HKSAR v. SAELO SOMKIT also known as HANN SEIJIRO, COLAYCO PETER SALAS AND ANOTHER

DCCC 3/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 3 OF 2014

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Reasons for Verdict

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1.  The defendant faces 7 charges. Charges 1 to 3 are for the offence of Fraud; charges 4 to 6 are for Dealing with property known or believed to represent proceeds of an indictable offence[1]; and charge 7 is for Possessing a false instrument. The defendant pleaded not guilty to all 7 charges.

2.  At the commencement of trial, the defendant was acquitted of charges 1, 2, 3 and 7 upon the prosecution formally offering no evidence against him on these charges.

3.  This Reasons for Verdict therefore deals only with charges 4, 5 and 6.

Background

4.  The defendant is the holder of 4 different passports issued by 4 different countries under 4 different names. There is no evidence to prove that any of the passports are false instruments.

5.  On 25^th June 2013, the defendant visited the main office of HSBC in Central, Hong Kong to access a safe deposit box that he had rented under his Korean passport name of Nam Ki Won.

6.  The defendant was required to sign to gain access to the box, but he used a signature that did not match that in the bank’s record. The defendant then produced his passport to the bank staff to verify his identity.

7.  The defendant however used his Marshall Islands passport that was issued under the name of Seijiro Hann instead of his Korean passport. This caused the bank staff to be suspicious. Police was alerted and the defendant was eventually arrested.

8.  Almost 4 months went by and the defendant was not charged.

9.  Then on 10^th October 2013, the defendant was arrested at Lai Chi Kok Reception Centre for deceiving a 3P Systems Company out of USD$693,000. This arrest was as a result of a report made to the Hong Kong Police by PW1, who alleged that the defendant had posed as someone else and had received the money under an Escrow Agreement Contract on condition that USD$10.5 million was to be raised for investment purpose for 3P Systems. The fund was never raised and the money was not returned. It is PW1’s belief that the defendant was the person behind the scam.

10.  Investigations were also conducted on the defendant’s various bank accounts opened under different names. A report was prepared on the movement of moneys in and out of the accounts. It is the prosecution’s case that based on the movements, the defendant knew or had reasonable grounds to believe that the moneys represented wholly or in part, directly or indirectly proceeds of an indictable offence.

11.  The present charges were eventually brought against the defendant. As mentioned above, the prosecution had since offered no evidence against the defendant on all but the 3 money-laundering charges.

Issues

Charge 4 and 5

12.  Based on the movement of the money in and out of the various accounts of the defendant, can the prosecution prove that there are reasonable grounds to believe that the moneys represented wholly or in part, directly or indirectly, proceeds of an indictable offence.

Charge 6

13.  The first issue is whether the evidence given by PW1 is credible.

14.  It is then for the prosecution to prove that based on the evidence of PW1, the defendant knew that the deposits into his bank account were in relation to an Escrow Agreement Contract allegedly made between the defendant (posing as someone else) and one 3P System Company Limited, and as such the defendant had defrauded PW1 and 3P Systems in not returning the money and had therefore dealt with the money while knowing that they represented proceeds of an indictable offence.

15.  Should the prosecution fail to prove the credibility and reliability of their prosecution witness, the issue then is whether, based on the movement of the moneys in and out of the bank account and other circumstantial evidence including the usage of multiple identity to open accounts with different banks in Hong Kong, there would be reasonable grounds to believe that the moneys going through the account in charge 6 wholly or in part, directly or indirectly represented proceeds of an indictable offence.

16.  Parallel to the credibility of the prosecution witness is the issue of the credibility and reliability of the defendant and his defence witnesses. If the court finds that the defendant and his witnesses are, or might be, telling the truth about the source of the moneys, then the benefit of the doubt must be given to the defendant, in which case there would be no grounds for the defendant to believe that the moneys represented proceeds of an indictable offence.

The prosecution case

17.  The prosecution called only one witness, Mr. Byun Sung Jun, to testify as to the payment of a total of HKD$5,368,015 into the defendant’s HSBC bank account relating to charge 6.

18.  As for charges 4 and 5, it is the prosecution’s case that based on the movement of the moneys in and out of the defendant’s bank accounts, the cash deposits and withdrawals and other circumstantial evidence including the fact that the defendant had no taxable income in Hong Kong, the only irresistible inference is that there are reasonable grounds to believe that those money represented proceeds of an indictable offence.

Summary of the evidence of PW1 Mr. BYUN Sung Jun

19.  PW1 is a consultant for the management and fundraising agent. As a fund agent, he would meet with fund companies and raise fund.

20.  In the beginning of May 2013, PW1 worked for the first time with a company called 3P Systems Company (hereinafter referred to as “3P Systems”). Staff of 3P Systems told PW1 that they needed around 1 billion Korean Won[2] urgently. PW1 successfully helped them to raise the fund through local private fund companies in Korea.

21.  After this success, 3P Systems engaged PW1 to help to raise another 10 billion Korean Won for facility investment purpose. 3P Systems needed the funds to invest in facilities in order to cope with extra orders from Hyundai Automobile Company for 3P Systems’ automobile automation systems.

22.  It was not easy for PW1 to raise this amount of funds in Korea and he discussed with 3P Systems about seeking funding from overseas. 3P Systems agreed.

23.  During PW1’s search for overseas funding, an acquaintance by the name of Mr. Yoon Yong Cheol (PW1 was not sure about the spelling) told PW1 about fund companies in Hong Kong that could help with the fundraising, and that Yoon knew a Mr. Choi who worked in a law firm in Korea who could help to arrange for overseas funding.

24.  It might have been the beginning of June 2013 but PW1 could not remember the exact date, PW1 and a representative director of 3P Systems went to Korea to meet the said Mr. Choi. The two of them, however, never got to meet up with Choi because Choi cancelled on them twice.

25.  PW1 complained to Yoon after the second cancellation, whereupon Yoon told PW1 to contact a Mr. Lee who worked in the same law firm as Choi and to proceed to make contact with Hong Kong directly. That same afternoon, PW1 received a SMS (phone text message) from a Mr. Hann, who “had a title as a lawyer from Hong Kong”.

26.  Hann said in the message that he was responsible for fund raising together with Mr. Lee of First Law Firm in Korea. Hann and PW1 then had a phone conversation when Hann said that if PW1 raised funds through First Law Firm, they would charge a high commission. Hann also said that both Choi and Lee were busy with their court cases and would not be helpful to PW1.

27.  PW1 was given two Hong Kong numbers to call Hann. They were 61880244 and 81990088.

28.  Hann asked for PW1’s email address so that he could communicate further with PW1. From then on, PW1 communicated with Hann by email regarding the companies and the fund raising contract.

29.  During the period when PW1 was in contact with Hann, there was also another lawyer and a fund manager Kevin Koo in Hong Kong that PW1 communicated with.

30.  PW1 also communicated by way of email with someone by the name of Colayto Peter Salas who claimed to be the general manager for the fund raising. PW1 said the name of the fund raising company was Gemny, while the law firm that Hann said he worked for was “Peter Law Firm”.

31.  The communication between PW1, Hann, Kevin Koo and Colayto Peter Salas concerning the fund raising contract and its terms and conditions went on for about one month.

32.  PW1 received a draft of the contract and had passed it on to 3P Systems and then had a meeting with the staff of 3P Systems to discuss the contents. Once the terms were confirmed, PW1 sent the contract to Hann by email. Once both parties agreed on the terms, they each signed and exchanged the scanned contract via email.

33.  Mr. Roh Woon Ho, the representative director of 3P Systems at the time, signed the contract on behalf of 3P Systems.

34.  A total of 3 contracts were signed: a document PW1 referred to as the “MOU”, a Term Sheet Agreement and the Escrow Agreement Contract. The escrow contract was in relation to service fees and commission. The commission was to be deposited into a designated account with HSBC in Hong Kong before the final raised fund of USD$10.5 million was transferred to Korea. The person who signed on the escrow contract was Peter Colayco Salas. This escrow contract was also sent to 3P Systems for their perusal and approval.

35.  The fundraisers requested the commission to be paid into the escrow account by way of two separate deposits. The first deposit of USD$330,000 was made on 14^th June 2013. This amount was transferred directly from 3P Systems’ bank account. The HSBC escrow account was held in the name of one Colayco Peter Salas, with an account number of 813-738119-833.

36.  The second deposit of USD$363,000 into the same HSBC account was made on 24^th June 2013. This amount was deposited in the understanding that 3P Systems would receive the fund of USD$10,500,000 the very next day.

37.  The full sum of the raised funds was to have been deposited into a designated account in Korea within one hour after the USD$363,000 was transferred on 24^th June 2013. This however did not happen, and PW1 and those of 3P Systems could no longer get in touch with any of the fundraisers after the said transfer was done.

38.  Hann told PW1 that Hann was the intermediate that connected Hong Kong with Korea, while Peter Colayco Salas was the actual person who managed the fund. PW1 did not know the relationship between the two.

39.  PW1 had only communicated with Peter Colayco Salas via email and had never spoke to him on the phone. PW1 believed that Hann, Peter Colayco Salas and Kevin Koo were 3 different people.

40.  PW1 qualified his answer by saying that “there is no proof, but I can presume and I can judge it was one person.”

41.  PW1 said he tried “hundred of times” to contact Hann but “the number was not available”. He also sent many emails but did not receive a reply. 3 months later, the Korean Consulate in Hong Kong contacted 3P Systems and then PW1 received a call from a staff of 3P Systems, asking PW1 whether he knew someone by the name of Mr. Colayco Peter Salas. PW1 actually talked with Mr. Park from the Consulate over the phone, and was informed that Colayto Peter Salas is the same Korean person with the name of Nam Ki Won. PW1 explained to Mr. Park that money had been transferred to the HSBC account in Hong Kong pursuant to the agreement in the escrow contract.

42.  Almost 4 months after the money that was deposited pursuant to the Escrow Agreement Contract had vanished, PW1 came to Hong Kong on 1^st October 2013, then to the Police to make a statement the following day.

43.  As far as PW1 knows, 3P Systems had since been able to recover about half of the money paid under the escrow contract. PW1 did not explain how that was done or who had returned the money.

Cross-examination of PW1

44.  In cross-examination, counsel for the defendant asked PW1 about a person by the name of YOON Yong Chul. PW1 was asked if Yoon was the Chief Executive of 3P Systems. PW1’s first reaction was to say, “This person has nothing to do with that”.

45.  PW1 explained that Yoon is not his friend, just his “junior”, as understood in Korean society. PW1 does not believe that Yoon is a very wealthy person. He does not know if Yoon likes to gamble, or whether Yoon would travel to Macau through Hong Kong for high stake gambling.

46.  PW1 however knows that Yoon and the defendant are acquaintances.

47.  PW1 was then asked about his relationship with the defendant.

48.  PW1 claims that he got to know the defendant in Korea. PW1 denied having worked with the defendant, or that they had ever been in partnership in 2007 and 2008.

H1 BIO

49.  PW1 denied that he had managed a company by the name of H1 BIO together with the defendant. PW1 said his connection with this company started in 2009 and he did not know anything about the company before that.

50.  When counsel asked if PW1 had any dealings at all with the defendant in relation to that company, PW1 asked counsel if he wanted the simple answer or the long answer. When counsel insisted that PW1 answered the question first, PW1 said, “there was no direct relationship”.

51.  PW1 was then asked if he had seen the defendant in person regarding the company, and he answered, “I cannot remember where but maybe about one time I met him”. PW1 claimed that he had never talked with the defendant on the phone in Korea.

Medimax (2000-2008)

52.  PW1 was then asked about a company named Medimax (2000-2008). Although PW1 knew about this company, he said he had never worked in this company, nor had he helped the defendant in managing this company.

53.  PW1 was asked if he was sure that he was not the Chief Executive of both H1 BIO and Medimax (2000-2008) with the defendant as the Vice-Chairman. PW1’s answer was as follows:

“The person he was involved with this company before, but I involved after.”

54.  It was suggested to PW1 that at some point in his association with the two companies, PW1 had used the same office as the defendant and that they met almost on a daily basis. PW1 denied that this was the case.

55.  It was put to PW1 that he and the defendant knew each other very well in Korea. PW1 disagreed.

56.  Later on in re-examination, PW1 said that he had known the defendant’s name as Nam Ki Won back in Korea but he had never met him, except for maybe “a glance” about 5 years ago. It is PW1’s evidence that when he was dealing with those involved in the fundraising, he had no idea that he was dealing with the person he had known as Nam Ki Won.

57.  When asked in re-examination if he knew that, when he dealt with Mr. Hann or Colayco, they were the same person as Nam Ki Won, PW1 said that he never thought about that and that he did not know at all.

The Lai Chi Kok visit

58.  PW1 was asked about his visiting the defendant in the Lai Chi Kok Reception Centre in Hong Kong. PW1 confirmed that he had visited the defendant there twice in September 2014, while the defendant was being remanded for the present case.

59.  It was put to PW1 that during the visits, PW1 apologized to the defendant and said that there had been a huge misunderstanding. PW1 denied that was the case, and said that it was the defendant who said to PW1 that he did not know it was PW1 and apologized to PW1.

60.  Later in re-examination, PW1 said when he visited the defendant at Lai Chi Kok, he recognized him as Nam Ki Won. PW1 however said that he could not recognize his voice. PW1 did not ask the defendant about the name of ‘Hann’ in those two visits and they did not talk about it.

61.  PW1 explained what he understood the defendant meant when he said he did not know it was PW1 and apologized to him. PW1 said that even though they knew each other in Korea, it was only by name and they had never talked on the phone nor met in person in Korea. The defendant had also been living overseas for about 5 years. It was therefore PW1’s belief that the defendant might not have known it was he.

62.  PW1 agreed that the purpose of the two visits, as well as giving evidence in this trial, is his effort of trying to recover the money that 3P Systems had lost. PW1 confirmed that civil action was being contemplated but not yet instigated. PW1 agreed that his ultimate aim was to recover the lost money.

63.  PW1 further said in re-examination that he went to visit the defendant at Lai Chi Kok because he wanted to ask the defendant whether he could suggest some methods to recover the loss suffered by 3P Systems. PW1 had had discussions with 3P Systems executive members before the visit.

64.  When asked how PW1 got to know that the defendant was being remanded in Lai Chi Kok, he said that he was contacted by the defendant’s father through one of the acquaintances in Korea and they met in Korea. That was how PW1 came to know about the defendant’s remand.

65.  According to PW1, the defendant mentioned that he would pay back “not only this amount”, but also “some other cases involved”, once the defendant got out of the place. 

PW1 and Yoon of 3P Systems

66.  PW1 confirmed that he was not privy to what went on in 3P Systems as between Yoon and the defendant.

67.  It is PW1’s evidence that he never told Yoon “anything about this case” after the initial contact. It was Hann, the lawyer from Hong Kong, who told PW1 not to further involve Yoon in the fund raising. PW1 therefore did not explain to Yoon what was happening in Korea at all. Ever since Yoon told PW1 to expect communication from Hong Kong, PW1 had never talked with Yoon about this case, nor did Yoon ask him about this case. Not even after the payments into the escrow account had gone missing. In fact, Yoon dropped completely out of the picture after he told PW1 to deal directly with Hong Kong. 

Communication with the defendant after the escrow transfers

68.  It was put to PW1 that shortly after the first payment into the escrow account, the defendant called and told PW1 that the money had been received. PW1 disagreed and said it was Hann the lawyer who called him about that.

69.  Counsel asked if it might have been the defendant calling under his Korean name. PW1 said he could get the picture now but at the time he did not know about that.

70.  It was put to PW1 that the defendant asked him why the transfer was made from 3P Systems, and PW1 told the defendant that since Yoon was the chairman of 3P Systems, it was up to him as to how the payment was made. PW1 disagreed.

Delay in reporting

71.  It was pointed out to PW1 that the first deposit into the escrow account was on 24^th June 2013, yet PW1 did not report the loss of the money to the Hong Kong Police until 2^nd October. PW1 agreed that it was the case, but explained that he had sent “some people” to Hong Kong and engaged a lawyer to look for those involved.

Contact from 3P Systems about the lost money

72.  Although PW1 was in continuous communication with 3P Systems after the loss of the escrow money, it is PW1’s assertion that Yoon did not know anything at all, even up to the time when PW1 was giving evidence.

The fund raising contract

73.  PW1 confirmed in court that the agreement entitled Term Sheet Agreement was a document governing the fund raising as between 3P Systems and Gemny.com Holdings Limited. PW1 did not witness the signing of the document by either of the signatory parties.

Kim Suk Ryol

74.  PW1 was asked if he knew a Mr. Kim Suk Ryol. PW1 said he was his senior in the business society. PW1 had heard about him going to Macau to gamble but had never seen it himself, nor had he gone with him.

75.  PW1 confirmed that from 2010 to 2012, he had heard about Mr. Kim and the defendant going to Macau to gamble together, but that he did not know anything at all.

76.  It was pointed out to PW1 that he at one stage worked as vice-president in the above-mentioned company of H1 BIO. PW1 agreed.

77.  PW1 however denied that he had sold H1 BIO’s assets for USD$4 million when the defendant was the chairman of the company.

78.  Lastly in cross-examination, PW1 confirmed that 3P Systems did not notify the public about their seeking to raise USD$10,500,000 in funds.

The defendant’s case

79.  The defendant elected to give evidence in his own defence. It is the defendant’s case in relation to charges 4 and 5 that the deposits and withdrawals were all related to his gambling activities. In relation to charge 6, it is his case that the money was deposited by a Chairman Yoon and was meant partly for their upcoming gambling trip to Macau and partly as a loan to the defendant for him to gamble in Macau on the trip.

80.  The defendant first of all explained the four passports he held in different names.

Saelo Somkit and Thailand business

81.  This is a Thai name that appears on the defendant’s Thai passport number L977084. The defendant went to Thailand when he was young. As for the origin of the defendant’s name in the Thai passport, the defendant explained that his father took part in the Vietnam War where he made a good friend. The defendant’s father went to Thailand after the war and through that friend came to meet a lady. They later adopted the defendant into the family and that was how the defendant got his Thai name, since his father thought the defendant should have a Thai name for business purpose.

82.  The defendant is still doing business in Phuket and Bangkok together with some business associates, where they sell goods to tourists.

Peter Salas Colayco: The Philippines passport

83.  The defendant stayed in the Philippines between 2009 and 2010 most of the time and was involved in some online lotto business. He came to know a government official there named Patrick Chang who worked at the National Security Department, where they gathered information and protected their president.

84.  The defendant invested USD$1 million to get a license for the lotto business and it included the citizenship. The defendant applied for the Philippines passport using a Pilipino name since Patrick Chang advised him that it is better for doing business there.

85.  The defendant had since used the passport to enter and exit the Philippines and had had no problem at all.

86.  The defendant did not have to produce his birth certificate in order to obtain the passport. All he had to do was filling out an application, wrote down the condition of investment and had his fingerprints taken. The passport was issued on 17 March 2010.

87.  The defendant is not involved in any business or company and has no business or company interest in Hong Kong under any of his four passports.

The 18^th November 2011 to 25^th June 2013 period

88.  According to immigration records, the defendant came to Hong Kong on several occasions in this period.

89.  It is the defendant’s evidence that during a three-month period, he gambled everyday in Macau with friends he invited over from Korea and Thailand. The defendant came to Hong Kong to deposit the money he won from gambling in Macau as well as to do some shopping here.

Seijiro Hann: Marshall Islands passport

90.  In 2005, the defendant befriended the son of the president of Marshall Islands who later told the defendant that if he purchased a 5-year government bond, he would be given citizenship to the country through their foreign affairs department. That was how the defendant came to be issued the Marshall Islands passport.

91.  The passport was issued in the name of Seijiro Hann. The defendant explained that Hann is the surname of his mother.

92.  At the time of the issuance of the Marshall Islands passport, the defendant was still holding his Korean passport under the name of Nam Ki Won.

93.  The defendant was declared bankrupt in Korea in 2009, which prompted him to instruct lawyers to request for the annulation of his Korean identity card. Once the annulation was done, the procedure of giving up his Korean passport, and thus nationality, would follow.

94.  The defendant doesn’t know the outcome of the request for annulation. It is the defendant’s evidence that he has not used his Korean passport since 2009.

95.  The defendant agrees that he did use his Korean passport to open a bank account with HSBC in Hong Kong in May 2009, with account number 510-041569-833. The defendant said he had not used his Korean passport in Hong Kong after that, but he could not remember clearly whether he had used it elsewhere.

96.  The defendant confirmed that at the time of his opening of the said HSBC account in May 2009, he was already holder of the Marshall Islands passport.

Why 4 passports

97.  The defendant explained that he did not have any particular bad intention for having four passports. He got those passports because they would help him do business in those countries.

98.  The defendant said he did not have any particular reason to use which passport under which situation.

Circumstances leading to the defendant’s arrest in Hong Kong on 25 June 2013

99.  The defendant agreed with the immigration records showing he arrived in Hong Kong on 21^st June 2013 using the Thai passport, together with a lady friend. The defendant only intended to have a meal at a nice restaurant and to do some shopping. There was no intention to meet with any business associates.

100.  While in Hong Kong, the defendant received a call from Chairman Yoon. The defendant had known Yoon from well before. Yoon was scheduled to come to Hong Kong to go gambling in Macau, so the defendant went to the bank and withdrew some money in preparation for Yoon’s trip.

101.  Yoon said they were going to gamble in Macau with some Korean girls. Yoon offered to lend some money to the defendant for gambling. According to the defendant, the amount was half of that “was first transaction from Korea for 6 months”. They were to bring this money to Macau.

102.  Should the defendant win, the defendant was to pay Yoon back straightaway. If the defendant lost, then the defendant would be given 6 months to repay Yoon, with a 2% monthly interest on the loan.

103.  Yoon was to arrange for HKD$5.3 million to be transferred. $2.65 million was to be lent to the defendant, for them to travel together and gamble together. Since Yoon wanted to holiday in Macau, he wanted the defendant to make all the necessary arrangements such as getting the gambling chips and booking the hotel rooms. That was why the defendant “picked up” the money to make all the arrangement.

104.  In short, it is the defendant’s evidence that the 2 remittances from 3P Systems from Korea into the HSBC account were to fund the gambling of Yoon and the defendant in Macau.

105.  The defendant however did not know in the beginning that the money was coming from 3P Systems.

106.  During examination-in-chief, counsel for the defendant asked the defendant when he received the phone call from Yoon. The defendant’s answer was that around that time, “I received the phone call from him everyday”. The defendant said Yoon told him that he was going gambling in Macau with his friends in the near future and asked the defendant to “prepare for that occasion” for him.

107.  The defendant said he had gone gambling with Yoon several times before in 2006.

108.  The defendant was then asked what he did as a result of receiving those phone calls from Yoon. The defendant said he “received the money” in the account under the name of Peter Colayco Salas. He said he received a call from a bank staff of HSBC on the morning of 25^th June 2013, telling him that some funds in US currency had arrived.

109.  The defendant then requested the bank staff to transfer that money into the account under the name of Hann Seijiro. The defendant requested this transfer because he had lost the card for the Peter Colayco Salas account, but he still had the premier black card for the Hann Seijiro account, which would make it easier for him to withdraw money in Macau. The black card also had a higher withdrawal limit and was generally easier to use.

110.  The defendant then went to the bank to deposit HKD$200,000 into a safe deposit box. He showed the key of the box to the bank staff and signed on a document as Hann Seijiro, forgetting that he had used his Korean passport to open the safe deposit box under the name of Nam Ki Won.

111.  The defendant was asked if he had another passport and he showed his Marshall Islands passport to her. The defendant then went to another floor of the bank to check on his premium account, to see if money had been transferred from the Peter Colayco Salas account into his Hann Seijiro account.

112.  In fact, prior to his visit to the HSBC to make the $200,000 deposit, he had received a phone call from Bangkok that his business there needed HKD$1 million urgently, so the defendant was going to transfer the money. However, before the defendant could do that, security officers of the bank came and they took him away. The defendant was later arrested.

18 June to 19 June 2013 period

113.  The defendant entered Hong Kong on his Thai passport on 18 June 2013 and departed the following day.

114.  On the same day he entered Hong Kong, the defendant opened an HSBC bank account in the name of Colayco Peter Salas. This same account was used to receive the first payment from 3P Systems on the day the account was opened.

115.  The defendant gave two reasons why he opened this HSBC account in the name of Colayco Peter Salas.

116.  The first reason was that he had forgotten at the time that he had a previous account with HSBC that was opened in the same name.

117.  The second reason was that Yoon knew that the defendant had opened a bank account in Manila using the Colayco Peter Salas name in the past when Yoon went to the Philippines.

118.  The defendant then talked about how PW1 and Yoon had repeatedly asked him for the account number of the Colayco Peter Salas account. The defendant explained that as Yoon was scheduled to go to Macau very soon, the defendant told Yoon that he could not prepare the chips before he had received the money.

119.  According to the defendant, Yoon addressed the defendant as President Nam, so Yoon knew the defendant as Nam Ki Won.  Yet, when Yoon wanted to deposit money to the defendant for gambling, Yoon asked for the account of Colayco Peter Salas because Yoon had known about a Colayco Peter Salas account in the Philippines, as mentioned above. Yoon had deposited money into that Colayco Peter Salas account before and had lost USD$5 million.

120.  The defendant tried to clarify his arrangement with Yoon as follows.

121.  The defendant said that on or about 18 June 2013, Chairman Yoon had asked the defendant if he had an account under the name of Colayco Peter Salas in Hong Kong, just like the defendant had in the Philippines. The defendant said he could open one. Yoon then told the defendant that he will wait for the defendant’s account number.

122.  Once the defendant finished setting up the new HSBC Colayco Peter Salas account, he gave Yoon the account number. The defendant said he did not think about it too much at that time and just provided Yoon with what he wanted. 

123.  When asked if Yoon had told the defendant why he wanted the Colayco Peter Salas Hong Kong account, the defendant said Yoon did not explain. Nevertheless, the defendant just opened the account.

Yoon’s travel arrangement to Macau

124.  In relation to the gambling trip that the defendant was to take together with Yoon, it is the defendant’s evidence that, as at the time of the defendant’s arrest, he did not know exactly how Yoon was to come to Hong Kong.

125.  If Yoon were to fly directly to Macau, the defendant would wait for him at the airport with a Rolls Royce. If Yoon chooses to come to Hong Kong, the defendant will wait for him at the Hong Kong airport with a Mercedes Benz from Shangri-La Hotel and then will fly together to Macau in a helicopter.

126.  The defendant was scheduled to go to Macau upon receiving the 2^nd remittance, and he was supposed to be told on the evening of his arrest whether Yoon was to come through Hong Kong or directly to Macau.

127.  The defendant said he did not have a work relationship with Yoon; they are very close friends and have been like brothers for the past 10 years. A partnership would best describe their relationship. The defendant knew that Yoon is a businessman who lives in Korea. It is the defendant’s understanding that Yoon “earned lots of money doing investment and private financing business”. Yoon’s investment company had purchased many big companies. The defendant understood that Yoon was involved in lending money to individuals and companies, and he knew that Yoon was very capable in “mobilizing the cash”.

128.  The defendant was expected to prepare for cars for transportation, hotel accommodation and gambling chips for the VIP on the second floor of the casino in MGM Hotel, with the help of their staff in Macau. That was what the defendant had promised to do. When asked why he so promised, the defendant explained as follows.

129.  Back in the beginning of June 2013, the defendant was in Bangkok and received a phone call from Yoon. Yoon asked the defendant whether he wanted to go to Macau at the end of June to gamble. The defendant said yes but at that time was not told how much they are going to gamble.

130.  Around 10 June, the defendant went to a casino in Cambodia together with his friend Kim Hyun Seo. They stayed there for 3 days and gambled everyday. While they were there, the defendant received phone calls from Yoon everyday. Yoon asked the defendant over the phone if it was possible to gamble on credit in Macau, just like they did in the Philippines.

131.  The defendant told Yoon that it was not possible and told Yoon that he should bring his own money.

132.  The defendant said in court that if they gambled on credit, lost and could not settle, it is then the defendant who would have to shoulder the responsibility for the debt. The defendant claimed that he was capable of arranging gambling in credit in Macau for up to USD$1 million.

133.  After talking to Yoon, the defendant inquired about direct flights from Cambodia to Macau and was told that there was none. The defendant therefore went to Guangzhou with Kim Hyun Seo, then on to Zhuhai and eventually Macau sometime between 10^th and 18^th June.

134.  When in Macau, Yoon told the defendant over the phone to wait, and that Yoon had instructed Mr. Byun (PW1) to give the defendant a call. The defendant knew that Yoon and PW1 worked together.

135.  The defendant therefore waited and did get a call from PW1. That was the first time they were on the phone since the winter of 2012. The defendant said he had worked for PW1 from 2008 to 2009 with the company H1 BIO. PW1 was the vice-president while the defendant’s cousin was the president and the defendant the vice-chairman. Their office was in Seoul, Samsung Dong, Landmark Building, Coffee Bean office.

136.  The defendant, PW1 and Yoon communicated several times while the defendant was in Macau. They asked the defendant if he had any bank account in Hong Kong, and whether the defendant could withdraw some money if they sent it to his account.

137.  The defendant was very busy gambling and all that he can remember is that he had given two account numbers to them: one under the name of Hann Seijiro and one under Colayco Peter Salas.

138.  Later on, the defendant received another phone call from Yoon telling him to go to Hong Kong because he will be sending the money there. The defendant was also told that the amount will be USD$690,000. Yoon did not explain to the defendant why it was that specific amount.

139.  Once in Hong Kong, the defendant went to the Central branch of Standard Chartered Bank and inquired about his account under Colayco Peter Salas there. The defendant was told that the account had been closed due to non-activity.

140.  It is the defendant’s evidence that the 2 deposits from 3P Systems into the HSBC Colayco Peter Salas account made on 18 and 24 June 2013 were sent over by Yoon for the pending gambling trip to Macau.

Connection between the defendant, Yoon and 3P System

141.  The defendant was asked about his knowledge of the connection between Yoon and 3P Systems. The defendant explained that Yoon told him that Yoon helped the Chairman of 3P Systems when he purchased the company.

142.  As for the defendant himself, he said that he had never met any of the people from 3P Systems and he did not know anything about the company.

143.  This June 2013 gambling trip was not the first that the defendant had gone on with Yoon. The defendant used to do big business and had earned lots of money “in the normal way”. The defendant at one time owned 3 companies and had then frequently visited Macau and Las Vegas together with Yoon. It was also not the first time that the defendant would take care of logistics before Yoon arrive to gamble, he had done that for Yoon before in Macau, the Philippines, Las Vegas and Saipan.

144.  The defendant cannot remember exactly how many times he had served Yoon as an agent like that, but there would have been twice since 2006.

145.  On those prior occasions, Yoon had arranged the money to be sent through Yoon’s acquaintance Mr. Kim and who worked at the VIP room on the second floor of MGM casino. It was this Mr. Kim who used to pass the money in cash to the defendant in Macau.

146.  The defendant did not know anything about this Mr. Kim, just that he is a kind of agent and lived on commission. They did not talk about this with each other.

147.  As for the deposit of HKD$2,556,268 into the defendant’s Colayco Peter Salas account on 18 June 2013, the defendant received a phone call from Yoon and PW1 at around 9am. Yoon told the defendant that Mr. Kim had already arrived in Hong Kong and asked the defendant to hand over HKD$2 million of the money that the defendant had withdrawn.

148.  It is not disputed that there were 4 cash withdrawals from the said account on 19^th June. The defendant confirmed that he did make those withdrawals, as well as transferred some money from the Colayco Peter Salas account to his Hann Seijiro account.

149.  The defendant made 4 withdrawals because the cash balance in the branch bank account was not enough and so the defendant had to withdraw from different branches.

150.  The defendant withdrew the HKD$2 million odd from 4 different branches and then handed over $2 million of the money to Mr. Kim who worked for Macau MGM and had come to Hong Kong. The money was passed to Mr. Kim at the 3^rd floor of the HSBC Premier account Lounge in Central. Mr. Kim then left for Macau first. The defendant left Hong Kong for Macau the same evening at 5pm. The defendant brought with him around $400,000 to $500,000 cash, being the balance of the withdrawals from the account.

The defendant and PW1’s relationship

151.  The defendant had known PW1 since 2008 in Korea. They used to work together in the earlier mentioned H1 BIO pharmaceutical company at the Coffee Bean office address. The defendant used to go to karaoke together with PW1 after work, in addition to attending company meetings together during officer hours.

152.  The defendant did not know that PW1 had been doing some work for 3P Systems. He came to know about PW1’s involvement with 3P Systems in the period between 10 and 18 June 2013. That was when the defendant thought PW1 was working as an executive member of 3P Systems.

153.  The Term Sheet agreement and the Escrow agreement contract (P11 and P12) were shown the defendant. The defendant did not know anything about the documents. He did not prepare them, and it seemed that he first saw those documents through his lawyers.

The Escrow agreement contract

154.  The defendant did not send this document to PW1, nor did he communicate with anyone about this document over the phone. The defendant did not communicate with PW1 claiming himself to be a lawyer by the name of “Hann” in Hong Kong. The defendant stressed that PW1 knew his voice and would have recognized him.

155.  The defendant does not know why his bank account number under the name of Colayco Peter Salas came to be in the first paragraph of the Escrow Agreement Contract. The defendant could not remember well but he did send details of his bank account to Yoon and PW1 after he opened the bank account, either by dictating to them over the phone or by way of SMS on the mobile phone.

Gemny.com Holdings Limited

156.  The defendant does not know about, nor did he have any dealings with this company that appear on the last page of the Term Sheet agreement.

157.  As for the signatory on behalf of 3P Systems on the Term Sheet agreement, CEO Woon Ho Roh, the defendant said he had never had any contact with him, nor had he spoken or corresponded with him. The defendant does not know if he is in fact the CEO of 3P Systems.

The Lai Chi Kok Visits

158.  According to the defendant, he and PW1 did not discuss the 2 payments made by 3P Systems into the defendant’s Colayco Peter Salas account. PW1 asked the defendant how he was in Lai Chi Kok, told the defendant not to worry and that he and his friends will try to get the defendant released as soon as possible.

159.  PW1 returned the following day. At this second meeting, PW1 also did not talk about the deposits. PW1 was still very worried about the defendant’s detention and told him to wait because he and Yoon and other friends were trying to help.

160.  It is the defendant’s evidence that there was no mention of money at all in the two Lai Chi Kok meetings. As far as the defendant understood, PW1 visited the defendant to see his face, to see if there was anything the defendant needed and to reassure the defendant that help is on its way.

Ahn Sung Hyuk

161.  Mr. Ahn Sung Hyuk works in Macau MGM and Galaxy as an agent and he also works at a travel agency. He is the defendant’s friend and one of the people that the defendant deals with closely. They had known each other for about 5 years.

162.  Whenever the defendant went to Macau, he would reserve accommodation through Ahn at a very reasonable price. Since several years ago, Ahn also assisted the defendant as an agent in the VIP room of the casino.

163.  Mr. Ahn gave evidence for the defence and his evidence is summarized later below.

The money going in and out of the defendant’s various bank accounts

164.  In relation to the movement of money in and out of the defendant’s various bank accounts, it is the defendant’s evidence that the withdrawals and deposits during the two charge periods were related to the defendant’s gambling.

165.  The defendant went to Macau from Shanghai in the beginning of November 2011. The defendant withdrew HKD$2 million from the ICBC account under his mother’s name. The defendant also borrowed about HKD$2 million in Macau from one Mr. Park Jae Won, who is either a manager of an agent of the VIP gambling room in Macau MGM or Galaxy.

166.  When the defendant arrived in Macau from Shanghai, he opened an account in the Junket Room in Jimei VIP in Galaxy casino. The defendant then deposited around HKD$4 million into the Galaxy Jimei VIP account in around mid-November 2011.

167.  From then on, he was gambling almost daily until the end of December with his friend from Korea and Thailand. There were about more than 5 friends who went to Macau to join the defendant. They gambled everyday.

168.  The defendant stayed in Galaxy Hotel under his Marshall Islands passport Hann Seijiro for more than 2 months, from end of November 2011 to February 2012. The casino gambling account was also opened under his Marshall Islands passport in the name of Hann Seijiro. The defendant’s assertion is purportedly supported by defence exhibit D-2, a letter obtained by the defendant’s solicitors in Macau, issued by Galaxy Casino, S.A., setting out the gambling records of one Hann Seijiro.

169.  As far as the defendant can recall, he had won more than $7 to $8 million from Galaxy in the 3 month period.

170.  Every time the defendant won, he would try to come to Hong Kong bringing along some cash withdrawn from his Galaxy casino account, together with Mr. Ahn and his friend. They would assist the defendant in carrying the cash because it was dangerous.

171.  The defendant explained that he wanted to deposit the cash in the Hong Kong HSBC account because he was scared to leave the cash in Macau for fear of losing the money again. The cash was brought in a bag from Macau and deposit into the defendant’s bank account the same day.

172.  The defendant would then do some shopping and return to Macau either the same day or on the following day. The defendant would then continue to gamble with his friends. Every time he won, he brought more cash to deposit into the Hong Kong bank account. The defendant felt that it was more difficult to withdraw cash in Macau and that was why he preferred to deposit the money in Hong Kong.

173.  The defendant cannot remember accurately as to how many times he had come to Hong Kong to make deposits, but think that it would have been 3 to 4 times, depositing about $6 to $7 million cash winnings that he brought over from the casino.  

174.  At one point, one of the agents in Jimei VIP talked to Mr. Ahn and Mr. Ahn asked the defendant if he still wanted to carry the cash around or to close the defendant’s account with the casino. The defendant told them that if they wanted to they could transfer the money to the defendant’s account. That was why the defendant received some money from his Jimei VIP agent.

175.  Since the defendant gambled for 3 months, he had earned a lot of commission on rolling money in the casino. As far as the defendant can remember, the commission for the rolling of the gambling alone was about HKD$2.5 million.

176.  As at January 2012, as far as the defendant can remember, he had up to HKD$11 to 12 million in his two bank account: the Hann Seijiro Marshall Islands passport account and the Colayco Peter Salas Philippines passport account.

177.  The defendant cannot remember the exact date, but he recalls withdrawing in total $11 to $12 million after losing money in his Bangkok and Korea business. The defendant brought the cash back to Jimei casino in Macau, opened an account under the name of Hann Seijiro with his Marshall Islands passport and deposited the money into that account.

178.  Jimei Casino VIP room had a high gambling limit, which meant that the defendant could bet $1 million each time. The defendant gambled and lost all his money in two hours.

179.  It is the defendant’s evidence that all the deposits and withdrawals into and out of the bank accounts, which are the subject matter of charges 4 and 5, were all related to the defendant’s gambling in Macau.

Standard Chartered Bank account in relation to charge 5

180.  The defendant entered Hong Kong with his Marshall Islands passport on 19 December 2012 and left on 1 March 2012.

181.  Just before the defendant left, he used his Philippines passport to open an account in the name of Colayco Peter Salas on 28 February 2012.

182.  The defendant explained that after he went to HSBC headquarters in Central that day, he saw the Standard Chartered Bank headquarters right next to it and thought that he might as well open an account with them. There was no other reason to open the account.

183.  The two deposits, each of $500,000 made at the time of opening the account were money from his winnings in Galaxy. The defendant was still able to remember the conversation he had with the bank manager who told the defendant that there would be a fee on the account and the eventual deposit will be slightly less than $1 million.

184.  The defendant does not remember when he brought over the $1 million, but he does remember that he brought cash.

185.  When the defendant was asked why he chose to withdraw cash from his Macau casino accounts and then bring them over to Hong Kong to deposit into his Hong Kong bank account, the defendant said that he understood that he had “made a big mistake” withdrawing cash from his casino account. He now realized that he could have gotten check issued by the casino. The defendant does not understand why he did not do that. Had he chose to do so, there would not be suspicion on the source of the money.

186.  The defendant further explained that in most of the VIP junket rooms in the casinos, they have large cash reserve. Whenever the defendant said he wanted to withdraw money, the casino people did not even ask the defendant if he wanted cash or check. All the defendant did was just signed and then picked up the cash.

187.  After the two deposits into the newly opened SCB account, the defendant went back to Macau. The defendant then had to be in the Philippines for a business trip. From the Philippines, the defendant went to Bangkok to deal with his retail duty free business there. The defendant needed cash to pay for the commission to the travel agency, so he called the manager of SCB to see if money can be transferred to the defendant’s Bangkok travel agency company. The manager told the defendant that it could be done as long as the defendant inform him of the account number and Personal Identification Number. 

188.  The defendant did as asked and money was received in Bangkok.

Questions in relation to charge 4

The HSBC account in Hann Seijiro’s name

189.  The defendant entered Hong Kong on his Marshall Islands passport on 18 November 2013. He opened an account in the name of Hann Seijiro with HSBC and then left Hong Kong on the same day. The defendant explained that he came to Hong Kong to ‘save’ his winnings from his gambling in the Macau casinos. He came to Hong Kong to open the account to prepare to bring money over from Macau.

190.  As for the HKD$6 million withdrawal the defendant made on 16 January 2012, the defendant explained that because he was having business trouble, he made the withdrawals to bring to Macau to gamble and try to win more money. That was the occasion when he went to Jimei casino and lost all his money in two hours.

Withdrawal of $4 million on 13 January 2012

191.  The defendant explained this withdrawal by giving the same reason as to the withdrawals he made on 16 January. He brought this money together with the later withdrawal to gamble in Jimei casino in Macau.

Withdrawal of $1.7 million on 19 January 2012

192.  The defendant made this withdrawal for the same purpose as the 13^th and 16^th January withdrawals.

24 February 2012 withdrawal of $3 million

193.  After the defendant lost all the money that he had previously deposited into his HSBC account, being money he had won from gambling at Galaxy casino before, the defendant was left with $3 million and he brought the money back from Macau. $2 million was used to repay his friend Mr. Park, while $1 million the defendant had kept for living expenses.

Charge 4 deposits totalling $21,745,018

194.  When asked about this figure, the defendant’s first reaction was that he did not quite understand, thinking that it was the amount of money that had gone into and out of the account.

195.  It was then pointed out by counsel for the defendant that of the 10 transactions that totalled $14,549,708, there was one in the amount of $3,999,992 from Marvellous Promise Development Limited and the defendant was asked about this company.

196.  The defendant said he only heard about the company while he was detained in Lai Chi Kok reception centre, the defendant knows nothing about this company.

197.  The defendant repeated what he said earlier about how there was money remaining in his Jimei VIP account and he had signed some papers for Jimei to have the money released. The defendant thought the assistant of his friend Mr. Ahn had given the cash taken out from the casino account and handed it over to the Chinese owned junket agent in Jimei VIP for deposit into the HSBC account.

198.  The defendant explained about junket operation as follows. Casinos in Macau would contract out the operation of VIP gambling rooms to junkets. The junkets would pay rental to the casino for the VIP rooms. The junket will strive to ensure regular customers gamble at their VIP rooms. It is the defendant’s understanding that Chinese people run junket operations in every casino in Macau. Each VIP room would have a different name. Generally speaking, therefore, junkets are the people who run the VIP rooms of the various casinos.

199.  The defendant would not know the relationship between the junkets operating the Galaxy VIP rooms and the companies that the junkets used to settle the gambling winnings with the defendant. The defendant just needed to know if his money was safe or not and did not care from which company the money deposited into his account came. The defendant believed that Marvellous Promise Development Limited was one of the companies used by the Galaxy junkets.

200.  When asked if the defendant knew Galaxy casino would have the defendant’s gambling record, the defendant answered that he believed so, because Galaxy is a major public casino and would have the ability to keep his records.

201.  A letter was eventually procured by the defendant’s lawyer in Macau and is produced as defence exhibit D-2 later on. The letter is addressed to the defendant’s lawyer, Dr. Elsa Espirito Santo, who gave evidence at the re-opening of the defence case. It is dated 30 December 2014 and issued by Jorge Neto Valente, Lawyers and Notaries Office in Macau.

202.  In the letter, the law firm forwarded information supplied by Galaxy Casino, S.A. with regard to one Mr. Hann Seijiro, covering the period between August 2011 and January 2012.

203.  The information refers to Hann Seijiro as ‘JM Black’ member with number 20143556, showing the same date of birth as stated on the defendant’s Hann Seijiro passport. It is stated that the last visit was on 17 January 2012. The turnover of the defendant’s gambling at the casino is $298,822,500.

204.  The theoretical win amount is $3,905,227 from 46 visits, with casino win at $2,429,125.

205.  The letter however does not state what currency the figures are in. The author of the letter did not give evidence and there is therefore no one to explain the contents of the letter.

206.  Also in the letter is the hotel room reservation record of the defendant, for the period from 6^th November 2011 to 20^th January 2012, a total of 106 days.

207.  According to the defendant, when he left Galaxy casino in end of February or early March 2012, he received old transaction records amounting to some 300 pages. The defendant signed receipt and received $2.5 million of commission for rolling of the gambling. The defendant did not keep the transaction records. As soon as he confirmed his commission payments were correct he dumped the records in the rubbish bin at the airport in Macau.

Cross-examination of the defendant

In relation to charge 4

208.  The defendant was asked about the depositing parties listed out at page 8 of the Accountant Report of Ms. Yiu Suet-wing, which was admitted into evidence by consent.

209.  The defendant had never heard of any of the 4 companies that made the transfers into his account. The defendant explained that all he cared was that money had been deposited into his account. He did not think about the actual transferor of the money, just that he understood the money to have been paid by the casino to him.

210.  On other occasions, as the defendant had mentioned above, each time he would pick up the cash from the Galaxy Jimei VIP junket, then bring the money to the Chinese manager there, and the defendant would sign for the transfer and then he would receive the money in his bank account. It is the defendant’s case that it was the same with the rest of the deposits shown in the accountant’s report.

211.  The defendant remembered that he was very happy during the period between November and December 2011. He had many friends in Macau who came from overseas and did not think much about whether the money he was getting from the casino was in cash or check, he was just focused on his gambling, on winning. It was only after his detention in Lai Chi Kok, when he thought back to the time did he realize that it would have been better that he received the money by way of checks.

212.  The defendant was then referred to page 21 of the accountant’s report. In relation to the Standard Chartered Bank account that was opened with two deposits of $500,000, the defendant confirmed again that he opened that account just on a whim for no particular reason. The defendant stressed that he did not have any bad intentions, he just did not think too much about opening another bank account.

213.  The defendant was then asked about an item listed as G8 dated 16^th May 2012 where $989,820 was withdrawn from the SCB account. The defendant recalled this withdrawal as the one he made by way of phone call while he was in Bangkok, when he needed money for his business there. As mentioned before, the money was for the payment of commission and salary and was transferred from Hong Kong to Thailand. The company involved is by the name of Cosco and the defendant is a shareholder of the company.

The $2.5 million commission payment from Galaxy and the 300 pages record

214.  The defendant confirmed that the payment of the $2.5 million commission by Galaxy was in cash. The defendant cannot quite recall but believes that part of the money was given to the defendant’s agent who was assisting him. Some of the money was spent shopping, specifically an $800,000 watch bought in Macau, and perhaps some clothes and bags as well. The defendant might also have used the money to gamble in the public casinos like The Venetian and MGM, but only in relatively small amount. At the end of the day, the defendant said he couldn’t quite remember how he had disposed of the full $2.5 million.

215.  It was put to the defendant that he himself had reasonable grounds for believing that the money he deposited into his Hann Seijiro HSBC account in the period 18^th November 2011 to 25^th June 2013 which amounted to $21,745,018 were proceeds of an indictable offence. The defendant disagrees.

216.  It is the defendant’s evidence that all the deposits were related to the defendant’s gambling activities.

217.  It was put to the defendant that the two deposits of $500,000 into his SCB account represented wholly or in part, directly or indirectly proceeds of an indictable offence. He disagrees.

The defendant’s passports

218.  The defendant was cross-examined on the contents of his passports, he was however able to give plausible answers as to why he used different names and the passports had different dates of birth.

219.  As for the usage of the defendant’s Korean address as his corresponding address, he explained that although he was living in Bangkok and Shanghai at the time, since the bank staff knew that the defendant is Korean, they suggested he wrote down his Korean address. Since the defendant’s family still owned the premises, the defendant did not think too much about that and put down the address when he opened the HSBC account 621-043207-888 on 18^th November 2011.

220.  It was pointed out to the defendant that he had put down he was the CEO of 3P Systems in the account opening mandate for the SCB account that was opened under the name of Colayco Peter Salas on 18^th June 2013. The defendant confirmed that he was in fact not working for 3P Systems at the time.

221.  The defendant explained that, at the time of the opening of the account, the defendant remembered that, just a few days before the opening of the account, PW1 and Yoon had mentioned to the defendant that he could work for them in 3P Systems overseas, that was why the defendant did not think much about it and just put down 3P Systems on the application form.

222.  When the defendant was asked why he was surprised when he saw that the money that was meant for the gambling trip with Yoon was deposited by 3P Systems, he explained that during the phone calls between himself and PW1 or Yoon preceding the transfer, they had asked him to write down the company 3P Systems. The defendant did not think too much about that and just did what he was told to do, that was to pick up the money and bring it to Macau and to arrange for Yoon’s arrival for the gambling. It is the defendant’s evidence that he cannot remember quite clearly what exactly was said about 3P Systems.

223.  Although the defendant was initially surprised that the money was to be sent from a company he had never heard of, he knew Yoon is rich and did not want to bother him by asking questions, or asking him his relationship with 3P Systems. The defendant did think perhaps the company owed Yoon some money and that was why it was being sent by the company.

224.  The defendant added that Chairman Yoon is 7 years his elder and has a strong character. If he gets stressed he would be upset with the defendant and that would not be good, and the defendant did not want that to happen.

225.  The defendant never asked Yoon to confirm that the USD$693,000 that was deposited by 3P Systems into the defendant’s personal account was legitimate. As long as Yoon said money was going to be transferred, the defendant did not think too much and just did what was asked of him. The defendant trusted Yoon and so he did not care about asking Yoon about the source of the money, nor the fact that the money had come from 3P Systems’ company account and not Yoon’s personal account.

226.  It is the defendant’s understanding that most of the big gamblers have their own stories or background, the defendant did not know and did not care, he just arranged as he was told to. Yoon never gave any reason to the defendant as to why he needed to remit the money to the defendant’s Hong Kong account rather than, say, bring a banker’s check, nor did the defendant ask.

227.  The defendant believes that Yoon had a strong relationship with 3P Systems, meaning that he believes that Yoon supported 3P Systems’ business running cash flow and had power of operating the company, like a shadow holder owner of the company.

DW2 Mr. Ahn Sung Hyuk

228.  Mr. Ahn runs a registered company that provide travel arrangement between Macau and Korea. He knows the defendant by the name of Saelo Somkit. He also knows that the defendant holds more than one passport.

229.  They first met in 2008 when the defendant went to Macau. Mr. Ahn was the person who made the hotel arrangement for the defendant on that occasion. The defendant was together with 7 other people. Mr. Ahn also made arrangements for the defendant to go shopping, visiting nightclubs, sightseeing and gambling in casinos.

230.  A friendship developed between them. Mr. Ahn came to find out that the defendant was a serious, high stake gambler when they gambled together. The defendant won a lot and he managed his winnings well.

231.  Mr. Ahn also heard from the defendant that he had big businesses in Korea and Thailand. The defendant talked about managing duty free shops. Mr. Ahn had visited Thailand twice and had seen the defendant’s shop.

232.  Mr. Ahn had seen the defendant in Macau several tens of times. All the occasions were related to gambling. The defendant stayed at The Venetian, Galaxy or Jimei Hotel. Mr. Ahn knew that the defendant used his Marshall Islands passport at both the hotels and the casinos.

233.  As for the defendant holding more than one passport, it is Mr. Ahn’s evidence that he had personally seen many Korean businessmen with more than one passport, and in different names as well.

234.  Mr. Ahn’s work included taking clients to the VIP rooms of the casinos and to make travel arrangements for them. That was how he would have contact with his clients’ passports and knew about multiple passports in different names.

235.  Mr. Ahn had personally seen the defendant gamble more than HKD$10 million at one time, the defendant would gamble on average $2 to $3 million.

236.  In the time that Mr. Ahn came to know the defendant, he came to know that the defendant maintained a safe deposit box in the head office of HSBC in Central, Hong Kong.

237.  Mr. Ahn escorted the defendant to the ferry terminal in Macau most of the time, because he was working as an agent for VIP customers, and Mr. Ahn was expected to accompany them even when they go to Korean restaurants.

238.  Mr. Ahn had seen the defendant work with junket agents himself. When the defendant won money from gambling, the junket agents would transfer the money to Hong Kong. The defendant would give the money to the junket in cash and then for them to transfer to Hong Kong.

239.  Mr. Ahn had seen the defendant bring his cash winnings from Macau to Hong Kong on several occasions. Mr. Ahn was escorting the defendant to the terminal or even to Hong Kong on those occasions. Mr. Ahn had seen a lot of other gamblers taking cash from Macau to Hong Kong when he travelled with them.

240.  Most of Mr. Ahn’s customers are Koreans and there are no Korean banks in Macau. There is however several branch offices of Korean banks in Hong Kong. The other reason they carry the cash to Hong Kong is to avoid paying the one percent commission to the agent, which is payable if the money is transferred via the account of the junket agents in Macau, and would have to wait for two hours until it can be confirmed that the transfer was completed.

241.  In February 2012, Mr. Ahn had gambled together with the defendant in Macau at the Jimei Casino. Mr. Ahn knew that the defendant lost a lot of money on that occasion. As far as Mr. Ahn was aware, it was about HKD$7 million. The defendant was upset.

242.  Mr. Ahn visited the Philippines together with the defendant in 2010 for investment purpose.

243.  Mr. Ahn also knows about a man by the name of Byun, PW1 in this case. He first saw PW1 in Korea about 4 years ago, when PW1 told Mr. Ahn that he worked as an agent doing business with companies, involved in the selling and purchasing of stock in companies.

244.  In October 2013, PW1 called Mr. Ahn to accompany him to visit the defendant in Lai Chi Kok Reception Centre in Hong Kong. Mr. Ahn agreed and went together with PW1 two times. Mr. Ahn understood that PW1 wanted to see Danny (this is how Mr. Ahn addresses the defendant) because he was worried about his well-being.

245.  It is Mr. Ahn’s evidence that they greeted each other at the meetings and talked about acquaintances relating to the business. The defendant requested Mr. Ahn to get the records of his gambling from Galaxy and Jimei on his behalf.

246.  The defendant prepared an authorization letter through his legal representatives and Mr. Ahn requested the staff in Galaxy and Jimei to provide him with the records but they refused. They said that the defendant had to make the request in person.

247.  According to Mr. Ahn, PW1 had told him that the defendant was arrested and detained in Hong Kong due to the overseas investment for 3P Systems. He was told nothing else.

248.  Mr. Ahn also know Chairman Yoon very well. He is a big businessman in Korea and manages several companies. Mr. Ahn had gone drinking together with Chairman Yoon several times in the Gangnam district in Seoul.

249.  Some time between 5^th and 9^th June 2013, Mr. Ahn took part in a video call with the defendant and Chairman Yoon. Mr. Ahn and the defendant were at the defendant’s house in Phuket. They discussed about Yoon going to Macau around the end of June to gamble and Chairman Yoon asked Mr. Ahn to take care of this in Macau.

250.  Mr. Ahn had heard of a company called H1 BIO, the name of this company was printed on the name card he received from PW1 when he first met him 4 years ago in Korea. PW1’s job title was stated as the CEO.

251.  At the request of the defendant’s lawyer, Mr. Ahn caused a search to be done on H1 BIO in Korea and produced the search result. According to this document, PW1 is listed as a director and CEO of H1 BIO. The document is exhibited as D-1, but it is in Korean and there is no official translation. The court interpreter was however able to confirm that a Mr. Byun is stated as Director at page 3 of the document, as highlighted.

252.  Also according to the court interpreter, the name H1 BIO appears on the 11^th line of page 8 of the document, and Byun is shown as director of H1 BIO on page 3 and 4, as highlighted.

253.  In cross-examination, Mr. Ahn confirmed that there was no talk of money at all when he and PW1 visited the defendant at Lai Chi Kok Reception Centre.

254.  Mr. Ahn also confirmed from his own personal experience that, because he is a foreigner in Macau, he was not allowed to deposit money into his own HSBC account in the Macau HSBC branch even if he also has an account in Hong Kong HSBC. Mr. Ahn was only able to withdraw money from his Hong Kong HSBC account through use of the ATM, which has a daily withdraw limit of $20,000 to $30,000.

255.  It is Mr. Ahn’s evidence that he works as a sub-junket on the junket in the casino and so he also had a relationship with the junket rooms in the casinos in Macau. From his experience in the VIP junket rooms, the winnings are given to the customers in cash, which would normally be carried by the customers themselves with their friends.

256.  If someone won millions and wanted to bring the money to Hong Kong but did not want to carry the cash, there are thousands of agents in Macau who can transfer the money to China or Hong Kong for a commission. The agents are always around and there are several hundred pawnshops inside the casino and they will handle the matter for the clients.

257.  In the 7 years that Mr. Ahn had worked in the casino, he had never heard someone asking for a check from the casino. It had always been cash.

258.  According to Mr. Ahn, in Macau, $10 million is not that big an amount. Someone can even bring $70 million worth of chips to cash in and it would immediately be done. The gamblers can either receive their winnings all in cash or they can give the chips from the casino to the agent directly and then the amount will be transferred to the gamblers’ bank account within 2 hours.

259.  Mr. Ahn was shown the accountants’ report and referred to the names of the companies that deposited money into the defendant’s Hong Kong HSBC account. Mr. Ahn explained that in Macau, even between agents they don't know their real names, so it was impossible that he would know any of the names of the account holders. Mr. Ahn did not recognize any of the depositors in the report, despite the fact that on the occasions that the defendant chose to have money remitted into his Hong Kong bank account Mr. Ahn had helped him identify an agent who would assist him that way.

DW3 Dr. Elsa Espirito Santo

260.  The defendant closed his case after Mr. Ahn’s evidence and the case was adjourned for closing submissions. However, the defence later applied to re-open their case and requested an adjournment for Letters of Request to be issued in order to obtain evidence from staff members of certain casinos to show the extent of the defendant’s gambling. The case was adjourned and eventually after almost one year, the defendant’s case was finally re-opened and Dr. Santo called as their final defence witness.

261.  Dr. Santo is a lawyer licensed to practice in Macau. Dr. Santo was instructed by Hann Seijiro, the defendant, to apply to the VIP rooms at the casinos where the defendant used to frequent for documentary records to prove the defendant’s gambling and his winnings.

262.  A Power of Attorney was prepared by the defendant in favour of Dr. Santo, who was then instructed to obtain documents from the relevant casinos.

263.  Dr. Santo then approached the lawyers representing the VIP rooms of Galaxy casino and requested for documents in relation to the defendant’s gambling at their premises. Dr. Santo received the letter as exhibited as D-2 from the lawyers.

264.  Dr. Santo however did not receive any reply from Jimei casino although she had sent the same letter and made the same request regarding her client.

265.  Dr. Santo received the documents in the end of 2014. She passed on the document to the defendant who then passed them on to Mr. Krishna, his Hong Kong solicitors.

266.  The original letter is in Portuguese and Dr. Santo arranged for an official translation into English. The contents of the letter show a Mr. Hann Seijiro as a member of Galaxy Casino, S.A. with a date of birth of 31^st March 1972. The total turnover recorded is $298,822,500.

Findings

267.  The burden of proof is on the prosecution, it is for them to prove beyond reasonable doubt the elements in each of the three charges.

268.  The defendant is of clear record and I have to take that into consideration when considering his propensity to commit the offences as alleged, as well as his credibility as a witness.

Credibility and reliability of witnesses

269.  I find Mr. Ahn and Dr. Santo both honest and reliable witnesses. I find their evidence corroborated that of the defendant. I find that the defendant is telling the truth when he said that he gambled heavily at various casinos in Macau during the charge periods in charges 4, 5 and 6.

270.  As for the letter from Galaxy Casino, S.A. as exhibited through Dr. Santo for the defence, I find that the letter contains hearsay evidence and as such cannot be used to prove the truth of its contents.

271.  However, Dr. Santo’s evidence goes to show that the defendant had actively tried to obtain his gambling records from Galaxy and Jimei casino, the two major casinos that he had gambled at and whose payments he claims are related to the deposits made to his Hong Kong bank accounts.

272.  Dr. Santo’s evidence thus corroborates the defendant’s assertion that he had been trying very hard to obtain the requisite records but it had been very difficult and not always successful. This goes to the credibility of the defendant.

273.  In relation to the prosecution witness Mr. Byun, I find that he is not an entirely truthful witness for the following reasons.

274.  Mr. Byun’s answers given in relation to the fundraising operation for 3P Systems are too simplistic. The Term Sheet Agreement and the Escrow Agreement Contract he produced in support of his story in relation to the fundraising are incredible on the face of them for the following reasons.

The “Term Sheet Agreement”

275.  I find the contents of the Term Sheet Agreement difficult to make sense of.

276.  First, the agreement referred to “key excerpts” from the “three-party Agreement which established the Foundation”. PW1 never referred to the contents of this three-party Agreement, or the establishment of the Foundation. The three-party Agreement is not produced into evidence.

277.  The following statements then appear on the first page of the Term Sheet Agreement:

“AND WHEREAS the Government of Hong Kong desires to establish a Fund for IT and sciences in 2000;

AND WHEREAS the HMOS and the Minister desire that this Agreement set forth the terms and conditions under which The Hong Kong Foundation for IT administer, invest and disburse the funds received by it;”

278.  The acronym “HMOS” is not defined or explained in the Term Sheet Agreement. The “Minister” is not identified in the document either.

Involvement of the Hong Kong Government

279.  The following clause appears at page 4 of the Agreement:

“Transfer of the amount

The Amount of U.S.$10.5 million will be made available to HMOS by the Government of Hong Kong as an endowment to establish the Hong Kong Foundation for IT.

A Funding Agreement of the Gemny fund, the Foundation, and the Government of Hong Kong, henceforth referred to as the Agreement, for a grant to be directed to the Foundation will be signed by the parties upon the announcement by the Government of Hong Kong of the approval of the grant funds.”

280.  The figure “US$10.5 million” is the amount mentioned by PW1 in his evidence as being raised. It would therefore appear that according to the Term Sheet Agreement the money is going to come from the Hong Kong Government.

281.  PW1 never mentioned anything about the involvement of the Hong Kong Government in the fundraising activities for 3P Systems, nor that the fund being raised was coming from them. Furthermore, for an agreement involving the Hong Kong Government making available the equivalent of HKD$82 million to an unnamed party, it is extremely shoddy and rudimentary.

282.  Furthermore, the second part of the above clause suggests that a Funding Agreement is a different document to the Term Sheet Agreement and is yet to come into existence at the time of the signing of the Term Sheet Agreement. Yet, under the heading of ‘Severability’, the following clause appears:

“In any provision of this Funding Agreement is determined to be invalid or unenforceable by an arbitrator or a court of competent jurisdiction from which no further appeal lies or is taken, that provision shall be deemed to be severed there from and the remaining provisions of this Funding Agreement shall not be affected thereby and shall remain valid and enforceable; provided that in the event that any portion of this Funding Agreement shall have been so determined to be or become invalid or unenforceable (the “offending portion”), the Parties shall negotiate in good faith such changes to this Funding Agreement as will best preserve for the Parties the benefits and obligations of such offending portion. ”

283.  The wording of this clause suggests that this Term Sheet Agreement is also at the same time the Funding Agreement. It is not clear at all why the agreement is so drafted. This anomaly exists in other clauses including that under the headings “Governing Law” and “Relationships of Governing Law”.

284.  I find it also dubious that, should the Hong Kong Government really be involved in the funding exercise, the following clause would be adopted in the agreement:

“Governing Law

This Funding Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the [illegible] of Canada applicable therein.”

285.  Why would a Korean company in need of funding be able to manipulate the Hong Kong Government into accepting the terms of such an Agreement? It is not disclosed what the Government is getting in return for making USD$10.5 million available to “HMOS”. I find the arrangement depicted in this Term Sheet Agreement illogical and unconvincing.

286.  This document is an exhibit introduced by the prosecution. They rely on the document to support the testimony of PW1 in relation to the fundraising exercise involving 3P Systems, PW1, Hann, Kevin Koo and the defendant.

287.  It is the prosecution’s case that there was a legitimate fundraising exercise going on between the parties, as evidenced by the Term Sheet Agreement. It is PW1’s evidence in court that the Term Sheet Agreement was the document governing the fund raising as between 3P Systems and Gemny.com Holdings Limited.

288.  The only evidence, apart from PW1’s oral evidence, that the prosecution has to prove that such a fundraising agreement existed is by way of this Term Sheet Agreement. Yet, as pointed out above, this agreement does not appear to be a genuine fund raising agreement.

289.  Furthermore, as analysed above, the contents of this Term Sheet Agreement border on the nonsensical and is likely not to be legally binding on the signatory parties.

290.  None of the signing parties gave evidence and there is therefore no admissible evidence as to the authenticity of the signatures either.

291.  I find that the only part of the Term Sheet Agreement that makes sense is the part providing for the payment of consulting and lawyer fees to “the Mo & CO., Peter Law firm”:

“Conditions

Completion of the Numbering Warrant and Purchase coupon is conditional upon the following:

The fees of 6%, out of US$10.5 million – KRW won including consulting and lawyer fees must be paid to the Mo & CO., Peter Law firm before investing US$10.5 million to Korean Bank.

Bank account of 3PS systems information: CITI 558-01401-244-01”

292.  Even here, the shoddiness of the agreement is apparent. First of all, the name of the bank account is wrongly stated as “3PS systems”. Secondly, there is no evidence to show whether this is a 3P Systems company account or whether it is the bank account of ‘Mo & Co., Peter Law firm’.

293.  It is my finding that this so called Term Sheet Agreement does not corroborate the evidence of PW1 and does not prove the existence of a USD$10.5 million fundraising agreement involving 3P System and Gemny.com Holdings Limited.

The “Escrow Agreement Contract”

294.  First of all, I find that clause 1 of the document that has been exhibited looks doctored. The spacing and fonts of the banking information and account number look to have been added on afterwards. The produced document is not the original evidence and there is no way for the court to see why such is the case.

295.  Secondly, there is a document attached to the Contract entitled ‘Explanatory Note’, apparently made by one ‘Lee Seung Yeup’, the Senior Manager of the Management and Support department of 3P System (LTD). Lee Seung Yeup did not give evidence and the contents of this ‘Explanatory Note’ are inadmissible.

296.  The signatories of this Contract are one Woon Ho Roh of 3PSYSTEM CO., LTD (against a company chop), and someone apparently representing a ‘Mo & Co, Peter Law Firm’. It is not certain from the wordings on the last page whether it was a Peter Law who signed for the firm. There is an illegible scribble underneath the chop of ‘Mo & Co, Peter Law Firm’. 

297.  Clause 1 of the Contract is as follows:

“1. “A” agrees to open Escrow to pay consulting fees and cost to “B” which equivalents of sum of US$330,000.00 initial deposit (including Taxes).

The banking information and account number is as follows:

BANK NAME: HSBC

Address : Head Office 1 Queen’s Road Central Hong Kong

SWIFT : HSBCHKHHHKH

Account number 戶口號碼: 813-738119-833

Full Name 全名: COLAYCO, PETER SALAS”

298.  Nowhere in this Escrow Agreement Contract is it set out who parties “A” and “B” are. The Term Sheet Agreement does refer to parties A and B as 3P Systems and Gemny.com Holdings Limited respectively. Gemny.com is however referred to as the investor in the Term Sheet Agreement and it is unclear whether the parties to the Escrow Agreement Contract are the same two parties “A” and “B”.

299.  There is no reference in this Escrow Agreement Contract to either the Term Sheet Agreement or the three-party Agreement referred to in the Term Sheet Agreement.

300.  The only condition that is set out pertaining to the escrow is at paragraph 4:

“4. Completion

4.1 Placing of shares will be completed on the completion date.

4.2 The listed company hereby represents and escrow to the investor that:

(a) The performance of this agreement will be protected under Mo & Co., Peter Law Firm.”

301.  There is no paragraph (b) under 4.2 of the Contract.

302.  Even when read in conjunction with the Term Sheet Agreement, it is not clear to which company the placing of shares is related to, or whether the company is in Hong Kong or elsewhere.

303.  I find that this so-called Escrow Agreement Contract is as shoddily drafted and presented as the Term Sheet Agreement. I find that there is serious doubt as to the authenticity and validity of this document. For the same reason as with the Term Sheet Agreement, I find that the prosecution cannot rely on this document to corroborate the evidence of PW1. That is to say, it does not serve as evidence to prove that there was in fact an agreement between 3P Systems and Gemny.com Holdings Limited for Mo & Co. Peter Law Firm to escrow the stated amount of money payable upon meeting certain conditions.

PW1’s evidence in general

304.  I find first of all that, based on the evidence of Mr. Ahn and the defendant, PW1 and the defendant had met before and that they had worked together for some time. I find therefore that PW1 must be familiar with the voice of the defendant.

305.  It is PW1’s evidence that he had talked with ‘Hann’ over the phone. I find it inherently improbable that, if the defendant was the same person, that PW1 would not be able to identify the voice of the defendant. Therefore, on the issue of whether the defendant or PW1 is telling the truth about how well they know each other, I find that the defendant was telling truth.

306.  I find PW1’s answer, when being asked on the topic, evasive and it is obvious that he was not telling the whole truth about his relationship with the defendant.

307.  I also find PW1 not telling the truth about the role that this Chairman Yoon plays in the whole alleged fundraising operation. PW1 was very quick to protect Yoon when asked about Yoon’s involvement and was obviously trying to divert the court’s attention away from Yoon.

308.  I also find that if PW1 really did think the defendant was the person who had deceived 3P Systems into paying the $5 million odd as commission payment, it would be impossible for him not to ask the defendant about the money when he went to visit the defendant at Lai Chi Kok Reception Centre. Yet, based on the evidence of both the defendant and Mr. Ahn, PW1 only cared about the well-being of the defendant and never mentioned anything about the money during the two visits.

309.  I find that there must be more to the whole arrangement of the payment of money into the defendant’s Colayco Peter Salas account in relation to charge 6 than what PW1 had told the court.

The defendant’s evidence

310.  Be that as it may, it is not for me to speculate as to what was really going on between PW1, the defendant and 3P Systems. It remains for the court to consider the movement of the money into and out of the defendant’s various bank accounts, being the reasonable grounds that the prosecution say would cause the defendant to believe that the money represented proceeds of an indictable offence.

311.  Although I do find the defendant’s opening of multiple accounts with different banks in Hong Kong under different names with different passports highly suspicious, the issue to be considered is whether, knowing the movement of the money in and out of the accounts, a person would have reasonable grounds to believe that the money involved represented proceeds of an indictable offence.

312.  Based on my findings on the defendant’s evidence, as well as his defence witnesses’ evidence, there is a possibility that the money involved were in fact related to the defendant’s gambling.

313.  I find it not inherently improbable that the defendant would not know the name of the companies depositing the money into his account, given his evidence that the money was from his gambling in Macau. All that the defendant would care about is that the money shows up in his account after he had handed over the cash to the agents in the Macau casino.

314.  Although it is suspicious that the defendant would be carrying cash from Macau to deposit them to Hong Kong bank accounts, but if I find that the defendant might be telling the truth, then there is no grounds to believe that the money represented proceeds of an, or any, indictable offence.

315.  Since I accept Mr. Ahn’s evidence as to the reason why a lot of gamblers might prefer receiving cash from the casino and carrying the cash away to waiting for transfers and having to pay a commission to the transfer agents, there must be a doubt as to whether the money being deposited into the accounts represented proceeds of an indictable offence.

316.  It is only if I rejected the defendant’s version of fact that I will then have to proceed to consider whether someone would have reasonable grounds to believe that all the money represented proceeds of an indictable offence. As that is not the case, the prosecution would not be able to rely on the drawing of inferences based on circumstantial evidence to seek to prove that anyone would have reasonable grounds to believe that the money represented proceeds of an indictable offence.

317.  Despite the suspicious activities in relation to the opening of the accounts and the large sums of cash deposits and withdrawals, I find that the defendant might be telling the truth about how he had been gambling heavily in Macau and had been bringing over cash to Hong Kong; having money transferred from Macau to Hong Kong through the use of junkets at the VIP rooms of the casinos that he gambled at.

318.  I also accept the defendant’s evidence as to his businesses in Thailand and the Philippines and how he would from time to time need to travel there and to have money transferred there for business purposes.

Individual charges

Charge 6

319.  I accept the evidence of the defence witnesses, as well as the defendant’s as to his gambling habits. I also accept that this Mr. Yoon character existed and that he would from time to time go gambling with the defendant. I find that the defendant’s story about how Yoon had agreed to lend him some of the money for gambling not incredible. Although the amount seems a lot to a normal person, given the perceived wealth of Yoon and the defendant’s past dealings with Yoon, I find that it is not the case that a reasonable person would believe that the deposits into the defendant’s bank account represented proceeds of an indictable offence.

320.  I also accept the defendant’s explanation for the withdrawal of the money and handing them over to a Mr. Kim for him to bring over to Macau. Again, given the past history and dealings between the defendant and Yoon and the perceived wealth of the latter, I find that a reasonable person would not necessarily believe that the money represented proceeds of an indictable offence.

321.  For those reasons, I acquit the defendant on charge 6.

Charge 4 and 5

322.  Since I find that the defendant might be telling the truth about his gambling activities and how he would carry cash back from Macau, have them deposited into his one account and moved to another account, and how he would from time to time make withdrawals in cash to bring over to Macau for gambling, I find that, there is no ground for the reasonable person to believe that the money that went in and out of the relevant bank accounts represented proceeds of an indictable offence.

323.  The prosecution is alleging serious wrongdoings on the defendant’s part. In the present case, I find that it is not enough just to point out that there were deposits and withdrawals in large amount and then ask the court to draw the irresistible inference that the reasonable person would have reasonable grounds to believe that the money represented proceeds of an indictable offence, given that there is evidence from the defendant and his witness to show that there is the possibility that the movement of money in and out of the accounts were for the defendant’s gambling or other legitimate purposes.

324.  I find that based on the defendant’s evidence that is accepted, there must be a reasonable doubt as to whether the defendant had reasonable grounds to believe that the moneys wholly or in part directly or indirectly represented proceeds of an indictable offence.

325.  I find that the benefit of the doubt must be granted to the defendant and I acquit him of charges 4 and 5 as well.

Conclusion

326.  The defendant is therefore acquitted of charges 4, 5 and 6.