HKSAR v. Wong Ching Tung

DCCC 1103/2023

[2024] HKDC 2044

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1103 OF 2023

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REASONS FOR SENTENCE

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1.Before me, D1[1] and D2[2] faced various charges on a Charge Sheet as follows.

2.Charge 1 is Conspiracy to defraud against D1 only, contrary to Common Law and punishable under section 159C(6)  of the Crimes Ordinance, Cap 200. Particulars are that D1, on or about 2 March 2023, in Hong Kong, conspired with other persons unknown to defraud Chan Siu by dishonestly and falsely representing that the son of the said Chan Siu was in need of money in the sum of $65,000 Hong Kong currency in cash, thereby to induce the said Chan Siu to part with a total cash sum of $65,000 Hong Kong currency;

3.Charge 2 (alternative to Charge 1)  is Dealing with property known or believed to represent proceeds of an indictable offence (hereinafter “Money Laundering”)  against D1 only, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.  Particulars are that D1, on 2 March 2023, in Hong Kong, together with other persons unknown, knowing or having reasonable grounds to believe that property, namely a sum of $65,000 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property;

4.Charge 3 is Conspiracy to defraud against D1 & D2.  Particulars are that they, on or about 3 March 2023, in Hong Kong, conspired together with other persons unknown to defraud Siu Hung Ping by dishonestly and falsely representing that the son of the said Siu Hung Ping was in need of money in the sum of $45,000 Hong Kong currency in cash, thereby to induce the said Siu Hung Ping to part with a total cash sum of $45,000 Hong Kong currency;

5.Charge 4 (alternative to Charge 3)  is Attempting to commit Money Laundering against D1 & D2, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, and sections 159G and 159J of the Crimes Ordinance, Cap 200.  Particulars are that they, on 3 March 2023, in Hong Kong, together with other persons unknown, knowing or having reasonable grounds to believe that property, namely a sum of $45,000 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, attempted to deal with the said property;

6.Charge 5 is Failing to surrender to custody without reasonable cause against D1 only, contrary to section 9L(1)  and (3)  of the Criminal Procedure Ordinance, Cap 221.  Particulars are that he, on 14 May 2024, in Hong Kong, being a person admitted to bail, without reasonable cause, failed to surrender to custody as was appointed by a court.

Procedural history

7.This case was fixed before me for plea and sentence of D1 and D2.

D1

8.Prior to the hearing date, I have through correspondence asked for written submissions from relevant parties, relating, inter alia, to the propriety of Charge 3 due to the potential issue of “conspiracy to do the impossible” in that PW2 Siu did not have a son.

9.Prosecution, by way of letter dated 18 November 2024, made written submissions on the point.

10.D1, by way of letter of even date, referred to the prosecution’s said letter and conceded to the prosecution’s position that Charge 3 was properly laid, without further submissions of his own.

11.At the hearing, before pleas were taken from anyone, I expressed misgivings about Charge 3 for the same reason as previously indicated.

12.I gave time to the prosecution to take instructions from the Department of Justice.

13.Upon taking instructions, prosecution informed me that the course chosen was to treat the matter as a not-guilty plea (though no pleas had formally been taken from D1)  and a trial date was to be fixed at the plea court.  D1 had no objection to the proposal.  A date was then fixed for D1 to appear at the plea court for the purpose of fixing a trial date.  Before D1 was sent back into custody, parties had the consensus that no pleas needed to be taken from D1 meanwhile, and that all the charges including those that D1 was intending to plead guilty to should be dealt with together.

14.Before leaving the matter, it ought to be mentioned that counsel indicated that D1 was willing to plead guilty to Charge 3 or Charge 4; however, prosecution indicated that they were not willing to accept D1’s intended plea to Charge 4.

D2

15.D2 pleaded not guilty to Charge 3 but guilty to its alternative Charge 4.

16.After convicting D2 of Charge 4, I acquitted him of Charge 3 because the prosecution accepted D2’s conviction of Charge 4 as satisfaction of the charge sheet as against D2.

Facts admitted by D2

Charge 4

17.On 1 March 2023, at about 9:30 am, PW2 Siu, then aged 66, received a phone call.  A male (“Male B”), who claimed to be a son of PW2, told PW2 that he had changed his phone number.

18.PW2 who had no son knew at once it was a scam call.  However, he went along and made up a fake name “Ah Kuen” as his supposed son’s name.  PW2 did this in the hope of bringing the culprit to justice.

19.On 3 March 2023, at about 9:45 am, Male B again called PW2 and claimed that he had been arrested by the police and needed $100,000 cash as bail money.  Although PW2 had $100,000, he told Male B that he only had $20,000 to $30,000.  Male B replied that $30,000 would be sufficient as he could borrow the balance from friends.  Male B further said that a lawyer friend named Chan Wai would contact PW2 to arrange for the collection of the money.

20.At about 10 am, it was Male B who called again.  Male B asked if the cash could be collected right away.  PW2 replied he would get back once the money was ready.

21.At about 1:15 pm, PW2 reported the case to the police.  A controlled meeting was prepared for dummy cash (comprising of valueless material)  to be handed over to the culprit.

22.At about 1:40 pm, acting on instructions of the police, PW2 got back to Male B indicating falsely that cash was ready.  However, at this point, Male B asked for a larger sum and after some negotiation, the additional amount came down to $15,000.

23.At about 1:45 pm, Male B called again indicating a Superintendent Chan would contact PW2 shortly.

24.Instead of waiting for the call, PW2 took the initiative to call Male B not long afterwards.  Male B took up the phone but then passed it over to Superintendent Chan who confirmed that Ah Kuen could be granted bail on condition of $45,000 bail money.  Male B spoke again and told PW2 not to tell anyone about the matter and said someone would be coming to collect the cash from PW2.

25.At about 2:26 pm, a male claiming to be Chan Wai called PW2 and asked where the bail money could be collected.  The parties agreed to meet up at the lobby of Block 28 of Heng Fa Chuen.

26.At about 2:40 pm, a Male C and D2 were wandering outside Blocks 28 and 29 of Heng Fa Chuen.

27.At about 3:02 pm, Chan Wai called to say he would arrive soon.

28.At 3:05 pm, Male C approached PW2 claiming himself to be Chan Wai.  Male C passed to PW2 a mobile phone saying at the same time Ah Kuen would like to talk.  PW2 picked up the phone and asked the opposite party if the cash should be passed over to Male C.  After getting the go-ahead, PW2 passed over the dummy cash to Male C at the same time asking Male C to take care of Ah Kuen. Male C said he would and left.  Male C then walked towards Heng Fa Chuen Post Office with D2 following him.

29.A few minutes passed before D2 was stopped and arrested in the vicinity.  The dummy cash was recovered from a sling bag carried by D2.  Under caution, he said he was instructed by one “Zero” to collect money from Male C and he was promised $500 reward for his labour.

30.D2 knew or had reasonable grounds to believe that the dummy cash originated from the telephone deception.

31.D2 now admits that, on 3 March 2023, in Hong Kong, he, together with other persons unknown, knowing or having reasonable grounds to believe that property, namely a sum of $45,000 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, attempted to deal with the said property.

Criminal record

32.D2 has a clear record.

Antecedents

33.D2 is aged 25 (23 at the time of the offence), educated to F3 level, and working as a cook.  He has a younger sister studying in college.  D2 is living with his divorced mother in public housing in Choi Hung.

Mitigation

34.Ms Yanky Lam of counsel assigned by the Director of Legal Aid mitigated on behalf of D2.  The following is a summary of the mitigation submissions.

35.D2’s parents, maternal grandparents and maternal uncle are in court to give D2 emotional support.

36.D2 pleaded guilty to Charge 4 having indicated the same months ago; he is entitled to 1/3 discount on his sentence.  D2 has no objection to the prosecution’s application regarding enhancement of sentence.

37.D2 has a clear record with good character and comes from a decent family.  D2 feels deeply remorseful for his misdeeds; in particular, he feels sorry for the victim.

38.D2 is single and he has been and still is working as a restaurant chef earning $15,000 per month.

39.D2 has been living with his divorced mother as his younger sister is studying in a university away from Hong Kong.  D2’s natural father left the family long time ago so D2 and his younger sister were brought up by their mother single-handedly.  D2’s step-father passed away in January 2024 due to cancer.  D2’s mother’s medical condition is stable after receiving some medical treatment.

40.D2’s mother had to take up different jobs to make ends meet.  Due to heavy workload, she could only spend very little time with D2 and his younger sister when they were young resulting in minimum parental supervision and guidance on them.  D2 became introvert and seldom shared his inner feelings with his mother in his teenage.  D2 mingled with his friends and peers and was easily influenced by others.

41.D2 was not acquainted with D1 ie Male C before the commission of the offence.  D2 was asked by a male called “Zero” to collect money from Male C for a reward of $500.  During investigation, D2 provided the contact number of Zero to the police.  Subsequently, Zero was arrested but not charged.

42.In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal took into consideration the following:

“There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However, the following factors are to be taken into account when determining sentence:

(a)  It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(b)  The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the “money laundering” activities are relevant factors to be considered.

(c)  The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(d)  If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(e)  The length of time the offence lasted.”

43.In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal held that given the highly variable circumstances in which the offence might be committed, it was difficult and undesirable to offer guidelines.  This was a category of offence which called for the sentencing judge to engage his “feel” for the case and his sentencing experience bearing in mind always the mischief at which the legislation was directed.  The best one could do was to draw the attention of judges to relevant sentencing considerations (see paras 25, 34 and 39).

44.Having said so, the Court of Appeal held that it would be helpful to identify some of the significant features for which the Court should look and take into account, though it is not possible to produce an exhaustive list:

(i)  The nature of the predicate offence, if known, and the penalty available for the predicate offence;

(ii)  This brings us to the question of the state of knowledge of the offender. This divides itself in two – knowledge of the nature of the predicate offence, where the predicate offence is known to the court; and knowledge of the fact that the funds are the proceeds of an indictable offence;

(iii)  An international dimension will always be a significant aggravating feature; and by international dimension we include money laundered from, or for those operating in, the Mainland;

(iv)  The sophistication of the offence is always relevant. This will include the degree of planning and whether deceit is practiced to achieve the objective;

(v)  Where the offence is committed by or on behalf of an organized criminal syndicate, that is an aggravating fact;

(vi)  It is relevant to take into account whether there is one transaction or many and the length of time over which the offence was committed;

(vii)  As in the case of Secretary for Justice v Herzberg, it will be an aggravating feature where the offender continues to launder funds after he has discovered as a fact that the funds are the proceeds of an offence or after he has discovered the nature of an offence which is serious; and

(viii)  The sentencing court should have regard to the role of the offender and the acts performed by him. In this regard, the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds. In the case of a person down the chain, the Court will wish to have regard to whether a benefit has been received and if so the nature and size of the benefit. But within the category of persons down the chain there will be gradations of culpability. So for example the drug addict or petty crook who is paid a small sum to open an account and hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime is much less culpable than an offender of a different sort not “used” in that way.

45.Phone deception case is more serious than a common street deception case and the Court should adopt a higher starting point in sentencing for deterrence.  The Court of Appeal in HKSAR v Hung Yung Chun [2011] 2 HKLRD 174 at para 182 held that the starting point for the case should be 4 years’ imprisonment.

46.There is nothing to suggest that D2 participated in the telephone deception ie the 3^rd Charge.  The prosecution evidence was insufficient to show that D2 knew the details of the deception although admittedly he must have known the money was obtained unlawfully.  No international dimension was involved.  Save and except knowing Male C was involved, D2 would not know the details of the deception or who [else] was involved and thus it was not suggested that the offence was committed by or on behalf of an organized criminal syndicate.  D2 was asked to collect money from Male C (not even from the victim direct).  The amount of money laundered is not the be-all and end-all of a case but is a significant feature.  The money involved in the present case was $45,000.  It was too harsh to apply a starting point of 4 years: HKSAR v Cen Huakuo [2015] 2 HKLRD 951.  A starting point of 3 years involving the amount of $50,000 in that case was adopted.

47.Ms Lam submitted on behalf of D2 a total of 13 mitigation letters written in Chinese by respectively (1)  D2 himself; (2)  his mother; (3)  his younger sister; (4)  his maternal grandfather; (5)  his maternal uncle; (6)  his maternal uncle-in-law; (7)  another maternal uncle-in-law; (8)  his maternal younger aunt; (9)  a family friend; (10)  his employer; (11)  a friend; (12)  a secondary-school mate cum good friend; and (13)  another friend.  The contents are generally that D2 has determined to change his ways and start afresh; that he is a gentle and helpful person who was respectful to elders and possessed good work ethics. The letter writers ask for a lenient sentence for D2 so he may become a useful member of society sooner.

48.Upon enquiry by the court about the topic of joint enterprise, Ms Lam submitted that the role played by D2 was passive and minimal, and he was not the ringleader.

Sentence

49.I have had regard not only to the authorities cited by Ms Lam, but also two other authorities of the Court of Appeal, namely HKSAR v Lin Zong Yue (official English translation), CACC 141/2014, and HKSAR v Chan Ho Kit (transliteration), CAAR 1/2024, [2024] HKCA 409, Chinese Reasons for Judgment.

50.In the present case, D2 knew or had reasonable grounds to believe that the dummy cash he dealt with (by implication, the $45,000 he attempted to deal with)  originated (unlawfully)  from the telephone deception: Re-re-amended Summary of Facts para 23.  So, he must have had at least some basic idea of the kind of evil or harm that was designed and exercised against the victim whom D2 would have witnessed and identified as a senior citizen at the scene of transfer of the dummy cash to Male C with whom D2 collaborated.

51.Therefore, although this case lacks one particular aggravating feature present in Cen Huakuo (where the applicant came from the Mainland to commit crime here), I am of the view that the 3 years starting point adopted by the Court of Appeal on appeal for one charge of conspiracy to commit money laundering is still applicable to the present case.

52.For the avoidance of doubt, the 3 years starting point I have adopted already has the element of joint enterprise factored into the assessment.

53.D2 pleaded guilty to the offence in good time and therefore enjoys the customary 1/3 discount on sentence.   As the applicant in Cen Huakuo (see para 24 thereof), D2 cannot expect leniency from the court simply because he has no criminal record.  In this type of case, the court would be slow to grant extra sentencing discount to a defendant with a previous clear record.

54.There are no other mitigating factors of weight to justify any further sentence reduction.

55.Pursuant to section 27(2)  of the Organized and Serious Crimes Ordinance, Cap 455, the prosecution has sought to furnish information to the court relating to the prevalence of the offence subject of Charge 4 (sic); and the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of the said offence (sic).

56.The information came in the form of a witness statement dated 28 October 2024 under the hand of CIP Cheng Sze Wai relating specifically to telephone deception cases rather than to the offence subject of Charge 4.

57.From the table drawn up in para 21 of the statement, it can be seen that the number of telephone deception cases with monetary loss went from 2,846 in 2023 to 6,193 in 2024 (up to September), with the corresponding accumulated loss rising from $1,102.80M to $2,220.80M.

58.I am satisfied that from these figures, telephone deception cases were and are indeed prevalent and the financial harm caused to the community by recent occurrences was and is indeed substantial.

59.Although the offence in question here is “attempt to commit money laundering” and not “fraud”, I take comfort from what fell from the Court of Appeal (D Pang J, as he then was, giving the judgment of the Court)  in Lin Zong Yue (a case of money laundering relating to telephone deception), at para 16:

“… As regards whether or not the sentence should be enhanced, we respectfully adopt another observation made in Cen Huakuo, namely that the court “may … take into account the overall circumstances of the case in so far as they are related to the defendant’s culpability”. This means that the applicant’s acts were after all an important part of the phone scams, and at the material time phone deception was indeed rampant and caused great harm to the community. Therefore, it is appropriate to enhance the sentence in the present case pursuant to the Organized and Serious Crimes Ordinance, as was the case in Cen Huakuo.” (footnotes omitted)

60.Because of the foregoing paragraph, I feel able to enhance the sentence of D2 pursuant to section 27(11)  of Cap 455.

61.In exercising that power, I deem it appropriate to enhance D2’s sentence after plea, by an extent of 1/3, following the authorities that have been referred to either by counsel or myself.

62.I am satisfied that the final sentence thus arrived at is not excessive in the circumstances of the offence and the offender.

(D2, please stand)

63.For Charge 4, D2 is sentenced to 32 months’ imprisonment.