HKSAR v. WONG KIM PING AND ANOTHER

DCCC 905, 909 & 1099/2022 (Consolidated)

[2023] HKDC 1398

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 905, 909 & 1099 OF 2022

________________________

________________________

________________________

REASONS FOR SENTENCE

________________________

1.  There are four defendants in this case, but we are only dealing with D1 and D2, who had pleaded guilty before me. The other two defendants, namely, D3 and D4, are still waiting for their trial.

Charges

2.  D1 faces a total of four counts of money laundering, Charges 1 to 4, whereas D2 faces Charges 5 and 6.  Each count relates to a bank account held by the respective defendant at the material time.

The predicate offence which gave rise to the money laundering charges

3.  In February and March 2022, PW1 - PW21 what they thought were “Brushing scams”, whereby they were recruited by the fraudsters to place orders on a fake online shopping website purportedly for boosting the sales volume in return for a commission. 

4.  The PWs were instructed to top up credits in their shopping accounts for placing orders by depositing money into designated bank accounts, and they were told that they would receive full refund with their commissions later on.  At the beginning, refunds and commissions were indeed paid. But when the PWs were lured to deposit more substantial amounts for placing bigger orders, the refund stopped and the fraudsters disappeared into thin air. 

The defendant’s dealings

5.  Between 2 and 8 March 2022, D1’s four bank accounts, one with each of the following banks, namely, Hong Kong and Shanghai Banking Corporation Limited (“HSBC”), Mox Bank, Nanyang Commercial Bank (“NCB”), and Standard Chartered Bank (“SCB”), had received a total of HK$1.87 million from PW1 to PW21.  When the police looked further into the transactions of these bank accounts, they found the following facts: 

(a)  Between 17 February and 10 March 2022, D1’s account with the HSBC received 50 deposits totalling HK$3,903,701.61. In turn, the sum was almost entirely withdrawn by way of 105 bank transfers. And PW4, one of the aforesaid victims, was amongst the top 10 depositors.

(b)  Between 24 February and 3 March 2022, D1’s account with the Mox Bank received a total of HK$1,555,717.62 by way of 418 bank deposit transfers. In turn, HK$1,554,238.83 was withdrawn from the account by way of 535 transfer withdrawals. PW1, PW2, PW4, PW5, PW13, and PW18 were amongst the top 10 depositors.

(c)  Between 7 February and 8 March 2022, D1’s account with the NCB received a total of HK$7,279,358.28 by way of 425 transactions. The sum was almost wholly transferred out by way of 511 transactions.

(d)  Between 17 February and 24 March 2022, D1’s account with the SCB received by way of 67 transactions HK$2,300,500.71. Likewise, the sum was almost entirely withdrawn by way of 67 transfers. PW4 was amongst the top 10 depositors.

6.  It should be noted also that of the four bank accounts, all of them were opened by D1 shortly before the date of offence.  In the case of the HSBC account, it was opened by him on 6 January 2022; the Mox Bank account on 23 February 2022; the NCB account on 10 January 2022; and the account with the SCB on 31 December 2021. 

7.  Now turning to D2. Between 25 February and 28 February 2022, D2’s two bank accounts, one with the Bank of China (“BOC”), and the other with the NCB, received a total of around $560,000 from PW1 to PW4. 

8.  For the BOC account, which was set up by D2 in June 2007, the police found that between 26 February and 28 February 2022, it had received a total of HK$2,208,218.8 by way of 57 deposits.  Almost every cent was withdrawn from this account by way of 61 transactions, leaving a balance of HK$52.39 by 28 February 2022.  PW1 and PW3 were amongst the top 10 depositors. 

9.  As for D2’s account with the NCB, the account was opened by him on 31 January 2022.  Between 26 and 28 February 2022, it had received a total of HK$2,264,029.72 by way of 73 deposits.  The money was likewise almost all withdrawn by way of 59 transfer withdrawals.  PW1 and PW4 were amongst the top 10 depositors. 

10.  As stated in paragraph 28 of the Summary of Facts, the transaction records of all these bank accounts held by D1 and D2 respectively had features to suggest that they were used as temporary repository of funds.  These included the fact that deposits and withdrawals were mostly made on either the same day or one following the other, all within a very short period of time.  Channelling of substantial funds through the bank accounts by way of multiple transactions is another example. 

The defendants’ arrests and VRIs

11.  In D1’s case, he admitted in the police interview that he had been asked to sell his bank accounts in return for some money.  For that purpose, he said he was asked to go to a hotel on 17 February 2022, where he handed over his ATM card and mobile phone.  Between that day and 9 March 2022, he was allegedly kept in three different hotels under guard and was not allowed to leave.  The purpose was to ensure that he could not use his ATM cards to withdraw money from his bank account. 

12.  He told the police that he received a reward of HK$15,000, one to two days after he left the last hotel on 9 March 2022, and he had not reported the loss of his ATM cards to the bank.  He claimed that he had no knowledge of the transactions carried out after he handed over the bank accounts. 

13.  In D2’s police interview, he came up with a rather similar version, except that in his case, he claimed to have been kept in a hotel only for two to three days, namely, between 26 and 28 February 2022.  And as his reward, D2 said he also received HK$15,000. 

The defendants’ Mens Rea

14.  In order to be sure, both counsels for D1 and D2 have been asked by me to confirm, one, that their clients were not under duress at the material time; and two, that although they did not (or claimed that they did not)  have knowledge of the bank transactions conducted with their bank accounts, they knew that their bank accounts were to be used for receiving money which they had reason to believe were proceeds of crime. 

The defendants’ backgrounds

15.  Both defendants were locally born and bred.  Both had a clear record before they committed the present offence. 

16.  D1 was born on 1 September 2003 and is now just about 20.  He was 18½ years old at the time of the offences back in February and March 2022.  He lives with his family which includes his aged grandfather, his parents, and two brothers.  The family apparently relied on CSSA and it was said by D1’s counsel, that in order to lessen the burden on the family, the defendant had to take up part-time work whilst in high school. 

17.  After finishing Form 6, D1 had an offer from a university in Taiwan to do a degree in construction and design.  It was said in mitigation on his behalf that it was the dire need for funds to enable him to further his education in Taiwan that drove him into the present crimes. 

18.  As to D2, he is now 34½ years old.  He was almost 33 back in February 2022.  He has been an air-conditioning worker for over 10 years.  On his behalf, it was said in mitigation that because of the pandemic, his work dwindled away, then he was literally living from hands to mouth and that, it was said, made him the perfect candidate for being a stooge. 

19.  In order to have a fuller understanding of the defendants’ background, I have, in the case of D1, called for a Training Centre report; and in the case of D2, a background report.  In coming to my decision today, I have considered the contents of these reports with care.  As they do not add a lot to what I have already been told by the defendants’ counsel, I do not propose to repeat their contents here. 

20.  Let me, however, say this before carrying on.  Whilst I could sympathise with the defendants’ financial predicament, it is never an excuse, let alone a reason, for committing the present offences.  And that is particularly so when it has been made very clear by courts in the territory in recent years that money laundering is an offence which has been and would be treated very seriously in courts. 

Mitigations advanced

21.  I turn now to the defendants’ mitigations.  Based on what has been set out in the written submissions and supplemented by counsel’s oral submissions, both defendants have asked me to consider the following matters as grounds which may help to reduce their sentences:-

(a)  the defendants’ timely guilty plea;

(b)  their clear records;

(c)  their cooperation with the police;

(d)  their financial predicament; and

(e)  this applies only to D1 - his young age.

22.  I am, of course, prepared to accept what is said under point (a)  and point (b)  above.  I am, however, not as sure about point (c).  As I have indicated at the hearing, if either of the defendants were trying to suggest in their police interview that they were kept at the hotels against their will, I would not have accepted it.  As I see it, their stay at the hotel, if it had happened at all, was more likely regarded by them as part of the necessary evil, an inconvenience which they would have to bear through in order to earn their keeps. 

23.  On the other hand, I am quite prepared to accept that these defendants did little more than opening the bank accounts and then passing the accounts, and the related cards and/or documents, to the culprits for unlawful use. 

Sentencing Principles

24.  Here, I am indebted to both the prosecution and counsels for the defence for drawing my attention to the various cases referred to in their lists of authorities.  I do not see a need for me to repeat these here, suffice perhaps to say that there is clear authority stating that an immediate custodial sentence is the usual sentence, and that if the amount being dealt with is substantial, then equally substantial term(s)  of imprisonment would be called for. 

25.  In the case of Secretary for Justice v Wan Kwok Keung, CAAR 13/2010, it has been said by the Court of Appeal that:-

“The sentencing starting point is 3 years or so where the ‘black money’ involved is between 1 million and 2 million dollars, 4 years or so when it is between $3 million and $6 million dollars, and could be over 5 years when it is above $10 million dollars.”

26.  The above is based on an overview conducted by Cheung JA of a number of prior cases in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545.  Of course, what is said by the Court of Appeal in these two cases were not meant to be guidelines, let alone tariffs, but they have been extensively referred to and generally looked at as a useful reference. 

27.  I should add also that although defence counsel for D1 has said in his submission, more than once, that the amount involved is not, and I quote, “a be-all and end-all”, there can be no question that it has always been regarded by courts as a significant consideration, and that is particularly so when it comes to people who had agreed to act as stooges. 

28.  In the case of D1, within a matter of 1¼month, that is, from 17 February to 24 March 2022, his four accounts, with his consent, had dealt with a total of around HK$14.9 million.  In the case of D2, within a matter of two to three days, namely, from 26 February to 28 February 2022, with the use of his two accounts, he had, in effect, dealt with about HK$4.5 million. 

29.  Taking everything into account, I am of the view that in D1’s case, if not for his age, a global starting point for the four charges should be one of 4½ years’ imprisonment; and in the case of D2, on the authorities before me, a global starting point of 3¼ years’ imprisonment would have been about right. 

D1’s age

30.  That leaves me with D1’s young age.  Under section 109A of the Criminal Procedure Ordinance, the court has a duty to consider if there is any other method of dealing with the defendant other than imprisonment.  And with that in mind, I had called for a Training Centre report, according to which D1 was said to be suitable for detention at the training centre. 

31.  For this matter, the prosecution has included in their list of authorities the following two cases, namely, HKSAR v Cen Huakuo [2015] 2 HKLRD 951 and HKSAR v Li Shunying DCCC 798/2014.  Relying on a passage taken out from each, the prosecution said that these cases support the proposition that for defendants in money laundering cases, young age is not a ground for leniency. 

32.  Now that may or may not be so, depending on how one looks at the cases, but I think it is important to note also that in each of these two cases, another factor was clearly at work. And that is that in each case, the defendant was a mainlander who came to Hong Kong specifically to commit crimes here.  In fact, the prosecution clearly acknowledges that in their submission as well. 

33.  Having considered these cases with care, I am of the view that although the offences at hand have always been dealt with severely in courts in our territory, they do not go as far as to say that imprisonment is the only sentencing option.  As a matter of fact, the trial judge in the first case, namely, Cen Huakuo, had called for a full series of report, meaning Detention Centre, Training Centre, and Rehabilitation Centre report.  It is only when the defendant was considered unsuitable for any of them that the trial judge considered the option of imprisonment. 

Prosecution’s application for enhancement

34.  Before I shall come to my view on the sentence to be passed, I think I should also deal with the prosecution’s application, for enhancement of the defendant’s sentence pursuant to section 27(2)(c)  and (d)  of the Organised and Serious Crimes, Cap 455.  The application is based on the information set out in the statement of Chief Inspector of Police Ip Chun-man, which is admitted into the evidence by consent. 

35.  According to this statement, there has been a steady increase in the number of cases for both deception and money laundering in the years of 2020 up to July 2023.  Just as importantly, there is also a parallel increase in the use of stooges in these two aforesaid types of cases.  This increased from 760 cases in 2020 to 2,220 cases in 2021, and 3,708 cases in 2022, and then to 3,356 cases just for the first seven months of 2023.  (In Chief Inspector Ip’s statements, the term “stooges” is used to refer to people who agreed to assist in the money laundering activities but has otherwise minimal or no involvement in the predicate offence.)

36.  Based on police investigation, Chief Inspector IP has also said that the majority of stooges in money laundering cases in Hong Kong has either lent or sold their bank accounts to criminals without further involvement thereafter on their part. 

37.  It is further stated by the Chief Inspector IP in paragraph 32 of his statement that the anti-money laundering regime in Hong Kong is hampered by the increasing use of stooges because:-

(a)  this interferes with the normal operation of the banking system and is having a negative effect on Hong Kong’s reputation as a financial hub;

(b)  the use of stooges constituted multiple layers of shields, concealing the identity of the mastermind behind, thus making it difficult for law enforcement;

(c)  the above two factors in turn encouraged more crimes to be committed;

(d)  as money laundering becomes more difficult to detect, criminals would have easier access to their ill-gotten gains;

(e)  in order to pursue, greater resources will have to be put into detection work by the community; and

(f)  people of low income or low level of education would be falling prey to the traps set up and become stooges.

38.  Both defence counsels opposed the prosecution’s application on the defendants’ behalf.  Although they have agreed to have the Chief Inspector IP’s statement read into evidence, and whilst they accept that the use of stooges in both deception and money laundering cases have been prevalent in the past three-and-a-half years, it is said by counsel for both defendants that the evidence from the Chief Inspector IP does not support the prosecution’s application.  In D1’s case, his counsel, Ms Tsang, made the following two points:-

(a)  D1 was a mere victim himself. It is said that D1 was the one being exploited, as opposed to the one exploiting. It is further said that he had no intention to cause harm to our society.

(b)  The power to order enhancement has to be used sparingly by the court given that there is already a heavy deterrence factor in the sentence passed for money laundering offences.

39.  D2’s counsel adopted the above points and added that there is no evidence before the court to tie D2 in with the predicate offence. 

40.  Having considered Chief Inspector IP’s evidence and defence submissions on the point, I do not think I can accept the arguments of the defence.  Whatever their reasons may be, these defendants, in my view, walked into the offences with open eyes and it would be naïve to say that they did not know about the harm being done to the society by what they did. 

41.  On the basis of the evidence before me, I am satisfied so that I am sure that the offences of deception and money laundering involving the use of stooges are prevalent.  Coupled with the nature and extent of the harm done to the society, I am of the view that it warrants, in the present case, an enhancement of 20 per cent. 

Sentences

42.  Based on what I have said earlier, I am of the view that, in light of D1’s age at the time of the offence, the most appropriate sentence for him would still be a term at the training centre.  In coming to this decision, I have in mind, among others, the Court of Appeal’s decision in the case of HKSAR v Lam Ka Sin [2021] 2 HKLRD 32.  That being the view I have arrived at, my decision earlier that an enhancement of sentence would have been warranted would not apply to D1. 

43.  In respect of D2, I have indicated earlier that a global starting point of 3¼ years, or 39 months’, imprisonment would have been right.  For his timely guilty plea, he would, of course, get the full one-third discount.  That will take his sentence down to 26 months. For his clear record, I will give him credit for an extra one month, which will further reduce his sentence to one of 25 months’ imprisonment. 

44.  On the other hand, with an enhancement of 20 per cent, the sentence will become one of 30 months for each charge.  Obviously, the two charges in the case of D2 should be dealt with together and looked at as one. 

45.  Accordingly, D1 is sentenced to a term at the training centre for each of the four charges, to be served concurrently.  D2 is sentenced to a term of 30 months’ imprisonment for each of the two charges he is convicted of.  And likewise the terms are to run concurrently.