HKSAR v. CHAN WING KAI

DCCC 1114/2018

[2019] HKDC 1073

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1114 OF 2018

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REASONS FOR SENTENCE

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1.  The defendant pleaded guilty to 3 charges of Conspiracy to Steal (Charges 1, 2 and 3) and 2 charges of Theft (Charges 5 and 7).

2.  The 2 charges of using an identity card relating to another person (Charges 4 and 6) on the charge sheet are ordered to be kept on file, not to be proceeded with against the defendant without the leave of court.

Summary of facts

3.  Mr Cheung Tsang Ping, Mr Li Jack C F and Mr Wong Tak Yin had each lost their Hong Kong identity cards without knowing it.  The offences involve the use of their identity cards by the defendant to steal, or conspire to steal, money from their bank accounts.

Charge 1: Conspiracy to steal - Mr Cheung’s identity card and the defendant’s apprehension on 28 February 2018

4.  At around 10:15 am on 13 January 2018, the defendant presented Mr Cheung’s identity card at the Hoi Yuen Road branch of Citibank in Kwun Tong and made a request for a reference letter of the bank account held under the name of the identity card, which would show the opening date and balance of the account.  The defendant also requested to change the pin code of the account.

5.  Wrongly believing that the defendant was the person as depicted in the identity card, the bank teller acceded to both requests.

6.  About one and a half month later on 28^th February 2018, the defendant presented Mr Cheung’s identity card at another branch of Citibank located at Festival Walk, asking for an account number reminder card to be issued.

7.  This time the bank teller was alerted that the identity card being presented had been reported lost and both Mr Cheung and the police were notified.

8.  Mr Cheung’s son worked nearby and so he went to the bank and took a video of the defendant, who left the scene before police arrived.

9.  The defendant was located and arrested a few hours later.

Charge 2: Conspiracy to steal - Mr Li’s identity card and $500,000

10.  Upon investigation, it transpired that the defendant had on 17 January 2018 at around 11:30 am presented another lost identity card, this time of Mr Li, at the Yee Wo Street branch of Bank of East Asia and requested to withdraw some cash.

11.  Wrongly believing that the defendant was the true holder of the identity card, the bank teller proceeded to ask the defendant from which account he would like to make the withdrawal, disclosing to the defendant in the process that Mr Li had a time deposit account and a savings account.

12.  The defendant said he would withdraw $500,000 from the time deposit account.  The bank teller reminded the defendant that such a premature withdrawal would incur a penalty.  A computer printout setting out the account balance and details of the deposit was given to the defendant.  The time deposit was in the amount of $3 million.  Upon seeing the printout, the defendant said he would re-consider and left the bank.

13.  About 10 minutes later, the defendant presented Mr Li’s identity card at the 3HK telecom shop that was also on Yee Wo Street and requested for a replacement sim card to be issued.  Staff of 3HK believed the defendant to be the true identity card holder and acceded to the request.

14.  Mr Li noticed that his mobile network went out of service at around noon that day, although he did not pay much attention to that at that time.

15.  Meanwhile, the defendant returned to Bank of East Asia, presented Mr Li’s identity card, and instructed the bank to terminate the time deposit and withdraw $500,000 from Mr Li’s bank account.

16.  The defendant successfully passed the identity verification process by providing a signature and reciting the last four digits of Mr Li’s phone number as registered in the bank’s record.

17.  The time deposit was terminated as instructed, a total of $2,999,092.80 was deposit into Mr Li’s saving account upon deduction of the penalty for premature withdrawal.  The defendant was then asked to wait for the bank to have the $500,000 cash ready.

18.  The defendant left the bank during this time.  He used Mr Li’s mobile phone number to call the bank to check on their process.  The defendant returned to the bank at around 2 pm and collected the $500,000 cash.

Charge 3: Conspiracy to steal - Mr Li’s identity card and $2.49 million

19.  Within half an hour of the said withdrawal, the defendant presented Mr Li’s identity card at the head office of Bank of East Asia at Des Voeux Road Central and requested to withdraw $2.49 million from Mr Li’s savings account.

20.  Believing that the defendant was Mr Li, the money was given to the defendant in cash.

Charge 5: Theft - Mr Wong’s identity card and $90,000

21.  3 days shy of 1 month later, at around 1:30 pm on 13 February 2018, the defendant requested to withdraw $90,000 cash from the bank account held in Mr Wong’s name at the HSBC branch on Lai Chi Kok Road.

22.  Wrongly believing that the defendant was Mr Wong, the bank teller acceded to the request and $90,000 cash was handed over to the defendant, who then asked for a computer printout of Mr Wong’s account, which showed the balance of all the bank accounts that Mr Wong held with the bank.

Charge 7: Theft - Mr Wong’s identity card and his $3.49 million

23.  The following day, at around 3 pm on 14 February 2018, the defendant visited the San Fung Avenue branch of HSBC and gave the following instructions:

24.  All foreign currencies in Mr Wong’s Premier account be converted into Hong Kong Dollar and transferred to Mr Wong’s current account.

25.  All the money in the savings account be transferred to the current account.

26.  $80,000 in the Bankbook account be transferred to the current account.

27.  A total of $1,913,561.08 was transferred into the current account, bringing the total balance of the account to $1,962,569.06.

28.  The defendant further instructed that an overdraft facility be taken out on the current account and an overdraft of $1.6 million was granted forthwith.

29.  The defendant then asked that $3.49 million be transferred from the current account to an account held in the name of “Lao Fung Xiang Jewellery Shop” (“Lao Fung Xiang”).

30.  Lao Fung Xiang is a goldsmith and jewellery shop in Mongkok.  A man purchased $3.49 million’s worth of gold bar there on 13 February 2018, settling the bill by way of a bank transfer.  The gold bars were released to the man at around 6:05 pm on 14 February 2018.

Cautioned statement

31.  After his arrest on 28 February 2018, the defendant said under caution that the identity card he used in relation to charge 1 (Mr Cheung’s card) was given to him by a mainlander called “O Kee” (O記) and that it was “O Kee” who had instructed the defendant what to do with the card.

32.  The identity card he used in charges 2 and 3 were given to him by “O Kee” and a “Tin Jan” (天真) who is also a mainlander.  It was they who instructed the defendant to obtain the sim card at 3HK and to withdraw the total of $2.99 million from Mr Li’s bank account.

33.  As for charges 5 and 7 relating to Mr Wong’s identity card, the defendant said under caution that he committed the offences because he was heavily in debt.

Previous convictions

34.  The defendant has 14 convictions from 8 court appearances.  Of those 14 convictions, 4 are related to dishonesty.  His last conviction was for burglary when he was sentenced to 20 months’ imprisonment in December 2016.

35.  He was last released from prison on 27 October 2017, being slightly less than 3 months before his commission of the offence in charge 1 on 13 January 2018.

Mitigation

36.  The defendant is 62, married with an 18-year-old son.  The defendant was educated up to Secondary Level and served as a police officer from February 1975 to July 2007.

37.  During this period of time, the defendant had picked up the habit of gambling, which proved to be the reason for his subsequent downfall.

38.  He lost their family home because he fell behind in mortgage payments and the property was repossessed by the bank and the defendant was declared bankrupt.

39.  In order to make ends meet, the defendant worked as a part-time taxi driver while he was a serving Police officer.  In 2005, the defendant was involved in an accident and he was subsequently convicted of dangerous driving and failing to stop in case of accident in August 2005.  The defendant chose not to report this criminal conviction to his superior.  When it was found out, the defendant was asked to resign in 2007.  His pension funds were never released.

40.  Before the defendant resigned, in 2006, he had a bypass operation.  He also suffered from diabetes and hypertension, requiring daily insulin injections and regular follow-up treatments.

41.  Since his resignation from the police force, the defendant had no income.  With a young son to support, the defendant chose to turn to crime.  He frankly informed the court in his letter that he had been convicted and incarcerated in other jurisdictions as well as in Hong Kong.

42.  When the defendant was last released from prison in October 2017, since he was still being disqualified from driving, and given his health condition, he was unable to find any work.

43.  Then in mid-November 2017, the defendant went gambling with a friend in Shenzhen and lost around RMB$300,000.

44.  Mr Liu told the court that as a result of demands and threats made by his debtors, together with the promise of a 10% cut from the stolen money, the defendant agreed with two mainlanders to commit the present offences.

45.  In addition to the identity cards, the defendant was also given sample signatures to use in the thefts.  The defendant merely followed their instructions and did what he was told to do.

46.  The defendant did not receive money from the thefts in charges 5 and 7, but his gambling debt was supposedly set off after the theft of the $2.99 million in charges 2 and 3 since 10% would be about $300,000, ignoring the exchange rate difference.

47.  During his present remand, the defendant had been thinking about his life and realized that he needed to turn a new leaf and cut off his gambling friends.

48.  Mr Liu told the court that a company in Shenzhen, knowing about the defendant’s past records and present situation, is willing to employ the defendant as a driver upon his release.  The defendant also undertakes to inform the company of his health condition upon the court’s inquiry, since someone suffering from heart disease, diabetes and hypertension may not be the best person to be put in charge of a vehicle as a professional driver.

Sentence

49.  The maximum sentence on conviction upon indictment for the offence of theft, and conspiracy to steal, is that of 10 years’ imprisonment.

50.  There are no sentencing guidelines given the variety of circumstances that the offences can be committed.

51.  In the case of HKSAR v Wang Shuai, CACC 183/2016, the applicant pleaded guilty to 7 charges, being one of fraud; three of obtaining property by deception; one of attempted fraud; one of handling stolen goods; and one of failing to surrender to custody without reasonable cause.  He was sentenced to a total of 2 years 9 months’ imprisonment.

52.  There the applicant presented the identity card of another person, Mr Lun, at the bank, requested to change the personal information including contact phone number and work address related to Mr Lun’s bank account, and then applied for replacement ATM cards for two of the accounts.

53.  As a result of the applicant posing as the account holder, $19,000 was withdrawn from one of the accounts.  This formed the subject matter of the fraud charge.

54.  22 days later, the applicant visited another bank and repeated the same routine.  He was,  however, unsuccessful this time because the staff suspected that the identity card did not belong to him and called the police.  This led to the attempted fraud charge.

55.  The applicant was arrested and Mr Lun’s wallet was found on his person, forming the subject of the handling charge.

56.  Prior to the arrest, the applicant had used Mr Lun’s credit cards to purchase goods worth around $25,000 in total on 3 different occasions, being the subject matter of the three obtaining property by deception charges.

57.  The applicant failed to attend court on one occasion after indicating his intention to plead guilty to the charges, resulting in the failing to surrender charge.

58.  It was put forward in mitigation that the applicant committed the offences because he was indebted to a loan shark and was unable to make the interest payments.  It was also put forward that the applicant was not the mastermind of the fraud and attempted fraud.

59.  The learned trial judge pointed out that the applicant’s conduct in approaching the banks posing as the account holder to defraud was a serious attack on the integrity of the banking system, although it was not a particularly sophisticated operation since the applicant was bound to be caught eventually.

60.  The judge recognized that the applicant did not have any similar convictions and adopted a starting point of 3 years’ imprisonment for the fraud and attempted fraud charges.

61.  For the credit card related obtaining charges, she adopted a starting point of 2 years and 9 months’ imprisonment each.

62.  For the handling charge, 2 years 6 months’ starting point, and the fail to surrender charge, a starting point of 6 months’ imprisonment.

63.  The Court of Appeal approved of the starting points and agreed to the judge’s application of the totality principle, which resulted in a final total sentence of 2 years and 9 months’ imprisonment after plea.

64.  Although the applicant was charged with the offences of fraud and attempted fraud, his method of presenting the identity card of another and posing as the account holder in order to facilitate the stealing is the same as adopted by the defendant in the present case.

65.  However, I find the defendant’s case far more serious than the applicant’s, in that he had conspired with two others to commit the offences, and the amounts involved are much larger than the $19,000 stolen from the bank account in Wang Shuai.  Furthermore, one of the reasons the defendant committed the present offences is because he was promised a 10% share of the stolen money.

66.  The thefts involved planning and premeditation and are of some sophistication.  An overview of the offences suggests an organized group of people operating behind the scene, exploiting gamblers who had lost money, coercing them into being the front person in the thefts, thus distancing themselves from the risk of being captured while enjoying the lion share of the stolen money.

67.  The defendant told the court about him being shown sample signatures of the account holders.  It is not known how they came to be in possession of the sample signatures, but it is chilling to think that our banking system can be so seemingly effortlessly compromised.  But for the alertness of one of the bank staff, the defendant would likely have stolen more.

68.  I find that the sentences imposed must strive to achieve a deterrent effect on those who might be put in similar positions as the defendant.

Mitigating factors

69.  Although I do have sympathy for the defendant’s personal circumstances and health condition, he ought to have sought help when he realized he had a gambling problem and they cannot be excuses for his commission of the offences. Having said that, I do find that they are sufficient to warrant a small discount in the ultimate sentence.

70.  As for the assistance he had given to the police during the investigation of the offences, I do recognize that the defendant’s confessions must have saved considerable time and effort on the part of the investigating authorities as well as the banks.  The defendant will also be granted a small discount in the ultimate sentence on this basis.

Aggravating factor

71.  The defendant committed the present offences just 3 months after his last release from prison.  Coupled with the similar convictions he had in the not too distant past, I find that the sentences must be adjusted upwards for the defendant being a persistent offender.

Charge 1

72.  Although no money had been stolen from the account of Mr Cheung in charge 1, it is clear what the defendant’s intentions were by changing the pin code of the account and later on asking for the account number reminder card to be issued.  There will be further manipulations of the funds in the account, with the ultimate objective of stealing Mr Cheung’s money being the agreement under the conspiracy.

73.  Given the circumstances of the commission of the offence, recognizing there being no actual loss, I will adopt a starting point of 3 years’ imprisonment.

74.  This sentence is adjusted upwards by 3 months for the said aggravating factor, to 39 months’ imprisonment.

75.  The defendant is granted the full one-third discount, leading to a sentence of 26 months’ imprisonment after plea.

Charges 2 and 3

76.  In relation to charges 2 and 3, the conspiracy to steal involved at least 3 people.  The agreement involved the undertaking of some daring actions on the part of the defendant.

77.  It is obvious that once the defendant had found out about the $3 million fixed deposit he needed to consult with his co-conspirators.  They planned carefully, not wanting to cause alarm, getting a new sim card to prevent the bank from checking with the real account holder and to use the number to convince the bank further of the defendant’s identity.  The defendant took the $500,000 and then moved to another branch to withdraw the $2.49 million.

78.  For charge 2, I will adopt a starting point of 3 years and 3 months’, increased by 3 months for the aggravating factor to 3 years and 6 months’ imprisonment.

79.  For charge 3, with the stolen amount at $2.49 million, I will adopt a starting point of 3 years 9 months, increased by 3 months for the aggravating factor to 4 years’ imprisonment.

80.  The sentences are, therefore, 28 months and 32 months’ imprisonment after plea.

Charges 5 and 7

81.  The stealing of Mr Wong’s $90,000 was straightforward.  All the defendant had to do was pretend to be Mr Wong as depicted in the identity card.

82.  The theft of the $3.49 million required more planning.  Having found out about the various accounts, the defendant proceeded to move the money into the current account to ensure that there was sufficient funds to pay for the gold.  Someone other than the defendant purchased and eventually collected the gold.  It is not clear how the gold were disposed of, whether they were moved out of Hong Kong or sold off here.

83.  I find that for the theft of the $90,000 in charge 5, the proper starting point is 3 years, increased by 3 months for the aggravating factor to a sentence of 3 years and 3 months’ imprisonment.

84.  For the $3.49 million in charge 7, given the circumstances of the commission of the offence and the amount involved, I will adopt a starting point of 3 years 9 months, increased by 3 months for the aggravating factor to 4 years’ imprisonment.

85.  The discounted sentences for charges 5 and 7 after plea are, therefore, 26 months’ and 32 month’s imprisonment.

Totality

86.  The total amount stolen in charges 2, 3, 5 and 7 is $6,570,000.

87.  The defendant had used 2 different identity cards in the 3 conspiracy charges and a third one in the two theft charges.  He had executed the agreement in the three conspiracies, although the conspiracies in charges 2 and 3 relate to the same bank account holder.

88.  The 4 sums of money were stolen from 4 different locations from bank accounts held in the name of two different people on 4 different occasions, although either on the same day or just the day after.

89.  The defendant may not have been the mastermind of the operations but he played a significant role in the conspiracies and the thefts.

90.  He needed to be able to maintain his calm when presenting the identity cards posing as another.  He had to be able to communicate convincingly and effectively with the bank staff so that they would not become suspicious.

91.  The defendant committed the offences out of greed, to settle his gambling debts and to make some extra money, as confirmed through his counsel informing the court that the defendant was expecting his 10% from the $90,000 and $3.49 million in charges 5 and 7 as well, although he was never paid.

92.  Taking a step back, I find that a global sentence after plea, without taking into consideration the mitigating factors yet, of 48 months’ imprisonment is the proper sentence to reflect on the overall culpability of the defendant and to achieve a deterrent effect.

93.  I will, therefore, order that 6 months of charges 2, 3, and 5, and 4 months of charge 7 be served consecutively to the 26 months sentence in charge 1, the balance to be served concurrently, resulting in the sentence of 48 months' imprisonment (4 years).

94.  As mentioned above, for the mitigating factors of the defendant’s personal circumstances, health condition and his assistance rendered to the police, I will grant the defendant a total discount of 2 months.

95.  The final total sentence for all charges is, therefore, 46 months’ imprisonment (3 years and 10 months) after plea.