONGHAO AND ANOTHER

DCCC 564/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 564 OF 2014

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REASONS FOR SENTENCE

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1.  There are two defendants in this case. D1 has pleaded guilty before me to and was convicted of two charges of conspiracy to deal with property known or believed to represent the proceeds of an indictable offence (Charge 1 and Charge 2). D2 was jointly charged with D1 in Charge 2 and he also pleaded guilty to that charge and was convicted accordingly.

Facts

2.  The predicate offences to which both charges are related are telephone deception. Both charges took place on 21 and 25 April 2014 respectively with the same modus operandi.  The victims of the two cases, V1 and V2, were both senior male citizens aged 81 and 68 respectively.  In each case, the victim received call at home from a male voice.  In Charge 1, the male voice pretended to be V1’s son and said that he was beaten up and sought help and demanded HK$180,000.  In Charge 2, the male voice requested V2 to pay HK$200,000 in order to save his son who was held hostage. 

3.  V1 managed finally to gather only HK$12,200, and as instructed by the male, he brought the money to a designated place in Mongkok where a male later identified by him to be D1 had approached him and collected the money.  V1 later met his own son and discovered that the whole incident was only a scam. The matter was subsequently reported to the police.

4.  In the case of V2, he informed the villain that he had only $32,000.  At the same time, it had already been confirmed that indeed his son was safe and therefore the matter was reported to the police.  As instructed by the villain, V2 was told to bring the money to a designated location near a school in Cheung Sha Wan, Kowloon.  After receiving the report, the police laid an ambush nearby and finally they noticed the presence of both D1 and D2.  Both defendants were seen appearing in the vicinity after alighting a taxi and they kept looking at V2.  The police immediately arrested both defendants when D1 was seen picking up the package of fake money dropped off by V2 in the vicinity.

5.  After arrest and under caution, both defendants admitted to the police that they were indeed instructed by a man called Ah Shun to collect money from an elderly man under the tree near a fire station in Cheung Sha Wan, Kowloon.  D1 said that he expected to receive HK$500 to HK$600 as reward whilst D2 said that he would receive 10% of the money to be collected as a reward.  D1 admitted that he knew that the money was in relation to ransom whilst D2 said that he knew the money was obtained via deception by Ah Shun.

6.  D1 was subsequently positively identified by V1 as the male who collected his money in the designated location in Mongkok in an ID parade. 

7.  According to the record, both D1 and D2 came together to Hong Kong on 21 April 2014 at the same time.

Defendants’ background and mitigation

8.  D1 is 27 years of age and he is coming from a farming family background in the Guangdong province.  He has a clear record in Hong Kong.  He is still single and he has received an education of Secondary Form 3 level in the mainland.  He was unemployed at the time of arrest but before that, he was working as a restaurant cook in a hotel in Guangzhou, earning RMB2,000 each month.  The restaurant closed down, however, in December 2013 and since then he became unemployed.

9.  D2 is aged 39.  He is married and he lives together with his wife aged 41 and his daughter, 18, who is a student in the mainland.  He was a colleague of D1 when they worked together in the same restaurant in Guangzhou.  An infant baby boy was born in May this year after D2 was arrested and detained in Hong Kong. D2 only received a Primary 5 education level in the mainland.

10.  In mitigation, Mr Chan Chung, counsel for D1, informed the court that D1’s father was suffering from ill health and on and off had to be admitted to the hospital for treatment.  After D1 was unemployed, he has suffered from enormous pressure.  He then took the suggestion of D2 and both decided to travel to Hong Kong together for sightseeing.  After arriving in Hong Kong, D1 said that D2 had received a call from Ah Shun and they were both lured by Ah Shun to take up the job to collect the money. 

11.  In mitigation, Mr Chan Chung emphasised the fact that D1 had pleaded guilty to both charges and was now very remorseful.  By pleading guilty, it saved the attendance of the two elderly victims to come to the court to give evidence. 

12.  In this case, the prosecution has sought to apply to enhance the sentence imposed by the court pursuant to section 27 of the Organised and Serious Crimes Ordinance (“OSCO”).  Mr Chan Chung did not oppose to the application to enhance the sentence.  Relying on a rather recent Court of Appeal decision in the HKSAR v Cen Hua Kuo(岑華擴), (CACC 21/2014), Mr Chan Chung urged the court to adopt a similar starting point of 3 years in respect of each charge for D1 and bearing in mind the totality principle when imposing the overall sentence.

13.  Mr Chan Chung also urged the court to follow the usual practice and enhance the sentence in each case by one-third.

14.  Mr Joseph Chan, solicitor for the D2, has adopted the mitigation made by counsel for the D1.  He informed the court that D2 also did not oppose to the application by the prosecution to enhance the sentence.  Mr Joseph Chan also asked the court to follow and adopt the 3‑year starting point in the case of D2 and also enhance his sentence by the extent of one-third.

Sentencing considerations

15.  The present two money laundering offences are clearly but a final phase of the more serious underlying telephone deception offences.  It is also clear that both defendants had acted as a legman or an errand boy, as labelled by Mr Chan Chung in his mitigation, to collect the cash for the fraudsters behind.  In fact, both defendants should consider themselves fortunate as they were not charged and convicted of “conspiracy to defraud” involving telephone deception because according to HKSAR v Hung Yung Chun [2011] 2 HKLRD 174 (a Chinese judgment), the Court of Appeal had clearly held that telephone deception cases were more serious than street deception cases, and higher starting points should be adopted for a deterrence.  The general starting point for telephone deception cases should be 4 years’ imprisonment.

16.  The act by D1 in this case has directly caused the loss of HK$12,200 to V1 in Charge 1 and in the case of D1 and D2, both defendants’ act has caused a potential loss of HK$32,000 to V2.  

17.  In Cen Hua Kuo (岑華擴), the Court of Appeal said that:-

“24. Money laundering is a serious offence and the applicant is also a mainlander who came to Hong Kong to commit the offence. Although the applicant is young, only 18, and without previous criminal conviction record, he cannot expect to be sentenced leniently by the court. (see SJ v Lau Man Ying [2012] 4 HKLRD 429 and Xia Xu Li)

25. The black moneys involved originated from telephone deception cases, and the applicant also knew the origin of the black money. All these were no doubt aggravating factors for the sentence. After taking into account the background of the cases and that the sentence must be of deterrent effect to avoid mainlanders to participate in any way this kind of telephone deception offences which were despicable and also shameless, we think that the appropriate sentence is 3 years as a starting point, and in accordance with the OSCO, the sentence should be enhanced by the extent of one-third.” (unofficial translation)

18.  I can see that what the two defendants have done in this case was similar to that of the applicant Cen Hua Kuo (岑華擴).  I have therefore decided to follow the decision by the Court of Appeal and adopt a similar starting point and enhance their sentences by one-third.  

19.  According to the figures provided by the Chief Inspector Lam Cheuk Ho as in his statement supplied by the prosecutions, the number of the drop-off cases in the telephone deception cases and the associated money laundering activities are prevalent crimes in Hong Kong.  The amount of the loss in these cases are also significant and are on the rise especially amongst the elderly population.  Therefore, the harm and the nature and extent of the harm caused to the community is by all means serious. 

20.  I am satisfied beyond reasonable doubt that this case warrants an enhancement of sentence.

Sentences

D1

21.  Based on the above reasons, for D1, in Charge 1 and Charge 2, the starting point is 3 years’ imprisonment on each charge.  Those sentences would be reduced by one-third on account of his plea, therefore reducing the sentence to 24 months in each case.  However, the sentence would have to be enhanced by one-third, and that is 8 months pursuant to the OSCO. Consequently, the sentence on each charge is 32 months imprisonment. 

22.  Given that both charges involved different victims and were committed in different days, in principle, the sentences should be consecutive.  However, in light of the totality principle, I order that 4 months of the sentence imposed on Charge 2 shall run consecutively to that of the sentence on Charge 1.  The total sentences imposed on both charges is therefore 36 months’ imprisonment.

D2

23.  Applying the same methodology for calculation, in Charge 2, the sentence for D2 is also 32 months imprisonment.  I can see no reason to differentiate the role played by D1 and D2 in this charge.  They are co-conspirators and they should be treated the same as far as criminal responsibility is concerned and, hence, D2 receives the same sentence as D1 in this charge.