HKSAR v. Cheung Kwok Yin

DCCC 9/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 9 OF 2015

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

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

Reasons for Sentence

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

1.The defendant has entered a plea of guilty to one offence of fraud. He has accepted the facts and I have convicted him of the offence.

2.The total benefit to the defendant from the fraud was $1,159,520.

3.The fraud arose out of a relationship formed by the defendant with the 1st prosecution witness when they both worked for the Neochemical Pharmaceutical Laboratories and at that time, which is in 2010, they were working as laboratory assistants, and the defendant inveigled the 1st prosecution witness to making a small investment in something called a “Power High Mondel”, which was a chip, and the 1st prosecution witness invested a total of $5,500 into that, which had been repaid by the defendant.

4.The defendant resigned from the company in March 2011.  He and the 1st prosecution witness did not meet up again until March 2012. 

5.In March 2012, the defendant called the 1st prosecution witness and said he was working as a purchasing manager in Mainland China.  He had an order for the “Power High Mondel” worth $3.2 million placed with him.  He needed a letter of credit in order to buy from a Taiwan seller.  He asked PW1 to invest in the business.

6.Following the defendant’s request and for the reasons that have already been stated, during the period of 17 March 2012 to 28 September 2013, PW1 transferred sums of money from her bank account into the defendant’s bank account.  There were transfers by ATM and bank counter transfers to the defendant’s account, and they were set out in tables A and B attached to the admitted facts.  All these monies were later withdrawn via ATM by the defendant or transferred to other of the defendant’s accounts, for instance, the defendant’s Hong Kong Jockey Club account.

7.During this period from 17 March 2012 to 28 September 2013, PW1 did not receive any profits from her investment.  However, after she had pressed him, a total of $30,100 was paid into her bank account by the defendant.

8.PW1 eventually reported the matter to the police. 

9.The defendant was arrested in October of 2014. 

10.Whilst interviewed, he said the following:  that the money was obtained from PW1 by using and giving her dishonest reasons; all the money obtained from PW1 was already spent by him on dining, food and drinks and some on gambling; and that there was no money left.

11.The defendant is currently aged 57 years of age.  He was educated to the Polytechnic University level and has a diploma. He suffers from diabetes.  He has a son aged 20 who is currently in a detention centre. 

12.He has criminal record.  He has a poor record of offences of dishonesty.  He has a total of seven recorded appearances in court between 1986 and 2009.  There are a total of 31 previous convictions for obtaining by deception; six for evasion of liability.  He has a previous conviction for theft and fraud. 

13.The defendant has been to prison on a number of occasions.  His longest, in 1995, he was sentenced to 28 months’ imprisonment for obtaining by deception.  In 1997, 2 years for obtaining property by deception.  He was sentenced to imprisonment in the year 2007 and again in 2009. 

14.The defendant has not been convicted of any offence since 2009 to date, although the defendant’s fraud in this case started in March 2012.

15.It is clear that the earlier sentences of imprisonment have not effectively deterred the defendant from committing this offence.

16.In mitigation, I am referred to the defendant’s plea of guilty; that this is not a sophisticated fraud (that, for example, no company was set up); there is no international element.  It is simply a set of deceitful representations that found a willing hearer. 

17.It is a case of a lengthy exploitation of a relationship of friendship.  The period over which the fraud took place is over 1½ years and the sum taken is substantial.  There are literally hundreds of transfers of small sums of money to the defendant by PW1.

18.There is, I am informed, no possibility of compensation.

19.I am told the defendant is remorseful and hopes to turn over a new leaf on his completing any sentence of imprisonment.

20.There is no guideline sentence for the offence of fraud.  This is because the ways in which this kind of offence can be committed can vary considerably. 

21.The core factors in terms of sentencing appear to be the degree of planning or sophistication, the gain to the defendant, the loss or impact to the victim.

22.In the case of HKSAR v Chong Yu, which is CACC 161/2008, the guideline for a breach of trust theft set out in HKSAR v Cheung Mee Kiu was adopted, where a bank was defrauded.

23.In HKSAR v Wan Kwong Chiu, CACC 349/2003, it was said it would be correct for the court to rely on the relevant factors listed in the case of Chan Sui To, which involved credit card fraud, and such factors are:

(1) the size of the operation;

(2) whether it involves large sums of money;

(3) the planning involved;

(4) whether there is an international dimension;

(5) the actual role of the defendant; and

(6) whether there is any plea of guilty.

24.A further factor to be considered in this case for this defendant is his record of offences for dishonesty. 

25.In his case, this clearly is an aggravating factor.  The previous sentence of imprisonment have not acted to deter the defendant from continuing to commit offences of dishonesty.  The offence in this case is of a similar type to all his previous offences.  The issue in this case is to what extent that be quantified as an additional element in sentencing to add to the starting point.  The defendant has clearly become a recidivist.

26.I consider that the starting point for sentence should represent the extent of the case in terms of the financial loss to the victim and the gain to the defendant.

27.I consider that, as we are dealing with a sum that is just in excess of $1 million, the starting point should be one of 36 months’ imprisonment.

28.This is to be enhanced by 9 months to represent the defendant’s poor record of dishonesty and persistently offending in this nature.

29.This gives a total of 45 months’ imprisonment.

30.The defendant is entitled to a one-third discount from that figure.

31.This will give a figure for sentence of 30 months’ imprisonment.