HKSAR v. CHAI CHI WAH, RICKY AND OTHERS

DCCC 1415/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1415 OF 2009

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Reasons for Sentence

DCCC 1415/2009

1.  The four defendants herein have each admitted some of the charges in the re-amended indictment dated 14 September, 2010.

2.  Each Defendant has admitted Count 6 on the indictment of attempted burglary, contrary to Section 11(1)(a) and (4) of the Theft Ordinance, Cap. 210 and Section 159G of the Crimes Ordinance, Cap. 200.

3.  D1 has also admitted Counts 1 and 2 on the indictment of burglary, contrary to Section 11 (1)(b) and (4) of the Theft Ordinance, Cap.210, and Count 7 of dealing 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.

4.  D3 has also admitted Count 8 on the indictment of dealing 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.

5.  The Prosecution asked that Count 3 against D1, D3 and D4, Count 4 against D1, Count 5 against D1 and D3, all counts of burglary, be left on file and not be proceeded with without leave of the Court. I granted this application.

DCCC 1042/2009

6.  D2 (who is D1 on the indictment in DCCC 1042/2009 and to whom I shall refer throughout as D2 to avoid confusion) also admitted count 1 on the indictment dated 16 September, 2009 of dealing 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.

Admitted Facts for DCCC 1415/2009

7.  On 17 October, 2004, at around 8 p.m., the door of a shop named Tin Tak Swallow’s Nest Gift Shop located at Shop No. 4, Kwun Tong MTR Station, Kwun Tong was secured and the staff left the shop. Upon returning the next morning, it was found that the padlock securing the door was missing, and the premises had been ransacked. 394.91 taels of birds’ nest valued at $266,368.92 were missing. A black glove not belonging to the shop was found on the premises. D1’s DNA was found inside the black glove (Count 1).

8.  At around 9:15 p.m. on 13 November, 2007, the door of the shop known as Wing Wah Dispensary at Shop Nos. 106-107, 1st floor, Lei Yue Mun Plaza, Kwun Tong was secured before the staff left. Upon return the following morning, staff found that the electric switch of the roller gate had been tampered with, and there were signs that the premises had been ransacked. 10 catties’ of birds’ nest, 3 catties’ of cordyceps, 5 catties of ginseng, one deer’s tail, one tael of monkey bezoar, 305 boxes of pills and $6,000 cash were found to be missing. The value of the stolen goods was $389,672. Two black gloves not belonging to the shop were found on the premises. D1’s DNA was found inside the two black gloves (Count 2).

9.  At around 8:30 p.m. on 30 March, 2009, Mr. Wong Hon- shing secured the main door of “Perpetual Antique Clocks & Watches” situated at Shop No. A 307, Level 3, New Town Plaza Phase 3, Shatin, with 3 locks, one near the ceiling, one at the middle of the door and the third one near the ground level. He then left. On his return the following morning, he could not unlock the lock near the ceiling (lock 1) and the lock in the middle of the door (lock 2) with his keys. The lock near the ground level was found to be open. Apart from the locks having been tampered with, nothing was missing from the shop.

10.  Investigation revealed that a private car with registration number NL 1707 that was registered under the name of a company of which D2 was the only director had stopped outside Yi Ching Lane outside the Royal Park hotel in Shatin at around 11:30 p.m. on 30 March, 2009, which location was opposite Phase 3 of the New Town Plaza in Shatin. D1, D2 and D3 boarded soon afterwards, and the car was driven away. Later that evening, the private car was found stopped at a carpark at Lok Ma Chau. D1, D2 and D3 were seen walking out of the carpark and intercepted for inquiries, arrested and cautioned. Upon search of the car, lockpicks, gloves, 4 keys and a bag containing a drill and components of the drill were found. Upon examination, it was found that the 4 keys could open lock 1. The drill mark found on lock 2 matched. D1, D2 and D4’s fingerprints were lifted from the vehicle. D4 was arrested later that morning. Metal fragments were found on D4’s jacket and trousers, D1’s jacket and the bag and drill component found in the private car and these matched the metal fragments found in the lock cylinder of lock 1 (Count 6).

11.  D1 is aged 31 years and he is married. He resides with his wife and 2 sons in Mainland China – he owns no property in Hong Kong. He claimed to earn $15,000 a month as a delivery worker. He had registered with the MPF scheme only between 4 July, 2003 and 9 September, 2004, and had not filed any tax returns with the Inland Revenue Department in Hong Kong since 2004. He held a savings bank account with the Hong Kong & Shanghai Banking Corporation as set out in the particulars of Charge 7 which was opened on 2 May, 2003. Fund analysis was conducted of his account from 1 September, 2005 which disclosed a total of $1,874,960 deposited into D1’s bank account, namely 82 cash deposits of $1,516,180 and 18 transfer deposits of $358,780. Between 1 September, 2005 and 6 March, 2009, D1 knew or had reasonable grounds to believe that the total sum of $1,874,960 held in his account did in whole or in part, directly or indirectly represent the proceeds of an indictable offence and with such knowledge dealt with the property (Count 7).

12.  D3 is single. He is aged 32 years. He cohabits with his girlfriend in a public flat in Tin Shui Wai. He claimed to be a part time delivery worker with a monthly salary of $7-8,000. He had never enrolled with any MPF scheme. Nor has he ever received any public assistance from the Social Welfare Department, nor filed any tax returns with the Inland Revenue Department of Hong Kong since 1 April, 2004.

13.  D3 maintained 2 savings accounts in the Hang Seng Bank. Fund flow analysis was conducted. For account 2 opened on 20 June, 2007, between 20 June, 2007 and 16 September, 2008, there was a total sum of $1,361,300 deposited into this account by cash deposits and bank transfers. There was also a withdrawal by cash withdrawals and bank transfers of $1,309,206. On 16December, 2008, the balance was $1.30, and the account was closed on 7 March, 2009. For account 1, it was opened on 18 November, 2005. Between 18 November, 2005 and 6 May, 2008, there was a total deposit of $797,870 by cash deposits and bank transfers into the account and a withdrawal of $846,039 by cash withdrawals and bank transfers. The balance in the account on the date of his arrest was $33.52. Between 18 November, 2005 and 6 March, 2009, D3 knew or had reasonable grounds to believe that a total sum of $2,159,170 held in his two bank accounts in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, and with such knowledge dealt with the said property (Count 8).

Admitted Facts for DCCC 1042/2009

14.  D2 was the holder of 2 bank accounts with the Hong Kong & Shanghai Banking Corporation and one bank account with the Bank of China (Hong Kong) Ltd. He was the sole signatory of these 3 accounts.

15.  Between 28 September, 2005 and 16 May, 2009, there was a total deposit of $9,402,535 into these 3 bank accounts. Some of the deposits were transfers between D3’s two HSBC accounts, and some were transfers from D1’s bank account, and some were cash deposits. Withdrawals were used to purchase shares, as well as cash withdrawals and transfers to the bank accounts of D1 and D3 herein.

16.  D2 was the only director of the company called Excellence Rich Ltd. No tax returns had been filed by the company – no actual business was carried out by the company. Nor had D2 himself filed any personal tax returns with the Inland Revenue Department in Hong Kong since 1 April, 2005. At all material times, D2 knew or had reasonable grounds to believe that the whole or a part of the money held in his 3 bank accounts represented directly or indirectly the proceeds of an indictable offence and with such knowledge, he dealt with them.

17.  D1 has 6 previous convictions in 5 court appearances, of which one is for an offence involving dishonesty. His record dates back to1993, and his last conviction was in 1997.

18.  In mitigation, Counsel for D1 submitted that he was aged 31 years, and was married with 3 children. He lives between Hong Kong and China. His 8 years old daughter lives in Hong Kong with his parents, while his wife, a PRC resident, lives in China with his twin sons aged 3 years. He has been out of trouble between 1997 and 2004, when the offence in Count 1 was committed. Although he did have previous convictions, these were not of the most serious, as can be seen from the sentences imposed upon him, with no previous similar convictions. He had indicated his intention to plead guilty as far back as on 19 August, 2010, and by his pleas, he has saved considerable court time and expense. The trial had been listed to last for 30 days. I had before me letters written by the Defendant, his mother, his aunt and his prospective employer, and I have considered the contents of all of them. His greatest mitigation of weight has been his pleas of guilty.

19.  D2 has 5 previous convictions in 4 court appearances, of which one is for burglary in 1994, and 2 others are for offences involving dishonesty. His record dates back to 1990 and his most recent conviction was in 2002.

20.  In mitigation, Counsel for D2 submitted that he has pleaded guilty, which reflected his remorse.D2 has also written a letter in mitigation, expressing his remorse, as has his current employer, who indicates that he will continue to employ D2 upon his release. It was submitted too that D2 supported charity and sponsored a child, and a letter from PLAN was submitted to show this. His greatest mitigation of weight has been his pleas.

21.  D3 has 5 previous convictions in 3 court appearances, including one for burglary in 1993. His record dates back to 1993, and his last conviction was in 1996. Counsel asked the Court to attach no weight to his previous convictions, seeing that his last conviction was in 1996 and he has been out of trouble since.

22.  In mitigation, Counsel for D3 urged the Court to disregard his previous conviction for burglary, which was in 1993 when D3 would have been almost 16 years old and for which he was placed on probations. He is 33 years and single, co-habiting with his girlfriend for 3 years – they have a son aged 17 months. He is the sole breadwinner, working as a part time delivery worker and earning about $7-8,000 each month. His greatest mitigation has been his pleas.

23.  D4 has 1 previous conviction in 2005 for breach of condition of stay. He is aged 30. He is married and he and his wife live with his parents. He was unable to make ends meet, his wife was 2 months’ pregnant, and upon the ill advice of his peers, he participated in the present offences. His daughter has been born whilst he has been remanded awaiting trial for the present offences. She is now 11 months old. Again, his greatest mitigation has been his pleas, which reflect his remorse and has saved costs and the time of the Court.

24.  I have carefully considered all that was urged upon me in mitigation on behalf of each Defendant, as well as the sentencing precedents handed up by Counsel together with the various letters tendered on behalf of some of the defendants.

25.  The correct starting point for a single burglary of non- domestic premises committed by a first offender of full age where there are no aggravating or mitigating features is 2½ years’ imprisonment. Where the defendant has committed more than one offence of a similar nature at different times, a higher sentence than if there had only been one offence is appropriate (see Attorney General v. Lui Kam-chi [1993] 1 HKC 215 as applied in Attorney General v. Lo Ching-fai [1996] 2 HKCLR 20).

26.  All the burglary charges here relate to burglary in commercial premises. In HKSAR v. Cheng Wai-kai, CACC 338/2007, the Court of Appeal had this to say :-

“The proper starting point for sentence in a case of burglary of non-domestic premises is 30 months’ imprisonment.  The starting point can be adjusted upwards if there are aggravating circumstances such as: (1) the offence is carefully planned and skilfully executed involving the use of heavy instrument or equipment; (2) the offence is committed by two or more people; (3) the offence targets at substantial premises and involves substantial properties; (4) the offender is a professional burglar and not just an opportunist; (5) the offender has previous convictions, particular previous convictions of similar nature; and (6) the offender commits multiple offences.”

27.  Mr. Arthur for D1 submitted that in respect of the burglary counts, counts 1 and 2 on the indictment, although the premises had been left in a mess, there was no damage. In respect of count 1, pursuant to the facts, what was missing was a padlock that had been used to secure the door, and for count 2, the electric switch of the roller gate had been tampered with. Although the value of the stolen property was not small, it was not the most serious. In my view, the value of the stolen property in each count is substantial. Both shops that were burgled dealt with Chinese herbs, which are of a high value. Counsel further submitted that by leaving behind gloves which contained his DNA, D1 might as well have left his calling card, and this pointed to the offences to have been committed by an amateur rather than a professional. I do not agree that that was necessarily the case – it could also have been out of sheer carelessness.

28.  Mr. Lee for D2 submitted in respect of Count 6 that the offence was one of attempted burglary, and there was no loss, thus a lower starting point should be taken. There was no evidence of the role played by each Defendant – no metal fragments were found on D2, and nor could he be viewed on the CCTV footage – his role was that of the driver, and his fingerprint was lifted from outside the door of the driver’s seat of the vehicle. In my view, the role of the driver can be no less than that of the other participants in a burglary. Counsel also submitted that there was no evidence of pre-meditation or professionalism – with respect, I must disagree. Four men go together to premises and attempt to burgle the premises. They have with them a drill, lockpicks, gloves and keys that could open some of the locks on the door. In my view, this shows pre-meditation and planning, as well as professionalism. These are aggravating circumstances that warrant an upward adjustment of the appropriate starting point.

29.  D1, D2 and D3 have each been convicted on their own pleas of one count of dealing with property knowing or having reasonable grounds to believe that it represented the proceeds of an indictable offence.

30.  In respect of D1 on Count 7, that money went through only one bank account, a savings bank account that he held with the Hong Kong and Shanghai Bank. The offence took place over a period of about 3½ years, between 1 September, 2005 and 25 March, 2009. Over that period he had filed no tax returns with the Inland Revenue Department, yet during that period a total of $1,874,960 was deposited into his bank account by cash deposits and bank transfers.

31.  In respect of D3 on Count 8, that money went through two bank accounts held by D3 with the Hang Seng Bank. The offence took place over a period of about 3 years and 4 months, between 18 November, 2005 and 6 March, 2009. Over that period, he had filed no tax returns with the Inland Revenue Department, yet during that period a total of $2,159,170 was deposited into his 2 bank accounts by cash deposits and bank transfers.

32.  In respect of D2 on Count 1 in DCCC 1042/2009, that money went through 2 bank accounts held with the Hong Kong & Shanghai Bank and one bank account held with the Bank of China. The offence took place over a period of almost 3 years and 8 months, between 28 September, 2005 and 16 May, 2009. Over that period he had filed no tax returns with the Inland Revenue Department, yet during that period a total of $9,402,535 was deposited into his 3 bank accounts by way of cash deposits and bank transfers.

33.  There was a large volume of deposits and withdrawals from the bank accounts in question in respect of D1, D2 and D3. Insofar as D2 is concerned, there were transactions between his accounts and that of D1 and D3 herein.

34.  A serious feature in this case is the length of time D1, D2 and D3 were involved in this activity. However, there is no evidence of an international element, nor do these offences appear to involve elements of particular sophistication.

35.  Section 25(3) of the Organized and Serious Crimes Ordinance, Cap. 455 provides that a person convicted of an offence under Section 25(1) of the said ordinance is liable upon conviction on indictment to a sentence of 14 years’ imprisonment and a fine of $5 million.

36.  Money laundering is a serious offence for which deterrent sentences are required not only to punish the defendants but also to deter others from behaving in this way. It is not wrong in principle to impose an immediate custodial sentence even on a first offender (see HKSAR v. Hui Kam [2000] 3 HKLRD 211). As to the seriousness of the offence and the need for deterrence, in HKSAR v XU Xia-li & another [2004] 4 HKC 16. Woo, V-P, said:-

“ 18. The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities.  Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produced monetary benefits would be enhanced.  If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong’s reputation as a world-class financial and banking centre.”

37.  In HKSAR v Javid Kamran, CACC 400/2004, the court, stressing the need for deterrent sentences, said that it was not possible to lay down guidelines, as there is a very wide range of culpability. The court identified a number of factors relevant in determining the culpability of a defendant, including the nature of the offence that generated the laundered money, the extent to which the offence assisted the crime or hindered its detection, the degree of sophistication of the offence and perhaps the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence. Another factor to be added is the degree to which an offence had an international dimension.

38.  There is no evidence as to what was the underlying offence that generated the laundered proceeds. The basis of the convictions is that when each defendant dealt with the money, he knew or had reasonable grounds to believe that the money did in whole or in part, directly or indirectly represent the proceeds of an indictable offence and with such knowledge dealt with it. It was affirmed in HKSAR v Chen Szu Ming, CACC270 of 2005, that the nature of the indictable offence from which the money was derived should be of no particular significance in sentencing, save that if a defendant knew that the money was derived from very serious crimes, it would be an aggravating feature. Nor is there evidence of the benefit each defendant derived from the exercise. Whether or not each defendant received a reward is insignificant as a sentencing factor for the reality is the offence of money laundering is very serious

39.  The sums of money laundered through the various accounts of D1, D2 and D3 cannot by any standard be said to be unsubstantial. Counsel for the Prosecution accepted that there were transfers between the various accounts and therefore the actual amounts may be less than that set out in the particulars but it was not possible to say with precision which transactions were counted twice because the movements were various and extended. In determining the appropriate starting point, I have borne this in mind.

40.  I have borne in mind too that by their pleas, each Defendant has saved considerable court time – the trial had been set down for 30 days – and they are entitled to credit for this. In respect of each Defendant, their pleas of guilty are their greatest mitigation of weight before me.

41.  In passing sentence I take into account everything said on behalf of the defendants together with the various letters submitted to court. All the defendants have previous convictions. D1 has no previous similar convictions, and his last conviction was in 1997. D2 has 5 previous convictions including one for burglary in 1994 – his last conviction was in 2002. D3 has 5 previous convictions including one for burglary in 1993, and his last conviction was in 1996. D4 has one previous conviction in 2005, for a dissimilar offence. Although they each have previous convictions, in respect of D1 to D3, these were all a long time ago, and for D4, his previous is for a dissimilar offence, and for the purposes of sentence, I have disregarded their previous convictions.

42.  I have sympathy with the families of the defendants. As always the family is the one that will suffer. The defendants however have committed the offences in full knowledge of these matters. I am satisfied this does not amount to a mitigating circumstance affecting the length of sentence.

43.  The Defendants are sentenced as follows:

DCCC 1415/2009

Counts 1, 2 & 6:

44.  On each count, in respect of each Defendant, I take as a starting point 3 years’ imprisonment. Each is entitled to a discount of one-third to reflect their pleas of guilty. I am prepared to give each defendant a further discount on 3 months to reflect the time and expense that has been saved by virtue of their pleas.

45.  On Counts 1 and 2, D1 is sentenced on each count to 21 months’ imprisonment.

46.  On Count 6, D1, D2, D3 and D4 are each sentenced to 21 months’ imprisonment.

47.  On Count 7 in respect of D1 and Count 8 in respect of D3, I take as a starting point 2½ years’ imprisonment, discount this by one-third to reflect their pleas, and sentence D1 and D3 each to 20 months’ imprisonment respectively for the charge each faces.

DCCC 1042/2009

48.  On Count 1 in respect of D2, I take as a starting point 2½ years’ imprisonment, discount this by one-third to reflect his plea and sentence him to 20 months’ imprisonment.

49.  D1, D2 and D3 have been convicted of multiple offences. These are separate and distinct sentences and warrant consecutive sentences. However, I do bear in mind the totality principle of sentence.

50.  In respect of D1, the sentences on Counts 1, 2 and 6 are to be concurrent, and that of count 7 be consecutive to the sentences for Counts 1, 2 and 6, that is a total of 41 months’ imprisonment.

51.  In respect of D2, the sentence for Count 1 in DCCC 1042/2009 is to be consecutive to the sentence imposed for Count 6 in DCCC 1415/2009, that is a total of 41 months’ imprisonment.

52.  In respect of D3, the sentence on Counts 8 in DCCC 1415/2009 is to be consecutive to that of Count 6, that is a total of 41 months’ imprisonment.