HKSAR v. Wong Ka Siu

DCCC 385/2021

[2021] HKDC 1564

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 385 OF 2021

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REASONS FOR SENTENCE

1.The defendant pleaded guilty to a charge of "Fraud". He lured the owner of a residential flat into mortgaging her share of the flat to a finance company instead of the bank she requested. As a result, the defendant dishonestly gained $95,000 from her.

Summary of Facts

Background

2.In February 2015, Madam Tsang (PW1)  borrowed $38,000 from Standard Chartered Bank (SCB).  The loan was handled by a staff member of SCB named Yoyo.

The mistaken phone call

3.In July 2015, PW1 tried to call Yoyo but pressed the wrong number.  Believing that she was speaking to Yoyo, PW1 asked the person who answered her call if she could borrow an additional sum of $10,000 from SCB.

4.On 7 July 2015, a female voice called PW1.  She told PW1 that her manager did not approve PW1's application for an additional loan.  The caller referred PW1 to a Mr. Chan of AY Accounting Services (Global)  Limited (AY)  and told PW1 that SCB was a partner of AY.  PW1 then called Mr. Chan.  He asked PW1 to attend AY's office in Mongkok on 9 July 2015.

The scam

5.On 9 July 2015, PW1 went to AY's office.  She was received by the defendant, who introduced himself as Mr. Chan.  PW1 told the defendant that she wanted to borrow $10,000 by mortgaging her share of a co-owned flat in Tung Chung.  The defendant falsely represented to PW1 that AY had been partnering with SCB for a few years and that AY could assist her in obtaining a mortgage from SCB.  He asked PW1 to return with the necessary documents next time.

6.On 23 July 2015, PW1 returned to AY's office with documents related to her flat.  The defendant told PW1 that if she mortgaged her flat, she could borrow $300,000. He asked her to meet him in Sheung Wan the following day.  PW1 said she only wanted to borrow $200,000.

7.On 24 July 2015, the defendant brought PW1 to aEasy Credit Hong Kong Limited (aEasy)  in Sheung Wan to borrow $300,000.  He told PW1 that the handling fee of borrowing $200,000 would be $100,000, so it would be better for her to borrow $300,000 (the "aEasy Loan").  When PW1 discovered that the interest rate was 20% per annum, she wanted to leave.  The defendant then offered to pay the legal fees and falsely represented to PW1 that (a)  he was working with Yoyo of SCB; and (b)  AY would assist PW1 in transferring the aEasy Loan to SCB after 3 months at a lower interest rate and with a rebate of about $50,000 from SCB (the "SCB Loan").  Relying on the defendant's representations, PW1 took out the aEasy Loan.

8.After deducting the legal fees for the loan, PW1 received a cheque for the sum of $286,000 from aEasy.  The defendant then took her to a bank to cash the cheque.  He asked PW1 to tell the bank staff that the purpose of cashing the cheque was to buy jewellery.

9.After cashing the cheque, the defendant handed a consultancy agreement to PW1. According to its terms, PW1 would be required to pay $95,000 to AY as consultancy fees for obtaining the SCB Loan.  PW1 then signed the agreement. The defendant took $95,000 from the cash which PW1 had just obtained.  He told PW1 that if Yoyo or anyone from AY called her asking how much she had paid him, she should say $50,000.

Discovery of the fraud

10.PW1 called SCB on 25 July 2015.  She was told that SCB did not partner with AY and that SCB would not refer customers to other firms for obtaining loans.  PW1 reported her case to the Police on 26 July 2015.

11.The defendant was arrested on 15 September 2015.  On 9 March 2016, PW1 identified the defendant at an identification parade.

12.AY was incorporated on 14 April 2015.  The defendant was the founding shareholder and a founding director of AY.  He signed the tenancy agreement for AY's office on 23 April 2015.  He transferred his shares in AY and resigned from his director post on 24 July 2015.

Mitigation & Sentence

13.The defendant is 40 and has a clear record. Defence counsel Mr. Yau informed me that the defendant is married with 2 sons (aged 6 and 1). The defendant is the sole breadwinner of his family. He started working after completing F.5 and has worked in different trades.

14.In mitigation, Mr. Yau submitted that shortly before the present offence, the defendant was introduced by a friend to work in the money-lending business. After the police investigation, the defendant switched to car sales. He has worked hard in the past few years to develop his own business. A bundle of mitigation documents was placed before me; their contents are duly noted.

15.Mr. Yau also submitted that there is undue delay in charging the defendant. He was arrested in September 2015 but was not charged until March 2021, some 5.5 years later. Mr. Yau stated that the defendant's eldest son was born shortly before he was arrested; and his 2^nd son, shortly before he was charged. Both the defendant and his wife have suffered much stress and anxiety in the past 6 years, not knowing when the matter would come to an end. The defendant's wife is diagnosed with post-natal depression after giving birth to their 2^nd son. Finally, Mr. Yau stressed that the defendant has reformed himself and made himself a useful member of his community.

16.I will deal with the issue of "delay" first. Prosecuting counsel Mr. Chiu has helpfully prepared a Chronology of Events for my reference. I need not go into the details, suffice it to say that it took the Police 2 years and 3 months to investigate this case and to submit the case file to the Department of Justice for legal advice; then another 3 years and 3 months to issue interim legal advice, conduct further investigation and finalize the legal advice. I note that all outstanding investigative actions were completed and the case file was re-submitted to the Department of Justice for further legal advice in April 2019; however, final legal advice was not issued until February 2021, some 22 months later.

17.In my view, 5.5 years to investigate this case and to obtain legal advice were excessive. There is clearly undue delay in bringing criminal prosecution against the defendant. I should, for the sake of completeness, mention that this case reached the District Court on 11 May 2021. After 2 mention hearings on 27 July and 7 September 2021, this case was fixed for plea & sentence on 29 November 2021.

18.I adjourned the sentence to obtain a Community Service Order Report. The comments in the report are positive. The Probation Officer wrote "He [has] worked his way up to open two automobile sales companies with partners and [has a] good income… From his family and friends' comment[s], the Accused [is] of [a] fine character. He [is] devoted to [his] family and involve[s] himself actively in child care[1]."

19.I find that the defendant most probably committed the present offence without giving too much thought to the illegality of his acts and their consequences. This afternoon, Mr. Yau informed me that through the arrangements made by the prosecution, the defendant has paid compensation in the sum of $95,000 to PW1.

20.I accept that the defendant has reformed himself since his arrest. As the Court of Appeal put it in Secretary for Justice v Chan Chi Tao[2] [2020] HKCA 296 (CAAR 6/2018; Chinese judgment), by sentencing the defendant to imprisonment now, it would not only declare his effort in rehabilitating himself futile, but would also destroy his business and everything he has built up in the past 6 years. It would be devastating to him and his family as well. In any event, the defendant has spent 14 days in jail custody pending his Community Service Order Report.

21.Based on the reasons stated above, I consider that a Community Service Order is the appropriate and just punishment for the defendant at this moment.

[Requirements of Community Service Order explained. The defendant understood and is willing to comply.]

I sentence the defendant to 180 hours of Community Service.