HKSAR v. LO YAN CHEE IRENE

DCCC 1003/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1003 OF 2013

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REASONS FOR SENTENCE

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1.  The defendant came before me and pleaded guilty to six charges of fraud, contrary to section 16A of the Theft Ordinance, Cap 210.  The fraud as alleged in the first three charges (Charge 1 to 3) related to the use, with consent, of the personal information of Madam Choi Yun King (“PW1”) to apply to three different banks in Hong Kong (DBS, Fubon and Standard Chartered) for three different credit cards which were later issued to PW1, but the same were kept in fact and used by the defendant.  The next three charges (Charges 4 to 6) concerns, however, with the applying of two replacement credit cards by the defendant to Fubon Bank and one replacement credit card from Standard Chartered Bank without the consent of PW1.

Facts

2.  The Court shall largely adopt the Summary of Facts as prepared by the prosecution which has also been admitted by the defendant before she was duly convicted of all the charges.  I am not going to read out the Summary of Facts, as it has already been read out to the defendant on the last occasion.  Also, a breakdown of the total transaction amounts and outstanding payments of the credit cards in question is already set out in the appendix prepared by the prosecution.  In summary, the total transaction amounts in relation to all the six credit cards involved is $806,934.38 and the total outstanding payment is $159,410.14.

Criminal record and personal background

3.  The defendant is aged 58.  In the past, she has only a spent conviction for theft back in 1978 in which she was only fined $200.  She was married in 1986 but divorced in 1998.  She has a son now aged 26 who is living in the United States.  She received a form 5 level of education in Hong Kong.  At the time of the offence, the defendant was an owner of a beauty salon.  She was in financial difficulty around the period and in 2007, she was declared bankrupt. She left Hong Kong at the end of 2009 for the United States and stayed there until she returned to Hong Kong on 1 May this year.  She now lives alone in Hong Kong and before she was remanded into custody, she worked as a casual cleaning worker earning $4,500 a month.

Mitigation

4.  Mr Micheal Cheung, counsel for the defendant, told the Court that the defendant committed the present offences without the intention to cause economic loss to the issuing banks.  It was because the business of her beauty salon was not good at the time of the offences, coupled with the fact that her son was in trouble with the law in the United States that she was in dire financial difficulties.  She therefore turned to ask PW1, a trainee in her beauty salon for assistance to apply the three credit cards for use to solve her cash flow problems.  The defendant had tried her best to make repayments and she did but the business of the beauty salon has turned from bad to worse and she could only make minimum payments and substantial interest has been accumulated as a result.  In the end, she was unable to repay and as said she was finally declared bankrupt. 

5.  According to Mr Cheung, the defendant mainly used the credit cards to meet her business expenditures.  The defendant also suffered depression in 2007 and a medical certificate issued by a Government Psychiatrist was tendered as proof.  After the offences, she left Hong Kong and flew to the United States at the end of 2009 to visit her son with a view to also find a job there and earn some money to repay PW1 and also to alleviate her depression.  However, she was unable to find any job there and her psychiatric condition has not been improved.  After nearly 3½ years, she decided to come back to Hong Kong to face up to her responsibility.  Mr Cheung also submitted a letter written by the defendant to the Court.  She has shown tremendous remorse in her letter and she felt sorry for making use of the kindness of PW1 and betraying their friendship, but stressed that she did not commit offences deliberately, and because of that, she still asked for a chance and a more lenient sentence from the Court.  Mr Cheung said that apart from the money found, which was US$1,470 on her person when the defendant was arrested in the airport, she was now unable to make any further restitution.  Lastly, Mr Cheung still urged the Court to take into account that the credit cards involved were not forged and the fact that the defendant had pleaded guilty to all the charges.  He asked the Court to take into account the totality principle to consider the overall criminality of all these charges.

Sentencing considerations

6.  In sentencing, I have taken into account the facts of this case, the background of the defendant, as well as the mitigation put forward by the defence.  No authority has been submitted during the course of mitigation but I have referred myself to a number of authorities concerning credit card frauds. The present case involves six credit cards in total.  It was by no means a large scale or even a medium-sized operation.  The defence contends that it does not involve forged credit cards and forged credit card syndicates but even if it is the case, still, the charges are, by themselves, serious enough as clearly, the crimes have undermined the credit card system.  In the case of R v Lai Chong Ning[1997] HKCU519, the Court of Appeal was dealing with eight counts of “using a false instrument”.  The false instrument in question was an application to the Chase Manhattan Bank, made in the name of another person, for credit cards to be issued.  The Court of Appeal dealt with the defence submission that the case did not involve forged credit cards and said:-

“ 10. Even if that is so, it has to be borne in mind that this was a systematic course of conduct over a number of months involving a relatively large sum of money.

11. While the case did not concern forged credit cards, it did concern false names and the offence can be characterised as credit card fraud.”

In Lai Chong Ning (supra), the offences spanned a period of approximately four months and the total amount obtained was $128,100. Altogether, 42 applications were made to the bank for credit cards. The trial judge adopted five years as the starting point and reduced it to three years for each charge on account of the guilty plea and assistance to the authority. All the sentences were to run concurrently. The Court of Appeal said the sentences were neither wrong in principle or manifestly excessive.

7.  In another case, HKSAR v Cheung Florence [1999] HKCU 19, the applicant pleaded guilty to a number of charges in the District Court which arose out of two cases, being DCCC 312/1998 and DCCC 388/1998.  In DCCC 388/1998, the applicant pleaded guilty to three counts of using a false instrument, three counts of theft and four counts of obtaining property by deception.  The first three counts related to applications the applicant made to different banks for credit cards to be issued in the name of her friend who resided with her.  The theft and deception charges related to the use she made of the cards after she received them.  She used them to purchase goods and withdraw money from ATMs.  The total amount involved was approximately $42,000. 

8.  In DCCC 312/1998, the applicant pleaded guilty to one charge of theft and six charges of obtaining property by deception.  She had, in the course of her work duties, access to confidential information concerning the customers, including details of their credit cards.  What she did was to utilise this information to make purchases on the internet and ordered that the cost of the purchases be debited to the customers’ accounts.  The Court of Appeal considered that the appropriate starting point in respect of all the offences should have been five years. 

9.  In HKSAR v Chan Yuk Kwan [2001] HKCU598, the Court of Appeal was dealing with a case where the applicant practised fraud upon a number of banks, caused his wife, an estate agent, to breach the trust reposed in her by some of her clients, by copying their details and identity cards, worked with other two men to fraudulently obtain eight credit cards.  As a result of the use made of the cards obtained by him by deception, the banks have suffered a loss of $148,000.  In sentencing, the District Judge referred to the guidelines for credit card frauds in R v Chan Sui To [1996] 2 HKCLR 128 but the Court of Appeal was of the view that the facts of this case accord more closely with that of Lai Chong Ning.  The Court of Appeal took the view that the totality warranted by the criminality disclosed by all the offences would be a sentence before plea of four years’ imprisonment.

10.  In a more recent case of HKSAR v Kum Chi Wing, Ralph[2007] HKCU 845, the appellant used the forged Hong Kong ID card to obtain five credit cards from various banks, and one credit card from a credit card company in 2001.  He used those cards for four years until April 2005, when he surrendered to the police.  Over the period of four years, he had made periodic payments in respect of those credit cards.  Even so, as stated in the agreed facts, the total loss to the credit card companies amounted to about $220,000, which, according to the appellant, was made up mostly of unpaid interest.  It is worth noting that the sentencing judge in the District Court was described by the Court of Appeal as “very lenient and sympathetic”, and after considering the sentences imposed in Chan Yuk Kwan, the District Judge adopted a starting point of only three years and gave the appellant a total discount of 50 per cent for his clear record, partial restitution, and surrender to the police.  One of the submissions which was made on behalf of the appellant was that because of the loss in this case consisted  mostly of unpaid interest, the Court should not sentence him on the basis that the loss to the credit card providers was $220,000.  The Court of Appeal did not agree and said that “the loss of unpaid interest is just as real a loss as the loss of principal”.  The Court was of the view that, “Credit is the life blood of commerce, and interest is the rent that one pays for the use of money.  So the court has no right to regard the loss of interest as somehow not as serious as the loss of capital.”

11.  It is clear that credit card offences are serious offences and must be deterred.  In fact, it has been said that even a small scale credit card fraud with small losses by an offender who is not alleged to be part of a larger syndicate can attract three years’ imprisonment.  See HKSAR v Cheung Ka Wo [2002] 2 HKC 517 and HKSAR v Tu I Lang [2007] 2 HKCU 859. 

12.  After reviewing all the above authorities, I come to the conclusion that despite the large amount of money involved and the long period of using the credit cards, the facs of this case somewhat disclose a lower criminality in that the defendant did not set out to use the credit cards with no intention of repayment at all.  It also did not refer to medium or large scale of forged credit card operation. There was no international dimension and it did not involve the manufacture of forged credit cards, as mentioned in the case of Chan Sui To.  Nevertheless, as said, it can still be regarded as a credit card fraud and the potential for loss is the most important consideration.  The consent by PW1 to allow the defendant to apply the three credit cards in relation to charge 1 to 3 were irrelevant in the eyes of the issuing bank, as the credit cards were still obtained by fraud, albeit the personal particulars were provided by PW1.  As for the replacement cards for charges 4 to 6, it is just a repetition of the earlier false representation to the two banks by the defendant and thus the charges become more serious as repeated offences. 

13.  On the other hand, the defendant had, over the period, made substantial repayment to the issuing banks for the use of her credit cards.  It is noted that the present outstanding amount of $159,410.14 was mostly interest and financial charges which have been accumulated.  Whilst the Court of Appeal has said that the Court should treat interest and principal equally, the facts remain that, in this case, nearly 80 per cent of the total transaction amount has already been repaid by the defendant over the years.  A further discount from the overall starting point is necessary to reflect the substantial partial restitution.  I decline, however, to give further discount on account of the defendant’s surrender to the police.  Firstly, unlike in the case of Kum Chi Wing, Ralph, where the applicant went straight into a police station and surrendered himself, the defendant after leaving the territory for over three years, just returned to Hong Kong and was arrested in the airport.  It is unclear that if the defendant’s name was not in the stop list, whether she would still have proceeded to surrender herself to the police in the airport. 

14.  Furthermore, she suddenly left Hong Kong without informing PW1 at the end of 2009 and could not be contacted since then.  Clearly, she was running away from her responsibility back then.  Even she finally came back to Hong Kong this May to face her responsibilities, she had left PW1 to deal with all the troubles and expenses left behind by her, and as such, any credit for voluntary surrender to the police, even if I am going to accept her assertion, must be offset by her sudden and irresponsible departure back in 2009. 

15.  Bearing in mind it is still a systematic course of conduct by the defendant over a longer period of time, involving a large sum of money, I consider that the appropriate starting point for the overall criminality of all the six charges is one of four years’ imprisonment.  The overall sentence will be reduced by one-third on account of her plea and a further discount of four months will also be given to reflect the partial restitution.  The resulting overall sentence should therefore be 28 months’ imprisonment.  In order to arrive at this sentence, the following individual sentences are made. 

16.  I consider that there are two groups of charges.  The first group consists of Charges 1 to 3 and the second group consists of Charges 4 to 5. For Charges 1 to 3, a starting point before plea should be three years’ imprisonment.  Similarly, for Charges 4 to 6, a starting point before plea should also be three years’ imprisonment.  After the one-third discount, on each of the Charges 1 to 3, and also the four months’ reduction, for each charge it should be 20 months’ imprisonment, to be run concurrently with each other.  For Charges 4 to 6, for each offence, after the one-third discount and also the four months’ reduction, also 20 months’ imprisonment, to run concurrently with each other. 

17.  Finally, I order that eight months of the total sentence on Charges 4 to 6 shall run consecutive to the 20 months’ sentence in relation to Charges 1 to 3, the balance to run concurrently, making a total of these two groups of charges one of 28 months’ imprisonment.