HKSAR v. CHAU YU TUNG

DCCC 715/2024

[2025] HKDC 370

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 715 OF 2024

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REASONS FOR SENTENCE

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1.  The defendant is, upon his plea and agreement to Summary of Facts, convicted of 2 charges of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.

Facts

Bank Accounts

2.  The defendant held a personal account with the Bank of China (Hong Kong)  Limited (the “BOC Account”)  and The Hongkong and Shanghai Banking Corporation Limited (the “HSBC Account”)  since 24 January 2011 and 9 August 2022 respectively.

3.  Since the opening of the accounts, the defendant had been the sole holder and sole authorised signatory of the BOC Account and the HSBC Account.

Deceptions

4.  10 citizens fell prey to an investment scam.  Scammers whom they met through mobile app or unsolicited text messages deceived them into making investments through untrusted website or mobile app.  To make investments, each of them followed the scammer’s instructions to pay money into designated bank accounts as capital, including the BOC Account and the HSBC Account, between 19 August 2022 and 1 September 2022.

5.  1 victim fell prey to an employment fraud.  Scammers approached him on Facebook with an unsolicited job offer to boost sales for an e-commerce platform.  The victim then followed the scammers’ instructions and deposited HK$25,500 into 4 bank accounts, including HK$3,500 transferred to the HSBC Account between 22 and 23 August 2022 in order to earn commissions on the job, which never existed.

6.  A blackmailer approached another victim through a dating app and WhatsApp, and deceived him into performing indecent acts in front of a webcam, during which the victim was being filmed naked.  The blackmailer threatened to circulate the footage if the victim did not pay him money.  Under threat, the victim paid a total of HK$141,000 into 3 bank accounts, including the BOC Account, which received HK$55,000 between 23 and 24 August 2022.

7.  2 other victims fell prey to a telephone deception.  Scammers impersonating as government officials accused them of money laundering.  They followed the scammers’ instructions and one of them paid HK$124,600 into 3 bank accounts, including paying HK$52,600 into the BOC Account on 23 August 2022.  Another victim paid a total of HK$548,000 and RMB 229,000 into 13 bank accounts, including paying HK$10,000 into the BOC Account on 24 August 2022.  She also opened an account with the Hang Seng Bank Limited and disclosed her online banking login password to scammers who, without authorisation, transferred HK$210,000 out of the account.

8.  These 14 victims subsequently realised they were deceived, and reported the case to the police.

BOC Account (2^nd Charge)

9.  The BOC Account was inactive from 1 June 2018 to 4 August 2022.  On 5 August 2022, the defendant visited the Bank of China and updated his personal information, including that he worked as an IT Personnel, earning about HK$10,001 to HK$25,000 per month, that the BOC Account shall be used for saving money or making fixed deposit and handling daily transactions, and that the funds passing through the account originated from his income accumulation.

10.  Between 19 and 24 August 2022, excluding transfer from or to the HSBC Account, there had been:

(a)  a total of HK$2,862,231 credited into the BOC Account through 88 deposits; and

(b)  a total of HK$2,862,425.62 debited from the BOC Account through 86 withdrawals.

11.  The 88 deposits consisted of (i)  55 FPS transfers made by 42 persons, (ii)  20 ATM deposit/ATM transfers, (iii)  9 bank transfers originated from 7 bank accounts, and (iv)  4 deposits made through a bank counter.  62 out of the 88 deposits are in the sums of HK$5,000 or more, between HK$5,000 and HK$400,000.

12.  A large proportion of the money received through these 88 deposits was being transferred to other persons within 10 hours of being credited into the BOC Account.  By withdrawals through the FPS or bank transfers, the BOC Account transferred money to 69 persons.

13.  On 24 August 2022, HK$17,496.38 remained in the BOC Account as closing balance.  The account was not active until 14 September 2022. 

14.  On 6 September 2022, the defendant visited a bank branch to update his mobile number registered with the bank. 

15.  By letter dated 14 September 2022, the Bank of China informed the defendant of the closure of the BOC Account and asked him to collect the account balance.  The balance was being withdrawn on 14 September 2022.

16.  Over the charge period, the BOC Account received HK$17,705 from the HSBC Account (which is excluded from the charge amount), and transferred HK$15 to the HSBC Account.

HSBC Account (1^st Charge)

17.  The HSBC Account was opened on 9 August 2022.  In his application to open the account, the defendant claimed that he works as a lawyer for Paul Kwan & Co, earning HK$240,000 per year, that the HSBC Account shall be used for saving money or making fixed deposits, and that the source of first deposit is his salary payment.

18.  Between 19 and 26 August 2022, excluding transfers from or to the BOC Account, and a reversal cheque deposit in the sum of HK$10,000, there had been:

(a)  a total of HK$1,910,728.02 credited into the HSBC Account through 108 deposits; and

(b)  a total of HK$1,893,007.55 debited from the HSBC Account through 85 withdrawals.

19.  The 108 deposits consisted of (i)  91 transfers made by 68 persons, (ii)  14 cash deposits, and (iii)  3 deposits made by unknown persons.  63 out of the 108 deposits are in the sum of HK$5,000 or more, between HK$5,000 and HK$172,827. 

20.  A vast majority of the money credited into the HSBC Account through the 108 deposits was being transferred to other persons on the same day.  70 bank accounts received money transferred from the HSBC Account through FPS or bank transfer.

21.  Over the charge period, the HSBC Account received HK$15 credited from the BOC Account (which is excluded from the charge amount), and transferred HK$17,705 to the BOC Account.

Criminal record

22.  The defendant has 4 previous criminal records involving convictions of 6 charges, none similar.  There are 3 charges involving dishonesty, including a charge of theft and 2 charges of conspiracy to defraud.

Mitigation

23.  The defendant is aged 34.  He has a 2-year-old daughter born out of his relationship with his ex-girlfriend.  He received education up to higher diploma level.  He had worked as a construction site worker and a decoration worker in the past.  He stopped working after he was diagnosed with psychiatric problems.

24.  The defendant said that he committed the present offences because he did not have enough money to take care of his ex-girlfriend and his daughter.  He is deeply remorseful as to what he has done. 

25.  It was said that he did not know what was happening behind the scene.  He was just a cog in the machine, ie, he was manipulated but he did not know what was happening.  He now knows turning a blind eye in this kind of circumstance is not an excuse.

26.  Defence counsel says there is no sentencing guideline in these cases. He stressed that there is no international element involved in the present case. 

27.  It was said that the defendant has, during the remand, started to believe in God and he promises he will attend church after he finishes serving his custodial sentence.

28.  It is conceded that the present case involved a total amount of 4.7-odd million.  He asked this court to impose a sentence of less than 20 months.  He also urged this court to consider the totality principle and to order, as far as possible, a concurrent sentence for the 2 charges.

Discussion

29.  Before sentencing, the court has considered all that was said on behalf of the defendant in mitigation as well as the mitigation letters lodged. 

30.  On conviction upon indictment of this offence, a person is liable to a fine of HK$5 million and to imprisonment for 14 years. 

31.  Mitigation letters from the defendant, the defendant’s cohabitee, two uncles and aunt, all asked this court to treat the defendant with leniency. They said the defendant lacked parental guidance when he was young, and he has transgressed the law in the past.  On release from prison, he had amended his ways and worked in gainful employment until the commission of the present offences.  They asked this court to be lenient on the defendant so that he can be released earlier to rehabilitate himself and to resume being a good father and husband.

32.  In the case of HKSAR v Boma [2012] 2 HKLRD 33, Stock JA (as he then was)  was explaining that it was not realistically possible or desirable to lay down guidelines in relation to the offence of money laundering because of the highly variable circumstances in which these offences were committed, and the widely different roles played by those convicted of these offences.  He said that deterrence was paramount in the sentencing exercise as the criminality in laundering arose from the encouragement and nourishment that it gives to crime in general.  He said the amount of money laundered is a significant factor, and the court should take into account of factors such as:

(a)  the nature of the predicate offence;

(b)  the state of the offender’s knowledge;

(c)  where the operation involved an international dimension, this would be a significant aggravating feature;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organised criminal syndicate, this would be an aggravating feature;

(f)  whether there was one transaction or many, and the length of time over which the offence was committed;

(g)  whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h)  the role of the offender and the acts performed by him.

33.  In this case, the amount of money laundered is HK$1,910,728.02 for the 1^st charge, and HK$2,862,231.01 for the 2^nd charge, totalling HK$4,772,959.03.

34.  Duration of the offence for the 1^st charge is 8 days and it involved 108 deposits.  Although the actual number of victims involved is unknown, one can see from the source of the funds that the number of victims involved is substantial.  For the 2^nd charge, the duration of the offence is 27 days, involving 88 deposits, and no less than 12 victims.

35.  The court noted that the HSBC Account was opened on 9 August 2022 and used in the commission of the 1^st offence just 10 days later, whilst the BOC Account was opened on 24 January 2011 and used in the commission of the offence 11 years later.

36.  It was noted, in particular, that shortly before the commission of the two offences, the defendant had actively went to the bank and made false representation to the bank, including but not limited to, paragraph 11(1)  and paragraph 23(1)  of the agreed Summary of Facts.  He, therefore, did more than just allowing the use of his bank accounts by the criminal syndicate.

37.  The scheme involved clearly is sophisticated and involved a criminal syndicate.  Although the predicate offence for the monies in the 1^st charge is unknown, that for the 2^nd charge involved telephone deception, investment scam, and blackmail.

38.  In the case of SJ v Wan Kwok Keung [2012] 1 HKLRD 201, Yeung JA (as he then was)  said that money laundering is a serious offence and must be deterred.  In considering the sentence, the emphasis should be on the amount of “black money” laundered, and not the benefit obtained by the defendant.  Paragraph 13 of the judgment stated that:

“…Of course if there is information to prove that the ‘black money’ is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc, or the defendant’s benefit is huge, then the sentence of the defendant should be adjusted upward.”

39.  There is no evidence before this court that the defendant was fully aware of the predicate offence or what benefit the defendant received as a result of the commission of the two offences.

40.  In the Wan Kwok Keung case, the Court of Appeal referred to the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, where the sentencing starting point for laundering money between HK$1 million and HK$2 million is 3 years, and between HK$3 million and HK$6 million is 4 years’ imprisonment.

41.  Considering the factors aforesaid and the circumstances of the present offences, in particular the amount of money involved, the number of victims involved, the number of transactions, the period within which the offences were committed and the role of the defendant, the court finds that the appropriate sentencing starting point is 3 years’ imprisonment for the 1^st charge, and 3 years and 6 months’ imprisonment for the 2^nd charge.

42.  It is well established that money laundering is a serious offence, and personal background of a defendant is seldom a valid mitigating factor. Immediate custodial sentence is the only appropriate sentencing option in these cases. 

43.  Although the defendant has previous convictions relating to dishonesty, the court is not going to enhance his sentencing starting point.

Enhancement of sentence

44.  The prosecution has applied for enhancement of sentence pursuant to section 27 of the Organized and Serious Crimes Ordinance, Cap 455, on the grounds of prevalence of the use of stooge accounts in the commission of these specific offences, and the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of these specified offences.  In support of the application, there is a statement from Chief Inspector Li Yiu Nam dated 20 February 2025 lodged with the court. 

45.  Defence objected to the application and their grounds of objection was the amount of money involved in the case does not justify the application. 

46.  According to the statement of Chief Inspector Li, the amount of reported loss or proceeds laundered in:

(a)  deception cases rose from HK$552.88 million in 2020 to HK$2,143.41 million in 2024;

(b)  money laundering cases rose from HK$2,465.01 million in 2020 to HK$3,971.75 million in 2024; and

(c)  cases involving use of stooge accounts rose from HK$1,879.83 million in 2020 to HK$4,466.39 million in 2024.

47.  It is quite clear that deception and money laundering cases in particular involving use of stooge accounts have become drastically and alarmingly more prevalent. 

48.  This court is clearly satisfied that both grounds of enhancement were made out.  The objection from the defence is without merit.  This court finds that it is just and appropriate to enhance the sentence by one-third.

49.  Accordingly, the sentencing starting point for the 1^st charge becomes 48 months’ imprisonment, and that for the 2^nd charge becomes 56 months’ imprisonment.

50.  The defendant has pleaded guilty and is entitled to the full one-third sentencing discount.  He is therefore sentenced 32 months’ imprisonment for the 1^st charge, and 37 months and 10 days’ imprisonment for the 2^nd charge.

Totality principle

51.  The 2 offences are identical in nature.  In essence, the defendant committed money laundering using his 2 bank accounts over the period from 19 August 2022 to 14 September 2022 involving a total of HK$4,772,959.03.

52.  Having regard to the overall culpability of the defendant, in particular the total amount of money laundered, and referring to the case of Hsu Yu Yi, the court finds that the total sentence (after plea)  of 42 months and 20 days’ imprisonment just and proportionate.  Accordingly, 5 months and 10 days’ imprisonment of the 1^st charge is to run consecutive to the sentence of the 2^nd charge, the rest to run concurrently. 

53.  The defendant is sentenced to a total of 42 months and 20 days’ imprisonment in this case.