HKSAR v. CHAN TAK YEUNG AND OTHERS

DCCC969/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 969 OF 2010

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Reasons for Sentence

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1.  D1, D2 and D3, you have pleaded guilty to the 1st charge of an offence of conspiracy to keep vice establishments, contrary to section 139(1)(a) and sections 159A and 159C of the Crimes Ordinance, the offence occurring between 1 June 2007 and 20 April 2010 and involved the five separate premises named in the indictment, all located in the Yau Ma Tei area of Kowloon.

2.  D1 and D4, you two have additionally pleaded guilty to the 2nd charge of conspiracy to deal with property known or reasonably 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 sections 159A and 159C of the Crimes Ordinance, the property being the moneys in cash received by the prostitutes from the customers for sexual services provided in those vice establishments. 

3.  The Summary of Facts reveal that it was you, D1 who was responsible for recruiting prostitutes from the Mainland to work in these brothels, whilst you, D2 and D3, were responsible for the daily operation of the brothels.   

4.  D1 and D2, you two employed a numbers of pimps who touted for business on the streets in the vicinity of the brothels and you employed D3, who was the head pimp and responsible in terms for the supervision of other pimps working under him.

5.  In addition to this, it was you, D1, who as the operator of this vice syndicate engaged the services of a money exchange company run by the 4th defendant to store the operational funds of the vice establishments.

6.  As a result of a joint operation conducted by the ICAC and the Organized Crime and Triad Bureau of the Hong Kong Police on 20 April 2010, the five premises were raided, in the course of which you, D2, and you, D3, were arrested and a total of 21 Mainland prostitutes were found in the various establishments.

7.  With regards to you, D4, the investigation conducted by ICAC revealed that since June 2009, the vice syndicate in which D1, D2 and D3 were involved, had indeed engaged the services of the Kiu Hing Foreign Exchange, a money exchange establishment, of which you are the sole proprietor.

8.  Your premises were searched, as a result of which a sum of $63,480 in cash was found in a plastic bag together with 11 pieces of paper which had recorded the amounts of moneys deposited and withdrawn from the company since 18 March.

9.  Under caution, you told the investigating officers, amongst other things, that D1 placed the money in your shop to facilitate himself, you knew he ran a vice business in the vicinity and every two to three days he would leave an average sum of about $30,000 in your shop.

10.  Subsequent examination of the 11 pieces of paper in fact has revealed that between 18 March 2010 and 19 April 2010 a total of $953,444 had been deposited in your shop.     

11.  With regard to the 1st charge relating to D1 to D3, this was in my view a sophisticated, significant operation involving no less than five brothels in the Yau Ma Tei area, spanning a period of nearly 3 years although I accept that there was some overlap in time in the operation of these establishments.  I also accept that there is no evidence of any exploitation of under-age girls. Nevertheless, there is an international element as it was you, D1, who recruited all of the prostitutes from the Mainland and you were well-aware, as was D2 and D3, that they would be working in Hong Kong illegally and in breach of their condition of stay.

12.  This was no small operation.  This is illustrated quite simply by the fact that a total of nearly $1 million had been deposited in a period of only one month between 18 March 2010 and 19 April 2010 into D4’s money exchange company, whose otherwise legitimate business was used to hide the proceeds of this illicit trade.

13.  As far as sentence is concerned, first of all with regard to D1, D2 and D3, on the 1st charge of conspiracy to keep vice establishments, I see no reason to differentiate between you.  Whilst the three of you performed different roles, each of you depended on the other for the successful operation of this illicit enterprise.

14.  In sentencing you, I take into account all that has been said on your behalves by way of mitigation. 

15.  I take as my starting point on Charge 1 a sentence of 3 years’ imprisonment.  I will reduce that by one-third to take account of your respective pleas of guilty, coming to 2 years’ imprisonment in respect of each of you on Charge 1.

16.  On Charge 2 with regard to you, D1, I take as my starting point a sentence of 2½ years’ imprisonment.  Once again I shall discount this by one-third to take account of your plea of guilty, coming to 20 months’ imprisonment on Charge 2.  Due to the question of totality of sentence, I order that 8 months of the sentence on Charge 2 is to run concurrently to Charge 1, the balance of 12 months consecutively, coming to an overall sentence in your case of 3 years’ imprisonment.

17.  Dealing with you, D4, you are a person of hitherto clear record.  You, of course took no part in the vice activities that D1 to D3 were responsible for, but you did allow your company, the Kiu Hing Foreign Exchange Company, to be used by D1 effectively to hide the proceeds of his vice business.

18.  You well knew that the moneys that he deposited into your shop on a regular basis were the proceeds of his illicit trade.  Whilst I accept that you did not do this for any financial reward, you did occasionally make use of some of these funds when you had insufficient funds in your shop to run the business.

19.  I had considered the possibility of placing you on a Community Service Order, and to that end, I have obtained a Community Service Order suitability report.  You will recall, no doubt, that on the last occasion I told you that even in the event of a positive recommendation in that report, it may well be that I would still in fact impose a sentence of imprisonment on you.

20.  As it has turned out, I note that in the suitability report you are not considered to be suitable for Community Service and I am not going to impose a Community Service Order on you.  It seems to me that a prison sentence in your case is inevitable despite your clear record as offences such as this are serious, and deterrent sentences must be passed to impress upon members of public the serious consequence of dealing in the proceeds of crime.

21.  Once again, in sentencing you I take account of all that has been said on your behalf by way of mitigation. 

22.  In your case I adopt a starting point of 12 months’ imprisonment.  I will discount that by one-third to take account of your plea of guilty, coming to 8 months’ imprisonment on Charge 2.