HKSAR v. WONG WOON HOI AND OTHERS

DCCC424/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 424 OF 2012

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Reasons for Sentence

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1.   There are four defendants in this case:

(1) D1 has not appeared for trial;

(2) D2 to D4 face various charges of using a false instrument, contrary to section 73 of the Crimes Ordinance, Cap.200.

2.   D2 and D3 have each pleaded guilty to three charges.

3.   D4 pleaded guilty to three out of five charges.  The remaining two charges were left in the court’s file.

4.   Chinese Male 1 and D2 were suspected to have used false documents to apply for loans from various financial institutions.

5.   D2 was arrested on 20 April 2011, whereas Chinese Male 1 was arrested on 24 May 2011.  Upon arrest, the bank cards of D2 to D4 were found on Chinese Male 1.

6.   Upon further investigations, D3 was arrested on 25 May 2011, whilst D4 was arrested on 26 May 2011.

7.   Another suspect, Tsui Sin-to (WP) was arrested on 26 May 2011.

Charge 1 (against D2 only)

8.   On 16 August 2010, D2 arrived at Public Finance Limited (“Public Finance”) in person to apply for a loan.  D2 handed in some supporting documents for the application, one of which was a certificate of employment dated 11 August 2010, purportedly issued by MES Corporation Limited and stating that D2 had been employed by the company since 3 March 2010 (Exhibit 1).

9.   The staff of Public Finance approved the loan in the amount of HK$50,000 on the same day. 

10.   The former employer of D2 confirmed that D2 was an employee of MES Corporation Limited at the material time, but Exhibit 1 was forged.

11.   Under caution, D2 admitted that he had applied for the loan and that all supporting documents for the application were provided by him.

Charges 2 and 3 (against D1 and D2)

12.   D2 submitted a loan application form dated 30 November 2010 to Dah Sing Bank Limited (“Dah Sing”).  D2 stated in the application that he was employed by Powerway Corporation Limited (“Powerway”) as a merchandiser with a monthly salary of HK$20,000.

13.   Some supporting documents were enclosed with the application form, including:

(1) a certificate of MPF enrolment form from HSBC with the employer ID of Powerway (Exhibit 2); and

(2) a bank statement of D2’s Hang Seng Bank account dated 27 October 2010, showing a salary deposit of HK$20,000 from Powerway on 18 October 2010 (Exhibit 3).

14.   Dah Sing approved the loan in the amount of HK$30,000 on the same day (Charge 2).

15.   D2 submitted a loan application form dated 16 December 2010 to Kingrise Finance Limited (“Kingrise”).  D2 stated in the application that he was employed by Power Way Corporation Limited as a merchandiser with a monthly salary of HK$20,000. 

16.   The following supporting documents were enclosed with the application form:

(1) an employment certificate dated 23 November 2010, purportedly issued by Powerway and stating that D2 was employed by the company as a merchandiser since August 2010 with a monthly salary of $20,000 (Exhibit 4);

(2) three salary statements purportedly issued by Powerway, stating that D2 had received a salary of $20,000 for the months of August to October 2010 (Exhibit 5);

(3) Exhibit 3; and

(4) a bank statement of D2’s Hang Seng Bank account dated 27 November 2010, showing a salary deposit of $20,000 from Powerway on 18 November 2010 (Exhibit 6).

17.   The finance company approved the loan in the amount of $15,000 on the same day (Charge 3).

18.   Company registration search revealed that Powerway was incorporated on 27 November 2009 with a registered office in Kwun Tong.

19.   D2 was its company secretary whereas Cheung Ming-lung (PW5) was its sole director.  PW15 was asked by Chinese Male 1 to become the person in charge of the company and he agreed.  Power Way maintained a bank account at Hang Seng Bank, which was opened on 6 October 2010, with PW15 as the sole signatory.

20.   Upon house search at D2’s premises, copies of Exhibits 3 to 5, a company chop of Powerway, the business registration document of Powerway, a security device for online banking, and an MPF membership certificate of HSBC in D2’s name stating Powerway as the employer were found.

21.   Under caution, D2 stated that:

(1) he came to know D1 in August 2010 via the introduction of a friend. D1 asked if D2 was in financial difficulty and offered to supply forged documents to D2 for making loan applications;

(2) D2 had applied for the loan from Dah Sing, and Exhibits 2 and 3 enclosed with the application were provided to him by D1 and were forged. D2 drew down $10,000 of the loan and handed the whole sum to D1;

(3) D2 had also applied for the loan from King Rise, and Exhibits 3 to 6 enclosed with the application were forged and were provided by D1. The loan granted was in the sum of $15,000, but after deduction of administration fees, D2 only received $11,000, which was then handed over to D1;

(4) D2 was the secretary of Powerway, but in fact, he had no connection with the company nor was he employed by the company. The director of Powerway was PW15, who was introduced to D2 by D1. D1 told D2 that Powerway was a shell company and that the company was opened for the purpose of forging salary statements and employment certificates so as to obtain loans;

(5) D2 had applied for the business registration of Power Way;

(6) he had transferred money from the bank account of Powerway to his bank account online, so as to create the impression that salary had been deposited into his Hang Seng Bank account. He had provided his Hang Seng Bank card to D1 and after he had transferred the money from Powerway to his bank account, D1 would withdraw the money later by using his bank card;

(7) as for the exhibits seized upon house search,

D2 confirmed that the company chop was for manufacturing forged documents in order to obtain loans, but he had never used it. The security devices for the online banking was for making online money transfers from the bank accounts of Powerway. He had reported Power Way as his employer to HSBC to obtain the MPF certificate pursuant to D1’s instructions. The purpose was for smooth application of loans in the future.

Charges 4 to 6 (against D1 and D3)

22.   On 8 October 2010, D3 attended Public Finance in person and applied for a loan.  In the loan application form dated 8 October 2010, D3 stated that he was employed by FAD Design Workshop (“FAD”) with a monthly salary of $12,000.

23.   Some supporting documents were enclosed with the application form, including:

(1) an employment contract between FAD and D3, stating that D3 was employed by the company as a warehouse and logistics administrator since January 2010 with a monthly salary of $12,000 (Exhibit 7);

(2) three salary statements purportedly issued by FAD, stating that D3 received a salary of $12,000 for the months of July to September 201 (Exhibit 8);

(3) a copy of D3’s bank passbook, showing a salary deposit of $12,000 on 6 October 2010 (Exhibit 9).

24.   Public Finance approved a loan in the amount of $70,000 on the same day (Charge 4).

25.   D3 submitted a loan application form dated 13 October 2010 to Dah Sing Bank.  D3 stated in the application form that he was employed by FAD with a monthly salary of $12,000. 

26.   The same set of documents submitted to Public Finance (Exhibits 7 to 9) were enclosed in this application. 

27.   In addition, there was a certificate of employment dated 7 October 2010, purportedly issued by FAD and stating that D3 had been employed by the company since 6 January 2010 (Exhibit 10).

28.   Dah Sing approved a loan in the amount of $20,000 (Charge 5).

29.   D3 submitted a loan application form dated 18 October 2010 to DBS Bank.  D3 stated in the application form that he was employed by FAD as an indoor worker with a monthly salary of $12,000.

30.   A set of documents similar to that submitted to Public Finance (Exhibits 8 to 9) were enclosed with the application.

31.   DBS approved a loan in the amount of $36,000 (Charge 6).

32.   Under caution, D3 stated that:

(1) he came to know D1 in March 2009 at a bar;

(2) D1 was in need of money and asked him to help borrow money from financial institutions. D1 gave D3 some employment proofs for borrowing money;

(3) D3 gave his bank card to D1, and D1 said that he would deposit money into the bank account to show that D3 had received salary, but the sum would be withdrawn by D1 later. D3 successfully borrowed money on three occasions - namely, from Public Finance, Dah Sing and DBS - and all the loans obtained were handed over to D1. D3 did not receive any part of the loans;

(4) D1 promised to repay the loans by depositing the payments into his bank account; and

(5) D3 had applied for the loan from Public Finance. Exhibits 7 and 8, which were enclosed with the application, were provided by D1 and were forged. D3 had never worked for FAD. The salary and Exhibit 9 was not D3’s salary. The amount would be withdrawn by others eventually. D3 had also applied for the loans from Dah Sing and DBS by using the same set of forged documents. Exhibit 10 was also provided to D3 by D1.

Charges 7, 9 and 10 (against D1 and D4)

33.   On 22 September 2010, D4 attended Public Finance in person and applied for a loan.  In the loan application form dated 22 September 2010, D4 stated that he was employed by American Insurance Company (Bermuda) Limited (“AIA”), with a monthly salary of $15,000. 

34.   Supporting documents enclosed with the application included:

(1) a business card of AIA in D4’s name (Exhibit 11);

(2) a business card of AIA in the name of Choi Luen-fong (“Choi”); and

(3) a certificate of employment dated 7 September 2010, purportedly issued by AIA and stating that D4 was employed by AIA as a private assistant sales manager with a monthly salary of $15,000 (Exhibit 12).

35.   Public Finance approved the loan in the amount of $30,000 on the same day (Charge 7).

36.   D4 submitted a loan application form dated 17 February 2011 to Dah Sing.  D4 stated in the application form that he was employed by Gold City (Asia) Limited (“Gold City”) as a sales with a monthly salary of HK$15,000.

37.   Supporting documents - including:

(1) a certificate of employment dated 20 December 2010 purportedly issued by Gold City and stating that D4 was employed by Gold City with a monthly salary of HK$15,000 (Exhibit 14);

(2) an MPF membership certificate of Manulife in D4’s name, stating that D4 was employed by Gold City (Exhibit 15);

(3) a copy of D4’s HSBC bank passbook, showing salary deposits of HK$15,000 on 22 October 2010, HK$15,000 on 23 November 2010, HK$13,500 on 22 December 2010, HK$15,000 on 24 January 2011 (Exhibit 16); and

(4) an employment contract between Gold City and D4, dated 15 September 2010 (Exhibit 17)

- were enclosed.

38.   Dah Sing approved a loan in the amount of HK$50,000 (Charge 9).

39.   On 18 February 2011, D4 went to Sun Hung Kai Finance Limited (“SHK”) and applied for a loan.  In the loan application form dated 17 February 2011, D4 stated that he was employed by Gold City as a sales, with a monthly salary of HK$15,000.

40.   Supporting documents similar to the Dah Sing loan were enclosed (Exhibits 14 to 17). 

41.   SHK approved a loan in the amount of HK$20,000 on the same day (Charge 10).

42.   Company search revealed that Gold City was incorporated on 8 October 2009, with a registered office in Kwai Chung.  D4 was its company secretary whilst Lam Wai-keung (PW14) was its sole director.

43.   Gold City maintained a bank account at Hang Seng Bank.  It was opened on 13 October 2010, with PW14 as the sole signatory.

44.   PW14 stated that D1 had asked him to register a company and he agreed, as D1 had helped him a lot in the past.

45.   Under caution, D4 stated that:

(1) he came to know D1 in about May 2010 in a bar;

(2) D1 asked if D4 was in need of money and told D4 that he could help D4 prepare the salary proof to apply for loans from financial institutions. However, D4 had to give 70 per cent of the loan to D1, because D1 was also in need of money. D1 promised to repay the loan and D4 agreed. D1 asked D4 to hand in his HSBC bank card and passbook to him for the preparation of necessary documents.

(3) D1 later gave D4 some salary proof, stating that D4 worked for Gold City. D4 had never worked for Gold City, and D1 told D4 that it was a fictitious company from which he would receive salary;

(4) the salary received in D4’s HSBC account was not under D4’s control, as his bank card and passbook had been given to D1;

(5) using the documents provided by D1, D4 had obtained loans from various financial institutions;

(6) D4 had applied for the loan from Public Finance on 27 September 2010, but all the supporting documents relating to AIA were forged and were provided by D1. D4 had never worked for AIA;

(7) D4 had also applied for the loan from Dah Sing and SHK with Exhibits 14 to 17, with the forged documents provided by D1. The salary records shown in Exhibit 16 were made-up entries and D4 was not in control of these transactions.

Background and mitigation

D2

46.   D2 is 23 years old.  He has a clear record.  He used to work as a waiter, earning about $7,000 per month.  After his arrest, he took on odd jobs, earning about $300 per day.  He lives with his parents and contributed $1,000 to $1,500 to them per month.

47.   D2 admitted that the offences were committed out of greed.  He received about $2,000 to $3,000 for his role in the scheme.

48.   He felt very guilty about committing these offences.  In the end, he enlisted the help of a friend, who reported the matter to the police by e-mail.  This initiated the whole investigation and led to the arrest of the defendants.

49.   Counsel submitted that D2 was very remorseful. That was why he had asked his friend to report the matter and pleaded guilty.

50.   The offences are serious but were committed within the space of only five months.  There is no dispute that the total amount of the loans in the three charges was $75,000, but the $15,000 in Charge 3 had been fully repaid.  The loss to the victims caused by D2 was $50,000.

51.   D2 is also willing to assist the prosecution and has given a non-prejudicial statement against D1.

52.   Counsel urged the court to be as lenient as possible.

D3

53.   D3 is now 21 years old, educated to Form 3.  He lives with his parents.

54.   He has one previous conviction which was also related to dishonesty and false instruments.  He was sentenced to a rehabilitation centre on 26 February 2010 and was released on 9 September 2010. He is now detained for a drug-related matter.

55.   Counsel submitted that D3 only took part in the scheme upon the invitation of D1.  He was not the mastermind and has pleaded guilty at the very first opportunity.

56.   The amount involved is $126,000, no part of which has been repaid.

57.   The offences were committed within one month.

58.   Counsel pointed out that D3 was very co-operative after his arrest and made a full confession. He has also indicated that he is willing to give evidence against D1 and has given a non-prejudicial statement.

59.   Counsel urged the court to be lenient.

D4

60.   D4 is now aged 33.

61.   He has two previous convictions, none of which are related to dishonesty.  On 26 July 2012, D4 was sentenced to 10 years and 8 months’ imprisonment for trafficking in dangerous drugs.

62.   Counsel submitted that when D4 agreed to plead guilty to some of the charges, he had no idea that D1 would abscond. D4 was ready and willing to give evidence against D1.

63.   According to D4, he committed these offences because he was in need of money to pay for the medical expenses of girlfriend, who was suffering from cancer.

64.   The loans involved in the three charges to which D4 has pleaded guilty amount to $100,000.  However, the $30,000-loan in Charge 7 has been fully repaid.  The loss to the victims was $70,000.

65.   Counsel relied on the case of HKSAR v Man Kam Fai, CACC309/2009.  In that case, the defendant obtained a loan of $78,000 with false documents.  Prior to his arrest, the defendant had repaid $13,000. In other words, the loss was $65,000. 

66.   Counsel submitted that the facts of that case and the amount involved are very similar to the present case.

67.   D4 has pleaded guilty at the first opportunity and has provided the prosecution with a non-prejudicial statement against D1.

68.   Counsel urged the court to be lenient.

Sentence

69.   In passing sentence, I have considered all the matters put forward on the defendants’ behalf.

70.   D2 is only 23 years old.  He had a clear record.  The amount of loss involved in $50,000.  His greatest mitigation is that he had initiated the investigation, which has led to the arrest, prosecution and conviction of at least three persons, including himself.

71.   In the light of those matters, I will not sentence D2 today.  His sentence is adjourned to 10 am on 9 October 2012 in this court for a detention centre report and he is remanded in custody.

72.   I understand that D3 is also a young offender and these charges are not excepted offences.

73.   However, D3 has one previous conviction involving three charges relating to dishonesty and false instruments.  He was sentenced to a rehabilitation centre in 2010.  He was released on 9 September 2010 and he committed these offences about one month after his release.

74.   The amount involved is $126,000.

75.   He committed the offences within the space of days.

76.   Apart from his guilty plea and his promise to assist the prosecution, there is really no mitigation.  A detention centre order for D3 would be manifestly inadequate. 

77.   All three offences are part of the same fraudulent scheme.

78.   For D3, I am of the view that an overall starting point of 4½ years would reflect his criminality in the present case.

79.   For each charge, I adopt a starting point of 4½ years. 

80.   I will give credit for his promised assistance to the prosecution:  the starting point for each charge is reduced to 4 years.

81.   I give D3 full credit for his guilty plea: the sentence for each charge is further reduced to 32 months, to be served concurrently.

82.   That is a total sentence of 32 months.

83.   The amount of loss caused by D4 in the present case is about $70,000, which is slightly more than the loss caused in Man Kam Fai.

84.   However, D4 cannot be described as a recidivist in similar offences.

85.   I am of the view that an overall starting point of 3½ years would be appropriate to reflect D4’s criminality.

86.   I give D4 credit for his promise to assist the prosecution:  the starting point is reduced to 3 years.

87.   I give D4 full credit for his guilty plea: the sentence for each charge is reduced to 2 years, to be served concurrently.

88.   D4 is now serving a sentence of 10 years and 8 months for another matter.

89.   After taking into account the principle of totality, I order that 1 year of the present offence is to be served concurrently with the sentence in HC 147/2012.