HKSAR v. WONG CHIU SANG

DCCC 741/2024

[2025] HKDC 745

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 741 OF 2024

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REASONS FOR SENTENCE

The defendant pleaded guilty to a charge of "Dealing with property known or believed to represent proceeds of an indictable offence". In short, he allowed a relative to use his bank account.

Summary of Facts

2.  On 13 August 2020, the defendant opened a bank account (No.97386710821)  with the Standard Chartered Bank (Hong Kong)  Limited ("the SCB Account").  He was the sole signatory of the SCB Account.  On the opening mandate, the defendant stated that he was a "manager/ executive" of a medical company in the "personal services, retail & wholesale" industry.

Deposits and withdrawals

3.  Between 13 August and 31 October 2020, the SCB Account received 15 deposits (by way of transfer from other bank accounts), which aggregated to a sum of HK$1,709,319.28. All 15 deposits were immediately withdrawn upon receipt by the account.  During the same period, the SCB Account also received 36 deposits (by way of transfer from other bank accounts), which aggregated to a sum of US$567,429.67.  All 36 deposits were immediately withdrawn upon receipt by the account.

4.  Based on the nature and pattern of the transactions of the SCB Account, the prosecution alleges that it was used as a temporary repository of funds; and the money remitted into the account did not commensurate with the defendant's personal and financial background.

5.  The defendant now admits that during the offence period, he had dealt with the sums of HK$1,709,319.28 and US$567,429.67, knowing or having reasonable grounds to believe that the said sums, in whole or in part, directly or indirectly, represented any person's proceeds of an indictable offence.

Mitigation & Sentence

6. The defendant is 52 and has a clear record. Defence solicitor Mr. Tsoi informed me that the defendant is married with a son (aged 19), who is a university student. Since 2023, the defendant has been employed by a drug store in Sheung Shui earning about $18,000 per month. He is the sole breadwinner of his family.

7. In mitigation, Mr. Tsoi explained that the defendant has a nephew surnamed Xu in the mainland who ran an import and export business. Around August 2020, Xu asked him to open a bank account in Hong Kong to facilitate Xu's business transactions. Without giving too much thought to the matter, the defendant agreed to help. After opening the SCB Account, he gave Xu its account number and details. All withdrawals were carried out by the defendant in accordance with Xu's instructions. He performed all transfers and, when required, withdrew cash and handed it over to Xu. After the defendant was arrested, Xu has cut off all contacts. Mr. Tsoi submitted that the defendant is truly remorseful. His imprisonment would no doubt have a devastating impact on his family.

8. The prosecution has applied for an enhanced sentence pursuant to section 27(2)(c)  and (d)  of the Organized and Serious Crimes Ordinance (Cap.455)  on the basis of prevalence as well as the nature and extent of harm caused to the community. Mr. Tsoi has no objection for the enhancement.

9. I bear in mind the Court of Appeal's decision in HKSAR v Xu Mai Qing CACC 464/2005, whereas Yeung JA (as he then was)  held "Under section 27(11)  of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences[1]."

10. I have read the witness statement of CIP Li dated 18 Feb 2025. I am satisfied that in 2020, money laundering cases were prevalent in Hong Kong in terms of the number of cases as well as the total value of monetary loss.

11. There is clear and cogent evidence before me that money laundering by bank accounts opened by "ML Stooges" is still widespread and commonly being practised in Hong Kong today. What true criminals need are gullible scapegoats like the defendant who would take the blame for them when the law enforcement takes action. The court must send a clear message to the general public that people who play the role of "ML Stooge" will receive severe punishment, so that there is a deterrent effect. When there are fewer or no willing "ML Stooges", the criminal activities which rely on their bank accounts would fail.

12. This is a typical case of money laundering by way of a stooge bank account. The defendant claimed that he had mistrusted a relative during the offence period; however, the money laundering plan would have been meaningless without the SCB Account. Assuming what the defendant said is true, given his role, the total sums which went through the SCB Account and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 25%.

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

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[2]

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

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

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[3]

16. In the present case, there is no evidence showing that: (i)  the funds received by the SCB Account were related to any predicate offence; and (ii)  either the defendant was involved in or had any knowledge of any predicate offence.

17. On the other hand, I cannot overlook the fact that almost HK$1.71 million and US$720,000 (i.e. approximately HK$7.32 million[4] in total)  went through the SCB Account within a period of less than 3 months. By letting someone use his bank account and thus allowing funds of unknown origins to pass through the SCB Account, the defendant played a pivotal role in helping the mastermind(s)  of criminal activities to access their illegal funds without revealing their identities.

18. In the circumstances, I adopt a starting point of 4 years' imprisonment[5]. With the timely guilty plea, the sentence becomes 32 months. Apart from this, I see no other mitigating factors which warrant any further reduction. With the 25% enhancement, I sentence the defendant to 40 months' imprisonment.