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Hksar v Chan Hok Yu A.k.a. Chan Man Chau And Another

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date08 September 2020
Neutral Citation[2020] HKCA 756
Year2020
Judgement NumberCACC341/2019
Subject MatterCriminal Appeal
CourtCourt of Appeal (Hong Kong)
CACC341/2019 HKSAR v. CHAN HOK YU a.k.a. CHAN MAN CHAU AND ANOTHER

CACC 341/2019

[2020] HKCA 756

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 341 OF 2019

(ON APPEAL FROM DCCC 353 OF 2018)

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BETWEEN
HKSAR Respondent

and
CHAN HOK YU a.k.a. CHAN MAN CHAU
(陳學儒又名陳汶洲)		 2nd Applicant
LAM KA SIN a.k.a. MAK KA SIN
(林嘉倩又名麥嘉倩)		 3rd Applicant

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Before: Hon McWalters JA in Court

Date of Hearing: 4 September 2020

Date of Judgment: 4 September 2020

Date of Reasons for Judgment: 8 September 2020

__________________________

REASONS FOR JUDGMENT

__________________________

1. The applicants were arraigned with four other co-accused in the District Court before Deputy District Judge LC Cheng (“the judge”) on charges of “Fraud”[1] and “Dealing with property known or believed to represent the proceeds of an indictable offence”[2]. In respect of the latter offence one of the charges, Charge 2, was pleaded in an inchoate form as a conspiracy[3].

2. D1 applied for leave to appeal against conviction and sentence in respect of Charges 1, 4 and 7, all charges of fraud, but subsequently abandoned his application which was then dismissed pursuant to rule 39 of the Criminal Appeal Rules, Cap 221.

3. The 2nd applicant was D3 at trial (“D3”). He pleaded not guilty to Charges 5 and 7 which were both charges of fraud in which he was jointly charged with D1. He was subsequently acquitted of Charge 5 but convicted of Charge 7 and was sentenced to 4 years’ imprisonment. D3 applied for leave to appeal against his conviction and sentence but subsequently abandoned his appeal against conviction which was then also dismissed.

4. The 3rd applicant was D6 at trial (“D6”). She was convicted on her plea in respect of Charge 2, the charge of conspiracy to deal with the proceeds of an indictable offence, and was sentenced to 1 year and 10 months’ imprisonment. D6 applied for leave to appeal against her sentence.

5. At the hearing of the applications I refused the application of D3 and granted the application of D6. I said I would hand down my reasons for my decisions at a later date. These are my reasons.

A. The prosecution case at the trial of D3

6. There were a total of 10 charges on the Charge Sheet; five charges of fraud and four of money laundering. In respect of the fraud charges, it was the prosecution case that two sham companies, namely Richside Internation (Asia) Limited (“Richside”) and Richgain International (Asia) Limited (“Richgain”), were utilised by D1, D3 and their accomplices as vehicles to defraud their victims by representing themselves as an intermediary between banks and prospective borrowers. As part of their deception they falsely represented to the victims that security money was required before their applications for bank loans could be processed.

7. Common to all victims is that they had each received cold calls concerning a promotion for loans. When they all expressed interest in taking out loans, they would be referred to either Richside or Richgain for further action. The victims paid over the security money but never obtained a loan and subsequently found that they could not contact the persons at Richside or Richgain with whom they had dealt. If they could not afford to pay the security money they were referred to a finance company where they could borrow the money they needed, but at a high interest rate.

A.1 Charge 7

8. PW6 testified that in early July 2016, he received a cold call from a person calling himself Mr Yu and purporting to be from DBS Bank (“DBS”). When he expressed interest in taking out a HK$3.3 million loan, Mr Yu informed PW6 that he would have to first go through an asset check with Richgain.

9. A few days later, PW6 received a call from one “Mr Cheung” who claimed to be a staff of Richgain and who represented to him that he could assist PW6 in his loan application with DBS. On 11 July 2016, PW6 and his friend (“PW7”) went to the office of Richgain and there they met Mr Cheung and a “fat man” who PW7 later identified as D3 in a police identification parade. PW6 and PW7 said that in this meeting, Mr Cheung explained how he would assist PW6 in his DBS loan application and that, during this meeting, D3 was mainly responsible for making photocopies of the necessary documents.

10. PW6 was subsequently informed by Mr Cheung that DBS had approved a HK$3.3 million loan to him on condition that he first pay 27.6% of the loan amount as security money, which would be held by Messrs Au, Thong & Tsang, a firm of solicitors, for 14 days for the purpose of conducting an asset valuation.

11. On 23 July 2016, PW6 and PW7 again went to the office of Richgain and on this occasion they met D3 and a “thin man”, who was later identified by PW7 as D1 in the ID parade held on 15 September 2016. D1 and D3 explained the terms of the loan to PW6 and asked him to sign on some documents that bore the name of DBS.

12. Upon the advice of Mr Cheung, PW6 took out a HK$700,000 bridging loan on 4 August 2016 with Golden Rich Finance Limited by using his property as security. On the same day PW6 drew a cheque of HK$910,800 on his Standard Chartered Bank personal account and passed it to D1 and D3 inside a cafeteria. He was specifically told that this cheque should be made payable to the boss of Richgain, namely “Ng Hiu Yan” (“Ng”).

13. PW6’s cheque was eventually paid into a Hang Seng Bank account held by Ng, who then withdrew the money from her personal bank account on 9 August 2016. Ng was D5 at trial, and she pleaded guilty to one charge of money laundering in respect of this transaction.[4]

14. Messrs Au, Thong & Tsang confirmed that they had never received any instruction to deal with PW6’s loan-related matters nor did they hold any money on his behalf. Staff from DBS confirmed that no loan application had been received on PW6’s behalf and that DBS would never request “security money” when processing loan applications.

B. The Summary of Facts for D6

15. D6 was charged only with Charge 2, which in essence alleged that she had agreed to lend her bank account to an uncharged accomplice in order to receive the security money tendered by PW3. The intended transaction did not go through because the bank refused to clear PW3’s cheque, hence D6’s criminal conduct was pleaded as a conspiracy charge.

16. The Summary of Facts to which D6 agreed for the purpose of her sentencing revealed that she presented a cheque, which was issued by PW3 and was in the sum of HK$1.1 million payable to her, to Hang Seng Bank for clearance on 12 January 2016. However it could not be banked into her personal account due to an irregularity on the face of the cheque.

17. On 8 December 2016, D6 was arrested for the offence of “Conspiracy to defraud” and under caution she admitted that she “just lent the account to someone for collecting money” and she did not know anything else.

18. D6 further explained that about a year previously she became acquainted with one “Ah Fei”, who was the boyfriend of her ex-school friend. “Ah Fei” asked if she was interested in earning quick money by lending her bank account to him, and she agreed to do so. He then passed her a cheque and told her to deposit it and immediately cash it at the counter of Hang Seng Bank in Central. She did as she was told but the bank staff refused to process the transaction as there was a problem with the cheque. Consequently, she returned the cheque to “Ah Fei”. A replacement cheque was subsequently obtained but, for reasons which are not clear, this was negotiated by D4.[5]

19. In subsequent cautioned interviews, D6 further admitted that she had agreed to help “Ah Fei” to receive HK$1.1 million for a reward of HK$10,000. On 12 January 2016, “Ah Fei” was waiting for her outside the bank, however the cheque could not be cleared due to poor handwriting. In the end, she received no reward.

C. The judge’s Reasons for Sentence in respect of D3 and D6

20. D3 was of clear record but D6 had a previous conviction of “Possession of a dangerous drug” in 2017 for which she had been sentenced to Drug Addiction Treatment Centre.

D3

21. In his Reasons for Sentence the judge assessed the gravity of D1’s offending for the fraud in Charge 7 in the following way:

“6. In my view, the seriousness of the fraud of the present case was undoubtedly no less than the loco London silver fraud. Both kinds of frauds were designed to cheat the gullible members of the public. The sentence must have deterrent effect. In each charge, D1 perpetuated the fraud with other persons. Although I cannot say that he was the mastermind, he played an active and vital role.

7. Anyone who joined in this kind of fraud will expect a sentence with imprisonment at a starting point no less than 4 years.”[6]

22. The judge clearly intended these comments to apply to D3 as he found that D3 had played as active and vital a role as D1 in the commission of the offence and was equally culpable as his accomplice. In respect of D3, the judge also took into account that the victim suffered a loss of HK$910,800.

23. Finally, the judge noted that D3 had a clear record but only referred to it as part of D3’s background.

24. The judge adopted 4 years’ imprisonment as the starting point for this Charge and then said:

“… I fail to find any mitigating factor that warrant any reduction in the sentence. …”

Consequently, he sentenced D3 to 4 years’ imprisonment.

D6

25. In respect of D6, who was convicted of Charge 2 on her own plea, the judge accepted her mitigation saying:

“35. I accept that the personal background of D6 was unfortunate and her life has been changing in a positive way since her son was born. She is currently free from drug habit. I...

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