HKSAR v. Hui Wing Yin, Vanessa and Another

DCCC 886/2019

[2020] HKDC 506

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 886 OF 2019

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REASONS FOR SENTENCE

1.D1 and D2 are jointly charged with 5 offences of "Fraud" (Charges 1, 4, 5, 6 and 13); whereas D1 alone faces 8 charges of "Fraud" (Charges 2, 3, 7, 8, 9, 10, 11 and 12) and 1 charge of "Failure to produce proof of identity on demand[1]" (Charge 14).

2.D1 pleaded guilty to Charges 1 to 6 and 10 to 14; and D2, Charges 1, 4, 5, 6 and 13.  I granted the prosecution's application to leave Charges 7 to 9 in the court file; not to be proceeded against D1 without leave of court.

Summary of Facts

3.The modus operandi of the scam involved in Charges 1 to 13 was basically the same.

Charge 1

4.About 1:00 a.m. on 1 March 2019, Madam Kwok (PW1; aged 32) saw a post on Facebook by "Anv Jessica" ("FB Account 1") about earning good income with nothing illegal involved.  PW1 responded to the post.  D1 then called PW1 saying she could introduce her to "Ah Keung", a boss in the food and beverage business, and arranged to meet up with PW1.

5.About 8:45 p.m. on the same day, D1 and D2 met PW1 in Kwai Fong.  D1 identified herself as the user of FB Account 1; whereas D2 was introduced as Ah Keung.  They then took PW1 to a SmarTone shop situated at Metroplaza.

6.D1 and D2 falsely represented to PW1 that they would pay PW1 $2,000 if she would enter into mobile phone purchase cum service agreements with SmarTone and hand over the mobile phones purchased to them.  They also told PW1 that she would bear no liability under the agreements since they would settle the payments for her.

7.As a result, PW1 entered into 2 mobile phone purchase cum service agreements with SmarTone.  D2 completed and signed a direct debit authorization form for the monthly payments of the service fees.  The bank account number put down on the form did not belong to PW1.

8.Under the 2 agreements, PW1 purchased 2 iPhone XS Max at $580 each, the total sum of $1,160 was paid by D1 upfront; 2 years of mobile service for PW1's existing mobile number at $970 per month; and a further extension of 2 years of mobile service for the same number at $970 per month.  PW1 handed over the 2 newly purchased phones to D1 and received $2,000 from D1.

9.None of the agreements entered into by PW1 was cancelled nor any of the monthly service fees was settled by D1 or D2.  Thus, SmarTone demanded $37,685.85 from PW1 in June 2019.

Charges 2 and 3

10.On 26 February 2019, Madam Leung (PW2; aged 36) saw a post on FB Account 1 about earning quick money legally.  She responded to the post and was asked about her current mobile phone service provider and existing service contract.

11.About 9:00 p.m. on 11 March 2019, D1 and a male (WP) met PW2 at a CSL shop situated at Tuen Mun Town Plaza.  D1 identified herself as the user of FB Account 1.  Employing a scam similar to the one in Charge 1, D1 and WP lured PW2 into purchasing 2 iPhone XS Max (the purchase price of which were paid by D1) and entering into 2 mobile service agreements.  PW2 handed over the 2 newly purchased phones to D1 and received $3,800 from D1.

12.None of the agreements entered into by PW2 was cancelled nor any of the monthly service fees was settled by D1.  In April 2019, upon demand by CSL, PW2 paid $2,361 as mobile service fees.  After negotiation, PW2 paid CSL a further sum of $19,879 to terminate the 2 agreements.  This is Charge 2.

13.Soon after the purchase of the iPhones, PW2 felt suspicious and told D1 that she wanted to terminate the agreements.  D1 falsely told PW2 that she had to transfer money to D1 in order to cancel the agreements.  Thus, between 13 and 22 March 2019, PW2 paid a total sum of $8,762 into the Alipay and TNG accounts nominated by D1.  This is Charge 3.

Charges 4, 5, 6 and 10

14.On 10 March 2019, Mr. Cheng (PW3; aged 20) saw a post on Facebook by "ChiLee" ("FB Account 2") about a job with a $2,000 to $5,000 pay.  He responded to the post and was asked about his current mobile phone service provider.

15.About 8:00 p.m. on 18 March 2019, D1, D2 and WP met with PW3.  D1 identified herself as the user of FB Account 2.  They took PW3 to a Wilson shop situated at Tuen Mun Town Plaza.  Employing a scam similar to the one in Charge 1, D1, D2 and WP lured PW3 into purchasing 1 Samsung Galaxy S9 at $4,498 and 1 vivo V9 at $2,098 using his own credit card.  PW3 handed over the 2 newly purchased phones to D1 and received $2,500 from D1.  This is Charge 4.

16.About 3:55 p.m. on 19 March 2019, PW3 communicated with the user of FB Account 2 via Facebook Messenger.  PW3 asked about the possibility of furthering their "business".  They agreed to meet up.

17.About 6:30 p.m. on the same day, D1, D2, WP and PW3 went to a China Mobile shop situated at KOLOUR in Yuen Long and then a "3" shop nearby.  Employing a scam similar to the one in Charge 1, D1, D2 and WP lured PW3 into purchasing 1 Samsung A8S at $800 with 2 years of mobile service from China Mobile; 1 iPhone XS Max at $3,280 with 2 years of mobile service and 2 additional SIM cards at $200 from "3"; 1 PALM phone at $2,744 (by instalments) with 2 years of mobile service from "3"; and 1 Apple watch at $4,032 (by instalments) with 2 years of mobile service from "3" using his own credit card or cash. PW3 handed over the 4 newly purchased devices to D1 and received $3,500 from D1.  This is Charge 5.

18.On 19 March 2019, shortly before PW3 entered into the mobile service agreement for the iPhone XS Max, D1, D2 and WP persuaded him to borrow $19,720 from WeLend online and to use the loan to settle the payment for the service plan and the price of the iPhone XS Max.  They falsely told PW3 that he would not need to repay the loan as they would transfer it to another person and settle the loan.  Under the loan agreement, PW3 had to repay a total sum of $32,972 in 4 years.  On 20 March 2019, D1, D2, WP and PW3 met in Mongkok.  They persuaded PW3 to borrow $15,000 from Thousand Fortune, a money lending company in Yau Ma Tei.  They falsely told PW3 that the money would be used for business and they would pay PW3 interest.  Furthermore, the loan would be transferred to another person so that PW3 would not be liable.  Under the loan agreement, PW3 had to repay a total sum of $17,245 in 5 months.  After negotiation with Thousand Fortune, PW3 settled the loan on 9 April 2019 by paying $16,025.  This is Charge 6.

19.On 21 March 2019, D1 asked PW3 to lend her $200.  PW3 agreed and deposited $200 into an Alipay account nominated by D1.  Between 22 and 25 March 2019, D1 falsely told PW3 that she would arrange for settlement of his liabilities under the agreements if he pays her $13,500.  PW3 told D1 to take the $200 which she previously borrowed and deposited a total sum of $13,300 into the accounts nominated by D1.  None of the agreements entered into by PW3 was cancelled or settled.  This is Charge 10.

Charges 11 and 12

20.Mr. Chan (PW4; aged 22) is a friend of PW3.

21.D1 falsely told PW3 that his liabilities under the agreements could be settled if he could find a friend to buy mobile phones for her; and his friend would not bear any liabilities either.  On 23 March 2019, PW3 told PW4 about the "money-earning plan" of buying mobile phones for D1.  However, something went wrong; PW3's liabilities could only be settled if PW4 took up a job similar to PW3's. Believing PW3's false representation, PW4 agreed to help.

22.About 7:00 p.m. on 23 March 2019, D1, PW3 and PW4 went to a FORTRESS shop situated at Wai Fung Centre in Mongkok.  D1 lured PW4 into borrowing $19,720 and $10,000 from WeLend online.  As a result, PW4 had to repay a total sum of $34,466 in 2 years.  This is Charge 11.

23.Employing a scam similar to the one in Charge 1, D1 lured PW4 into purchasing 1 iPhone XS Max at $10,799 from FORTRESS.  PW4 paid $10,000 in cash using one of the 2 loans from WeLend and D1 paid the remaining $799.  Afterwards, they went to a "3" shop nearby.  D1 lured PW4 into purchasing 1 iPhone XS Max at $3,280 with 2 years of mobile service from "3".  PW4 paid the entire price of $19,720 in cash using one of the 2 loans from WeLend.  D1 paid PW3 and PW4 $500 each as their rewards.  This is Charge 12.

Charge 13

24.About 10:00 a.m. on 30 March 2019, Mr. Ho (PW5; aged 31) saw a post on FB Account 2 about earning quick money.  He responded to the post and D1 called him to arrange for a meeting.

25.About 4:00 p.m. on the same day, D1 and PW5 visited a "3" shop, a China Mobile shop and a SmarTone shop, all situated at Metroplaza in Kwai Fong.  D2 joined in when they had just left the "3" shop.  D1 left early when D2 and PW5 were still at the SmarTone shop.

26.Employing a scam similar to the one in Charge 1, D1 and D2 lured PW5 into purchasing 1 PALM phone at $2,744 and 1 Huawei Y9 (free of charge) with 2 years of mobile service from "3"; 1 Samsung A8S at $800 with 2 years of mobile service from China Mobile; and 2 iPhone XS Max at $2,980 each with 2 years of mobile service for each phone from SmarTone.  PW5 handed over the 4 newly purchased phones to D1 and D2, but did not receive any reward.  This is Charge 13.

Arrest and admissions

27.About 10:00 a.m. on 31 March 2019, PW5 alerted the Police.  When PW5 as at the police station, D1 called him to arrange for a meeting.

28.About 11:00 a.m. on the same day, D1 and D2 were arrested at Tsuen Wan Plaza.  D1 failed to produce proof of her identity.  Under caution, she claimed that she lost her identity card in Sham Shui Po 2 months ago, but did not have money to obtain a replacement.  This is Charge 14.

29.In her cautioned interviews, D1 admitted, inter alia, that she did everything pursuant to the instructions of WP (also known as "Fei Jai" or "Fei Ting").  She met both WP and D2 on Facebook.  She claimed that Fei Jai taught her how to deceive people into buying new mobile phones for them.  The phones were then resold for money.  The Facebook accounts which were used for contacting the victims were shared by Fei Jai, D2 and D1.  Regarding the e-accounts which were used for receiving payments from PW2 and PW3, D1 claimed that they were given to her by Fei Jai.

30.In his cautioned interviews, D2 made admissions similar to D1's.  He admitted that after D1 had sold the mobile phones purchased by PW5, she gave D2 $1,500 as his reward.  He also admitted having deceived PW1 and PW3 together with D1.  The "cheating scheme" was managed by D1, D2 and Fei Ting.

Mitigation

D1

31.She is 38 and has 1 conviction record which involved a total of 8 offences of "Fraud".  For those 8 offences, she was sentenced to a total of 9 months' imprisonment in June 2019.  Her counsel Mr. Tien informed me that D1 has a daughter (aged 10) with her ex-boyfriend.  With her current boyfriend, D1 gave birth to a pair of twins in mid-2016.  In mid-2019, she consented to the Adoption Order of the twins.

32.In mitigation, Mr. Tien submitted that D1 made full and frank admissions right after her arrest.  Mr. Tien suggested that D1 had only received $1,000 from Fei Jai for each newly purchased mobile phone she turned in.  She had received about $16,000 in total.  Mr. Tien informed me that owing to his immigration status, D1's boyfriend is unable to work in Hong Kong.  D1 has been detained for this case since her arrest in late March 2019.  She had to rely on her 80-year-old mother to look after her 10-year-old daughter.

D2

33.He is 40 and has 4 conviction records, which included 1 offence of Theft (Shoplifting).  His counsel Mr. But did not say much about D2's personal background.

34.In mitigation, Mr. But submitted that the offences in the present case are not internet crimes.  Facebook was used merely to invite interested persons to come out to meet.  The false representations were made to the victims face to face when the party met. Furthermore, the victims were not elderly people or people with certain vulnerabilities.  The scam employed cannot be classified as "street deception" either.  Mr. But further submitted that D2 made full and frank admissions right after his arrest.

Sentence

35.Both defence counsel acknowledged that this case does not involve the Barrick type of breach of trust. They, however, accepted that the sentencing guidelines laid down by the Court of Appeal in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 may nevertheless be relevant. Prosecuting counsel Mr. Leung submitted that the guidelines in Ng Kwok Wing are perhaps simply a yardstick. For cases which are not of the Barrick type, the court may still follow the guidelines in Ng Kwok Wing or impose a sentence which is higher or lower than the guidelines, depending on the facts of each case.

36.I accept that the present case is not strictly a cybercrime, which normally deceives victims of their money directly online. Mr. But was correct in pointing out that the false representations were made to the victims in person. I also accept that the syndicate did not appear to target at elderly people or people with certain vulnerabilities; at least the 5 victims in this case were not. Mr. Tien submitted that the scam is not a sophisticated one. I agree. The "deal" was just too good to be true ― purchasing brand new mobile phones and subscribing to mobile service plans in return for cash with no liabilities attached.

37.Mr. But submitted that D2 played a lesser role than D1; whereas Mr. Tien submitted that the ring leader was Fei Jai. For the purpose of sentencing, I need not determine who played a lesser role. As revealed in the Summary of Facts (dated 2 June 2020), what each culprit did is clear. They might have played different roles, but they each contributed to the planning and/or execution of the scam and are equally culpable. There is no need to distinguish their roles or to apportion their culpability.

38.According to the Summary of Facts, the net loss suffered by all 5 victims is about $245,000 in total. D1 and D2 are jointly responsible for about $170,000; and D1 is also responsible for the remaining $75,000.

39.Based on the scam employed in the present case, I consider the seriousness of this case commensurate with the sentencing guidelines in Ng Kwok Wing. Hence, I will follow those guidelines.

40.I am aware that the sum involved in each charge varies; however, each charge arose from the same type of deception. It is unnecessary to set the sentence for each charge based on the individual monetary value. Other than Charge 14, which I will deal with in due course, I adopt a starting point of 9 months' imprisonment for each charge. With the timely guilty plea, the sentence for each charge is reduced to 6 months.

41.For D1, I sentence her to 6 months' imprisonment each for Charges 1 to 6 and 10 to 13. Since she is responsible for the net loss suffered by all 5 victims (i.e. $245,000), I consider a global starting point of 22.5 months' imprisonment appropriate for all 10 charges. With the timely guilty pleas, the overall sentence is reduced to 15 months. To achieve this, I order the sentences to run in the following manner :-

(i) Charges 2 and 3 concurrent;

(ii) 2 months in Charge 1 consecutive to Charges 2 and 3;

(iii) Charges 4, 5, 6 and 10 concurrent;

(iv) 2 months in Charges 4, 5, 6 and 10 consecutive to Charges 1 to 3;

(v) Charges 11 and 12 concurrent;

(vi) 2 months in Charges 11 and 12 consecutive to Charges 1 to 6 and 10; and

(vii) 3 months in Charge 13 consecutive to Charges 1 to 6 and 10 to 12.

42.For D2, I sentence him to 6 months' imprisonment each for Charges 1, 4, 5, 6 and 13. Since he is responsible for the net loss suffered by 3 victims (i.e. $170,000), I consider a global starting point of 15 months' imprisonment appropriate for all 5 charges. With the timely guilty pleas, the overall sentence is reduced to 10 months. To achieve this, I order the sentences to run in the following manner :-

(i) Charges 4, 5 and 6 concurrent;

(ii) 2 months in Charge 1 consecutive to Charges 4, 5 and 6; and

(iii) 2 months in Charge 13 consecutive to Charges 1, 4, 5 and 6.

43.The maximum penalty for Charge 14 is a fine at Level 2 (i.e. $5,000[2]). In my view, it is unnecessary to lay this charge against D1. I will impose a nominal fine of $200, to be paid forthwith.