HKSAR v. OLANIYI KOLAWOLE TAIWO AND ANOTHER

DCCC 440/2021

[2022] HKDC 809

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 440 OF 2021

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REASONS FOR SENTENCE

D1 faces 2 charges of "Money laundering" (Charges 1 and 8); whereas D2 faces five (Charges 2, 3, 4, 7 and 9). They are also jointly charged with 2 "Money laundering" offences (Charges 5 and 6).

2.  Both D1 and D2 pleaded guilty to Charges 5 and 6. D1 also pleaded guilty to Charge 1; whereas D2 pleaded guilty to Charges 2, 3, 4 and 9.  I granted the prosecution's application to leave Charge 8 against D1 and Charge 7 against D2 in the court file; not to be proceeded against them without leave of court.

Summary of Facts

Background

3.  D1 opened an account (No.771-1-005525)  with Hang Seng Bank ("D1-AC1")  on 1 June 2007.  It is a HKD savings account and D1 was the sole signatory.

4.  D2 opened an account (No.543-626139-833)  with HSBC[1] ("D2-AC1")  on 16 March 2007.  It is a HKD and AUD savings/current account and D2 was the sole signatory.

5.  D2 opened an account (No.722-823-07546-3)  with ICBC[2] ("D2-AC2")  on 3 February 2015.  It is a HKD and AUD savings account and D2 was the sole signatory.

6.  D2 opened an account (No.543-2-040706)  with HSBC ("D2-AC3")  on 28 October 2003. It is a HKD savings/current account and D2 was the sole signatory.

7.  D1 and D2 opened an account (No.142-88-11753-2)  with BEA[3] ("JAC-1")  on 15 April 2015.  It is a HKD and AUD account; either D1 or D2 could be the signatory.

8.  D1 and D2 opened an account (No.771-378205-888)  with Hang Seng Bank ("JAC-2")  on 22 April 2015.  It is a HKD and AUD account; either D1 or D2 could be the signatory.

9.  As a sole proprietor, D2 set up Gold Sea International Trading Company ("Gold Sea")  on 1 April 2015.

10.  Gold Sea opened an account (No.722-530-00589)  with ICBC ("GS-AC2")  on 11 May 2015.  It is a HKD and AUD account and D2 was the sole signatory.

Charge 1 (against D1)

11.  Between 20 January and 4 June 2015, D1-AC1 received a total of 4 remittances from Australia which aggregated to HK$295,357.48.  Three remittances were made in January and one in June.

12.  By 18 withdrawals, a total sum of HK$295,016 was removed from D1-AC1.  Of the said sum, HK$171,700 was taken by 13 ATM cash withdrawals; HK$76,470 was transferred to D2-AC1 in 2 transactions; HK$39,470 was transferred to D2-AC3 in 1 transaction; and HK$7,376 was transferred to a corporation by 2 autopay transactions.

Charge 2 (against D2)

13.  Between 20 January and 24 June 2015, D2-AC1 received a total of 150 remittances from Australia which aggregated to AUD6,063,031.28 (equivalent to HK$36,378,187.68).  The remittances were made throughout each month from January to June 2015.

14.  In January 2015, D2-AC1 also received 3 remittances in HKD from Australia which aggregated to HK$178,428.02.

15.  By 51 transactions, a total sum of HK$36,168,832 was transferred from the AUD account to the HKD savings account of D2-AC1.

16.  By 145 withdrawals, a total sum of HK$39,618,371 was removed from the HKD savings account of D2-AC1 (of which HK$15,570,000 was taken by 27 cash withdrawals; HK$6,197,300 was transferred to its HKD current account in 5 transactions; HK$581,414.54 was transferred to D2-AC3 in 28 transactions; HK$15,685,055 was transferred to 5 corporations in 14 transactions; and HK$63,700 was transferred to D1-AC1 in 4 transactions).  By 5 withdrawals (by transfer or by cheque), a total sum of HK$6,197,300 was removed from the HKD current account of D2-AC1 (of which HK$6,185,300 were transferred to 3 corporations). 

Charge 3 (against D2)

17.  Between 3 February and 1 August 2015, D2-AC2 received a total of 211 remittances from Australia which aggregated to AUD9,041,507.54 (equivalent to HK$54,249,045.24).  The remittances were made throughout each month from February to July 2015.

18.  By 52 transactions, a total sum of HK$54,221,542.56 was transferred from the AUD account to the HKD savings account of D2-AC2.

19.  By 116 withdrawals, a total sum of HK$54,552,793.20 was removed from the HKD savings account of D2-AC2 (of which HK$10,705,000 was taken by 27 cash withdrawals; and HK$43,553,103 was transferred to 5 corporations in 27 transactions).

Charge 4 (against D2)

20.  Between 6 and 23 February 2015, D2-AC3 received a total of 20 remittances from Australia which aggregated to HK$1,347,191.74.  The remittances were made on 6, 9, 16, 18 and 23 February.

21.  By 10 withdrawals, a total sum of HK$1,356,060.17 was removed from D2-AC3.  Of the said sum, HK$1,235,160.17 was transferred to D2-AC1 in 7 transactions; HK$100,000 by 1 cash withdrawal; and HK$20,900 by ATM cash withdrawal in 2 transactions.

Charge 5 (against D1 and D2)

22.  Between 15 April and 3 August 2015, JAC-1 received a total of 23 remittances from Australia which aggregated to AUD932,679.91 (equivalent to HK$5,596,079.46). The remittances were made in April, May and June 2015.

23.  By 14 transactions, a total sum of HK$5,666,162.68 was transferred from the AUD account to the HKD account of JAC-1.

24.  By 14 withdrawals, a total sum of HK$5,666,162.68 was removed from the HKD account of JAC-1 (of which HK$1,607,928 cash withdrawal by D2 in 6 transactions; HK$1,020,000 was transferred to D2-AC1 in 3 transactions; and HK$2,409,251 was transferred to 2 corporations in 4 transactions).

Charge 6 (against D1 and D2)

25.  Between 22 April and 6 August 2015, JAC-2 received a total of 9 remittances from Australia which aggregated to AUD47,528.05 (equivalent to HK$285,168.30).  The remittances were made mainly in June 2015.

26.  By 3 transactions, a total sum of HK$277,571.86 was transferred from the AUD account to the HKD account of JAC-2.  Of the said sum, HK$43,000 was taken out by 4 ATM cash withdrawals; and HK$240,000 was transferred to a bank account held by D2.

Charge 9 (against D2)

27.  Between 23 June and 24 August 2015, GS-AC2 received a total of 73 remittances from Australia which aggregated to AUD3,139,702.56 (equivalent to HK$18,838,215.36). The remittances were made mainly in July and August 2015.

28.  By 24 transactions, a total sum of HK$17,861,425.77 was transferred from the AUD account to the HKD account of GS-AC2.  Of the said sum, HK$13,774,654 was transferred to 3 corporations in 14 transactions; HK$430,000 cash withdrawal in 4 transactions; and HK$95,000 was transferred to D2-AC2 in 6 transactions.

Arrest

29.  D1 was arrested on 2 September 2015.

30.  D2 left Hong Kong on 27 August 2015.  She was arrested on 23 October 2017 upon her return.

D2's admissions

31.  In her video recorded interview conducted on 24 October 2017, D2 admitted that it was her signature on the opening mandates for the relevant bank accounts. Regarding Charges 2 to 4, she admitted that she was the sole holder of the accounts.  Regarding Charge 9, she admitted that she owns Gold Sea; she used its business registration to open the bank account; and she was the only person who had access to that bank account.

Other evidence

32.  For the tax years 2011/12 to 2013/14, D1 declared in his tax returns that he was a security staff with an annual income of HK$243,384, HK$229,580 and HK$59,138 respectively.

33.  For the tax years 2011/12 to 2013/14, D2 declared in her tax returns that she was an accounting staff with an annual income of HK$148,005, HK$189,658 and HK$132,625 respectively.

34.  D1 and D2 now admit that during the respective offence periods, they had reasonable grounds to believe that the remittances received by their bank accounts represented the proceeds of an indictable offence and had dealt with those proceeds.

Mitigation

D1

35. He is 53. He came to Hong Kong from Nigeria in 2006 and has become a permanent resident. He has 1 conviction record, which is "Drink driving". Since the offence took place after the present case, for the purpose of sentencing, I will treat D1 as having a clear record.

36. D1's counsel Mr. Kelly informed me that D1 has been working at a famous club in Central as a security manager with 10 people under him since March 2014. The club has recently determined to downsize its manpower and D1's employment will be terminated in August 2022. In mitigation, Mr. Kelly submitted that D1 and D2 got married in 2006. They had a pleasant relationship for 13 years. Unfortunately, certain events took place and their marriage ended in 2019. Mr. Kelly stressed that from D1's arrival at Hong Kong until the present offences, he had contributed to the society just like any local resident. Mr. Kelly acknowledged that D1's wrongdoing was he allowed others to use his bank accounts. Mr. Kelly also relied on delay in prosecution as a mitigating factor.

D2

37. She is 47 and has a clear record. Her counsel Mr. Leung informed me that D2 had 2 unpleasant marriages. She married her 1^st husband at the age of 21. Their 1^st child (a daughter)  was born in the same year. Their 2^nd child (a son)  was born 4 years later, but her husband soon left the family. D2 then became a single parent supporting 2 children and her mother. D2's son has reading and learning difficulties. Some years later, D2 met D1 and they got married.

38. In mitigation, Mr. Leung submitted that D1 and D2 knew a friend named Raymond, who claimed to be a rich person looking for people to assist with his business. Raymond promised the couple to develop his business and they would then be employed. D1 and D2 were persuaded to help Raymond and thus got into trouble. Mr. Leung described it as "a story which began and finished within 6 to 8 months with only an empty promise left behind". Mr. Leung explained that D2 was a bit foolish thinking that she did not do anything wrong, which caused her to lose the full one-third discount; however, she managed to reach an agreement with the prosecution before trial.

Sentence

39. I will deal with the issue of "delay" first. Prosecuting counsel Mr. Beel has helpfully prepared a Chronology of Events for my reference. I need not go into the details, suffice it to say that it took the Police 25 months to investigate this case and to submit the case file to the Department of Justice for legal advice. I note that D1 and 2 other persons were arrested in September 2015; whereas D2 was out of Hong Kong at that time. D2 was not arrested until October 2017 upon her return. Even if counting from November 2017 (when the evidence against all 4 suspects was consolidated), the Department of Justice took 3 years and 3 months to issue its legal advice. Between November 2018 and January 2021, the Police has sent a total of 13 reminders to the Department of Justice making enquiries on the progress of the legal advice.

40. To complete the picture, I should mention that D1, D2 and the other 2 suspects were charged in March 2021. D1 and D2 first appeared in the District Court in June 2021. After 2 mention hearings, on 30 November 2021, this case was fixed for trial commencing on 20 July 2022 with 8 days reserved. All parties confirmed that they have reached an agreement on plea discussion before trial, although both D1 and D2 formally pleaded guilty to the respective charges on the 21^st instead of the 20^th July 2022.

41. In my view, 5.5 years (for D1)  and 3 years and 5 months (for D2)  from initial arrest to being charged is excessive in this case. I appreciate the complexity of money laundering cases and the volume of documents usually involved. As far as both defendants are concerned, there is undue delay in bringing criminal prosecution against them. Whatever the reasons were and notwithstanding the 13 reminders, taking 3 years and 3 months to issue legal advice in the present case is simply unacceptable.

42. The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

"Money laundering" is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the "money laundering" offences.

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[4]

43. In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33. I have also borne in mind the amounts of money involved, the duration of the offences, the defendant's role in relation to the movements of funds as well as his/her personal circumstances.

44. In SJ v Ngai Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money" was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[5]

45. I accept there is no evidence in the present case showing: (i)  the money received by the relevant bank accounts was related to any predicate offence; and (ii)  either defendant was involved in or had any knowledge of any predicate offence. On the other hand, as the sole signatory or co-signatories of the respective bank accounts, both defendants must have done something to move the funds or facilitated the moving of the funds out of the bank accounts.

46. By allowing funds of unknown origins to pass through their bank accounts, both defendants played a pivotal role in helping the mastermind(s)  of criminal activities to access their illegal funds without revealing their identities. The court must send a clear message to the general public that people who play any role in "money laundering" will receive severe punishment, so that there is a deterrent effect.

47. Both defendants pleaded guilty to their respective charges after the trial date has been fixed but before the trial began. I would grant them a 23% discount for their guilty pleas. With the undue delay factor, I consider it fair and just that both defendants should receive a full one-third discount for their respective sentences. Apart from this, I see no other mitigating factors which warrant any further reduction.

48. For the purpose of sentencing, I would only consider the amount of funds received by each bank account.

D1

49. For Charge 1, the sum involved is HK$295,357.48. I adopt a starting point of 12 months' imprisonment. With the one-third discount, the sentence is reduced to 8 months.

50. For Charge 5, the sum involved is AUD932,679.91 (equivalent to HK$5,596,079.46). I adopt a starting point of 4 years' imprisonment. With the one-third discount, the sentence is reduced to 32 months.

51. For Charge 6, the sum involved is AUD47,528.05 (equivalent to HK$285,168.30). I adopt a starting point of 12 months' imprisonment. With the one-third discount, the sentence is reduced to 8 months.

52. D1 has dealt with a total of approximately HK$6.18 million. I adopt a global starting point of 4 years' imprisonment for all 3 charges. With the one-third discount, the overall sentence is reduced to 32 months. Hence, I order the sentences for Charges 1, 5 and 6 to run concurrently.

D2

53. For Charge 2, the sums involved are AUD6,063,031.28 (equivalent to HK$36,378,187.68)  and HK$178,428.02. I adopt a starting point of 5.5 years' imprisonment. With the one-third discount, the sentence is reduced to 44 months.

54. For Charge 3, the sum involved is AUD9,041,507.54 (equivalent to HK$54,249,045.24). I adopt a starting point of 6 years' imprisonment. With the one-third discount, the sentence is reduced to 4 years.

55. For Charge 4, the sum involved is HK$1,347,191.74. I adopt a starting point of 3 years' imprisonment. With the one-third discount, the sentence is reduced to 2 years.

56. For Charge 5, the sum involved is AUD932,679.91 (equivalent to HK$5,596,079.46). I adopt a starting point of 4 years' imprisonment. With the one-third discount, the sentence is reduced to 32 months.

57. For Charge 6, the sum involved is AUD47,528.05 (equivalent to HK$285,168.30). I adopt a starting point of 12 months' imprisonment. With the one-third discount, the sentence is reduced to 8 months.

58. For Charge 9, the sum involved is AUD3,139,702.56 (equivalent to HK$18,838,215.36). I adopt a starting point of 5 years' imprisonment. With the one-third discount, the sentence is reduced to 40 months.

59. D2 has dealt with a total of approximately HK$116.87 million. I adopt a global starting point of 7 years' imprisonment for all 6 charges. With the one-third discount, the overall sentence is reduced to 56 months. Hence, I order the sentences for Charges 2, 3, 4 and 9 to run concurrently; and Charges 5 and 6 to run concurrently, but 8 months to run consecutive to Charges 2, 3, 4 and 9.