HKSAR v. HOUNSA PAUL

DCCC 939, 1066/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 939, 1066 OF 2013(consolidated)

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REASONS FOR SENTENCE

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1.  I convicted the defendant after trial of three charges of fraud and three charges of money laundering. The prosecution alleged that the defendant fraudulently opened accounts at three different banks in Hong Kong using a forged entry chop in his passport and laundered a total of HKD18,927.10 money through the accounts.

2.  The defence case was that the defendant came to Hong Kong for business purposes. He denied practicing any deception on the banks and asserted that all the monies going through the three accounts were for legitimate business or other purposes.

Background

3.  The defendant is a visitor from Benin. He arrived in Hong Kong on 9 January 2012 and was permitted to stay for 14 days until 23 January 2012.

4.  In April 2013 the police commenced an investigation concerning initially one and then three bank accounts opened by the defendant in Hong Kong. On 14 February 2012 the defendant opened accounts at the Bank of Communications Company Limited (BOCC) and the Hang Seng Bank (HSB). On 27 February 2012 the defendant opened an account with the Industrial and Commercial Bank of China (Asia) Limited (ICBC).

5.  When the defendant opened the bank accounts he produced his passport which contained a false immigration stamp. The stamp purported to show that the defendant had arrived in Hong Kong on 1 February 2012 and was allowed to stay for 90 days thereby concealing that he was an overstayer – Charges  1, 2 and 5.

6.  The BOCC account was closed on 16 November 2012. There were 3 deposits into the account totalling USD341,004.84 (equivalent to HKD2,660,000) remitted from overseas. There were cash withdrawals very soon after the deposits were made (Charge 3).

7.  The HSB account was closed on 30 August 2012. There were 10 deposits by way of overseas remittances into the account totalling HKD2,456,76 with similar cash withdrawals on the same or following day (Charge 4).

8.  The ICBC account was closed on 12 October 2012. During the seven and a half months it had been open there were 20 deposits totalling HKD13,720,912.53. There were 62 withdrawals totalling HKD13,720,913.80. The majority of the withdrawals were in cash (Charge 6).

Arrest, Records of Interview and Police Enquiries

9.  On 29 April 2013 the defendant was arrested by police officers in connection with the ICBC account (Charges 1 and 3).  A report had been made to the police about a suspected e-mail fraud involving the use of the defendant’s ICBC account. When interviewed he said he opened the account using his own passport. He said that apart from his own business he allowed other overseas “Buyers” to use the account as a payment platform to remit money to Hong Kong . The defendant said the buyers did not place orders with him. He said that they had difficulty in obtaining immigration visa and could not open a bank account in Hong Kong. The defendant said once a deposit was made into the account he would withdraw cash to pay the designated supplier. The defendant said he earned about USD5,000 during his stay in Hong Kong.

10.  The defendant said that he kept the relevant records and receipts at the residence of a female friend who lived at 5/F, No. 183 Temple Street, Hong Kong. Police enquiries revealed that a female tenant at these premises was not seen after 22 March 2013.

11.  The defendant claimed he knew nothing about any e-mail fraud and that he never used e-mail to communicate with customers.

12.  He told the police he had two other accounts.

13.  The police obtained information relating to the accounts held by the defendant with BOCC and HSB. When later questioned about these accounts the defendant remained silent.

14.  In his evidence during the trial the defendant said that the transactions came about mainly through his association with persons running two electronic goods shops in Tsimshatsui. I rejected his evidence.

15.  I was sure that the monies paid into the defendant’s bank accounts were not for genuine business transactions or any other legitimate purposes. I was sure that the defendant knew that the monies paid into his three accounts represented the proceeds of indictable offences or closed his mind to the obvious.

Record

16.  At the time of the offences the defendant had a clear record. On 13 January 2013 he appeared before the Shatin Magistrates Court where he was convicted of 6 offences of possession of false instruments and one of breach of condition of stay. The false instruments related to the forged entries in his passport which he used to open the bank accounts the subject of  charges 1,2 and 5. The defendant was sentenced to imprisonment for a total of 5 months and two weeks.  The defendant was released from jail on 29 April 2013 and was then arrested for the current offences.

Mitigation

17.  The defendant is 34 years of age and comes from Benin. He was educated to tertiary level in Benin and ran his own business as a trader in electronics goods.

18.  On 7 January 2013 he surrendered to the Immigration Department for having overstayed in Hong Kong. Inspection of his passport revealed a number of false immigration chops for which he was later prosecuted. It was whilst the defendant was serving his sentence in respect of these offences that the police became aware that the defendant had fraudulently opened bank accounts and laundered money through them.

Sentencing Considerations

19.   Clearly, the offences are serious offences.  The maximum sentence for each offence is 14 years imprisonment. I was sure the defendant fraudulently opened bank accounts in Hong Kong for the purpose of laundering substantial sums of money through the accounts, just under 19 million from 26 remittances into the three accounts.

20.  There are international dimensions.  The defendant comes from Benin and opened the three bank accounts in Hong Kong whilst here illegally some 5 weeks after entering Hong Kong.  A number of remittances came from countries such as Dubai, Palestine, Albania, Singapore, USA and Canada. There were 22 different remitters and in respect of two remittances made on the 14 May2012 and 12 June 2012 in the respective sums of  HKD659.544.50 and HKD732,897.56 the remitters were unknown.

21.  I was sure that one of  the 26 remittances, a remittance of USD7,500 on 3 October 2012 involved an email scam whereby money payable for legitimate businsess reasons was diverted into one of the accounts of the defendant.

22.  The prosecution were unable to prove the predicate offences. I was sure that the defendant knew that the remittances represented the proceeds of  indictable offences or closed his mind to the obvious. He had fraudulently opened the bank  accounts to facilitate the laundering. As stated above, monies came into the accounts of the defendant from various parts of the world, the scheme was elaborate and sophisticated.

23.  I rejected the defendant’s evidence as to how the monies came to be paid into his accounts. I accept he was unlikely to have been a mastermind but in my view his role was significant.

24.  There are no tariffs for these offences and each case depends on its own facts.

25.  In relation to charges 1, 2 and 5 the maximum sentence is 14 years imprisonment. Bank accounts are valuable properties and substantial deterrent sentences are required for those convicted of such offences. I was sure the reason for opening the accounts was to facilitate money laundering. I considered a starting point of three years imprisonment to be appropriate and having considered all the circumstances decided the sentences should be imposed concurrently.

26.  In relation the offences of money laundering the amounts set out in charges 3, 4 and 6 are USD341,004.84, USD2,456,777.76 and HKD 13,720,912.53 respectively. The maximum sentence for the offence is 14 years.  Having considered all the circumstances surrounding the commission of this offence I took the view that the appropriate starting point of charges were sentences of 2, 3 and 4 years imprisonment were appropriate. I decided that the sentences on charges 2 and 3 should be served concurrently but that 18 months of the sentence on charge 6 should run consecutive to the sentences on charges 3 and 4 making a total starting point of 4 years and 6 months imprisonment.

27.  I was sure that offences 1, 2 and 5 were committed to launder the sums referred to in charges 3, 4 and 6 and therefore decided that the concurrent sentences for charges 1, 2 and 5 should be served concurrently with the starting point of  4 years and 6 months imprisonment imposed for the other charges.

28.  I have taken into account that the defendant has already served a sentence of 5 months and 2 weeks for related offences. He was released from prison on 29 April 2013 and arrested for these offences on that day. He has been remanded in custody since then

29.  In all the circumstances I have decided that the total sentence should be 4 years and 2 months imprisonment. I therefore make the following order:

Charges 1, 2 and 5 – 3 years imprisonment all concurrent

Charge 3  2 years imprisonment

Charge 4  3 years imprisonment

Charge 6  4years imprisonment

30.  In respect of charges 3, 4 and 6 the sentences will run concurrently but 14 months of the sentence shall run consecutive to the three years imposed in respect of charges 1, 2 and 5. The total sentence will be imprisonment for 4 years and two months.