HKSAR v. LI HO YIN

DCCC 1030/2024

[2025] HKDC 2052

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1030 OF 2024

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REASONS FOR SENTENCE

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1.  The defendant (“D”)  pleaded guilty to two counts of dealing with property known or believed to represent the proceeds of an indictable offence (“money laundering offence”), contrary to sections 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap. 455 (“the Ordinance”).

Facts

2.  The facts of the case are set out in the Amended Summary of Facts; I shall not repeat the same in detail herein.

3.  In gist, D was the sole signatory of the bank account in Charge 1 at China CITIC Bank (“Account 1”)  and the bank account in Charge 2 PAO Bank (“Account 2”). Between 21^st December 2022 and 31^st January 2023, a Ms Lai fell for a fraudulent investment scheme and she was enticed by a fraudster to remit money to a bogus website for purported investments in cryptocurrency; she suffered a total loss of over HK$9 million, among which HK$163,200 was dissipated in a single transaction to Account 1 on 11^th January 2023; a second victim, a Ms Lui, suffered a total loss of around HK$1.7 million, among which HK$290,000 was dissipated in 2 transactions to Account 2 on 9^th and 10^th January 2023.

4.  Investigation revealed that:

(1)  Account 1 had been opened by D on 21^st December 2022 and closed on 27^th February 2023; between 5^th January 2023 and 27^th February 2023, a total of 28 deposits totaling HK$2,043,689 were deposited into the account, and a total of 28 withdrawals totaling around the same amount were withdrawn; as at 27^th February 2023, Account 1 had a closing balance of nil.

(2)  Account 2 had been opened by D on 29^th December 2022; between 5^th January 2023 and 2^nd February 2023, a total of 25 deposits totaling HK$947,417.32 were deposited into the account, and a total of 23 withdrawals totaling around the same amount were withdrawn; as at 2^nd February 2023, Account 2 had a closing balance of HK$99.32.

(3)  At all material times, Accounts 1 and 2 had been used as temporary repositories of funds.

5.  D was arrested on 4^th October 2023 and 7^th November 2023 for Charges 1 and 2 respectively. He remained silent under caution.

6.  D agrees that he, together with persons unknown, knowing or having reasonable grounds to believe that the monies deposited into Accounts 1 and 2 in whole or in part, directly or indirectly represented proceeds of an indictable offence, dealt with the said property.

The prosecution’s application under section 27 of the Ordinance (“P’s s27 Application”)

7.  The offence of money laundering is a specified offence within the meaning of the Ordinance. The prosecution has furnished information pursuant to section 27(2)  of the Ordinance regarding: (1)  the prevalence of the offence (specifically, the prevalence of the use of stooge accounts in the commission of the offence of money laundering); and (2)  the nature and extent of any harm (whether direct or indirect)  caused to the community by recent occurrences of this offence.

8.  According to the statement of Chief Inspector Li dated 27^th November 2025, many money laundering stooges in Hong Kong “sell” or “lend” their accounts at financial institutions to criminals for money laundering purposes. Most of them would allow criminals to have full access and control of their accounts. The anti-money laundering regime in Hong Kong is hampered by the prevalence of stooges for money laundering activities; the prevalence of stooge accounts interferes with the normal operation of the banking system, and has a negative effect on the reputation of Hong Kong as a well-known international financial hub; the prevalence of stooge accounts substantially facilitates the commission of crimes and in turn leads to more crimes being committed as the mastermind could easily evade criminal liability. The use of stooge remains prominent, with a rising trend in its use from 31.38% recorded in the year 2020 to 75.10% recorded in 2024 (see Table A of Chief Inspector Li’s statement).

Background and mitigation

9.  D is 54 years of age, single and resides alone. He was unemployed at the time of the commission of the present offences.

10.  He had 18 conviction records prior to the offence dates consisting of 29 charges, 11 of which is dishonesty-related. This is his first time committing the offence of money laundering.

11.  The authorities cited by the defence include HKSAR v Boma [2012] 2 HKLRD 33 and HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201.

12.  It is submitted that in this case:

(1)  D lent his bank accounts to a friend and received no remuneration for doing so. He had no knowledge of, nor played a part, in any predicate offence. He had no knowledge and/or control of (i)  the amount of money involved; (ii)  the sophistication of the offence, including the degree of planning; and (iii)  the fact that the offences concerned multiple transactions, involving multiple victims.

(2)  There is no evidence in the present case showing that except for the HK$163,200 from the first victim, Ms Lai, and HK$290,000 from the second victim, Ms Lui, (totaling $453,000)  the funds received by D’s accounts were related to any specific predicate offence.

(3)  The offences do not concern any international element.

(4)  The sums of money went through D’s accounts within a period of less than two months.

(5)  D was asked by the same person to open the two accounts. The offences are very similar in nature, and the movement of money in the accounts occurred during a similar time frame. The offences significantly overlap in nature, and the sentences should run wholly concurrently. Alternatively, the Court is invited to have regard to the totality principle in arriving at a global sentence that avoids an excessive or crushing punishment, and which reflects D’s overall culpability.

(6)  D has reflected and learned from his mistakes and assures that he will not re-offend. He asks for the Court’s leniency. (It should be noted that D has retracted his mitigation letter.)

(7)  The Court is urged to adopt an overall starting point of less than 4 years’ imprisonment and to give a 1/3 discount for D’s timely plea.

(8)  Regarding P’s s27 Application, the defence submits in written submissions that the prosecution bears the burden of proof in establishing the prevalence of the offence, and the power to enhance sentence has been described by courts as an exceptional power to be used sparingly, citing HKSAR v Li Kin Keung [2012] 4 HKLRD 135. It is submitted that the high starting point adopted in money laundering cases already contains within it a substantial element of general deterrence. A further enhancement of sentence would be tantamount to a double enhancement. However, the defence in oral submissions stated that D does not object to P’s s27 Application, but urges the Court to adopt an enhancement of 20-25% rather than a higher percentage.

Sentence

13.  I have considered the facts of the case, the mitigation put forth by the defence and the case authorities.

14.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, the Court of Appeal stated that:

“9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

(1)  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.

(2)  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.

(3)  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.

(4)  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.

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

15.  In HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal further stated that:

“12. ‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the ‘money laundering’ offence (See Court of Appeal cases HKSAR v Javid Kamran (CACC 400/2004), HKSAR v Xu Xia Li and another [2004] 4 HKC 16, etc.).

13. Generally, the sentence for ‘money laundering’ offence 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.

14. This Court has, in a number of other similar cases, also listed others factors relevant to the sentence to be imposed including the number of offences, the length of time the offence lasted, the degree to which the defendant participated in the offence involving ‘black money’ and whether or not it was an organised and sophisticated crime, etc.

15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of ‘money laundering’ cases. The sentencing starting point is 3 years or so where the ‘black money’ involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.”

16.  In HKSAR v Boma [2012] 2 HKLRD 33, the significant features (other than the amount of “illicit money” involved)  which the court should take into account were set out to be as follows:

(1)  The nature of the predicate offence, if known, and the penalty available for the predicate offence …

(2)  … the state of knowledge of the offender. This divides itself in two – knowledge of the nature of the predicate offence, where the predicate offence is known to the court; and knowledge of the fact that the funds are the proceeds of an indictable offence …

(3)  An international dimension will always be a significant aggravating feature …

(4)  The sophistication of the offence is always relevant. This will include the degree of planning and whether deceit is practised to achieve the objective.

(5)  Where the offence is committed by or on behalf of an organized criminal syndicate, that is an aggravating fact.

(6)  It is relevant to take into account whether there is one transaction or many and the length of time over which the offence was committed.

(7)  … it will be an aggravating feature where the offender continues to launder funds after he has discovered as a fact that the funds are the proceeds of an offence or after he has discovered the nature of an offence which is serious.

(8)  The sentencing court should have regard to the role of the offender and the acts performed by him. In this regard, the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds. In the case of a person down the chain, the court will wish to have regard to whether a benefit has been received and if so the nature and size of the benefit. But within the category of persons down the chain there will gradations of culpability. So for example the drug addict or petty crook who is paid a small sum to open an account and hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime is much less culpable than an offender of a different sort not ‘used’ in that way.”

17.  In Secretary for Justice v Ngai Fung Sin Apple [2013] 5 HKLRD 95, the Court of Appeal reiterated that:

“43. This Court has on many occasions repeated the warning that ‘money laundering’ is a very serious crime. One of the reasons is that in a modern society perpetrators of serious crimes are very often motivated by financial gains, so that to combat the crime of ‘money laundering’ can be an effective measure against such serious crimes.

44. 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. On the other hand, if there is evidence which can prove from what serious crimes the ‘illicit/black money’ was derived and if the defendant was aware of the origin of the ‘illicit/black money’, that would be an aggravating factor (see Secretary for Justice v Lau Man Ying [2012] 4 HKLRD 429 and HKSAR v Xu Xia Li & Anor [2004] 4 HKC16). Based on the same rationale, the fact that the defendant of a ‘money laundering’ case has not obtained any financial benefit is not a mitigating factor.”

18.  This case involves 2 charges of money laundering through 2 different bank accounts. The duration of Charge 1 was around 2 months (from 5^th January 2023 to 27^th February 2023)  and involved around HK$2 million; the duration of Charge 2 was around 1 month (from 5^th January 2023 to 2^nd February 2023)  and involved around HK$947,000. The “illicit money” was at least partly from online (cryptocurrency)  investment fraudulent schemes, which must involve a certain amount of organisation and planning. I agree that in this case, there is no evidence to indicate D participated in the fraud or that the case involved any international element; D’s role was lending/selling his accounts to be used by others. However, it must be noted that although the defence argues that the facts only show part of the total sums were proceeds of fraud, case authorities clearly state that neither the fact that the illicit money was actually not derived from an indictable offence nor D’s ignorance of the actual source of the money is a mitigating factor; the fact that D has not obtained any financial benefit (or only a minimal benefit)  is not a mitigating factor either. I do accept that as money laundering cases go, this is not the most serious of its kind. Nonetheless, the number of deposits into Accounts 1 and 2 totaled over 50; thus it can be inferred that the number of victims involved is not insignificant.

19.  Although D is not of clear record, he does not have any similar criminal conviction record. I shall not take into account his record when sentencing him. He has pleaded guilty and shall be given the full 1/3 discount for his plea. I do not find that there is any other mitigating factor in the case to further reduce his sentence. 

20.  As to P’s s27 Application, I accept that the offence in the two charges is a specified offence under the provision, and since 2020 the offence (in particular, using stooge accounts to commit the offence of money laundering)  has been prevalent, and has caused harm to the community. I do not agree with the defence that an enhancement of sentence under this provision “would be tantamount to a double enhancement” – the enhancement is related to the prevalence and the nature and extent of the harm of the offence and not the role or the particular circumstances of D (see HKSAR v Wong Ming Chun (CACC 31 & 32/2024)). It must also be emphasised that according to HKSAR v Xu Mai-qing (CACC 464/2005): “what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences.”

21.  Having considered the submissions of parties and the statement of Chief Inspector Li, I accept that the relevant information shows that despite the police having spent ample resources on crime prevention, advertising and warning people not to “sell” or “lend” their bank accounts to others and being lured into committing the specified offence, the offence of money laundering, and specifically the use of stooge accounts to commit the offence, remains prevalent, and still causes significant harm to the community. Given that the information shows that the number of cases (the total number of stooges arrested)  increased from 2020 to 2024 but slightly decreased in 2025 (see Table A of Chief Inspector Li’s statement), I am of the view that the appropriate degree of enhancement is 1/4.

22.  In light of the above, I am of the view that the appropriate sentences for the 2 charges are as follows:

(1)  Charge 1: Starting point of 30 months’ imprisonment, reduced by 1/3 on account of D’s guilty plea to 20 months’ imprisonment, and enhanced by 1/4 in light of s27 of the Ordinance to 25 months’ imprisonment.

(2)  Charge 2: Starting point of 24 months’ imprisonment, reduced by 1/3 on account of D’s guilty plea to 16 months’ imprisonment, and enhanced by 1/4 in light of s27 of the Ordinance to 20 months’ imprisonment.

23.  I am of the view that in all the circumstances of the case and bearing in mind the principle of totality, a term of imprisonment of 30 months is sufficient to reflect the culpability of D in the case (in essence, adopting an overall starting point of 3 years’ imprisonment, reduced to 2 years due to D’s guilty plea, and enhanced by 1/4 in light of s27 of the Ordinance). As such, I shall order 5 months of the sentence in Charge 2 to be consecutive to the sentence in Charge 1.

24.  D is sentenced to 30 months’ imprisonment.