HKSAR v. LIU CHIN CHUN AND OTHERS

DCCC648/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 648 OF 2010

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Reasons for Sentence

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D1 and D2 were jointly charged for 3 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 (Charge 1 – 3)

D1 and D3 were jointly charged for 3 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 (Charge 4 – 6)

D1 and D4 was jointly charged for one count of conspiracy to deal 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 and section 159A of the Crimes Ordinance Cap 200 (Charge 7)

D1 pleaded guilty to charge 1, 2, 4, 6 and 7 and admitted the facts, he was convicted accordingly. The rest of the charges against him were put on court file not to be proceed without leave upon application from the prosecution.

D2, D3 and D4 were convicted after trial on all their respective charge or charges.

Facts

This is a money laundering case related to a lottery scam but there is no proof of actual knowledge of the underlining crime on the part of the defendants. Each of D1 to D4 joined the money laundering syndicate at different stages. All D1 to D4 are Taiwanese passport holder having no family or business ties with Hong Kong. They were assigned their respective roles and tasks. D2 to D4 all travelled from Taiwan to open bank accounts with 4 different banks in Hong Kong on various dates. D2 to D4 were stooges who held bank accounts that were used (in D2 and D3’s case) or to be used (in D4’s case) for money laundering. D2 and D3 also collected laundered cash from remittance agencies. D1 had custody and control of bank and/or remittance documents in relation to the money laundering transactions carried out by D2 and D3, and those to be carried out by D4. D1 gave out instruction for some of the dealings and also collected the cash withdrawn by D2 and D3 and passed the same onto other persons unknown for onward transmission to his recruiter.

D1 and D2 were arrested on 26 November 2009 for money laundering. Upon arrest, D1 was found in possession of certain items including a quantity of cash, a piece of remittance receipt with D2’s name, D3’s SCB ATM card, a HSBC ATM card of Wang I Hsiung, a piece of paper written with account details of WANG I-Hsiung and D4, four mobile phones and keys to his reported place of abode at Kimberley Road.

At D1’s Kimberley Road residence, there were, amongst other things, 26 ATM cards, under the accounts of 10 persons, including that of D3 (HSB and HSBC) and D4 (HSBC, HSB and SCB), 13 bank passbooks under the name of 5 persons, including that D2 (BOC) and D4 (SCB and BOC), remittance receipts issued by MoneyGram and Western Union with D2 and D3’s name on it respectively.

D2 and D3 carried out the transactions as instructed while they were in Hong Kong and handed over their passbooks and ATM cards with PIN to D1 when they left Hong Kong. D4 also left his passbooks and ATM cards with PIN behind in Hong Kong for the use of others when he returned to Taiwan.

D3 and D4 were arrested on 31 December 2009 upon arrival at the Hong Kong International Airport.

For sentencing purpose, I excluded the amounts in relation wholly to the initial deposit and the amount not covered by the period charged and go with the round up figure stated in the particular of the charges where it is admitted or lower than the actual figures shown on the exhibit. The sums in total laundered in relation to the charges are:

Charge 1 HKD 709,643.98 ( 14 deposits & 9 withdrawals with 4 banks in about a week)

Charge 2 HKD 140,510.00 (5 sums of remittance)

Charge 3 HKD 52,415.90 (2 sums of remittance)

Charge 4 HKD 1,332,434.63 (32 deposits & 37 withdrawals with 4 banks in about 10 days)

Charge 5 HKD 65,226.16 (3 sums of remittance)

Charge 6 US D 4,485.00 (1 sum of remittance)

The scheme in question was carefully planned and well structured, and it involved the recruitment of many individuals and the deployment of a large number of bank account for the purpose of moving funds across the world. D2 and D3 accounts were only a small part when compared with all those in possession by D1; within 10 days a sum in total over HKD 2.3 mil has been laundered through D2 and D3 accounts.

Although D1 was not the mastermind of the scheme but he involved in it at a much earlier stage and with knowledge of the scale of operation, at least for the part carried out in Hong Kong. I noted, however, unlike the case of D1, there is no evidence that apart from his own involvement, D2 to D4 were aware of the scale of the whole scheme, yet each of them came from Taiwan to open bank accounts here and thus all were aware of the international element involved. All these amount to aggravating features in considering the sentence.

Money laundering is a very serious offence as it is an attempt to legitimize proceeds from criminal activities. And the gravamen of the offence is the amount of money laundered and not the amount of profit to the defendant or the loss to the victims. Taking into account of the aggravating features and the involvement of the respective defendants, I consider the appropriate starting point for the charges as follow:

Charge 1 4 years for D1 and 3 years for D2

Charge 2 2.5 years for D1 and 18 months for D2

Charge 3 12 months for D2

Charge 4 4.5 years for D1 and 3.5 years for D3

Charge 5 18 months for D3

Charge 6 2 years for D1 and 12 months for D3

Charge 7 3 years for D1 and 2 years for D4

I noted all the defendants are with clear record, for this I reduced the starting point on all charges by 6 months. Further, I noted all the charges concerned a continuous course of conduct related to the same scheme of money laundering, thus a concurrent order is appropriate in the case of D1 to D3.

Mitigation

D1 aged 32, single, received up to secondary education in Taiwan, with clear record. The defendant entitled to 1/3 discount for his plea, further the defendant offered to give evidence in the trial against the other defendant and witness statement had been obtained from him, although D1 was not called during the trial, his offer to assist has been taken up the prosecution, further he also offer assistance to the Taiwan authority, for this I would allow further discount to him, making a total of 50%.

D2 aged 35, received up to secondary education in Taiwan, with clear record. He is divorced with 3 children and aged parents. D2 has a brain surgical operation in 2005 and suffered poor memory since then, but counsel of D2 confirmed that he was not suffering from any psychiatrics condition and was not on any medication before he came to Hong Kong. I do sympathize with D2 aged parents and young children’s afflictions but D2 has committed a serious crime, a term of imprisonment with considerable length is inevitable. D2 is convicted after trial, I do not consider there to be any mitigating factor that called for further deduction.

D3 aged 29, single, received up to Post-secondary level in Taiwan, with clear record. He has stable employment and full support from his family and friends. D3 is convicted after trial, I do not consider there to be any mitigating factor that called for further deduction.

D4 aged 29, single, received up to high school in Taiwan, with clear record. D4 is convicted after trial, I do not consider there to be any mitigating factor that called for further deduction.

Order

D1

Charge 1 sentenced to 21 months imprisonment

Charge 2 sentenced to 12 months imprisonment

Charge 4 sentenced to 24 months imprisonment

Charge 6 sentenced to 9 months imprisonment

Charge 7 sentenced to 15 months imprisonment, all to run concurrently, making a total of 24 months.

D2

Charge 1 sentenced to 30 months imprisonment

Charge 2 sentenced to 12 months imprisonment

Charge 3 sentenced to 6 months imprisonment, all to run concurrently,

making a total of 30 months.

D3

Charge 4 sentenced to 36 months imprisonment

Charge 5 sentenced to 12 months imprisonment

Charge 6 sentenced to 6 months imprisonment, all to run concurrently,

making a total of 36 months.

D4

Charge 7 sentenced to 18 months imprisonment.