HKSAR v. AHMAD SOHAIL

CACC 29/2018

[2019] HKCA 608

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 29 OF 2018

(ON APPEAL FROM DCCC NO 1104 OF 2016)

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J U D G M E N T

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1.  On 17 January 2018, the applicant was convicted after trial before District Court Judge Dufton of a single offence of dealing in the proceeds of an indictable offence in the sum of $3,216,629 and sentenced to 2 years and 10 months’ imprisonment.

2.  By notice dated 1 February 2018, the applicant applies for leave to appeal against his conviction only.

3.  By perfected grounds of appeal signed by Mr Chung Boey, for the applicant, it is complained that (1) the judge erred in failing adequately to consider and deal with the defence submission that: (a) the prosecution must adduce evidence to prove that the applicant had reasonable grounds to believe that the property dealt with represented the proceeds of an indictable offence; (b) the cash withdrawals were irrelevant and could not be part of the money laundering; (c) the prosecution must prove that the circumstances relied upon related to the provenance of the property dealt with; and (d) one dealing could not be the “surrounding circumstance” of another dealing; (2) the judge wrongly directed himself that “surrounding circumstances” could be general background circumstances of the applicant instead of the specific circumstances which surrounded each act of dealing by the applicant; and (3) the conviction is unsafe and unsatisfactory.

4.  It is submitted by Mr Boey that at trial the key issues relevant to this application were whether the prosecution needed to adduced evidence to prove that the applicant had reasonable grounds to believe that the property dealt with represented the proceeds of an indictable offence; whether cash withdrawals were relevant to be considered as part of the money laundering scheme; and whether the particular circumstances were surrounding circumstances that would give rise to a reasonable ground to believe.

5.  The proceeds in question were held in a single bank account in the name of the applicant, who was the sole account signatory. The case against the applicant, which was accepted by the judge, was that the bank account was cash intensive and used as a temporary depository to conceal and disguise the monies passing through the account which were not commensurate with the applicant’s income as disclosed to the Inland Revenue Department or any other source of income or assets. 

6.  The defence case, which was rejected by the judge, was that the defendant never suspected that the cash deposits and transfers to his account came from illegal sources and the two cash deposits related to betting on horse racing and seven transfers were monies belonging to his boss who for convenience used his account.

7.  The subject matters of the grounds of appeal were all raised before the judge, who, in my view, carefully and correctly considered and addressed them.

8.  As to Ground 1(a), Mr Boey argues that the prosecution had to prove the actual predicate offence or the nature of the activity from which the property was derived.  Such an argument had been rejected in HKSAR v Yeung Ka-sing, Carson (2016) 19 HKCFAR 279, at paragraph 90, and correctly rejected by the judge.  Following a comprehensive analysis of the evidence, the judge listed the surrounding circumstances that led him to conclude that the applicant had reasonable grounds to believe that the funds of the bank account represented the proceeds of an indictable offence.

9.  As to Ground 1(b), Mr Boey argues that the cash withdrawals were irrelevant and could not form part of the money laundering. This was correctly rejected by the judge.  As pointed out by the respondent, the cash withdrawals were an element of the concealment and the disguise process, cash being difficult to trace, and formed part of the surrounding circumstances in addressing the ingredients of the offence.

10.  As to Ground 1(c), Mr Boey argues that the prosecution had to prove “the circumstances” that were relied upon went to the provenance of the property dealt with.  This was correctly rejected by the judge, who identified the circumstances on which he was satisfied that the applicant had reasonable grounds to believe that the property was the proceeds of an indictable offence.  He said:

“96. I accept the Treasury Accountant’s findings. An expert was not however required to make these findings. The findings relating to the deposits and withdrawals can be ascertained by simply looking at the bank statements contained in the banker’s affirmation and preparing tables just as the Treasury Accountant did. The highlighting for example cash deposits and cash withdrawals is no more than an aide memoire for the court. The finding that the total deposits far exceeded and were not commensurate with the reported income is obvious from the documentation.

97. Having regard to all the surrounding circumstances, including:

(a) the bank account was cash intensive;

(b) almost all the money deposited in the account was withdrawn;

(c) monies totalling over $1 million were withdrawn on the same day the money was deposited with some of the withdrawals made within minutes of the money being deposited in the account;

(d) the monies passing through the account were not commensurate with the known income of the defendant as reported to the Inland Revenue Department; and

(e) the defendant did not own any real property; did not own any vehicle and did not own any company or hold any position as director in any company in Hong Kong,

I am satisfied so I am sure the only inference to draw is that the defendant had reasonable grounds to believe $3,216,629 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.”

11.  As to Ground 1(d), Mr Boey argues that the judge erred in not accepting that “one dealing could not be the ‘surrounding circumstance’ of another dealing”.  As pointed out by the respondent, the case against the applicant was that the bank account which was cash intensive was used as a temporary depository to conceal and disguise the monies passing through the bank account.  The maintenance of the bank account by the applicant was a continuous and single offence.

12.  Having noted the relevant principles in Carson Yeung, the judge rejected the submission that the surrounding circumstances had to be circumstances surrounding the dealing.  He was correct to do so.  It was submitted to the judge that the fact that the applicant did not have sufficient income; did not pay sufficient tax; and did not have any other property were not circumstances surrounding the dealing.  In rejecting this submission, the judge said:

“92. In HKSAR v Yeung Ka Sing, Carson, the Court of Final Appeal said:

‘The current offence therefore focuses on the property – “any property” – and on the circumstances surrounding the defendant’s acts of dealing with that property. Obviously, if he can be proven to have known that the property represented someone’s proceeds of an indictable offence, the offence is established. But, if the defendant does not know for a fact that the property represented such proceeds (as is likely to be the case with professional money launderers who would make it their business not to know), it is sufficient for the prosecution to establish that, given the circumstances of which he was aware, surrounding his dealing with the relevant property, the defendant had reasonable grounds to believe that it represented the proceeds of someone’s indictable offence, whether committed in Hong Kong or abroad.’

93. Mr Wong SC submitted that in focusing on the circumstances surrounding the dealing the circumstances cannot be any “general” surrounding circumstances and must be specific to a particular dealing and not circumstances which exist even if there were no dealing. Thus Mr Wong SC submitted the fact the defendant did not have sufficient income; did not pay sufficient tax; and did not have other property are not circumstances surrounding the dealing.

94. I have no hesitation in rejecting this submission. In my view how the defendant dealt with the money; whether he had sufficient income or other property; and whether he disclosed his income to the Inland Revenue Department are all circumstances surrounding the dealing.

95. Mr Wong SC submitted that the court cannot take into account the withdrawal of the money.  In making this submission Mr Wong SC placed reliance on the decision of the Court of Final Appeal in HKSAR v Li Kwok Cheung George.  That case concerned the use of money regarded as ‘clean’ money intended to be used as an instrument for committing an indictable offence.  I am satisfied the Court of Final Appeal were not saying the withdrawal of the money can never be a surrounding circumstance.”

13.  As to Ground 2, Mr Boey argues that the judge wrongly directed himself that “surrounding circumstances” included general background circumstances of the applicant, which in his submission is limited to the specific circumstances which surrounded each act of dealing by the applicant.  As pointed out by the respondent, this argument is erroneously based on the proposition that each transaction in the account constituted a separate dealing, whereas the dealing in this case was the continuous concealment and disguise of monies in the applicant’s bank account.  There is no substance to this argument.

14.  There is no basis to find that the conviction was unsafe or unsatisfactory.  Accordingly, this application is without merit and the application for leave to appeal against conviction is refused.

15.  The applicant is reminded of his right to renew his application for leave to the Court of Appeal, but he is also warned of the consequences of doing so, which may include a direction for any loss of time spent in custody pending its appeal, if the Court were to come to the view that there was no justification for the renewal of his application.