HKSAR v. SINGH JOBANPREET

DCCC 944/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 944 OF 2012

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Reasons for Verdict

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1.  The defendant pleaded not guilty to two charges of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised & Serious Crimes Ordinance, Cap. 455.

2.  The particulars of the 1st charge are as follows:-

Singh Jobanpreet, between 15 December 2011 and 21 March 2012, both dates inclusive, in Hong Kong, dealt with the property, namely moneys in the sum of about $529,189.80 Hong Kong currency in the account numbered 023-073653-838 of the Hongkong and Shanghai Banking Corporation Limited held in the name of R.J. Trading Company, knowing or having reasonable grounds to believe that the said property in whole or in part, directly or indirectly represented proceeds of an indictable offence.

3.  The particulars of the 2nd charge are as follows:-

Singh Jobanpreet, between 8 March 2012 and 29 March 2012, both dates inclusive, in Hong Kong, dealt with property, namely moneys in the sum of $1,844,050.80 in account numbered 02756293065835 of the Bank of Communications Company Limited held in the name of R.J. Trading Company, knowing or having reasonable grounds to believe that the said property in whole or in part, directly or indirectly represented proceeds of an indictable offence.

Background

4.  R.J. Trading Company, according to a business registration document, was commenced on 15 December 2011.  Its registered address is the defendant’s residential address.  The HSBC account of charge 1 was opened by the defendant in the name of R.J. Trading Company on 15 December 2011.  He was the sole signatory.  It was closed on 21 March 2012. 

5.  The Bank of Communications account of charge 2 was opened by the defendant in the name of R.J. Trading Company on 8 March 2012, he was the sole signatory.

6.  Certain victims were tricked into depositing or remitting money to account 1 and 2 of both charges by e-mail fraud schemes. The e-mail purported to relate to genuine instructions.  The moneys deposited or remitted into each account were very quickly withdrawn.  There is no legitimate business activity in any of the two accounts nor did R.J. Trading Company do any business. 

7.  All of these above facts by way of background were not challenged by the defendant and known to the defendant except for the origins of the money. 

8.  Admitted facts were prepared, Exhibit P3, that covered the prosecution case in its entirety. The prosecution called no witnesses.  The prosecution case, in short, was that the defendant opened false business bank accounts and when moneys obviously representing the proceeds of an indictable offence were deposited or remitted, he personally withdrew the majority of it over a bank counter in cash knowing or having reasonable grounds to believe the money was such.

9.  The defence case, in short, was that the defendant did deal with all the moneys referred to in both bank accounts of charges 1 and 2 without knowing of the origin of the moneys.  He opened the company and bank accounts as a favour for a friend and only acted upon his instructions as to when to withdraw moneys as directed.  He trusted this friend and did not suspect the money was dirty money.  His credibility is in issue.

The evidence

10.  The admitted facts, P3, refer to the whole of the prosecution case.  Exhibit P1 is the banker’s affirmation in relation to the HSBC account of charge 1 and Exhibit P2 is the banker’s affirmation in relation to the Bank of Communications account of charge 2.  There is no need to repeat or regurgitate the facts of Exhibit P3.  They show only the defendant dealt with moneys in both accounts.

11.  In the three months the HSBC account was opened, there were four deposits in US dollars amounting to approximately $529,189.80. All the moneys were withdrawn by the defendant on two occasions in cash and shortly after it was deposited.  Similarly there were four deposits in the Bank of Communications account of charge 2 in US dollars amounting to approximately $1,844,050.80.  Most of the moneys were withdrawn by the defendant in cash shortly after each deposit.

12.  Paragraphs 4 and 5 refer to two victims identified who were tricked into depositing money into accounts of charges 1 and 2.  Both did the transfers after receiving false emails purporting to give genuine instructions.  The first victim suffered a loss of US$30,000 and the second victim suffered a loss of US$75,700 and US$92,150 transferred on two occasions.

13.  The defendant was arrested on 29 March 2012 inside the Mody Road branch of the Bank of Communications.  The police were informed by the bank itself.  Defendant had already made several withdrawals from this bank days prior to his arrest.  They are set out in paragraph 22 of Exhibit P2.  He withdrew $585,000 on 23 March from the Mody Road branch in cash.  On 26 March, he withdrew a further $420,000 in cash from the same branch.  On 27 March, he withdrew cash of $700,000 from another branch because the Mody Road branch had insufficient cash.  When he returned to the Mody Road branch on 29 March, the bank called the police.

14.  When the defendant was arrested inside the branch, three other Indian males were arrested outside the bank including a Ramanjit Singh.  They were later released without charge.  Under caution, the defendant told the police he had been recruited by a Chinese male to open bank accounts for a commission.  He refused to answer any questions put to him in a subsequent interview.  To be clear, all of the above was not challenged by the defendant. 

15.  The defendant elected to give evidence and did not call any witnesses.  He gave evidence to show he did not have knowledge or reasonable grounds to believe he was money laundering.  He is 19 years old and educated in India until he was 15.  He came to Hong Kong in 2008 to be reunited with his family who were living here.  After he arrived, he worked in a laundry business for a year and then at DHL packing cargo for about eight months.  He then followed his father to work when work was available.  He said he did not speak Cantonese and very little English, nearly none.  He has a clear record in Hong Kong and before 2011 did not have a bank account nor any company set up to do business.  He was ignorant of bank accounts and their workings. 

16.  In September or October 2011, he met a man he referred to as Mr Rommy in Tsim Sha Tsui through some Indian friends.  Before December 2011, they met two to three times but only exchanged greetings, they did not converse.  He said they got friendlier in December 2011 by which he meant they became friends, talked to each other and met up.  He then got a call from Rommy asking for a favour.  He asked the defendant to open a bank account for him as he needed some help collecting some money that was due to him.  He promised the defendant a reward.  He told the defendant he had a problem with his own account and his money was being delayed.  Rommy told the defendant he needed his proof of address and identification documents.  The defendant agreed to help Rommy and met up where he was taken to open a company.  Then he was taken by Rommy to HSBC to open an account.  Rommy dealt with all the paperwork.  The defendant just signed documents as directed.  He did not ask what he was signing. 

17.  When the account was opened, Rommy kept the ATM card.  He made two withdrawals on 12 January and 18 January 2012 because Rommy had asked him to go to the bank and make such withdrawals.  He then had to deliver the cash to a Mr Bobby near Mirador Mansions, Tsim Sha Tsui.  The defendant was told by Rommy to tell the bank staff that he wanted to withdraw all the money deposited.  He was taught to say “I want my TT”. 

18.  As for the Bank of Communications account, Rommy told the defendant they would ignore the HSBC and open another account because the Bank of Communications was a good bank.  Rommy told the defendant he needed another account.  Again, Rommy took the defendant to the bank and dealt with all the paperwork to open an account.  The defendant just signed what he was told to sign.  Again, Rommy kept the ATM for this account. 

19.  For the three withdrawals from this account on 23rd, 26th and 27 March, Rommy took the defendant to make the withdrawals at the bank.  On 23 March, Rommy did not go to the counter with the defendant, he stood nearby.  He took the cash from the defendant outside the bank. 

20.  On 26 March, Rommy arranged to meet the defendant outside the Mody Road branch and told him to go in and withdraw all the money from the account.  Rommy did not enter the bank with the defendant. He collected the cash from the defendant outside the bank.

21.  On 27 March, Rommy arranged to meet the defendant again but Mody Road had insufficient funds so sent the defendant to another branch.  At that branch, the defendant said Rommy dealt with the withdrawal at the counter himself. 

22.  On 29 March, Rommy again asked the defendant to withdraw cash.  They ended up at the Mody Road branch where Rommy sent the defendant inside to withdraw cash.  Just before the defendant was approached by the police in the bank, he received a telephone call from Rommy who was outside the bank.  Rommy told the defendant “If anyone asked about the withdrawals of large sums of money” he was to say he was recruited by a Chinese male.  The defendant thought as Rommy was also arrested, Rommy would explain everything to the police.  The defendant agreed he lied to the police as instructed by Rommy.

23.  At Tsim Sha Tsui Police Station after they were arrested, Rommy told the defendant to blame a Chinese male and that they were in it together.

24.  The first time he mentions helping Rommy is in court when he gives evidence.  When asked why he never told the police, especially after he was charged with the two offences, he says the police said he could choose to either tell them or tell the court.  He decided to wait to tell the court.  As far as he knew, Rommy was still in Hong Kong but he did not try to contact him after his arrest.

25.  The defendant produced a copy of two photographs of a man he says is Rommy he printed from a Facebook page.  The defendant had his own Facebook page.  The photographs were exhibited as Exhibit D1.  Exhibit D2 were photographs of the defendant’s I-Phone records displayed.  They show calls either to or from a Rommy Singh and two phone numbers for this man.  The defendant says this Rommy is the same Ramanjit Singh arrested outside the bank on 29 March.  The prosecution do not challenge this.

26.  Exhibit D3 were phone call records for the defendant’s mobile but not relied upon or elaborated upon.  The defendant was asked why he agreed to open a company and two bank accounts at this Rommy’s request as well as why did he trust him.  The defendant explained that Rommy had said he was a businessman and the defendant thought he looks like a businessman. He spoke English and Chinese, he travelled to India and China he said on business.  The defendant said Rommy talked like a businessman but he did not ask what he did or where his business was located. 

27.  The defendant said when Rommy told him he had a problem and he needed him to open a bank account, he did not question it or him because he believed him, believing he was a businessman.  When asked why he did not ask Rommy what his business was, the defendant said he did not because he is a simple and not well-educated person.  He did not suspect Rommy or suspect Rommy was lying to him or using him.  He had no idea the money came from improper sources nor suspected this as he had not done any business before nor had any experience of it.  He had never had a bank account and did not know such things could happen in a bank.  He did not think what Rommy asked him to do was suspicious.

28.  He accepted a total of about $10,000 from Rommy as a reward for helping him.  The defendant did not think it was strange or odd that Rommy did not approach bank counters with him; that did not cross his mind nor did it cause alarm bells to ring.  When he was asked if he questioned Rommy where so much money came from over a few days, he answered he did not need to ask as it was Rommy’s business.  It did not occur to him to ask and he said “Everything was going good, I think it was good”.

The law

29.  The prosecution has the burden of proof to prove all elements of this offence.  The mens rea of dealing has two parts, knowing or having reasonable grounds to believe.  The prosecution submits that there existed reasonable grounds for the defendant to believe the moneys in whole or in part represented the proceeds of an indictable offence. 

30.  Reasonable grounds to believe contains objective and subjective elements.  It was considered in HKSAR v Shing Siu Ming & Ors [1999] 2 HKC 818, a case under the former Drug Trafficking (Recovery of Proceeds) Ordinance, Cap. 405.  There the court said:-

“This phrase we are satisfied contains subjective and objective elements. In our view, it requires proof that there were grounds a commonsense right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom. That is the objective element. It must be proved that those grounds were known to the defendant, that is the subjective element.”

31.  The elements were recently considered in the case of HKSAR v Pang Hung Fai, CACC34/2012, where the Court of Appeal held that the meaning of having reasonable grounds to believe as set out in Shing Siu Ming was correct.  The Court of Appeal when referring to Shing Siu Ming noted that in explaining each of the two components in the way it did, first the objective and then the subjective, and order was assumed and applied thereafter.  In Pang Hung Fai, the Court of Appeal saw a reason to reverse this order.  It held that the more logical approach was to first ask the question what were the facts known to the defendant and the objective factual circumstances in which he found himself and of which he was aware at the time at which he had dealt with the property which is the subject of the charge.  It is for the prosecution to establish the facts and circumstances relied upon. 

32.  The second question then is this, do those facts and circumstances provide reasonable grounds to believe that that property in whole or in part represented the proceeds of an indictable offence, see paragraphs 105 to 109.  The Court of Appeal went on to reiterate the statutory provision does not require proof that a particular defendant himself believed the moneys were the proceeds of an indictable offence.  It referred to HKSAR v Ma Zhujiang [2007] 4 HKLRD 285, where it was unsuccessfully argued that “The phrase required proof that the defendant did in fact hold the requisite belief” (paragraphs 18 to 19, 30 to 31 of Ma Zhujiang).  The prosecution are not required to prove the defendant’s actual belief.  The question is, do reasonable grounds exist to form a belief regardless of whether any such belief is in fact held by an accused.  The courts do not allow a person to turn a blind eye in dealing with property which might be proceeds of an indictable offence. 

33.  In HKSAR v Wan Yet Kwai CACC372/2008, Hartmann JA, as he then was, said that:-

“If a person, although he cannot know for certain, nevertheless has reasonable grounds to believe that, having regard to all the circumstances, he may well be dealing in the proceeds of an indictable offence, and if that person goes ahead and deals then he commits an offence under section 25(1). This is so even if there also exist reasonable grounds for believing in some alternative scenario. What cannot be ignored is that money laundering is invariably a devious activity, its purpose being to appear what it is not. In our view, it would therefore undermine the purpose of the legislation if a person was able to turn a blind eye to a reasonably held belief that certain properties represent the proceeds of an indictable offence by being able to focus instead on some alternative reasonably held belief as to its provenance.” (Paragraphs 32 to 33).

34.  The defence do not challenge the prosecution’s case that the moneys of charge 1 and 2 are proceeds of an indictable offence. The prosecution can identify some victims and their predicate offence but not all.  Nonetheless, the defence do not seek to legitimise the balance or question it.  The prosecution do not need to prove the predicate offence referred to the commission of the offence.

35.  The defendant is a man of clear record, I have warned myself accordingly.  I have considered the likelihood and propensity of a man with a clear record committing these offences. 

My findings

36.  I have carefully considered all of the evidence and submissions made by both sides.  I remind myself that when drawing inferences from the evidence, an inference of guilt can only be drawn against the defendant if it is the only reasonable inference to be drawn.  It must be compelling and the only one no reasonable man could fail to draw from the direct facts proved.  I refer to page 5 of the oft cited authority R v Kwan Hing Bong [1979] HKLR 1. 

37.  The evidence of the prosecution is the defendant opened a company and then two company bank accounts in two different banks, one after the other.  He knew he was not going to trade or do business nor intend to use the accounts for any business.  The accounts were ultimately used to receive money fraudulently obtained.  Once the money was deposited, it was withdrawn by the defendant for a financial reward.  These facts are relied upon by the prosecution to establish reasonable grounds to believe the moneys were proceeds of an indictable offence. 

38.  I have considered the defendant’s evidence at length and accept he did not on his own volition open accounts and start a company with the intent to receive and deal with illegally obtained money.  I find it probable he agreed to open these accounts for another in return for a financial reward.  That other person could be Rommy, a Ramanjit Singh who was arrested outside the bank whilst the defendant was inside attempting to withdraw cash. 

39.  What I do not find credible is his evidence he trusted Rommy and had no reason to suspect the request to open bank accounts and deal with large sums of money.  On his own evidence, the defendant barely knew this man.  They became friends over a period of at most two weeks.  He said they became friends in December 2011 and the first account was opened on 15 December.  He tried to convince the court he believed this man was a legitimate businessman but could not explain why he formed that belief.  His evidence Rommy looked like a businessman and sounded like a businessman is weak and insufficient to support his evidence he trusted Rommy and could trust Rommy. 

40.  His lack of questions to Rommy, I suspect, was due to the lure of a financial reward for his part in this scheme.  The huge sums of money, the frequency he said he had to make withdrawals and the fact he either gave the money to a stranger or Rommy outside the bank should have made him suspicious but he denies it.  His answer to several questions that it did not cross his mind to suspect or to ask or to question is not believable either. 

41.  The defendant’s attempt to portray himself as a victim who was uneducated, unsophisticated and innocent is rejected.  He clearly understood many questions put to him in court before the questions were translated.  His English was more proficient than he would have the court believe. He was only 18 at the time but had been in Hong Kong for several years and working from when he arrived here.  He owned an I-phone, had e-mail as well as a Facebook page. 

42.  He lied to the police despite saying he was very frightened when the police arrested him.  He lied because he was told to lie. I am sure he lied because he did not want to implicate Rommy at the time.  This indicates he knew what he was doing or had been doing was suspicious.  If he was an innocent, the natural response would surely be to tell the truth.  If he believed he was legitimately helping a friend, the natural response would surely be to tell the truth, if not immediately at least soon after.  His explanation as to why he lied to the police is rejected.

43.  Even if he did not know he was dealing with the proceeds of an indictable offence, the circumstances in which he agreed to help this Rommy should have made him aware the money was questionable.  I find he at least turned a blind eye to the obvious. 

44.  Defence counsel submitted the defendant did not turn a blind eye to the obvious because nothing was obvious to him.  With respect, I am sure the defendant did ignore the obvious, he put on blinkers and blindly did as he was asked for a reward. 

45.  I have to consider whether there existed reasonable grounds to believe the money in both accounts were in whole or in part directly or indirectly represented the proceeds of an indictable offence. I am satisfied the only reasonable inference to be drawn from the evidence is that the defendant when he helped Rommy by opening accounts and withdrawing large sums of money as instructed had reasonable grounds to believe the money was dirty money, illegally obtained money. 

46.  I am also satisfied a commonsense, right-thinking member of the community would also without hesitation conclude that the facts of this case would lead him or her to believe the money constituted the proceeds of an indictable offence.

47.  Despite the defendant’s clear record, I am satisfied the prosecution can prove all the elements of both charges beyond reasonable doubt.  Accordingly, the defendant is convicted as charged of charges 1 and 2.