HKSAR v. HUANG DELIN

DCCC 174/2020

[2020] HKDC 681

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 174 OF 2020

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REASONS FOR SENTENCE

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1.  This is a case of money laundering. The scenario is nothing complicated and can be described as follows: the fraud perpetrated in the instant case is best known as identity fraud, and the establishment of a stooge account and a shell company through which the proceeds are to be laundered.

2.  One day in October 2019, a Hong Kong industrial corporation received a bogus email purportedly coming from its subsidiary in the Mainland asking it to transfer funds in the sum of US$ 500,000 to a stooge account held by the defendant with a local bank in the name of a company called Hefan Trade Limited. As soon as the transaction was done, the parent company informed its subsidiary of it only to be told that they had not made such a request. The matter eventually was reported to the police.

3.  Fortunately, the money in the stooge account has been restrained in the nick of time before it could be siphoned off by the defendant. In the days following the making of the remittance, the defendant made several attempts to transfer the funds out of the account but were all unsuccessful not least because the fraud was discovered soon enough.   

4.  The fraud occurred on 22 October 2019. In the following three days, the defendant went to a branch of Bank of China in Hong Kong every day attempting to transfer the proceeds to another account, but each time was told to come back later by the bank staff who noticed that the account in question was put under “Special condition”. On his last visit to the bank on 25 October, he was arrested.

5.  In his interview with the police, the defendant admitted opening the account for the use of others for unknown purposes and this was undertaken for a monetary reward- he was promised a reward of RMB$3,000 for opening the account and RMB$5,000 for each subsequent transfer.  He did it because he was heavily in gambling debt at the time.

6.  He further told the police that his stay here was all arranged by two men who picked him up at the border and kept his ID card and two-way permit etc, and he was brought by them to the bank to make the transfer and all that. He knew nothing about the transactions in the account.

7.  The defendant, a 32-year-old man from the Mainland, has a clear record. He only has junior high school education and is married with 3 children.

8.  In his letter to the court, the defendant said that he had been a law-abiding citizen all along, and had a proper job in the Mainland; being misled by his friends, he committed the present offence without realising the serious consequences of it. He is truly remorseful for what he did and asks for leniency so that he could go back home as soon as possible to take care of his family, in particular his wife who is suffering from uterus cancer.

9.  In mitigation, counsel for the defendant, Mr Kwan, submitted that there is no evidence that the defendant knew the US$500,000 to be the proceeds of an indictable offence; he was only lending his account to others and turned a blind eye to the situation in the account after giving all the bank cards and statements to others.

10.  Judging from the amount involved, i.e. US$500,000, Mr Kwan suggested a starting point of 3 ½ years citing the case of Wan Kwok Keung (2012) 1 HKLRD 197 in support which held that a term of 4 years is to be considered for dealing with money in the range of 3 to 6 million.

11.  There are other factors to be considered by a sentencing court which are set out in the cases of Boma CACC 335/2010 and Liao Liting CACC 334/2015 (but it is not meant to be an exhaustive list). Mr Kwan discounted the other factors as insignificant when compared with those in Liao’s case and urged the court to take the same view.

12.  For example, he said the criminal activities lasted longer in Liao’s case than in the instant which only involved one transaction (one remittance) in the defendant’s account. There were many deposits in Liao’s case amounting to about 3.73 million, and almost all of it were taken out of the account immediately but the victim of the present case suffered no loss – the US $500,000 remained in the account.

13.  Mr Kwan also emphasized the fact that the defendant was frank with the police disclosing everything he knew to the police after his arrest.

14.  First of all, as the facts show, the defendant set up a shell company, Hefan, here in Hong Kong on 26 July 2019, and the company bank account was opened on 27 August 2019. The fraud occurred on 22 October 2019, and remittance was made on the same day. In the next 3 days, the defendant was here to try to transfer the funds, albeit without success.

15.  An IP check on the sender of the bogus email revealed that the IP address originated from Pennsylvania, USA.

16.  The defendant, a Mainlander, who came to Hong Kong clearly doing nothing but crimes.

17.  Perhaps the defendant was only playing a small part in the scam but his role was nevertheless significant; without him, the fraudsters’ plans could never be brought to fruition.

18.  Given the facts of the case, I take 3 ½ years as the starting point. Insofar as mitigation is concerned, apart from his guilty plea, there is nothing of substance. Discounting one-third for his timely plea, the starting point is reduced to 28 months.

19.  There being no reasons for further reduction in sentence, the defendant is therefore sentenced to 28 months’ imprisonment.