SECRETARY FOR JUSTICE v. WAN KWOK KEUNG

[English Translation – 英譯本]
CAAR 13/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

APPLICATION FOR REVIEW NO. 13 OF 2010

(ON APPEAL FROM DCCC NO. 420 OF 2010)

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JUDGMENT

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Hon Yeung JA (giving the judgment of the Court):

The background

1.  On 13^th September 2009, the police searched the Respondent’s (雲國強) residence at Wah Ming Estate, Fanling (“the residence”) pursuant to a gambling authorization.  At that time, the Respondent was alone in the residence.

2.  The police found that a computer inside a bedroom of the residence was logged on to an illegal soccer gambling website (“the website”), and the Respondent admitted that 4 customers had placed bets with the website through him. The Respondent indicated that he would get 1% of the betting amount as commission, and the amount may reach several thousand dollars each month.

3.  Under caution, the Respondent further admitted that he placed bets with the website for his customers through the account of a friend called “Sai Man” (transliteration). Customers who lost the bets would make deposits into his account with the Hong Kong and Shanghai Banking Corporation (“HSBC account”) whereas customers who won the bets would be given the money by him personally or by way of bank transfer after he had collected it from “Sai Man”.  The Respondent admitted that he had stopped working for 2 to 3 years before his arrest and only worked on a casual basis occasionally, so he had to rely on borrowings for a living. The Respondent agreed that he did not file a tax return between 2002 and 2009.

4.  According to the evidence of the gambling expert, the betting record found upon search from the residence showed that the total bets placed on illegal soccer gambling through the Respondent amounted to about $150,000 between 10^th August 2009 and 13^th September 2009.

5.  Between 25^th September 2002 and 13^th September 2009, the number of withdrawals from and deposits into the HSBC account were 2,222 and 1,696 respectively, and their total amounts were each about 14 million dollars.  Among the 1,696 deposits, 1,223 were by way of bank transfer and 416 were non-passbook deposits.  The average amount of withdrawals and deposits from and into the HSBC account were each about $165,000 per month.

The original sentence and reasons for sentence

6.  As a result of the above incident, the Respondent was charged with the first count of an offence of “money laundering” for which the proceeds of crime amounted to about 14 million dollars and the second count of an offence of “bookmaking”.

7.  On 8^th September 2010, the Respondent pleaded guilty to all charges before District Court Judge Eddie Yip.

8.  In relation to the “money laundering” offence and the “bookmaking” offence, Judge Yip took 21 months’ and 3 months’ imprisonment respectively as the sentencing starting points. He reduced the sentences by one third for the Respondent’s guilty pleas which resulted in 14 months’ and 2 months’ imprisonment. He also ordered that the sentences for the two charges to run concurrently and thus the Respondent had to serve an overall sentence of 14 months’ imprisonment.

9.  In his Reasons for Sentence, Judge Yip listed the relevant factors for sentencing and the sentences passed in a number of similar cases. Judge Yip took the view that the organisation of the Respondent’s “money laundering” offence was simple and without manipulation by bookmaking syndicate.  Judge Yip also took the view that the facts of the “money laundering” offence and those of the “bookmaking” offence overlapped and thus the sentences should run concurrently.

The application

10.  On the ground that Judge Yip had adopted a manifestly inadequate starting point for the “money laundering” offence, which failed to reflect the gravity of the facts of the case, the Secretary for Justice (“the Secretary”) requested this Court to review the sentence in an application made under section 81A of the Criminal Procedure Ordinance.

11.  The Secretary’s position was that there were aggravating factors in the “money laundering” offence in this case, they include:

(1) The act of money laundering had lasted for as long as 7 years;

(2) The money laundered amounted to 14 million dollars odd; and

(3) The Respondent did directly participate in the offence involving the

“black money”.

 Discussion

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.    

16.  The “black money” in this case was from illegal bookmaking on soccer gambling and not from a particularly serious crime, and the Respondent’s offences, including his bookmaking offence, were not well-organised either. According to the Respondent’s confession, the amount of money that he had received from the offence was not huge, it was not over $150,000. This Court agrees that where the offence of “money laundering” is concerned, this case is not a very serious one.

17.  However, this Court cannot ignore the fact that the Respondent had “laundered money” on thousands of occasions for as long as 7 years and the total amount involved was as high as 14 million dollars. And neither can this Court ignore the fact that the “black money” laundered by the Respondent was from the bookmaking offence in which he had participated.

18.  This Court agrees with the Secretary that the starting point of 21 months’ imprisonment for the “money laundering” offence adopted by Judge Yip is manifestly inadequate in that it “falls outside [the range of sentences] which the judge, applying his mind to all the relevant factors, could reasonably consider appropriate” (See Lord Lane CJ in AG’s Reference No.4 of 1989 [1990] 1 WLR 41, the test expressed in line A on page 46 of the Judgment).

19.  This Court is of the view that the appropriate starting point should not be lower than 4 years’ imprisonment even if the Respondent is to be dealt with in a way most favourable to him.

20.  Having considered that the Respondent had pleaded guilty and that the sentence is passed in the application for review, this Court is of the view that the sentence for the Respondent’s first count of “money laundering” should be one of 2 years and 6 months’ imprisonment to run concurrently with the 2 months’ imprisonment on the second count of bookmaking. The total sentence imposed on the Respondent should be 2 years and 6 months’ imprisonment.

Conclusion

21.  This Court allows the Secretary’s application for the review of sentence and the sentence imposed on the Respondent is increased from 14 months’ to 2 years and 6 months’ imprisonment.

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. P. Y. Lo, Barrister-at-law.