HKSAR v. SALIM MAJED AND ANOTHER

DCCC 646/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 646 OF 2012

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Reasons for Sentence

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1. Salim Majed (D2) and Dahdal Hafez (D3) appear before me facing seven counts of “Dealing with property known or reasonably believed to represent proceeds of an indictable offence”, commonly known as money laundering. Charges 4 to 7 are against D2, and Charges 8 to 10 against D3.

2. D2 and D3 pleaded not guilty to the charges and were convicted of the respective charges after trial.

3. D2 and D3 came to Hong Kong from the U.K. in late November 2011, with the help of a Pakistani male Yaser and Yaser’s wife, Rainbow, D2 acquired a company “Day Leader” and D3 acquired a company “Charmsky” in Hong Kong.  With the help of Yaser and Rainbow, D2 and D3 opened bank accounts with the HSBC, Hang Seng and the BOC in early December 2011.

4. Although D2 and D3 were given the bank items by the HSBC and Hang Seng, ie the ATM cards, the PINs, the security devices and the passwords for Internet Banking, they passed the bank items to Yaser so that Yaser and/or some other people could operate the bank accounts of Day Leader and Charmsky while D2 and D3 were not in Hong Kong.

5. It is the court’s findings that D2 and D3 were paid to come to Hong Kong to set up the companies and to open the bank accounts in question.  They knowingly allowed their bank accounts to be used by others.  Although D2 and D3 had parted with the bank items of the HSBC and Hang Seng and had never received any bank items from the BOC, they could conduct banking transactions in person at any of the HSBC, Hang Seng and the BOC branches.

6. The evidence received and accepted by this court reveals that the victims of international email and mail frauds were lured to deposit moneys into the designated bank accounts in Hong Kong.  These accounts were related either to D2 or D3.  D2 and D3 were arrested when they came to Hong Kong from the U.K. to deal with the accounts.

7. From the bankers’ affirmations, one can see that for the HSBC, Hang Seng and the BOC bank accounts of Day Leader, during the relevant period, the total deposits amount was approximately HK$8.01 million.

8. Charge 4 concerns a modest sum of HK$8,609.20 in the BOC’s account no. 012-676-017725-8.

9. I found that on Charge 4, D2 dealt with HK$8,000 himself when he made the cash withdrawal during his second visit to Hong Kong.  He aided and abetted another person to deal with the rest of the property as particularised.  

10. Charge 5 concerns US$1,998.52 in the BOC’s account no. 012-679-9-212860-1.

11. I found that D2 aided and abetted another to deal with the aforesaid property.

12. Charge 6 concerns HK$266,495.22, €30,566.10, GBP25,750.00 and US$677,578.30 in the Hang Seng bank account of Day Leader.  

13. I found that D2 dealt with HK$260,000 himself when he made the cash withdrawal during his second visit to Hong Kong.  He aided and abetted another person to deal with the rest of the property as particularised.

14. Charge 7 concerns HK$141,153.98 and US$219,278.36 in the HSBC bank account of Day Leader. 

15. I found that D2 dealt with HK$140,000 when he made the cash withdrawal during his second visit to Hong Kong.  He aided and abetted another person to deal with the rest of the property as particularised.

16. From the bankers’ affirmations, one can see that during the relevant period, for the HSBC, Hang Seng and the BOC bank accounts of Charmsky, the total deposits amount was approximately HK$3.2 million.

17. Charge 8 concerns a modest sum of HK$2,000 in the BOC account of Charmsky.

18. I found that D3 dealt with the property when he made the cash withdrawal during his second visit to Hong Kong.

19. Charge 9 concerns HK$1,548.80 and US$109,146.26 in the Hang Seng bank account of Charmsky.

20. I found that D3 dealt with HK$1,548.80 and US$1,000 when he made the cash withdrawal during his second visit to Hong Kong.  He aided and abetted another person to deal with the rest of the property as particularised.

21. Charge 10 concerns HK$186,664.50 and US$277,103.84 in the HSBC bank account of Charmsky.

22. I found that D3 dealt with US$900 when he made the cash withdrawal during his second visit.  He aided and abetted another person to deal with the rest of the property as particularised.

23. I found that taking into consideration the way Day Leader and Charmsky were set up, the nature and method of opening the bank accounts in question, the handing-over and permitting all controlling devices of the accounts to be used by a third party, making withdrawals from the accounts moneys that D2 and D3 knew were not theirs, there were grounds that a common-sense, right-thinking member of the community would consider sufficient to lead a person to believe that the property that D2 and D3 each dealt with or helped to deal with in whole or in part represented proceeds of an indictable offence.  I found that these grounds were known to D2 and D3.

24. Both D2 and D3 are men of hitherto good character.

25. I have considered all the matters urged on D2 and D3’s behalf by Mr. Pierce and Mr. Loftus.

26. Mr. Pierce informed me that on 27^th March 2013, before D2 took the witness-stand, D2 had through his lawyers, offered to plead guilty to the three cash withdrawals.  D2’s offer was turned down by the Prosecution.  Mr. Pierce in his closing made some fair concessions in respect of the cash withdrawals made by D2 (paragraph 25.19 and 28).

27. I am aware that D2 and D3 admitted most of the Prosecution’s case and some time was saved as a result.

28. I am aware that there is no sentencing tariffs for the offence of money laundering.

29. In HKSAR v Boma, CACC 335 of 2010, a case of money laundering, Stock V.P. says the first three factors to which any sentencing court should have regard are the maximum penalty available, i.e. 14 years’ imprisonment, the need for deterrence and the question of the amount of the money laundered (paragraphs 35 to 38).

30. Stock V.P. points out in paragraph 40 that the court should take into account some of the other significant features, inter alia:

(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 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.

The list is not an exhaustive one.

31. The maximum penalty for money laundering is one of 14 years’ imprisonment, subject to the jurisdiction limit of 7 years’ imprisonment in the District Court.

32. It is important that Hong Kong’s reputation as an international financial centre must be closely guarded.  It is necessary to deter the commission of the money-laundering offence.

33. Some of the moneys were proven to be proceeds which stemmed from international email and mail fraud.  From the section 65B statements of PW1 to PW7, one can see that:

(a) US$105,351.55 and US$72,383.47 ended up with the Hang Seng account of Day Leader (Charge 6 against D2).

(b) US$39,961.57 ended up with the HSBC account of Day Leader (Charge 7 against D2).

(c) US$28,967.58, US$48,307.58 and US$31,894.58 ended up with the HSBC account of Charmsky (Charge 10 against D3).

34. Charge 4 concerns a modest amount of HK$8,607.72.

35. Charge 5 concerns US$1,998.52 (approximately HK$15,506).

36. Charge 6 concerns HK$266,495.22, €30,566.10, GBP25,750.00 and US$677,578.30 (approximately HK$6,146,139.83).

37. Charge 7 concerns HK$141,153.98 and US$219,273.36 (approximately HK$1,842,534.77).

38. The total sum involved for Charge 4 to 7 was approximately HK$8.01 million.

39. Charge 8 concerns HK$2,000.

40. Charge 9 concerns HK$1,548.80 and US$109,146.26 (approximately HK$848,414.63).

41. Charge 10 concerns HK$186,664.50 and US$277,103.84 (approximately HK$2,336,713.19).

42. The total sum involved for Charge 8 to 10 is a little under HK$3.2 million.

43. D2 and D3 were convicted on the basis that they had reasonable grounds to believe the moneys they dealt with and helped to deal with, in whole or in part, directly or indirectly represented proceeds of an indictable offence, not that they had knowledge of it. 

44. The operation involved an international dimension.  Overseas victims were involved.  D2 and D3 travelled all the way to Hong Kong to set up the companies and open the accounts in question.  They travelled to Hong Kong to make the cash withdrawals during the second visit.  According to Boma, this would be a significant aggravating feature.

45. The offences involved sophisticated and careful planning and, clearly, D2 and D3 committed the offences on behalf of an organised syndicate which arranged D2 and D3 to travel to Hong Kong to set up the companies and open the accounts.

46. The offences took place within the period of December 2011 and 22^nd February 2012, a little less than three months.  There were many transactions involved, as shown in annex 1 to the verdict.

47. D2 and D3 each played a pivotal role in the money‑laundering activities albeit they were not the mastermind.

48. On Charge 4, taking all the matters into consideration, a starting point of 18 months’ imprisonment is appropriate.

49. I allow D2 1-month reduction for his clear record and another month reduction for admitting most part of the prosecution’s case and his offer to plead to the cash withdrawal. The offer, though turned down by the Prosecution, was echoed by Mr. Pierce in his closing.

50. For Charge 4, I sentence D2 to 16 months’ imprisonment.

51. On Charge 5, I take 18 months as the starting point.  I allow 1-month reduction for D2’s clear record and another month reduction for D2’s admitting most of the Prosecution’s case.

52. For Charge 5, I sentence D2 to 16 months’ imprisonment.

53. On Charge 6, I take 5 years as the starting point.  I allow D2 3 months’ reduction for his clear record.  I allow D2 another 2 months’ reduction for admitting most of the Prosecution’s case and his offer to plead to the cash withdrawal, which was echoed by Mr. Pierce in his closing submissions.

54. For Charge 6, I sentence D2 to 55 months’ imprisonment.

55. For Charge 7, I take 3 years as the starting point.  I allow D2 2 months’ reduction for his clear record.  I allow D2 another 2 months’ reduction for admitting most of the Prosecution’s case and his offer to plead to the cash withdrawals.  Though turned down by the Prosecution, D2’s offer was nevertheless echoed by the concessions made by Mr. Pierce in his closing submissions.

56. On Charge 7, I sentence D2 to 32 months’ imprisonment.

57. On Charge 8, I take a starting point of 15 months’ imprisonment.  I allow D3 1-month reduction for his clear record and another month for admitting the bulk of the Prosecution’s case.

58. On Charge 8, I sentence D3 to 13 months’ imprisonment.

59. On Charge 9, I take 2 years as the starting point.  I allow D3 2 months for his clear record and another month’s reduction for admitting the bulk of the Prosecution’s case.

60. On Charge 9, I sentence D3 to 21 months’ imprisonment.

61. On Charge 10, I take 3 years as the starting point.  I allow D3 2 months’ reduction for his clear record and 1-month reduction for admitting the bulk of the Prosecution’s case.

62. On Charge 10, I sentence D3 to 33 months’ imprisonment.

63. I take into the totality principle.

64. In the case of D2, a total term of 5 years’ imprisonment should adequately reflect D2’s overall culpability for Charges 4 to 7.

65. I order the sentences for Charge 4, 5 and 7 are to run concurrently with each other but 5 months for the sentences for Charge 4, 5 and 7 are to run consecutively to the sentence for Charge 6, making a total sentence of 5 years’ imprisonment (60 months).

66. In the case of D3, a total term of 3 and a half years’ imprisonment should adequately reflect D3’s overall culpability for Charges 8 to 10.

67. I order the sentences for Charge 8 and 9 are to run concurrently with each other but 9 months of which shall run consecutively to the sentence for Charge 10, making a total term of 3 and a half years’ imprisonment (42 months).

68. It remains for me to thank counsel for their assistance.