HKSAR v. LO HOI POR

DCCC 180/2017

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 180 OF 2017

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REASONS FOR SENTENCE

1. The defendant pleaded guilty to 3 charges of "money laundering". The total sum involved is approximately $49.9 million.

Summary of Facts

2. The defendant was the sole account holder and signatory of the 3 bank accounts particularized in Charges 1 to 3 ("Accounts 1 to 3").

3. Between 21 February 2012 and 9 January 2014, not counting the interest received, Account 1 received deposits (by way of cash, transfers and cheques) which amounted to an aggregate sum of $21,638,714.  During the same period, except for service fees which amounted to $7,495, a total sum of $21,631,234 was withdrawn by way of cash, transfers and 1 cheque.  This is Charge 1.

4. Between 6 December 2012 and 10 January 2014, Account 2 received deposits (by way of 82 transfers and 1 cheque) which amounted to an aggregate sum of $7,210,000. During the same period, the same amount was withdrawn by way of 1 transfer and 79 cheques.  This is Charge 2.

5. Between 14 October 2011 and 23 September 2013, not counting the interest received, Account 1 received deposits (by way of cash, transfers and 1 cheque) which amounted to an aggregate sum of $21,031,742.  During the same period, except for service fees which amounted to $2,200, a total sum of $21,029,559.29 was withdrawn by way of transfers.  This is Charge 3.

6. Fund flow analysis of Accounts 1 to 3 revealed, inter alia, that the depositors/recipients of the funds did not have any apparent nexus with the defendant; the money of each deposit was withdrawn within 3 to 7 days; and all banking transactions took place in Hong Kong.

7. According to the Inland Revenue Department, prior to 2011, the defendant had worked as a customer service attendant earning $325 per day and a security guard earning $400 per day.  Between January 2011 and December 2013, the defendant did not file any tax return.  There is no record showing that he was engaged in any cash-generating business during the offence periods.

8. According to the Immigration Department, the defendant was in Hong Kong on the respective dates when Accounts 1 to 3 were opened.

9. The defendant was arrested on 8 July 2015.  He remained silent under caution.

Mitigation & Sentence

10. The defendant is 36 and divorced. He has 2 conviction records, which included 1 "Robbery" offence and 3 driving offences. The "Robbery" offence is dated 1995 when the defendant was still a teenager (for which he was given a Probation Order). The driving offences are dated 2016 and were apparently committed after the present case. Defence counsel Mr. CHENG informed me that the defendant was educated up to F.3. He used to be a customer service attendant and a security guard. After 2011, he had no long-term employment and only took up odd jobs.

11. Mr. CHENG also informed me that the defendant resides with his parents and younger sister. His father (aged 84) is in the terminal stage of an illness (with a standing instruction of "Do Not Resuscitate" given). His mother (aged 64) suffers from diabetes and psychiatric illness. His younger sister gave birth to a child about 2 years ago and suffers from post-natal stress. A bundle of mitigation documents was placed before me; their contents are duly noted.

12. In mitigation, Mr. CHENG submitted that the defendant was bankrupt in 2007. Despite his bankruptcy, he was still pursued by friends for his debts. Under such pressure, a creditor friend told him to open bank accounts for which he would receive $20,000 per account. Mr. CHENG stressed that the defendant had no knowledge of any predicate offence(s); he simply turned a blind eye to what he was asked to do. After opening the 3 bank accounts, he parted with the relevant bank documents and did not deal with the accounts any more.

13. 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]

14. 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.

15. 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]

16. I accept that in the present case, there is no evidence showing that the defendant was involved in or had any knowledge of any underlying criminal activities. In fact, there is no evidence of commission of any predicate offence(s). I also accept that the defendant did no more than "selling" his bank accounts to someone and that he did not deal with the funds which went through the accounts. Furthermore, all banking transactions took place locally in Hong Kong.

17. On the other hand, I cannot overlook the fact that almost $50 million went through Accounts 1 to 3 in a period of 30 months. By "selling" his bank accounts to others, the defendant 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.

18. In the circumstances, I adopt a starting point of 5 years' imprisonment each for Charges 1 and 3; and 4 years' imprisonment for Charge 2. With the guilty pleas, the sentence is reduced to 40 months, 32 months and 40 months respectively. Apart from this, I see no other mitigating factors which warrant any further reduction.

19. Bearing in mind the totality principle, I consider a global starting point of 5.5 years' imprisonment to be appropriate. A one-third discount is given for the guilty pleas, reducing the overall sentence to 44 months. To achieve this result, I order: (i) 2 months in Charge 2 to run consecutive to Charge 1; and (ii) 2 months in Charge 3 to run consecutive to Charges 1 and 2. Thus, arriving at a total prison term of 44 months.