HKSAR v. MOHAMMAD LIAQAT

DCCC 191/2023

[2025] HKDC 1691

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 191 OF 2023

----------------------

----------------------

--------------------------------------

REASONS FOR VERDICT

--------------------------------------

The charges and gist of the case

1.  The Defendant (“D”) pleaded not guilty to two counts of “Dealing with property known or believed to represent proceeds of an indictable offence”, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455.  

2.  The prosecution case is that between January 2016 and October 2018, D, having reasonable grounds to believe[1] that the sums in two bank accounts (being, in charge 1, HK$10,308,458 in an HSBC bank account in D’s name (“D’s HSBC Account”); and, in charge 2, HK$661,317.50 in a Hang Seng Bank account in D’s name (“D’s HS Account”)) in whole or in part represented the proceeds of an indictable offence, dealt with the said property.

3.  The prosecution submits that from the IRD records of D and also from three video-recorded interviews (“the 3 VRIs”) given voluntarily by D (P31 being the transcript of the 1^st VRI, P33 being the transcript of the 2^nd VRI and P35 being the transcript of the 3^rd VRI), D only worked for Top Smart International Trading Limited (“Top Smart”) between fiscal years 2011/12 and 2017/18, and had a modest income. However, D’s HSBC Account records shows that the account was used as a money repository rather than a genuine personal bank account (i.e., there were numerous bank transactions, large in number and amounts between various accounts (including D’s HSBC Account and Top Smart’s bank account), and sums deposited into D’s HSBC account would be withdrawn / transferred away almost immediately); the account showed mirror pattern transactions in the offence period. As to D’s HS Account, the deposits and withdrawals fluctuated greatly in the offence period (the total deposits in 2016, 2017 and 2018 were $263,000, $63,106 and $1,009,011, respectively); this account also showed mirror pattern transactions. The prosecution asserts that D had reasonable grounds to believe these funds represented the proceeds of an indictable offence and he still dealt with them.

4.  D’s case is that all the sums deposited and withdrew were for legitimate purposes, e.g., for mobile phone business conducted on behalf of Top Smart or other entities, payments for his wife’s cake business, expenses related to the Pakistan Islamic Welfare Union (“the Union”) (of which he was chairman), for everyday purposes and expenses, etc.

5.  The documents in the prosecution case were not in dispute and produced by agreement.[2] It was admitted pursuant to section 65C of the Criminal Procedures Ordinance, Cap 221 that D gave the 3 VRIs voluntarily, that he was arrested on 9 June 2022, and that he has a clear record (P1 and P1A).

The prosecution case

6.  The prosecution only called the investigation officer (WSGT 7508) (“PW1”) to give evidence.[3] 

7.  PW1’s evidence was that she took over the case on 6 March 2019, and thereafter used bank statements and vouchers etc to construct tables regarding fund flow (being P3-5 for D’s HSBC account; P6-8 for D’s HS Account). PW1 also conducted the 3 VRIs with D. During cross-examination, she was asked about the details of the fund flow tables and D’s answers and attitude during the 3 VRIs; PW1 confirmed that D was cooperative during the interviews. PW1 admitted that during the 3 VRIs when D was asked about the various transactions in the two bank accounts, the police had not obtained information about most of the counterparties of the transactions (and could not provide such information to D); the police had not asked the bank for the information, nor checked any CCTV footage with regard to ATM withdrawals/deposits, nor had any search warrant been executed in relation to Top Smart. PW1 left the team in charge of this case in January 2021 and did not know if there had been any follow-up work done by others in relation to the case (including obtaining the information of the counterparties of the transactions) after her departure[4].

The defence case

8.  After the prosecution closed its case, the defence made midway submissions. I considered the evidence presented by the prosecution and the submissions of parties, and ruled that there was a case to answer on both charges. D elected to give evidence and called Mr Waheed Abdul to testify as a defence witness.

9.  D gave evidence that he had arrived in Hong Kong from Pakistan in 1995 when he married his wife (who is from Hong Kong). He had worked in the travel agency field, the auto industry, and later joined Top Smart in 2010. He joined the Union (which served the Pakistani and local communities, and held religious and cultural activities, with some activities funded by the Hong Kong Government) in around 2002, and he became the chairman in around 2012. D has received certificates, awards and recognition (including from the Chief Executive and the police) for his service and contribution to the community.[5]

10.  As to his work for Top Smart, D in essence gave evidence that the company (owned by Mr Mian) purchased second-hand mobile phones from overseas or local/Mainland companies and sold them to purchasers (some local, some overseas). D was involved in the purchasing part of the business but not in the selling of the phones. The business was very cash-heavy, and he would need to bring cash on behalf of the company to pay for the purchases – sometimes it would be cash from the office, and sometimes it would be money transferred into D’s account (via the ATM machine, by cash deposit, etc) to be withdrawn by him to make the payments. D was only told by Mr Mian that money would be / had been deposited for a certain purchase; the funds might come from bank accounts other than Top Smart’s (including the bank accounts of buyers of phones from Top Smart), but they were all arranged by Mr Mian. When asked why Mr Mian did not transfer the money directly to the seller, D stated that his team had to check the quality of the phones (and some phones in the batch might be rejected) before payment, so the amount that needed to be paid could not be finalised until after that had been done.

11.  As to the method of withdrawal of cash by D to pay for the phone purchases, D said that he sometimes did so at an ATM machine (with limit of $20,000 per transaction, $80,000 daily); if the amount was large, then he would go to the bank counter.

12.  D also added that as some of the funds were from the buyers of phones, the amount deposited into his account might not match the amount for the next purchase. If he did not use up all the money transferred into his account for a certain purchase, he would sometimes use it for another assignment or transfer it back to Top Smart, or withdraw it and pay Mr Mian / Top Smart back in cash – all based on Mr Mian’s instructions.

13.  There was a paper trail for all of these purchases/transactions, but the paperwork was kept by Top Smart (and D had left the company in early 2020). By the time of the 3 VRIs, D was no longer an employee of Top Smart and did not have access to such paperwork[6].

14.  D worked at Top Smart from 2010 to 2020; his salary was paid by transfers into his account or by cash, or by cash deposit into D’s account. As business was not as good since 2018, Mr Mian did not pay D regularly but in lump sums of $50,000 or $100,000 irregularly. Up until now, some salary is still owed.

15.  D also worked with Mr Waheed Abdul, the owner of Galaxy Wireless. The company was also in the second-hand mobile phone business (purchasing phones from countries like the US, France, etc). Sometimes Mr Waheed Abdul needed to make “TT” transfers to pay the suppliers, and D would help him do so. (Mr Waheed Abdul originally said he would pay D for that service, but in the end he did not pay D; D was willing to do so anyway because they were family friends belonging to the same hometown in Pakistan.) As to the money for these “TT” transfers, Mr Waheed Abdul would sometimes deposit money into D’s account, and would sometimes pay D in cash. The money was deposited on Mr Waheed Abdul’s instructions but were from different parties. Once there was enough money to send a “TT”, Mr Waheed Abdul would inform D, and D would send the money for the mobile phone order.

16.  D was asked to give interviews to the police under caution 3 times for this case. He cooperated every time. However, there was insufficient information provided by the police for the transactions (which happened some time ago) and he found it difficult during the interviews to give any details with the limited information provided by the police on the transactions. Subsequently, D himself went to the ATM machine to punch in the account number of the counterparty for each transaction (i.e., the depositor / receiver of money from D’s HS Account / HSBC Account) and was able to find out the partial names of most of these parties (the machine would display the name with some letters represented by asterisks, unless the account holder had blocked the information). The counterparty names in red on D8(64)-(91) were added to the fund flow tables (originally prepared by PW1) by the defence to show the information obtained by D using this method. From this additional counterparty information, D was able to explain the purpose of / reason for a large number of the transactions in his two accounts (which he had been unable to without the information during the interviews).

17.  Mr Waheed Abdul gave evidence that he was the owner of Galaxy Wireless. He had known D for many years, and they were from the same hometown in Pakistan (Gujranwala). Mr Waheed Abdul had contracts with Chinese companies; he was the middleman helping these companies to place orders for second-hand phones with suppliers; these Chinese companies would pay the suppliers directly and no money would go through Mr Waheed Abdul’s account. However, Mr Waheed Abdul wanted to do a side business without letting the Chinese companies know. As such, he had asked D to help him send “TT” transfers to suppliers to purchase phones. Mr Waheed Abdul explained that he did not open a bank account for Galaxy Wireless to make the transfers because he wanted to keep this side business a secret from the Chinese companies; he also did not use his personal account for the same reason. D’s role had only been to arrange for transfer of funds to suppliers overseas, and the phones would be sent to Mr Waheed Abdul directly. D had only acted on Mr Waheed Abdul’s instructions on where to send the money.

18.  D’s evidence (and the evidence from Mr Waheed Abdul, PW1 and documentary evidence) in relation to the transactions in D’s HSBC Account and D’s HS Account are accurately summarised in Part G and Part H, respectively, of D’s Closing Submissions dated 30 May 2025 (“D’s Closing”) and I do not intend to repeat the same here.

Directions

19.  The prosecution has the burden to prove for each charge the requisite elements of the offence beyond a reasonable doubt. D has no burden of proof.

20.  I bear in mind D has no criminal conviction record when considering his credibility and propensity.

21.  There are two counts against D. I must consider each independently.

22.  D’s 3 VRIs under caution were admitted as evidence. They are mixed statements and consistent with D’s evidence in the box (save D was able to provide more information when he testified). The real issue thus becomes whether the court accepts D’s evidence. (HKSAR v Lo Wai Ming [2007] 3 HKLRD 191; R v Vu Trong Minh [1994] 1 HKC 161; HKSAR v Woo King Chi [2008] 3 HKLRD 326)

23.  In this case, the prosecution submits that the Court can draw the irresistible inference that D committed the offence in the two charges. I remind myself that if I am to draw an inference, the inference must be drawn from facts proved and that the inference must be the only reasonable inference to be drawn from the proved facts.

Legal principles

24.  Section 25(1) of the Organized and Serious Crimes Ordinance, Cap. 455 provides that: “Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property.”

25.  The prosecution confirmed that it is not relying on the “knowing” limb.

26.  For the “reasonable grounds” limb, it is not necessary for the prosecution to prove, as an element of the offence, that the property dealt with by the defendant in fact represents the proceeds of an indictable offence: HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279 at [28], [90].

27.  The test for “having reasonable grounds to believe” as reformulated in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446 at [26] is as follows:

(1)  What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his/her belief as to whether the property was the proceeds of crime (“tainted”)?

(2)  Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

(3)  If the answer to question (2) is “yes” the defendant is guilty. If it is “no” the defendant is not guilty.

28.  It is not the law that a defendant is entitled to be acquitted on the ground that he/she believed or may have believed that the property was not tainted. The court needs to apply the test of “reasonable grounds to believe” from the viewpoint of the defendant, having regard to all the facts and circumstances known to him/her. The defendant’s belief is relevant to the extent that it reveals facts and circumstances upon which the belief is based. However, the actual question to be answered is: on an objective basis, do these facts and circumstances (known to the defendant which may have affected his/her belief) establish “reasonable grounds to believe” that the property is tainted.[7] 

Analysis and findings

29.  Most of the prosecution case (as shown by documentary evidence) was not disputed by the defence. PW1’s evidence was not seriously challenged by the defence – cross-examination centred on taking PW1 through the fund flow tables she had put together and the various transactions contained therein. I am of the view that PW1 gave evidence to the best of her recollection, but she left the team in charge of this case and the investigation early on, and I agree with the defence submission that: “PW1’s ability to address certain issues was hampered by the way in which the investigation was conducted and the way in which her investigation was ended early.”[8]

30.  As to the defence evidence, I am of the view that D and Mr Waheed Abdul were honest witnesses who gave evidence to the best of their recollection regarding the events/transactions relevant to the case. Their evidence was consistent in material aspects on matters of which they both had knowledge.[9] The defence is able to provide documentary evidence in support of D’s evidence (including tax returns). As I have stated above, D is of clear record and his credibility and propensity have to be assessed in that light. D has provided numerous documents which show his positive good character – the evidence regarding his background (including the certificates/commendations awarded to him by the police and different government departments) is summarised accurately in para 29 of D’s Closing.

31.  On the evidence which is accepted by the court, the following facts / circumstances were known to D which may have affected his belief regarding whether the subject property in Charge 1 was tainted:

(1)  D’s background[10], including his involvement in the Union and his experience in the second-hand mobile phone business (in particular, that it is cash-intensive, involving a lot of deposits and withdrawals (payments in and out) to conduct the business);

(2)  The transactions in D’s HSBC Account were mainly related to the second-hand mobile phone businesses of Top Smart and Galaxy Wireless;

(3)  D’s knowledge regarding the character of Top Smart’s boss, Mr Mian;[11]

(4)  D’s knowledge regarding the business of Top Smart;[12]

(5)  Some of the deposits into the HSBC Account were salary from Top Smart, as reflected in tax returns;[13]

(6)  D’s knowledge of the business of Galaxy Wireless and of the character of Mr Waheed Abdul and their personal relationship;[14]

(7)  D’s knowledge regarding the $500,000 transaction involving Amandeep Kaur[15] (being the cause triggering the investigation in this case);

(8)  D’s knowledge regarding the transactions in his HSBC Account as explained by him and accepted by the court.[16]

32.  On the evidence which is accepted by the court, the following facts / circumstances were known to D which may have affected his belief regarding whether the subject property in Charge 2 was tainted:

(1)  D’s background, as set out above in para 31;

(2)  D’s use of his HS Account mostly for everyday purposes and expenses;

(3)  D’s use of his HS Account once in a while for purposes related to Top Smart (and his relevant knowledge regarding Mr Mian and Top Smart, as set out above in para 31);

(4)  D’s knowledge of his wife’s cake business and that she would sometimes ask customers to deposit payment for such into D’s HS Account;[17]

(5)  D’s knowledge regarding the transactions in his HS Account as explained by him and accepted by the court.[18]

33.  The question the court has to answer is: Would any reasonable person who shared D’s knowledge be bound to believe that the property for each charge was tainted?

34.  Given the evidence accepted by the court (including the evidence of D and the evidence of Mr Waheed Abdul), I am of the view that P has not proved that any reasonable person who shared D’s knowledge of the relevant facts and circumstances would be bound to believe that the property of either of the charges was tainted. I am of the view that a reasonable person would have the same beliefs and views as D in the circumstances – that the sums are for legitimate purposes and not tainted.

35.  Thus, for both charges, the answer is “no” to the question in para 33 above.

36.  In the premises, D is found not guilty of Charges 1 and 2.