HKSAR v. LIAO SANXING

DCCC 1084/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1084 OF 2012

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REASONS FOR SENTENCE

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The defendant pleaded guilty to an offence of conspiracy to commit "money laundering". The sum involved is $50,000.

Summary of Facts

2.  In the afternoon on 26 September 2012, a phone deception took place locally in Hong Kong.  The intended target, Mr. TSANG, received phone calls claiming that his son was in financial trouble and asking him for immediate delivery of $50,000 cash (the original demand was $200,000).  Mr. TSANG alerted the Police before making payment.

3.  DSPC 14087 was assigned to impersonate Mr. TSANG.  Over the phone, the culprit asked the detective to go to Shek Lung Street in Yaumatei about 3:45 pm on the same day.

4.  About 4:30 pm, the defendant approached DSPC 14087 asking him to hand over the $50,000.  The detective revealed his police identity and arrested the defendant.

5.  In a video-recorded interview, the defendant admitted that in August 2012, he lost RMB20,000 in gambling to someone named "Dao Muk" in Fujian, mainland China.  As a result, he had to pay Dao Muk RMB1,000 each month as interest.  Subsequently, Dao Muk told the defendant that he would not be required to pay the monthly interest, if he agrees to go to Hong Kong to collect something.  The defendant agreed and entered Hong Kong on 24 September 2012.  Before departure, Dao Muk gave the defendant a mobile phone and some SIM cards for contact in Hong Kong. At 2:00 pm on 26 September, Dao Muk called the defendant asking him to go to the pick-up location.  Dao Muk told the defendant to pick up something that would be dropped by someone.  The defendant suspected that he was instructed to do something illegal but did not know the details.

Mitigation & Sentence

6.  The defendant is 27 and has a clear record.  He is married and has an 8-month-old daughter in the mainland.  Prior to his arrest, he worked as merchandiser of construction materials earning RMB5,000 per month. 

7.  Defence counsel Mr. CHAN submitted that the defendant has been a good citizen throughout his life.  He has served 2 years in the army from 2002 to 2004 and was honourably discharged.  He works hard to provide sufficiently for his parents, wife and daughter.  Moreover, there is no evidence of the defendant having any knowledge or taking part in the underlying phone deception against the victim.  Mr. CHAN further submitted that the defendant has frankly admitted to the Police that he got himself into trouble by gambling, and then he was used by Dao Muk.  Mr. CHAN explained that the defendant gambled because he wanted to earn more money to support his family.  The defendant is truly remorseful.  He decided to plead guilty to the charge after receiving proper legal advice.  A bundle of mitigation letters and certificates have been placed before me; their contents are duly noted.

8.  The Prosecution has applied for enhanced sentence pursuant to section 27(2)(c) and (d) of the Organized and Serious Crimes Ordinance (Cap.455) on the basis of prevalence as well as the nature and extent of harm caused to the community. Mr. CHAN does not object to this application.

9.  I bear in mind of the Court of Appeal decision in HKSAR v XU Mai Qing CACC 464/2005, whereas Yeung JA (as he then was) held "Under section 27(11) of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences." [1]

10.  As revealed in the statement of WDSIP LUK (although not happily worded), the number of "Drop-off" mode cases[2] in 2008 was 38, which accounted for 7.9% of the overall successful phone deception cases.  The numbers then gradually increased to 80 cases in 2009, 126 cases in 2010, 149 cases in 2011 and 169 cases in 2012.  The number of "Drop-off" mode cases in 2012 accounted for 23.8% of the overall successful phone deception cases in that year.  The amount of monetary loss also has a steady increasing trend from 2009 to 2011 (from $7.46 million to $10.74 million).  In 2012, the figure was still $10.22 million.  In my view, there is clear and cogent evidence before me that the "Drop-off" mode phone deception is still widespread and commonly being practised in Hong Kong today.  Given the role played by the defendant, the amount involved and the overall circumstances, I grant the Prosecution's application and will enhance the sentence by 20%.

11.  The Court of Appeal in SJ v WAN Kwok Keung [2012] 1 HKLRD 201 held:

"Money laundering" is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the "money laundering" offences.

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[3]

12.  In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v HSU Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33.  I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances. 

13.  For the purpose of sentencing, I accept that the defendant probably had no knowledge of and did not take part in the underlying phone deception offence.  On the other hand, he admitted that he had suspicion about the legality of what he was asked to do by Dao Muk.  As revealed in paragraph 5 of the Summary of Facts, the defendant approached the detective (who was impersonating Mr. TSANG) and asked him to hand over $50,000.  It is plain that he knew that much at least.

14.  Time after time, the court has expressed in very clear terms that being in financial difficulty (however serious) is no mitigating factor for committing a crime.

15.  In HKSAR v NG Tsz Ming HCMA 454/2005, the appellant allowed someone, whom he met on ICQ, to use his bank account to accept some funds in return for a commission.  As a result, a sum of $49,000, which was proceeds of a theft offence, were transferred into the appellant's account. Deputy High Court Judge To (as he then was) upheld the starting point of 12 months' imprisonment.

16.  The circumstances under which the defendant approached the victim to pick up cash would most certainly trigger his suspicion about the legitimacy of such money.  However, it does not mean he knew that the cash he intended to pick up is proceeds of a deception.  In the absence of any such evidence, I take the view that the defendant's role is similar to those who sell their ATM cards or lend their bank accounts to others for dealing with proceeds of crimes.  Hence, in this case, I adopt a starting point of 15 months' imprisonment.  A one-third discount is given for the guilty plea, reducing the sentence to 10 months.  Apart from this, I see no other mitigating factors which warrant any further discount.  With the 20% enhancement, the sentence is therefore 12 months.