Scamming a scammer: criminal breach of trust?

Facts

In late 2012, Raj met 'Maria' on an "adult finder" site.¹ He "became interested in her and she told him likewise".² However, she lived in far away, in Australia, and asked him to send her money so she could come to Singapore to meet him. He sent her $1,200 and so became a victim of a classic internet love scam that the Singapore Police Force has since warned against in posters and banners across the island.

She made it all the way to Malaysia. They were to meet there, but first she asked him to collect $81,000 on her behalf from a contact in Singapore, and bring it to over for her. He agreed.

On 9th March 2013, he collected a envelope from Maria's contact in Singapore at the NEX MRT station. He did not open the sealed envelope nor count the money because he wanted to get back to his lorry (parked on a double yellow line) before the parking warden came round.

His interest in the money exceeded his interest in Maria at that point. He pocketed the $81,000 and remained in Singapore. When questioned by Maria, he fabricated stories about trouble at the checkpoint, that the money had been seized by an officer, that he had been called to appear in court, that he needed to be bailed out, and more. He later told the police, rather unconvincingly, that the envelope contained only bits of white paper, not $81,000.

Police investigations later confirmed what Raj had already suspected — that this was a scam. They determined that Maria was a "phantom", did not exist, and her emails had been written by a team of overseas scammers. The $81,000 had belonged to another victim of the scam, who subsequently realised he had been deceived, and had made a police report.

The Offence

Raj was charged with criminal breach of trust (CBT). He was found to have been entrusted with $81,000 by 'Maria', and to have dishonestly misappropriated that property.

s405 of the Penal Code reads:

Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or intentionally suffers any other person to do so, commits “criminal breach of trust”

The offence is punishable by imprisonment for up to 7 years, or with a fine, or with both.

Raj was convicted and sentenced to 13 months' imprisonment. An appeal against both the conviction and the sentence was made to the High Court, which was dismissed.

Arguments in the District Court

In the District Court ([2020] SGDC 95), the defense chose to focus on the element of entrustment. It was argued:

1. That the person who entrusted the property must have had legal ownership of the property
2. That the actual identity of the person who entrusted property must be ascertained

Legal Ownership

In relation to the first argument, the defense took the position that the party entrusting property must be the legal owner of the property. This was rightly rejected.

Proprietary rights exist along a spectrum. They exist in respect of things, but need to be understood in relation to people. This relativity of title allows for the resolution of disputes between people with titles of differing strength, without any need to determine who the original or ultimate owner is. For this reason, finders of property³ and even thieves,⁴ have possessory rights to the property. This was recognised by Ong Chin Rhu DJ, who, in dismissing this argument, noted that ownership is merely the "highest possible right in a thing", and that a mere possessory right can be transferred, and is sufficient for entrustment. Furthermore, s405 of the Penal Code is also very broadly phrased. It refers to entrustment "in any manner" and does not require that the entrustment be lawful. In any case, such an argument has already been squarely rejected in local caselaw, as was noted by the prosecution: Pittis Stavros v PP.⁵

You Must Know Who You Wrong

In the District Court, the defense argued that it must have been known to the accused that the property belonged to someone else (an argument towards the mens rea). It was further argued that the actus rea element of entrustment required establishing the identity of Maria. However, confusingly, they appear to have melded this argument with the earlier argument that ownership is necessary for entrustment. The overall argument was therefore that:

1. The entrustor must be the owner of the property
2. The identity of the entrustor must therefore be known in order for entrustment to be established (actus rea)
3. To wrongfully dispose of the property, the accused must have known whose right was being infringed upon (mens rea)

Ong Chin Rhu DJ did not highlight the distinct arguments made towards the actus rea and mens rea elements, but instead dealt with this submission as a whole, and rejected it for similar reasons as above — because ownership is not a necessary element of CBT. She held that the identity of the entrustor is immaterial: "what was essential was that the ownership or beneficial interest in the property alleged to have been entrusted must be in some person other than the accused". She cited the Indian case of Som Nath Puri v State of Rajasthan:⁸

…As long as the accused is given possession of property for a specific purpose or to deal with it in a particular manner, the ownership being in some other person other than the accused, he can be said to be entrusted with that property to be applied in accordance with the terms of entrustment and for the benefit of the ownership

In other words, entrustment includes all cases where property in handed over for a specific purpose, and CBT will be committed whenever the property is disposed of contrary to the terms on which possession has been handed over.

A Trust Relationship Cannot Be Based On Deceit

On appeal to the High Court, the defense advanced a slightly different argument: that an entrustment requires a trust relationship, that such a trust relationship must be "legitimate or genuine", and when a trust relationship is formed as a result of the entrusting party's fraud and deceit, then no valid trust relationship is created.⁷

Vincent Hoong J accepted the AGC's submission that a purposive interpretation of s405 should be taken, with the effect that it should be construed broadly so as to punish any "knowing or intentional betrayal of an initial trust placed in the accused person which the law does not condone".⁹ A broad view of the provision should therefore be taken.

Neither the parties nor the court deal explicitly with this, but it should be noted that when establishing CBT, a trust is not needed in the technical, equitable sense. The accused need not be a trustee and the obligation need not be enforceable in Equity. This is clear from Gan Beng v PP.¹⁰

In essence, the defense was submitting that a person cannot be entrusted with property if they have been deceived as to the true identity of the entrusting party (because 'trust' as in 'entrustment' cannot occur in a relationship built on deceit).

This was rejected by Vincent Hoong J who held that what was essential was the terms of the entrustment (i.e. the conditions imposed on the accused possession of the property), and this was not impacted by the deceit as to identity. He cited the example of an anonymous crowdfunding campaign, given by Ong Chin Rhu DJ's in the court below, with approval.¹¹ Even if the donors to such a campaign chose to remain anonymous and so could not be identified, there would still be an entrustment of the monies collected to the fundraiser because the money was given and collected for a specific cause. If the money was subsequently dishonestly misappropriated, that would constitute CBT.

Vincent Hoong J also dealt with the mens rea point in holding that dishonesty is established so long as the accused acted with the intention of causing wrongful gain to himself or wrongful loss to another person, or his conduct fulfilled the s24 Penal Code criteria (i.e. was dishonest "by the ordinary standards of reasonable and honest persons", and he knew "that act is dishonest by such standards").

He therefore dismissed the appeal on the conviction, and also dismissed the appeal on the 13 month sentence, stating that the court below had not failed to consider any relevant legal principles, and the sentence imposed was not manifestly excessive.

Comment

To some, the result reached may not be immediately intuitive. A victim of a love scam, who realised he was being scammed,¹² and decided to pocket the money rather than act as a money mule, was charged with criminal breach of trust and sentenced to 13 months' imprisonment.

Undoubtedly, some punishment is warranted — restitution of the money he misappropriated at the very least. A law-abiding citizen should have made a police report upon learning of the scam and should have given the money to the police to be returned to its rightful owner, if possible. Raj did not do this, and indeed, acted dishonestly by pocketing money he knew was not his and which he was given for specific reasons. Yet imprisonment for more than a year, for scamming a scammer, can seem harsh.

There are a host of other ways in which Raj could have been more appropriately punished, and the money returned to its rightful owner. For instance, Raj could have been charged with dishonest misappropriation (s403) instead. It is a less severe offence than CBT, with a maximum sentence of 2 years, as compared to the 7 years that a person convicted of CBT can be imprisoned for.

Identity of the Entrustor

This case involved a deceit as to identity. Taking guidance from contract formation cases involving mistake as to identity, there are two ways in which this can be analysed:

1. Raj believed the person he was communicating with was Maria when in reality 'she' was a group of scammers (mistake as to identity)
2. It is not just that Raj believed the person with whom he was communicating to be Maria when in reality she was Y — in reality, the person he communicated with never existed; her identity was an imaginary one dreamt up by a group of scammers (non-existent party)

In the contract law, the distinction between the two turns on whether the transaction took place face-to-face or via written communication. In face-to-face transactions the parties are presumed to have intended to deal with the person before them, whatever their identity may be, whereas in written communications the parties are presumed to have intended to deal with the party named in the written communication.²²

There are hints that the defense may have made some submissions along these lines in the High Court — it was argued that the concept of consensus ad idem, and mistake, and misrepresentation from civil law were relevant to entrustment. The defense may have cited cases such as Cundy v Lindsay¹³ where it was held that no contract existed between a handkerchief seller and a scammer because the scammer purported to be, and the handkerchief seller believed they were contracting with, a company which in truth did not exist. There is no doubt that the scammer existed, and was a flesh-and-blood person, but the point is that of him the handkerchief sellers "knew nothing and of him they never thought".

On the facts of the case, Raj's communications with Maria appeared to be wholly over email, so on a contractual analysis it is clear that Raj intended to deal with Maria only, not simply the other person, whomever they may be. No contract could possibly have been formed.

However, contract formation and transfer of a proprietary interest are different in nature. The former hinges upon the parties intentions whereas the latter can occur irrespective of intention. Furthermore, given the unsatisfactory distinction drawn in contract formation, Vincent Hoong J reasonably chose not to proceed down those lines. He noted that for the purposes of establishing CBT, the court was not concerned with whether a valid contract had been formed, or whether a valid trust had been formed.²³ This is consistent with the broad interpretation of the provision taken in the past and also has the benefit of avoiding the unsatisfactory state of mistake as to identity that exists in contract formation, where the result can turn on "illogical and sometimes barely perceptible distinctions".¹⁴

Existence of An Entrustor

It should be clarified that although the specific identity of the entrustor is immaterial, it is nonetheless essential that an entrustor exists. To the extent that Vincent Hoong J appeared to suggest that establishing the existence of an entrustor is not necessary — e.g. by noting that there is no need to mention the entrustor on the charge,²¹ it is submitted that this was unintentional and would in any case be misguided. It is conceptually unsound that one can be entrusted with property by a non-existent person, and act in contravention of terms set out by that non-existent person. It is not important who the entrustor is, so long as they have some proprietary right over the property. But it is important that they exist, because a non-existent person cannot hold a proprietary right in property. There would be no question of CBT arising if Raj had misappropriated his own money whilst simply imagining that the money belonged to someone else, and that he had been given the money to deal with in a certain way by that person.

Entrustment requires the transference of some proprietary interest in property, for some purpose.¹⁵ It is essential to entrustment that the proprietary interest alleged to have been entrusted must have been in some other person.²⁰ It makes no linguistic or conceptual sense for a non-existent person to be able to have a proprietary interest or to be able to transfer that interest. Indeed, the prosecution appeared to have appreciated the need for some other party to exist in order for there to be an entrustment of property — it amended the original charge to say Raj had been entrusted with property "by one 'Maria Lloyd'".

In Pittis Stavros v PP, ²⁴ See Kee Oon JC (as he then was) was willing to delete the identity of the entrustor from the CBT charge. As Vincent Hoong J noted, this supports the proposition that the identity of the entrustor is immaterial. However, it does not follow that no entrustor is required, and that entrustment can occur in the absence of any other party besides the accused. The reason the identity of the entrustor was deleted from the charge in Pittis Stavros was because it was unclear which of two parties the relevant property belonged to. It was entirely clear that someone had entrusted the property to the accused, just not who precisely that party was.

Ong Chin Rhu DJ's example of an anonymous online crowdfunding campaign is helpful in understanding why the identity of the entrustor is unnecessary for CBT to be established, but has little relevance to a situation where the entrustor does not exist.

It is submitted that the following example may be more helpful when considering a non-existent entrustor. A person believes the spirit of his deceased grandfather has instructed him to retrieve money from a secret hiding spot and use it to adorn his grave. The person instead pockets the money, contrary to what he believes are the spirit's wishes. Here, the entrustor is non-existent (for the purposes of mortal law at least), so whilst the person may have come into possession of the money, he cannot logically be said to have been entrusted with the money. It may be that all the mens rea elements of CBT are made out: the person believed he was given the money by his grandfather, that his grandfather had ownership of the money, and that he was to deal with the money in the manner instructed by his grandfather. But mental dishonesty alone is not criminal, and such a person would not be liable for CBT.

Conclusion

Despite the alluring similarities between mistaken identity cases in contract law and mistaken identity in CBT, Vincent Hoong J's decision to keep the two apart is probably the right one, especially given the unsatisfactory state of the former. However, it should be clarified that this holding does extend so far as to exclude any need for an entrustor altogether.