HKSAR v. FONG SIU MO AND OTHERS

DCCC1192/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1192 OF 2009

----------------------

----------------------

---------------------------

Reasons for Sentence

---------------------------

1.  Fong Siu-mo, Ho King-nang, Cheuk Yuen-ping, Cheung Chung-kin and Li Chi-fai, you have all been convicted after trial of the conspiracy alleged in the charge to defraud Madam So Ying.

2.  This was a very carefully planned and elaborately and convincingly executed plan to defraud an entirely innocent middle-aged woman who happened to own her own flat and to have accumulated a reasonably large sum of savings.

3.  Each one of you played a crucial role in its execution.

4.  In the month or so before your activities focused on Madam So, two shelf companies had been bought and premises rented. One of the companies, Sure Rise (Hong Kong) Limited, purported to be a company trading in mobile phones, and the other, Good Wealth (China) Limited, whose offshoot, Good Wealth (Promotion) Development Company, purported to trade in cheap costume jewellery.

5.  Dummy telephones and advertising material were acquired to give the premises of Sure Rise the semblance of a genuine business.

6.  As far as Good Wealth is concerned, some cheap costume jewellery was bought and put on display in its office.

7.  A young receptionist, Karen Lam, was employed by Good Wealth and a young man, Siu Wang-yip, was employed by Sure Rise as a salesperson to give the companies the appearance of legitimacy.

8.  Although the companies, to outward appearances and, in particular, to Madam So Ying, were separate, they were, in fact, closely connected.

9.  The 1st defendant, who held himself out as being the manager of Sure Rise, was involved with the 3rd defendant in renting the premises of Good Wealth.  Both gave false names to the agent who took them to view potential premises for Good Wealth’s office.

10.  The 1st defendant gave a false name to Siu Wang-yip, the young man he employed in Sure Rise.

11.  Advertisements were placed in the press, advertising positions in Good Wealth as accounting clerks and merchandisers.

12.  I was satisfied that the purpose of those advertisements was to find persons who might have accumulated sufficient assets and might appear sufficiently gullible to be suitable victims for your fraud.

13.  The interviewing of applicants and selection of potential victims was done by the 5th defendant, purporting to be the manager of Good Wealth, whereas the 2nd and 3rd defendants posed as other members of the staff of that company.

14.  Madam So Ying was interviewed for the post of accounts clerk at Good Wealth by the 5th defendant on 31 January 2007.  During the course of the interview, information was elicited from her that she owned her own home and had savings.

15.  Later that day, she was told that she was engaged.

16.  When she first reported to work, she was required to produce her bank savings book to the 5th defendant, which showed a credit balance of over $100,000.

17.  At the time she reported for work, she was introduced to the 2nd defendant and the 3rd defendant as being fellow members of the staff.  The particular pretence that was made insofar as the 3rd defendant was concerned was that it was also her first day working for the company.

18.  I am satisfied that that was to provide reassurance to Madam So Ying that there was someone in the same position as her who would appear to be a willing participant in the business proposition that would be later put to her.

19.  On Madam So’s first day of work, 2 February 2007, the 5th defendant purported to instruct the 2nd defendant to teach Madam So and the 3rd defendant the duties that they should perform.  The tasks that Madam So and the 3rd defendant were instructed to perform that day were purely nominal, and about 3 pm, the 5th defendant told them they could leave early.

20.  On Madam So’s second day at work, 5 February, she was led by the 5th defendant, accompanied by the 2nd and 3rd defendants, on a trip to Mong Kok, purportedly to look at shop premises Good Wealth intended to rent, but in reality, as a pretext after the visit was over for the 2nd and 3rd defendants to introduce Madam So Ying to the 1st defendant at Sure Rise as a purported supplier of mobile phones.  The pretence that was put forward by the 2nd defendant was that he wanted to look at mobile phones.

21.  Thereafter, the 5th defendant instructed the 2nd defendant and the 3rd defendant to accompany Madam So to the Mainland on the next four successive days, the stated purpose being “to see how costume jewellery was bought there”.

22.  In reality, these visits to Shenzhen were a pretext to enable the fraud to be carried out.

23.  On the first of these visits to Shenzhen on 6 February, costume jewellery of only very small value was bought at different stalls.

24.  At one point, the 3rd defendant stated that she wanted to sell a mobile phone.  This provided an opportunity to the 2nd defendant to lead Madam So, in the company of the 3rd defendant, to a mobile phone shop and introduce her to a man who introduced himself as Mr Lam.

25.  This Mr Lam was obviously a co-conspirator.

26.  The 3rd defendant purported to sell a mobile phone to this Mr Lam.

27.  Thereafter, the 2nd defendant suggested that they go to have a foot massage.  The 2nd defendant, accompanied by the 3rd defendant, led Madam So to a foot massage establishment, where Madam So was led to believe they had by chance made the acquaintance of the 4th defendant, who represented himself to be a driver in a position to smuggle goods across the border.

28.  The following day, 7 February, the 5th defendant again instructed Madam So to accompany the 2nd and 3rd defendants to Shenzhen on a purported buying expedition.  Once more costume jewellery of very little value was bought.

29.  During the visit, the 2nd defendant claimed that he too wanted to sell a mobile phone.  This provided a pretext for taking Madam So, accompanied by the 3rd defendant, back to the shop where they had been the previous day.

30.  It was while visiting Mr Lam  at the shop that Mr Lam, apparently without any prompting from the 2nd or 3rd defendants, proposed a purported private deal to Madam So, the 2nd defendant and 3rd defendant involving 10 mobile phones which would be bought in Hong Kong and then brought over the border where they would be sold at a higher price. 

31.  This initial small and, ultimately apparently successful transaction, involving 10 mobile phones was, I am satisfied, a bait to lure Madam So into later participating in a much larger transaction, said to involve 320 mobile phones, through which she would be defrauded.

32.  On their return to Hong Kong after Lam had proposed the deal involving 10 mobile phones, the 2nd defendant arranged a meeting with the 4th defendant, at which Madam So and the 3rd defendant were present. The 4th defendant said that he agreed to transport the 10 mobile phones to the Mainland for a small fee.

33.  This meeting with the 4th defendant was followed by a visit to the 1st defendant at the premises of Sure Rise, where the 10 mobile phones were purportedly ordered from the 1st defendant.  This was to add credence to the pretence that Sure Rise was a bona fide supplier of phones.

34.  Madam So was prevailed upon to contribute $5,840 as her one-third contribution to this proposed deal.

35.  On the following day, 8 February, the 5th defendant again instructed Madam So to accompany the 2nd and 3rd defendants to Shenzhen on a buying expedition.

36.  This instruction provided the opportunity for Madam So to be taken to Sure Rise’s premises, where they received the 10 mobile phones. The mobile phones were then delivered to the 4th defendant for him to transport to the Mainland.

37.  Following this, Madam So, the 2nd and 3rd defendants then crossed the border.

38.  After doing so, they received the 10 mobile phones back from the 4th defendant and delivered them to Mr Lam, who paid a price which appeared to result in the three participants in the deal - Madam So, the 2nd and 3rd defendants - making a small profit of $160 each.

39.  This third encounter with Mr Lam gave him the opportunity to then propose a much larger deal involving 320 phones, which the 2nd defendant apparently accepted.

40.  The 2nd defendant purported to make a call to Sure Rise to enquire how much Sure Rise would charge for the phones in Hong Kong.  The 2nd defendant informed Madam So that Sure Rise would charge $1,068,500.  The 2nd defendant then attempted to persuade Madam So to contribute one-third of this price, in other words, over $300,000.

41.  Madam So reluctantly acquiesced in contributing the $5,840, plus the profit of $160, which she was led to believe she had earned on the transaction involving the 10 phones, to be used towards a deposit to be paid to Sure Rise for the 320 phones.

42.  She did not agree to anything further.

43.  On her return to Hong Kong, Madam So was taken by the 2nd defendant, accompanied by the 3rd defendant, to a restaurant where the 4th defendant pretended he would agree to take the 320 phones to the Mainland.

44.  The 2nd defendant, accompanied by the 3rd defendant, then led Madam So to Sure Rise’s office, where $72,000 was given to the 1st defendant as a purported deposit for the 320 mobile phones.

45.  I was satisfied that the 1st defendant pretended to make a call from his office to a supplier, confirming that 320 mobile phones were available.

46.  The 2nd defendant told Madam So that she and the 3rd defendant should meet him at Sure Rise’s building the following day at 10.30 am, when they should each contribute a one-third share of the balance of the purchase price.

47.  That evening, the 5th defendant again instructed Madam So to accompany the 2nd and 3rd defendants on yet another buying expedition to the Mainland.

48.  During the course of the night, Madam So became very reluctant to have anything further to do with the proposed deal. 

49.  She called the 2nd defendant some time after 8 am.  His initial response was to tell her that no one could take her place and that she should obtain a loan.

50.  Just before 10.30 am, she called the 2nd defendant again and he pretended that if Madam So could contribute $100,000, he would try to get someone else to raise the balance.

51.  Shortly beforehand, Madam So had called the 3rd defendant, who claimed she was at a bank withdrawing money.

52.  When Madam So went to Sure Rise’s building at 10.30 am, neither the 2nd nor the 3rd defendants were present. She received calls from them, urging her to go up to Sure Rise’s premises first, as well as a call from the 1st defendant, asking if she was coming up to the premises.

53.  It would appear that, by then, their intention was that she should hand over her contribution to the 1st defendant in the absence of the 2nd and 3rd defendants.

54.  Madam So went to the bank to withdraw her contribution, but fortunately  was warned by the police as to what was afoot.

55.  The 1st defendant was arrested at Sure Rise’s office.

56.  The 2nd, 3rd and 4th defendants were found waiting at a nearby restaurant.

57.  The 5th defendant was in the Mainland, but returned for just over an hour and a half later in the afternoon, only to return quickly to the Mainland.  He returned to Hong Kong eight days later and was arrested.

58.  Very fortunately, and no thanks to the conspirators, Madam So Ying had only lost $5,840, rather than a sum of over $300,000, as the conspirators had planned.

59.  Even more fortunate is the fact that the 1st defendant was found with the bulk of the $72,000 which had been given to  him on 8 February.

60.  Accordingly, Madam So’s $5,840 can be returned to her.

61.  These fortunate circumstances do not detract from the evil intention of the conspirators, which would have been to deprive a middle-aged working woman of what was to her a huge sum of money, which would undoubtedly have seriously affected her for the rest of her life.

62.  In considering the appropriate initial starting point in this case, I have borne in mind the relatively short period of time over which these events unfolded, the fact that the object of the conspiracy charge was simply to defraud Madam So alone, and the fact that, ultimately, Madam So has not suffered any financial loss.

63.  On the other hand, the defendants before the court were not simply bit players in a much larger fraudulent enterprise.  It is obvious that each one played a crucial role in the execution of this very sophisticated and heartless charade to defraud Madam So.

64.  For that reason, I do not consider it appropriate to distinguish between them in arriving at an initial starting point.

65.  I am satisfied that an initial starting point of 4 years’ imprisonment is appropriate for each defendant on the conspiracy charge.

66.  This is a case where there has been a lengthy delay in the prosecution of this case.

67.  The 1st defendant, the 2nd defendant, the 3rd defendant and the 4th defendant were arrested on 9 February 2007.  The 5th defendant was arrested on 17 February 2007.

68.  They were released on bail but were not charged until 1 September 2009, over 2½ years later.

69.  They appeared for the first time in the Magistrates’ Court on 3 September 2009, and in the District Court on 17 November 2009, when it was indicated they would plead not guilty.

70.  Realistically, Mr Mitchell has not sought to justify a delay as long as 2½ years before these defendants were charged.

71.  This delay is a circumstance of mitigation, though not as significant as it would have been if they had admitted their guilt to the police investigating the matter or had later pleaded guilty in court.

72.  I do not find that fault on the part of the defendants can be laid at the door of the 1st, 2nd, 4th and 5th defendants for the delay in charging them.

73.  Some responsibility for the delay can be laid at the door of the 3rd defendant, who radically changed her appearance and thereby avoided identification at an ID parade in March 2007, which had necessitated referral to the Department of Justice for advice.

74.  In all the circumstances, however, I am prepared to treat the defendants equally in this respect.

75.  Bearing in mind the observations of the Court of Appeal in HKSAR v Ho Hon Chun Danel & Ors, CACC350/2002, I am prepared to discount the ultimate sentence of each of them by 3 months to reflect the delay.

76.  Insofar as the case against the 1st defendant, the 4th defendant and the 5th defendant are concerned, I find nothing in the circumstances of the case and in what has been urged upon me in mitigation to either increase or further reduce their sentences from the initial starting point to which I have referred on the conspiracy charge.

77.  None of them has shown any remorse whatsoever.

78.  None can claim in mitigation that they are of previous good character, although their previous convictions are not similar to the charge before the court.

79.  In my view, the appropriate sentence on each of them, on the charge of conspiracy, is one of 3 years 9 months’ imprisonment.

80.  The 2nd and 3rd defendants fall into a completely different category.  Both have a previous conviction for conspiracy to defraud, involving very similar schemes of deception.  Although in different cases, both were involved in fraudulently persuading new employees of companies to open investment accounts in the Loco London gold or silver markets, with a view to defraud them.

81.  The 2nd defendant was convicted on 27 July 2002 of such conspiracy to defraud, after changing his plea to one of guilty when one of his co-defendants indicated his or her willingness to give evidence for the prosecution.  He was sentenced to 3 years’ imprisonment.

82.  The 3rd defendant was convicted on her own plea and sentenced to 2 years 2 months’ imprisonment on 15 November 2001.

83.  I have borne in mind it is for this court to sentence a defendant for the offence before it, but this court has to bear in mind, in deciding the appropriate sentence for this offence, that these defendants received substantial terms of imprisonment for very similar offences a very few years previously, and that those sentences did not deter them from repeating the offence.

84.  The courts have to send a very clear message that those who decide again to enter into one of these heartless and cruel scams will be very severely dealt with.

85.  I am satisfied that only a substantial increase in the starting point for those who re-offend in this way will deter them and others in a similar position from repeating their offence.

86.  For that reason, I increase the starting points for the 2nd and 3rd defendants by 2 years. 

87.  I am satisfied that there are no circumstances that warrant any further discount than the 3 months to which I have already referred because of delay.

88.  The appropriate sentence for both the 2nd and 3rd defendants on the charge of conspiracy to defraud is 5 years 9 months.

89.  The 1st defendant was also convicted after trial of the offence of doing an act tending and intended to pervert the course of public justice.

90.  Anxious, no doubt, that Mr Wong Shui-lam, the employee of the estate agency who had introduced him and the 3rd defendant to the premises at Room 1112, Fast Industrial Building, 658 Castle Peak Road, which had been rented by Good Wealth, might identify them, he called Mr Wong and attempted to persuade him not to identify anyone if he was asked by the police to do so.

91.  I was satisfied that the words uttered by the 1st defendant, although they were wider than the allegation in the charge, which was that he attempted to persuade Wong not to identify him in an identification parade, nonetheless included such an attempt.

92.  This was a serious offence, which warrants a sentence of 12 months’ imprisonment.

93.  Bearing in mind the appropriate total sentence the 1st defendant should face, I am prepared to order that 9 months of the sentence on Charge 2 should run consecutively to his sentence on Charge 1, making a total sentence of 4½ years’ imprisonment.

94.  The sentences I pass are as follows:

(1) the 1st defendant, Charge 1, 3 years 9 months’ imprisonment; on Charge 2, 12 months’ imprisonment; 9 months of which to run consecutively to the sentence on Charge 1, making a total sentence of 4½ years;

(2) the 2nd defendant, on Charge 1, 5 years 9 months’ imprisonment;

(3) the 3rd defendant, on Charge 1, 5 years 9 months’ imprisonment;

(4) the 4th defendant, on Charge 1, 3 years 9 months’ imprisonment;

(5) the 5th defendant, on Charge 1, 3 years 9 months’ imprisonment.