HKSAR v. Chen Weiye

DCCC 989/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 989 OF 2015

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Reasons for Sentence

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1.The defendant pleaded guilty to one charge of Dealing with property known or believed to represent proceeds of an indictable offence and one charge of Conspiracy to deal with property known or believed to represent proceeds of an indictable offence.

Outline of facts

Charge 1

2.68 year old Madam Choi received a phone call from an unknown male at around 3pm on 20^th August 2015. The man falsely claimed that he was Choi’s son-in-law and was being assaulted. Another unknown male then took over the call and demanded from Choi $200,000 in return for the release of the son-in-law. Choi said she only had $15,000. The man agreed to accept this lesser sum and told Choi that he will go to her residence to collect the money.

3.Choi later received another phone call from the man saying that the security officer would not allow him into the building. Choi therefore went downstairs to meet the man.

4.Choi was met by the defendant at the lobby of the building who told her that he was there to collect the money. The defendant brought Choi to a nearby pedestrian tunnel. Choi eventually handed over $15,000 to the defendant, who told her to wait for her son-in-law and then left.

5.Choi waited for a while but no one showed up. She returned to her building and borrowed a phone there to call her daughter. She called the Police after realizing that she had been deceived.

Charge 2

6.58 year old Madam Yam received a phone call at home from an unknown male at around 1:30pm on 20^th August 2015. The man falsely claimed to be her son, saying that he was being assaulted and detained. An unknown male took over the call and demanded $200,000 from Yam for the release of her ‘son’. Yam said she only had $120,000. The man agreed to take this lesser sum.

7.Feeling suspicious, Yam used her mobile phone to contact her husband who confirmed that their son was in fact safe. Yam immediately notified Police about the matter.

8.Later on at around 3pm, Yam told one of the unknown male that the money was readied and agreed to make the delivery at a park in Tsuen Wan. Police officers arranged for a brown envelope with a stack of fake money inside for Yam to bring to the man.

9.At around 5pm, another male called Yam and told her to hand over the money to a man in red at the park. The man in red, who was in fact the defendant, then approached Yam and Yam handed over the brown envelope to him.

10.Police officers intercepted the defendant when he was about to leave. The brown envelope together with its contents were recovered from the defendant and he was arrested. Under caution, the defendant admitted that he was told to make the collection.

The defendant’s video recorded interview

11.In the subsequent video recorded interview, the defendant confessed to the commission of the two offences and gave details as to his movement on the day of the offences. The defendant was to remit the money collected to a bank account in mainland China. In relation to the $15,000 handed over by the victim in charge 1, he had remitted $14,500 and kept $500 as his own reward. The defendant made the remission himself and was found in possession of the remission application form.

12.The defendant committed the offences to make some quick money.

Previous convictions

13.The defendant is of previously clear record in Hong Kong.

Mitigation

14.The defendant is 20 years old and is a mainland Chinese citizen. He came to Hong Kong on 17^th August 2015 by way of a 2 way entry permit.

15.Mr. So for the defendant submitted that the defendant’s guilty plea is the biggest mitigating factor. He pointed out that there is no evidence to suggest that the defendant is the mastermind of the telephone deceptions, that the defendant was a mere courier and had committed the offences in return for small sums of money. There was no loss suffered by the victim in charge 2, whereas the loss of $15,000 suffered by the victim in charge 1 was not a large amount.

16.Mr. So submitted that, according to what the defendant said in his video recorded interview,  the defendant only found out he was taking ransom from the victim in charge 1 after he had met with the victim and when the defendant handed over the phone for the victim to communicate with a man whom the defendant himself did not know.

17.Mr. So submitted that the two offences had taken place on the same day and can be viewed as of the same transaction, despite the fact that they involved two different victims.

Prosecution’s application to enhance the sentence

18.The prosecution furnished the witness statement of Detective Chief Inspector Lam Cheuk-ho pursuant to section 27(2) of the Organized and Serious Crimes Ordinance, Cap. 455 (“OSCO”) in support of their application for this court to impose an enhanced sentence on the two charges.

19.The witness statement was read into evidence pursuant to section 65B of the Criminal Procedure Ordinance, Cap. 221 and produced as exhibit P-1 and P-1A (Chinese translation).

20.Mr. So did not dispute the evidence of DCIP Lam. Mr. So however pointed out that the total amount of money loss in cases of Telephone Deception ‘Drop-off’ cases had actually gone down since 2013, from $13.7 million odd to $11.9 million odd in 2015.

21.It must however be pointed out that the total amount of money loss in all cases of successful Telephone Deception cases had gone up in the same period, from $39 million odd in 2013 to $317 million odd in 2015.

22.Mr. So also pointed out the proportion of money loss in Telephone Deception cases resorting to the ‘Drop-off’ method had gone down from 35.06% in 2013 to just 3.8% in 2015.

23.Be that as it may, I find that the amount of monetary loss does not necessarily reflect on the number of deception cases.

24.Mr. So submitted that because of the minor role of the defendant in the commission of the two offences, the court should not enhance the sentences. Mr. So did not provide any cases in support of the proposition.

Sentence

25.The maximum sentence on conviction upon indictment for the section 25(1) offence of ‘money laundering’, and conspiracy to launder money, is that of a fine of $5 million and imprisonment for 14 years.

26.Although Mr. So did not make any submissions on the matter, in sentencing money laundering cases, the factors to be taken into consideration are discussed in the cases of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma [2012] 2 HKLRD 33.

27.The factors include the amount of money involved; the level of the defendant’s participation and number of occasions he was involved in the laundering activities; the nature of the underlying indictable offence; whether there is an international element; and the length of time the offence lasted.

28.The Court of Appeal in Boma stressed that deterrence is a paramount objective of the sentence; that the amount of money laundered is not the be-all and end-all of a case, but it is a significant feature. The Court also urged the sentencer to take into account other features including the nature of the predicate offence; the state of the offender’s knowledge; whether there is an international dimension; the sophistication of the offence including the degree of planning; whether the offence was committed by or on behalf of an organised criminal syndicate; whether there was one transaction or many and the length of time over which the offence was committed; whether the offender continued to launder after discovering the nature of the funds; and the role of the offender and the acts performed by him.

29.At the request for assistance by the court, Mr. Kwan for the prosecution submitted the case of HKSAR v Cen Huakuo [2015] 2 HKLRD 951. There the appellant was convicted of conspiracy to deal with property known or believed to represent proceeds of an indictable offence. The victim was a 78 year old woman who received a phone call from someone falsely accusing his son of committing offences of indecency. The victim agreed to hand over $50,000 at a public park to ensure his safe return. It was then found out that her son was in fact safe and the matter was reported to the Police.

30.The appellant met up with the victim at the park and told her that her son was being detained. The appellant handed over a mobile phone to the victim. Police later arrested the appellant.

31.The learned trial judge adopted a starting point of 4 years’ imprisonment, found that telephone deceptions were prevalent, enhanced the sentence by 50% to 6 years’ imprisonment.

32.On appeal against sentence, the Court of Appeal allowed the appeal by substituting a sentence of 4 years’ imprisonment.

33.The Court, among other things, found that the appellant did not participate in the deception; that it was very likely that he was only instructed to collect money from the victim. Although the appellant must have known the money was obtained unlawfully and the incident was connected to the telephone deception, it was too harsh to apply a starting point of 4 years.

34.The Court also pointed out that in “money laundering” offences, the amount of money laundered was a major sentencing consideration and a 4 years starting point for $50,000 was manifestly excessive.

35.The Court also found that a 50% enhancement was too severe on the facts of that case. The Court, however, did find aggravating factors in that the appellant had come from mainland China to commit the crimes in Hong Kong. Although the appellant was only 18 and of clear record, the money laundered was derived from a telephone deception and he knew its source.

36.Given all the circumstances and the requirement that a sentence should deter mainlanders from participating in such abhorrent offences, the Court of Appeal found that a proper starting point is that of 3 years, which should then be enhanced by one-third to a final sentence of 4 years’ imprisonment.

37.Mr. So did not make any submissions in relation to the case of Cen Huakuo.

Sentence

38.I find that the facts in both charges 1 and 2 are almost on all four with the facts in the above case of Cen Huakuo. The main difference being the amount of money involved being slightly more in Cen Huakuo. In any event, the amount involved in the two charges are relatively small. It must however be pointed out that the $15,000 loss suffered by madam Choi in charge 1 can still have a debilitating effect on her life.

39.The defendant came to Hong Kong just 3 days before his commission of the two offences. The money in charge 1 was immediately remitted out of Hong Kong and into a bank account in mainland China, making investigation and recovery extremely difficult. Together they have tainted the case with an international element.

40.The underlying offence, as the Court of Appeal pointed out in Cen Huakuo, is a very serious offence. Telephone deception cases target those who are vulnerable, either because of age or because of emotional attachment to their loved ones. Those vulnerable enough to fall victim to the deceptions are bound to suffer serious psychological harm as a result.

41.The crimes would have involved substantial planning and organization, but the defendant is very likely to be at the lowest level of the group committing the crimes. His was the most risky part of the operation. It is obvious that those who planned the crimes targeted the defendant because of his age and desire to make some quick money. There is no evidence to prove that the defendant himself had taken part in the planning and organisation of the crimes.

42.The laundering was a one-off situation and both charges took place on the same day.

43.Having taken into consideration the above factors and all the circumstances of the offences, I adopt a starting point of 3 years’ imprisonment for both charge 1 and 2.

44.I find that the only mitigating factor is the defendant’s plea of guilty. Applying the usual one-third discount, the sentences become 2 years’ imprisonment each.

45.Taking into account totality, I find that 6 months of the sentence in charge 2 should be made consecutive to the sentence in charge 1, taking the total sentence for the two charges to that of 30 months’ imprisonment.

Enhancement

46.I now apply the formula adopted in the case of HKSAR v Tam Wai-pio [1998] 4 HKC 291 in relation to the enhancement of sentence.

47.I find that the offences in charge 1 and 2 are specified offences and that they are organized crimes within the meaning of section 2 of OSCO.

48.Having regard to the evidence as presented in the witness statement of Detective Chief Inspector Lam, I find that telephone deception crimes do call for an enhancement of the sentence under the terms of section 27(2)(c) and (d) of OSCO, based on the prevalence of the offence of money laundering involving telephone deceptions, as well as conspiracy to so launder, and the nature and extent of the harm caused to the community by the recent and frequent occurrences of the offence in this form.

49.I find that the sentence should be enhanced by one-third given the need for deterrence.

50.The defendant is therefore sentenced to a total of 40 months’ imprisonment for the two charges.