HKSAR v. ZHOU JIELIAN AND ANOTHER

DCCC 735/2022

[2024] HKDC 898

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 735 OF 2022

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REASONS FOR SENTENCE

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D1 and D2 are jointly charged with an offence of "Conspiracy to deal with property known or believed to represent proceeds of an indictable offence". In short, D2 lent D1's bank account to someone.

Procedural History

2.  On 31 May 2023, D2 pleaded guilty to the charge before me; whereas D1 pleaded not guilty.  The prosecution offered no evidence against D1; the charge against her was dismissed.

3.  Mr. Lau, counsel for D2, applied to adjourn mitigation and sentence since D2 intends to give evidence against Mr. Choi Chi-man, a co-conspirator named in the charge.  Mr. Lau informed me that D2 has given 2 non-prejudicial statements ("NPS")  to the Police in November 2022 and March 2023 respectively, which led to the arrest of Choi.  Ms. Ma for the prosecution confirmed that Choi was arrested but not yet charged.  Ms. Ma accepted that Choi would not have been arrested but for D2's NPS.  On the other hand, without D2's evidence, the prosecution would not be able to proceed with the trial against Choi.  Hence, the prosecution also prefers to adjourn the sentencing of D2 until the conclusion of Choi's trial.

4.  This case was brought up for mention on 20 September 2023, 20 December 2023 and 17 April 2024 to keep the court informed of the progress of Choi's case (DCCC 734/2023).

5.  On 17 April 2024, Mr. Lau indicated that D2 would like to be sentenced as soon as possible.  He stressed that D2 still intends to give evidence against Choi (whose trial is fixed for 10 April 2025, with 5 days reserved).  Mr. Lee for the prosecution submitted that the evidence against Choi comes primarily from D2. Hence, the prosecution prefers to adjourn the sentencing of D2 until the conclusion of Choi's trial.  Mr. Lau replied that D2 is aware of the difference in the sentencing discounts, but D2 does not want to wait another year.  I decided to adjourn this case to 17 May 2024 for mitigation.

Summary of Facts

Background and the predicate offences

6.  D2 and D1 are husband and wife.  D1 opened a savings account (No.078-530375-XXX)  with HSBC ("the HSBC Account")  in her own name on 2 October 2013.

7.  Around 2015, the Mandatory Provident Fund Schemes Authority discovered some MPF claimants having made false claims in their applications for early withdrawal by claiming that they would permanently leave Hong Kong.

8.  Investigation revealed that a moneylender named Citi Gold Finance Advisory Limited ("Citi Gold")  was involved in soliciting or assisting those MPF claimants to make false claims in 2014 and 2015.  Upon their successful applications for early withdrawal, Citi Gold would arrange for the cheques issued by the MPF trustee companies to be sent to designated addresses, and then passed onto the MPF claimants.  The claimants would in return deposit sums of money to bank accounts specified by Citi Gold as commission.

9.  The HSBC Account was one of the bank accounts designated by Citi Gold for receiving commission from MPF claimants.

Money laundering

10.  Bank records showed that 2 MPF claimants have deposited a total sum of $124,280 into the HSBC Account.  Between 11 November 2013 and 31 July 2017, the HSBC Account received 1,062 deposits with an aggregate sum of $6,437,963.90.  About 34% of the total deposit sum was by cash and 52%, ATM transfers.  The total sum withdrawn during the same period was about the same as the total sum deposited.  About 65% of the total withdrawal sum was by ATM cash and 35%, ATM transfers.

Arrest and admissions

11.  The Police arrested D2 on 31 January 2019.  Under caution, he admitted that he had given the HSBC Account to his friend Choi Chi-man to use since Choi had lent D2 $10,000 during D2's bankruptcy in 2013.

12.  In his video recorded interview, D2 stated that he became bankrupt in October 2013.  In 2014/15, he had no bank account.  Between 2014 and 2015, he worked as a bus driver earning about $14,000 per month.  D2 has known Choi since Form 4.  D2 said he had never heard of Citi Gold.  D2 admitted having lent the HSBC Account to Choi in late 2013 by giving him the bank card and password.  D2 lent Choi the HSBC Account because Choi was a good friend and had helped him when he had financial problems.  D2 claimed that he had no idea what Choi would do with the HSBC Account; and did not know about its transactions since he parted with the account.  Choi returned the bank card to D2 around August 2017.

Other evidence

13.  D2 did not file any tax return with the Inland Revenue Department during the offence period.  For tax years 2013/14 and 2015/16, D2's annual income was $102,740 as reported by his employers.

14.  Citi Gold was incorporated in Hong Kong on 1 February 2013.  Choi was a shareholder of Citi Gold.  He was also a director from February 2013 to August 2014.  The company was dissolved on 2 November 2018.

15.  Between 11 November 2013 and 29 January 2015, a total sum of $289,220 was transferred from the HSBC Account to 2 personal bank accounts of Choi.  On 4 December 2014, two deposits (in a total sum of $11,200)  were transferred from Choi's personal bank accounts to the HSBC Account.  On 28 April 2014, a sum of $10,000 was transferred from the bank account of City Advisory Company ("CAC")  to the HSBC Account.  Between 30 December 2014 and 16 February 2015, a total sum of $198,750 was transferred from the HSBC Account to CAC's account (of which Choi was the sole signatory).

Mitigation & Sentence

16. The defendant is 38 and has 1 conviction record which involved a "Part 1 Poison" offence (dated 2007 and fined $1,000). Mr. Lau informed me that D2 is married with a son (aged 15). He is currently a taxi driver earning about $15,000 per month; whereas his wife, a part-time waitress. D2's mother suffers from cancer and chronic diseases.

17. In mitigation, Mr. Lau submitted that in 2013, D2 encountered serious financial difficulties and became bankrupt in October that year. This case has brought about tremendous stress to D2 since his arrest in January 2019. Mr. Lau explained that Choi was D2's good friend and only friend. He had no idea what Choi would do with the HSBC Account.

18. The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

"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" offences.

Generally, the sentence for "money laundering" offences 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.[1]

19. In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33. I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

20. In SJ v Ngai Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[2]

21. I accept there is no evidence showing that D2 was involved in or had any knowledge of any predicate offence (i.e. the false claims for early withdrawal of MPF). I also accept that D2 did no more than "lending" his wife's bank account to a good friend. On the other hand, I cannot overlook the fact that a total of $6.43 million went through the HSBC Account in 3 years and 8 months.

22. By "lending" the HSBC Account to someone, D2 played a pivotal role in allowing the mastermind(s)  of criminal activities to access the illegal funds without revealing their identities. The court must send a clear message to the general public that people who play any role in "money laundering" will receive severe punishment, so that there is a deterrent effect. In the circumstances, I adopt a starting point of 4 years' imprisonment[3].

23. Although D2's NPS led to the arrest of Choi, it is common ground that the prosecution would not be able to proceed with the trial against Choi without D2's evidence. In other words, D2's assistance rendered to the Police so far would become futile should he change his mind about giving evidence against Choi. Since D2's assistance cannot be materialized until the conclusion of his evidence in Choi's trial, I would only grant him a 37.5% discount to reflect his guilty plea and assistance rendered up to this point[4], reducing the sentence to 30 months. I sentence D2 to 30 months' imprisonment.