HKSAR v. DING SHOUFENG

DCCC 851/2024

[2025] HKDC 2138

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 851 OF 2024

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REASONS FOR SENTENCE

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1.  In this case the defendant is charged with one count 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, Laws of Hong Kong. He pleaded guilty to the charge and is convicted upon his plea and the facts he admitted in open court.

2.  The offence is commonly known as money laundering.  It took place between 8 November 2018 and 14 December 2018, concerning the movements of funds in an account controlled by the defendant. 

3.  During the said period, there were a total of US$11,155,079.61 (equivalent to HK$87,009,620.9)  and HK$114,700 paid into the said account, of which US$7,628,795.24 (equivalent to HK$59.5 million)  and HK$114,700 formed the subject matter of the charge.  In other words, of all the money paid into the account, 68.4% had been laundered as proceeds of an indictable offence. 

Circumstances of the offence

4.  The defendant is a Chinese resident.  He had not reported he had any income in Hong Kong, filed no personal tax return with the Inland Revenue Department.  His visits to Hong Kong were on a two-way permit.  He had no business or residential address in Hong Kong.  He had visited Hong Kong on 14 occasions during the period between October 2018 and December 2019, each time he entered and departed the territory on the same day.  He came to Hong Kong again 16 March 2024, when he was arrested in relation to the present offence.

5.  Hong Kong Libin Import and Export Trading Limited (hereinafter referred to as Libin)  was incorporated in Hong Kong on 30 April 2018. The defendant was its sole director and Shenzhen Libin International Logistics Company Limited is its sole shareholder.  It was registered with the Business Registration Office and had reported to have commenced business on the same day.

6.  As on 30 April 2019, the defendant was both the only shareholder and director of Libin.  He also prepared and signed Libin’s financial statements with the Inland Revenue Department.

7.  On behalf of Libin, the defendant opened a corporate account (“the account”)  in Hong Kong.  The defendant was the sole signatory.  Libin was stated to engage in trading in household products made in China to the targeted markets of Britain and Japan.  Its correspondence address was in Shenzhen.  Its sale turnover was said to be HK$24 million.

8.  Libin’s audited filed its audit financial status with the Inland Revenue Department.  Between 20 April 2018 and 31 December 2021, Libin reported no revenue, cost of revenue or any other income.  Between 1 January 2019 and 31 December 2019, Libin reported revenue of HK$15,075,792 and cost of turnover to be $14,930,587, a gross profit of HK$145,205.  Its taxable profit was $510.

9.  However, the independent auditors had stated that since the records, books and financial statements together with evidence kept and/or provided by Libin were insufficient to carry out a proper auditing, they were unable to give a proper opinion on the accuracy of Libin’s financial statement. 

Significant movements of funds in the account

10.  Between 8 November and 14 December 2018, there were 276  deposits in US dollars by way of cross-border transmittances from bank accounts in mainland China, Taiwan, Albania, Australia, Canada, France, Ireland, Italy, South Korea, Vietnam and the United States, making a total sum of US$11,155,079.61. 

11.  During the same period, US$11,018,412.55 were withdrawn from the account in 339 separate transactions.  On 10 December 2018, a cheque in the sum of HK$114,700 was deposited into the account.  Two days later, HK$110,150 were transmitted from the account to another company. 

12.  There were no supporting documents in Libin’s statement to show 204 of the US dollars deposits (in the total sum of US dollars as stated in the charge)  were related to any of its business transactions.  The amount was about 68.4 % of all the monies paid into the account. 

13.  Furthermore, the deposits and withdrawals revealed a pattern consistent with the account being used as a temporary repository of funds.  The defendant therefore had reasonable grounds to believe that the funds in whole or in part represented proceeds of an individual offence when he dealt with the same. 

14.  Upon police inquiry, the defendant admitted in writing that in the capacity of Libin’s director, he had on 5 December 2018 received a sum of US$16,104.89.  At the request of a third party, he had it exchanged to renminbi and deposit the same into a designated account in China.

Sentence

15.  The offence in question can be committed in a multitude of circumstances, resulting in a wide spectrum of culpability, consequently resulting in the different degrees of severity in sentence.  The Court of Appeal did not set out a clear sentencing guideline but pointed out that one must bear in mind that the charge, namely the offence of money laundering, is a serious offence and that deterrence is the paramount consideration.  The amount of money laundered is also a significant feature. 

16.  For cases involving more than $10 million of “black money”, the starting point could be over 5 years (see HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201). Furthermore, the Court of Appeal has set out a non-exhaustive list of factors as sentencing consideration, some of which are not available in the present set of circumstances.

Discussions

17.  The offence was committed within the span of one month.  The total sum laundered was HK$59,614,700, effected by 340 occasions, taking up about 68.4 % of the total sums paid into the account during the same period.  All except HK$114,700 were in US dollars. 

18.  The funds were transmitted from Libin’s Hong Kong accounts in China, Hong Kong and nine other countries, showing international dimension in the activities.

19.  There was no information relating to the source, legitimate or otherwise, of the funds, nor was there any information relating to the existence and/or nature of the predicate offence.  Likewise, there was no evidence to show the defendant’s knowledge and/or involvement of the predicate offence, if any, or the defendant had any financial interest in the money laundering activities. 

20.  I agree that the conviction is based on the reason to believe limb of the charge.  On the other hand, the defendant was a de facto owner and controller of Libin, a Hong Kong registered company.  He is the only person capable of directing any funds to be transferred out of the said account.  He had full knowledge of the movements of the monies and his actions could not be said to be mere reckless or careless. 

21.  Furthermore, the defendant also admitted that at least on one occasion and not in the course of normal business, he had personally caused a sum of US dollars to be exchanged to renminbi and transmitted the same to China.  In my view, that showed that he had full knowledge of the manner in which money laundering was carried out. 

22.  Neither the defendant nor Libin had any tangible connection to Hong Kong.  The defendant was a visitor to Hong Kong, his 14 visits were in fact day trips.  Obviously, the main reason he came to Hong Kong was for the primary purpose of carrying out the money laundering.  Although the court did not make any findings on whether the offence involved any criminal organisation, yet by the number of transactions and the number of different destinations of funds, the only inference one could draw was that there were other parties involved. 

23.  As accepted by the prosecution, Libin had a legitimate business and part of the funds paid into the account was involved in the money laundering exercise.  Yet the amount laundered, constituted 68.4 % of all the incoming funds during the period,and Libin had no employee and did not report any taxable profits.  I came to the inevitable conclusion that this business was substantially a cover up for the money laundering activities or the business was basically for money laundering. 

24.  Although the defendant might not have personally benefited from the offence, he was certainly aware of the nature of these transactions and was acquainted with the mechanism of committing the offence.  I am not persuaded by the defence’s argument that by reason of the fact that the defendant had retained control of his account, his culpability is lower than someone who has simply extinguished his control of his account. 

25.  In my view, in those who allowed others use their account (either for financial gain or otherwise)but were not personally involved in the transfer of funds, their culpability as compared to those who actually assisted in the money laundering process is lower.  On the other hand, those who was fully aware of the movement of the funds and/or has been instrumental in effect the transfer would bear a high degree of culpability.

26.  The fact that the defendant had retained control of his account and used its legitimate operations to shield the money laundering part could well be an aggravating feature and is definitely not a mitigating factor. 

27.  Having considered the whole circumstances of the case, I adopted 66 months’ imprisonment as starting point. 

Mitigation

28.  The defendant is aged 41, a mainland resident.  He has a clear record in Hong Kong.  He has a university degree in law; after his graduation, he worked in shipping, logistics, import and export.  He is the sole provider for his wife and three young children.  His father had passed away during his incarceration for the present offence.  His mother also suffer from emotional stress brought on by the defendant’s predicament. 

29.  I have also reviewed the enthusiastic accolades of his dearest and nearest in a video submitted as part of the mitigation.  His daughter, wife, family members and friends all sang his praises.  However, bearing in mind that the main sentencing principle for the present charge is one of deterrence, the offender’s personal circumstances bear little weight in mitigation. 

30.  The defendant has been in custody since his arrest on 16 March 2024.  When the case was first brought up for plea on 7 January 2025, the defendant pleaded not guilty and a trial date was fixed on 27 October 2025.  It was only by 4 March 2025 the defence lawyers wrote to inform this court of his intention to change his plea to one of guilty.  For reasons not relevant to this sentencing exercise, the plea date was finally fixed to 9 December 2025.  In other words, the defendant did not plea in the first opportunity and therefore is not entitled to a customary one-third reduction. 

31.  Having considered the whole circumstance, in particular his guilty plea and his having a clear record, I will reduce the sentence by 25 % from 66 months to 49 months. 

Enhancement application

32.  Pursuant to section 27(2)  of the Organized and Serious Crimes Ordinance, Cap 455, the prosecution applied for enhancement of the defendant’s sentence based on the prevalence of the offence and the harm caused to the community.  In support of the application, the prosecution filed the affirmation of Chief Inspector Li Yiu-nam dated 2 December 2025.  The chief inspector set out his academic qualifications, work histories and all the related trainings he had.  His qualification as an expert witness in the practice and investigation of the crime of money laundering have not been challenged and the defence waived the right to cross-examination of the chief inspector. 

33.  Having read his statement, I am satisfied that by reason of his qualification, experience at work and the trainings he had, the Chief Inspector had sufficient knowledge and experience to be an expert witness. 

Money Laundering Stooge

34.  The chief inspector considered the present case a species of money laundering stooge, which is when a person “assisted in the money laundering activities but has minimal or no involvement in the predicate offence or has little or no knowledge of the predicate offence” (see paragraph 13 of the affirmation). 

35.  This definition was not challenged by the learned defence lawyer.  However, he argued the present case did not fall into this definition by reason that the account was set up for a legitimate purpose, had been used in part as such, and the defendant had retained control of the account, unlike cases where the control of the account was handed over in full. It is not necessary to speculate the real purpose of a money laundering exercise, as it is trite law that for the present offence,the prosecution has only to prove that the accused had reasonable grounds to believe that what he dealt with was “black money”. 

36.  In this case, the defendant had knowingly used this account to move funds.  By his plea, he accepted he had a reason to believe those were black money.  The mere fact that he still had control of the account did not take his case out of the money laundering stooge definition nor does it absolve him from liability and reduce his culpability.  If the learned defence counsel truly believed that it was the case, and the particular features of the case did not fit in by the definition, he should have demanded the chief inspector be tendered for cross-examination or advised his client not to plead guilty in order to argue the point in full. 

Prevalence

37.  The defence counsel commented that the statistics applied by the chief inspector showed the “dramatic proportionate drop in money laundering stooge cases”.  While it is true that for the first 10 months of 2025, the number of reported cases was 353 involving $1,485.15 million, as compared to the whole year of 2025, where there were 549 cases involving $3,971.75 million.  All the figures for the whole year of 2025 had not come in by the time the affirmation was made.  It may be too soon to jump into the conclusion that there was a dramatic proportionate drop. 

38.  I note that at the time the offence was committed in 2020, there were 121 reported cases involving $2,465.01 million. Thereafter both figures fluctuated but had remained substantial.  The term prevalence is synonymous to common and does not confine to a rise in instances and the total amount involved. 

39.  Yet even for the first 10 months of 2025, there were 353 reported cases and the sum of $1,495.15 million cannot be said to be negligible for a community of 8 million inhabitants. 

Harm to the community

40.  The harm of money laundering crimes to Hong Kong, as pointed out by the Chief Inspector, can be summarised this: they interfere with the normal operation of banking systems and tarnish the reputation of Hong Kong as a world-famous financial centre; they provide shields to conceal the identity of masterminds and encourage the crime and render police investigations, if at all possible, more expensive and sometimes futile; the lack of accountability and profits generated in turn encourage, enable, and engender more crimes to be committed. 

41.  The defence did not argue the above point.  Having considered all the evidence, in particular the affirmation of Chief Inspector Li, I am convinced that although the crime of money laundering seemed to be on a decline in number for the first 10 months of 2025, the sheer number reported cases and the amount involved, the crime was still prevalent in Hong Kong and did cause substantial crime to the community.  I would therefore enhance the sentence by 20%, making the sentence a total of 58 months imprisonment.

42.  Having considered the background of the defendant’s case and the circumstances of the present offence, I do not see any other valid mitigating factors which justifies further reduction of the sentence. 

43.  Therefore, the defendant is sentenced to a total of 58 months.