HKSAR v. LEUNG WAN SING

DCCC 415/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 415 OF 2010

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Reasons for Sentence

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Charge and case as found

1.  The Defendant is charged with laundering monies between June 2007 and August 2008. There were a total of $4,530,713.95 deposited into, and a total of $3,989,353.70 withdrawn from, his 2 bank accounts in Bank of China. He is convicted after trial of the said totals subject to a deduction of lawful income of $86,875 (based on an assumption favourable to him that this sum had passed through such accounts).

2.  The Defendant had opened the 2 following accounts at Bank of China (“BOC”):

(a)  Savings account number 030-571-1-020878-5 (“030 Account”) on 5 June 1996;

(b)  Savings account number 012-563-0-001639-8 (“012 Account”) on 13 June 2008.

3.  Between 16 June 2007 and 28 August 2008, a total of $3,501,565.85 was deposited into, and $3,151,242.60 was withdrawn from, the 030 Account, which comprised the following:

(a)  40 transactions of cash deposits at counter;

(b)  311 transactions of cash deposits through ATM;

(c)  65 transactions of transfer deposits through ATM;

(d)  2 transactions of transfer deposits at counter;

(e)  33 transactions of cheque deposits at counter;

(f)  3 transactions of auto-transfer deposits by Hong Kong Jockey Club;

(g)  83 transactions of cash withdrawals through ATM;

(h)  81 transactions of transfer withdrawals through ATM;

(i)  8 transactions through EPS.

4.  Between 13 June 2008 and 28 August 2008, a total of $1,029,148.10 was deposited into, and $838,111.10 was withdrawn from, the 012 Account, which comprised the following:

(a)  7 transactions of cash deposits at counter;

(b)  74 transactions of cash deposits through ATM;

(c)  8 transactions of transfer deposits through ATM;

(d)  7 transactions of transfer withdrawals through ATM;

(e)  9 transactions of cheque withdrawals at counter.

5.  The Defendant had not filed any tax return with the Inland Revenue Department (“IRD”) between 15 February 2002 and 22 June 2009. Nor had he entered into any correspondences with IRD with regard to his income or any other matter.

6.  A company named Cheers Man Engineering Company Limited had filed a Notice of Remuneration of Persons with IRD on the Defendant’s behalf in the sum of $86,875 for the period between 1 April 2007 and 31 March 2008. I accept it as his lawful income.

7.  On 20 September 2008, the Defendant was arrested by the police outside a restaurant in Shamshuipo. When interviewed under caution, he exercised his right to remain silent.

8.  He is convicted on the basis that there were grounds which a commonsense, right-thinking member of the community would regard as sufficient to lead a person to believe that property in whole or in part represented proceeds of an indictable offence and that those grounds were known to him.

Personal background and mitigation

9.  The Defendant is 47 years of age. He was born in Hong Kong. He had received F.1 education. He was divorced 8 years ago. He has a 18-year-old daughter and a 17-year-old son. The daughter has suffered from a cyst in her brain. The Defendant has instructed his counsel to tell me that she has had headache from time to time. There is no medical evidence of her precise condition or prognosis. The defence has decided to rest this point here. The son had committed theft and sentenced to probably the detention centre. He was released one year ago. The Defendant would like to spend more time guiding his conduct.

10.  The Defendant has a string of previous convictions but none similar to money laundering. After he was released from jail in May 2007, he had worked as a waiter in a pub for 2 months at a monthly salary of $9,000. In the offending period, he had also sub-contracted works from Cheers Man where he earned $86,875.

11.  Defence counsel submits that our present case shall attract a lesser sentence by comparison with the case of HKSAR v Hsu Yu Yi CACC 159/2009 as its underlying offence cannot be identified likewise and it has no international element.

Sentencing principles

12.  Secretary for Justice v Herzberg [2010] 1 HKC 531 was an application for review of sentence by the prosecution. The respondent there had remitted over $600 million to 2 bank accounts in Zagreb and Amsterdam and $24.9 million into his own bank account. The monies represented proceeds of unlawful trading of shares in the United Kingdom. The Court of Appeal regarded that a starting point of 9 years ought to have been taken. Counted as relevant sentencing factors by Lunn J, who delivered the judgment in the Court of Appeal, were as follows:

(1)  The nature of the offence that generated the laundered money;

(2)  The extent to which the offence assisted the crime or hindered its detection;

(3)  The degree of sophistication of the offence and perhaps the defendant’s participation;

(4)  The length of time the offence lasted;

(5)  The benefit the offender derived from the offence;

(6)  The amount of money involved;

(7)  The defendant’s knowledge of the nature of the underlying offence;

(8)  The presence of otherwise of an international element in the commission of the offence.

13.  Defence counsel relies on its facts as a comparison the case of Hsu Yu Yi (above). The applicant there was convicted after trial of money laundering. The victim was a Singaporean woman who was defrauded into remitting a total of Singaporean $990,000 into 9 bank accounts in Hong Kong as processing fee for a sizeable lottery prize. One of the bank accounts was held by the applicant, who was a Taiwanese coming to Hong Kong to open such account. He knew it was for receiving monies to launder. The Court of Appeal revised the starting point from 4 years to 3 ½ years.

14.  Pursuant to my request for cases sentenced on unknown underlying offences, the defence draws my attention to 2 cases. The first one is HKSAR v Xu Xia Li CACC 395/2003 where the two applicants had dealt with $11 million and $3 million within 10 days. The starting point of 3 years was affirmed on appeal. The second one is HKSAR v Chiu Kit CACC 210/2009 where two applicants had dealt with $42 million within 4½ months. There was an international element. The Court of Appeal affirmed the starting point of 5 years for the leading applicant but revised that of the assisting applicant from 4½ years to 2½ years.

15.  I am aware of a case,HKSAR v Chen Zhen Chu [2007] 5 HKC 505, where the underlying offence was not known. The applicant had operated by himself or through others over 27 bank accounts to deal with HK$ 73 million from 700 individuals in a period of 13 months across Hong Kong, Australia and China. The average was $5 million in a month. Although the nature of the underlying offence could not be identified, the Court of Appeal regarded it a very bad case of its type. It was a trans-national organised crime which offended the restriction of money flows into and out of Australia and China. The applicant was the leader in the scam. The aggravating factors also included the large amount, the carefully planned and well-structured scheme (with the recruitment of large number of individuals both in Australia and in Hong Kong and the opening of large number of bank accounts), and that the applicant was working together with an accomplice. The Court of Appeal revised the starting point from 9 years to 7½ years.

Sentencing this Defendant

16.  I agree that it is constructive to compare with Hsu Yu Yi (above). Speaking of our present case, the underlying offence cannot be identified and there is no international element but the amount involved was much larger and the Defendant’s role was more active as seen from the large number and variety of forms of transactions in and out of his bank accounts over a period of 14 months. On the balance, I take a starting point of 3 years. As he has no effective mitigating factors, this is his sentence.