HKSAR v. Lo Hoi Chun

CACC 373/2017

[2018] HKCA 79

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 373 OF 2017

(ON APPEAL FROM DCCC NO. 312 OF 2016)

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D E C I S I O N

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1.The applicant (Lo Hoi Chun) and other defendants were convicted by Judge CP Pang (the judge) in the District Court on a single charge of conspiracy to defraud. The allegation was that the applicant was a party to a conspiracy to defraud clients of Wincades International Accounting Affairs Limited (Wincades) by falsely representing that Wincades was entrusted by banks or other financial institutions to handle loan arrangements and that Wincades could assist clients to obtain loans with favourable terms with no charge to clients unless the applications for loans were successful.

2.Evidence adduced by the prosecution indicated that between March 2014 and March 2015, members of the public (the victims), who were in financial difficulty because they had to pay high interest rate on mortgages and/or personal loans, received cold calls from unidentified persons claiming to be representing banks or financial institutions and they were offered loans on attractive terms.  When the victims indicated interest, they were referred to Wincades.

3.The victims were given particulars of member staff of banks and financial institutions which were false.  The banks and financial institutions mentioned in the cold calls all denied any relationship with Wincades.

4.When the victims visited Wincades’ office in response to the cold calls, they were attended to by salespersons who promised to apply for loans for them at low interest rate and they were persuaded to sign consultancy agreements.  One of the clauses in the agreement was that fees would not be chargeable by Wincades unless the application for loan was successful.

5.The victims were then made to pay the consultancy fees with money obtained from a money lender arranged by Wincades at very high interest rate.  The victims were told that the high interest rate for the transitional loan would be off‑set by the favourable interest rate to be obtained under the proposed loan arrangement and therefore the victims would be financially better off.  The victims did not obtain the loans as expected and when they made enquiries, they were ignored and the consultancy fees paid were never returned.

6.The victims suffered a total loss of about $3 million.

7.The police raided Wincades’ office after some of the victims reported the matter and found certain “preamble scripts” which appeared to have been used by the callers as conversation templates when cold calls were made to clients.  The templates indicated that the callers would pretend to be staff members of banks or other financial institutions.  There were other documents containing instructions of how to deal with clients who made enquiries.  One of the rooms at Wincades’ office appeared to be used for making the cold calls and CCTV footages of 27 March 2015 captured the applicant entering and talking to people inside the room where cold calls were made.

8.Two of the victims (PW7 and PW9) alleged that the applicant was the salesperson who induced them to sign the consultancy agreements and they paid $94,000 and $100,000 respectively.

9.According to PW7, he responded to cold calls from someone who claimed to be representing Hang Seng Bank and went to the address as directed.  When he arrived at Wincades’ office on 29 December 2014, he was attended to by the applicant.  When PW7 said he was referred to Wincades by Hang Seng Bank, the applicant replied that Hang Seng Bank often referred cases to them.  PW7 was persuaded to pay $94,000, but the applicant only issued an invoice for $61,000, saying that the balance of $34,000 was fees for the Housing Department.

10.PW9 also received a cold call from someone claiming to be working for Prime Credit Finance and he was instructed to go to Wincades’ office to look for a Mr Law.  When he arrived at Wincades’ office on 7 March 2015, he was attended to by the applicant who induced him to sign the consultancy agreement and pay a sum of $100,000 as consultancy fees.  Documents relating to PW9 and another victim were found inside the room where the applicant was arrested.

11.The applicant was also identified by another victim (PW4) as a staff member of Wincades in an identification parade, however, during cross‑examination, he said that the applicant was not the Mr Lai he met at Wincades’ office in December 2014.  There was a letter issued by the Inland Revenue Department to the applicant relating to his tax information and the letter suggested that the applicant received income from Wincades from 1 March to 31 March 2015.

12.The defence case generally was that Wincades’s business of arranging loans for clients and charging them consultancy fees was a genuine business arrangement.  They denied the existence of any conspiracy to defraud and further suggested that even if there was one, the defendants were not parties to it.

13.All the defendants, including the applicant elected not to give evidence.  Only one of the defendants (D7) called six defence witnesses who gave evidence to the effect that they were able to obtain loans at a favourable interest rate through Wincades.

14.The judge found that false representations had been made to the victims in order to defraud them of consultancy fees in a conspiracy and that the defendants, including the applicant, were parties to the conspiracy to defraud.  The judge therefore convicted the applicant as charged.

15.The applicant had filed his notice of appeal against conviction and sentence relying of a numbers of grounds.  He sought bail pending appeal.

16.For the purposes of this application, Mr Marco Li, did not dispute that there had been a fraud committed against the victims.  In my view, the evidence of a fraud against the victims was overwhelming.

17.Mr Li suggested that the judge had not considered the case against each defendant.  He suggested the case against the defendants might not stand or fall together and he suggested that there might be more than one conspiracy and in so far as the prosecution alleged that Wincades was a vehicle used to carry out the aim of the conspiracy, the charge was bad for duplicity.

18.Mr Li also suggested that the successful applications for loans by some of the clients of Wincades at favourable interest rate would suggest that the alleged global conspiracy was not dishonest.

19.For obvious reasons, it is neither necessary nor desirable for me to express too strong a view on the merits of the grounds of appeal relied on by Mr Li in the present application.  However, on the findings of the judge that there had been a concerted effort to defraud the large number of victims who sought assistance from Wincades to obtain loans, the inference, based on the prosecution evidence, that the applicant was a party to the fraud, was an irresistible one.

20.Each of the conspirators might have a different role to play, but they all operated around Wincades and their common motive was to make cold calls to potential victims with a view to defraud them.  Identical modus operandi was adopted.  The cold calls all appeared to have been made in a room in the office of Wincades and similar scripts were used.  Those unfortunate victims, who chose to response to the cold calls and appeared at Wincades’ office, would be lured into signing consultancy agreements and in the end defrauded of large sums of money.  The money obtained from the victims was all deposited into the accounts of Wincades with receipts issued in its name.  All these indicated that there was just a single conspiracy to defraud the victims.

21.The judge had taken into consideration the prosecution evidence against each defendant, including the applicant, before concluding that they were parties to the conspiracy to defraud.  The judge, in my view, was right to reject the suggestion of duplicity of charges.

22.I also agree with the conclusion reached by the judge that the successful applications for loans by some of the customers provide little assistance to the defence.  It may not be necessary to speculate why Wincades managed to successfully arrange loans for some of their clients.  It could be part of the plot to make the fraudulent scheme less suspicious.  It is important to note the large numbers of victims who had been subjected to fraudulent misrepresentations and fell prey to the fraudulent scheme.  The evidence that the applicant assumed false identities and himself made false representations to some of the victims clearly demonstrated that he was acting dishonestly.

23.On the available information and the argument put forward on behalf of the applicant, I am not persuaded that the proposed appeal has a high chance of success and there is no other basis upon which I can exercise my discretion to grant him bail pending appeal.  The application is therefore dismissed.

Ms Jasmine Ching, SPP of Department of Justice, for the Respondent

Mr Marco Li, instructed by J Chan, Yip, So & Partners, for the Applicant