HKSAR v. KWOK WING KIT

DCCC331/2010

IN THE DISTRICT COURT OF THE

HONG KONGSPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 331 OF 2010

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Reasons for Sentence

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1.  Defendant, I have convicted you after trial of the offence of dealing with property known or reasonably 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, this offence otherwise commonly known as money laundering.

2.  I found after trial that you knew that you had dealt with the proceeds of an indictable offence from the very outset. I was satisfied that you had received reward for the money laundering. I was satisfied that you had deliberately set up a sole proprietorship watch company by the name of Golden Power, and, after that, set up a bank account in Golden Power’s name to receive the laundered money. From my findings, I found that you knowingly lent your company bank account to your cousin named Kok Chi-chong for the moneys to be laundered through your accounts.

3.  There was no evidence before me that you were involved in the actual indictable offence, which was admitted to be fraud committed on people mainly in Europe or in the United Kingdom who received calls from people claiming to be the representatives of certain companies. Unknown victims were invited by those representatives of those companies to participate in share trading which allegedly would yield them good returns. Those victims were instructed by those representatives of the companies to remit the moneys representing the purported handling charges, and one of those bank accounts to which they were told to remit money was the company bank account which you had opened in the name of Golden Power. As to at least two of the remittances of moneys, they had not received any shares or proceeds of sale of their shares. They had lost contact with the representatives of the companies and they did not know you, nor did they know the relationship between Golden Power and the companies.

4.  The amount of money that was laundered through your account in 66 remittances between 7 November 2007 and 26 February 2008 was a total of US$600,581.74 and £7,382.94. All the money was withdrawn by you from this account. HK$3,975,988 was remitted to Kok Chi-chong in the Philippines via two remittance companies. The remainder of the money was retained by you, to which I found you had personally been rewarded a sum of HK$160,000.

5.  Mr McNamara, your counsel, has mitigated on your behalf this morning. You are aged 57 and had been a businessman in the trading of watches since 1995. You came to Hong Kong in 1978, doing some menial jobs. You were educated up to Form 3. You have 7 previous convictions arising out of 3 different occasions. The offences in 1982 involved forgeries and you were sentenced to a total term of 5 years’ imprisonment in the High Court. You have other offences for possession for the purpose of manufacture of goods to which a forged mark was applied and these are purely offences for the same possession of forged trademarks. Your last conviction was in 1991. You are married with one son and you live in Hong Kong.

6.  Mr McNamara has submitted to me a very recent case of HKSAR v Hsu Yu Yi, CACC159/2009, a judgment of the Court of Appeal, a Chinese court of which the judgment has been translated into English by the Judiciary. In that case, the Court of Appeal dealing with the offence of conspiracy to deal with money laundering offences went through the general principles and many authorities and the applicable amounts of money laundered and the sentencing starting points on each case. Twelve cases were mentioned.

7.  Having considered those cases, they arrived at a sentence of 3½ years’ imprisonment for a sum of $2.5 million, which was the proceeds of crime whereby the defendant was involved in cross-border criminal activities which were well‑organised illegal activities with elaborate planning and had an international dimension. It appears that the defendant in that case was also involved in the actual indictable offence. Mr McNamara has submitted that this present case is not as serious as that case and asks this court to start with a lower starting point, and as in Hsu, give you credit and reduce the sentence for your admission of the facts.

8.  As the Court of Appeal in Hsu Yu Yi rightly recognised, there are many cases to which the court has sentenced in regard to money laundering, and as can be seen, there was a broad wide range of sentencing. What can be seen is that for money laundering offences it is a serious offence of which deterrent sentences are appropriate and an immediate custodial sentence is appropriate even for those who are first offenders. From all those authorities, the courts have still, however, not laid down any tariffs as there is obviously a very large range of culpability. The relevant factors in determining the appropriate sentence are:

the amount of money involved;

the culpability of the defendant;

the defendant’s level of participation and the number of occasions on which he is involved in the money laundering activity;

the degree of sophistication of the offence;

the length of time the offence was committed;

any benefit the defendant derived from the offence; and

if there was an international dimension, amongst others.

9.  The amount involved in this case was approximately HK$4 million. I have found that you had deliberately set up the company and the bank account for the purposes of money laundering. You had knowingly participated in the offence for approximately 4 months to which you took the money that arrived from Europe, mostly from the United Kingdom, converted that money to Hong Kong dollars and transferred the money to the remittance agents so that the money could be remitted to the Philippines.

10.  There was very clear international dimension. It was a carefully planned operation involving 66 remittances in 4 months in an amount of $4 million. You did play quite an important role by setting up the bank account and the company and transferring the money to your cousin. You were the sole person involved in Hong Kong.

11.  In taking all these matters into account, and looking at your level of participation, I consider a sentence after trial of 3 years and 4 months to be appropriate. However, I take into account the fact that you have in the trial made a full admission of the prosecution case and that was reduced into Admitted Facts and will reduce that by one month, making that term to 3 years and 3 months.

12.  The prosecution have applied for a compensation order of $500,000 from you, which are made up of $100,000 bail and $400,000 in your personal bank account at Wing Lung Bank. By consent you have agreed that those moneys of $500,000 be paid as compensation to the victims. In those circumstances, I consider a further reduction to be applicable to your sentence and I shall reduce the term by a further 3 months’ imprisonment, making a total term of 3 years’ imprisonment, to which you are so sentenced.