HKSAR v. CHAN WAI YAN

[English Translation — 英譯本]
CACC 45/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO.45 OF 2011

(ON APPEAL FROM DCCC NO.197 OF 2010)

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REASONS FOR JUDGMENT

Hon Chu JA (giving the reasons for judgment of the Court):

Background

1. The appellant was charged with three counts of “dealing with property known or believed to represent proceeds of an indictable offence” (commonly known as “money laundering”), contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455.  The appellant pleaded not guilty to the charges. On 31 December 2010, the appellant was convicted by District Judge Anthea Pang on Charges 1 and 2 and acquitted of Charge 3. Having considered the background report, on 21 January 2011, Judge Pang sentenced the appellant to 2 years and 9 months’ imprisonment on each of Charges 1 and 2, to be served concurrently.

2. The appellant applied for leave to appeal conviction and sentence.  On 8 September 2011, Yeung VP dismissed her application for leave in respect of conviction but granted her leave to appeal sentence.

3. On 1 February 2012, we allowed the appellant’s appeal against sentence and reduced the term of sentence on both charges to 21 months which were to be served concurrently.  We now provide reasons for our judgment.

Facts of the case

4. In Charge 1, on which the appellant has been convicted, she was accused of having dealt with a total sum of $1,734,005 in her account with the Bank of China (“BOC account”) between 2 January and 17 May 2004.  In Charge 2, on which the appellant has also been convicted, she was accused of having dealt with a total sum of $1,504,196.76 in her account with the Hongkong and Shanghai Banking Corporation (“HSBC account”) between 17 May and 25 January 2008.

5. The appellant was the sole authorized signatory of the abovementioned two bank accounts.  The facts agreed by both the prosecution and the defence revealed that between 2 January and 17 May 2004, the BOC account had deposits totalling HK$1,734,005 and withdrawals totalling HK$1,744,344.  Four of the deposits, involving a total sum of HK$1,692,705, were made by transfer from Taiwan through several remittance agents, and after each of these deposits was made, the appellant withdrew the remittance in cash.  On the other hand, between 17 May 2004 and 25 January 2008, the HSBC account had deposits totalling HK$1,504,196.76 and withdrawals totalling HK$1,504,147.40.  Six of the deposits, involving a total sum of HK$709,296, were made by transfer from the Mainland through a remittance agent between 19 April and 9 May 2005.  On 11 May 2005, a further sum of HK$383,663 was deposited into that account.  After each of these deposits was made, the appellant withdrew the money in cash.

6. The appellant did not dispute that she had dealt with the money in the BOC account and the HSBC account, including making withdrawals, but she denied knowing or having reasonable grounds to believe that the money concerned came from the proceeds of an indictable offence.

7. The appellant elected to give evidence.  Her testimony revealed that she got married in 1995 and had a son, but she and her ex-husband were separated in 1997.  After that she worked as a public relations hostess at a nightclub.  She became acquainted with a customer Mr Chan and they subsequently became cohabitees.  Mr Chan assumed responsibility for her and her son’s living expenses, and later the appellant also gave birth to two daughters for Mr Chan.

8. The appellant said that Mr Chan had been engaged in mobile phone business.  In April 2004, Mr Chan requested to use her bank account to receive four remittances from Taiwan.  Mr Chan had no bank account at that time because he had previously incurred business debts, as a result of which his accounts were frozen, and since then he had not opened any other bank account.  Each time after a remittance had been deposited into the appellant’s BOC account, Mr Chan would accompany the appellant to withdraw the amount in cash.  Sometimes Mr Chan paid for the appellant’s living expenses out of the withdrawn sum, but apart from that, all the money was taken away by Mr Chan.

9. On 17 May 2004, the appellant withdrew all the money in the BOC account and had the HSBC account opened on the same day.  She claimed that she had “lent” the HSBC account to Mr Chan upon his request, for the purpose of transferring money related to his Taiwan business to Hong Kong.  Between 19 April and 9 May 2005, six sums of money were transferred to the HSBC account, and the appellant said that it was only upon her arrest that she came to know that those sums of money were in fact from Mainland China.  She also said in her testimony that each time after money had been remitted to her account, Mr Chan accompanied her to the bank to withdraw the money.

10. The appellant called Mr Chan as her witness.  Mr Chan admitted that on 3 March 2009 he was convicted before the Court of First Instance on one count of trafficking in dangerous drug and was serving the sentence therefor, although he had already lodged an appeal against the conviction.  Mr Chan said that he had been engaged in trading business, that the monies transferred to the appellant’s BOC account and HSBC account were loans relating to his mobile phone business in Taiwan, and that he did not know why there were six sums of remittance which came from Mainland China.  Mr Chan also said that when he asked the appellant to let him use her accounts, he had told her the purpose thereof was to receive loans in respect of his Taiwan business.

11. The trial judge ruled that neither the appellant nor Mr Chan was a veracious and reliable witness.  The judge did not accept that the monies transferred to the appellant’s accounts were related to Mr Chan’s telephone business in Taiwan.  She found that the appellant had reasonable grounds to believe that the monies referred to in Charges 1 and 2 represented the proceeds of an indictable offence.  She convicted the appellant on both charges accordingly.

The trial judge’s reasons for sentence

12. In passing sentence, the trial judge noted that “money laundering” was a serious offence and referred to the sentencing considerations set out in the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536.  The judge took into account the fact that the four remittances in Charge 1 spanned approximately half a month, that the six transfers from the Mainland out of the seven remittances in Charge 2 spanned the best part of a month, and that following the transfer of each remittance to the appellant’s account, she and Mr Chan went in person to the bank and withdrew the money in cash.  In light of these facts, the judge considered 3 years’ imprisonment the appropriate starting point for each charge.  Having regard to the appellant’s clear record and the need for her to take care of three children single-handedly, the judge reduced the term to 2 years 9 months.  In the end, the appellant was sentenced to 33 months’ imprisonment on each of Charges 1 and 2, with the two sentences to be served concurrently.

Grounds of appeal

13. The appellant submitted that the sentence of 2 years 9 months’ imprisonment was manifestly excessive for the following reasons: (1) there was no evidence to show that she had obtained any benefit from dealing with the monies in question; (2) she had not dealt with the monies by means of complex schemes, and the offences were not meticulously planned; (3) she had cooperated with the police in their investigations and provided her personal financial documents; (4) she had agreed most of the facts at trial, which helped shorten the length of trial; and (5) she had been under tremendous stress throughout the period of more than 2 years from the commencement of police investigations in 2008 to her being convicted on 31 December 2010.

14. The appellant relied on the following cases in support of her grounds of appeal:

(1)   HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 157;

(2)   HKSAR v Cheung Po Lin,DCCC 585/2009;

(3)   HKSAR v Li Wor Sang,DCCC 126 (sic)/2009; and

(4)   HKSAR v Leung Mei Yu Rebecca,DCCC 365/2009。

15. The appellant submitted that Mr Chan was her two daughters’ father.  When Charges 1 and 2 took place, her elder daughter was already born.  In order to maintain her relationship with Mr Chan, the appellant acceded to his requests by “lending” him her accounts and assisting in withdrawing the monies. The appellant said that her case was similar to that of the applicant in HKSAR v Lai Kam Yee Teresa, in that it was only for the children’s benefit that she acceded to Mr Chan’s requests and dealt with the monies in question.

Legal principles relating to sentencing

16. We have made it clear in many decided cases that “money laundering” is a serious offence as those who take part in laundering the money not only assist in dealing with and retaining the proceeds of illegal activities and attempt to legitimize the proceeds of criminal activities, but in effect also indirectly encourage criminal activities.  It is therefore necessary to deter “money laundering” offences: see HKSAR v Xu Xia Li & Anor [2004] 4 HKC 16; HKSAR v Javid Kamran, CACC 400/2004 (date of judgment: 12 April 2005) and Secretary for Justice v Wan Kwong Keung [2012] 1 HKLRD 197.

17. No sentencing guidelines have been laid down for the offence of “money laundering” because the circumstances of the offence vary from case to case.  In general, the sentence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or any other gain.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, the Court of Appeal set out the following sentencing considerations (see paragraph 9 of the judgment):

“ (a) It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(b) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(c) The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However, if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(d) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(e)   The length of time the offence lasted.”

18. In addition, if a defendant has committed an offence for the sake of maintaining the relationship with his/her close relatives or partner, or by reason of having been used by them, the court may consider exercising its discretion to give further discount to sentence: see HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 157; HKSAR v Chiu Kit& Anor, CACC 210/2009 (date of judgment: 20 May 2010) and HKSAR v Leung Mei Yu Rebecca, DCCC 365/2009 (date of Reasons for Sentence: 20 May 2010).

Reasons for decision of this Court

19. The appellant is now aged 36 and divorced.  From her relationships with her ex-husband and Mr Chan, she has three children who are aged 15, 12 and 5 respectively and all taken care of by her.  Prior to the present case, she had a clear record.  The appellant herself, her parents and her siblings have written letters seeking mitigation of the appellant’s sentence.

20. The total amount of monies involved in Charges 1 and 2 was approximately HK$2.7 million.  The two offences spanned half a month and the best part of a month respectively, neither of which was particularly long.  The appellant went to the bank and withdrew the remittances in cash shortly after they had been transferred into her two bank accounts, and the monies were passed on to Mr Chan.  There was no evidence to indicate the indictable offence(s) from which the monies in question were derived.  Nor did the evidence show that the appellant had taken part in any offence relating to “black money”.

21. In light of the above circumstances, without more, the starting point of 3 years adopted by the trial judge for each charge could not be regarded as manifestly excessive.  However, there were special circumstances which distinguish the present case from other cases of the same type.

22. The appellant testified at trial that she and Mr Chan were intimate cohabitees at the material time and had given birth to two daughters.  It was only upon Mr Chan’s requests that she allowed him to use her bank accounts, and it was not for obtaining benefit that she assisted in dealing with the monies in question.  After being convicted, the appellant reiterated this point when she was interviewed by the probation officer and pointed out that she had assisted Mr Chan because he was her partner and her daughters’ father.

23. In our view, it could be seen from the evidence that Mr Chan and the appellant were cohabitees and their intimate relationship had lasted quite a long time.  In addition, on the appellant’s description, Mr Chan had all along taken care of her, their two daughters as well as her son who was born of her previous marriage.  By the time she dealt with the monies in question, she and Mr Chan had already had a daughter.  In view of the above circumstances, there is a credible ring about the appellant’s statements that she was merely acceding to Mr Chan’s requests when she allowed him to use her personal bank accounts and assisted him in making the withdrawals in question, and that she did so for the sake of their relationship and with a view to maintaining such relationship so that her children would be taken care of.

24. In passing sentence, the trial judge did not take into account that the appellant had committed the offences on account of her relationship with Mr Chan.  This, in our view, is a relevant and important special factor which renders it appropriate to adopt 2 years’ imprisonment as the starting point for each of the two charges.  In view of the appellant’s clear record and the need for her to look after three children, we agree that it was proper for the trial judge to reduce the term by another 3 months as she had done.  It follows that the sentence for each charge should be 21 months’ imprisonment.

Conclusion

25. For the above reasons, we have allowed the appellant’s appeal against sentence, and reduced the sentence for each of Charges 1 and 2 to 21 months’ imprisonment, with the sentences to be served concurrently.

Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. Edmund Cham, Solicitor.