HKSAR v. HON YUK CECI

DCCC 487/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 487 OF 2015

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REASONS FOR SENTENCE

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The charges

1.  On 16 December 2015, the defendant appeared in this court and pleaded guilty to a total of nine charges of dealing with property known or believed to represent proceeds of indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.

The facts

2.  Following a criminal complaint received from overseas, the police conducted an investigation into the defendant’s personal account held at the Bank of China (Hong Kong) Limited (“BOC”) of which she was the sole authorized signatory.  It was discovered that within the space of some two weeks in September 2013, an amount of $400,000 passed through the account in suspect circumstances, details of which were as follows.  On 11 September 2013, a sum of HK$321,516.67 originating from the United States was deposited into the account and then withdrawn in cash: HK$10,000 on 11 September 2013; HK$300,000 on 12 September 2013; and HK$10,000 on 12 September 2013. (Charges 1 to 3)  On 18 September 2013, a Hong Kong remittance agent converted a certain sum in the US currency into HK$85,609.38 and deposited it into the account from which were withdrawn two amounts, also in cash, namely, HK$10,000 and HK$70,000; the two withdrawals took place on 24 September 2013.  (Charges 4 and 5)

3.  On 27 September 2013, Bank of China terminated the account.  The following day, ie., 28 September 2013, the defendant opened an integrated account at Bank of East Asia in the name of Talent Trade Company (“Talent Trade”).  The police found that Talent Trade of which the defendant was the sole proprietor had neither a business address nor any reported taxable income.  On 30 October 2013, a sum of US$22,091.46 originating from Korea was received into the account, which was firstly converted into HK$170,000 and then withdrawn in cash the following day. (Charged 6)  On 6 November 2013, another sum in the amount of US$4,962.25 was remitted from Australia into the account; the money was withdrawn in the Hong Kong currency in cash, again, the day after its receipt. (Charge 7)  On 6 December 2013, as a result of an-email fraud, a Latvian merchant remitted US$300,000 into the account.  The next day, the defendant had US$100,000 of it converted into HK$744,200 and had it withdrawn in cash; she had the balance in the US currency standing to that account converted into HK$1,549,649.64. (Charges 8 and 9)  She attempted to withdraw the entire amount from the account but was prevented from doing so because the bank insisted on documentary proof of the underlying transaction to which the money related.  In answer to the bank’s request, the defendant submitted an invoice issued purportedly by Talent Trade, the veracity of which was however doubted by the bank.  In consequence, the account was frozen.

4.  In March 2014, when cautioned for the offence of money laundering, the defendant admitted having committed the offences at the instigation of an African male “Mike”, whom she considered as a sex partner but about whom she knew practically nothing: his full name, exact address, occupation, marital status, family background, education level, and immigration status. 

5.  The nine offences of which the defendant stands convicted were committed between September and December 2013, involving a total of US$327,274.02, which was equivalent to approximately of HK$2.9m.

Mitigation

6.  The defendant, now 42 years of age, is a university graduate and has a criminal conviction record in April 1994 involving five offences, namely, one theft and four charges of obtaining property by deception, for which she was ordered to perform community services for 80 hours. 

7.  In his plea in mitigation, Mr Kevin Tang appearing on the defendant’s behalf submits that the defendant is a kind-hearted person having adopted her sister’s daughter in 2005.  Following the defendant’s divorce in 2010, the adopted daughter’s upbringing has been entrusted to the defendant’s ex-husband.  While the nine offences committed by the defendant have all had an international dimension, Mr Tang stresses there is no evidence that the defendant has been aware of the nature of the underlying offences from which the proceeds originated.  He tenders a number of commendation letters showing that the defendant has been a valued employee of Fedex.  Several academic records are handed up to court in support of Mr Tang’s submissions that the defendant has taken active steps for self improvement.  Of the present offences, Mr Tang submits that due to loneliness subsequent to her divorce, the defendant has developed a relationship with Mike who asked for the use of her bank account to receive monies from his friends; the defendant found this suspicious.  Mike told her it was inconvenient to use his own account to do so.  Thinking that Mike needed the monies to cover his living expenses, the defendant acceded to his request – ignorantly and stupidly, submits Mr Tang – and allowed him to use her bank account and withdrew the monies for him.  (In reply to the court’s enquiry, Mr Tang agrees, on further instructions, that the defendant has had suspicion about the illegal provenance of the monies.)  The defendant has obtained minimal amounts as her rewards, namely, the balance or leftovers in the account after the withdrawals.   Mr Tang hands up clemency letters written by the defendant herself and her family members.  The letters show that the defendant has been a responsible member of her family, who would spare no effort in improving herself.  It is emphasized in these letters that in adopting her sister’s daughter, the defendant has shown herself to be a kind-hearted person.  A certificate showing that she has been a regular blood donor has also been placed before the court.

8.  The defendant’s background report, with which the defendant agrees, shows that she was married in 1996 to a driver; she was then 22 years old.  Her marriage broke down in 2010 due to financial problems; custody of the adopted daughter was granted to her ex-husband.  She contributes around $3,000 towards the daughter’s upbringing.  She has occasionally obtained personal loans from banks for purposes of investment and of conducting an on-line business.  Her simple-mindedness has, she says, resulted in her believing in Mike, a person about whom she has had meagre knowledge. She insists she has received no monetary rewards from Mike, and realizes now that she stands to lose everything: her future, and that of her adopted daughter’s as she has always intended to send her to Taiwan for further studies. According to the defendant’s sister and adopted daughter, the defendant is a loving and responsible person, having taken the daughter to nearby countries for holidays and taken out an insurance policy for the daugher.  They reveal that the defendant herself lives a frugal life.

Discussion

9.  The offence of money laundering targets ill-gotten gains as a means to curb the criminal activities that generated them in the first place.  The paramount sentencing consideration is deterrence (see HKSAR v Boma[1]). Other relevant considerations include the statuary maximum penalty; the amount involved; the nature and extent of the defendant’s involvement; the degree of sophistication; the nature and seriousness of the predicate offence (if known); the defendant’s state of knowledge of the predicate offence; the presence of international element; and the duration of the laundering activities (HKSAR v Hsu Yu Yi[2] and HKSAR v Boma[3]).

10.  In sentencing the defendant, the court takes the following factors into account.  First, there is multiplicity of offences in that the defendant has committed the money laundering activities on nine occasions in some four months’ time.  Secondly, the international aspect in the nine offences must have been obvious to her; the monies were remittances from overseas in, or converted from, the US currency.  Thirdly, the reason why her personal account was cancelled by Bank of China must have been obvious to her: the transactions conducted via the account were most obviously suspect. Fourthly, despite the closure by Bank of China of her personal account in these circumstances, the defendant immediately opened a company account, on the face of it, for regular trade and business, not only to continue the suspect transactions, but also to get herself involved in even larger amounts of proceeds of crime.  Fifthly, when pressed for documentary proof of the regular, commercial nature of the US$300,000, the defendant supplied to the bank documents which must obviously have been generated rather than genuine.  Fifthly, the total amount involved in the nine charges was in excess of HK$2.9m.

11.  Mr Tang submits, in his plea in mitigation, that the balance standing to Talent Trade’s account has been recovered; to that extent, the victimized company has not suffered the entire loss of the US$300,000. Mr Tang fairly concedes, however, that the return of the US$200,000 to the company could in no way be described as restitution for the purpose of sentencing.  In the court’s view, little weight can be attached to the partial recovery of the loss, a loss that has failed to materialize because of the defendant’s failure – not for want of trying – to strip the account of that sum. 

12.  Mr Tang puts forward as a ground of mitigation that the defendant herself did not obtain significant gains from assisting the mastermind in the criminal enterprise.  On this issue, the Court of Appeal has been consistent in its approach: the sentence in money laundering cases should mainly reflect the amount of the proceeds laundered, and not the benefit obtained by the defendant (see Secretary for Justice v Wan Kwok Keung[4] and HKSAR v Wu Jianbing[5]).

13.  Finally, Mr Tang relies on HKSAR v Xu Xia Li and anor[6] in which the Court of Appeal said:

11. It can be seen from the 5 cases cited above that the accused in each either knew or believed that the money they laundered or conspired to launder came from or was believed to have come from different criminal activities. It appears that no particular significance was attached to the kind of criminal activities which produced the proceeds. The offence of which the accused persons were convicted was the same as that of which the applicants before us were found guilty. It related to laundering money which the defendant knew or had reasonable ground to believe came from an indictable offence. By the nature of the offence itself, in our judgment, the nature of the indictable offence from which the money was derived should be of no particular significance in sentencing, save that if the defendant knew that the money was derived from very serious crimes, it would be an aggravating feature to be taken into account in sentencing.

14.  The court notes that the case of HKSAR v Xu Xia Li and anor[7]pre-dates the leading authorities of HKSAR v Hsu Yu Yi[8] and HKSAR v Boma[9], in both of which the Court of Appeal specifically made the nature and seriousness of the predicate offence, if known, a relevant sentencing consideration.  In the court’s view, while proof of the defendant’s knowledge of the underlying offence – in particular, when it is by its nature a serious one – is most certainly an aggravating factor, the absence of such proof does not constitute significant mitigation.

15.  Secretary for Justice v Ngai Fung Sin Apple[10], to which the prosecution referred, was a case involving the laundering of some HK$1.9m in six cash withdrawals over five days, the Court of Appeal said:

54. “Money laundering” is a very serious crime, because it indirectly furthers the commission of serious crimes, especially international crimes; therefore, the court must deal with “money laundering” seriously in order to produce a deterrent effect. As a matter of fact, the effective crackdown on “money laundering” can discourage the commission of other serious crimes.

55. On the authority of Wan Kwok Keung, Hsu Yu Yi, HKSAR v Poon Lok Man (CACC 171/2012) and HKSAR v Zhan Jian Fu (CACC 258/2007), when the amount involved in the “money laundering” is $2,000,000 or so, the starting point is around three years’ imprisonment.

16.  The court notes that in HKSAR v Hsu Yu Yi[11], a case in which the money laundering involved also an international dimension, the Court of Appeal adopted a starting point of three and a half years’ imprisonment for a defendant who had personally dealt with approximately HK$2.5m.

17.  In the present case, in view of the sentencing factors identified above and in all the circumstances, the appropriate global starting point should be one of three years and three months’ imprisonment.  The defendant is entitled to one-third discount for her guilty pleas.  The effective sentence is therefore two years and two months’ imprisonment.

18.  To give effect to this sentence, a starting point of 18 months’ imprisonment is adopted for each of Charges 1 to 7; the sentences are each reduced to 12 months’ imprisonment on account of the defendant’s guilty pleas, to be served concurrently.  In respect of Charges 8 and 9, the starting point should be 30 months’ imprisonment each; the two sentences are, likewise, reduced by one-third to 20 months’ imprisonment; they are also to be served concurrently. 

19.  It is ordered that a period of six months of the concurrent term of imprisonment in respect of Charges 1 to 7 is to be served consecutively to the 20 months’ imprisonment for Charges 8 and 9, making a final sentence of two years and two months’ imprisonment for the nine charges.

Conclusion

20.  For the nine offences of which she stands convicted, the defendant is sentenced to two years and two months’ imprisonment.