HKSAR v. CHEUNG KAI YEE

DCCC 661/2017

[2018] HKDC 790

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 661 OF 2017

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Reasons for Sentence

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1.  The defendant has pleaded guilty to a single charge under section 25(1) of the Organised and Serious Crimes Ordinance, namely dealing with property known or believed to represent the proceeds of an indictable offence.

2.  The features of the offence indicate the offence occurred from the period of 26 March 2007 to 13 December 2011, and the defendant dealt with some HK$11.13 million within his own personal bank account.  The prosecution case appears to be based on the basis that the defendant had reasonable grounds to believe that that property did represent the proceeds of an indictable offence.

3.  The Summary of Facts sets out in some detail the nature of the transactions involved in this offence.  The defendant was the sole signatory of an HSBC account, and cash deposits of significant amounts of over 100,000 had started to appear in the account from 26 March 2007 onwards.  The end of the significant sums was on 25 August 2011, and there had been some further deposits up to 13 December 2011, deposits being in the form of cash, cheque and transfer.  Those deposits were of such a nature as to alert the holder of the account to the possibility that they were the proceeds of an indictable offence, and in total amount to deposits and withdrawals in the region of $11.1 million.

4.  The defendant did provide some explanation for this.  In 2008 he had retired as a metal recycling worker, and some time before that he had become involved with a clansman in the mainland called Jimmy, and he had gone into the business of purchasing items for Jimmy which were then exported apparently to Malaysia, and the major deposits into the account were sourced from Jimmy and other clansmen for this purpose, and there was mention of the exporting of items such as acetone and iodine.

5.  The defendant had heard that people had been arrested in China in respect of this business, and he had ceased to be involved in that business from then on. 

6.  The defendant was earning some $200,000 to $300,000 from this enterprise, and in fact in mitigation he said he earned a total of 600,000 from the business.  The defendant does accept the figure of 11.1 million as being the relevant figure that was dealt with in this account.

7.  As far as the defendant’s personal circumstances are concerned, he is aged now 69 years old.  He has a previous spent conviction for gambling which is not relevant to these proceedings.  He retired in 2008 as a metal recycling worker after 30 years’ work.

8.  He has a wife and two sons.  One of his sons has some medical problems and requires the defendant’s attention.  Also, letters of mitigation have been forwarded from the defendant and his wife.  The defendant says in mitigation much of what he said in fact in his records of interview to the police.  After retirement, he became involved with Jimmy, a Malaysian businessman who dealt in the electroplating business.  Jimmy wanted to source raw materials within China and export them to Malaysia.  The defendant became involved after accepting Jimmy’s request.  He used the account in question to accept money from Jimmy, and bought the goods and sent them to Malaysia.

9.  It would seem there was no attempt to conceal his identity.  It was his own account.  There were three major occasions on which this occurred.  He was paid $200,000 each time, a total reward of 600,000.

10.  The defendant had no knowledge of this particular trade, and he did not attempt in any way to ascertain legitimacy.  He was aware his clients had been arrested here and in the mainland.

11.  The defendant says he has been open in terms of the police investigation.  He has assisted the police by making a non‑prejudicial statement in December of last year.  He was arrested as early as 2014. Naturally, these matters take some time to investigate, and so the matter has been hanging over him for some time.

12.  As far as sentencing is concerned, the court is aware and needs to be aware of the factors set out in the case of HKSAR v Baumer and Masso [2012] HKCA 52, which makes it fairly clear that there is no actual guideline sentence for these matters because the way in which a person becomes involved and the amounts of money involved vary considerably in these cases.

13.  As far as those factors are concerned, the court is urged to consider that there is only one charge that the defendant faces. No predicate offence can actually be identified, and the defendant, when he became suspicious of the criminal nature of these transactions as the result of the arrest of his clients, had stopped dealing in them from that point onwards.  And there was no clear planning by the defendant.  He simply sourced goods and received money.  There was no attempt to hide his own identity.  He was obviously easy to find, as his name was on the account.

14.  This cannot be identified as the work of a criminal syndicate, and though it does technically fall within the definition of having an international dimension, which does apparently include money or operations in the mainland, although naturally there is no international border between Hong Kong SAR and the mainland, I don’t particularly regard it as a significant aggravating feature in this case.

15.  Having looked at these figures, it is then necessary for the court to determine what is an appropriate starting point. The major facts of this case are it does appear to be a substantial sum of money over a lengthy time, during which the defendant had clear reasonable grounds to believe that that property was the proceeds of an indictable offence.

16.  Balancing that against the other mitigating factors put forward by the defendant, I consider an appropriate starting point for sentence in this case, and it is limited to the facts of this case, is one of 39 months’ imprisonment.

17.  After deduction for the defendant’s plea of guilty, that leads to a sentence of 26 months’ imprisonment.