HKSAR v. WEN XIAOHUI

DCCC 75/2025

[2025] HKDC 1891

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 75 OF 2025

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REASONS FOR SENTENCE

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1.  The defendant has entered a plea of guilty to three charges of money laundering which is contrary to Section 25(1)  and (3)  of Cap 455 refer to colloquially as “OSCO”.  The defendant was himself arrested in this case on both 16 May 2024 and 2 August 2024 and has been in custody since then.

2.  The three charges represent the defendant being the sole account holder of three separate bank accounts in which the money laundering transactions took place.  Those accounts are with three banks.  The 1^st charge relates to the Hang Seng Bank; the 2^nd charge relates to the Standard Chartered Bank and the 3^rd  charge relates to the Bank of China.

3.  The analysis of the accounts showed in respect of those three bank accounts that in respect of, firstly, the Hang Seng Bank account, the operative time of the use of the account was between 28 November 2023 and 5 January 2024 where a total sum of $1,617,451 was laundered through that account as a result of 101 deposits and 65 withdrawals within that period.

4.  In respect of the Standard Chartered Bank account, the operative period was between the 4 December and 13 December 2023 where $2,388,454.15 was laundered through that account as a result of 436 deposits and 205 withdrawals.

5.  Finally, in respect of the Bank of China account, the account was operative and used between 6 December 2023 and 5 January 2024 where a total of $4,839,126.14 was laundered through that account as a result of 105 deposits and 136 withdrawals.  The operation of the accounts clearly shows the bank accounts were used for money laundering and the total of $8,845,031.29 was laundered through the three accounts.  As I have indicated before, the three accounts are charged individually.

6.  The prosecution have also produced evidence as a result of 22 prosecution witnesses who were victims of online scams and deceptions.  They were targeted on different occasions and by different methods and instructed to transfer funds into the defendant’s three bank accounts.  A summary has been helpfully produced of that.  We can see that in respect of the Hang Seng Bank, a total of 9 prosecution witnesses are involved in early January, $87,610 going into that account; into the Standard Chartered account, 12 prosecution witnesses are involved in about a week in December where the total of $107,492.15 being remitted through that account, and finally, in respect of the Bank of China, there is 1 prosecution witness who was instructed to send money to that account on 4 January 2024 for the total amount of $120,000 being remitted through that account.  Totally, there are $315,102.15 remitted as a result of these 22 victims through the three accounts operated by the defendant.

7.  There is no dispute in this case the defendant’s operation of the bank accounts.  He did give an explanation in respect of his records of interview by which he says he was operating at the behest of somebody else to open the accounts and gave the accounts to another person and had no knowledge himself of the way in which the accounts were operated and the deception that took place.

8.  Now that is a summary of the evidence against the defendant in this case.  As far as the defendant’s personal background as established by the prosecution is concerned, he is, I understand, 43 years old.  He has a clear record in Hong Kong.  He is a person who is born and raised in Mainland China.

9.  Information provided by the defence shows that he is a divorcee with two children.  He was the main breadwinner of his family.  He lived with his children and parents in Mainland China. Evidence was produced about his father who is currently age 72 and disabled, appears to have paralysis of his lower limbs and he says that person and his mother are dependent on him and that prior to his arrest for these matters he had been working as a construction worker earning around RMB3,000.

10.  I note also as part of the prosecution case there is an application for an enhancement of sentence.  I will deal with that at the end of the sentencing process.

11.  Dealing now with the principles of sentencing.  There are generally three cases that are regarded in respect of the approach to sentencing in cases of money laundering although there is no guideline.  I will refer to the cases of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545.  There is also the case of Boma, HKSAR v Boma [2012] 2 HKLRD 33.  There is the case of HKSAR v Chung Chi King which is an unreported case, CACC504/2021 that deals with enhancement applications.  Also reference has been made in this case and in the submissions to The Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 which looked at Hsu Yu Yi and gave general suggestions as to the bands within which sentencing may fall for money laundering cases where there are no particular aggravating factors.

12.  The general principles of the court operate are on, or firstly, that there is no sentencing guideline for the offence of dealing with proceeds of an indictable offence, namely because the facts vary from case to case, but there are a number of factors that can be taken into consideration but the most salient factor is of course the amount of money involved and the amount of benefit received by the defendant in the transaction.

13.  Secondly, the culpability of the offence, that is the assistance, support and encouragement offered to the commission of the indictable offence and the defendant’s level of participation in that offence.  Also, the defendant’s involvement in any predicate offence is also a factor to be taken into consideration.  It is also to be taken into consideration if there is any international element involving the activities, and finally, the length of time the offence lasted.

14.  Boma reiterates those factors to be considered dealing with matters such as the nature of the predicate offence, to what extent the defendant was involved and knew of the predicate offence, whether there is an international element, how elaborate the schemes were, whether a criminal syndicate is involved, the number of transactions, the length of time and whether the defendant actually continued to launder money after knowing the nature of the predicate offence.  Another factor of that set out in Boma is the role of remuneration of the defendant.

15.  Now the submissions from the defence revolve around the fact the defendant follows what appears in this case to be a fairly set formula in that he is the holder of what is described as stooge accounts.  The holders of those accounts are normally kept in ignorance of what is going on, they simply are used to create a bank account and hand the means of operating that bank account to others.  However, they are an essential factor in the creation of these frauds and although it is a mitigating factor or lack of an aggravating factor that they have little knowledge of the online scams, it is still a serious offence warranting lengthy periods of imprisonment.

16.  Now in terms of the submissions that was put before me by the defence, they say that the defendant is an operator of a stooge bank account, that he was involved in laundering through those accounts about $8.8 million and the offences themselves in this case were over a short period, about a month in total.  The predicate offences can be identified in up to 22 cases and appear to be unconnected online telephone deception scams. There is no evidence produced by the prosecution to show the defendant’s awareness of those fraudulent activities.

17.  It is acknowledged by the defendant that he came to Hong Kong purely for the purpose, it would appear, of opening those accounts, he came from Mainland China to do that and he operated and opened those accounts within a period of two days.  It is said the defendant’s culpability is confined to the acts of opening the bank accounts and giving up control of those accounts to others.  At that time, he must have had reasonable grounds to believe the proceeds from indictable offences would be dealt with through those accounts.

18.  Besides the defendant coming to Hong Kong, there is no other evidence of an international transaction.  It is said the defendant’s culpability merely relates to the opening and relinquishing control of the accounts and there are no further aggravating factors to be considered.

19.  Now in respect of the determination of the initial starting point in these cases, I will lean heavily on the amount of money that has been laundered and the short period within which that laundering took place.  So I must first determine an initial starting point for that, then deduct that initial starting point by a full one-third because the defendant has indicated a plea from an early stage and is entitled to that deduction and then to deal with any enhancement that might be appropriate under the Section 27 of OSCO.

20.  In respect of the 1^st and 2^nd charge, I take an initial starting point of 3 years’ imprisonment or 36 months’ imprisonment and on the 3^rd charge I take a starting point of 4 years’ imprisonment or 48 months’ imprisonment.  That will lead to a figure after deduction for a plea of guilty on charge 1 of 24 months, charge 2 of 24 months and charge 3 of 32 months.

21.  I now deal with the question of enhancement.  The defence quite properly indicates they do not object to the enhancement of the defendant’s sentence under OSCO.  There is a statement from Inspector Li dated 20 October 2025 dealing with the prevalence and use of stooge accounts in the commissions of  specified accounts such as money laundering offences and the nature and extent of harm caused to the community by the occurrence of this particular specialised offence.

22.  The prosecution fully has to establish the prevalence of this offence, not necessarily that the offences are increasing and it may be inferred perhaps from Chief Inspector Li’s statement in respect of 2025 for which statistic are only at present available between January and September that the total number of deception cases, of money laundering cases detected and undetected has declined or may decline from 2024, that may be the case is established on Chief Inspector Li’s evidence.  Nevertheless, his statement still shows these offences to be prevalent and also to cause harm both directly and indirectly to the community.  I consider it on the basis of Inspector Li’s statement the prosecution has established the basis on which the sentences that I have already indicated can be enhanced.

23.  I will enhance those sentences in the region of 20 per cent because I am not making a precise calculation but in respect of the 1^st charge, it will mean enhancement of 5 months to 29 months.  Similarly for the 2^nd charge, enhancement of 5 months to 29 months.  In respect of the 3^rd charge, enhancement of 6 months to 38 months’ imprisonment.

24.  Now I must consider the overall totality, the overall totality again being determined by the amount of money laundered in total which is around $8.8 million which would put it, in my view, a starting point in respect of enhancement between 4 to 5 years’ imprisonment.

25.  I consider an overall sentence should be one of 43 months’ imprisonment.  I will achieve that by ordering that 5 months of charges 1 and 2 be served consecutively to charge 3, the balance of those charges to be served concurrently.  That will lead to a total sentence of 43 months’ imprisonment.