HKSAR v. PLAMEN IVANOV MILANOV AND OTHERS

DCCC1044/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1044 OF 2011

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Reasons for Sentence

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The Charge and the Facts

1.   The charge sheet of this case contained one single count of conspiracy to steal, contrary to section 9 of the Theft Ordinance, Cap. 210, and sections 159A and 159C of the Crimes Ordinance, Cap. 200.

2.   All three Defendants were jointly charged. The prosecution case was that the Defendants had, between 6 May 2011 and 17 May 2011, conspired together with an unknown person to steal cash in Hong Kong. Each Defendant pleaded guilty to the charge.

3.   The facts were these : on 8 May 2011, a fake bank card containing data of an overseas ATM card was held in one of the Public Bank ATM machines. The bank’s card centre manager was alerted and a report was made to the police in mid-May 2011.

4.   As a result of subsequent enquiries and investigation, the police kept the 3rd Defendant under observation in the early morning of 17 May 2011. At the time, the 3rd Defendant was seen entering a Hang Seng Bank branch at Des Voeux Road Central and using an ATM machine there. Then, the 3rd Defendant entered a Public Bank branch and again used the ATM machine installed at the bank.

5.   The 3rd Defendant later returned to Ovolo Hotel. Shortly afterwards, the 1st and the 2nd Defendants were stopped outside the Hotel by the police. Upon search, 6 fake bank cards and cash of about HK$50,000 were found inside the 1st Defendant’s wallet. The 2nd Defendant was carrying a bag at the time and different currencies totaling about HK$80,000 were found. The 1st and the 2nd Defendants were arrested. Later, the 3rd Defendant was found sleeping in the hotel room and he was also arrested.

6.   The police then conducted a search of the hotel room in which all three Defendants resided. As a result, 169 fake bank cards, US and Canadian currencies in the sum of about HK$246,000 were found in the 1st Defendant’s belongings; cash of different currencies in the sum of about HK$253,000 was found in the 2nd Defendant’s luggage; and in the 3rd Defendant’s belongings, 3 fake bank cards and cash of different currencies in the sum of HK$157,000 were found.

7.   Together with the 12 fake bank cards seized from the banks, there were, in total, 190 fake bank cards.

8.   Other than the cards, the police also found two notebook computers in the hotel room. One of the computers had in it 33 sets of card data. The data all related to overseas bank accounts and had been used in the fake cards seized.

9.   I have examined these fake cards. They were simply plastic cards with magnetic strips on which data were stored. They did not bear any bank name or logo. Passwords were handwritten on the cards.

10.   It was stated in the Summary of Facts that as two sets of card data were found on 4 of the cards, there were only 188 sets of card data. All the card data related to overseas bank accounts.

11.   It was further stated in the facts that, between 6 and 17 May 2011, the fake cards were used to make a total of 1,045 attempts to withdraw cash in the total sum of HK$2,190,300 from ATM machines of 7 local banks at 24 different locations. Of these 1,045 attempts, 351 were successful and a total of HK$765,600 was withdrawn. Another 694 transactions seeking to withdraw a total of HK$1,424,700 were unsuccessful. The withdrawals ranged between HK$400 and HK$5,400.

Mitigation

12.   Mr. Delaney stressed, in mitigation, all three Defendants’ good character, their co-operation with the police, their willingness to repay the money stolen, and their foreigner status.

13.   The court was informed that all three Defendants entered Hong Kong on 9 March 2011. They then left but returned on 3 and 4 May 2011. Mr. Delaney emphasized that they initially came to Hong Kong for legitimate business purposes with no intention to commit any offence here.

14.   The trip of the 2nd and the 3rd Defendants were financed in part by their friends in Sofia and they were here for a business feasibility visit. The 1st Defendant, likewise, was said to have come here to explore business opportunities. Mr. Delaney submitted that such was supported by what the 1st Defendant told the officer under caution, that is, he came here to buy watches for sale in Bulgaria.

15.   The three Defendants, however, met Coco, who was described as a sweet-talking man, in Hong Kong. They were then persuaded to join Coco’s scheme of making quick money by using the fake cards. The 1st Defendant, owing to his heavy financial commitments which included looking after his own family members, his step-daughter and his second wife’s parents in Bulgaria, succumbed and agreed to take part in the criminal enterprise. Similarly, both the 2nd and the 3rd Defendants also agreed to participate.

16.   As a result, Coco gave the Defendants the fake cards. When asked by the court as to how the card data came to have been stored in the computer found in the Defendants’ hotel room, Mr. Delaney stated that although the computer was the 2nd Defendant’s computer and he was aware that Coco had used it, the data input was done by Coco. The 2nd Defendant had nothing to do with the inputting.

The 1st Defendant

17.   The 1st Defendant is aged 48. He grew up in Bulgaria but has moved to live in Canada since about 10 years ago. The 1st Defendant has a clear record in Canada and in Hong Kong.

18.   The 1st Defendant is divorced with two daughters, now aged 24 and 26 respectively. After the divorce, the 1st Defendant lived with and was responsible for looking after his daughters. It was said that he raised them well. Unfortunately, one of them has been diagnosed to suffer from anxiety disorder.

19.   Prior to the 1st Defendant’s arrest in Hong Kong, he worked as a driver and dispatcher in the same company for a long period of time. He was well respected at work and he had earned his promotion in the company. Before leaving for Hong Kong, the 1st Defendant was earning about CAD$40,000 annually plus gratuities.

20.   In August 2010, the 1st Defendant got remarried. It was said that it was during his courtship with his second wife in Bulgaria that he came to know the 2nd and the 3rd Defendants as well as the man nicknamed Coco, who is the wanted person in this case.

21.   In the letters written by the 1st Defendant’s family members, his friends, and his work supervisor, he was described as a responsible, hardworking, honest and loving man. All of them expressed disbelief in the 1st Defendant’s commission of the offence and considered it to be out of character. However, in one of the letters, it was revealed that the 1st Defendant, in recent times, had indicated that he was in financial difficulties.

The 2nd Defendant

22.   The 2nd Defendant is now aged 31. He was born in Bulgaria and is the only son of his family. The 2nd Defendant has completed secondary education. He has a clear record in Hong Kong and in Bulgaria. Although he is not yet married, the 2nd Defendant has a son aged 3½ years.

23.   Prior to his arrest, the 2nd Defendant had worked in his family company and had also involved himself in the buying and selling of cars in Eastern Europe as well as in transportation business in Bulgaria.

24.   The letters given to the court described the 2nd Defendant as a responsible person and a caring father. The 2nd Defendant has also made charitable donations over the past few years.

25.   In mitigation, it was said that both the 1st and the 3rd Defendants accepted that the 2nd Defendant played a lesser role in the scheme and both urged the court to pass a more lenient sentence on the 2nd Defendant. Mr. Delaney further submitted that although the evidence against the 2nd Defendant might not be very strong, he nevertheless accepted his responsibility and pleaded guilty. Thus, a lower starting point was sought for the 2nd Defendant.

The 3rd Defendant

26.   The 3rd Defendant is now aged 33. He is married with 2 sons. The younger one was born while the 3rd Defendant was detained in Hong Kong. He has a clear record in Hong Kong and in Bulgaria.

27.   The 3rd Defendant is the bread-winner of the family. His father passed away when the 3rd Defendant was a baby. Prior to his arrest, the 3rd Defendant had been gainfully employed. He worked as a driver and an assistant in a furniture company until 2006. Thereafter, he was self-employed.

28.   It was said that the 3rd Defendant had actively participated in voluntary work in the past 10 years, providing his time and money in organizing children’s basketball and ruby teams.

Sentencing Considerations

29.   There is no tariff in the sentencing of this type of offences.

30.   Mr. Delaney referred me to the case of R v Chan Sui To & Another [1996] 2 HKCLR 128 which dealt with credit card fraud. He also referred me to a number of cases involving fake bank cards which were dealt with in the District Court (HKSAR v Kavanagh Darren & Another DCCC 572/2008; HKSAR v Aktas Alim & Another DCCC 1061/2009; HKSAR v Cheung Hoi Wing DCCC 1176/2009; and HKSAR v Ionut Leonard Oancea & Others DCCC 782/2011).

31.   While accepting that there was an international dimension in this case, Mr. Delaney urged the court to take note of the fact that these Defendants were simply cogs in the operation. They were not the master minds. It was also submitted that their operation was not a particularly sophisticated one : the Defendants had travelled on their genuine passports; they had not disguised themselves in any way when making the withdrawals; they had kept the money without diverting the proceeds elsewhere; and there were a large number of unsuccessful withdrawal attempts (about 2/3 of the total attempts).

32.   In considering sentence, I have taken into account all the relevant facts and all that was said on behalf of the three Defendants.

The Defendants’ Visitor Status

33.   Although I find it strange that the 1st Defendant, who was said to have been in financial difficulties, would have come such a long way to Hong Kong to merely explore business opportunities and although I find it hard to understand why the 2nd and the 3rd Defendants would have gone on a business trip partly financed by their friends, I am prepared to give them the benefit of the doubt and accept that all three Defendants initially came to Hong Kong for legitimate purposes.

34.   However, it remains a fact that at the time of their commission of the offence, they were visitors in Hong Kong. Yet, they conspired together to commit a series of thefts which involved making over 1,000 ATM withdrawals and seeking to get a total of about HK$2.2M in Hong Kong within a period of less than 2 weeks.

35.   Those who engage themselves in criminal enterprises while visiting Hong Kong must be deterred.

The Scale of the Operation

36.   Mr. Delaney suggested that the Defendants’ operation was not a sophisticated one. I do not agree and I cannot ignore the significant number of fake cards found and the huge number of withdrawal attempts made in this case. There were altogether 4 of them entering this conspiracy. This was not a case in which only one single Defendant had armed himself with one or a few fake cards. The Defendants’ group had with them a total of 190 fake cards. The amount of cash successfully withdrawn was also substantial, that is, about HK$765,000.

37.   While the number of fake cards and the number of withdrawals are not the sole determinants of the size of these operations, they are helpful indicators. I accept that, in this case, the number of unsuccessful withdrawals far outnumbered the number of successful ones. It is, however, clear that the Defendants’ group was well-organised and their operation was sophisticated. If not, the group would not have had the means of obtaining such a large amount of cards and data which all related to overseas bank accounts.

38.   Insofar as these Defendants are concerned, at the latest, when they got hold of the cards, they would have become aware of the scale of the operation and the extent of their conspiracy.

The Potential Losses

39.   Moreover, I have to consider the potential losses which could be caused to the banks by the Defendants’ criminal acts. On the facts admitted and given the number of fake cards, I have no doubt that if the Defendants had not been arrested by the police, their cash withdrawal operation would have continued for some more time.

40.   I also cannot lose sight of the fact that the police had found 33 sets of card data being stored in the computer. If these Defendants were not core members of the group, I do not believe that the data would have been left in their custody. Therefore, even accepting that the data were input into the 2nd Defendant’s computer by Coco and that Coco was the prime mover of this unlawful scheme, I find that the three Defendants were important cogs in the operation.

41.   With the stored data, it would be possible for the Defendants’ group to make new fake cards, thus enabling them to continue with their operation in case any of the cards were held in the ATM machines.

The Effect on the Banking System

42.   By their criminal agreement, these Defendants sought to challenge and undermine Hong Kong’s banking system. Nowadays, the use of ATM machines has become an integral part of our daily life. Those who seek to employ fraudulent means to beat the ATM system must be deterred for these machines’ existence and continued existence is important to our banking system. Apart from deterring these Defendants, a strong message has to be sent to those who are tempted to do the same and a severe sentence is called for.

43.   I also observe that the use of fake bank cards on ATM machines, when compared with the use of forged credit cards, is an offence which could be committed with relative ease and which might be more difficult to detect.

44.   When one seeks to use a forged credit card in shops, one has to present himself and the card there. If the shop assistant is in doubt, he could seek verification from the bank, thus rendering it easier for the culprit to be caught.

45.   However, when one uses a fake bank card on an ATM machine, the worst that could happen is that the fake card be held, and if the culprit is not in disguise, his image be captured by the CCTV camera.

Sentencing in This Case

46.   In view of the facts of this case and the aggravating factors mentioned above, I consider a starting point of 5 years to be appropriate.

47.   In the case of the 2nd Defendant, it was stated in the Summary of Facts that he did not make any withdrawal himself. Mr. Delaney suggested that this was illustrative of his limited participation in the scheme. Whether that was so is open to argument for sometimes, the one who participated least might also be the one who was in charge.

48.   Whatever the situation was, the 2nd Defendant was a party to this conspiracy and he was the one who held the greatest amount of cash amongst the three. However, I am prepared to accept that the evidence against the 2nd Defendant is not as strong as that against the 1st and the 3rd Defendants. To the 2nd Defendant’s credit, he pleaded guilty nevertheless. I am therefore going to adopt a lower starting point in the 2nd Defendant’s case, that is, one of 4½ years.

49.   Mr. Delaney urged upon this court that each of the Defendants possessed positive good character and sought, on their behalf, a more lenient sentence. Given the serious nature of the present offence and that these Defendants committed the offence while visiting Hong Kong, their absence of previous criminal conviction and their provision of charitable donations and voluntary work in their local communities could not be of any material assistance in their mitigation.

50.   Moreover, while the court is sympathetic over the Defendants’ family plight, the hardship they would bring to their families was a matter which these Defendants should have considered before committing the offence.

51.   Similarly, I do not regard the fact that they are foreigners would assist them in their mitigation. The “harsher regime” these Defendants might have to endure in prison only results from their choosing to commit this serious offence after arriving in Hong Kong as visitors. Such is a consequence which they have to bear.

52.   Although Mr. Delaney referred to the Defendants’ willingness to hand over the stolen money and that the banks would not suffer any losses, it was not disputed that, even without the Defendants’ consent, the court, in this case, could order that the Defendants’ money be held by the police pending claims from the banks. In fact, this was the order made. While the Defendants were co-operative in this respect, I do not see it as warranting a separate reduction in sentence.

53.   For all three Defendants, they would get a one-third reduction in sentence for their pleas. This reduction has already included in it the element of good character and their co-operation with the police. This is the high water-mark for a guilty plea.

54.   5 years reduced by one-third is 40 months’ imprisonment. This is the term which each of the 1st and the 3rd Defendants is to serve.

55.   4½ years reduced by one-third is 3 years’ imprisonment. This is the term which the 2nd Defendant is to serve.