HKSAR v. CEN HUAKUO

[English Translation – 英譯本]

CACC 21/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 21 OF 2014

(ON APPEAL FROM DCCC NO 953 OF 2013)

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REASONS FOR JUDGMENT

Hon Yeung VP (giving the reasons for judgment of the Court):

Background

1. The applicant (Cen Huakuo) pleaded not guilty to one count of Conspiracy to Deal with Property Known or Believed to Represent Proceeds of an Indictable Offence, which is commonly known as the offence of “money laundering”,and was tried before District Judge Sham (trial judge).

2. The applicant was convicted after trial and on 31 December 2013 was sentenced to 6 years’ imprisonment.

3. The applicant, represented by Mr Bruce Tse, applied for leave to appeal against sentence. After hearing, we granted leave to appeal and treated this application as the appeal proper.  We allowed the appeal and reduced his sentence from 6 years to 4 years.  The following are our reasons for judgment.

Prosecution case

4. On 31 July 2013, the victim (an old lady surnamed Chan, aged 78) received a phone call from an unknown male in the afternoon.  The male said that her son had committed some offences of indecency, and told her to pay $250,000 in order to ensure the safety of her son.  Eventually, they agreed to reduce the amount to $50,000, and arranged to hand over the money at Fat Kwong Street Park.

5. When Madam Chan knew that her son was safe, she informed the police. As a result, she was arranged by the police to go to Fat Kwong Street Park to meet the culprit(s).  The applicant appeared at the scene.  He asked Madam Chan if she had brought along the money and told her that her son was being detained.  The applicant was able to tell the name of Madam Chan’s son, and he also handed a mobile phone to Madam Chan for her to talk to another person.  That person kept pressing Madam Chan over the phone and asked her why she had not brought along the money.  Thereafter, the applicant told Madam Chan not to leave the park, but he would leave first.  (Once he left,) he was arrested by the police officers who laid ambush in the vicinity.

6. The applicant is 18 years old, a mainlander of clear record.

Trial judge’s reasons for sentence

7. The trial judge indicated that the applicant was one of the culprits who took part in the phone deception, because when he demanded money from Madam Chan, he clearly stated that her son was being detained.  The trial judge considered that the applicant should be sentenced on the basis that he had taken part in the phone deception.

8. The trial judge made reference to the approach advocated in HKSAR v Hung Yung Chun [2011] 2 HKLRD 167, and pointed out the following views of the Court of Appeal:

(1) Phone deception casesare more serious than street deception cases and a higher sentence should be imposed because victims of phone deceptions believed that their children were being detained, so that they were under far greater fear and stress than those in street deception cases;

(2) Just as in street deception cases, the victims would lose all or most of their life savings; and

(3) The appropriate starting point is 4 years’ imprisonment.  On enhancement, an enhancement of 1/3 will do for now.  However, should this type of cases become even more prevalent, the court may increase the rate of enhancement.

9. The trial judge placed emphasis on the fact that the applicant was not the only one involved in the crime, but there were other culprits taking part in the conspiracy to commit the offence. Although what the applicant did was only to contact Madam Chan personally, the trial judge considered his role a crucial one because the scam would be very difficult to succeed were it not for the fact that he was willing to collect the money personally.

10. The trial judge adopted 4 years’ imprisonment as the starting point, and because this type of offence has been on the rising trend since 2009 – it reached its peak in 2013 – and there are signs that it is becoming even more prevalent, he decided to enhance the sentence by 50% to 6 years, thus the applicant was sentenced to 6 years’ imprisonment.

Grounds of appeal

11. The major complaint of Mr Tse was that the trial judge was wrong to sentence the applicant on the basis of the underlying indictable offence.  Mr Tse emphasized that the applicant was convicted of “money laundering” rather than any underlying indictable offence.  He cited HKSAR v Chen Szu Ming（陳思銘）CACC 270/2005 and HKSAR v Xu Xia Li and Anor [2004]4 HKC 16 to support his view.

Discussion

12. All the defendants in the cases cited by Mr Tse relied on their ignorance of the indictable offence underlying the offence of “money laundering” as a mitigating factor. However, the position taken by the Court of Appeal was that their ignorance of the indictable offence could not be treated as a mitigating factor, because they were sentenced on the offence of “money laundering” and not the underlying indictable offence in connection with “money laundering”.

13. A defendant must be sentenced on the offence of which he is convicted.  However, when considering the appropriate sentence, the Court may of course take into account the overall circumstances of the case in so far as they are related to the defendant’s culpability.  Mr Tse has no objection to that, and Chen Szu Ming mentioned above supports this approach.  At paragraph 16 of the judgment, the Court of Appeal said:

“When sentencing a defendant in respect of a particular charged offence it is that offence for which he is sentenced. In doing so a court should generally take account of surrounding circumstances only so far as they affect the defendant’s culpability for that offence.”

14. The trial judge’s reference to the approach adopted in Hung Yung Chun when he sentenced the applicant may be nothing more than an indication that he considered that he should take account of the objective circumstantial factors affecting the defendant’s culpability.  His approach may not necessarily be improper.

15. However, we cannot ignore the fact that the defendants of Hung Yung Chun pleaded guilty to the charge of conspiracy to defraud, and the facts they admitted showed that they had actively taken part in the phone deceptions, so they could not say that they knew nothing about the phone deceptions involved in that case.  The defendants of Hung Yung Chun were sentenced on the basis that they took part in the acts of deception in connection with the case and that they knew about that.  At paragraphs 13 and 14 of the judgment, the Court of Appeal gave a clear exposition of this stance:

“13.  … both applicants pleaded guilty to conspiracy to defraud. The facts they had admitted also indicate their active participation in the scheme. Their acts were more serious than the ones in a general “money laundering” case.

14. Both applicants claimed that before their arrest, they knew nothing at all about the phone deception cases. This claim is in contradiction with their guilty pleas to conspiracy to defraud and is to be rejected. Moreover, both of them had come to Hong Kong on many occasions to take part in those acts of deception. The 2^nd Applicant even witnessed the arrest of her co-conspirator … when committing Charge 5. Therefore their professed ignorance of the crime committed by their co-conspirators is not to be believed at all.”

16. The sentences passed in of Hung Yung Chun were based on the fact that the defendants knew the details of the deception offences including the fact that the victims were put into fear because someone told them that their family members were being detained or beaten up, and the victims gave the culprits several hundred thousand dollars out of that fear.  Owing to the above factors, the Court of Appeal was of the view that the culpability of the defendant of a phone deception case was more serious than that of the defendant of a street deception and thus adopted the starting point of 4 years.

17. In “money laundering” cases, some defendants have no knowledge or only have an incomplete and sketchy understanding about the indictable offence in connection with the “money laundering” offence, but some defendants, even though they have not taken part in the relevant indictable offence, may have detailed knowledge and understanding of it and are also aware of the adverse impact arising out of their acts of “money laundering”.  The Court has to take into account these factors when considering the sentence.

18. The applicant did not take part in the deception, he told Madam Chan that her son was being detained, but that only shows his sketchy understanding about the relevant indictable offence and does not mean that he knew the details.  When considering the applicant’s knowledge about therelevant indictable offence, the trial judge should not have interpreted the facts in the most unfavorable way against the applicant.

19. The prosecution evidence was insufficient to show that the applicant knew the culprits did tell Madam Chan that harm would be done to her son as he had committed some offences of indecency. The trial judge considered that what happened was equivalent to kidnapping Madam Chan and that she was subjected to far greater fear and stress than those experienced by victims in street deception cases, and he blamed the applicant for that.  In the circumstances of the present case, this approach was unfair to the applicant.

20. In any event, the criminal acts of the defendants in Hung Yung Chun were far more serious than that of the applicant.  The applicant did not take part in the relevant deception offence, and it is very likely that he was just instructed to collect money from Madam Chan.

21. Although the applicant must have known that the money collected from Madam Chan was obtained unlawfully and the incident was in connection with the phone deception, it was too harsh to apply the starting point in Hung Yung Chun to him.

22. Mr Eddie Sean, Senior Assistant Director of Public Prosecutions for the respondent, agreed that the trial judge should not have used phone deception as the basis for sentencing.  However, he stressed that as far as “money laundering” offences are concerned, there were many aggravating factors in the present case, such as, the applicant knew that the underlying offence was phone deception, he was from the Mainland and the offence was committed by an organized criminal gang etc.  Mr Sean emphasized that many of the aggravating factors set out in HKSAR v Boma [2012] 2 HKLRD 33 could be identified in the present case.  He was of the view that the trial judge was right in adopting 4 years as the starting point.

23. Aggravating factors may vary in different cases.  In respect of “money laundering” offences, the amount of the “black money” involved is certainly a major sentencing consideration (see paragraph 38 of the judgment of Boma and paragraph 44 of the judgment of HKSAR v Ngai Fung Sin Apple [2013] 5 HKLRD 95). The amount of the “black money” involved in this case is $50,000.  The starting point of 4 years adopted by the trial judge is still manifestly excessive even if sentencing is considered from the point of view most unfavorable to the applicant.  His approach of enhancing the sentence by 50% due to the rising trend of this type of offence is also too severe.  In fact, there is no authority to support the trial judge’s enhancement by 50%.  We do not consider it a proper approach, especially on the facts of this case.

24. “Money laundering” is a serious offence, and worse still, the applicant came from the Mainland to commit crime here. Although the young applicant is only 18 years old and has no criminal record, he cannot expect leniency from the Court.  The “black money” involved was derived from phone deception and the applicant knew the source of the “black money”.  All these constitute aggravating factors (see Secretary forJustice v Lau Man Ying [2012] 4 HKLRD 429 and Xu Xia Li).

25. Taking into account all the circumstances of the case and the requirement that a sentence should have deterrent effect in order to prevent mainlanders from taking part in such an abhorrent and despicable offence like “phone deception” in whatever manner, we are of the view that the appropriate starting point is 3 years’ imprisonment, and the sentence should be enhanced by one-third pursuant to the Organized and Serious Crimes Ordinance.

26. The total sentence of the applicant should be 4 years’ imprisonment. Accordingly, we grant the applicant’s application for leave to appeal and, treating his application as the appeal proper, allow the applicant’s appeal and reduce his term of imprisonment from 6 years to 4 years.