HKSAR v. Chan Wing Chuen

DCCC 6/2025

[2026] HKDC 767

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 6 OF 2025

________________________

________________________

________________________

REASONS FOR SENTENCE

________________________

1.There are 6 defendants and 4 charges altogether in these proceedings. 

2.The charges laid against the defendants are as follows:

Charge 1: Conspiracy to defraud, which is preferred against all 6 defendants;

Charge 2: Conspiracy to defraud, which is preferred against D6 only;

Charge 3: Conspiracy to defraud, which is preferred against D3 only; and

Charge 4: Dealing with property known or believed to represent proceeds of an indictable offence, which is preferred against D1 only.

3.Among the 6 defendants, D2, D3, D4, D5 and D6 pleaded guilty to Charge 1; and furthermore, D6 pleaded guilty to Charge 2, and D3 pleaded guilty to Charge 3, and their sentencing was adjourned (to 29^th April, 2026).  D1 pleaded not guilty to Charges 1 and 4, and his trial has been heard by this court separately.

4.What this court has to do now (on 29^th April, 2026)  is to pass sentences on D2 to D6 and to give the reasons thereof.

5.The particulars of Charge 1 read: D1, D2, D3, D4, D5 and D6, between the 21^st day of April 2023 and the 20th day of June 2023, both dates inclusive, in Hong Kong, conspired together and with a person known as “Sing” or “Chow Sing Sing” and also other persons unknown, to defraud such corporations, companies and shops as might be induced to accept payment by way of debit cards in the sales of goods by dishonestly and falsely representing that the persons presenting the debit cards were the genuine cardholders of those debit cards, thereby inducing the aforesaid corporations, companies and shops to accept the said debit cards to be used for payment in the purchase of goods from the said shops.

6.As the facts would reveal, the gist of the prosecution’s case, as far as Charge 1 is concerned, is that the group of six reached a conspiracy agreement with a person nicknamed Sing or Chow Sing Sing and some other persons unknown to use some debit cards issued by a few Mainland banks, yet those debit cards were not belonging to any member of the conspiratorial group, to settle payments for purchases of jewellery and iPhones at different retail shops.  As those debit cards were never registered under the name of any member of the conspiratorial group, and did not belong to any member of the conspiratorial group in any event, no one other than the cards’ true and genuine owners could use them to make any purchase.

7.The particulars of Charges 2 and 3 are similar to those of Charge 1.

8.Insofar as Charge 2 is concerned, the prosecution’s case is that D6, between the 14^th day of June 2023 and the 20th day of June 2023, both dates inclusive, D6 conspired with a person known as Sing to defraud shops by an identical method, namely by using debit card or cards not belonging to D6 or Sing to settle payments for purchases of goods at some retail shops. One can easily notice that the period for which the conspiracy lasted has shortened, and the number of co-conspirators has reduced.

9.Insofar as Charge 3 is concerned, the prosecution’s case is that D3, between the 11th day of June 2023 and the 20th day of June 2023, both dates inclusive, D3 conspired with a person known as Sing to defraud shops by an identical method, namely by using debit card or cards not belonging to D3 or Sing to settle payments for purchases of goods at some retail shops. One can again easily notice that the period for which the conspiracy lasted has shortened, and the number of co-conspirators has reduced when compared to Charge 1.

10.Charge 4 only concerns D1. This court need not deal with it now.

Summary of Facts

11.The summary of facts read out to D2 to D6 in open court consists of 12 pages. For present purposes, I would only succinctly set out the prosecution’s case against the five of them.

Charge 2 (against D6)

12.According to the sales records of a shop called Wan’s Diamond, which was situated in Tsim Sha Tsui, on 16^th June 2023, D6 went to the shop to buy gold bars and pellets weighing 1580.16 grammes in total. The prices of those gold bars and pellets were HK$846,156 in total (unless otherwise stated, all currencies mentioned in this piece of writing are Hong Kong Dollars). D6 paid the purchase price by using a Mainland UnionPay debit card. This card is denoted as Card 1 in these proceedings.

Charge 3 (against D3)

13.Also, according to the sales records of Wan’s Diamond, on 18^th June 2023 (i.e. 2 days after the aforesaid transaction), D3 went to the shop to buy a number of gold bars weighing 40 taels in total. The price of those gold bars was $802,160. D3 paid the purchase price by way of a Mainland UnionPay debit card. 

14.Such debit card was different from the one used by D6 on the prior occasion, and it is denoted as Card 2 in these proceedings.

15.D3 only collected those gold bars the following day, which was 19^th June 2023.

Charge 1 (against D2 to D6)

Tsim Sha Tsui Apple Store

16.On 20th June 2023, which was 2 days after D3’s visit to Wan’s Diamond, D3 and D4 went to the Apple Store situated in Tsim Sha Tsui and purchased 45 iPhones (of the model iPhone 14 Pro Max 256 GB).  The total price for those 45 iPhones was $458,955 ($10,199/each). D3 and D4 settled payment by way of 3 different debit cards issued by Mainland banks. Those 3 debit cards were not the same as those two used at Wan’s Diamond, and were denoted as Card 3, Card 4 and Card 5 respectively in these proceedings.

17.D3 and D4 made their purchases separately, and they left the Apple Store at different time.

18.At about 12 noon, a team of police officers were conducting  observations outside the Apple Store in Tsim Sha Tsui.  They saw that, right after D3 had finished his purchase, he walked out of the Apple Store and approached a private car with the registration number VK 3866, which was at that time parked on the roadside at Canton Road. They saw D3 putting two bags of items into the boot of the car.

19.At about 12:38 p.m., right after D4 had bought iPhones from the Apple Store in Tsim Sha Tsui, police saw D4 walking out from the Apple Store and approaching the same private car. D4 opened a passenger door and put two bags of items into the car.

20.At that time D2 and D3 were seated at the driver seat and a rear passenger seat in the car respectively.

21.Soon after D4 had put those two bags into the car, police officers put D2, D3 and D4 under control. 

22.Police officers searched the car and recovered the following from the car:

(i)  the 45 newly bought iPhones;

(ii)  some receipts issued by the Apple Store;

(iii)  51 debit cards issued by Mainland banks, including Card 3;

(iv)  2 mobile phones; and

(v)  a notebook containing handwritten records of 19 bank card numbers, passwords, cardholders’ names and personal particulars.

23.Police officers also searched D3 and D4. They found Card 4 and a Wan’s Diamond receipt on the body of D3; and Card 5 on the body of D4 or among her personal items.

24.Police arrested and cautioned D2, D3 and D4.

25.At the material time, the car VK 3886 was registered under the name of D2.

Shatin Apple Store

26.On the other hand, on the same day also around 12 noon, D6 went to the Apple Store situated in Shatin and bought 6 iPhones, also of the model iPhone 14 Pro Max 256 GB. The total price of those 6 iPhones was $61,194. D6 used a debit card issued by a Mainland bank to settle payment. Such debit card was never used on prior occasions by anyone, and is denoted as Card 6 in these proceedings.

27.A short while after D6 had left the Apple Store in Shatin, police officers found D5 and D6 together on a podium of New Town Plaza, which was near where the Apple Store was. Police officers intercepted them and conducted body searches on them. Among the items carried by D6, police officers found:

(i)  the 6 newly bought iPhones;

(ii)  an Apple Store receipt;

(iii)  3 debit cards issued by Mainland banks, including Card 6; and

(iv)  9 receipts that were issued respectively by Luk Fuk Jewellery, Chow Sang Sang Jewellery and 3DG Jewellery with the earliest one dated 21^st April 2023.

28.None of the defendants was the cardholder of the debit cards seized or used by D3, D4 and D6 for purchasing goods.

29.Representatives from Wan’s Diamond and Apple Stores stated that, should they know that the debit cards used by D3, D4 and D6 for payments were not cards belonging to them, they would not have proceeded with, or completed the transactions in question. They would not have delivered any goods ordered, either.

30.Also on the same day, some other teams of police officers raided two units situated within Tung Nam Factory Building at No. 40, Ma Tau Kok Road, To Kwa Wan.

31.The first unit was on the eighth floor of the building, and was given the designation “TP1” by the police. The second unit was on the first floor of the building, and was given the designation “TP2” by the police.

32.Inside TP1, police located and arrested D1.

33.Also, police conducted a search at TP1 and found, amongst other things, the following items:

(i)  2 point-of-sales machines;

(ii)  2 boxes of company registration documents;

(iii)  2 banknote counting machines;

(iv)  6 mobile phones;

(v)  4 local credit cards (none belonging to any of the defendants)  on a desk; and

(vi)  5 pieces of paper with some handwritings relating to (i)  the purchase prices of mobile phones and gold pellets; (ii)  the names or nicknames of D2, D3, D4, D5 and D6 with purchase prices against each of their names or nicknames; and (iii)  the information about some Mainland debit cards including the card particulars of Card 3.

34.Police also gained entry into TP2 and conducted a search therein. Police found, among other things, the following items:

(i)  3 Mainland debit cards issued by the Agricultural Bank of China (none of those cards belonged to any of the defendants);

(ii)  7 invoices issued by jewellery shops such as Emperor, 3DG Jewellery and Wan’s Diamond; and

(iii)  6 point-of-sales machines and some bank statements (including two statements relating to a bank account held under D2’s name).

35.In the entire police operation, police seized, among other things, a total of 62 Mainland debit cards from different locations, with the vast majority of them having been found in the private car VK 3886.

36.Police had conducted video-recorded interviews with D2 to D6.  Save and except D6, D2 to D5 all remained silent under caution. D6 did say something to the effect of admitting having purchased iPhones with a debit card not belonging to himself, but he refused to tell the police where or from whom he got that debit card.

37.Police had seized the mobile phones of D2 to D6 for the purposes of conducting data analyses and examinations.

38.The examinations had the following findings:

(i)  D2, D3, D4, D5, D6 and a person called Sing or Chow Sing Sing had a common WhatsApp chat group called “Sz”; that is to say, all of them were participants of that chat group.

(ii)  Such WhatsApp chat group was set up on 16^th June 2023.

(iii)  D2 was addressed by some other defendants as “Po Chi Lo” (報紙佬; Newspaper Man).

(iv)  Between 16^th and 20th June 2023, Sing would, on a daily basis, give instructions within the said chat group to others as to when, where and how to use various debit cards to purchase iPhones and gold items.

(v)  D3 to D6 had responses to those instructions given by Sing.

(vi)  The instructions given by Sing related to the use of 16 debit cards for the purchases of 458 iPhones of the model iPhone 14 Pro Max 256 GB; 20 iPhones of the model iPhone 14 Pro Max 521 GB; 18 iPhones of the model iPhone 14 Pro Max 1 TB; and 30 taels of gold pellets.

(vii)  With regard to the purchase of iPhones in Tsim Sha Tsui, Sing had told D2 that his car would be used for storage of those newly bought iPhones.

(viii)  Furthermore, Sing also mentioned that D2 would be the one to pass debit cards to others, and to collect the newly purchased items.

39.On the other hand, police had, among other things, the following findings after examining the mobile phones of D3 and D6:

(i)  Both D3 and D6 were participants of two WhatsApp chat groups having the same title “Gp”.

(ii)  Those two chat groups were created on two different days, namely 21^st April 2023 and 2^nd May 2023 respectively. For the sake of clarity, the one created on 21^st April 2023 is, for present purposes, denoted as the First Group, whereas the one created on 2^nd May 2023 is denoted as the Second Group.

(iii)  Insofar as the First Group is concerned, D3 and a person known as “Lok Chai” were the administrators, and participants included D6 and some persons unknown.

(iv)  The conversations in the First Group started on 21^st April 2023 and ended on 27^th April 2023.

(v)  In the First Group, Lok Chai had shared with others the search results he obtained from Google on a topic of “Legitimizing tainted money”. There, one of the methods mentioned was, insofar as phone deceptions were concerned, first of all to have victims’ money deposited into a bank card, and thereafter to get someone to use the bank card to make purchases at shops. It was stated that, by such process the tainted money could be legitimized and thereafter be transferred back to the criminal syndicate.

(vi)  The conversations in the Second Group started on 2^nd May 2023 and ended on 19^th June 2023. It was indeed a continuation of the conversations that took place in the First Group. In there, Lok Chai had told others, among other things, that they could start “working” as soon as some debit cards had been delivered to Hong Kong from Shenzhen.

40.Apart from the aforesaid, police also found in D6’s mobile phone that D6 had a private WhatsApp chatroom with Sing. Those conversations took place between 14^th and 20th June 2023. Among other things, Sing had given instructions to D6 on the use of no less than 29 debit cards to make purchases; and at some stage, D6 reported to Sing that he had purchased 78 iPhones as well as gold items worth about $3,571,874.

41.Likewise, police found in D3’s mobile phone that he also had a private WhatsApp chatroom with Sing. Those conversations took place between 11th and 20th June 2023. Among other things, Sing had given instructions to D3 on the use of no less than 37 debit cards to make purchases; and at some stage, D3 reported that he had purchased 108 iPhones and gold items worth about $6,303,011.

42.The Mainland banks that issued the debit cards seized by the police confirmed that none of the defendants were the cardholders, and stated that the defendants were not entitled to use those debit cards.

Background of the defendants and their pleas in mitigation

D2

43.D2 was 62 years old at the time of the offences, and is now 65.

44.He was born in Hong Kong, and received education up to secondary level. He is a divorcee. He has a son from his former marriage, but has not seen his son for long.  He is living with his sister and brother in a public housing unit. He is unemployed.

45.D2 has 17 criminal convictions. Among them, 9 related to theft or shoplifting (usually attracting an imprisonment term of a few weeks or months), 3 related to possession of dangerous drugs and one related to trafficking in a dangerous drug. Such conviction for trafficking in a dangerous drug was recorded in 2020 and was his last conviction before the current offences. On that occasion he was sentenced by the District Court to 4 years and 3 months' imprisonment.

46.Notwithstanding that he had those drug-related convictions, according to his counsel, D2 is not a drug addict and has no health issues.

47.Counsel for D2, Ms Yang, has referred no less than 13 sentencing authorities to this court. Much of her submission was focused on analysis of those sentencing authorities. Given the volume of those sentencing authorities, for present purposes, this court would not repeat every single case that has been referred to in Ms Yang's submission (indeed the same approach is applied to authorities referred to by other counsel). In the discussion below this court would only refer to those authorities that are considered to be of jurisprudential value to the present sentencing exercise.

48.Such being the case, Ms. Yang did emphasize that D2 was not the mastermind or ringleader in the syndicate. She also submitted that, according to her instructions, D2 committed the offence because of financial pressure, as he could not secure any job after his discharge from prison in June 2022.

D3

49.D3 was 24 years of age at the time of the offences. He is now 27. He received education up to secondary 4 level. He works as a kitchen assistant. His monthly income is about $20,000.

50.At the time of these offences D3 was single, yet he married D4 some time before these proceedings. They are now husband and wife.

51.D3 has a clear record.

52.Mr. Lee, counsel for D3, said that D3 committed these offences because of his poor judgment and inability to appreciate their serious legal consequences. Mr. Lee said D3 has had a deep reflection upon himself, and has now a genuine remorse. Mr. Lee asked this court to pass on D3 a lenient sentence, so as to allow D3 to reintegrate into the community and be re-united with his mother and wife.

D4

53.D4 was 24 years of age at the time of the offences. She is now 27.

54.D4 was a divorcee at the time of the offences. She explained in the mitigation letter she wrote to this court that she became upset when she was made aware of the fact that the partner of her ex-husband was pregnant, and it was then that she decided to fight for the custody of her son in the family court proceedings. She knew she could do so only if she had a sound and stable income. Originally she had a job as a waitress, but it so happened that she lost her job after having a dispute with a colleague of hers. 

55.Being anxious about the prospect of securing a new job, she learnt from someone that she could receive fruitful rewards by participating in the scheme of buying iPhones with illegitimate debit cards. She could not resist such temptation, and therefore got onboard.

56.As a result of this criminal case she has lost the custody of her son, who had to be put under the care and custody of Po Leung Kuk. She regrets so much for what she has done, and is now extremely remorseful.

57.Mr. Kwan, counsel for D4, invited this court to note that, notwithstanding the saying in the summary of facts that the WhatsApp chat groups linking up all the defendants with Sing were created in as early as April or May 2023, yet D4 was not added to their chat groups until 17^th June 2023, which was 3 days before the police arrest action, thereby indicating D4's subordinate and limited role in the syndicate. Mr. Kwan submitted that D4 only followed others' instructions to use those debit cards to buy iPhones at the Tsim Sha Tsui Apple Store; and as the summary of facts showed, D4 did not participate in the purchases of any gold items or any purchases that took place on other occasions.

58.D4 has a conviction for theft, which was recorded in 2014 when she was about 15 years old. She was given a probation order at the outset, but was later ordered to be detained at the rehabilitation centre as a consequence of her breach of the probation order.

D5

59.D5 was 27 years old at the time of the offences. He is now 30.

60.He has been in a stable relationship with his girlfriend for over 4 years. He has an elder brother and is the younger son of his parents.

61.He is a holder of a diploma awarded by IVE. Before the commission of the current offence he had worked in a few different industries. But for some reason he became unemployed at the time of the offence. He then committed the offence in question.

62.A while after his arrest he managed to obtain gainful employment at a watch company as a manager. At one time his income was almost $30,000 per month. Nonetheless he lost the job after the court revoked his bail.

63.D5 has a clear record.

64.Mr. Yeung, counsel for D5, also highlighted the fact that D5 was only added to those WhatsApp chat groups on 16^th June 2023, which was 4 days before the police arrest action. In Mr. Yeung’s submission, such fact strongly suggested that D5 was not the instigator of the conspiracy.

65.Furthermore, it was submitted that there was no evidence of D5 being at any time in control of the debit cards; and police never found any debit cards or iPhones on him.

66.Despite the foregoing, Mr. Yeung conceded that, as shown by the dialogues in the WhatsApp chat groups, at times D5 played the role of a coordinator by giving instructions to others about which iPhone model to buy and where to buy those iPhones. 

D6

67.D6 was 20 years old at the time of the offences. He is now 23.

68.D6 has a clear record.

69.Prior to his remand D6 resided with his parents and elder sister.

70.D6 received education up to secondary 6. After leaving school he has actively engaged himself in training programmes of various types, as a result of which he has gained qualifications as a sailor, an electrical worker and a lifeguard.

71.Mr. Kwok, counsel for D6, invited this court to consider obtaining reports for D6 before sentencing with a view to sending him to correctional institutes such as the Rehabilitation Centre, Detention Centre and Training Centre. However, this court had already rejected such submission with reasons given on the very same day(i.e. 11th March 2026). In short, this court takes the view that the offences D6 committed are serious, and according to the sentencing authorities, immediate imprisonment is necessary.

72.In mitigation Mr. Kwok referred this court to no less than 10 mitigation letters written by respectively D6, his family members, friends, social workers, work supervisor and coach. In gist, they said D6 is a filial son. They believed he committed the offences because of his eagerness to earn money, and a failure on his part to appreciate the serious legal consequences following from those illegal acts. They asked this court to sentence D6 leniently.

Sentencing authorities

73.Conspiracy to defraud is a serious offence. It attracts a maximum sentence of 14 years’ imprisonment. However, because the offence can be committed by offenders in many different ways and forms, and furthermore because the number of victims, the amount of money deceived and the number of co-conspirators can vary from case to case, the Court of Appeal did not find it appropriate to lay down any sentencing tariffs. However, that does not mean that there are no sentencing authorities to which a sentencing court could make reference and, in appropriate circumstances, follow.

74.Counsel informed this court that, despite their efforts in doing extensive legal research, they did not manage to find any Court of Appeal authority on the sentencing of defendants involved in debit card fraud cases. The best they could do was to find many credit card fraud cases, particularly those decided after R v Chan Sui To [1996] 2 HKCLR 128.

75.Before I discuss the line of authorities about credit card fraud sentencing, I consider it appropriate to analyse the nature of the scheme which D2 to D6 practised on the jewellery shops, Apple Stores and even the Mainland banks.

76.As Mr. Iu for the prosecution pointed out, the crux of this entire case was about debit card fraud, not credit card fraud.

77.In a typical credit card fraud case, usually two stages are involved.

78.The first stage involves the obtaining or even the manufacturing of the credit card in question. In the former category of cases, the offender either obtain, by fraud, the credit card in question from the issuing bank (for instance, applying for a new credit card with the use of personal particulars belonging to someone); or obtain by way of stealing a credit card from the genuine cardholder. Be it a card newly issued by the relevant bank, or a card stolen from its genuine owner, the card is authentic. In the latter category of cases, the offender might, by way of some tools and equipment, manufacture a counterfeit credit card. Alternatively he might somehow have some means to obtain a counterfeit credit card. In those circumstances the credit card is a false instrument manufactured solely for deceit purposes.

79.The second stage of a typical credit card fraud involves the use of the card in question, be it an authentic or a fake card. In the unfortunate event of the shop keeper or salesman being deceived, the goods in question would be sold and delivered to the hands of the user of the card, or the services in question rendered to the user of the card.

80.At the end of the day, whether the shop in question would suffer loss depends on how the bank or card issuing company negotiates with it. If the bank or card issuing company is willing to bear the responsibility for ultimate payment settlement, then the shop would not have to suffer financial loss.

81.The working mechanism of a debit card is nevertheless different. In order that a debit card can function, money has to be deposited or transferred beforehand into the account that has been linked up with the card. Without any money in the account the debit card simply cannot function.

82.Likewise, the first question this court has to ask is how the defendants in this case obtained the debit cards in question. The summary of facts stated that all the debit cards that had been seized (some of which had been used)  belonged to persons other than the defendants. There is no suggestion or evidence that the cards were not authentic. It is worthy of note that, in one of the WhatsApp chat groups, the person called Lok Chai did say that some of the cards were going to be delivered from Shenzhen to Hong Kong. Moreover, it is not disputed that the person called Sing was the one who gave instructions and commands to others in the chat groups, and should for the purposes of these proceedings be regarded as the ringleader. Nonetheless it is not known how Lok Chai or Sing obtained all those genuine debit cards.

83.To a certain extent, this finding is to the benefit of the defendants.

84.The second question to be asked is: What purpose or purposes were the defendants trying to achieve by the use of those debit cards? Unlike in a credit card fraud case, the aim of the defendants was not to merely get the goods or services in question and leave. Again, it is worth paying attention to the messages that Lok Chai had sent out to others. In one of the WhatsApp chat groups, he shared with others one of the methods for legitimizing tainted money was to first of all transfer money from victims of phone deception to bank accounts, and thereafter use the relevant bank cards (i.e. debit cards)  to make purchases for goods (but not to pay for services), and finally to have the goods converted back into money. From what Lok Chai had shared with others, it is not difficult to see that what the syndicate was doing was to purify the tainted money, that is to say, it was a money laundering exercise with a high degree of planning, premeditation and sophistication.

85.Counsel for D4 and D5 made submissions to the effect that this case should not be taken to contain an element of money laundering. I must say that this court can hardly accept those submissions in the face of those clear signs and evidence that the scheme of using debit cards to buy goods was designed for the sole purpose of purifying proceeds of crime. The other way of looking at the matter is to ask the following question: If the monies in the debit card accounts were not proceeds of crime, what was the point of using debit cards belonging to others to buy plenty of expensive and even luxurious goods?

86.That being the case, the degree of involvement of each defendant in such money laundering exercise might vary. Those who only became a member of the criminal enterprise at a late stage might not even know that other culprits were laundering money. I shall discuss their individual culpabilities later.

87.In the light of such background, this case cannot be directly compared with credit card fraud cases, and therefore those authorities on credit card frauds are not directly applicable. However, as there are no sentencing authorities on debit card frauds, this court still considers those sentencing authorities on credit card frauds are of value to the present sentencing exercise.

88.That having been said, this court has not lost sight of those sentencing authorities on the offence commonly known as “money laundering”, such as HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545; Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201; and HKSAR v Boma [2012] 2 HKLRD 33.

89.When it comes to the sentencing of the offence of money laundering, an oft-cited passage is found from paragraph 15 of the judgment of Court of Appeal in Wan Kowk Keung, which reads:

“15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. The sentencing starting point is 3 years or so where the “black money” involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.”

90.As my calculations below would show, Charge 1 alone already involves the agreement to purchase iPhones worth over $5,000,000.

91.I now turn to those authorities on credit card fraud cases.

92.In the course of my reading my attention was attracted to Attorney General v Chan Yet Wai and Others, CAAR 14/1993. There, the first respondent pleaded guilty in the District Court to four charges of obtaining property by deception; one charge of using a false instrument; one charge of conspiracy to defraud and one charge of possession of a false instrument. The judgment only provided a brief summary of the case background. In short, the charge of conspiracy to defraud was about the first respondent having conspired with the other two respondents to obtain goods from various shops in Tsim Sha Tsui and at Park Lane Square by using a credit card not belonging to them (the judgment did not say whether it was a genuine or counterfeit card). The value of those goods were, in October 1992, worth $20,000. The 4 charges of obtaining property by deception was about the first respondent having used two credit cards belonging to someone other than himself to purchase items of jewellery worth about $122,000 in total in the days of September 1992.

93.The District Judge passed a sentence of one year’s imprisonment on each of those conspiracy and deception charges, and ordered that all those sentences were to run concurrently among themselves, and furthermore also concurrently with other false instrument charges. As the total sentence on the false instrument charges was 2 years’ imprisonment, the overall sentence imposed on the first respondent was 2 years’ imprisonment. The Attorney General asked for a review of the sentence. The Court of Appeal held that, given the first respondent’s involvement and criminality in the matter, a starting point of 6 years’ imprisonment would have been appropriate.

94.In R v Chan Sui To [1996] 2 HKCLR 128; CACC 115/1996, the Court of Appeal at page 6 of its judgment said, inter alia, the following:

“A number of authorities were cited to us to indicate the level of sentences for credit card frauds. It is not easy to reconcile the sentences, but in general we apprehend that a sentencing judge would need to consider various factors including:

1. The size of the operation e.g. whether it involves large sums of money, whether it concerned a large number of persons or forged credit cards.

2. The planning that has gone into perpetrating the fraud, whether it is elaborate or simple, whether technical skills were used, and to what extent.

3. Whether there is an international dimension.

4. Whether the accused played a major role, e.g. running a syndicate, engaging in actual manufacture, organising the use of forged cards, or whether he is a mere "cog in the wheel" as a courier or a custodian or keeper.

5. Whether there is a plea of guilty.

In considering whether large sums of money were involved, we would suggest that, at the present cost of living, amounts up to $50,000 may be considered relatively small, amounts from $50,000 to $150,000 medium, and amounts above that may be considered large.”

95.And later, at page 13 of the judgment, the Court of Appeal had this to say:

“Allowing for the different facts and the varying degrees of culpability, it is impossible to formulate a set of principles of sentencing from those decisions. We think however it would be helpful to the courts if they were guided by some criterion. We would therefore suggest that an accused who plays an active but not necessarily a key role in a medium size operation involving between $50,000 and $150,000, with no elaborate planning and equipment, and without an international dimension, should receive a sentence of five to six years after trial. Sentences may be adjusted upwards or downwards according to the circumstances.”

96.In order to show the serious view that the courts take about the fraudulent use of credit cards, I would also mention HKSAR v Fung Wai Yip, CACC 231/2018. The applicant stole 32 credit cards from lockers in the changing rooms of public swimming pools during the period from 1 October 2016 to 20 April 2017. He retained two of those cards and gave the rest of them to the other two defendants in that case. The three of them then used those stolen credit cards to purchase goods from various shops. The total amount of goods purchased was about $660,000, whilst there were other occasions on which attempts to purchase goods of the value of about $70,000 failed. The applicant pleaded guilty to 32 charges of theft and a charge of conspiracy to defraud. In respect of the charge of conspiracy, the judge took the view that the operation to which the conspiracy related was of a medium scale lasting for a period of over 6 months. She adopted an initial starting point of 6 years’ imprisonment and enhanced that initial starting point for other reasons. The Court of Appeal did not consider such initial starting point manifestly excessive or inappropriate.

97.I have given consideration to all the submissions made by counsel and the materials placed before me. Below is my analysis of the offences and each defendant’s culpability.

98.As has been discussed above, the ultimate goal the conspiracy sought to achieve was to launder proceeds of crime. The Court of Appeal has reiterated in many cases that, in sentencing defendants guilty of the offences of money laundering, one of the factors which the sentencing courts should consider was, among other things, whether the defendants had knowledge about, or had even taken part in, the predicate offences from which the proceeds of crime came.

99.The summary of facts said nothing about the sources in the debit card accounts relating to the 62 debit cards seized by the police. However, in the light of what Lok Chai had said to others in one of the chat groups, it can reasonably be inferred that the monies in the debit card accounts were proceeds obtained illegally from victims of deceptions of various types. 

100.I am aware that Lok Chai talked of “legitimizing tainted money” in the First Group at a time between 21^st and 27^th April 2023. At that time, D3, D6 and some persons unknown were members of that chat group. Insofar as D3 and D6 are concerned, all their overt acts of purchasing gold items and iPhones were carried out in June 2023 (including those items that they reported to have bought in their private chatrooms with Sing). From those facts, it can reasonably be inferred that at all material times D3 and D6 knew that the purpose of the entire scheme was to launder proceeds of deception.

101.There was no evidence that Lok Chai, Sing or someone else had repeated, or mentioned about, the purpose of the scheme in their group chats with D2, D4 and D5.

102.There was no evidence that D2, D4 and D5 had knowledge that the purpose or goal of the scheme was to launder proceeds of crime.

103.As said, there was no evidence that the debit cards were counterfeit. Nonetheless, those debit cards did not belong to any of the defendants. They must have known that they were not entitled to use debit cards belonging to others to make purchases.

104.Police seized some point-of-sales machines, money counting machines as well as 5 pieces of paper (with the names of the defendants on them)  in the two units in Tung Nam Factory Building that police raided.

105.However, there was no evidence that any of the defendants had visited those two units (as to D2’s situation, see my discussion below); and there was no evidence as to the identity of the author or writer who wrote on those pieces of paper. To whom those handwritings belonged was simply not known. It would appear that those were records relating to what instructions had been given to D2 to D6 in respect of which debit cards were to be used and what items were to be bought.

106.I have not lost sight of the fact that, in the unit on the first floor in Tung Nam Factory Building, two bank statements bearing D2’s name were found. However, it was not known under what circumstances D2 had given the unit’s address to the bank as his correspondence address. Finding D2’s letters in the unit is not evidence that D2 must have been to that unit himself.

107.In those circumstances, it cannot be said that D2 to D6 had knowledge about any of the items found in the two units in Tung Nam Factory Building.

108.From what has been disclosed by the summary of facts, I would say that the mastermind or ringleader of the syndicate was either Lok Chai or Sing, or both. It is true that D2 and D5 had assumed the role of passing debit cards to others; keeping iPhones in his (D2’s)  own car; or directing others to proceed with the purchases of goods; but I cannot give predominate weight to those matters without taking into account the fact that the persons giving instructions at the high end of the command line were Lok Chai or Sing. I would say that D2 and D5 had at most assumed the role of a coordinator at the intermediate level.

109.Nevertheless, I have not lost sight of the value of the iPhones which the defendants were instructed to buy in those chat groups.

110.In the Sz Group, of which D2 to D6 were all members, Sing had mentioned about the purchases of 496 iPhones in total. Among them, 4 models were mentioned, and iPhone 14 Pro Max 256GB was the lowest model. From the purchases made by the defendants at Tsim Sha Tsui and Shatin Apple Stores, I can tell that the retail price of a single iPhone 14 Pro Max 256GB was $10,199 at the time of the offences. Assuming that all 496 iPhones to be bought were of this model, the total amount of money involved, or to be laundered, would be $5,058,704. The calculation has yet to include the gold items intended to be purchased.

111.As has been set out above, in their individual chatrooms with Sing, D6 reported that he had already spent over $3,571,874 to buy iPhones and gold items; and D3 reported that he had already spent over $6,303,011 to buy iPhones and gold items.

112.One can see that, the total amount of money the greater, or global conspiracy sought to deal with and launder was in the order of over $14.9 million, which was close to $15 million.

113.Certainly, there was no evidence that D2, D4 and D5 knew of the conspiracies that D3 and D6 had entered into individually with Sing.

114.From the facts disclosed and the matters stated above, I find that this case has the following aggravating features:

(a)  The issue of the defendants’ knowledge aside, the aim or purpose of the conspiracies sought to achieve was to launder proceeds of crime obtained illegally from victims of deception.

(b)  As the police found, at least 62 Mainland debit cards were involved.

(c)  A cross-border element was involved.

(d)  The scheme involved a sophisticated design and a high degree of premeditation; and there was a division of labour among the defendants.

(e)  The conspiracy or conspiracies lasted for 2 months.

(f)  A large quantity of valuable and luxurious goods were involved.

(g)  The conspiracy particularized in Charge 1 alone would involve purchases of goods worth over $5 million.

115.I now assess the appropriate sentence to be passed on each of the defendants.

116.Among the 5 defendants, D3 and D6 are the most culpable. I have this finding because, as early as late April 2023, D3 and D6 had already become members of the chat group denoted as the First Group; and furthermore they had entered into their individual and separate conspiracies with Sing, which have been particularized as Charge 3 and Charge 2 respectively.

117.I have already stated above that D2 and D5 had assumed the role of being a co-ordinator at the intermediate level.

118.Counsel for D5 highlighted the fact that D5 had only become a member of those chat groups on 16^th June 2023, which was four days before his arrest. On the other hand, D2, apart from being a co-ordinator, had driven others to the Apple Store at Tsim Sha Tsui, and allowed his private car to be used as temporary storage of the newly bought iPhones. D2 is more culpable than D5 if they are to be compared with each other.

119.D4 only became a member of the chat groups on 17^th June 2023. The only overt act she had done was to buy iPhones at the Tsim Sha Tsui Apple Store. D4 is the least culpable among the five defendants.

120.In the light of all the circumstances, I would think that, in respect of Charges 1, 2 and 3, the individual starting point should, depending on the features of each particular charge and the defendant’s personal circumstances, be somewhere between 54 months’ and 63 months’ imprisonment. In determining such level of sentence I have taken into account the fact that the aim of the conspiracy was to launder proceeds of crime, the scale of the operation and the aggravating circumstances aforesaid. For the sake of clarity, I must emphasize that, for the purposes of each charge, the amount of proceeds of crime I have taken into consideration was the value of the goods that Sing had instructed the defendants to buy on the occasion or occasions relevant to each charge (i.e. Charge 1: $5,058,704; Charge 2: $3,571,874; and Charge 3: $6,303,011), but not the global amount of $14.9 million involved in the greater conspiracy. I adopt this approach because I do not consider it fair and just to attribute knowledge of the greater conspiracy to all the defendants.

D2

121.D2 has 17 convictions, 9 of which related to dishonesty. Also he was sentenced to 4 years and 3 months’ imprisonment by the District Court in May 2020 and only discharged in June 2022, which was about one year before he committed Charge 1. Against such background and in the light of his culpability and degree of involvement in the matter, I would consider that a starting point of 5 years’, or 60 months’ imprisonment be appropriate. He pleaded guilty to Charge 1. He is entitled to a one-third discount. Hence, for D2, the sentence in respect of Charge 1 is 40 months’ imprisonment.

D3

122.D3 has a clear record. Yet he had knowledge about the conspiracies and their purpose as early as April 2023. He was heavily involved in the conspiracies all along. Therefore, I am minded to take a global view in the assessment of the appropriate sentences for Charges 1 and 3, instead of focusing merely on what items of goods D3 had purchased on those occasions relevant to Charge 1, and what items of goods he had purchased on other occasions relevant to Charge 3.

123.In respect of Charge 1, I consider that a starting point of 5 years 3 months’, or 63 months’ imprisonment is appropriate for D3. He pleaded guilty and is entitled to a one-third discount. The sentence for D3 in respect of Charge 1 is first of all reduced to 42 months’ imprisonment. In the light of D3’s clear record, I am minded to, by way of discretion, reduce that sentence by a further one month.

124.Therefore, the sentence for D3 in respect of Charge 1 is 41 months’ imprisonment.

125.In respect of Charge 3, I also adopt a starting point of 5 years 3 months’, or 63 months’ imprisonment. After giving him a one-third discount, the sentence for Charge 3 is 42 months’ imprisonment. I am also minded to exercise my discretion and reduce that sentence by a further one month.

126.The sentence for D3 in respect of Charge 3 is 41 months’ imprisonment.

127.The two conspiracies which D3 engaged himself in had some correlation with each other. I would consider it fair and just to order 3 months of the sentence for Charge 3 to run consecutively to the sentence for Charge 1. Therefore, the overall sentence passed on D3 is 44 months’ imprisonment. That would be equivalent to an adoption of a global starting point of 66 months’ imprisonment, which I consider to be just and appropriate.

D4

128.D4 has a conviction for theft, which was recorded when she was a teenager. Yet her level of participation in the present case was far less than others. In D4’s case, I would adopt a starting point of 4 years and 6 months’, or 54 months’ imprisonment. She pleaded guilty. After giving her a one-third discount, the sentence for D4 in respect of Charge 1 is first of all reduced to 36 months. I am minded to, by way of discretion, give a further 2-month reduction to D4.  The sentence for D4 in respect of Charge 1 is 34 months’ imprisonment.

D5

129.D5 has a clear record. He had a lesser level of participation than D2. I would adopt a starting point of 4 years and 9 months’, or 57 months’ imprisonment. He pleaded guilty and is entitled to a one-third discount. In view of D5’s clear record, I am minded to, by way of discretion, reduce that sentence by a further one month. The sentence for D5 in respect of Charge 1 is 37 months’ imprisonment.

D6

130.D6 is now 23 years old and is the youngest among all 5 defendants. He has a clear record. However, like D3, he was also heavily involved in the conspiracies all along. His case bears much resemblance to that of D3. Like what I have done in D3’s case, in respect of D6, I am minded to take a global view in determining the sentences for Charges 1 and 2.

131.In respect of Charge 1, I consider that a starting point of 5 years 3 months’, or 63 months’ imprisonment is appropriate for D6. He pleaded guilty and is entitled to a one-third discount. The sentence for D6 in respect of Charge 1 is first of all reduced to 42 months’ imprisonment. In the light of D3’s clear record and young age, I am minded to, by way of discretion, further reduce that sentence by 2 months. 

132.Therefore, the sentence for D6 in respect of Charge 1 is 40 months’ imprisonment.

133.In respect of Charge 2, I also adopt a starting point of 5 years 3 months’, or 63 months’ imprisonment. After giving him a one-third discount, the sentence for Charge 2 is first of all reduced to 42 months’ imprisonment. I am also minded to exercise my discretion and further reduce that sentence by 2 months.

134.The sentence for D6 in respect of Charge 2 is 40 months’ imprisonment.

135.The two conspiracies which D6 engaged himself in had some correlation with each other. I would consider it fair and just to order 3 months of the sentence for Charge 2 to run consecutively to the sentence for Charge 1. Therefore, the overall sentence passed on D6 is 43 months’ imprisonment. That would be equivalent to an adoption of a global starting point of 65 months’ imprisonment, which I consider to be just and appropriate.

136.To conclude, the sentences passed on the defendants are as follows:

D2: 40 months’ imprisonment;

D3: 44 months’ imprisonment;

D4: 34 months’ imprisonment;

D5: 37 months’ imprisonment; and

D6: 43 months’ imprisonment.