HKSAR v. YEUNG KIN CHAI

CACC 341/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 341 OF 2008

(ON APPEAL FROM DCCC NO. 876 OF 1997)

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J U D G M E N T

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Hon Beeson J (giving the judgment of the Court):

1.  On 31 March 2009 we heard this application for leave to appeal and reserved our decision for judgment to be handed down.  Our judgment follows.

2.  The Applicant pleaded guilty in the District Court before Judge d’Almada Remedios to one charge of dealing with property known or reasonably believed to represent the proceeds of an indictable offence and one charge of failing to surrender to custody without reasonable cause.

3.  He was sentenced to 2 years 4 months’ imprisonment on the first charge and 6 months’ imprisonment on the second charge.  The sentences were ordered to run consecutively, making a total of 2 years and 10 months’ imprisonment.

4.  The Applicant applied for leave to appeal against sentence only on the first charge.  No complaint was made about the 20% discount given for the late plea of guilty; nor was any issue taken about the sentences being made consecutive.

5.  The facts underlying the charges and admitted by the Applicant were that Mr Hui Chao-tak (PW1) was the proprietor of a transport business carrying goods between Hong Kong and the Mainland.  In April 1995 he delivered goods to the mainland for a Mr Ng.  In January 1996 Mr Ng asked him to do another delivery.  He was told that the goods were computer parts worth $1 million approx.  PW1 was to be paid a transportation fee of $163,000 and a commission of $35,000.

6.  It was a trade practice that a cashier order would be issued as security in favour of the company to which goods were consigned.  After delivery was effected that company would return the cashier order and pay the transportation fee and commission.

7.  Accordingly, Mr Ng told PW1 to give a cashier order in the sum of $500,000 to Ng’s company as security; it was to be made out in the name of Yeung Kin-chai i.e. the Applicant.  Mr Ng told PW1 that Yeung Kin-chi was the name of his boss’s wife.  PW1 issued 2 cashier orders, each with a face value of $250,000.

8.  On 19 January 1996 arrangements were finalised between PW1 and Mr Wong, who was Mr Ng’s boss.  Mr Wong gave PW1 a receipt for the cashier orders and PW1 went to deliver the goods.

9.  In the afternoon of the same day the Applicant cashed both cashier orders.  To negotiate the orders he opened an account with the bank in his own name, deposited the orders and immediately withdrew cash of $500,000.

10.  Next day PW1 tried but was unable to contact Mr Ng.  The bank then advised him that the orders had been cashed.  PW1 contacted Mr Wong by telephone and Mr Wong promised to deposit the money into his account.  No deposit was ever made and Mr Wong could not be contacted thereafter.  PW1 learned then that the consignment was comprised of worthless parts.

11.  Immigration Department records showed that the Applicant left Hong Kong for China on 20 January 1996 and returned on 23 January 1996.  He was arrested in June 1996 on his return from a trip to Taiwan.  He admitted having been instructed by Mr Lee, whom he described as a mainlander, to deposit the cashier orders and withdraw the money.  He claimed that he had been paid $5,000 to do so.

12.  PW1’s trial on Charge 1 was fixed for 29 and 30 October 1997 and he was admitted to court bail.  He attended trial on the first day, but not thereafter.  An arrest warrant was issued, but the Applicant was not re-arrested until May 2008.  The Applicant did not surrender voluntarily, but was transferred as a serving prisoner from Macau, to Hong Kong to complete his sentence for a burglary he had committed in Macau.

13.  The Applicant had a criminal record for offences of dishonesty, which began in 1983 with a robbery conviction for which he was sentenced to 3 years’ imprisonment.  In 1986 he went to prison for 3 years for an offence of burglary.  In 1988 he was imprisoned for 2 years 3 months for another burglary offence.  In May 2007 he was sentenced, in Macau, to 2 years 6 months for burglary.  He was returned to Hong Kong on 24 April 2008 under the Transfer of Sentenced Persons Ordinance, Cap 513, to complete his sentence.

14.  The sole ground of appeal was that the starting point of 3 years’ imprisonment adopted by the judge for Charge 1, was manifestly excessive given the facts of the case.  Miss Monica Chow, who appeared as counsel for the Applicant on sentence and on appeal, accepted that there were no sentencing guidelines for money laundering cases, but referred the judge and this court to a number of cases, decided between 2002 and 2008, to support her submission that the case did not warrant a 3-year starting point.

15.  In mitigation counsel had submitted that the Applicant did not know Mr Ng or Mr Wong, the main players in the scheme; that he had become involved through Mr Lai simply to deposit and withdraw the funds and that he had been paid only $5,000 for his assistance.

16.  Counsel submitted on appeal that the judge had accepted that the scheme was not sophisticated, that the Applicant was not the prime mover; that the sum was not large; that there was no international element; that it was a single transaction and that the Applicant, inevitably, would have been traced easily because he had used his own identity card to open the account.

17.  It is not clear from the Reasons for Sentence whether the judge had accepted all those factors as cogent mitigation, or whether she was repeating what counsel had said.  [RFS paras 15, 16 and 17].  She did note that the sentences in the cases referred to, ranged in length from 18 months to 4 years and that the sums laundered were much greater than in the present case.  Those cases, overall, showed that the courts regarded money laundering offences as very serious; the judge took that into account in adopting a 3-year starting point.

18.  As a matter of general principle, in a money laundering offence the amount of money laundered is highly relevant on sentence.  Other features that render the offence more serious are the length of time the laundering has subsisted; the degree of sophistication of the laundering scheme; the number of people involved or affected and what is referred to as ‘the international element’.  Such sentences properly contain an element of general deterrence.

19.  Money laundering is considered a serious and damaging offence as shown by the maximum sentence of 14 years’ imprisonment.  In HKSAR v Xu Xia Li and Ching Yu Chiu, CACC 395/2003, a case referred to by Miss Chow and which had involved transactions between Hong Kong and Canada, Mr Justice Woo JA stated;

“The prohibition of the offence is to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities.  Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced.  Money laundering is therefore treated as a serious offence.  If money laundering offences were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong’s reputation as a world class financial and banking centre.”

20.  Having considered the facts however we are of the view that although this was a money-laundering charge, the offence was less serious than most.  For that reason the sentence imposed does not sit comfortably with those in cases referred to us where lower penalties were imposed for more serious offences.

21.  A cross-section of money laundering cases, heard over the last seven years, was summarised by Miss Chow and we set out some of those cases where the sentences appear low.

HKSAR v Lam Hei Kit CACC 84/2003 (9^th January 2004)

The applicant was convicted after trial of two offences of money laundering and two offences of possessing unlawfully obtained travel documents.  The two money laundering offences involved HK$1.78 million and US$120,000.  The applicant received concurrent terms of two years’ imprisonment for the money laundering offences.

HKSAR v Cheung Kam Lun CACC 15/2003 (2^nd March 2004)

The applicant was convicted after trial for conspiring to launder proceeds, said to be $5 million, from smuggling illegal immigrants.  The laundering was done through casinos in Macau, for 2% commission on the amount laundered.  In adopting a starting point of three years, the trial judge noted that the scheme was sophisticated, difficult to detect and had an inter-jurisdictional element.  The Court of Appeal dismissed an appeal against sentence as the applicant played a pivotal role in the execution of a sophisticated scheme.

HKSAR v Choi Sui Hey CACC 277/2007, CAAR 10/2007 (17^th October 2008)

The Court of Appeal considered a starting point of three years appropriate, after trial, where the applicant had laundered HK$1.1 million to Fiji over a six-month period, with a further HK$750,000 to be similarly remitted.”

22.  That leaves us to consider this Applicant’s proper sentence.  His offence was a single transaction involving a simple transfer procedure.  Comparing his sentence with those of other offenders involved with much greater sums of money, and more sophisticated, longer-running schemes, we feel some reduction in sentence is justified.  We do take the point made by Mr David Leung, who appeared for the Respondent, that this offence occurred in 1996 when the sum of $500,000, would be considered more substantial than it would be now.  Taking all matters into account we consider a starting point of 30 months would be appropriate.

23.  The only mitigation of any weight was the Applicant’s plea of guilty for which he was given a 20% discount, assessed after the judge had taken into account his failure to surrender to custody and about which no complaint has been made.  We retain that discount.

24.  Accordingly we grant the application for leave to appeal and treating this hearing as the appeal itself, we allow the appeal, quash the sentence imposed by the judge on Charge 1 and substitute therefor a sentence of 2 years’ imprisonment.

25.  The 6-month sentence on Charge 2 remains unchanged, as does the order making the sentence on Charge 2 run consecutively to Charge 1.