HKSAR v. Ng Wai Lun

DCCC 731/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 731 OF 2016

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Reasons for Sentence

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1.The defendant is Mr Ng and he has pleaded guilty on this indictment to six charges of evasion of liability by deception. The defendant has written cheques up to a face value of $2,504,000 to meet obligations of repayment to his customers. All the cheques the defendant wrote were dishonoured.

2.The defendant has admitted a Summary of Facts in respect of this matter, and they show the defendant was the sole director of two companies.  There was a Chuen Kong Driving School Limited which is described as CK and a Chinese Vehicle Licences Limited described as CVLL, and CK involved -- its business is arranging driver training courses and applying for insurance and renewal of mainland driving licences.  And CVLL arrange cross-border vehicle licences.  At its height between April and August 2014, CK had 23 branches throughout Hong Kong and employed approximately 23 staff.  And CVLL had three branches in Tsuen Wan, Sheung Shui and Mongkok.

3.The charges I am concerned with are the Charges 2 and 3 relating to customers described as PW1 and PW2.  There was a further charge in relation to these events but that is left to lie on the file.

4.These gentlemen needed cross-border vehicle licence, and on 11 July, the defendant offered them two of those kind of licences at three-quarters of a million dollars each, and they would buy a company that would own the cross-border vehicle licences.  At that stage, PW1 paid $200,000 cash deposit.

5.Later, in July, on 16 July, the defendant asked for a further RMB400,000.  At that stage, the defendant gave PW2 a cheque for 1.14 million.  This was to represent a refund of the CBVL purchase was not completed.  On the strength of that, PW1 transferred the RMB400,000.

6.On 26 July 2012, the defendant asked for a further RMB936,000.  That transfer was made.

7.By 16 August 2012, the CBVLs (short for cross-border vehicle licences) were not available, and the original cheque for 1.4(1.14?) million was placed in an account but not honoured at that stage. 

8.As a result of that, on 31 August, the defendant issued a second cheque, and that is the one, the cheque in respect of Charge No. 2 the defendant pleaded guilty to.  That was for 1,114,000, and then another cheque for 30,000 which constitutes Charge 3.  That was to be as compensation.  The 30,000 cheque was deposited but was not honoured.

9.And in respect of the other cheque, there were insufficient funds in the account to honour that cheque as well.

10.The next charge the defendant pleaded guilty to is the 5th charge which involves a similar approach in modus operandi. The victim in that charge, PW4, also wanted a cross-border vehicle licence.  He met the defendant in the Mongkok branch of the company, agreed to buy the CBVL for RMB480,000, on 15 May made a deposit of RMB10,000, on 22 May a further deposit of RMB30,000, on 4 June a deposit of HK$60,000 in cash, and on 25 June 2012 paying the outstanding balance of HK$400,000 by cheque.

11.By October 2012, the CBVL was not available, and the defendant issued a cheque for $522,000 drawn on an HSBC account, asking PW4 not to cash the cheque as it was a security. 

12.By 11 June 2013, the CBVL still had not been received, and the defendant asked for the old cheque back and issued a further cheque in the same amount, HK$522,000 drawn on a Bank of China account. 

13.In November 2013, the CBVL was not available. And on 28 November, an attempt was made to cash this cheque.   That is the $522,000 cheque.  However, it was not honoured, and it was not honoured because the account had been closed.

14.The defendant also pleaded guilty to the 6th charge involving PW5 who again wished to buy a CBVL.  That was for RMB400,000 which was transferred to a mainland bank account.  This victim was issued with a HK$500,000 cheque as a security in the event the CBVL could not be obtained.

15.In July 2013, he paid a further $220,000 for another CBVL.  By April 2014, the CBVL was not available and this PW5 tried to deposit the cheque but it was not honoured.  The account had been closed at that time.

16.And the 7th charge is again a similar modus operandi, the victim, PW6, wanting to buy a CBVL, agreeing to pay half a million renminbi for the CBVL and then through to 2013 making various payments to CVLL’s bank account.  And by 3 October 2013, half a million renminbi had been paid, the defendant issuing a post-dated cheque drawn on the Bank of China for HK$250,000 as security.  That was in the event that the CBVL could not be obtained.  Again no CBVL or refund was obtained, and the relevant account was closed when the cheque would be issued.

17.The final charge the defendant pleaded guilty to was the 9th charge which occurred in between November 2013 to January 2014.  Again the victim, PW7, wished to arrange for a CBVL, and he agreed to pay HK$1.450 million for two CBVLs.  He had given $250,000 by cheque, and this victim was issued with cheques, one of which is the cheque in Charge 9 which is for $125,000.  On 16 January, he presented the cheque but that was not honoured.  He, like all the other victims, never received a CBVL or a refund.

18.As I have already stated, the total sum on the face of all the cheques that are agreed in the statement of facts is $2,514,000.

19.I turn to the defendant’s antecedents.  He is aged 40.  He has a criminal record.  I will deal with that in a moment.  He was educated to Primary 6 level in Hong Kong.  He was last discharged from prison on 20 May 2009.  There is no record of any illness or sickness, but I do have some evidence the defendant suffers from anxiety.  He is single and lives with his mother and father or did at the time of his arrest.

20.The defendant has produced a psychiatric report dated 7 July 2017 which shows the defendant at present has an anxiety disorder which appears to arise out of the stress caused by his investigation and prosecution for these matters.  It can be seen that these matters date back to 2000 -- appeared between 2012 and 2014.  So the matters have been hanging over the defendant for some time now.

21.The defendant does have a -- I call it a lengthy record for offences of dishonesty dating back to 1991 when he was placed on probation for blackmail.  In 1993, the defendant committed his first offence of obtaining property by deception for which he was placed on probation.  Since then, he had served community service and finally his first period of imprisonment in 1999 for offences of obtaining property by deception where he was sentenced to a term of 18 months’ imprisonment.  In 1999, the defendant was sentenced to a term of imprisonment for theft and evasion of liability by deception.  And I am told these related to a driving school the defendant had set up.  In 2005, a sentence of 2 years’ imprisonment for conspiracy to defraud, again apparently relating to the operation of a motoring school, and then in 2007, a series of offences which led to an overall sentence of 3 years’ imprisonment for again another fraud involving the operation of a driving school in a total of $1.5 million fraud apparently.

22.I am informed that the record appears to confirm the defendant has in the past pleaded guilty to these offences.  So the defendant has on the face of his record 23 former offences of dishonesty, and this is the fourth similar offence involving the issue of driving licences and involving offences of deception.

23.As far as the defendant’s mitigation is concerned, I have already made reference to his pleas of guilty and to the anxiety disorder he has suffered since some round about 2012 for these offences, and the defendant has described himself as living in hell for the past five years, haunted by anxiety.

24.Of course, now turning to the question of sentence for these matters, there is no tariff or guideline sentence for offences of evasion of liability by deception or for the offence of obtaining by deception which it closely mirrors.  I am dealing with a total of six charges ranging over about two years.  So it was a long-term operation involving giving people what were worthless cheques by way of a security, all the victims paying large sums of money into the accounts and none of them receiving the refunds or the licences that they wanted.

25.The defendant has repaid some $59,000 of the money that he had which shows the defendant is at least trying to make some recompense and has shown some remorse. 

26.It will be necessary in respect of each of these offences to determine a starting point for sentence. 

(Discussion re clarification of figure of 59,000)

27.590,000.  All right.  Thank you for that, yes. Yes.  I was just saying which shows at least some attempt to recompense the money that has been taken by these offences and, in my view, represents a substantial contribution.

28.Yes, and I will go back to my methodology again which is to determine a correct starting point for sentence in respect of each of these offences, having regard to the mitigating factors that have been set out, then determining the appropriate discount for the defendant’s plea of guilty, having then done that to determine what the correct overall totality of sentence should be for this offence, recognising again the defendant’s plea of guilty and then determining to what extent these offences should be served consecutively or concurrently in order to arrive at the correct overall total sentence.

29.And I briefly look at the appropriate discount from sentence for the defendant here.  As far as the case is concerned, the trial has had a somewhat chequered history.  The case was originally set down for a trial on 16 March 2017.  That trial did not carry on on that day because the defendant was in person, and there had been some problem with the solicitors’ firm that was representing the defendant at that stage.  The trial could not proceed on that day when the trial was listed again for mention on 17 March 2017 and was eventually refixed for 10 July 2017 for 10 days’ trial, and the pleas at that stage were again indicating the pleas of not guilty.  

30.Now, the position is that before trial on 10 July, an agreement was reached as to plea which meant that witnesses were not required for the trial today.  The defendant pleaded guilty on the first day of trial.  In doing so, he saved a large amount of time and also the witnesses’ trouble. 

31.The courts have indicated as far ago as 2014 in case 418 of 2014 that the total one-third discount in the District Court is for a person who indicates his plea of guilty at the time when the trial is set down, and the appropriate discount beyond that point lies between 20 to 25 per cent. 

32.In this case, as I say, its history is chequered. It has been set down for trial and then reset down.  The defendant was left unrepresented at the last time that came for trial.  

33.I do not believe the defendant can be still given the total one-third discount but I will give a discount of 25 per cent in his case. 

34.Now, in determining the overall starting point for sentence for the individual charges, I have already taken into account this is the defendant’s fourth vehicle fraud, this defendant’s fourth fraud involving the format of vehicle licences, the case can ‑‑ the offences containing over quite a period of time and incurring considerable losses to the victims.  Clearly, an immediate sentence of imprisonment is the appropriate sentence.

35.I must also bear in mind that the previous sentence of imprisonment has failed to deter the defendant from committing offences of this nature, and that is an aggravating factor in determining sentence.

36.The mitigating factors are the defendant’s pleas of guilty, his anxiety as a result of these prosecutions and also the repayment of the money.

37.What I shall do is indicate the starting point in each offence and then the actual sentence after discount of 25 per cent.  Then I will deal with the total overall sentence.

38.Yes.  The starting point on the 2nd charge I will calculate as being 32 months’ imprisonment.  After plea of guilty, that leads to a sentence of 24 months’ imprisonment.  On Charge 3, a starting point of 12 months’ imprisonment.  After a deduction of 25 per cent, that leads to a sentence of 9 months’ imprisonment.  On Charges 5 and 6, a starting point of 24 months’ imprisonment.  After a deduction of 25 per cent, it leads to a sentence of 18 months’ imprisonment on each of Charges 5 and 6.  On Charge 7, a starting point of 20 months’ imprisonment which is reduced to 15 months’ imprisonment, having regard to the plea of guilty.  And then on Charge 9, a starting point of 16 months’ imprisonment.  After a deduction for 25 per cent, it leads to a sentence of 12 months’ imprisonment.

39.I have determined that the overall sentence for the defendant should be one of 42 months’ imprisonment or 3 and a half years’ imprisonment.  This posits an overall starting point of 56 months’ imprisonment with a reduction of 25 per cent.  I consider that to be the overall correct starting point for this series of offences.

40.I shall achieve that by ordering that Charges 2 and 3 be served concurrently to each other, then ordering that Charges 5 through to 9 be served concurrently to each other but consecutively to Charges 2 and 3.  That leads by my calculation to an overall total of 42 months’ imprisonment.  Yes, overall total of 42 months’ imprisonment.