HKSAR v. Cheung Ka Chun and Another

DCCC 801/2023

[2024] HKDC 788

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 801 OF 2023

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REASONS FOR SENTENCE

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D1 and D2 are jointly charged with 2 offences of "Conspiracy to defraud" (Charges 1 and 3)  and 2 "Money laundering" offences (Charges 2 and 4; alternative to Charges 1 and 3 respectively). They both pleaded guilty to Charges 2 and 4 (and accepted by the prosecution). I made no order as to Charges 1 and 3.

Summary of Facts

Incident 1

2.About 1:00 p.m. on 9 February 2023, Madam Fong (PW1; aged 69)  received a phone call made to her home landline.  A male voice (Male A)  pretending to be PW1's son claimed that he was arrested by the Police and needed $30,000 as bail money.  PW1 said she only had $20,000 in the bank.  Male A told her not to tell anyone about this.  After withdrawing $20,000 from the bank, PW1 received a call on her mobile phone (which was forwarded from her home landline)  from Male A telling her to hand over the cash to his friend at the taxi stand of Tuen Mun Town Plaza ("Taxi Stand 1").

3.About 2:37 p.m. on the same day, D1 approached PW1 at Taxi Stand 1 outside a restaurant named Men Wah, claiming to be collecting money on behalf of PW1's son.  D1 gave his phone to PW1 with Male A on the line telling her to give the money to his friend.  PW1 complied and D1 left with the money.

4.About 3:15 p.m. on the same day, Male A called PW1 again asking for a further sum of $50,000 as bail money. PW1 said she could only gather $15,000.  Male A told PW1 that the same person (i.e. D1)  would wait for her at Taxi Stand 1 and asked her not to tell anyone about this.  PW1 went to Men Wah at 4:00 p.m. and saw D1 again.  PW1 asked D1 to call her son.  D1 gave his phone to PW1 with Male A on the line telling her to hand over the cash to his friend.  PW1 complied.  PW1 then invited D1 to go to a nearby police station but he refused.

5.About 10:00 p.m. on the same day, PW1 called her son, who confirmed that he was not arrested by the Police.  The case was reported.

Incident 2

6.About 9:00 a.m. on 10 February 2023, Madam Yim (PW2; aged 80)  received at least 7 phone calls made to her home landline.  A male voice (Male B)  pretending to be PW2's youngest son claimed that he was arrested by the Police for fighting and needed bail money.  PW2 refused initially but changed her mind owing to Male B's repeated requests.  PW2 gathered $70,000 cash at home and went to the taxi stand at Sam Shing Estate ("Taxi Stand 2").  Male B asked PW2 to call him at 6880 5942 upon arrival.

7.About 11:10 a.m. on the same day, PW2 arrived at Taxi Stand 2 together with her domestic helper.  PW2 used her mobile phone to call Male B.  About 5 minutes later, D1 approached PW2 claiming to be Mr. Chan and gave his phone to PW2 with Male B on the line. Male B told PW2 to give the money to D1.  PW2 complied.  D1 took the cash and boarded a green taxi LD 5729.

8.About noon on the same day, PW2 received at least 12 more calls from Male B asking for a further sum of $160,000 as medical fees for the victim in the fighting incident.  PW2 called her youngest son's wife, who confirmed that her husband was at work.  PW2's eldest son later on accompanied PW2 to make a report at a police station.

9.The Police traced the green taxi LD 5729.  D1 was found having alighted at Hotel COZi in Tuen Mun.  CCTV footage captured D1 returning to Room 736 of that hotel together with D2 and a female.

Arrest

10.About 11:10 p.m. on 13 February 2023, D1 surrendered to Tuen Mun Police Station.  He was cautioned for "Obtaining property by deception" in relation to Incident 2.  D1 claimed that he surrendered because he knew he did wrong; he deceived $70,000 from an elderly woman.  He alleged that D2 was involved as well.  D1 also admitted having deceived another elderly woman $35,000 on 9 February 2023 (i.e. Incident 1).

11.D2 was arrested near his home on 20 February 2023 for "Fraud" in relation to Incidents 1 and 2.  He denied knowledge of both offences under caution.

Video recorded interviews (VRIs)

12.In his VRIs, D1 claimed that he has known D2 for 15 years.  He admitted that he agreed to D2's request to take part in both incidents to collect things because he was in need of money.  D1 has described in details how he followed the instructions of D2 and an unknown male with mainland accent in both incidents.

13.Regarding Incident 1, D1 said he had collected a total sum of $35,000 from an elderly woman.  He handed over the money to D2 in Wong Tai Sin, upon which D2 deposited the same at a cryptocurrency exchange shop situated at Kwun Tong Plaza ("the Crypto Shop").  D1 made similar admissions about Incident 2.  D1 claimed that D2 had told him late in the evening on 10 February 2023 that D2's girlfriend was arrested for "Fraud" and D2 had asked D1 to lay low.  Having thought about what he had done, D1 then realized the involvement of a phone deception syndicate; and decided to surrender.  D1 has identified himself in the CCTV footage of Incidents 1 and 2; Hotel COZi; as well as the Crypto Shop.

14.In his VRIs, D2 claimed that he has known D1 for 20 years.  D2 said he and D1 had agreed to work for an unknown male to collect money.  D2 believed that he could be collecting debts for online gambling business in Macau in return for tea money and travelling expenses.  For the jobs on 9 and 10 February 2023, D2 claimed to have overslept and D1 went alone.  D2 admitted having remitted $35,000 and a sum of money respectively on 9 and 10 February 2023 at the Crypto Shop at the request of the unknown male.  D2 has also identified himself in the CCTV footage of the Crypto Shop.  D2 did not find the job introduced by the unknown male suspicious.

Mitigation

D1

15.He is 33 and single.  He has 4 conviction records, which were all minor gambling offences.  His counsel Ms. Wu informed me that after leaving school, D1 has worked different jobs including waiter, cook and clerk.  Owing to the pandemic, he was unemployed for months.  Shortly before the present offences, he found a part-time job as a janitor earning about $14,000 per month.  He later found another part-time job earning $800 per day.  Even with both jobs, he could not make ends meet.

16.In mitigation, Ms. Wu submitted that D1 committed the present offences in order to earn some quick money.  Ms. Wu explained that D1 did not know what he was supposed to pick up from the victims until he was given the banknotes.  His suspicion about phone deception occurred after he had collected the cash from the victims.  Finally, Ms. Wu submitted that once he realized what he had done, he surrendered to the Police and made full admissions about his involvement.  Ms. Wu stressed that D1 wore a mask in all CCTV footage.  In other words, the only evidence against D1 came from his own admissions.

D2

17.He is 34 and single.  He has 2 conviction records, which included 3 offences unrelated to "money laundering".  His counsel Ms. Ma informed me that at the beginning of 2021, D2 had a full-time job at a shipping company earning $25,000 per month.  Owing to the pandemic, the company was closed in early 2022.

18.In mitigation, Ms. Ma submitted that upon learning that D1 had surrendered to the Police, D2 also surrendered himself on the following day.  He was told that his case was taken over by CID and that he should wait for them to contact him.  Ms. Ma also submitted that D2 did not give too much thought to what he was collecting; he just wanted to earn some quick money to relieve his mother's financial burden. As stated in his VRIs, D2 thought he was collecting some kind of parcels or debts arising from gambling in Macau.  He did not know the source of the cash; he simply followed the instructions to deposit the sums into a crypto account.

Sentence

19.The prosecution has applied for an enhanced sentence pursuant to section 27(2)(c), (d)  and (e)  of the Organized and Serious Crimes Ordinance (Cap.455)  on the basis of prevalence; the nature and extent of harm caused to the community; and the nature and extent of the total benefit gained by anyone from the present offences.  Ms. Wu and Ms. Ma did not object to the application for enhancement.

20.I bear in mind the Court of Appeal's decision in HKSAR v Xu Mai Qing CACC 464/2005, whereas Yeung JA (as he then was)  held "Under section 27(11)  of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences[1]."

21.I have read the witness statement of DCIP Tang dated 18 March 2024.  I am satisfied that in 2023, telephone deception cases were prevalent in Hong Kong in terms of the number of cases as well as the total value of monetary loss.

22.The "By Hand" mode phone deception cases always involve someone picking up the money left behind by the victim at a public place or collecting the money directly from the victim.  Hence, the money collection portion is part and parcel of any type of phone deception ("Guess Who", "Pretend Officials" or "Detained Son").  Although the "collector" may not have knowledge of the underlying phone deception, the circumstances under which he/she picks up or collects the money are usually peculiar and would thus arouse his/her suspicion about the legality of his/her collecting act and/or the nature of the money collected.  That is the reason why the "collector simpliciter" is often charged with a money laundering offence (instead of deception).

23.There is clear and cogent evidence before me that the "By Hand" mode phone deception is still widespread and commonly being practised in Hong Kong today.  The court must send a clear message to the general public that people who play the role of "collector" will receive severe punishment, so that there is a deterrent effect.  When there are fewer or no willing "collectors", the "By Hand" mode phone deception method would fail.

24.Both D1 and D2 claimed that they did not have any prior knowledge of the underlying phone deception; however, the scam would have been meaningless without a willing "collector".  Given the role played by them, the amount involved and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 25%.

25.The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[2]

26.In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Cen Huakuo [2015] 2 HKLRD 951.  I have also borne in mind the amount of money involved, the duration of the offences, each defendant's role in relation to the movements of funds as well as his personal circumstances.  A marked difference between both defendants in the present case and the applicant in Cen Huakuo is that D1 and D2 are not mainland residents who came to Hong Kong to commit crimes.

27.For the purpose of sentencing, I accept there is no evidence showing that either D1 or D2 knew about the details of the phone scams.  Even retrospectively, they probably had no more than a "sketchy idea" of the deception against PW1 and PW2.  To this extent, their culpability is perhaps less than the perpetrator(s)  of the underlying phone deception[3].  Hence, for both defendants, I adopt a starting point of 2.5 years' imprisonment each for Charges 2 and 4.  With the timely guilty plea, the sentence is reduced to 20 months.  Apart from this, I see no other mitigating factors which warrant any further reduction.  With the 25% enhancement, I sentence each defendant to 25 months' imprisonment for each charge.

28.Bearing in mind the totality principle, I consider a global starting point of 39 months' imprisonment appropriate for both Charges 2 and 4.  With the timely guilty pleas, the overall sentence becomes 26 months.  With the 25% enhancement, the overall sentence becomes 32 months' imprisonment.  I note that the evidence against both defendants (particularly D1)  in both incidents came solely from their own admissions.  I would therefore grant them a discount of 2 months[4], reducing the overall sentence to 30 months.  To achieve this, I order:  5 months in Charge 4 to run consecutive to Charge 2.  In other words, the total prison term for D1 and D2 is 30 months each.