HKSAR v. Lo Kim Ting

DCCC 464/2022 & DCCC 109/2023

(Consolidated)

[2026] HKDC 1027

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 464 OF 2022 & 109 OF 2023

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REASONS FOR SENTENCE

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1.This is the consolidated trial of DCCC 464/2022 (Charge 3 to 6) and DCCC 109/2023 (Charge 1 & 2).  The defendant (D) was convicted after trial of 6 counts of “Fraud”, contrary to section 16A of the Theft Ordinance, Cap.210.

Facts

2.This is a straightforward case of fraud. Instead of a case of unfortunate business failure, the case is fundamentally about dishonest inducement and misuse of trust.  

3.D held himself out as operating legitimate businesses and induced others to invest substantial sums.  However, D’s ventures were sustained not by genuine profit, but by investor funds, without proper books or transparent accounts. Promised returns never materialized, his explanations shifted when challenged, and the investors were left without clarity nor repayment.  Viewed against the commercial reality and the documentary record, this could not be a case of business failure, but a deliberate course of deceit.

4.The funds from the respective investors were transferred to D’s control and dissipated by him.  Promised returns did not materialize.  When questioned, explanations were given to fob them off.  Further assurances followed and eventually D could not be reached.  

Charge 1

5.Between May 2015 and October 2015, D by false representations relating to the acquisition of 49% shareholding, working capital budget and reserve for stock replenishment, had deceived Wong Sing Yue Mark to invest in Chief International Group Limited “Chi Mei” for a total of $4,299,500.  Mark managed to obtain the dealership of Japanese Pork (worth $500,000) and shareholding of Akasaka (worth $1.2 million) from Tenny after Tenny had failed to contact D to complete the transaction.  His net loss was about $2.6 million. 

Charge 2

6.Between July 2015 and August 2016, D by false representations that he had obtained the general dealership of Spanish COVAP iberico ham and would transfer it to Chi Yat in due course, presenting himself as someone with solid background with a very extensive sale network, had deceived Choi Kin Sang Wallace to invest in Chief International (Hong Kong) Limited “Chi Yat” for a sum of $500,000 in October 2015 by cheque and the cheque was cashed in November 2015.  Apart from that, a number of Wallace’s invoices were unsettled.

Charge 3 to 5

7.Between February 2018 and November 2018, D had by various false representations deceived Li Yim Ha Sherry to invest $210,362 for a booth of Food Expo 2018 that did not exist, to contribute $18,320 towards the registration of Chief International Management Limited “Chi Fung” while the fee was only $5,880 and to invest $2 million in Chi Fung for business that D had no intention to proceed with.  Sherry only received $10,000 back from D.  Sherry’s net loss was about $2.2 million. 

Charge 6

8.On or about 9 June 2018, D by false representation had deceived Sherry and her husband Dickson Cheung, to induce Dickson to reimburse him $20,600 for metaphysics service of Mr Yeo Tin-ming that was never engaged.

Background/Mitigation

9.D aged 34, clear record, single and resides with his family.  D completed his matriculation in UK, thereafter he enrolled a management degree course at Birkbeck, University of London in 2012.  He returned to Hong Kong in 2014, in the final year of the degree course.  The university agreed to maintain his place in the degree course for 6 years, i.e. he had to complete it by 2020.  However, D did not return to complete the degree course.

10.D is an overseas education consultant.  Apart from involving himself in education matters, D initiated to give assistance to Yan Chai Volleyball Club.  Since 2024, D offered transport services for secondary school students to take part in the training sessions on a voluntary basis.  Family members and friends show their support by submitting mitigation letters for D, some of them are in court today.  D also submits a mitigation letter to show his regret and describes the stress he has suffered since 2019.

11.The present case is not strictly a breach of trust case.  The defence refers to the Ng Kwok Wing sentencing guidelines as a yardstick, and submits it would attract a global starting point of 4 years 9 months.  The court is also urged to consider discretionary discount relating to the stress suffered by D due to delay, his good character, and voluntary work taken up.

Sentence

12.A person commits the offence of fraud is liable on conviction upon indictment to imprisonment for 14 years.

13.In HKSAR v Ho Ka Keung (No 2) [2009] 1 HKC 88, CACC 196/2007, the Court of Appeal explained the relevant factors in determining the sentence for commercial fraud cases: -

“11. ... It is well established that commercial fraudswill attract, other than in exceptional circumstances, an immediate custodial sentence, even for a first offender. Obviously the length of that sentence will be determined by reference to factors such as, but not exclusively, the nature of the fraud itself; the duration of the fraud; its sophistication; the role played by the convicted person; the effect it may have on the marketplace; whether there are cross-border or international implications; and the nature and extent of the risk to the victim’s proprietary interests, as well as, albeit to a minimal extent, the extent of any loss actually sustained.”

14.In HKSAR v Ng Tik Ki Chaneki CACC68/2011, a case about investment fraud, the applicant posed himself to be a surveyor and a man of substance has defrauded a woman and her daughter over a period of 16 month for substantial sums of money in the range of $1 to $1.5 million. Mr. Justice Hartmann JA said:

“51. Criminal frauds take on an almost infinite variety of shapes, seeking to inflict all manner of harm. Often, as in the present case, they involve the exploitation of the victim’s trust. For such reasons, in respect of crimes of fraud, there is no sentencing ‘tariff’ as such.

52. That being said, in Secretary for Justice v Dank & Another [2008] 4 HKC 483, this Court said that in respect of sentencing in frauds involving breach of trust, of which this is one, the guidelines are those referred to in R v Clark [1998] 2 Cr App 137 as adopted in Hong Kong in HKSAR v Cheung Mee Kiu [2006] 4 HKLRD 776.

53. In HKSAR v Ng Kwok Wing [2008] 4 HKLRD 1017, the guidelines in HKSAR v Cheung Mee Kiu were adjusted. In cases involving a loss of between $1 million and $3 million, the sentence should be three to five years’ imprisonment.

54. In the present case, on a strict adherence to the guidelines, this would suggest a sentence of about three years and six months’ imprisonment. But guidelines are intended to assist the court in arriving at the correct sentence; they do not purport to identify the correct sentence itself: see R v Millberry [2003] 1 WLR 546, 556 per Lord Woolf CJ.”

15.The defence refers to HKSAR v Wong On Ni CACC 164/2020, the applicant in this case claimed to engage in trading luxury goods, enticing victims to supply her with luxury goods for sale, or to invest in a scheme to buy luxury goods from suppliers with the applicant undertaking to resell them for a profit and return the proceeds of sale.  The sentencing judge treated the circumstances of the case as not strictly involving a “breach of trust”, although she considered there was some degree of trust from the victims.  The judge referred to the sentencing guidelines in Cheung Mee Kiu and from there considered a wide range of factors in deciding the applicant’s overall culpability.  After passing individual sentences on each count, the judge applied the totality principle and ordered a partly concurrent sentence.  Hon Zervos JA held that the judge’s approach in sentencing was correct and upheld the sentence.

16.The defence submits that the present case is not a “strictly” breach of trust case.  The criminality involved should be lower than those cases of the Barrick type of breach of trust.  In the present case, Mark and Sherry did not have any experience in business before they became a partner to D’s business ventures while Wallace did not have experience in food products.  D held himself out as an experienced food wholesaler and induced the victims (Mark, Wallace and Sherry) to take up shares of his companies, to join his business ventures as a partner.  D had used that privileged and trusted position to defraud them. The three trusted D’s business decision and invested in the capacity of a business partner as requested by D. 

17.I am of the view that as in Ng Tik Ki Chaneki and Wong On Ni, be it not a strictly breach of trust case, the present case involves the exploitation of the victim’s trust.  For Charge 1, in a period of about 4 months, D by false representations had deceived Mark to invest about $4.3 million in Chi Mei and Mark suffered a net loss of about $2.6 million.  Despite his age, clear record and voluntary work taken, I consider the appropriate starting point is 4 years’ imprisonment.

18.For Charge 2, in a period of about 5 months, D by false representations had deceived Wallace to invest $500,000 in Chi Yat.  I consider the appropriate starting point is 2 years’ imprisonment.

19.D was arrested for Charge 1 on 28 January 2016 and was released on police bail until 14 June 2016.  He committed Charge 3 to 6 after he has been arrested for Charge 1. Though he was released unconditionally by the police since 14 June 2016, the case was still under investigation.

20.For Charge 3, in a period of about 4 months, D by false representations had deceived Sherry to invest about $ 210,000 in a booth of Food Expo.  Sherry managed to receive $10,000 back from D.  I consider the appropriate starting point is 1.5 years’ imprisonment.

21.For Charge 4, in May 2018, D by false representation had deceived Sherry to pay $18,320 for the incorporation and secretarial services of Chi Fung which did not have any substantive operation.  I consider the appropriate starting point is 9 months’ imprisonment.

22.For Charge 5, in a period of about 2 months, D by false representation had deceived Sherry to pay $2 million for the operation of Chi Fung which did not have any substantive operation after the incorporation of Chi Fung.  I consider the appropriate starting point is 4 years’ imprisonment.

23.For Charge 6, in June 2018, D by false representation to Sherry and Dickson had deceived Dickson to pay $20,600 for metaphysics services of Mr. Yeo that was not engaged.  D had engaged another metaphysician instead.  False WhatsApp messages pretended to be sent out by Mr Yeo was created.  This count, however, did not relate to business operation, D was not acting in any professional capacity.  I consider the appropriate starting point is 7 months’ imprisonment.

24.A cheque in the sum of $115,000 was issued to Dickson but Dickson had returned the $115,000 by cheque to D according to their prior agreed arrangement in the same month (my finding related to the two cheques is at para. 257 to 267 of the verdict).  Sherry only received $10,000 back from D.  

25.According to the guidelines in Cheung Mee Kiu as adjusted in Ng Kwok Wing, where the loss was between $3 million to $15 million, the sentence should be 5 to 10 years’ imprisonment.  Even not a “strictly” breach of trust case, from 2015 to 2018, D had deceived 4 victims beyond 7 million, the total net loss of all the victims in the present case was over $5.3 million, despite his age, clear record and voluntary work taken, I consider the overall starting point should not be lower than 5.5 years’ imprisonment.

· Delay

26.The defence refer to HKSAR v Chiu Chi Wing CACC 243/2012, in paragraph 37 the Court of Appeal refers to seven factors identified by Buss JA in Scook v The Queen [2008] 185 A Criminal Review 164 at 176:

“The seven factors identified by Buss JA, which were stated not to be intended to be exhaustive or inflexible, were:

“ First, delay is not, of itself, a mitigating factor.

Secondly, delay will not ordinarily be a mitigating factor if it has been caused by difficulties in detecting, investigating or proving the offences committed by the offender, and the period of the delay is reasonable in the circumstances.

Thirdly, delay will not ordinarily be a mitigating factor if it is caused by the offender’s obstruction or lack of co-operation with the State, prosecuting authorities or investigatory bodies, but the offender’s reliance on his or her legal rights is not obstruction or lack of co-operation for this purpose.

Fourthly, delay will not ordinarily be a mitigating factor if it results from the normal operation of the criminal justice system, including delay as a result of the offender or a co-offender exercising his or her rights; for example, interlocutory appeals and other interlocutory processes.

Fifthly, delay may be conducive to the emergence of mitigating factors; for example, if, during the period of delay, the offender has made progress towards rehabilitation or other circumstances favourable to him or her have emerged.

Sixthly, delay (not being delay of the kind described in the second, third and fourth guiding principles) will ordinarily be a mitigating factor if:

(a) the delay has resulted in significant stress for the offender or left him or her, to a significant degree, in ‘uncertain suspense’; or

(b) during the period of delay the offender has adopted a reasonable expectation that he or she would not be charged, or a pending prosecution would not proceed, and the offender has ordered his or her affairs on the faith of that expectation.

Seventhly, delay caused by dilatory or neglectful conduct by the State, prosecuting authorities or investigatory bodies may result in a discount of the sentence that would otherwise be imposed on the offender, if the court thinks it an appropriate means of marking its disapproval of the conduct in question.”

27.The defence concedes that the delay in the present case was a result of the normal operation of the criminal system and is not ordinarily be a mitigating factor. However, the case spanned over 10 years, significant stress has loomed over D.    

28.The case is not complicated.  Mark made his first witness statement in December 2015 and D was arrested in January 2016 (Charge 1).  Sherry and Dickson made a report to the Police on 16 November 2018.  D was first arrested for obtaining property by deception in relation to Charge 3 to 6 on 28 January 2019.  Wallace made a report to the Police on 30 April 2019 (Charge 2).  D was re-arrested for fraud in relation to Charge 3 to 6 on 20 April 2022.  

29.D was brought before the Court on 4 May 2022 in relation to Charges 3 to 6 (DCCC 464/2022) and brought before the Court on 6 January 2023 in relation to Charge 1 & 2 (DCCC 109/2023).  Taking into account of the COVID 19 pandemic, I do not consider there to be any undue delay in DCCC 464/2022 and Charge 2 of DCCC109/2023. However, D was arrested for Charge 1 in January 2016, but this Charge was not brought to Court until 7 years later in January 2023. 

30.Charge 3 to 6, originally DCCC 464/2022, was set down on 18 August 2022 for trial on 7 June 2023 with 6 days reserved.  The case was brought up on 23 February 2023 for Prosecution’s application of consolidation with Charge 1 and 2, originally DCCC 109/2023 and adjourned to 11 April 2023 for argument on consolidation. Eventually, the two cases were consolidated and the original trial dates for DCCC 464/2022 were vacated, the consolidated trial was refixed to 13 June 2024 and was further adjourned to 17 July 2025 due to various defence’s applications.

31.I consider there is considerable undue delay regarding Charge 1, should this count be dealt with more efficiently, and all the charges be brought to court in one go in 2022, the subsequent consolidation could have been avoided, the trial might well have been concluded in 2023.   For this reason, I allow 8 months reduction on Charge 1 (reduced to 40 months) and the overall sentence (reduced to 58 months).  I do not consider there to be any further mitigating factor. 

Order