HKSAR v. CHENG KA CHUN

DCCC 747/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 747 of 2016

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REASONSFOR SENTENCE

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1.  The defendant pleaded guilty to one count of aiding and abetting thedealing 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 89 of the Criminal Procedure Ordinance, Cap. 221.

Summary of facts

2.   This is a money laundering case involving a total sum of HK$1,872,001.10.

3.  On 4 December, 2013, the police performed an anti-vice operation against a criminal syndicate in control of the vice website www.sex141.com (“the Website”).

4.  On the same day, the police searched the business premises of Belief Consulting Company operated by Sum Ho Wah, Howard (“Sum”) in Mongkok.  Upon searching the premises, various bankcards and bank passbooks including one ATM card and one passbook issued by the Hang Seng Bank with the account number 255-9-047-325 (“the subject bank account”) were found.  The police also seized one external hard disk at the scene.  Upon examination of the external hard disk, the personal particulars of the defendant herein and the subject bank account details including the passwords were recovered from one computer file on the external hard disk.

5.  The police also conducted a search at the residential address of Sum on the same day and seized the e-banking security device of the subject bank account from the premises.

6.  At the material time, the defendant was the sole account holder and signatory of the subject bank account.  Bank records showed that the subject bank account was opened on 15 September, 2007. Between 15 May, 2013 and 5 December, 2013, total deposits in the subject bank account were totally HK$1,872,001.10.  Fund flow analysis of the subject bank account disclosed that most of the deposits made into the subject bank account were withdrawn within a short period of time.  A small amount of money i.e. HK$1,300, were deposited to the subject bank account in a day, making a total of HK$1,501,500 (i.e. $1,300 x 1155) during the relevant period. Two of the depositors were confirmed to be local sex workers who paid monthly fees of HK$1,300 each for advertising on the Website to solicit customers.  Withdrawals were mainly made at the maximum limit of a day in the total sum of HK$20,000.  All the relevant bank transactions took place within this jurisdiction.

7.  According to the records of the Inland revenue Department, for the year from 1 April 2009 to 31 March 2014, the defendant reported that he was a plumber, a technician and a trainee and earned a total of HK$802,298 for that period.

8.  The defendant was arrested on 15 April, 2014. Under caution, he said, inter alia, that he sold the subject bank account to a male named “Ah Kwan” but he did not know how “Ah Kwan” handled the bank account.  Since 2007, he had been a construction worker with a monthly income of HK$13,000.  In mid-December, 2011, he received a call from Mr. Kwan, a money lender, who asked to borrow the defendant’s bank account for 2 years in return for HK$2,000.  On 3 January, 2012, the defendant handed over his Hang Seng Bank card, the e-banking token and login password to an unknown male.  He received HK$2,000 as his reward for lending the subject bank account.

9.  I was satisfied beyond all reasonable doubt that the facts admitted by the defendant supported the charge, and accordingly I convicted him of the charge.

Previous convictions

10.   The defendant is of previously clear record.

11.  The Prosecution submitted the authority HKSAR v. Boma [2012] 2 HKLRD 13, which set out the factors to be considered for offences of this nature.

Antecedent Statement

12.   The Antecedent Statement was read into th record by the Prosecutor.  No issue was taken on its contents by the Defence.  The Antecedent Statement disclosed, inter alia, that the defendant is now aged 31 years. He was born in Hong Kong. He had been educated to Secondary 5 level. He was a construction worker at the time of his arrest for the present offence on 15/4/2014. He claimed to be of good health and had never abused dangerous drugs or joined any triad society. His parents divorced when he was an infant and he had never met his father. His mother, aged 54 years, was a waitress, while his sister, aged 19 years, was a student. He lived with them in Sheung Shui at the time of his arrest.

Mitigation

13.  Defence Counsel submitted that at the time of the offence, i.e. between May and December, 2013, the defendant was an apprentice plumber and earned $13,000 a month. He was single.   He got married in 2015, and has a baby son aged 8 months.  His wife is a PRC citizen – she gave birth to the baby in Hong Kong. She comes to Hong Kong on a 2-way permit each time.   His mother is now retired, She suffered from cancer and had surgery in 2015.   He lived with her and his son, as his half-sister has moved out to live with her boyfriend.  He now works as an underground cable surveyor at a construction site and earns $20,500 a month.   He committed the present offence in 2013 because he was heavily in debt. He had accumulated a debt of $60,000 as he had indulged in gambling. He was being pressed by loan sharks and financial institutions for payment, and stupidly resorted to lending his bank account. In return he received HK$2,000. He had pleaded guilty at the first opportunity and was remorseful and sought leniency.  He had learnt his lesson – this was his first offence. Mr. Chong submitted that there were no aggravating features – there was no international element.  The matter had been hanging over the defendant since his arrest on 15/4/2014 – some 1 ½ years although the Defence did not say that this was undue delay – they accepted that a case had been brought up to the Court of Final Appeal on a similar charge which might be a reason for the time taken to bring the matter to Court.

14.  Mr. Chong drew my attention to the authority of  Secretary for Justice v. Ngai Fung Sin Apple [2013] 5 HKLRD 104, where the Court of Appeal held that in money laundering cases, the sentence passed was primarily to reflect the amount of the illicit money involved and not the benefit obtained by the defendant or others.  He referred to paragraph 55 of the judgment, where the Court of Appeal referred to a number of authorities where it was held that when the amount involved in the “money laundering” is HK$2 million or so, the starting point is around 3 years’ imprisonment.  Counsel submitted that that the Appellant/Respondent had been convicted after trial, the laundered amount was HK$1,906,800, and there was an international element as the Appellant/Respondent had taken the money to China. The Court of Appeal held in paragraph 57 of its judgment that even looking at the case from the angle most favorable to the Appellant/Respondent,  the sentence should not have been less than 2 ½ years’ imprisonment.  As it was an application for a review of sentence by the Secretary for Justice and the matter had hung over the Appellant/Respondent’s head for a long time, the Court of Appeal imposed a sentence of 2 years’ imprisonment.  Mr. Chong submitted that an appropriate starting point here was 2 ½ years’ imprisonment as there were no aggravating features and no international element.

15.  After hearing Counsel in mitigation, I adjourned the matter until today, and called for a Background Report, remanding the defendant in custody and warned him the likely sentence was an immediate custodial sentence.     The Background Report is now before me.  Mr. Chong informs me that the contents are admitted by the defendant.     In mitigation, Mr. Chong had referred to the Defendant’s half-sister who had moved out, who was not referred to in the Background Report – I am told that she is the defendant’s half-sister and had moved away and therefore was not mentioned.  The Background Report mentioned his elder sister who was not mentioned in mitigation. I am told that the defendant just forgot to mention her previously.  She is a single mother with 3 children, and has moved back to live with the defendant’s mother.  Counsel also submitted a number of letters in mitigation, from the defendant, his wife and his elder sister, as well as from his church and from his friends.

Sentence

16.  I have carefully considered all that has been urged upon me in mitigation by Counsel on behalf of the defendant as well as the authority submitted, and the contents of the Background Report now before me and the contents of the mitigation letters submitted.  The Background Report confirms much of what I have been told by Mr. Chong. I do not intend to repeat the contents herein.  The interviewing Probation Officer opined that the defendant was brought up in a single parent family and he had a good family relationship all along. He was hard-working to earn a living to support his family and seen to be a responsible husband.  He committed the present offence because of his financial debts. He was now very remorseful.

17.   Section 25(3) of the Organized and Serious Crimes Ordinance, Cap. 455 provides that the maximum sentence on conviction upon indictment for the offence of dealing with property known or believed to represent proceeds of an indictable offence is that of a fine of $5,000,000 and 14 years’ imprisonment. Section 89 of the Criminal Procedure Ordinance, Cap.221, provides that any person who aids and abets the commission by another person of any offence shall be guilty of the like offence.

18.   In the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal discussed the factors relevant for consideration when sentencing money laundering cases. The factors would include the amount of money involved; the level of the defendant’s participation and number of occasions he was involved in the laundering activities; the nature of the underlying indictable offence; whether there is an international element; and the length of time the offence lasted.

19.   In the case of HKSAR v Boma [2012] 2 HKLRD 33, it was stressed that deterrence is a paramount objective of the sentence and that the amount of money laundered is a significant feature. The sentencer should also take into account features such as the nature of the predicate offence; the state of the offender’s knowledge; whether there is an international dimension; the sophistication of the offence including the degree of planning; whether the offence was committed by or on behalf of an organised criminal syndicate; whether there was one transaction or many and the length of time over which the offence was committed; whether the offender continued to launder after discovering the nature of the funds; and the role of the offender and the acts performed by him.

20.   In our present case, there is no evidence to prove that the defendant knew the purpose for which the subject bank account would be used. It is likely that the defendant was being exploited. Having said that, the defendant did commit the offence for a reward of $2,000.

21.   The defendant played a limited role in the money laundering. He simply lent his bank account for a reward of HK$2,000. There was no sophistication involved on the part of the defendant.

22.   The total amount involved in the charge is HK$1,872,001.10. While the amount is not small, it is by no means a large amount when compared to other money laundering cases.

23.   The subject bank account was used between 15 May and 5 December, 2013.

24.   In relation to the money laundering, there was not much planning involved. There is no evidence to suggest that there was an international element. The nature of the predicate offence is vice-related. Although it was obviously premeditated and planned, there is no evidence that the defendant had knowledge of them. There is no evidence that defendant waspart of an organised criminal syndicate.

25.   Balancing all the above factors, for the combined total of $1,872,001.10, I find that an appropriate starting point should be that of 2 ½ years’ (30 months) imprisonment.

26.   I find that there are no aggravating factors in the defendant’s commission of the offences.

27.   Granting the defendant the usual one-third discount would result in a sentence of 1 year and 8 months’ (20 months) imprisonment.

28.  Mr. Chong does not seek to say that there has been undue delay or attach blame to the Prosecution for the time taken to charge the Defendant. The Defendant was arrested for the present offences in 15 April, 2014, but his first appearance in the District Court was only on 6 September, 2016, over 2 years after his arrest. He submitted that the Defendant had suffered much stress as a result of the long wait. I am satisfied that there has been no delay by the Prosecution. Time would be required for the fund flow analysis and to await the decision of the Court of Final Appeal.  However, I am satisfied that some credit should be given in sentence for the time it has taken for this matter to be brought to court.  In the circumstances, I would reduce the sentence by a further one month. I am satisfied that there are no grounds to further reduce the sentence. I have considered whether there are any grounds to suspend the sentence.  I do not see any.

29.   I therefore sentence the defendant to 1 year and 7 months’ (19 months) imprisonment on the charge.