HKSAR v. Kong Chi-kiu
Read the full judgment text of DCCC 768/2021 on BabelCite. This District Court judgment was delivered on 26 April 2022.
1. Defendant pleads guilty to 13 charges of fraud (Charges 1 – 13) and 2 charges of money laundering (Charge 14 – 15).
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DCCC 768/2021 [2022] HKDC 371 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 768 OF 2021 ________________________
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________________________ REASONS FOR SENTENCE ________________________ Charges 1.Defendant pleads guilty to 13 charges of fraud (Charges 1 – 13) and 2 charges of money laundering (Charge 14 – 15). Facts 2.In March – August 2017, each victim of Charge 1 – 12 had either viewed Defendant’s IG on, or been introduced by Defendant’s employees to, a high-yielding short-term investment plan allegedly run by Defendant’s own company, “Self International Ltd.” Unaware that it was a scam, they deposited money with Defendant accordingly. Defendant initially distributed quick and generous interest to them, namely victims of Charges 1, 2, 5, 6, 8, 11 and 12. That made them invest more. Victims of Charges 3, 4, 7, 9 and 10 did not receive anything despite their deposits though. Defendant disappeared. The victims reported to the police for their loss. In August 2017, Defendant was arrested. She admitted under caution that she had set up Self International Ltd. exclusively for the scam. Her home became her employees’ quarters. She had up to 80 clients at the best time but it went down to 30. She had never intended to make or actually made any investment for the clients. The deposits received by her were used to pay investors as interest to sustain the fraud, to repay her own debt, or were kept in a bank account to her order in Australia. At all material times, neither she nor Self International Ltd. had filed any tax returns. 3.The 12 victims suffered a loss of $1,666,675 in total as follows:
4.In April – May 2017, the victim of Charge 13, also of fraud, had paid $27,831 to Defendant, who promised to acquire for her two air tickets. Defendant disappeared. The victim lost the said amount. 5.Charge 14 concerns (1) one HSBC account opened in September 2016 in the name of Defendant (“Defendant’s HSBC Account). In March – August 2017, which canvasses the period of Charges 1 – 13, on a monthly basis there were mirroring amounts deposited into and withdrawn from this account. Deposit ever made was $2,435,785.22 in total whereas withdrawal was $2,438,065.52. She knew or had reasonable grounds to believe that the deposits in whole or in part directly or indirectly represented proceeds of indictable offences. 6.Charge 15 concerns (1) one Standard Chartered Bank account opened in March 2017 in the name of Defendant (“Defendant’s SCB Account”). In March – June 2017, which canvasses part of the period of Charges 1 – 13, on a monthly basis there were mirroring amounts deposited into and withdrawn from this account. Deposit ever made was $1,157,386.11 in total and withdrawal ever made was $1,157,382.28. She knew or had reasonable grounds to believe that the deposits in whole or in part directly or indirectly represented proceeds of indictable offences. Background and mitigation 7.Defendant is 26 years old. She has a clear record. As part of her background, it is said that her mother deserted the family, followed by divorce, when Defendant was 12 years old. Defendant did not have much contact with her father, either. She even had to look after her younger brother. She first sought psychiatric help in 2011. In the medical report dated 8 March 2022, Dr. Lam of Castle Peak Hospital stated that she had defaulted consultation after 2011, that she was diagnosed by a private psychiatrist to have panic disorder in 2017. She had three brief admissions to Castle Peak Hospital in late 2017, all diagnosed as Adjustment Disorder. Medication was prescribed. She defaulted the subsequent consultation. In a psychiatric report dated 11 March 2022, Dr. Pang of Tai Po Hospital stated that the current diagnosis remained as Adjustment Disorder. She had become stable on medicine prescribed. 8.Apart from Defendant’s pleas of guilty, Mr. Kelly urges me to consider her relatively young age as a mitigating factor. It can be reckoned that at the time of the offences, she was 21 years old. She was able to conceive of setting up a company, using an IG account, and recruiting others to pursue the scam on dozens of victims. I regard her as more sophisticated and mature than an average girl of her age. 9.Another mitigation advanced is that Defendant is now keeping her 24-month-old child with her in custody. The child’s father is said to be a Beijing resident, have given no financial support, and separated from her. According to Rule 21 of Prison Rules (Cap. 234A), a child under 3 years of age can stay with the mother in certain conditions. The placement of a child is always in the hands of the Commissioner of Correctional Services, or in default of a solution therein, the Chief Executive. 10.It can be reckoned that when Defendant serves her sentence, her child has soon to be placed elsewhere. Mr. Kelly invokes the prerogative of mercy. I find Defendant rather irresponsible as, despite her arrest in August 2017, she had elected to have a child without a proper future plan. I do not find any mitigating factor here. Sentencing Defendant 11.Charges 1 – 12 were instances of a fraud. Defendant set up a company, an IG account, a staff, to defraud the clients. The culpability in each instance was the same except for the difference in loss to the victim. The starting point of sentence is in proportion to the loss as follows:
12.I give Defendant a one-third discount for her pleas of guilty. The sentence is as follows:
13.For Charge 13, I take a starting point of 6 months. After a one-third discount for her plea of guilty, the sentence is 4 months. 14.Defendant’s admission to the police is that the respective accounts under Charges 14 and 15 were each used to collect the victims’ deposits. The prosecution and the defence both accept that the net loss to PW3 under Charge 4 ($1,000,000) was laundered through Defendant’s SCB Account, not involving Defendant’s HSBC Account, whereas the net loss to other victims under the other charges of fraud ($666,675 in total) was laundered through Defendant’s HSBC Account, not involving Defendant’s SCB Account. 15.Charge 14 concerns two tranches of deposit in Defendant’s HSBC Account, the first being what she knew to be proceeds of her fraud on the victims under Charges 1 – 3, and 5 – 13 ($666,675 in total), the remainder being what she had reasonable grounds to believe to be proceeds of certain indictable offences ($2,435,785.22 - $666,675 = $1,769,110.22). I take 3 years 6 months as the starting point. After the one-third discount for her plea of guilty, the sentence is 2 years 4 months. 16.Charge 15 concerns two tranches of deposit in Defendant’s SCB Account, the first being what she knew to be proceeds of her fraud on PW3 under Charge 4 ($1,000,000), the remainder being what she had reasonable grounds to believe to be proceeds of certain indictable offences ($1,157,386.11 - $1,000,000 = $157,386.11). I take 27 months as the starting point. After the one-third discount for her plea of guilty, the sentence is 18 months. 17.I consider the totality principle and order all sentences to be served concurrently. As the highest sentence is 2 years 4 months for Charge 14, it is also the total sentence.
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