HKSAR v. LUO JIAYOU

DCCC 755/2024 & 188/2025

Consolidated

[2025] HKDC 1334

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASES NOS. 755 OF 2024 & 188 OF 2025

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REASONS FOR SENTENCE

The defendant pleaded guilty to 3 charges of "Money laundering". In short, he sold his 3 bank accounts to someone.

Summary of Facts

2.  The defendant is a mainland resident.  He held a Two-Way Entry Permit during the offence period.

3.  On 9 August 2023, the defendant opened a bank account (No.447-8-440438-1) with Standard Chartered Bank ("the SCB Account").  In the opening mandate, he claimed to be a manager of SZ Zhong Sheng Heng Yun Log Co Ltd, earning HK$13,000 per month.  A copy of his Two-Way Entry Permit was submitted to the bank.  Both the correspondence address and residential address provided by the defendant were the same address in Shenzhen.  He requested to receive monthly e-statements.

4.  On 8 August 2023, the defendant opened a bank account (No.923137095888) with Hang Seng Bank ("the HSB Account").  In the opening mandate, he claimed to be a clerk, earning HK$170,000 per year.  Copies of his Two-Way Entry Permit and mainland ID card were submitted to the bank.  Both the correspondence address and residential address provided by the defendant were the same address in Gui Zhou Sheng.  He also provided an email address and a mainland mobile number to HSB.  The defendant was given an ATM card and a cheque book.

5.  On 9 August 2023, the defendant opened a bank account (No.01287820348565) with Bank of China ("the BoC Account").  In the opening mandate, he claimed to be a supervisor in a logistics company, earning HK$25,001 to HK$50,000 per month. Copies of his Two-Way Entry Permit and mainland ID card were submitted to the bank.  Both the correspondence address and residential address provided by the defendant were the same address in Shenzhen.  He was given an ATM card.

6.  The defendant was the sole signatory of all 3 bank accounts mentioned above.

Deception

7.  Between 11 and 13 September 2023, a total of 14 victims (PWs 1 to 14) were deceived in various ways (wrongly believing that they could earn some quick money).  They remitted funds to different bank accounts including the SCB Account.  In those few days, the SCB Account received a total sum of HK$351,485.50.  PWs 1 to 14 went to the Police.

8.  On 21 August 2023, another victim (PW15) was deceived by a cryptocurrency scam.  He remitted funds to different bank accounts including the HSB Account and the BoC Account, each having received HK$50,000 from PW15 respectively on 3 and 4 September 2023.  PW15 also went to the Police.

Deposits and withdrawals

9.  Between 25 August and 31 December 2023, the SCB Account received over 243 deposits, which aggregated to a sum of HK$4,402,553.61 (including the sum of HK$350,000 odd from PWs 1 to 14).  A total sum of HK$4,402,447.87 was withdrawn by over 135 transactions. All the funds were withdrawn within the same day of receipt.  This is Charge 1.

10.  Between 25 August and 4 September 2023, the HSB Account received over 21 deposits, which aggregated to a sum of HK$1,618,040 (including the sum of HK$50,000 from PW15).  A total sum of HK$1,557,825.19 was withdrawn by over 32 transactions.  All the funds were withdrawn within the same day of receipt.  This is Charge 2.

11.  Between 25 August and 30 November 2023, the BoC Account received over 47 deposits, which aggregated to a sum of HK$3,058,862.77 (including the sum of HK$50,000 from PW15).  All the funds were withdrawn within the same day of receipt.  This is Charge 3.

Arrest

12.  The defendant was arrested on 7 March 2024.  Under caution, he admitted that he opened the SCB Account for his friend and received RMB4,000 as a reward.  The defendant was arrested on 8 November 2024 in relation to the HSB Account and the BoC Account.  He remained silent.

13.  The defendant now admits that during the offence period, he, knowing or having reasonable grounds to believe that the respective funds held in the SCB Account, the HSB Account and the BoC Account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, had dealt with those funds.

Mitigation & Sentence

14. The defendant is 31 and single. He has a clear record. Defence counsel Ms. Chun informed me that the defendant resides with his parents and is the sole income source of his family. Owing to his inadequate education, the defendant could only work as a courier and a lottery tickets salesperson. In mitigation, Ms. Chun submitted that in order to earn more money, the defendant engaged in gambling and ended up owing a debt in the sum of RMB30,000. In July 2023, he was recruited by a WeChat group to open bank accounts in Hong Kong. The defendant came to Hong Kong on 8 August 2023 to open the bank accounts in the present case and sold them for money. Ms. Chun stressed that he had no knowledge of and was not involved in any deception offences at all.

15. The prosecution has applied for an enhanced sentence pursuant to section 27(2)(c) and (d) of the Organized and Serious Crimes Ordinance (Cap.455) on the basis of prevalence as well as the nature and extent of harm caused to the community. Ms. Chun did not object.

16. I bear in mind the Court of Appeal's decision in HKSAR v Xu Mai Qing CACC 464/2005, whereas Yeung JA (as he then was) held "Under section 27(11) of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences[1]."

17. I have read the witness statement of CIP Li dated 18 July 2025. I am satisfied that in 2023, deception-related money laundering cases were prevalent in Hong Kong in terms of the number of cases as well as the total value of monetary loss.

18. There is clear and cogent evidence before me that money laundering using bank accounts opened by "ML Stooges" is still widespread and commonly being practised in Hong Kong today. What true criminals need are gullible scapegoats like the defendant in the present case who would take the blame for them when the law enforcement takes action. The court must send a clear message to the general public that people who play the role of "ML Stooge" will receive severe punishment, so that there is a deterrent effect. When there are fewer or no willing "ML Stooges", the criminal activities which rely on their bank accounts would fail.

19. This is a typical case of money laundering by way of stooge bank accounts. The defendant claimed complete ignorance of the money-making scams against PWs 1 to 15; however, those scams would have been meaningless without his bank accounts. Assuming what the defendant said is true, given his role, the total sums which went through the 3 accounts and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 25%.

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

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.[2]

21. 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 amounts of money involved, the duration of the offences, the defendant's role in relation to the movements of funds as well as his personal circumstances.

22. 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…[3]

Charge 1

23. I accept there is no evidence showing that: (i) except the HK$350,000 odd from PWs 1 to 14, the funds received by the SCB Account were related to any predicate offence; and (ii) the defendant was involved in or had any knowledge of any predicate offence. As the sole owner of the SCB Account, the defendant should have retained its ultimate control and paid attention to its transactions on a regular basis.

24. On the other hand, I cannot overlook the fact that a total sum of HK$4.4 million odd went through the SCB Account within a period of 4 months. By selling his bank account to someone and thus allowing funds of unknown origins to pass through the SCB Account, the defendant played a pivotal role in helping the mastermind(s) of criminal activities to access their illegal funds without revealing their identities.

25. In the circumstances, I adopt a starting point of 4 years' imprisonment[4]. With the timely guilty plea, the sentence becomes 32 months. With the 25% enhancement, I sentence the defendant to 40 months' imprisonment for this charge.

Charge 2

26. There is no evidence showing that except the HK$50,000 from PW15, the funds received by the HSB Account were related to any predicate offence. A total sum of HK$1.6 million odd went through the HSB Account within a period of less than 2 weeks. Hence, I adopt a starting point of 3 years' imprisonment[5]. With the timely guilty plea, the sentence becomes 24 months. With the 25% enhancement, I sentence the defendant to 30 months' imprisonment for this charge.

Charge 3

27. There is no evidence showing that except the HK$50,000 from PW15, the funds received by the BoC Account were related to any predicate offence. A total sum of HK$3 million odd went through the BoC Account within a period of 3 months. Hence, I adopt a starting point of 4 years' imprisonment. With the timely guilty plea, the sentence becomes 32 months. With the 25% enhancement, I sentence the defendant to 40 months' imprisonment for this charge.

Overall sentence

28. The total sum received by the 3 bank accounts was HK$9 million odd. Bearing in mind the totality principle, I consider a global starting point of 5 years' imprisonment appropriate and just[6]. With the timely guilty pleas, the overall sentence is reduced to 40 months. Apart from this, I see no other mitigating factors which warrant any further reduction. With the 25% enhancement, the final overall sentence becomes 50 months. To achieve this, I order: 5 months in Charge 2 to run consecutive to Charge 1; and 5 months in Charge 3 to run consecutive to Charges 1 and 2.