HKSAR v. Guo Jiepeng

DCCC 720/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 720 OF 2014

-----------------------

---------------------------------------

REASONS FOR SENTENCE

---------------------------------------

1.The defendant pleaded guilty to one charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to s 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455, and ss 159A and 159C of the Crimes Ordinance, Cap 200.

Facts

2.Around noon on 30 May 2014, an 81-year-old man (“the victim”) received a phone call at his home in Tai Po from a man (“the first man”) saying that the victim’s son owed him HK$300,000 and was being detained by him.  This was confirmed by another man at the other end of the line who addressed the victim as “father”.  After negotiations, the victim agreed to make an immediate payment of HK$30,000 for the release of his son.

3.When the victim realized that it was a scam, he reported the matter to the police.  Police officers were then deployed to assist the victim.

4.Around 2 pm on the same day, the victim arrived as instructed at an alley behind a hotel in Mong Kok.  The defendant then approached the victim and told him that he had come to collect the money.  The victim then passed an envelope containing fake money to the defendant, who told the victim that his son would be released if the money was found to be in order.  Thereupon, the defendant was arrested by the police.

5.At the time of his arrest, the defendant had on him 2 mobile phones.  Call records of these mobile phones showed 3 telephone conversations with 2 PRC numbers between 12:15 pm and 1:22 pm on that day.  Three incoming calls to one of the defendant’s mobile phones (made between 1:24 pm and 1:41 pm on that day), and 7 incoming calls to the victim’s mobile phone (made between 12:45 pm and 1:43 pm on that day) had come from the same phone number.

6.Upon his arrest and under caution, the defendant admitted collecting money from the victim upon receiving instructions to do so over the phone.  In his cautioned video-recorded interview, the defendant admitted coming to Hong Kong on 27 May 2014 and receiving an envelope from the victim.

7.Movement records showed that the defendant had arrived in Hong Kong around 9:04 am on 27 May 2014.

Defendant’s background

8.The defendant comes from the mainland.  He is a man of clear record.  He is 21 years old, single, and was educated to junior secondary school level in the mainland.  He was working as a fisherman at a monthly income of around RMB2,000 prior to coming to Hong Kong on 27 May this year.  His family members consist of his paternal grandfather, his parents, and a younger brother.

Mitigation

9.In mitigation, the defendant’s counsel Mr Gordon Wong pointed out that apart from having a clear record in Hong Kong, the defendant had never been in trouble with the law in the mainland.  The defendant frankly admitted his offence in court and is willing to take responsibility for it.  He was neither the mastermind nor one of the men who had spoken to the victim.  Mr Wong agreed that the term “legman” would be an apt description of the role the defendant played in what was essentially a telephone deception scam.

10.While not opposing the prosecution’s application for enhancement of sentence, Mr Wong urged the court to consider giving the defendant more than the usual one-third discount on account of the defendant’s young age of 21, his clear record, his plea of guilty which was first made known to the court on 21 October 2014, and the fact that the victim suffered no loss.

Reasons for sentence

11.Although the defendant is charged with conspiracy to commit money-laundering, the facts of the case show that he was in fact part of a telephone deception scheme whereby the victim receives telephone calls from unknown callers falsely alleging that a family member of the victim owes them money and is being detained.  The callers demand money from the victim as repayment of the debt in return for the release of the family member.  The victim is instructed over the phone to deliver the money to a certain location for collection by a person, who is often described as “the legman”.

12.In this case, the defendant played the role of “the legman”.  He came to Hong Kong on 27 May 2014.  Three days later, on 30 May, he collected the money from the victim.  The amount of money involved is HK$30,000.  There is no evidence as to what, if any, reward he would get for the role he played.

13.The Court of Appeal in HKSAR v Wu Jianbing [2012] 1 HKLRD 781 held that money laundering was a serious offence.  Generally, the sentence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others.  Other factors relevant to sentencing included the number of offences, the duration, the degree to which the defendant participated in the offence involving “black money” and whether it was organized and sophisticated crime.

14.In Wu Jianbing, where the appellant had pleaded guilty to two charges of money laundering and two charges of conspiracy to launder money in a case where the appellant, acting as a “legman”, had collected payment of money from victims who had received telephone calls from unknown persons falsely claiming to have detained their family members who had allegedly owed them money, the Court of Appeal indicated that a starting point of 3 years imprisonment should be adopted for each of those offences.

15.In light of the similarity of the factual circumstances of Wu Jianbing and our case, I would follow the Court of Appeal’s decision in that case and adopt a starting point of3 years imprisonment.

16.For his plea of guilty, the defendant is entitled to a one-third discount from the starting point.  The matters put forward by his counsel in support of his plea for a further reduction do not constitute sufficient justifications for a greater reduction than the usual discount of one-third.

17.I would therefore reduce the starting point by one-third, giving a sentence of 2 years imprisonment.

18.However, this is not the end of the sentencing exercise in our case, as this court has to deal with the prosecution’s applicationunder s 27 of Cap 455 for enhancementof sentence on the grounds of prevalence of the offence and the harm caused to the community.  As I mentioned earlier, this application is not opposed by the defendant.

19.In support of its application, the prosecution submitted a statement from CIP Lam Cheuk Ho dated 5 September 2014. According to this statement, this case falls within the category of “telephone deception” cases, and the modus operandi employed in this case in the collection of payment from the victim belongs to the “drop off” mode.

20.It is clear from this statement that in the last few years, there has been an increase in “drop off” cases.  In terms of the number of successful “drop off” cases, meaning cases where money was successfully obtained from the victims, there were 169 successful cases in 2012, 200 cases in 2013 and 133 cases between January and August of 2014.  The percentage of successful “drop off” cases compared to the overall successful telephone deception cases has been on the rise as well, and such percentage is 23.8% for 2012, 27.5% for 2013, and 28.2% for the period between January and August 2014.

21.In terms of the money misappropriated in telephone deception cases with the “drop off” modus operandi, the amount of the loss was significant and there is an obvious tendency of increase.  In 2012, the total amount of loss in the “drop off” cases was around HK$10.22 million; in 2013, the loss was HK$13.74 million; and in the period between January and August of 2014, the loss was HK$9.85 million. 

22.CIP Lam’s statement also mentions that in terms of the number of reports with persons arrested in relation to successful telephone deception cases with the “drop off” modus operandi, most of the charges laid against the arrested persons were in relation to a money laundering offence or a conspiracy to commit such an offence.

23.I am satisfied from the contents of CIP Lam’s statement that the prosecution has proved beyond reasonable doubt with regard to both the prevalence of this specified offence and the extent of harm done to the community.  I might add that the defendant has no objections to the contents of this statement.

24.As for the extent of enhancement, I would also adopt what was considered suitable by the Court of Appeal in Wu Jianbing, namely, one-third.

25.Applying one-third to 2 years, the defendant’s sentence would be enhanced by 8 month.  Consequently, the defendant’s sentence, after enhancement, would be one of 32 months imprisonment.