HKSAR v. MA CHE HOU

DCCC 656/2024

[2024] HKDC 1503

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 656 OF 2024

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REASONS FOR SENTENCE

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Charges

1.  The defendant pleads guilty to one count of money laundering.

Facts

2.  On 21 January 2021, one Mr Ng (PW3)  responded to a Facebook post, which offered to sell a toy figure. He transferred HK$1,500 to a Faster Payment System Account (the FPS Account).

3.  On 26 January 2021, one Ms Chan (PW2)  responded to a Facebook post, which offered to sell Disney keychains and dolls. She then transferred HK$1,620 to the FPS Account, and three days later a further sum of HK$1,200.

4.  On 2 February 2021, one Mr Kwok (PW1)  also responded to a Facebook post, which offered to sell a game account. He transferred HK$1,344 to the FPS Account.

5.  PW1-PW3 did not receive the goods they had purchased. They realized they had been defrauded and reported the matter to the police.

6.  Police found out the FPS Account was linked to a Bank of China Account (the BOC Account)  in the defendant’a name.

7.  The BOC Account was opened on 9 November 2011 as a payroll account. It was closed on 4 June 2021. The defendant was the sole signatory and reported himself to be a technician with monthly earning in the range of HK$10,001-HK$25,000.

8.  Yet, between 25 November 2020 and 4 June 2021, in the BOC Account there were 21,095 deposits in the total sum of HK$6,981,609.3, of which HK$6,782,892.27 were deposited by way of FPS transfers from different individuals. The amount of deposits ranged from HK$10 to HK$27,100.

9.  In the same period, there were 2,343 withdrawals from the BOC Account totaling HK$6,981,609.3, of which HK$4,397,477 were withdrawn by way of FPS transfers and HK$2,557,200 were withdrawn via ATM.

10.  On 1 June 2022, the defendant was arrested. He refused to answer any questions.

Criminal record

11.  The defendant has previous convictions. They were in 2009 and 2010 and not similar to the present offence.

Mitigation

12.  Counsel says the defendant is now aged 32. He is married and has two children (aged 2 and 4). Before his arrest, he was living with his wife, children and parents. He was educated up to Form Three and worked as a supervisor in a construction site.

13.  Counsel says the defendant had a serious stroke in September 2022 during custody. Fortunately, he has recovered from that but lost much of his memory.

14.  A CSD medical report dated 17 September 2024 shows the defendant is clinically stable though medication and follow-up are required.

15.  Counsel confirms the defendant has no life-threatening issues or daily living problems apart from impaired memory of the past.

16.  Counsel says the defendant is remorseful and vows to turn a new leaf.

17.  Counsel agrees that the defendant has previous convictions but points out that they were for dissimilar offences.

18.  Counsel recognizes there are no sentencing guidelines for money laundering. Nonetheless, he refers to these cases: HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, HKSAR v Lung Yun Ngan [2011] HKEC 683, HKSAR v Lee Ka Ki CACC 148/2007 and Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201.

19.  As to the enhancement of sentence sought by the prosecution under s 27(2)  (c)  and (d)  of the Organized and Serious Crimes Ordinance Cap. 455, Counsel does not challenge the application or the information furnished therefor. However, he refers to HKSAR v Xiang Juan [2024] HKDC 512 and 香港特別行政區 訴 謝志健  [2024] HKDC 1264.  In those two cases, the enhancements were both a mere 20%. Counsel asks this court to adopt the same extent.

20.  Counsel submits that the original starting point for the present case should not be much higher than 4 years’ imprisonment. The defendant pleads guilty in time so he should be entitled to a one-third discount.

21.  Counsel says the evidence only shows a few thousand dollars of all the money transacted came from scams. As such, a few months’ reduction could be given to the defendant. The reduced starting point would then be around 30 months and the enhancement should only be 20%, bringing the final sentence to 36 months.

22.  Finally, Counsel asks the Court to consider that the defendant has to serve a lengthy sentence in DCCC 688/2023. He asks the court to consider the proximity of the two cases. (The present case occurred between November 2020 and June 2021 while DCCC 688/2023 was related to a crime perpetrated between a certain day in 2021 and August 2022.)

Sentence

23.  Between November 2020 and June 2021, the defendant used his BOC account to launder money of nearly HK$7 million. There were 21,095 deposits and 2,343 withdrawals.

24.  Evidence shows three victims (PW1-PW3)  had been scammed online and paid totally several thousand dollars which landed in the defendant’s BOC Account finally. All the nearly HK$7 million in the account were gradually drawn out.

25.  I do not have to rule whether all the money in the defendant’s BOC Account was scam proceeds. But anyone looking at the account would be sure that the defendant, as the account holder, at least had reasonable grounds to believe the money in his account in whole or in part, directly or indirectly represented proceeds of some indicatable crimes.

Original starting point

26.  Money laundering is always a serious offence. Because the facts vary from case to case, there are no sentencing guidelines.

27.  The relevant consideration for sentence include the amounts transacted, the number of accounts involved, the volume and complexity of the transactions, the duration, the predicate offences, the role of the defendant and his knowledge.

28.  Taking into consideration the facts of the case and Counsel’s mitigation, I consider a starting point of 48 months’ imprisonment as appropriate.

29.  The defendant pleads guilty in time. He is entitled to a one-third discount.

30.  The defendant had a serious stroke during custody but that was dealt with and he is now clinically stable. In court, he appears no different from a normal person. Counsel also confirms that the defendant suffers no significant inconvenience in his daily life in the prison. Thus, there is no discount of sentence for his health issues. The defendant is only entitled to the usual discount for his early plea.

31.  I do not agree with Counsel that the court should give the defendant a further discount due to the fact that only a few thousand dollars was proved to be scam money. The defendant is sentenced on the basis that he had reasonable grounds to believe the money in his bank account was proceeds of indicatable crimes, not that he knew so.

Enhancement

32.  Having read the undisputed information furnished by the prosecution in support of their application for enhancement of sentence, I am satisfied that scam offences are prevalent and in many cases, the culprits would receive the crime proceeds through “stooge accounts”. The money would then be siphoned out of those “stooge accounts”.

33.  Chief Inspector LI in his s.65B statement provides the following data: 2020: 761 cases/HK$209.5M; 2021: 1,286 cases/HK$755.05M;   2022: 2,580 cases/HK$889.46M;   2023: 3,344 cases/HK$1,194M;   2024 Jan-Aug: 378 cases/HK$846.99M.

34.  Such scam victims were in no small numbers; the victims’ losses as a whole were huge. These scam activities can only be curbed by deterrent sentence. I would think an enhancement of at least one-third might bring about some effect.  Needless to say, greater enhancement would be called for if such crimes remain prevalent.

35.  A one-third enhancement of the defendant’s original 32-month sentence would be 10.66 months (rounding down to 10 months and 15 days). The final sentence is 42 months and 15 days’ imprisonment.

Totality of DCCC656/2024 and DCCC 688/2023

36.  Earlier today, the defendant was sentenced by me in DCCC 688/2023 for one count of Conspiracy to Defraud. It is a human trafficking case. I sentenced him to 56 months’ imprisonment after his plea.

37.  While this case and DCCC 688/2023 were proximate in time, they were separate and distinct offences. The two terms of imprisonment theoretically should be consecutive to each other. Yet, I have to consider their totality; the two terms add up to 98 months and 15 days.

38.  I think a total of 84 months’ imprisonment for the defendant’s plea in both cases would be just right. Therefore, I order only 28 months’ imprisonment of the present case to run consecutively to the 56 months’ term imposed in DCCC 688/2023. As a result, the defendant has to serve a total of 84 months’ imprisonment for his plea in both cases.