HKSAR v. WONG HO HANG AND ANOTHER

DCCC 782 & 785/2021 (Consolidated)

[2023] HKDC 1431

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 782 & 785 OF 2021

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REASONS FOR SENTENCE

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D1

1.  D1 pleaded guilty to 2 charges of fraud, contrary to section 16A of the Theft Ordinance [Charges (8)  & (11)] at the start of the trial.

2.  Charges (8)  & (11)  concerned with a residential property in Lohas Park, Tseung Kwan O, as particularised in the respective charge [hereinafter referred to as “the Property”].

3.  The prosecution alleged that D1 had, by deceit, namely by falsely representing to Law Kin Wa (“Law”)  [in the case of Charge (8)] and to one Lam Sui Fung, Francis (“Lam”)  [in the case of Charge (11)] that D1 was authorized by the owner of The Property to handle the renting of the same, and with intent to defraud, induced Law [in the case of Charge (8)] and Lam [in the case of Charge (11)] to commit an act or a series of acts, namely effecting payments in the total amount of HK$90,000 [in the case of Charge (8)] and HK$26,000 [in the case of Charge (11)] ], which resulted in benefit to D1, or in prejudice or substantial risk of prejudice to Law [in the case of Charge (8)] and Lam [in the case of Charge (11)].

4.  The corresponding facts which D1 admitted revealed that:-

4.1 One of the owners of The Property, one Madam Ngai (“Ngai”)  advertised her property for rent through an online platform in early September 2020.

4.2 On 13 September 2020, D1 responded to the advertisement by using WhatsApp messages and mobile telephone number 5200-5931 to contact Ngai.

4.3 Through a telephone call, D1 and Ngai agreed that D1 would rent the above residential address.

4.4 On 16 September 2020, Ngai met up with D1 and two other males. Ngai checked the HKID card of one of the other males who turned out to be Lam Yuk Lung bearing HKID Card No Z684499(6)  and took a photograph of it. Ngai and that male signed a tenancy agreement, which stipulated that, inter alia:-

4.4.1 the property would be let for a 12-month fixed term;

4.4.2 the monthly rent was $17,500; and

4.4.3 the lessee would pay a month's rent in advance with a deposit of HK$35,000.

4.5 Attached to the tenancy agreement was a copy of Ngai’s HKID card, and Lam Yuk Lung’s HKID card.

4.6 D1 then gave two cheques (serial numbers 215131 and 215132)  with a respective face value of HK$35,000 and HK$17,500 to Ngai. The cheques were dated 17 September 2020 and were to be drawn from D1’s bank account.

4.7 Ngai then handed over the keys of the Property to D1.

4.8 On 17 September 2020 Ngai deposited the two cheques given to her by D1 into her bank account.

4.9 On 18 September 2020 Ngai’s bank informed her that the cheques ‘bounced’. Ngai contacted D1 and he said he would resolve the matter.

4.10 On 22 September 2020 D1 informed Ngai that $20,000 would be transferred via online transfer to her bank account and the remaining $32,500 would be deposited into her bank account by a cheque.

4.11 On 25 September 2020 Ngai was informed that a third cheque (serial number 215137)  also ‘bounced’. But $20,000 was transferred into the bank account of Ngai.

4.12 D1 had failed to settle the outstanding amount despite numerous requests from Ngai.

4.13 On 20 October 2020, one Mr Lai (“Lai”)  saw an advertisement for the rental of residential unit at La Splendeur (LP3)  on Facebook.

4.14 On 10 November 2020 D1 claiming to be the son of Ngai said he could let out the Property on Ngai’s behalf.

4.15 On 3 November 2020 D1 showed the Property to Lai and her husband, Law.

4.16 Lai agreed to rent the property.

4.17 On 10 November 2020 Law:-

4.17.1 gave HK$20,000 in cash to D1 as rental deposit.

4.17.2 as the lessee signed a temporary tenancy agreement for the property and D1 signed as lessor on behalf of Ngai.

4.17.3 received from D1 photocopies of D1’s HKID card and a copy of Ngai’s HKID card.

4.18 On 25 November 2020 D1 provided Law with (1)  a tenancy agreement and (2)  a power of attorney, purportedly signed by Ngai authorizing D1 to handle the letting of the Property.

4.19 Believing that D1 was authorized by Ngai to handle the matter, Law signed the tenancy agreement as the lessee. He also handed HK$70,000 in cash to D1 as the remaining upfront rent for 6 months. D1 issued a receipt to Law.

4.20 On 30 November 2020 D1 gave the keys of the Property to Lai, and Lai took possession of the same and moved into it.

4.21 On 15 October 2020, one Lam Sui Fung, Francis (“Lam”)  posted a request that he wanted to rent an apartment on an online platform. Lam was then approached by a “Kelvin Lee”, first through Facebook and then using WhatsApp: claimed that he had a residential unit to rent.

4.22 On 5, 18 and 24 November 2020 D1 showed the Property to Lam. On the last occasion Lam asked why the registered owner for the property was different from D1’s name and D1 claimed that he was the son of Ngai and was acting on her behalf.

4.23 On 11 December 2020 Lam and D1 met in a Mongkok hotel lobby, where D1 handed over (1)  a copy of Ngai’s HKID card and (2)  a power of attorney, purportedly signed by Ngai authorizing D1 to handle the letting of the Property.

4.24 Thereafter, D1 provided a tenancy agreement to Lam which they both signed. The agreement stipulated that:-

4.24.1 The lease was for a 12-month fixed term;

4.24.2 The monthly rent was $13,000; and

4.24.3 The lessee would pay a deposit of HK$26,000.

4.25 Thereafter, Lam transferred the required deposit of HK$26,000 to D1’s bank account.

4.26 After confirming the receipt of the HK$26,000, D1 told Lam that he could take possession on 28 December 2020.

4.27 As D1 had failed to hand over the keys and D1 became out of reach, Lam made a report to the Police.

4.28 D1 was arrested on 18 December 2020.

5.  D1 was convicted after trial of two other charges of fraud, contrary to section 16A of the Theft Ordinance [Charges (5)  & (6)].

6.  It is alleged by the prosecution that D1 had, by deceit, namely by falsely representing to such person(s)  (the Lessee(s))  who might wish to rent Charge (5)  Parking Space and Charge (6)  Parking Space that these parking spaces were owned by Lam Yuk Lung and D1 was authorized by the owner of the respective parking space to handle the renting of the same, and with intent to defraud, induced the Lessee(s)  to commit an act or a series of acts, namely effecting payments in the total amount of HK$9,000 [in the case of Charge (5)] and HK$22,400 [in the case of Charge (6)], which resulted in benefit to D1, or in prejudice or substantial risk of prejudice to the Lessee(s).

7.  The relevant facts of Charges (5)  & (6)  in which D1 was convicted of had already been dealt with in my reasons for verdict and I therefore will not repeat the same here.

Mitigation of D1

8.  Mr Tse told this court that D1 is now 23 years of age.  He, was born in Hong Kong.  He ranked the eldest among three siblings.

9.  D1’s mother had a stroke when she gave birth to D1’s youngest brother in 2011.  She was hospitalised for over three years.  After being discharged from the hospital, D1’s mother lost her self-care ability.  D1’s father then quitted his job and began to provide full-time care to her. As a result of which, D1 needed to move and live with his paternal grandparents in Tseung Kwan O in 2017 when he was aged 18.

10.  D1 had stable academic performance throughout his primary and secondary school years.  He attended the Hong Kong Diploma of Secondary Education Examination in 2017.  He then read his “Higher Diploma Medical and Health Product Management” in HKU SPACE.  After his graduation at HKU SPACE in 2020, he was promoted to Hong Kong Polytechnic University.  He studied the “Bachelor of Science - Applied Biology with Biotechnology” in September 2020.  Unfortunately, the present case resulted in him being detained at Lai Chi Kok Reception Centre since 21 December 2020.

11.  Although not being able to continue his studying at the Hong Kong Polytechnic University, D1 kept on studying via distance learning courses during his detention.  He studied “Higher Certificate Programme on Business Management - Introduction to Commercial Law” at the Hong Kong Management Association and “University English Writing Skills”, “Foundation Chemistry” at Hong Kong Metropolitan University in January 2022 and June 2023 respectively.  It is D1’s wish that he could resume his studying at the Hong Kong Polytechnic University.

12.  Mr Tse drew to the attention of this court that it was revealed in the Community Service Order Suitability Report prepared by the probation officer that D1 “admitted his misdeeds and showed readiness to accept the legal responsibility of the offences he committed.  He showed remorse and deep regret for his wrongdoing.  In view of the young age of the Accused, commitment in meeting the requirements of Community Service Order (CSO), availability for community service, physical fitness and good family support, the Accused is considered a suitable person for CSO.  It is believed that by serving the CSO sentence, the Accused can contribute the society and continue his studying.  Hence, CSO with the total number of hours of work in the range between 120 to 160 hours is recommended”.

13.  Mr Tse urged upon this court to consider the option of Community Service Order.

D2

14.  D2 was convicted after trial of one charge of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance (money laundering)  [Charge (7)].

15.  By Charge (7), the prosecution alleged that D2 had, knowing or having reasonable grounds to believe that property, namely a total sum of HK$27,000 in the account as particularised in Charge (7)  [hereinafter referred to as “the Charge (7)  Account”], in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

16.  The relevant facts of Charge (7)  in which D2 was convicted of had already been dealt with in my reasons for verdict and I therefore will not repeat the same here.

Mitigation of D2

17.  In mitigation, Mr McGuinniety told this court that D2, a 38-years-old man, who is locally born.  He is adivorcee and has a teenage daughter now aged 12.

18.  He is now working in an egg roll company as a truck driver (for the over 10 years), with a monthly salary of $23,000 plus bonus rising to HK$30,000.  Mr McGuinniety prayed-in-aid the information gathered by the probation officer that “the director of the company commented that (D2)  was a dutiful staff who was punctual for work and responsible in discharging his duty.  He was satisfied with the job performance of (D2)  and gave a score of 8 out of 10 for that.

19.  D2 would give his ex-wife $10,000 a month and pay the rent of the flat his family lived in, which was more than $10,000.

20.  It was revealed in the Community Service Order Suitability Report that: “for this case … around the time before the happening of this case, D1 claimed himself doing the business of car rental and asked (D2)  to refer customers.  As invited by D1, (D2)  accepted to be a business partner. (D2)  said D1 was bad in reputation in the field of car rental for his dishonesty.  D1 therefore would use the bank account of (D2)  for business transactions.  As a business partner, (D2)  agreed to the same.  In the incidents related to Charge 7, (D2)  said D1 told him that the sums of money paid into his bank account was the deposits received in car rental transactions.

21.  Mr McGuinniety indicated to this court that such revelation reflected the remorse on the part of D2 insofar as his knowledge of D1’s money transaction was concerned.

22.  Mr McGuinniety acknowledged the worry expressed by the probation officer the fact that D2’s urine test conducted on 18 September 2023 revealed that he took cocaine.  It therefore led the probation officer to make the following comments in his report:-

“It is uncertain about how serious is the drug problem though the problem seemingly has not affected the employment of the (D2). It is also not sure if the (D2)  will stay away from dangerous drug. If the (D2)  keeps his drug habit, it may not only affect him to perform community service but also the organisation that provides him the placement for community service. Thus, it is hard to be certain to say that the (D2)  is suitable for CSO. Nevertheless, if the Court considers CSO the best sentence option for the (D2), it is suggested to add the special condition that “he shall abstain from all dangerous drugs and submit himself to random urine tests as and when directed by the supervising probation officer” in the Order”.

23.  Mr McGuinniety submitted that D2 will abstain from all drugs from now on.

24.  Mr McGuinniety also submitted that the probation officer did not discard Community Service Order as being a viable option in view of D2’s revelation of his drug taking.

25.  It was urged on behalf of D2 that the option of Community Service Order (with special conditions as recommended by the probation officer)  be adopted.

The Law

26.  The maximum sentence for the offence of fraud under section 16A of the Theft Ordinance is 14 years’ imprisonment on conviction upon indictment.

27.  The maximum sentence for the offence of dealing with property known or believed to represent proceeds of indictable offence is a fine of $5,000,000 and imprisonment for 14 years on conviction upon indictment.

28.  There is no tariff in relation to fraud and money laundering offences, each case depends very much on their own facts.

29.  Insofar as the offence of money laundering is concerned, the Court of Appeal in Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201^stated the relevant factors in sentencing (at paragraphs 12-14 of the judgment):-

“12. ‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimatise the proceeds of the crime. In order to crack down on serious crimes” and “to prevent offenders from getting financial gains, it is necessary to deter and prevent the offenders from financial gains. It is necessary to deter the commission of the money laundering offence.

13. Generally, the sentence for a ‘money laundering’ offence should mainly reflect the amount of the ‘black money’ laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most ‘money laundering’ cases, there may not be evidence to show from what indictable offence the ‘black money’ is in fact derived. Of course if there is information to prove that the ‘black money’ originated from a serious crime, including drug trafficking, kidnap and blackmail, illegal human trafficking and other organised crimes, etc, or the defendant’s benefit is huge, then the sentence should be adjusted upward.

14. This Court has, in a number of other similar cases, also listed other factors relevant to the sentence to be imposed, including the number of offence, the length of the time the offence lasted, the degree to which the defendant participated in the offence involving the ‘black money’ and whether or not it was an organised and sophisticated crime”.

30.  In HKSAR v Boma Amaso [2012] 2 HKLRD 33, the Court of Appeal emphasised that “the question of the amount of the money laundered is not the be-all and end-all of a case, but is a significant feature”.  The Court went on to elaborate on the other relevant factors to be considered (at paragraph 40 of the judgment):-

(a)  the nature of predicate offence;

(b)  the state of the offender’s knowledge;

(c)  where the operation involved an international dimension, this would be a significant aggravating feature;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organised criminal syndicate would be an aggravating feature;

(f)  whether there was one transaction or many and the length of the time over which the offence was committed;

(g)  whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h)  the role of the offender and the acts performed by him.

Sentence of D1

31.  The modes operandi of the fraud practiced by D1 in Charges (5), (6), (8)  and (11)  are similar, albeit they concerned with different subject matters.

32.  They all took place within a two-months-period.

33.  I noticed that the monies taken from the victims in Charges (5)  & (6)  were repaid to them whilst those taken from the victims in Charges (8)  and (11)  remained unpaid.

34.  The fraud in question certainly involved a certain degree of planning albeit it this court is prepared to give the benefit of the doubt to D1 that he was not the mastermind in the operation.

35.  One factor which this court must take into account is the fact that D1 had been remanded in custody since 21 December 2021.

36.  Having considered all factors concerned and the submissions made on behalf of D1, I find community service order to be the appropriate sentence for all the charges which he is convicted of.

37.  D1 is therefore sentenced to 240 hours of Community Service Order for each of Charges (5), (6), (8)  and (11).

38.  These sentences are to run concurrently.       

Sentence of D2

39.  The nature of the predicate offence is uncertain in the case of Charge 7.

40.  Aside from using his bank account to facilitate the transactions of 3 specific sums of money, there was no other involvement on the part of D2.

41.  D2 must therefore be given the benefit of the doubt that the money involved was not related to one of the more serious crimes such as drug trafficking, kidnapping etc.

42.  The transactions in question took place within a short space of time.

43.  The aggregate amount of money involved cannot said to be great.

44.  I further see no other aggravating factors involved.

45.  Having considered all factors concerned and the submissions made on behalf of D2, I find community service order to be the appropriate sentence for Charge (7).

46.  D2 is therefore sentenced to 240 hours of Community Service Order with special condition attached, namely that:-

“he shall abstain from all dangerous drugs and submit himself to random urine tests as and when directed by the supervising probation officer” in the Order”.