HKSAR v. CHUNG HIU TUNG

DCCC 860/2022

[2024] HKDC 400

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 860 OF 2022

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REASONS FOR SENTENCE

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1.  The defendant was convicted on her plea and agreement to re-amended Summary of Facts to 11 charges of fraud, contrary to section 16A of the Theft Ordinance, Cap 210 (Charges 1, 3, 4, 5, 7, 8, 9, 10, 12, 15 and 16), and one charge of procuring the making of an entry in a record of a bank by deception, contrary to section 18D(1)  of the Theft Ordinance, Cap 210 (Charge 17).

2.  It has also been ordered that Charges 2, 6, 11, 13 and 14 be kept on court file and not to be proceeded with without leave of the court.

Facts

Charges 1, 3, 4 and 5

3.  Between February and May 2021, the defendant perpetuated e-shopping fraud scams.  The defendant would put up posts on Facebook or send messages to the victims via instant messaging application, offering to procure goods and/or services for them.  The victims were directed to deposit payments into the defendant’s FPS account or into the defendant’s bank account.  However, after the victims made the payments, they did not receive the goods/services they paid for and subsequently lost contact with the defendant.

4.  As a result of false representation made by the defendant, PW1 ordered 5 iPhones and 1 Apple watch.  The total amount of payments made by PW1 was HK$18,939. (Charge 1)

5.  PW3 ordered Ritz Carlton Hotel accommodation and 1 Cartier bracelet. The total amount of payments made by PW3 was HK$9,200. (Charge 3)

6.  PW4 ordered 88 dolls.  The total amount of payments made by PW4 was HK$4,710. (Charge 4)

7.  For PW5, she contacted the defendant with a phone number she got from a colleague.  The defendant falsely claimed to be a staff of member of the Correctional Services Department (“CSD”)  and could purchase iPhones at a discount.  PW5 paid HK$6,900 to the defendant to purchase an iPhone but never received it. (Charge 5)

Charges 7 to 10

8.  On 27 December 2020, PW7 was told by the defendant (with whom she got acquainted through a dating application)  that she had iPhones for sale and PW7 was asked to find buyers.  PW7 messaged her co-workers, PW8 to PW11, who expressed their interest.  PW8 to PW11 then contacted the defendant and placed orders for various Apple products, during which the defendant made false representation to them.  However, after receiving payments, the defendant kept on delaying delivery of goods and eventually went out of contact.

9.  As a result of false representation made by the defendant, PW8 ordered 2 iPhones.  The total amount of payments made by PW8 was HK$15,800. (Charge 7)

10.  PW9 ordered 3 iPhones, one of which was ordered on behalf of PW12.  The total amount of payments made by PW9 to the defendant was HK$23,700.  PW12 later refunded PW9 HK$7,900. (Charge 8)

11.  PW10 ordered 2 iPhones.  The total amount of payments made by PW10 was HK$15,800. (Charge 9)

12.  PW11 ordered 3 iPhones and 1 Apple pencil.  The total amount of payments made by PW11 was HK$23,599. (Charge 10)

Charge 17

13.  On 8 January 2021, PW10 was notified by the defendant that HK$78,899, being refunds owed to her and PW8, PW9 and PW11 for the ordered goods, would be deposited into her bank account.  PW10 checked the balance of her HSBC account and saw a cheque deposit in the sum of HK$78,899.  However, PW10 was subsequently notified by HSBC that the cheque, which was drawn on the defendant’s Dai Seng Bank current account, was bounced as payment had been countermanded by the drawer.  At that time, the defendant’s current account balance is only HK$2.

Charge 12

14.  In June 2020, PW13 received a Facebook message from the defendant, falsely claiming that she was a CSD staff member and could purchase Disneyland hotel and theme park ticket package at a discount.  PW13 relayed this message to PW14 and PW14 placed orders with the defendant on behalf of PW15 on 16 June 2020. On the same day, PW15 transferred HK$6,500 to the defendant’s FPS account. However, PW15 never received the theme park tickets and/or the hotel vouchers as promised.  PW13 later refunded PW15 HK$6,500.

Charges 15 and 16

15.  In July 2021, PW18 came to be acquainted with the defendant who falsely claimed to be a CSD staff member and could purchase Apple products at a discount as staff welfare.  Between 14 July 2021 and 27 July 2021, PW18 paid a total of HK$44,370 to the defendant’s FPS account for purchasing 9 iPhones and a MacBook Pro.

16.  Meanwhile, a person claiming to be the defendant’s supervisor at CSD (“Madam Fong” or “Sandy”)  contacted PW18 by WhatsApp.  From 1 August 2021 onwards, the defendant or Madam Fong, told PW18 that she had to pay deposits or “retention fees” for the products ordered, or else she would lose her title to these products.  As a result, between 1 August and 10 August 2021, PW18 paid deposits totalling HK$30,000 to the defendant.

17.  Later, as PW18 had run out of money for paying deposits, she surrendered Apple products to a total value of HK$120,185 to the defendant as collateral.

18.  Further, between 16 September 2021 and 21 December 2021, PW18 paid additional deposits/retention fees totalling HK$568,700 to the defendant.

Arrest and Cautioned Interviews

19.  On 22 December 2021, the defendant was arrested for “obtaining property by deception” and under caution admitted having deceived others in order to make money to repay her debts.

20.  An iPhone, which was purchased by PW18 and surrendered to the defendant as collateral, was also seized from the defendant.

Criminal Record

21.  The defendant has 6 previous criminal records involving convictions of 41 charges, all related to dishonesty, of which 26 of them are convictions of fraud charges.  She was last discharged from prison on 21 March 2020.

Mitigation

22.  The defendant is currently 31 years old.  At the material times, she was a game operator at AIA Vitality Park with a monthly salary of around HK$15,000.  She has completed a higher diploma programme.  Her parents and younger sister reside in Macau.  It is said that defendant has to support her mother who suffers from renal dysfunction.

23.  Defence counsel submitted that the defendant committed the offences as her boyfriend was a big spender and the defendant was asked to take out loans to support his spending habit.  As a result, she was in heavy debts.  It was said the defendant and her boyfriend had arguments frequently over money matters. The defendant later discovered that her ex-boyfriend left Hong Kong for good and stayed with another female.  She then realised how stupid she was to commit the offences for her boyfriend.

24.  It is said that although the defendant is willing to pay compensation to the victims, she did not have any financial means to do so, except that she would agree the money in her frozen bank account can be applied towards refund for the victims. 

25.  Defence understands the prosecution would apply for an enhancement of sentence for Charges 1, 3 and 4 and they would not challenge the application but prays that the enhancement would be as lenient as possible.

26.  Defence counsel admitted that this is a case of “e-Shopping Fraud”.  It was said that the scheme was not sophisticated.  It was admitted that the defendant did claim she was a Correctional Services Department staff during the commission of some of the offences.

27.  Defence counsel also submitted that there is no sentencing guideline over cases of Internet scams.  The court needs to consider factors like the facts of the case, the modus operandi, the value involved, and whether a defendant has any previous similar convictions.  He referred this court to the cases of HKSAR v Leung Yiu Fai, CACC 100/2014, and HKSAR v Ng Wing Ki Winky and another, CACC 150/2021.  He also urged this court to consider the totality principle in the sentencing exercise.

28.  Defence counsel also submitted to the court 2 mitigation letters written by the defendant as well as a pastor.  He asked this court to impose a lenient sentence on the defendant.

Discussion

29.  Before sentencing, this court has carefully considered all submissions on behalf of the defendant, including the mitigation letters as well as the legal authorities in the area.

Fraud (Charges 1, 3, 4, 5, 7, 8, 9, 10, 12, 15 and 16)

30.  A person is liable on conviction upon indictment for this offence to imprisonment for 14 years. 

31.  There is no sentencing guideline for this offence for the very reason that the modus operandi, sophistication of the scheme, number of persons involved, number of victims affected, amount of money involved, duration during which the offence was committed, the effect of the offence on the victim varies immensely.  Therefore, the sentencing starting point in each case will depend on the facts of the particular case.

32.  As the defence counsel put it, this case is a typical “e-Shopping Fraud” case.  It does not involve a breach of trust and the defendant is the sole perpetuator of these offences, although she did present herself as “Madam Fong” or “Sandy” to the victims.

33.  It is said in the case cited by the defence, ie, HKSAR v Leung Yiu Fai, that the fraud on the Internet is serious for the following reasons:

(1)  The defendant preyed on ordinary members of the public and all members of the public are exposed to such fraud. The number of victims involved could be very substantial.

(2)  The crimes committed by the defendant has serious adverse effect on Internet trade, as people tend to be cautious to Internet trade, which affects the rights of the bona fide Internet traders.

(3)  Internet fraud would easily be copied and the lack of deterrence in the sentence of these offences will lead to a surge of these cases.

(4)  Internet transactions do not involve face-to-face encounters, the offender could easily use different methods to hide his identity, which make it difficult for the crime to be solved.

(5)  It is generally difficult for the victims to recover their loss.

34.  The Court of Appeal emphasised the need for deterrence as a sentencing consideration for this type of offence and approved a starting point of 30 months, saying that it was not excessive for a fraud in which 36 victims were deceived over a period of 2 months at a total loss of HK$63,180.

35.  In the case of HKSAR v So Ka Wai, CACC 243/2017, the applicant and another defendant conducted an online Internet fraud in which they represented that they had virtual goods for sale.  Between 21 January 2015 and 22 January 2016, the applicant and another induced purchasers to make payments totalling HK$52,181 into the designated bank accounts.  After receiving these monies, the applicant and another failed to deliver any of the goods that had been purchased.  There were 60 victims of this online fraud.

36.  The Court of Appeal said that given the duration of the fraud, the number of victims involved, the amount involved, and the planning necessary for its execution, a lengthy prison sentence would be appropriate.

37.  It was said further that the increasing prevalence of such crimes, the difficulties associated with detecting them, and the resources needed for the successful investigation are all reasons why the length of custodial sentence should contain an element of deterrence.  In this So Ka Wai case, a starting point of 3 years’ imprisonment was not disturbed on appeal.

38.  Coming to the present case, the defendant committed Charge 12 three months after she was released from prison in late March 2020.  Before commission of the present 11 fraud charges, the defendant had been imprisoned 4 times since 2014 when she was 21 in relation to 26 fraud charges.  She knew very well the legal consequence for commission of these offences, yet it is clear that she did not learn a lesson during the past.  She was not deterred by the relatively short sentence of imprisonment imposed on her in the past.  There is no doubt that she is a persistent offender for fraud which amounts to an aggravating feature in sentencing.

39.  Defence counsel said the defendant committed these offences because she wanted to support her boyfriend who was a big spender.  This court does not find this as a valid mitigating factor because at the time of these offences, she was already aged 28.  Given her past experience with the law and her age, she was a person who embarked on commission of these offences of her own choice.

40.  The defendant sometimes committed multiple offences on the same period, for example, Charges 7, 8 and 9. 

41.  When the defendant committed offences under Charge 5, 12, 15, and 16, she impersonated herself as a CSD staff, a public officer.  This added to her culpability in such cases.

42.  The defendant has pleaded guilty and she is entitled to full one-third sentencing discount. 

43.  The mitigating letters from the defendant and the pastor says the defendant is determined to start afresh this time.  This court has reservation to accept her determination to start afresh as genuine in view of her past record.  Further, it is well established that any remorse that the defendant had has already been subsumed in the one-third sentencing discount for which she is entitled.

44.  Defence counsel said the defendant has no money and is therefore unable to compensate the victims but she would be willing to apply the credit balance of HK$132,000 in her frozen bank account for such purpose.  The sum of HK$132,000 represented only 14.8% of the total loss of the victims.  In any event, the same was not entirely voluntary and was not done until this very moment.

Enhancement of sentence

45.  Prosecution seek for enhancement of sentence for the Charges 1, 3 and 4, all being specific offences within the meaning of the Organized and Serious Crimes Ordinance, Cap 455, and has furnished information to this court pursuant to section 27(2)  of the ordinance.

46.  According to the statement of Woman Detective Senior Inspector Ng Pak-wai Victoria, the modus operandi of these fraud charges fall within the “e-Shopping Fraud” cases under technology crime.  Police enforcement action to combat these e-Shopping Fraud is hampered by many factors by reason of the modus operandi. 

47.  From Annex A of the statement, one could see that the sharp rise in e-Shopping Fraud from 2,187 cases in the year 2018 to 8,735 cases in the year 2022.  For the first 10 months in 2023, the number of such cases is already 7,739.

48.  From Annex C of the statement, one could see also that the amount of loss of victims of e-Shopping Fraud had also risen from HK$50 million in the year 2018 to HK$ 156.7 million just for the first 10 months in the year 2023. 

49.  This court agrees with Ms Ng that judging from the crime trend, the contribution to the overall technology crime reports, as well as the increasing popularity of e-shopping activities in Hong Kong, the e-Shopping Fraud related crimes and the associated money laundering activities in supporting the commission of such crime are prevalent in Hong Kong.  These crimes are of obvious concern to the society of Hong Kong, in terms of the harm caused to the community and the repeated occurrences. 

50.  Considering the alarming rise in the numbers of e-Shopping Fraud cases and the loss amount, the court will enhance the sentence by 33%.

Sentence

51.  The sentencing starting point and final sentence of each fraud charge are summarized as below.

Charge	Value involved (HK$)	Period	Sentencing starting point
1	$18,939	8/2/2021-19/2/2021	12 months
3	$9,200	8/5/2021-10/5/2021	8 months
4	$4,710	23/5/2021-31/5/2021	8 months
5	$6,900	28/5/2021-3/6/2021	8 months
7	$15,800	27/12/2020-6/1/2021	12 months
8	$23,700	27/12/2020-6/1/2021	12 months
9	$15,800	27/12/2020-6/1/2021	12 months
10	$23,599	27/12/2020-3/1/2021	12 months
12	$6,500	19/6/2020	8 months
15	$44,370	1/7/2021-27/7/2021	14 months
16	$598,700 $120,185 (as a collateral)	1/8/2021-21/12/2021	36 months

Charge	Sentencing starting point	Aggravated by reason of persistent offender	Aggravated by reason of posing as CSD staff	Sentence after plea (1/3 discount)	Sentence after 33 % enhancement
1	12 months	3 months		10 months	13 months and 9 days
3	8 months	2 months		6 months and 20 days	8 months and 26 days
4	8 months	2 months		6 months and 20 days	8 months and 26 days
5	8 months	2 months	1 month	7 months and 10 days
7	12 months	3 months		10 months
8	12 months	3 months		10 months
9	12 months	3 months		10 months
10	12 months	3 months		10 months
12	8 months	2 months	1 month	7 months and 10 days
15	14 months	3 months	1 month	12 months
16	36 months	4 months	2 months	28 months

Charge 17

52.  On conviction upon indictment of this charge, a person is liable to imprisonment for 10 years. 

53.  The defendant committed this offence when the victims in Charges 7, 8, 9 and 10 chased her for a refund and in order to delay any action that they might take. 

54.  Sentencing starting point for this charge is 12 months.  The defendant is sentenced to 8 months’ imprisonment by reason of her guilty plea.

Totality

55.  Now, I am going to consider totality principle.  The defendant has caused in total a loss of HK$888,403 to the 11 fraud victims.  She committed these offences from 19 June 2020 (Charge 12)  to 21 December 2021 (Charge 16), ie, over 18 months period.  She is a persistent offender. 

56.  This courts finds having regard to the overall culpability of the defendant as well as the enhanced sentence for Charge 1, 3 and 4, the overall just and proportionate sentence after plea for the defendant would be 45 months’ imprisonment.

57.  Accordingly, the sentences for Charges 12, 15 and 16 shall run totally concurrent to each other.  The sentences for Charges 1, 3, 4 and 5 shall run totally concurrent to each other and 7 months of which shall run consecutive to the sentences for Charges 12, 15 and 16. 

58.  Charge 17 is related to Charges 7, 8, 9 and 10.  Therefore, sentences for Charges 7, 8, 9 and 10 and 17 shall run totally concurrent to each other and 10 months of which shall run consecutive to the sentences for the other charges, the rest to run concurrently.

59.  The total sentence for the defendant in this case is 45 months’ imprisonment.