HKSAR v. Chang Chung-chih

DCCC509/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 509 OF 2009

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Reasons for Sentence

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1.The defendant has been convicted after trial of a total of 10 offences. These are paired offences of conspiracy to defraud and dealing with the proceeds of an indictable offence.

2.The facts proved by the prosecution establish that on five separate occasions money was deceived out of the victims by way of the use of a telephone call to them with an allegation that their son was being detained by persons unknown and a sum of money would have to be paid to secure their release. This charade went through and the money was in fact paid in four of the occasions.

3.The defendant’s role in this was the role of the -- colloquially we will call it the “bagman”, the man who takes the money and the makes off with it usually out of the jurisdiction so that the proceeds can be distributed. Of course, the defendant’s role is the one that involves the maximum risk but it appears that the role of bagman is now becoming more used given the success the police have had interdicting the use of bank accounts in Hong Kong for the payment of the money.

4.The defendant has been proved by the prosecution of acting as the receiver of the moneys involved in the conspiracies to defraud on five separate occasions over the course of just over two months.

5.The 1st charge involved a sum of $200,000, the 3rd charge $120,000, the 5th charge $12,000 and the 7th charge $30,000. In relation to the 9th charge the money was never handed over. So it is a sum of over a quarter of a million dollars in total.

6.As far as the defendant’s position is concerned, he is a Taiwanese. He has no real connection at all with Hong Kong other than to come here to involve himself in these offences. He is a 31 year old man and has, I am told, a girlfriend and has involved himself in various casual forms of employment in Taiwan. I bear in mind that he is not from Hong Kong and any sentence of imprisonment will, of course, be harder on him because of his lack of local customs and knowledge.

7.I also mention in relation to this case there is an application for enhancement of sentence by the prosecution on the basis that the offence committed of conspiracy to defraud is a specified offence, and the prosecution say that under Section 27(2)(c) of the Cap.455 I should enhance the sentence based on its prevalence of this specific kind of offence and in support of that I have a statement by David Alexander Williams, a police officer, setting out details of the nature of this offence and its prevalence.

8.Now, what I have to do in relation to these proceedings is, firstly, determine the appropriate starting point on each of these charges having regard to the part played by the defendant. The starting point in this case, of course, is the finishing point because it is a conviction after trial. Then I have to consider whether it is a specified offence within the meaning of the ordinance. Thirdly, does the crime call for the enhancement of sentence under Section 27(2)(c) of the ordinance; and fourthly, if it has and it is called for, the percentage increase by way of enhancements of the sentence, and then I can deal with any questions of totality of sentence after that.

9.Now, the first question is what is the appropriate starting point for these offences. They are obviously serious offences involving the duping of elderly persons. The people targeted were of a certain age. They were all targeted by phone calls to their homes. Large sums of money were demanded from them. I have no reason to believe that these would not have been substantial sums of money and would have caused financial hardship to the victims. They all involve allegations or claims that their children had been chopped or beaten. They would cause considerable distress and fear and upset to the victims. These are serious offences of both conspiracy to defraud and of course the consequent dealing with the proceeds.

10.I bear in the mind the defendant’s role. He was the man commissioned to go backwards and forwards with the money so he was an important member of the conspiracy. Without him it could not have been brought to completion.

11.I consider the appropriate sentence in respect of these offences or the starting point as it is described as 4 years’ imprisonment, and that is the appropriate sentence on both the paired charges; 4 years’ imprisonment on each of the conspiracy to defraud and also the other charge of dealing with the proceeds of the indictable offence. So without any question of enhancement that is the sentence I would impose on each of the sentences of Charges 1 through to 10.

12.Now, the offence is a specified offence under the Organized and Serious Crimes Ordinance. I have to consider whether an enhancement sentence is required under Section 27(2)(c) of the ordinance. The evidence of Chief Inspector Williams is that these offences are classified as what is described as telephone deception in that the suspect contacts the victim by telephone and the suspect uses deception to persuade the victim to transfer deposit moneys into a designated bank account, or in this case it would be to take the money to the ferry terminal for dropping off to the man with the shoulder bag. The modus operandi is that the victim is deceived that a family member or colleague, suchlike, is in financial need and their well-being is in danger if the money is not paid over, and the classic way that this has been perpetrated is by use of automatic teller machines from which moneys are withdrawn.

13.The facts of this case manifest an adaptation of that to police informants, enforcement activity which has made the use of bank accounts more difficult.

14.Now, amongst cases classified under this rubric we have the statistical increases shown in paragraph 8 of the statement. In the year 2004 there were 262 reports with stolen funds of 7 million. The figures have grown up. To 2006 it was 23.21 million. By 2008 that was 23.71 million and 1,429 reports and in this year as of 31 August, the 1,101 reports and 22.22 million has already been stolen. I am also told that in 2006, 2007 and 2008 telephone deception cases accounted for 36.5, 34.2 and 30.7 per cent of all deception cases in Hong Kong by a third and that clearly shows that these offences are prevalent and increasing.

15.There is information provided in respect of Section 27(2)(d) but that is not, in fact, one of the grounds put forward in the notice by the police but it is of some interest just to perhaps review part of that. Eighty per cent of the victims are over 50 and 90 per cent of the victims were targeted by phone calls to their residence, again showing that in this particular case there was a deliberate targeting of people at home and a reliance upon the nature of family ties here that people would pay large sums of money to secure their children’s release.

16.Paragraph 13 deals with one of the factors that they say is relevant to this case which is that the physical collection of cash in person by a suspect was not common until 2008 because the physical handover of cash is a high risk activity and that of the 5,890 cases reported between 2006 and 2009 only 125 involved physical collection of cash. But of those 120 have been reported since October 2008. But what is significant is that although the modus operandi of this telephone deception, this form of telephone deception is small, the amount of money in fact taken through this form is large. There was a total of 1,556 telephone reports between October 2008 and August 2009. One hundred and 20 involved physical collection of cash but those accounted for 24.1 per cent of the total loss; namely 33.2 million in that period. So substantial losses are associated with this adaptation of the modus operandi of the telephone deception.

17.What I can say on the basis of Chief Inspector Williams’s statement is that the prosecution have established that the offence itself is prevalent and also that enhancement of sentence is called for. I am told that in another case of a similar form to this an enhancement of 50 per cent was taken as being the appropriate figure. I see no reason to differ from that opinion and that will involve an increase in Charges 1, 3, 5, 7 and 9 to 6 years’ imprisonment. So the sentences are as follows.

18.On the 1st charge and the 3rd, 5th, 7th and 9th charge you will be sentenced to 6 years’ imprisonment. On the remaining Charges 2, 4, 6, 8 and 10 there is a sentence of 4 years’ imprisonment.

19.Now, we are dealing here with five separate occasions involving a number of different sums of money which gives the court the power to order some or part of these sentences to run consecutively to each other although the effect of the enhancement is to not leave the court much leeway in order to do that within the maximum sentencing power of this court. Also I must consider the conception of overall totality, appropriate overall totality for this overall criminal enterprise having regard to this defendant’s role within it.

20.I do consider having considered all those factors that the total sentence of 6 years’ imprisonment is sufficient in this case to reflect the seriousness of the series of offences, so I will simply order that the sentences on Charges 1 to 10 be served concurrently one to another to a total of 6 years’ imprisonment.