HKSAR v. GABRIEL BENISTI

DCCC830/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 830 OF 2011

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Reasons for Sentence

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1.  The defendant pleaded guilty to four charges of dealing with property known and/or reasonably believed to represent proceeds of indictable offences.

The Facts

2.  The immigration records showed that the defendant came to Hong Kong on two occasions:-

	Arrived	Departed
1.	9/2/2009	12/2/2009
2.	6/12/2010	8/12/2010 (he was arrested at the departure hall.)

3.  Between October 2008 and February 2009, the defendant acquired and became the sole directors of the four companies named in the four charges.

4.  During his first visit to Hong Kong, he opened four bank accounts in the name of the four companies with HSBC.  The defendant claimed that the four companies engaged in trading electronic components or appliances.  The four bank accounts could be operated through the Internet.  The defendant was the sole signatory and the sole authorised Internet user of the four bank accounts.  In his second visit, he had also opened another HSBC account in a French company name. 

5.  Between 10 June 2009 and 6 January 2010, a total of €6,155,666 was remitted into the four bank accounts.  Shortly after remittance, the total money transferred out from the four bank accounts was €6,018,612, and I have put it down in a table:  

Company	transferred in remitted from	Amount (Euro)	transferred out remitted to	Amount (Euro)
HD Electronics Ltd	Hong Kong France	3,261,580	Hong Kong (including Sunnyward) Cyprus, Mainland China, Israel, Switzerland	3,147,382
Art Mega Enterprise Ltd	Hong Kong, (including Sunnyward Ltd)	924,094	Cyprus, Mainland China, Germany and Hong Kong (including Sunnyward)	922,650
Loyal Well Ltd	Hong Kong Germany Portugal	966,591	Hong Kong, (including Sunnyward) Mainland China, Germany, Portugal, Hungary, Poland and Belgium	961,571
Sunnyward Ltd	From (1) HD electronics (2) Art Mega (3) Loyal Well	Euro 1,003,400	(1) Hong Kong (i) Art Mega (2) London (3) Israel	Euro 987,009

6.  In the video record of interview, the defendant admitted that:-

(i) he was a decoration worker in Israel.

(ii) In 2009, his Israeli friend, David, asked him to come to Hong Kong to acquire the companies and to set up the bank accounts.

(iii) David told him it was to “gain tax advantages”. He would get a reward of €5,000 upon completion of the task.

(vi) Air ticket and hotel accommodation were also arranged by David.

(vii) A lawyer was arranged to accompany him to open the bank accounts and also acted as an interpreter.

(viii)He gave all the bank accounts and security codes devices to David. He received €5,000.

(x) He just opened the account and had not been involved in his business or the remittance record.

7.  In mitigation, I am told the defendant has a clear record.  He is French, 27 years old.  He is married.  His wife and three young children are all living in Israel.  He worked as a decoration worker in Israel and earned about €3,000 - €4,000 per month.  The chief rabbi also wrote a letter on his behalf to ask for leniency from this court as his young family in Israel suffers badly while the defendant in local prison suffers language and cultural differences. He does not have the benefit of friends or family visit as local prisoners do.

8.  The general points of mitigation have been detailly contained in the written submission.  I will come to those points when dealing with the sentencing factors. 

Sentence

9.  There is no doubt that the defendant faces four very serious charges.  The maximum penalty after conviction of a charge of money laundering under section 25(3) of the OSCO is a fine of 5 million and 14 years’ imprisonment. 

10.  In determining the sentence of this case, a number of factors have to be taken into consideration: 

(i) the amount of property being dealt with;

(ii) the length of time involved.

11.  The particulars in the four charges and the Summary of Facts can be summarised in the following tables:

Charge	Dates	Period	Amount (HK$)
1	10/6/2009-6/1/2010	8 months	34 million
2	10/6/2009-19/11/2009	6 months	9.7 million
3	10/6/2009-2/12/2009	7 months	10 million
4	14/7/2009-9/12/2009	6 months	10.5 million

12.  In mitigation, the defence said that the amount in each charge should not be a significant factor in determining the sentence. In a gist, the defence mitigation placed heavy emphasis on the fact that the defendant’s level of participation only limited to the opening of the four accounts.  Therefore, the defendant had no knowledge as to the amount involved in each charge.

13.  The defendant is French, used to live and work in Israel.  He came to Hong Kong with a Canadian lawyer who could speak his own language to act as an interpreter.  The trip to Hong Kong was also paid for.  The defendant received €5,000 for a few days’ trip out to Hong Kong, and this is not a small sum.

14.  With all the other expenses, including the Canadian lawyer and the Hong Kong solicitors, the sum involved in opening the four accounts was not small either. 

15.  To open a bank account, especially from a faraway country, in Hong Kong is only related to money.  The defendant had been told that the purpose was “to gain tax advantages”.  That would be a substantial sum in order to justify the exercise and the expenses to come to Hong Kong to open the four accounts. 

16.  Any ordinary person would think that the sum must be so substantial that the money had to be divided into four separate accounts. 

17.  The question to ask: had the defendant never crossed his mind about the sum involved?

18.  The duty of the trip also included the delivery of the bank documents and the Internet security devices back to Israel.  He was the sole signatory and authorised Internet user to the four bank accounts. Nowadays, with the advanced technology all over the world, these four bank accounts could be operated in any part of the world. 

19.  Against this background, the defendant on his first trip to and away from Hong Kong must have realised that the seriousness of the money involved in these accounts must be substantial.  To this extent, I conclude that the amount in each account was also a determining factor in consideration of the sentence.

20.  (iii) The defence also said there is no evidence as such in the Summary of Facts that the proceeds were from any indictable offence. However, it is also accepted by the defence that the prosecution did not have to prove that the property represent the proceeds of an indictable offence, Oei Wiryo v HKSAR FACC4/2006 refers.

21.  Also, the defence said that there is no evidence to suggest that all the money was proceeds of an indictable offence.  On the other hand, there is no evidence to suggest that the proceeds were from legitimate source.

22.  The inward transfers to Sunnyward (Charge 4) were from the three other accounts as appeared in Charge 1 to 3. 

(vi) The Defendant’s Participation

23.  The defence said that his role limited only to the opening of the bank accounts.  He was not involved in the subsequent operation of the four accounts. 

24.  However, it cannot be denied that without the defendant’s involvement in the opening of the four accounts, the international scheme of money laundering in different countries would not be successful.  The subsequent transactions in the four accounts could never have been taken place. 

25.  This was an initial step but indeed a very important one as accepted by the defence.  The fact that the defendant was accompanied by a lawyer to Hong Kong to open the accounts also indicated that it involved a highly organised and sophisticated syndicate to ensure that the plan was to be carried out smoothly.

5. The International Elements

26.  It is accepted by the defence that there is an international element involved, but it is only limited in the sense that the accounts were set up in Hong Kong.  I disagree.

27.  The defendant is a Frenchman and his usual place of domicile is Israel before the arrest.  He came to Hong Kong with a Canadian lawyer purposely just for the opening of the four accounts and brought back the bank documents and the Internet security devices back to Israel. 

28.  A reasonable inference was that the four accounts would at least be used in Israel. 

29.  However, as the Summary of Facts admitted by the defendant turned out that the money remitted into the accounts came from Hong Kong, France, Germany and Portugal.  The money transferred out or remitted to different countries, including Cyprus, Mainland China, Israel, Switzerland, Germany, Portugal, Hungary, Poland, Belgium, Hong Kong and London.  

30.  The network was in fact a very large and worldwide one.

Sentencing Authorities

31.  As to the term of sentence, the defence place heavy emphasis on the case of HKSAR v Lee Wai Yiu CACC100/2006 that the 1st applicant and the 2nd applicant were sentenced to 3 years and 4 years after trial, for which involved 180 million and 350 million respectively over a period of six years.  The defence asked this court to consider a sentence of no more than 3 years.  Otherwise, the defendant would feel aggrieved for being treated differently.

32.  It is true that there is no sentencing guideline for the offence of money laundering.  As pointed out by the defence, in the case of CACC159/2009, of which the Court of Appeal has discussed 12 different cases of money-laundering sentences. It was clear that each case was determined on its own facts and, generally, for the sum involved - 1 to 2 million was 3 years;

3 to 6 million was 4 years; 10 million was 5 years.

Dislocation Factor

33.  Finally, I noted that the defendant is a Frenchman.  He came to Hong Kong on two occasions, each time stayed for a short time.  

34.  In passing sentence, I do not attach weight to the evidence of the second trip. 

35.  His purpose to come to Hong Kong on the first visit was to commit the present offences, to undermine the laws of Hong Kong.  There is a public interest in discouraging such criminal activity.  Therefore, the dislocation factor that the defendant suffers hardship in the local prison deserves no sympathy from this court.

36.  Having considered all the factors, this court orders:-

Charge 1	starting point: 6 years reduced to 4 years
Charge 2	Starting point :- 5 years reduced to 3 years and 4 months, 4 months be run consecutively to Charge 1
Charge 3	starting point: 5 years reduced to 3 years and 4 months, and 4 months be run consecutively to Charge 1 and 2
Charge 4	5 years reduced to 3 years and 4 months, the sentence in Charge 4 be run concurrently to Charge 1, 2 and 3

The total sentence: - 4 years 8 months.