HKSAR v. LO WANG KUEN

DCCC 829/2023

[2024] HKDC 1267

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 829 OF 2023

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REASONS FOR SENTENCE

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1.  The defendant, Mr Lo, has pleaded guilty a single charge of conspiracy to deal with property or believed to represent the proceeds of an indictable offence, contrary to Section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, and Sections 159A and 159C of the Crimes Ordinance, Cap 200. The particulars show that the offence occurred between 15 March 2021 and 7 July 2021. The defendant is alleged to have conspired with other persons to deal with property in a total of HK$1,518,236.27.

2.  The bare facts of the particulars can be seen to be given a more detailed explanation in the facts that have been agreed by the defendant. These show that on 15 March 2021, the defendant set up an account with the Wing Lung Bank which is described as the CMB account. This was an account of which the defendant was the sole holder and signatory of the account. The account had five sub-accounts in various currencies. The, what I will call “the scam”, occurred between 27 May and 4 June. PW1 was the victim in the case of what is described as a “Mainland official phone scam”. PW1 was instructed to surrender her E banking account particulars of password and also make deposits into designated accounts. One of the accounts was the CMB account into which some HK$26,000 was deposited on 3 June 2021.

3.  Furthermore, in respect of the CMB account, between 15 March 2021 and 7 July 2021 there were other deposits totaling HK$1,518,236.27 from different parties into the sub accounts of the CMB account. The sums transferred into the accounts were transferred out within a few days. The CMB account is described in the facts as a temporary repository for these funds.

4.  The defendant was arrested for money laundering on 7 December 2022. On that day, 7 December, a video-recorded interview was recorded with the defendant where the defendant explained what had happened. The defendant said he had loaned his bank account for a person Gau Jai to pay his salary into and alone he was paid HK$3,000 for that. He passed over the ATM card and PIN to Gau Jai and he later said he had no knowledge of the transactions, receipts, entries or deposits to the account, there is no dispute as to that, and the defendant admits from those facts that he was involved in a conspiracy and had reasonable grounds to believe that the property in whole or part directly or indirectly represented the proceeds of an indictable offence.

5.  The defendant himself is age 29. He has a clear record. He presents mitigation as follows: He aged 29, lives with his mother and sister, educated to Form 6 level in Hong Kong. He has worked as a casual delivery worker in the past. As far as his personal mitigation is concerned, there is evidence presented by the defence to show that he had been an enthusiastic and diligent worker and has remained in employment even after his arrest and charge for this offence. He has deep remorse. His employer recommends him to me and will employ him on his release from prison. The defendant has also been involved in charity work since 2019. He has been a volunteer at the Hong Kong Children Charity Foundation acting as a driver and helper. There is again evidence to support this proposition. It is submitted that this shows a positive good character in respect of the defendant. The defendant also has clear family support, the family are here today to support him in his plea of guilty. The defendant, I am also told, shows deep remorse for the offence he has committed.

6.  There are some mitigating factors in respect of the offence that are brought to my attention. It is agreed in the facts and it is the case that there is no evidence that the defendant was aware of the nature of the predicate offence, that is the “Mainland stooge offence”. There is no international dimension that we are aware of. The defendant’s part in the offence is relatively small and unsophisticated and there is no clear evidence of organised crime activities. The defendant was passive in the offence as he was just the person who loaned his bank account and in fact in April of 2021, as can be seen from the facts, the defendant actually notified the bank about certain suspicious transactions he found on the account.

7.  As far as the approach to sentence is concerned, we note that the maximum sentence in respect of this offence is 14 years’ imprisonment. There are no sentencing guidelines or tariffs. Each case must be dealt with on its own individual facts. There are some reference cases that can be referred to. I note the case of HKSAR v Boma [2012] 2 HKLRD 33. It sets out some sentencing factors for consideration by the court. There is of course the amount of money that the case is involved in; the predicate offence, here the case is a type of fraud; the defendant’s knowledge or involvement in the predicate offence; whether there is an international dimension; degree of planning and sophistication, the involvement of organised crime. These are all factors that must be determined when setting the starting point for sentence.

8.  As far as the quantum is concerned, again there is no tariff or sentencing guideline. In the case of HKSAR v Ng Kwok Wing [2008] 4 HKLRD, we can see that thefts involving breach of trust with loss of between $1 million to $3 million would result in a starting point for sentence for a person of clear record after trial at a sentence between 3 to 5 years’ imprisonment.

9.  Also reference can be made to the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD. That sets out the sentencing approach in money laundering cases after analysis for a number of other cases and in that case the court determined that for amounts of money laundered between $1 million to $2 million sentence of 3 years would be the starting point.

10.  In this case, the prosecution also seek to enhance the sentence, they are entitled to do so. The prosecution has made an application for enhancement for sentence pursuant to Section 27(2)(c), (d)  and (e)  of Cap 455 on the basis of the prevalence of the offence, the nature and extent of the harm caused to the community and the nature and extent of the total benefit gained by anyone from the present offence. The prosecution has to prove the prevalence of the offence not necessarily an increase in the number of such offences.

11.  I have seen and considered the witness statement of Chief Inspector of Police Yip dated 25 June 2024 and I am satisfied on that, and it is not challenged, that in the period of 2020 to 2023 money laundering cases were prevalent in Hong Kong, that the “Mainland stooge” type of case are widespread and commonly practiced in Hong Kong. I will in fact grant the prosecution’s application for enhancement of sentence, which is unopposed.

12.  I will indicate at this stage I will adopt a figure of 20% for enhancement which seems to be common in these offences where the defendant does not participate in the offence is involved in the conspiracy by providing his bank account for the receipt of the moneys.

13.  I turn to the question of the actual quantum of sentence now. Taking all the factors into consideration which I have already outlined, I am going to take a starting point for sentence given that this $1.5-odd million for this defendant take a starting point for sentence of 2½ years or 30 months’ imprisonment.

14.  I will look at the mitigating factors that should be taken from that figure. I am aware of the evidence being presented about the defendant’s character and of his charity involvement and also his clear record. He is a relatively young man with a clear record. I should give and I will give some deduction for these factors, in fact I will quantify that taken together at a 3 month reduction from this initial starting point. The starting point for sentence is now one of 27 months’ imprisonment. The defendant is entitled for his plea of guilty indicated at an early stage for a one-third deduction from that figure. That leads to a figure of 18 months’ imprisonment. This figure of 18 months’ imprisonment is the figure that must be subject to the enhancement.

15.  I have indicated already that the enhancement will be one of 20%. However, an enhancement of 20% does not give a round figure, that must be rounded down to the nearest figure which is one of 3 months’ imprisonment. That must be added to the sentence of 18 months’ imprisonment leading to a final sentence at 21 months’ imprisonment for this offence.