HKSAR v. Cheng Yiu Man and Others

DCCC 254/2019

[2020] HKDC 648

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 254 OF 2019

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REASONS FOR SENTENCE

D1 and D2 are jointly charged with 1 offence of "Attempted fraud" (Charge 1) and 1 offence of "Conspiracy to defraud" (Charge 2); whereas D1, D2 and D3 are jointly charged with 1 offence of "Conspiracy to defraud" (Charge 3).

2.D1 and D2 pleaded guilty to Charges 1 and 2.  D1 also pleaded guilty to Charge 3.  The prosecution applied to leave Charge 3 against D2 in the court file; not to be proceeded against her without leave of court.  I granted the application.

3.D3 intends to contest Charge 3.  The prosecution applied for an adjournment since 2 key witnesses are Taiwanese, and non-Hong Kong residents are currently not allowed to enter Hong Kong through the airport.  I adjourned D3's portion of this case to 22 September 2020 for mention.

Summary of Facts

Background

4.In June 2018, D2 saw an advertisement on Facebook and Instagram about making quick money.  She left a message providing her contact details.

5.On 29 July 2018, D2 received a phone call.  The caller, who claimed to be "Ah Man", asked if she was still interested in making quick money.  Ah Man explained to D2 that the job involved transactions of luxurious goods.  D2 gave her mobile phone number to Ah Man, and he told her that he would contact her via WhatsApp with the number 6679 3649.

Charge 1

6.Mr. Lam (PW1) owned a collection of Japanese whisky.  He created a Facebook page offering his whisky for sale.

7.About 10:30 p.m. on 31 July 2018, PW1 received a message on Facebook Messenger sent from a Facebook account named "David Tiger" indicating interest in his whisky.  The sender then used the number          5395 7016 to communicate with PW1 via WhatsApp.  After discussion, David Tiger agreed to buy 6 bottles of Karuizawa and 3 bottles of Macallan from PW1 at a total price of $928,000.  They arranged to complete the transaction at PW1's office in Central.

8.About 10:20 a.m. on 2 August 2018, D2 received a WhatsApp voice message from Ah Man instructing her to wait at the Central MTR Station Concourse; a man in white shirt will give her a cashier order at    3:00 p.m. on the same day.  The cashier order was to pay for 9 bottles of whisky for the boss David Tiger at Entertainment Building. She would receive $3,000 as her reward.  D2 was told to dress formally and to claim to be David's secretary.  Ah Man also told D2 that David would contact her via WhatsApp.  Once she has checked the whisky, she should send their photos to David to seek confirmation.

9.D2 did what she was told.  A man in white shirt who claimed to be Ah Man's little brother handed her a cashier order (No.585643) purportedly issued by the Bank of Communications ("BComm") for the sum of $928,000 ("the 1^st Cashier Order").

10.About 3:40 p.m. on 2 August 2018, claiming to be David Tiger's secretary, D2 met PW1 in his office situated at Entertainment Building.  She handed the 1^st Cashier Order to PW1, who took a photo of it.  D2 checked the whisky; took their photos and sent them to David.  PW1 and D2 then went to Citibank to deposit the 1^st Cashier Order, but the bank staff told PW1 that it could not be cleared immediately.  PW1 instead asked the bank staff to confirm if the 1^st Cashier Order was genuine, but was refused since it was not issued by Citibank.

11.PW1 and D2 then went to a nearby branch of BComm to deposit the 1^st Cashier Order.  The bank staff indicated that they were unable to deposit the cashier order or verify its authenticity since PW1 did not have an account with BComm.  As a result, PW1 refused to hand over the whisky.  D2 took back the 1^st Cashier Order and left.

12.D2 informed David Tiger of the situation via WhatsApp.  David told her that he would deal with PW1 himself.  At the same time, D2 received a call from Ah Man asking her to meet his little brother at Tsim Sha Tsui MTR Station to return the 1^st Cashier Order to him.

13.Madam Chung (PW5), a representative of BComm, subsequently confirmed that the signature, reference number and date of the 1^st Cashier Order were all false.

14.The WhatsApp records of D1's mobile phone number (6679 3649) showed that D1 gave instructions to D2 regarding what to wear and what to do during the transaction with the whisky dealer on 2 August 2018.  They also negotiated the amount of D2's reward.

Charge 2

15.On 31 July 2018, Mr. Tan (PW2) posted an advertisement on Facebook to sell his Rolex watch at $119,000. On the same day, he received a message on Facebook Messenger sent from a Facebook account named "FU Siu Alex".  The sender showed interest in PW2's Rolex watch and agreed to purchase it at the asking price.  PW2 and the sender arranged to complete the transaction on 3 August 2018.

16.About 1:00 p.m. on 3 August 2018, D2 received a WhatsApp message from Ah Man to pick up a watch in Mongkok; she would receive $3,000 as her reward.  D2 was to claim to be a friend of her boss David.  She was given the seller's phone number to liaise with him.  Ah Man told D2 to wait for his little brother outside Langham Place at 2:30 p.m. to collect a cashier order.

17.About 2:45 p.m. on the same day, D2 saw Ah Man's little brother, who gave her a cashier order (No.585645) purportedly issued by BComm for the sum of $119,000 ("the 2^nd Cashier Order").

18.Claiming to be a colleague of FU Siu Alex, D2 met PW2 outside Langham Place later on in the same afternoon.  They went to a watch shop ("Wing Kwong") situated at Sino Centre to have the watch inspected.  After the inspection, D2 gave PW2 the 2^nd Cashier Order, which they deposited at a branch of Standard Chartered Bank together.  Thereafter, PW2 passed the Rolex watch to D2.

19.D2 sold the Rolex watch to Wing Kwong for $110,000 shortly after 5:00 p.m. on the same day.  She presented her own Hong Kong Identity Card at Wing Kwong for record purpose.

20.PW5 subsequently confirmed that the signature, reference number and date of the 2^nd Cashier Order were all false.

21.Mr. IP (PW7), a representative of Wing Kwong, confirmed that D2 sold the Rolex watch to them at $110,000 on 3 August 2018.

22.The WhatsApp records of D1's mobile phone number (6679 3649) showed that D1 gave instructions to D2 regarding what to do with the watch seller on 3 August 2018 and the agreed price for the sale of the watch.  They also negotiated the amount of D2's reward.

Charge 3

23.Mr. Chen (PW3) is a Taiwan resident.  He joined a Facebook forum which functioned as platform for wine trading.

24.On 21 August 2018, PW3 received a message on Facebook Messenger sent from a Facebook account named "FU Siu Alex".  The sender showed interest in PW3's whisky and agreed to buy 3 bottles at $1,509,150.  PW3 and the sender arranged to complete the transaction on 3 September 2018.

25.On 3 September 2018, PW3 and Madam Wu (PW4) came to Hong Kong to complete the deal.  About 3:25 p.m. on the same day, they met D3 at a branch of HSBC situated at No.141 Des Voeux Road Central.  D3 gave PW3 a cashier order (No.713833) purportedly issued by Dah Sing Bank for the sum of $1,509,150 ("the 3^rd Cashier Order").  They then deposited the 3^rd Cashier Order at HSBC.

26.Shortly before 4:00 p.m. on the same day, PW3 instructed a friend in Taiwan via WeChat to pass a bottle of whisky to the person collecting it on behalf of the buyer.  Afterwards, PW3, PW4 and D3 went to a McDonald's situated at No.68 Connaught Road Central to inspect the remaining 2 bottles of whisky which were brought to Hong Kong by PW3 and PW4.  D1 was already waiting at the restaurant when they arrived.  He inspected the 2 bottles and took them away.

27.Mr. Chu (PW6), a representative of Dah Sing Bank, subsequently confirmed that the signature, reference number and date of the 3^rd Cashier Order were all false.

28.The WhatsApp records of D1's mobile phone number (6679 3649) showed that D1 gave instructions to a person to collect a bottle of whisky in Taiwan and to state that she was a staff member of the boss.  D1 offered to pay that person $5,000 for the task.

29.WeChat records of D3's mobile phone number (5989 4366) showed that D1 had instructed D3 on 31 August 2018 to buy a suit for work.  D1 was kept informed of the progress of the transaction all along.  D1 asked D3 to keep the cashier order safe and not to let the seller hold it.

Admissions

30.Regarding Charge 1, D2 admitted under caution that she was recruited by Ah Man to earn some quick cash.  She was told that the transactions were risk-free.  On 2 August 2018, Ah Man gave her an envelope and instructed her to complete a transaction with a whisky dealer.  She was instructed to pretend to be David's secretary.  She went to PW1's office, but the transaction could not be completed.

31.D1 admitted that he was the Ah Man mentioned in D2's video recorded interview.  He claimed that the 1^st Cashier Order was given to him by his boss.

32.Regarding Charge 2, D2 admitted that she was instructed by Ah Man to carry out the transactions.  Ah Man gave her the 2^nd Cashier Order.  After she obtained the watch, she passed it to Ah Man.  Ah Man then asked her to sell the watch.  She did so and gave the cash to Ah Man.  D2 received $4,000 as her reward.

33.D1 admitted that he was the Ah Man mentioned in D2's video recorded interview.  He claimed that the 2^nd Cashier Order was given to him by his boss.

34.D2 and the other defendants in this case first appeared in the magistracy on 22 March 2019.  She recognized D1 as Ah Man's little brother.

35.Regarding Charge 3, D1 admitted under caution that he assigned a person to accompany the seller to deposit the cashier order at a bank.  D1 was responsible for inspecting the whisky, and earned about 10% of the sale price as commission.  He admitted that he knew the cashier order was false.  He handed the whisky to an unknown person after the inspection.

Mitigation

D1

36.He is 20 and has 1 conviction record, which is a "Theft" offence.  His counsel Mr. Hui informed me that D1 committed the present offences when he was 18.  He is single and resides with his family at a public housing unit.  Prior to his arrest, D1 was a casual delivery worker earning $600 per day.

37.In mitigation, Mr. Hui submitted that D1 made frank admissions during the investigation stage.  He was not the "boss" and acted as a middle man only.  D1 realized that he was selfish and foolish.  He has been remanded in jail custody since his arrest in September 2018.  He made use of the time and completed some self-study courses.  Mr. Hui invited me to call for pre-sentencing reports.

D2

38.She is 25 and has a clear record.  Her counsel Mr. Lau informed me that D2 started to work when she was 16.  She is educated up to university level.  She currently works as an artist assistant, earning about $13,000 per month.

39.In mitigation, Mr. Lau submitted that D2 owes a finance company about $450,000 as a result of investing in a faulty business.  At the same time, D2's mother is suffering from some bone trouble in her foot, which affects her mobility.  D2 was financially desperate, so she decided to take up the "jobs" offered by Ah Man.  Mr. Lau stressed that D2's role was minor and she was not the mastermind.  She received a total of $4,000 as her reward in both charges.  She also gave a non-prejudicial statement ("NPS") to the Police.

Sentence

40.Although this case does not involve the Barrick type of breach of trust, I find the sentencing guidelines laid down by the Court of Appeal in HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017 nevertheless relevant. In my view, such guidelines are 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.

41.I accept that the present case is not strictly a cybercrime, which normally deceives victims of their money directly online. The forged cashier orders were presented to the victims in person in order to deceive their goods. I also accept that the syndicate did not appear to target at elderly people or people with certain vulnerabilities; at least the 3 victims in this case were not. I do not consider the scam to be a sophisticated one either. The most crucial deceptive element was the forged cashier orders.

42.Mr. Lau submitted that D2's role was to assist D1; whereas Mr. Hui submitted that there was a boss behind D1. For the purpose of sentencing, I need not determine who played a lesser role. As revealed in the Summary of Facts (dated 21 July 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.

43.I called for a pre-sentencing report on D1 simply because of his age. I have duly considered the report. In short, he is not qualified for Rehabilitation Centre and is found medically unfit for Detention Centre. Although the assessing officer recommended a Training Centre Order, his comments on D1's behaviour are not favourable. D1 has been remanded in Pik Uk Correctional Institution since September 2018. He breached the institutional rules 4 times by fighting with an inmate or assaulting an inmate respectively in September 2018; April, June and July 2019. Regarding D1's attitude towards the present offences, the assessing officer wrote "[the] defendant evasively admitted that he committed the crime for earning fast money for buying drug[s]… [the] defendant gained little insight into his problems. It shed doubt on his readiness and determination to amend himself. [He] showed superficial remorse for his misbehaviour and simply asked the court for a lenient sentence.[1]"

44.I do not consider a Training Centre Order to be an appropriate and just punishment for D1 in the present case. I am also not persuaded that a Training Centre Order would benefit him in terms of disciplinary training and reformation. In other words, immediate imprisonment is the only viable sentencing option for D1.

45.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.

46.The sum involved in Charge 1 was $928,000. It was fortunate that PW1 was prudent enough to seek verification of the authenticity of the 1^st Cashier Order. As a result, he suffered no loss. Hence, I am prepared to adopt a lower starting point. According to Ng Kwok Wing, for $1 million, the starting point is 3 years' imprisonment. I will adopt a starting point of 30 months' imprisonment for this charge. With their timely guilty pleas, I sentence D1 and D2 each to 20 months' imprisonment for Charge 1.

47.The sum involved in Charge 2 was $119,000. According to Ng Kwok Wing, for $250,000, the starting point is 2 years' imprisonment. I will adopt a starting point of 12 months' imprisonment for this charge. With their timely guilty pleas, I sentence D1 and D2 each to 8 months' imprisonment for Charge 2.

48.The sum involved in Charge 3 was $1,509,150. According to Ng Kwok Wing, I will adopt a starting point of 3.5 years' imprisonment for this charge. With his timely guilty plea, I sentence D1 to 28 months' imprisonment for Charge 3.

Overall sentence

49.D1 is responsible for a total of approximately $2.55 million. Since PW1 suffered no loss in Charge 1, I consider a global starting point of 4 years' imprisonment appropriate for all 3 charges. With the timely guilty pleas, the overall sentence is reduced to 32 months. To achieve this, I order the sentences to run in the following manner :-

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

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

50.D2 is responsible for a total of approximately $1.05 million. Since PW1 suffered no loss in Charge 1, I consider a global starting point of 33 months' imprisonment appropriate for Charges 1 and 2. With the timely guilty pleas, the overall sentence is reduced to 22 months. Although the force of her NPS, if any, seems to be futile[2], D2's willingness to assist the law enforcement should be encouraged and recognized. I will grant her a further discount of 1 month, reducing her overall sentence to 21 months. To achieve this, I order 1 month in Charge 2 to run consecutive to Charge 1.