HKSAR v. Chavdarov Yordan Tihomirov and Others

DCCC 104/2020

[2020] HKDC 772

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 104 OF 2020

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Reasons for Sentence

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1.There are three defendants in this case and all three are charged with the 1st charge, conspiracy to steal contrary to section 9 of the Theft Ordinance, Cap 210 and sections 159A and 159C of the Crimes Ordinance, Cap 200. The particulars are that all three, between a date unknown in March 2019 and 2 May 2019, conspired together with other persons unknown to steal sums of cash of an unknown amount belonging to Aeon Credit Service Asia Company Limited. All three have pleaded guilty to this charge.

2.The 1st and 2nd defendant faced Charge 2, possession of equipment for making false instruments which included magnetic strip cards without data, notebook computers, a card reader, USBs and two electronic devices found in their hotel room that they shared.  After discussion between parties this charge was put on the court file not to be dealt with unless there is leave from this court or the Court of Appeal. 

3.Similarly, Charge 3 against the 3rd defendant is an identical charge to Charge 2 with identical items found in the 3rd defendant’s hotel room.  After discussion between the parties this charge was also put on the court file. 

4.The 1st and 2nd defendant have pleaded guilty to Charge 4 and that is possessing false instruments contrary to section 75(1) of the Crimes Ordinance, Cap 200 where on 2 May 2019 in their hotel room, they had in their custody or under their control 73 magnetic strip cards which were and which they knew or believed to be false, with the intention that they would be used to induce somebody to accept them as genuine, and by reason of so accepting them to do or not do some act to his own or another person’s prejudice. 

5.Similarly, Charge 5 against the 3rd defendant is an identical charge to Charge 4 where identical false instruments, namely 43 magnetic strip cards were found in the 3rd defendant’s hotel room. 

6.After the admission of the Summary of Facts, the 1st and 2nd defendant were convicted of Charges 1 and 4 whilst the 3rd defendant was convicted of Charges 1 and 5. 

The Summary of Facts

7.All three defendants are Bulgarian nationals who arrived in Hong Kong on 18 March, 26 March and 30 April 2019 respectively.  According to the travel index check records there was no departure record.  All three were arrested in their hotel rooms in the Prudential Hotel in Tsim Sha Tsui, Kowloon on 2 May 2019 after they had been put under observation the previous day.  The 1st and 2nd defendant were sharing a room, Room 911, whilst the 3rd defendant was inside Room 921. 

8.On 30 March and 23 April 2019, Aeon found irregularities with their ATM machines.  In particular, on 30 March an ATM in East Tsim Sha Tsui MTR station malfunctioned and they found plastic cards with electronic chips jammed inside the card insertion slot.  This was reported to the police and the machine resumed service on 16 April. 

9.Also on 23 April 2019, during a check of the same ATM, a similar card with electronic chips was found inside the card insertion slot and a pinhole camera was concealed above the number pad of the ATM. 

10.Between 29 and 30 April 2019, Aeon received reports from numerous customers reporting unauthorized cash withdrawals from their accounts via Aeon ATMs in Mongkok, Admiralty and Tsim Sha Tsui. There is a table in the Summary of Facts showing fraudulent transactions on various days at different ATMs between 18 and 28 April 2019.  Some of the transactions captured the 2nd defendant using an ATM at the material times or the forged card used in those machines were subsequently seized from the 2nd defendant’s hotel room.  Those fraudulent transactions and thefts totalled HK$299,000.  These are the particulars of Charge 1. 

11.On 30 April 2019, they discovered four more plastic cards in the card slot of an ATM in Mongkok MTR.  They had magnetic strips on the back suggesting they were encoded with credit card account data used to withdraw cash from that ATM. 

12.The police located and put all three defendants under observation from about 8 pm on 1 May.  All three were observed making withdrawals at ATMs in Admiralty, Central and Tsim Sha Tsui before meeting up in Tsim Sha Tsui and returning to their hotel.  The Summary of Facts contains a table setting out the observations of each defendant by police officers and corresponding CCTV footage of them operating ATM machines in various locations. 

13.After the observation concluded, not long after, the police arrested the defendants in their two hotel rooms.  In the 1st and 2nd defendant’s hotel room, amongst other things, they found another 73 magnetic strip cards.  In the 3rd defendant’s hotel room, amongst other things, they found another 43 magnetic strip cards.  The police also seized six mobile phones and about $75,000 cash during the search.  Under caution all three defendants remained silent. 

14.In the subsequent video-recorded interviews, the 1st and 3rd defendant answered some questions but did not make full admissions.  What they said has been summarised in the Summary of Facts.  The 2nd defendant declined to answer any questions.

15.All three defendants have clear records in Hong Kong.  I have heard full mitigation on behalf of the defendant and have heard full explanations as to why they were in Hong Kong and how they came to commit these offences.  All defence counsel have said everything that can be said on their behalf.  I have also had many letters of mitigation, in particular from the 1st defendant.  I have taken those contents into account.  I thank defence counsel for their full written mitigations. 

16.The 1st defendant is 28 years old, single and supports his younger sister, her child and his mother.  His parents divorced when he was young.  He was essentially brought up by his grandparents. Football has been his life and from the age of 17 he has played professional football in Europe until 2018 when he had to retire after a diagnosis of Hepatitis B and numerous football-related injuries.  In 2015, he had started an online shoe business as well as selling hooka pipes.  He also went back to school to study economics and tourism.  His businesses did well to begin with but tapered off. 

17.He came to Hong Kong to look for shoe manufacturers because he was told this was the place.  His friend, the 2nd defendant called him after he arrived in Hong Kong when he learned of his trip here from social media.  He said he would share the hotel expenses with the 1st defendant when he arrived.  The 1st defendant was keen as he had not realised how expensive Hong Kong was nor was there any business to be found.  He changed his flight to 3 May 2019 to go home when he knew he had someone to share his hotel expenses with.

18.A few days after the 2nd defendant arrived, he told the first defendant why he had come and offered him a 25 per cent cut of all cash withdrawn from ATM machines if he agreed to help.  The 1st defendant agreed to commit these offences because he was tempted by the quick money. 

19.The 2nd defendant is 32 years old and single but has a long-term girlfriend in Bulgaria.  I have been told of his family background.  He worked in restaurants and bars as a bar manager in Bulgaria before he lost his job in September 2017.  He suffered from depression after his father’s death in 2017, became a heavy drinker and lost his job.  He borrowed money to survive but was unable to repay loans.  He borrowed from loan sharks incurring huge amounts of interest which he was unable to repay. 

20.He was told to come to Hong Kong to commit these offences to repay those debts.  His flights and hotel were paid for and all the equipment required found in his hotel room was purchased on his behalf.  He was told to meet someone in Hong Kong to give him withdrawn cash after the event and also he would be given blank cards.  It is submitted he is a foot soldier, not the mastermind. 

21.The 3rd defendant is 34 years old, single.  He does have a 7-year-old son.  His son’s mother is suffering from cancer.  The 3rd defendant’s father died some years ago and his mother is unable to work due to chronic heart disease.  His family rely on him for financial support. 

22.The 3rd defendant came to Hong Kong hoping to go on to China to buy video cards for a cryptocurrency business and happened to know the 2nd defendant was in Hong Kong.  Because he was familiar with the English language, he asked the 2nd defendant to help him apply for a visa for China.  The 3rd defendant had only been here one day when the 2nd defendant told him what he was doing and asked him to help.  It was this same day that the police put all three under observation.  The 3rd defendant had no idea the 2nd defendant was here in Hong Kong to commit these crimes but did agree to help which he now regrets.

23.Defence counsel have referred me to several sentences imposed in the District Court for similar offences.  There are no guideline tariffs for offences of this nature.  The Court of Appeal however in R v Chan Sui To [1996] 2 HKCLR 128, recognised that it was impossible to formulate a set of principles of sentencing for credit card frauds due to varying degrees of culpability and different facts.  They did suggest that a defendant who played an active but not necessarily key role in a medium-sized operation involving between $50,000 and $150,000 with no elaborate planning and equipment, and without an international dimension, should receive a sentence of 5 to 6 years after trial.  The Court of Appeal said sentences may be adjusted upwards or downwards according to the circumstances. 

24.I have been referred to several cases involving overseas nationals who have come to Hong Kong and committed like offences.  In HKSAR v Palevici, Iosif Adrian [2015] 5 HKLRD 625, the Court of Appeal said a sophisticated syndicated operation with an international element involving the multiple use of forged payment cards and the loss of over $700,000 attracting a starting point of 6 years and 6 months’ imprisonment was neither manifestly excessive or wrong in principle.  In that case, the two appellants were Romanian nationals who had come to Hong Kong to commit these offences.  They faced similar charges but the facts were more serious than those here. 

25.In mitigation, counsel for the 1st and 3rd defendant asked me to take into account that their clients are not as culpable as the 2nd defendant.  However, the 1st defendant was involved in this scheme not long after the 2nd defendant arrived in Hong Kong and certainly during the time the victims suffered losses.  He may not have come to Hong Kong with the intention of committing the crimes but he agreed to conspire with the 2nd defendant once here. 

26.The 3rd defendant only arrived in Hong Kong on 30 April 2019 and although he had agreed to be a party to the conspiracy and had items to carry out the conspiracy in his hotel room, he had done little to date.  What he had done in furtherance of the offences was what was observed by the police on the night of 1 May, his first night in Hong Kong. 

27.I have been told he is a cryptocurrency miner. Although I take into account the fact he refused to give the police the passwords to mobile phones which I find to be uncooperative of a man so recently caught up in these offences.  I accept that the 3rd defendant had not participated as much as the 1st and the 2nd defendant.  At the same time, it must not be forgotten that but for their arrests, considering what they had in their hotel rooms, they could have gone on to successfully steal more money using this fraudulent scheme. 

28.I will accept that the most culpable here is the 2nd defendant on his own admission.  The 1st defendant is less culpable and the 3rd defendant, I accept, is the least culpable.  Accepting mitigation, their roles and involvement can be differentiated in this case. 

29.I have taken into account the facts of this case including the loss suffered, the number of magnetic strip cards and the fact that all three are foreign nationals; there is an international element.  I have considered the backgrounds, pleas and mitigation put forward on behalf of all the defendant, including mitigation letters from home and mitigation letters from those who have come to know them whilst they have been in custody in Hong Kong.  Lastly, I have taken into account the authorities referred to. 

30.For the 1st defendant, I take a starting point of 4 years and 6 months for Charge 1 and a starting point of 4 years for Charge 4. 

31.For the 2nd defendant, I take a starting point of 5 years and 6 months for Charge 1 and a starting point of 4 years for Charge 4. 

32.For the 3rd defendant, I take a starting point of 3 years and 6 months for Charge 1 and a starting point of 3 years for Charge 5. 

33.All defendants pleaded guilty at the earliest opportunity and will benefit from the full discount. 

34.After that discount is applied, the defendants are sentenced as follows:  The 1st defendant is sentenced to 3 years’ imprisonment for Charge 1 and 2 years and 8 months for Charge 4; the 2nd defendant is sentenced to 3 years and 8 months for Charge 1 and 2 years and 8 months for Charge 4; the 3rd defendant is sentenced to 2 years and 4 months for Charge 1 and 2 years for Charge 5. 

35.I order all sentences to run concurrently. Accordingly, the 1st defendant is sentenced to a total of 3 years’ imprisonment, the 2nd defendant is sentenced to a total of 3 years and 8 months, the 3rd defendant is sentenced to a total of 2 years and 4 months.