HKSAR v. ZENG YANJUN

HCCC 386/2025

[2026] HKCFI 3496

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 386 OF 2025

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REASONS FOR SENTENCE

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THE CHARGES AND PLEAS

1.  The defendant, ZENG Yanjun, pleaded guilty before a Magistrate on 6 November 2025 to two counts of “Dealing with property known or believed to represent proceeds of an indictable offence”, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance (Cap. 455) (“OSCO”) and were committed to this Court for sentence.  This morning, the prosecution sought to amend the particulars of the offence of both counts by adding “together with other persons unknown” and this amendment was not objected by the defence.  Before me, the defendant pleaded guilty to both counts as amended and admitted the amended summary of facts and she was duly convicted as charged.

2.  The particulars of the two counts are as follows:

Count	Period	Bank Account	Amount (HK$ equivalent)
1	15 January 2018 – 3 October 2018	HKD current account (no. 331706) of NewShengDa Trading Limited with DBS Bank	HK$86,300
2	28 March 2018 – 3 October 2018	USD sub-account (no. 331830) of the same DBS account	US$87,229,374.20(approx. HK$680,389,118.76)

The total amount dealt with under the two charges is approximately HK$680,475,418.76.

BACKGROUND FACTS

3.  The defendant is a two‑way permit holder from Mainland China.  On 8 August 2017, she incorporated a company named “NewShengDa Trading Limited” in Hong Kong, of which she was the sole director and sole shareholder.  On 8 December 2017, she submitted a copy of her two-way permit and PRC identity card and successfully opened a DBS Bank account in the company’s name, designating herself as the sole authorised signatory.  In the opening mandate, she stated that the company’s business was “trading of textile” and anticipated a monthly turnover of HK$700,000.  As supporting evidence of her company’s trade, the defendant also submitted a sales contract in which it was alleged that NewShengda bought cotton from the seller at RMB118,500.

4.  For Count 1 (HKD current account): between 15 January 2018 and 3 October 2018, the account received only two deposits – HK$30,300 on 15 January 2018 and HK$56,000 on 28 March 2018.  The deposits were followed by 13 online transfers, dissipating HK$86,300 to other local accounts.  The top two transfers were a HK$50,005 internal transfer to her own USD sub-account(i.e. the subject account of Count 2) and a HK$20,055 transfer to a Hong Kong company.  The account balance was reduced to zero on 3 October 2018.

5.  For Count 2 (USD sub‑account): between 28 March 2018 and 3 October 2018, the account received 255 deposits from 46 depositors, totalling US$87,2229,374.20 (approx. HK$680 million). The funds originated from multiple jurisdictions: Dubai (74.52%), Hong Kong, the United States, the United Kingdom, Mainland China, India, Singapore and other countries.  There were 1,773 online transfers made in this account dissipating the entire amount to 256 beneficiaries in 23 jurisdictions worldwide, including India (39.76%), China (12.50%), Hong Kong (10.88%), the US, Dubai, and many other countries.  The account balance was reduced to zero by 3 October 2018.

6.  The defendant was arrested on 24 April 2024 upon entering Hong Kong at Lo Wu Control Point. Under caution, she remained silent.  Neither the defendant nor NewShengDa Trading Limited has any legitimate business operations or taxable income in Hong Kong.  Neither has filed any tax return (save for a nil return for the company in 2018/19).  Neither owns any real property, vehicle or vessel in Hong Kong.

7.  The defendant’s immigration record shows that she was not in Hong Kong on the date of incorporation (8 August 2017), but she was in Hong Kong on 7‑8 December 2017 to open the bank account.  She left Hong Kong on 8 December 2017 and did not return until 17 December 2018 – after all the laundering activities had ceased.  The offences therefore took place while she was outside Hong Kong, and the accounts were operated by online banking.

SENTENCING PRINCIPLES

8.  The maximum sentence for an offence under section 25(3)(a) of OSCO is a fine of HK$5,000,000 and imprisonment for 14 years.

9.  The Court of Appeal has repeatedly stressed that money laundering is a serious offence because it encourages and facilitates crime, and because it threatens Hong Kong’s reputation as an international financial centre.  Deterrence is theparamount consideration: see HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201 at §12 and HKSAR v Boma [2012] 2 HKLRD 33 at §36.

10.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, the Court of Appeal identified the following relevant factors (at §9):

(i) The amount of money involved is a major consideration, not the benefit received.

(ii) The defendant’s level of participation and the number of transactions.

(iii) If the predicate offence is known, its seriousness may be taken intoaccount.

(iv) An international element is an aggravating feature.

(v) The length of time over which the offence was committed.

11.  In Boma (supra.), the Court added further significant features (at §40):

· The nature of the predicate offence and the offender’s knowledge of it.

· The offender’s state of knowledge that the funds were proceeds of crime.

· The sophistication of the operation.

· Whether the offence was committed by or on behalf of an organised criminal syndicate.

· The role of the offender (director of the operation vs a person down the chain).

· Whether the offender obtained any personal benefit.

12.  In Wan Kwok Keung (supra.), the Court of Appeal provided a rough guide based on the amount of “black money”: a starting point of about 3 years for HK$1-2 million; and “could be over 5 years” for amounts above HK$10 million (at §15).  Those figures are not rigid tariffs, but they provide a benchmark for reference.

THE DEFENDANT’S MITIGATION

13.  Through her counsel, Mr. Benson Tsoi SC and with him, Ms. Yvonne Leung, the defendant advanced the following mitigating factors.

(a) Early guilty plea

14.  The defendant pleaded guilty at the first opportunity before the Magistrate.  She is entitled to the full one‑third discount, which I will apply.

(b) Low level of culpability – used as a pawn by a close relative

15.  Mr. Tsoi submits that the defendant was a “person down the chain”, a mere stooge.  At the material time, she was only 23 years old.  Her cousin‑in‑law (Mr. Wu) asked her to come to Hong Kong to sign papers to set up the company and the bank account, telling her it was for his cross‑border trading business.  She trusted him because he was a senior family member and appeared to be a successful businessman.  She did not personally conduct any of the transfers or receipts online and she had handed over control of the online banking to Mr. Wu once she has opened the two bank accounts.  She received no personal benefit whatsoever from the laundering.

16.  The defence relies on HKSAR v Chan Wai Yan [2012] 4 HKLRD 195, where the Court of Appeal recognised that if a defendant commits an offence at the behest of a close relative, the court may give a further discount (see §18, citing HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 157).  In HKSAR v Hui Kam [2003] 3 HKLRD 211, a defendant who laundered HK$6.5 million for her elder brother received a starting point of only 15 months (reduced to 6 months after plea).  Those cases involved much smaller amounts, but the principle is clear.

17.  I accept that the defendant was not the mastermind.  She was a young woman with no previous criminal record, who was manipulated by a close relative. Her role was just to set up the company and to open the bank accounts for the use of Mr. Wu.  That is by comparison a low level of culpability, although she plainly knew or had reasonable grounds to believe that the funds were proceeds of crime – otherwise she would not have admitted the charges.

(c) No predicate offence alleged

18.  It is further submitted by Mr. Tsoi that the prosecution has not identified any specific predicate offence.  The prosecution does not allege that the money was derived from drug trafficking, fraud, or any other particular crime.  The absence of a known predicate offence reduces the defendant’s moral blameworthiness compared to a case where she knew the money came from, say, drug trafficking.

(d) Positive good character

19.  The defendant has no previous convictions.  She has provided evidence of her voluntary work over six years (2018‑2023) with a community group in Fujian province dedicated to services for the elderly and orphans in Mainland China.  The defendant has also actively participated in the planning and organization of the group activities.  According to Mr. Tsoi, the defendant has a tertiary education and was employed as an administrative officer at a language training institution earning approximately RMB 8,000. Her former employer and fellow volunteers speak highly of her.  She has shown genuine remorse.

20.  In Secretary for Justice v Wong Hong Leung [2010] 1 HKLRD 226, the Court of Appeal gave a six‑month discount for positive good character in a serious bribery case. While such factors carry less weight in money laundering cases where deterrence is paramount, they are not irrelevant.

(e) Personal circumstances

21.  Mr. Tsoi informs me that the defendant’s family circumstances are modest.  She lives in Fujian with family members including her parents and her husband whom she had just married for one month before she was arrested.  The defendant has been in custody since her arrest on 24 April 2024 and has been detained for 26 months.  During this time, her grandmother who was very close to her passed away, and she also suffer from hyperthyroidism requiring regular medical monitoring.  The defendant has the support of her whole family, as shown by their letters of mitigation who are all shocked by the mistakes she had made and they all ask the court to give her a chance and pass a lenient sentence so as to allow her to get back to her family and the community as soon as possible. The defendant has also shown genuine remorse and deep reflection in her own mitigation letter, and I was told she has also made use of the time in prison and completed several courses.

APPLICATION FOR ENHANCEMENT OF SENTENCE UNDER SECTION 27 OF OSCO

22.  The prosecution, through the statement of CIP LI Yiu-nam dated 2 June 2026, seeks an enhancement of sentence under section 27(2)(c) of OSCO on the ground of the prevalence of the use of “stooge accounts” in money laundering.  The prosecution submits that the offence is common and that a deterrent sentence is necessary.

23.  Section 27(2) provides that the court may pass a sentence more severe than it would otherwise have passed if it is satisfied that the information furnished under that subsection (including as to the prevalence of the specified offence) shows that the nature or extent of the harm caused to the community by recent occurrences of the offence justifies such a sentence.

24.  The prosecution’s information shows that between January and April 2026, there were 2,757 persons arrested for money laundering, of whom 72.58% were stooges.  In 2025, the proportion was similar.  Compared to 2024 (10,496 arrests, 75.10% stooges), the prevalence remains high, albeit not increasing dramatically.

25.  Mr. Tsoi originally submitted in his written mitigation that any enhancement should be modest and in this case, no more than 15% and that the Court should be cautious not to impose an excessive uplift of the sentence that would cause “confusion and unfairness” (citing HKSAR v Chan Ka Shing [2012] 2 HKLRD 220 at §30, in the context of the analogous enhancement provision for drug offences).  This morning, however, Mr. Tsoi changed his position by arguing that an enhancement of the sentence is not called for in this case as what the defendant has done in this case does not even fit into the definition of a “money laundering stooge” and in any event, the latest statistics provided by the prosecution actually shows a decline of the actual figures in relation to the total numbers of stooges arrested.

26.  Ms. Karinna Lai, SPP for the prosecution replies by referring me to para. 13 of the statement where CIP LI has defined a “money laundering stooge” as “someone who had assisted in the money laundering activities but has minimal or no involvement in the predicate offence or has little or no knowledge on the predicate offence.” As the holder of the bank accounts in question, by surrendering the use and control of her bank accounts to her cousin-in-law, the defendant’s conduct falls squarely within the definition of a “money laundering stooge”.  As to whether the use of stooges in deception and money laundering cases is still prevalent in Hong Kong according to the statistics, Ms. Lai conceded that while the actual numbers of 2024 (7,883) has been falling as compared to 2025 (5,355), the actual figures of the first 4 months in 2026 (January-April) is already 2,001 and therefore the projected figure of 2026 will be 6,003 (2,001x3) which is still higher than the figures in 2025 and hence the use of stooge in money laundering activities is still very prominent and prevalent.

27.  In final reply to the prosecution submission, Mr. Tsoi heavily relies on HKSAR v Li Kin Keung [2012] 4 HKLRD 135 where the Court of Appeal ruled (at §31) that the sentencing judge’s decision to enhance the sentence is not justified as the relevant statistics did not substantiate a finding of progressive prevalence of the offence specified.

28.  Despite the able submission of Mr. Tsoi, I accept that the use of stooge accounts is indeed prevalent in this jurisdiction and that general deterrence must be strengthened.  Firstly, I find that the defendant’s conduct in this case which is to lend the bank accounts for the use of her cousin-in-law with no reward already fits into the category of a “money laundering stooge” even she has no involvement in the predicate offence or has no knowledge on the predicate offence.  Secondly, while it is true that there is a record of decline of the actual numbers of stooges arrested from 2024 to 2025, I agree with the prosecution observation that the use of stooge remains prominent in that the figure of the first quarter of the current year is already 2,001 with a projected figure well in excess of the 2025 figure.  Furthermore, the percentage of the total numbers of stooges arrested in the first quarter of 2026 is 72.58% which is already more than the 71% figure as recorded for the whole year of 2025 which, in my judgment, is also an indication of the prevalence of the use of stooges in money laundering activities.

29.  However, that said, the defendant’s role is still that of a low‑level stooge, not a director of a laundering syndicate.  An enhancement that is too drastic would risk punishing her more severely than the principal offenders whom she assisted.  In the end, I consider that an enhancement of 15% is appropriate and proportionate in the circumstances of the case.

DETERMINATION OF STARTING POINT

30.  I now turn to assess the appropriate starting point before enhancement and before the plea discount.  

31.  The amount laundered is within the HK$10 million threshold mentioned in Wan Kwok Keung.  By that measure alone, the starting point would be well above five years.  However, the amount is not the be‑all and end‑all.  As said, the defendant’s role was relatively low.  She was not the organizer and there is no evidence that she received any personal benefit.  Also, the predicate offence is unknown and she was used by a close relative.

32.  I have considered all the sentencing authorities submitted by the defence.  The present case falls somewhere between a low‑level money mule and a sophisticated operator.  The sum of HK$680 million is of course enormous, and the international dimension (funds from more than 7 jurisdictions and paid out to 23 jurisdictions) is also a significant aggravating feature.  Even a low‑level stooge who enables such vast sums to be washed must expect a substantial sentence.

33.  Balancing all the aggravating and mitigating factors, I take a starting point of 6½ years (78 months) imprisonment for the two counts globally.  This reflects the huge amount, the international element, but also taking into consideration at the same time the defendant’s low role, lack of personal gain and the absence of known predicate offence.

ENHANCEMENT UNDER SECTION 27 OF OSCO

34. Applying the 15% enhancement to the starting point:

(78 months × 1.15) = 89.7 months.

35. I round this up to 90 months as the enhanced starting point.

DISCOUNT FOR GUILTY PLEA

36. The defendant pleaded guilty at the first opportunity. She is entitled to a full one‑third discount. The enhanced starting point of 90 months is reduced by one‑third: (90 months × 2/3)to 60 months.

FURTHER REDUCTION FOR CLOSE RELATIVE MANIPULATION AND POSITIVE CHARACTER

37. As said, in Chan Wai Yan(supra.) and Hui Kam (supra.), the Court of Appeal allowed an additional discount for defendants who were used by close relatives. Although the present case involves an enormous sum, the principle remains that such defendants are less morally blameworthy. I consider that a further reduction of 6 months is appropriate to reflect this factor, as well as the defendant’s positive good character.

38. The final sentence is therefore 54 months’ (4 years and 6 months) imprisonment.

TOTALITY OF THE SENTENCES

39. Count 1 involves a mere HK$86,300 and Count 2 a staggering amount of approximately HK$680 million. The two counts of money laundering arise from the same bank account holder (HKD current and USD sub‑account) and the same course of conduct. I order that the sentences on the two counts to run concurrently.

CONCLUSION

40. For each of the two counts, the defendant is sentenced to 4 years and 6 months’ imprisonment, to run concurrently. The total sentence is therefore 4 years and 6 months’ imprisonment.