HKSAR v. ZHANG WEIQIANG

CACC 198/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 198 OF 2013

(ON APPEAL FROM DCCC NO. 388 OF 2013)

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REASONS FOR JUDGMENT

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Hon McWalters J (giving the reasons for judgment of the Court):

Introduction

1.  On 24 May 2013 the applicant appeared in the District Court before District Judge Johnny Chan (“the judge”) charged with 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.

2.  The particulars of the offence alleged that between the 2 August 2007 and 11 October 2007 the applicant together with a person known as “Michael Yu” (“Yu”), dealt with AU$747,694.21, Australian currency, that was in a bank account of the Standard Chartered Bank (HK) Limited in the applicant’s name, knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence.  It was an admitted fact that at the exchange rate prevailing at the time of the commission of the offence this amount equated to HK$4,785,242.94.

3.  He pleaded guilty to the offence and on the same day he was sentenced to 32 months’ imprisonment.  On 7 June 2013 he applied for leave to appeal against this sentence.  At the hearing of this application we dismissed it and said that we would give our reasons for so doing at a later date.  This we now do.

The Circumstances of the Offence

4.  The Summary of Facts which the applicant admitted for the purpose of his plea revealed that the Hong Kong Police conducted an investigation that disclosed suspicious money transfers between Australia and Hong Kong involving a Mr Zhang Yongxi, Mr James Yu and Mr Tsang Yin-chiu. In the course of that investigation the police became aware of monies being transferred from a bank account of the Standard Chartered Bank (Hong Kong) Limited which had been opened by the applicant in his own name and who was the sole signatory to it.

5.  The applicant opened this bank account on 2 August 2007 and between that day and 11 October 2007 a total sum of AU$747,694.21 was deposited into the account on seven different occasions.  Of these seven deposits, four were transferred from a local account and these four deposits totalled HK$192,741.33. Three of the deposits were transfers from Australia and these were amounts of AU$79,961.44 (on 17 September 2007), AU$389,991.44 (on 18 September 2007) and AU$85,000 (on 27 September 2007).

6.  During the charge period a total sum of AU$610,234.20 was withdrawn from the account on seven occasions.  Three of these seven withdrawals involved transfers to Australia totalling AU$610,000, namely AU$190,000 (on 11 September 2007), AU$200,000 (on 8 October 2007) and AU$220,000 (on 8 October 2007).  On 11 October 2007 the closing balance was AU$137,460.01 and since this date no transaction has taken place in respect of the account.

7.  The immigration record of the applicant revealed that he was a resident of Mainland China and that on the day of three of the withdrawals, 2 August, 11 September and 8 October, he had arrived in Hong Kong and then returned to the Mainland later on the same day.

8.  On 6 February 2013 when the applicant arrived in Hong Kong he was intercepted and arrested.  In a subsequent video recorded interview he revealed that he worked as a manager in a paper manufacturing factory in Mainland China and received a monthly salary of RMB10,000.  His counsel told the Court that in 2007 his cousin, the person referred to in the charge as Michael Yu, requested him to open an account in Hong Kong and to allow him to use it to make money transfers from Australia to China, via Hong Kong.  He said that Yu told him he was preparing to do business in China.  He was unable to provide any means to contact Yu and he said he did not ask Yu why he himself did not open the account.  The initial deposit to this account, he said, was provided by Yu’s friend.  After opening the account, he gave the account book and bank card to Yu.

9.  He admitted that he had come to Hong Kong on a number of occasions to remit monies from Hong Kong to Australia to beneficiaries whose particulars were provided by Yu.  He admitted that he had some suspicion concerning those monies that had to be remitted to Australia as that did not appear to be consistent with Yu’s intention to do business in China.  However, he never made any enquiry and had no knowledge about the reasons for the remittance of these monies. He admitted that in dealing with the property, he knew or had reasonable grounds to believe that the property, directly or indirectly, represented the proceeds of an indictable offence.

10.  The applicant asserted that he had never received any financial reward for the assistance he provided Yu in lending his account to him and making the money transfers on his behalf.

The Reasons for Sentence

11.  After setting out the facts of the case, the judge referred to the mitigation which had been advanced before him on behalf of the applicant.  This was that the applicant is 42 years of age, and had completed secondary education in China where he worked as a manager in a paper manufacturing factory.  He is married and has a 10 year old daughter.  His father is 72 years of age, is retired and suffers from poor health.  The applicant is the sole breadwinner of his family.

12.  Key to this offence, and key to this appeal, is this person Michael Yu who is also known by the name of James Yu.  The applicant and Yu grew up together and studied together.  His cousin’s family, it was said, had previously provided financial assistance to the applicant’s family when they were undergoing difficult times and that is why, when Yu asked the applicant to help him to open a bank account in Hong Kong, the applicant did not refuse him.  It was said that the applicant felt under an obligation to repay Yu for the assistance that the Yu family had provided in the past to his family.

13.  Counsel referred the judge to the fact that the applicant had co-operated fully with the police from the time that he was arrested and it was his assertion that he had received no monetary reward throughout the whole incident.  It was said that he played a minor role in this criminal activity being simply the signatory to the bank account.

14.  The judge was referred to three authorities by defence counsel, one of which was HKSAR v Tsang Sai-yan DCCC 325 of 2009.  The defendant in that case is, in fact, the Tsang Yin-chiu who was referred to in the Summary of Facts admitted by the applicant.  This person had been convicted of three money laundering offences and sentenced to a total term of 3 years and 4 months’ imprisonment.

15.  In determining the appropriate sentence for the applicant, the judge referred to the sentencing remarks of District Judge Remedios in HKSAR v Tsang Sai-yan and also to comments made by the Court of Appeal on this offence in HKSAR v Abayomi CACC 197 of 2005; unreported, 22  December 2005, and HKSAR v Boma [2012] 2 HKLRD 33.  He specifically referred to paragraph 40 of the latter judgment which sets out some of the more significant features of which account should be taken in determining the seriousness of the money laundering conduct and the culpability of a money launderer.

16.  He reminded himself of the need to protect any damage to Hong Kong’s reputation as an international financial centre and that in respect of money laundering activities there was a need for deterrent sentences.  He also noted that there was to some degree an international dimension to the offence as it did involve a cross-border element.  He also noted that only one bank was involved and it could not be said that the offence was a sophisticated one although it did involve some degree of planning.  He also observed that the nature of the predicate offence was unknown but that there was no evidence that the offence had been committed on behalf of an organized criminal syndicate.  He said he was aware that the period of time over which the offence had been committed was only two months and involved only seven deposits and seven withdrawals.  However, he concluded that the applicant played a pivotal role in the commission of the offence, having opened the account in his own name and having helped Yu to operate the account.  He described the amount of money laundered as being a very substantial amount.

17.  Taking into consideration all these factors, he adopted a starting point of 4 years’ imprisonment.  Noting that the applicant had a clear record and had pleaded guilty to the charge, he reduced the starting point by one-third to bring the sentence down to 32 months which was the sentence that he imposed.

The Ground of Appeal

18.  The Perfected Ground of Appeal against Sentence contained only one ground which complains that the sentence is manifestly excessive in that:

(i) insufficient consideration was given by the judge to the particular features of the applicant; and

(ii) the adoption of 4 years’ imprisonment as the starting point was higher than sentences for similar cases of money laundering, including that of the person Yu and as a consequence there is an unjustified disparity between the applicant’s sentence and that of Yu.

Discussion

19.  The core complaint of this applicant is that he has been sentenced more severely than Yu who was only sentenced to 26 months’ imprisonment from a starting point of 3 years 6 months,[1] for laundering over HK$9.4 million.  In that case the judge sentencing Yu (not the judge in the present case) accepted that he was the prime mover of the money laundering as he was, in fact, the person who had committed the predicate offence.  A further aggravating feature was that as this offence had taken place in Australia, with its proceeds being transferred to Hong Kong, there was an international element to the money laundering.

20.  Of course, because the predicate offence took place outside of Hong Kong, Yu could not be prosecuted for it here.  But, when he dealt here with the proceeds of that offence he could, and was, prosecuted for money laundering.  Yu’s money laundering offence occurred between 28 September and 18 October 2007 with the monies from the Australian predicate offence being obtained on 16 October 2007.  This was after the date on which this applicant’s account received transfers from Australia and so the monies with which this applicant dealt were not the same as those with which Yu dealt in his money laundering offence.

21.  Put at its highest the applicant’s case is that Yu was a fraudster committing crimes in Australia and using Hong Kong as his money laundering centre.  To launder his proceeds of crime he enlisted the support of others, amongst whom was the applicant.  In these circumstances, so the argument goes, the applicant has a justifiable sense of grievance that he has been sentenced more severely than Yu.

22.  When different offenders are sentenced by different judges for the same type of offence, but not the same actual offence, there will be occasions where one sentence appears to be inconsistent with others.  This is especially likely where the offence is one, and money laundering is such an offence, in respect of which the appellate courts have eschewed a tariff or guideline approach to sentencing.  In the case of Yu the sentencing judge has clearly imposed a lenient sentence.  We do not know why and we do understand that this applicant would feel aggrieved that this person was treated with such leniency.

23.  But, the law on disparity of sentence as a ground of appeal against sentence is settled.  The case law draws a clear distinction between joint offenders being sentenced for their participation in the same offence and offenders who have committed the same type of offence (eg money laundering) but whose crimes are quite unconnected.  In the latter situation an otherwise appropriate sentence imposed upon an offender does not become manifestly excessive simply because another offender whose crime is unconnected with that of the first offender, has received a more lenient sentence.

24.  Though Yu and the applicant are connected, their offences are not.  They are not in the position of joint offenders involved in the same crime being separately dealt with by different judges, but even if they were, that would not avail this applicant.  There is a long line of Hong Kong Court of Appeal authority dating back to R v So Hung-lee and Anor [1986] HKLR 1049 which deals with a disparity of sentence complaint.  The following passage is taken from the headnote to this case:

“Where different sentences were passed on different occasions by different judges on different accused for the same offences, then the only consideration would be whether the sentence passed on the appellant was appropriate.”

This decision has been repeatedly followed by this Court, most recently in HKSAR v Cheng Sau Yuk [2012[ 5 HKLRD 415.

25.  Throughout our case law there is a consistent approach that judicial error by one judge which confers a windfall on one accused will not inure to the benefit of another accused dealt with by another judge.  To act otherwise would involve the Court of Appeal acting quite illogically setting aside a correct sentence and replacing it with a wrong sentence in order to bring it into line with another wrong sentence.

26.  Consequently, although this applicant may well feel aggrieved that Yu has been treated leniently that does not entitle him to say that, by reason of this fact alone, there must be judicial error in the assessment of his sentence.  The applicant must still demonstrate that such an error has occurred.

27.  In this respect Mr Leung, counsel for the applicant, has argued that a starting point of 4 years was outwith the range of sentences appropriate for this applicant’s culpability.  In this respect he referred to the fact that the applicant did not know that the monies were the proceeds of crime and that the offence was not sophisticated.

28.  All the points referred to us by Mr Leung were advanced before the judge and were clearly taken into account by him when assessing the seriousness of this offence and the culpability of this applicant.  We can see no error in the approach of the judge or in the matters to which he had regard.  Nor can it be said that for this amount of monies a starting point of 4 years’ imprisonment is outside the range of appropriate sentences.

Conclusion

29.  For these reasons we dismissed the application for leave to appeal against sentence.

(Frank Stock) Vice-President

(Ian McWalters) Judge of the Court of First Instance

[1] This was reduced by 3 months to 39 months in order to give credit to the defendants for saving prosecution time.