HKSAR v. Summerson Alexander Thomas

DCCC 1257/2023

[2024] HKDC 2139

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1257 OF 2023

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REASONS FOR SENTENCE

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1.The defendant, Mr Alexander Thomas Summerson, has pleaded guilty to a single charge of fraud, contrary to Section 16A of the Theft Ordinance.

2.The particulars of that offence show that the offence took place between 2 June 2022 and 18 February 2023, those dates being inclusive. The allegation being that by deceit the defendant made false representations to Mr Li Cheung-kwong.  He would help sell seven paintings owned by that Mr Li, and that Mr Li would have to settle various fees to facilitate the sale of the said paintings.  This was done with an intent to defraud.  By doing this, he induced Mr Li to commit a series of acts, namely to pay to him, Mr Summerson, a total of HK$3,855,000 resulting in benefit to Mr Summerson and a risk of prejudice to Mr Li.

3.The defendant has pleaded guilty to that.  He has agreed a Summary of Facts which set out the rather unique set of circumstances in which this offence has come about.

4.Mr Li, who is referred to in the particulars of the offence as a gentleman who at the time when these Facts were drafted was 52 years old.  He is an art collector and owned a collection of seven paintings which in the Facts are valued at approximately HK$1.6 million and referred to as “the paintings”.  He was a company director between 2012 and 2015.  He bought those paintings at an art gallery called “Art Futures Group” and stored them there. In 2019, this Art Futures Group was acquired by another company known as Macey and Son, which is a company in which the defendant had been involved.

5.On 2 June 2022, the victim, Mr Li, referred to as PW1, received a call from the defendant and he offered to arrange for the paintings to be auctioned, it is said, in South Korea.  The defendant and PW1 met together and the defendant indicated he would help PW1 sell the paintings but required a sum of $150,000 to be paid as registration fees for the auction.  Money was then transferred to the defendant’s HSBC account, ostensibly for the payment of registration fees.  This initial transfer took place on 10 June 2022.  From that point on, the Facts say the defendant claimed multiple times that the auction progress had been hindered and gave various excuses to demand more fees from PW1, such as administration fees, legal expenses and accounting fees.  The defendant would also reassure PW1 those fees would be refundable should the transaction become unsuccessful should there be no sale.  An example of that is given on 25 November 2022.

6.The defendant continued to receive various sums from PW1 following the latest discussions.  Around 8 months later on 16 February 2023, PW1 met the defendant in Central for the second time for some discussions.  The defendant once again asked PW1 for money.  PW1 then found the matter suspicious, discussed the matter with family and the case was reported to police.

7.The Facts show that between 10 June 2022 and 17 February 2023, PW1 transferred a total of $3.815 million to the defendant’s HSBC account by way of 75 bank transfers for various purposes.  The defendant had told PW1 on at least six occasions, which are set out in the Facts, that the paintings had been successfully sold with a higher completion price each time.  PW1 never received any of the purchase price thereof already received from PW1.  The defendant was accordingly arrested on 9 March 2023.

8.Financial analysis was conducted on the defendant’s HSBC account which was set up on 15 March 2018.  He is the sole holder and signatory of that account, declared to be a Senior Art Broker at Macey and Sons.

9.Bank records between 14 May 2022 and 1 March 2023 reveal a total of HK$5.22 million deposited into his account, including all the transfers made by PW1.  Out of that $5.22 million, which includes the transfers from PW1, 35.85 per cent of the funds were withdrawn by way of ATM withdrawals whereas around 28.68 per cent of which was spent on hotels, leisure and recreational items.  It is said that none of the items appear to be connected with any fees to solicitors, accountants or to overseas authorities.

10.Defendant now admits the offence by these Facts.

11.I turn now to the defendant’s background.  I have obtained a background report on him.  I will deal with that later.  The defendant is now, according to his report, aged 42.  He has convictions for what would be offences subsequent to this case.  They are firstly, on 4 July 2023, possession of dangerous drugs where he received 5 months' imprisonment, possession of a dangerous drug where he received 8 months' imprisonment and possession of pipe equipment fit and intended for smoking where he received a total of a further 3 months' imprisonment.  The overall total sentence appears to be one of 10 months' imprisonment which has been served as of today.

12.The defendant has provided mitigation to the court.  It would read as follows.  He is 41 years old, technically a single man in Hong Kong although he does have a relationship in this city and a son by way of that relationship. He was born in the United Kingdom and received education up to secondary school level.  At that time, around about 1999, the defendant joined the United Kingdom military, United Kingdom land forces, and served with the Royal Marines.  Following his discharge, the defendant entered the workplace as a salesman in the United Kingdom and later in Hong Kong, finally moving to Hong Kong in 2010.

13.I am persuaded from information provided to me the defendant had a clear record in the United Kingdom.  The defendant in Hong Kong was initially employed in the financial sector as a broker and then took up employment as an agent to clients choosing to invest in items such as commodities, art and imported whiskies.  As I have indicated earlier, the defendant has a partner in Hong Kong residing together on Lamma Island with an 8-year-old son.  The defendant is in locus parentis to that son.  It appears in mid-2023 was when the defendant was arrested and charged with the offence of possession of a dangerous drug and on 4 July 2023 the defendant was sentenced to the sentence of imprisonment that I have already set out.  Mitigation says that he served part of that sentence in a Drug Addiction Centre.  It would be fair to conclude the defendant at this stage is no longer a drug dependant.

14.The mitigation says the defendant concedes he was working at Macey and Sons and was able through his contact there to contact PW1 proposing to arrange the sale of the paintings.  The mitigation puts forward that when the defendant offered his services to PW1, the intention was to create a bona fide sale of PW1’s artwork in a manner that resulted in profit not only to PW1 but also to the defendant, but it would appear over time the defendant got in way over his head in relation to this transaction.

15.I make some observations on the mitigation that has been put forward at this stage.  The defendant is a man of 42 years old and committed this offence between 2022 and 2023.  It is unusual in the experience of this court for a man to start a life of crime at this age.  It is an unusual factor in this case. It would primarily appear to me the defendant was one of the people who have been severely affected by the pandemic in Hong Kong when most commercial activity was brought to a halt, he was left with the responsibility for himself and his family and he has obviously taken what was the easier way out by defrauding PW1 of his money.  However, it is a mitigating factor that the defendant is not an old man but he is not a young man and it is not an age when people usually start to commit criminal offences.  He maintained a clear record up to that point, has served his country in the past and has worked, clearly hard, and gained significant support within the community with which he lives in Lamma Island.

16.The background report which I obtained on the defendant is generally favourable to him.  The conclusion says that he has expressed verbal remorse for the present offence and regret for hurting the victim and his family.  He has told the officer, he spent all the money he took.  It is said that the accused has learned a hard lesson from his mistakes including his previous drug abuse and the present fraud case and showed improvement towards his attitude towards life.  The defendant expressed verbal remorse for causing distress to the victim and his family.  It would appear he is not in a position to make any recompense for the money that has been taken.

17.I turn to the approach to sentencing in this case.  The circumstances in which the defendant became involved with the victim, PW1 in this case, clearly involved a relationship of trust between them and the court must have regard to the general sentencing in respect of offences that involve breach of trust. 

18.I first note, before I do that, that there is no general or overall tariff for fraud offences in Hong Kong.  The circumstances in which a fraud can be committed are so wide and so broad that no actual tariff or guideline for sentence can be given to the courts because of that.  As I said already, I already observed in relation to this case, this is an unusual fraud and came about in an unusual way.  However, it is observed and clearly conceded in mitigation that this does involve some element of a breach of trust.  Offences of breach of trust, there are guidelines for that where they involve a theft, particularly if we refer to the case of HKSAR v Cheung Mee Kiu CACC 99/2006 which sets out a general approach to the court based on the amount of money involved in the particular offence.

19.In Cheung Mee Kiu, having regard to future cases, it is said that where the amount of money involved in the theft offence is between $3 million to 15 million then the starting point for sentence should range between 5 to 9 years' imprisonment.  For the band below that of $1 million to 3 million, the starting point would be 3 to 4 years' imprisonment.  The defendant’s case is at the lower part of the $3 million to $15 million band, being around $3.8 million.  I made one observation in relation to that and that is these figures relate back to, I believe it is 2006 and certainly there has been some substantial inflation in relation to the currency since that point. 

20.As far as the defendant’s individual circumstances are concerned, I must bear in mind that a starting point for sentence involving a breach of trust in respect to the offence he incurred can possibly lead to a starting point for sentence in relation to him in the region of 5 years' imprisonment and that must to a certain extent guide the figure that I choose for a starting point for sentence for the defendant.

21.When sentencing the defendant there are three factors I would take into account.  Firstly, that he has pleaded guilty.  Secondly, he has shown remorse.  Also, I bear it in mind that he has indicated that he would plead guilty to these matters from an early stage.  I also note that in relation to his criminal record that he has committed these offences before the actual conviction in relation to the drug offences so at the time when these offences were committed technically the defendant was of clear record.  So he is a man of clear record, he is a man of 42 years old, he is a man with family responsibilities and a young child of the age of eight to which he is the father and has continuing responsibilities in that area.  Any sentence of imprisonment I impose will affect that family and will, to a certain extent, interfere with the right to family life of both his co-habitant and also his child.  I must bear that in mind when determining the appropriate starting point for sentence.

22.Having regard to all these factors I am going to take a starting point for sentence at 54 months' imprisonment.  That is the overall starting point that I will bear.  Bearing in mind the defendant at the time of the offence was a person of clear record and bearing in mind the other personal factors, I shall reduce that by 6 months to 48 months' imprisonment.  From that figure I will then deduct a total of one-third, which is a further 16 months, which leads to a final sentence of imprisonment of 32 months' imprisonment for this offence.  My final sentence is one of 32 months' imprisonment.