HKSAR v. ZHANG HONGPING

DCCC 941/2024

[2025] HKDC 603

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 941 OF 2024

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REASONS FOR SENTENCE

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Background

1.  The Defendant, Mr Zhang, pleads guilty before the Court, for a charge 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 (the “money laundry” charge), that Mr Zhang, between 19 October 2023 and 3 November 2023, both dates inclusive, in Hong Kong, together with a person known as “Huang Zhenguo”, knowing or having reasonable grounds to believe that a total sum of HK$3,555,677.35, in the bank account with Standard Chartered Bank (Hong Kong)  Limited, account number 402-8-632707-1 (the “Account”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property[1].

2.  Mr Zhang also admits before the Court that the contents of the Summary of Facts to be true and correct[2] , inter alia that:

a. Between 26 October 2023 and 29 October 2023, Mr Wong Anthony (“PW1”)  fell for a compensated dating scam. PW1 suffered a total loss of HK$335,235, among which, HK$600 was dissipated in a single transaction to the Account on 26 October 2023.

b. At all material times, Mr Zhang was the sole account holder of the Account. He opened the Account in his name on 17 October 2023.

c. Between 19 October 2023 and 3 November 2023:-

i. A total of 109 deposits amounting to HK$3,555,677.35 were deposited into the Account;

ii. A total of 129 withdrawals amounting to HK$3,555,588.25 were withdrawn from the Account;

iii. Most deposits and withdrawals were made by the internet transfer, which involved numerous different counterparties. Multiple deposits were usually made on the same day, the funds accumulated and were gradually dissipated on the same day or shortly after; and

iv. As at 3 November 2023, the Account had a closing balance of HK$89.1 with no known further transaction thereafter.

d. At all material times, the Account was being used as a temporary repository of funds.

e. On 5 May 2024, PC5255 (“PW2”)  arrested Mr Zhang. Under caution, he remained silent.

f. Under a cautioned video-recorded interview conducted by DPC25581 (“PW3”)  held on the same day, Mr Zhang said he opened a bank account in the Standard Chartered Bank. He opened the Account on request by a friend named Huang Zhenguo (“Huang”). The account opening documents was prepared by Huang and he accompanied Mr Zhang to open the Account. After the Account was opened, Mr Zhang received $1,200 as remuneration from Huang. Huang told Mr Zhang that the bank card of the Account was kept by the bank.

g. Mr Zhang voluntarily surrendered his phone to PW3 for examination. PW3 found WeChat conversation between Mr Zhang and an account named Huang Zhenguo. The counterparty sent the Defendant an address of a Standard Chartered Bank branch on the account opening date of the Account (17 October 2023)  and a few hours later asked Mr Zhang if he got the card (拿到卡了/是吧)。

h. Travel movement record confirmed Mr Zhang arrived at Hong Kong at 09.10 hour and departed Hong Kong at 18.21 hour on 17 October 2023.

i. Between 19 October 2023 and 3 November 2023, Mr Zhang, together with a person known as Huang Zhenguo, knowing or having reasonable grounds to believe that property, namely that the monies deposited into the Account, in whole or in part, directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

3.  Mr Zhang has a clear record in Hong Kong.

The Starting Point

4.  Under section 25 of the Organized and Serious Crimes Ordinance, the offence is punishable on indictment with a fine of $5,000,000 and imprisonment for 14 years.  There is no tariff for this type of offence because of the wide range of culpability involved.

5.  Generally speaking, the main sentencing factor is the amount of “black money” involved in the individual cases.

6.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal emphasized that the amount of money being laundered is a major sentencing consideration.  Cheung JA, in giving the judgment of the court, also had the following observations at para 9:

“9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

(1)  It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2)  The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant's level of participation and the number of occasions on which he is involved in the ‘money laundering' activities are relevant factors to be considered.

(3)  The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence pre se when determining the sentence of the dealing offence.

(4)  If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong's reputation as an international finance and banking hub from being tarnished.

(5)  The length of time the offence lasted.”

7.  In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, Yeung JA (as he then was)  observed that:

“12. “Money laundering” is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the “money laundering” offence (See Court of Appeal cases HKSAR v Javid Kamran (CACC 400/2004), HKSAR v Xu Xia Li and another[2004] 4 HKC 16 , etc.).

13. Generally, the sentence for “money laundering” offence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most “money laundering” cases, there may not be evidence to show from what indictable offence the “black money” are in fact derived. 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 should be adjusted upward.

14. This Court has, in a number of other similar cases, also listed others factors relevant to the sentence to be imposed including the number of offences, the length of time the offence lasted, the degree to which the defendant participated in the offence involving “black money” and whether or not it was an organised and sophisticated crime, etc.

15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. 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 where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.”

8.  In fact, the sentencing framework of money laundering cases keeps on evolving in Hong Kong.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal emphasized that at para 38 that “the question of the amount of the money laundered is not the be-all and end-all of a case, but is a significant feature”.  The Court went on to list out other relevant factors that should be taken into account at para 40:

“(1)  The nature of the predicate offence for generating “black money” and the sentence to be imposed;

(2)  Whether the defendant knew what the predicate offence was;

(3)  Whether there is an international element;

(4)  Whether the offence of “money laundering” involves elaborate steps, schemes or fraudulent means;

(5)  Whether there is a criminal syndicate;

(6)  The number of transactions and the length of time during which the offences were committed;

(7)  Whether the defendant continued to launder money after the nature of the predicate offence;

(8)  The role and remuneration of the defendant.”

9.  In this case, the black money involved in slightly over HK$3.5 million; the duration involved is about 16 days; there were 129 withdrawals and 109 deposits; the known predicted offence is a compensated dating scam, and most of the other predicted offences are unidentified; the modus operandi is a very primitive one; there is no international element; other than Mr Zhang received HK$1,200 to allow others to use the Account, he had no other involvement in this case.

10.  After considering all the matters in this case, I conclude that Mr Zhang should be put at the lower level of the category that the appropriate starting point should be a 3 years and 3 months imprisonment.

Mitigation Aggravation Total Sentence

11.  Mr Zhang pleads guilty at the earliest opportunity, he will have one-third discount on sentence.

12.  According to Mr Robert Chan, the Defence Counsel, Mr Zhang is utterly remorseful.  He lives with his family in China; at the material time, he was asked by his friend, Mr Huang, to open the Account and received a sum of HK$1,200 as remuneration.

13.  In general, the Court does not consider Mr Zhang has any mitigating factor other than his timely plea.  The sentence for Mr Zhang is one of 2 years and 2 months’ imprisonment after deduction.

14.  The prosecution applies enhancement of sentence under s. 27 of the Organized and Serious Crimes Ordinance Cap 455.

15.  Mr Chan has no objection to the application.

16.  I read the witness statement of Mr Li Yiu Nam, the Chief Inspector of Police, and I am satisfied that the offence committed by Mr Zhang is a specified offence, that the prevalence of the offence and the nature and extent of any harm caused to the community by recent occurrences of the offence, that a more severe sentence should be imprisoned. 

17.  I conclude the appropriate enhancement should be one of 20% of the original sentence.

18.  Hence, Mr Zhang should be imprisoned for 2 years and 7 months after proper deduction and aggravation.

Conclusion

19.  Mr Zhang is sentenced to a prison term of 2 years and 7 months.