HKSAR v. GURUNG TIKARAM

DCCC 176/2025

[2025] HKDC 2137

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 176 OF 2025

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REASONS FOR SENTENCE

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1.  The defendant (“D”) pleaded guilty to a charge of Dealing with property known or believed to represent proceeds of an indictable offence (commonly known as “"Money Laundering"), contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455.

SUMMARY OF FACTS

2.  An online investment scam whereby victim (“PW1”) met a scammer via Instagram and was duped into opening an investment account on a bogus platform so as to invest in USDT Futures.  She wired altogether HKD4,497,200 to various bank accounts designated by the scammer and one of which turned out to be D’s bank account opened with Standard Chartered Bank ( “SCB A/C”), which received HKD155,000 from PW1 on 7 March 2023.  When PW1 tried to withdraw the sums invested, she was asked to remit even more funds.  Thus, she realized she was conned and reported the case to the police.

3.  D’s SCB A/C was opened on 3 March 2023 and closed on 2 May 2023.  Fund flow analysis showed that during the said period, the SCBA/C recorded a total deposit of HKD3,697,457.37 over 108 transactions and the funds were all withdrawn on 131 occasions. 

4.  On the account opening mandate, D claimed to work in the personal services/retail & wholesale industry, making HKD16,000 per month.  He provided a residential address in Temple Street, Yau Ma Tei and submitted his HKID card copy to SCB during the account opening process.  He was provided with e-statement and a cheque book by the bank (mailed to his residential address by ordinary post).

5.  Fund flow analysis also showed that all the funds, once deposited into the said account were siphoned off within a day or two.  Hallmark pattern of money laundering was sighted and the account was used as a temporary repository of funds.

6.  Movement record showed that D was within the jurisdiction when the subject account was opened.  D did not file any tax returns for the financial years between 2019/20 and 2021/22. D was arrested on 21 January 2024.  Under caution, he remained silent.

7.  D did not account for the source of funds received into his SCB A/C during the material time. Over HKD3.6 million was remitted into the subject account by strangers (including PW1) who were not known to D within 2 months’ time.  The large sum of money remitted into D’s subject account was incommensurate with his financial status.     

8.  D was the sole authorized signatory of the SCB A/C; thus, he was always in control of it.  He was found to have dealt with the funds in the subject account during the material time, knowing or having reasonable grounds to believe that the said property, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence. 

PROSECUTION’S APPLICATION

9.  The Prosecutions applied for an enhancement of sentence pursuant to section 27(2) of the Organised and Serious Crimes Ordinance Cap. 455 by furnishing with the court a witness statement of Chief Inspector Li Yiu Nam of the Money Laundering and Terrorist Financing Risk Assessment of the Financial Intelligence and Investigation Bureau, Hong Kong Police Force dated 2 December 2025.  The information provided by Chief Inspector Li showed the prevalence of the use of stooge account in the commission of money laundering offence in Hong Kong and the extent of harm caused directly or indirectly to the community.

CRIMINAL RECORD AND BACKGROUND OF THE DEFENDANT

10.  D has 10 previous criminal convictions and one breach of probation order record.  All of them are not similar to the present offence.

MITIGATION

11.  D is now aged 46. D is separated with his wife. D has a daughter aged 14.  D worked as a cleaner in hotel earning HKD16,000 per month.  D was living in Shanghai Street, Mongkok before his arrest.

12.  In mitigation, it is submitted that shortly before 3 March 2023, D was offered with HKD5,000 to open a bank account in the SCB.  D then surrendered the full control and operation of the bank account to the person who offered him the money.  D was also provided with the Temple Street address.  On 3 March 2023, SCB Account was opened.  Then D gave the bank card and passwords to that person to use.  As D did not reside in Temple Street, he did not receive any cheque book or e-statement. Therefore, he had no idea what was going on in the SCB Account.  In fact, D just ‘turned a blind eye’ to what money would be deposited into (or withdrawn from) the SCB Account after he ‘sold’ his account to the buyer.

13.  It is submitted that there is no evidence that D participated in the investment scam and he had no knowledge of the scam, there was no international element involved and no sophisticated plan involved.

14.  Mr Kwan, representing the D, referred the court to a number of District Court sentence cases[1] which concerned defendants using their bank accounts as stooge accounts to launder “black money” from 4 to 6.5 million dollars that adopted sentence in the range of 3 years to 3 years and 9 months as starting point.

15.  Mr Kwan raised no objection to the enhancement application but asked the court to consider it to be between 20% and 25%. 

SENTENCE

16.  The maximum penalty for the offence of money laundering is 14 years’ imprisonment. There is no sentencing tariff for this offence. Money laundering is a serious offence.

17.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal listed the following factors for consideration when determining the appropriate sentence:

(a) The amount of money involved was a major consideration, not the amount of benefit received by a defendant in the transaction.

(b) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(c) The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(d) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(e) The length of time the offence lasted.

18.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal listed some of the significant features which the sentencing court should take into account.  The list is non-exhaustive, they include:

(a) the nature of the predicate offence, if known, and the penalty available for the predicate offence;

(b) the state of the offender’s knowledge;

(c) where the operation involved an international dimension, this would be a significant aggravating feature;

(d) the sophistication of the offence, including the degree of planning; whether deceit was practiced to achieve the objective;

(e) where the offence was committed or on behalf of an organized criminal syndicate would be an aggravating feature;

(f) whether there was one transaction or many and the length of time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of funds were proceeds of an offence or a serious offence was involved; and

(h) the role of the offender and the acts performed by him.

19.  In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal listed out the factors relevant to sentencing, including the number of offences involved, the duration of the offence, the defendant’s level of participation, whether or not it was organized or sophisticated crime; and the sentence should be adjusted upwards, if there was information to prove that the ‘black money’ originated from serious crimes or the defendant’s benefit was huge.

20.  I have also considered The Secretary of Justice v Xie Zhijian（谢志建）[2025] HKCA 911 the Court of Appeal stated that the amount of money involved is not the sole important factor for sentencing.  The court should have given regard to the overall consideration of the case.

21.  As regards to the length of time of the offence, the duration was around 2 months, which was between 3 March to 2 May 2023.  The money involved was around HKD3,697,457.  The number of deposits into SCB accounts totaled over 108 and the funds were all withdrawn on 131 occasions.  The facts also showed that once the funds were deposited, they were siphoned off within a day or two.  D obtained a monetary rewards by opening the stooge account. 

22.  Taking into account of the nature of the offence that D was facing, the facts of the case admitted, the background of D, the mitigation submitted by the defence and the relevant authorities, I adopt a starting point of 39 months’ imprisonment, after one-third discount upon D’s guilty plea, the sentence is 26 months’ imprisonment.

ENHANCEMENT

23.  The Prosecutions applied for an enhancement of sentence pursuant to section 27(2) of the Organised and Serious Crimes Ordinance.  As stated in Chief Inspector Li’s statement, anti-money regime in Hong Kong is hampered by the prevalence of stooges for money laundering activities as follows:

(a) It interferes with the normal operation of the banking system, having a negative effect on the reputation of Hong Kong as an international financial hub;

(b) It forms multiple layers of “shields” concealing the identity of the masterminds behind, making it difficult, for police to identify the masterminds behind;

(c) It facilitates the commission of crimes and in turn leads to more crimes being committed, as the mastermind could easily get away with the criminal liability;

(d) The prevalence of stooge accounts makes money laundering easier, which allows culprits to make use of their ill-gotten gains to extend their sphere to engage in a wider range of illegal activities;

(e) It means that law enforcement agencies have to put in more investigation efforts and resources; and

(f) People with low income or less awareness of the consequence of selling their bank accounts are more likely to be lured by the culprits to take the risks of commission of crimes to surrender their accounts for monetary reward.

24.  The information provided by Chief Inspector Li covered the data for period between 2020 and October 2025.  Though the number of cases in 2025 (till October) involving the use of stooge accounts is less than the number in 2024, there is no doubt that this type of offence remains prevalent in the community[2] (see HKSAR v Lee Yuek Sing & Anor CACC 515/2001 and HKSAR v 楊鎧駿 CACC 135/2024).

25.  Having considered all the information, I am satisfied that enhancement of sentence is appropriate in this case.  I am of the view that 25% enhancement is appropriate having regarded to all the circumstances.  As a result, after the enhancement by 25%, the defendant is sentenced to 32 months’ imprisonment.

26.  There is no other mitigating factor which justifies a reduction of sentence.

CONCLUSION

27.  The sentence of D is 32 months’ imprisonment.