HKSAR v. CHAU YU TUNG

CACC 62/2025 [2025] HKCA 1135

On appeal from [2025] HKDC 370

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 62 OF 2025

(ON APPEAL FROM DCCC NO 715 OF 2024)

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JUDGMENT

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1.  On 3 March 2025, following his guilty pleas to two charges of dealing with property known or believed to represent the proceeds of an indictable offence entered before Deputy District Judge K Lo (the judge), the applicant was sentenced to a total term of 42 months and 20 days’ imprisonment. It was alleged that, between 19 and 26 August 2022, the applicant dealt with HK$1,910,728.02 in his personal account with The Hongkong and Shanghai Banking Corporation Limited (HSBC)  (Charge 1); and that between 19 August and 14 September 2022, he dealt with HK$2,862,231.01 in his personal account with Bank of China (Hong Kong)  Limited (BOC)  (Charge 2).[1]

2.  On 24 March 2025, the applicant applied for leave to appeal against his sentence.  He appears in person, having had legal aid refused on 12 May 2025.

The facts

3.  The facts outlined to the judge and admitted by the applicant[2] were that, between 19 August and 1 September 2022, various victims of an investment scam, employment fraud, blackmail and telephone deception were deceived by unidentified scammers into transferring funds to designated bank accounts, including the applicant’s HSBC and BOC accounts, of which he was the sole holder and signatory. Fourteen victims reported the matter to the police upon discovering they had been deceived.[3]

4.  On 9 August 2022, the applicant opened the HSBC account, claiming he was a lawyer earning HK$240,000 per annum, and stating that the account would be used for savings with his salary as the source of the initial deposit.  Between 19 and 26 August 2022, the HSBC account received 108 deposits totalling HK$1,910,728.02, and 85 withdrawals totalling HK$1,893,007.55 were made, with most of the deposited funds being transferred to other persons on the same day (Charge 1).[4]

5.  The BOC account was opened on 24 January 2011 and remained inactive from 1 June 2018 to 4 August 2022.  On 5 August 2022, the applicant updated his account information at the bank, claiming to be an IT worker earning a monthly salary of HK$10,001 to HK$25,000, and stating that the account was for savings and daily transactions, with funds originating from his income.  Between 19 and 24 August 2022, the BOC account received 88 deposits totalling HK$2,862,231.00, and 86 withdrawals amounting to HK$2,862,425.62 were made.[5] Most of the funds were transferred to other persons within 10 hours of being deposited, leaving a closing balance of HK$17,496.38 on 24 August 2022.  The BOC account remained inactive until its closure on 14 September 2022, when the remaining balance was withdrawn (Charge 2).

The sentence

6.  At the time of his sentencing, the applicant was 34 years old and educated up to higher diploma level.  He had worked as a construction site and decoration worker, earning around HK$25,000 and HK$32,000 per month respectively, but ceased work after being diagnosed with a psychiatric illness.  He had a two-year-old daughter with his ex-girlfriend, to whom he paid most of his income as maintenance.  He had nine previous convictions from six court appearances, including five dishonesty-related offences: two for conspiracy to defraud and three for theft.[6]

7.  In mitigation, it was submitted that the applicant committed the present offences due to financial difficulties in supporting his ex-girlfriend and daughter.  Counsel on his behalf contended that he acted merely as a “cog in the machine”, having been manipulated without knowledge of the underlying scheme, and that there was no international element.  He urged the judge to impose a total sentence of less than 20 months’ imprisonment.[7]  However, it was accepted that the total amount transacted through his bank accounts exceeded HK$4.7 million, and that the appropriate starting point for laundering between HK$3 million and HK$6 million would be around 4 years’ imprisonment[8].

8.  The prosecution applied under section 27 of the Organized and Serious Crimes Ordinance (Cap 455)  (OSCO)  to enhance the applicant’s sentences, on the basis of the prevalence of the use of stooge accounts in money laundering offences and the nature and extent of harm caused to the community by their recent occurrence.  For this purpose, the prosecution relied on statistics[9] indicating a rising trend in the number of deception and money laundering cases (particularly those involving stooge accounts), and in the quantum of losses or proceeds laundered from 2020 to 2024.  The defence objected, arguing that the aggravating factors were limited and that the total amount involved did not justify the enhancement.[10]

9.  Having considered the circumstances of the offences in accordance with sentencing principles[11], including the sums involved, the number of victims and transactions, the duration of the offences, and the role of the applicant, the judge adopted a starting point of 3 years’ imprisonment for Charge 1 and 3 years and 6 months for Charge 2.  She was satisfied with the appropriateness of the OSCO application and enhanced the starting points by one third to 48 months’ imprisonment for Charge 1 and 56 months’ imprisonment for Charge 2, without further enhancement for the applicant’s previous dishonesty-related convictions.  After giving a one-third discount for his guilty pleas, the judge reduced the sentences to 32 months for Charge 1, and 37 months and 10 days for Charge 2.  

10.  Applying the totality principle, the judge treated the two offences as identical in nature and concluded that a total sentence of 42 months and 20 days’ imprisonment properly reflected the applicant’s overall culpability, given that a total sum of HK$4,772,959.03 was laundered through his two accounts between 19 August and 14 September 2022. She arrived at this result by making 5 months and 10 days of the sentence for Charge 1 consecutive to the sentence for Charge 2, and the remainder concurrent.

The ground of appeal

11.  In his Form XI, the applicant complained that his sentence was excessive.  In a letter filed on 8 August 2025, he explained that he only took issue with the one-third enhancement under OSCO, submitting that this was “slightly on the high side” compared to the 20% enhancement applied in other similar cases involving young defendants lured into opening or lending their bank accounts to syndicates for money laundering in exchange for a reward.

12.  The respondent submitted that the judge had properly reviewed the OSCO application, which was supported by updated statistics, and that the one-third enhancement was within the acceptable sentencing range.  Given the applicant’s overall culpability, the judge correctly considered totality in the sentencing process, and the overall sentence was neither manifestly excessive nor wrong in principle.

Discussion

13.  I agree with the respondent’s submissions.  This was a serious case of money laundering, where it was shown that the laundered funds were the proceeds of serious crime, involving a criminal syndicate scamming victims through various fraudulent and deceptive schemes.  

14.  The applicant did not dispute the starting points.  In assessing the applicant’s overall criminality, the judge identified several aggravating features in this case.  While it was accepted that there was no international element, the judge noted that the scheme was sophisticated and involved a criminal syndicate.  She highlighted the serious nature of the predicate offences, including telephone deception, investment scams and blackmail, although the agreed facts did not state that the applicant was aware of the predicate offences or that he received any benefit.  However, it was implicit in the admitted facts and mitigation that he received a financial benefit, in that he allowed the accounts to be used to launder funds because he was in a “financial crisis”.[12]  She found that the applicant did more than merely allow his accounts to be used by the syndicate, having actively visited the banks and made false representations in opening or activating the accounts for the purpose of laundering illicit funds.  The HSBC account was used for the offences just 10 days after its opening, while the BOC account had been inactive for over 11 years before it was used.  She pointed out the multiplicity of transactions concerning different victims and involving a total sum of some HK$4.7 million.  During the charge period, the HSBC account received 108 deposits within eight days from an unknown but substantial number of victims, while the BOC account received 88 deposits over 27 days from at least 12 victims.

15.  The judge gave detailed reasons for the sentence, identifying the relevant facts and circumstances and the applicable sentencing principles in determining the overall sentence to be imposed on the applicant.  As the only complaint about the applicant’s sentence concerns the enhancement due to the prevalence of this type of offending, the judge comprehensively addressed the relevant principles in her analysis, concluding that the sentence should be enhanced by one-third.[13]  She was correct to do so.  This determination was based on information and data furnished in a detailed statement from the officer-in-charge of money laundering and terrorist financing.  There have been cases in the past in which the enhancement under section 27 of OSCO for money laundering offences has been 20%.  However, more recently, the percentage enhancement has been 25% or one-third.  In HKSAR v Leung Yiu Fai[14], this Court considered the enhancement of a sentence under section 27 for a case of online fraud, explaining that it was a matter to be determined by the trial judge in the exercise of his or her discretion, having regard to the particular case and its circumstances.  The Court held that, unless the enhancement imposed by the trial judge was unreasonably excessive, the Court should not intervene.  In the circumstances of that case, the Court considered a one-third enhancement was not a lenient approach, nor so unreasonable as to warrant the Court’s intervention.  The Court emphasised that, if the prevalence of similar cases continues to increase, the courts may even consider an enhancement exceeding one-third.

16.  The applicant has no cause for complaint about the sentence imposed on him, and there was the aggravating factor of his previous convictions for dishonesty that could have resulted in further enhancement to his sentence.

17.  The application for leave to appeal against sentence is refused.

18.  The applicant is reminded of his right to renew his application for leave to the Court of Appeal, but he is also informed of the consequences of doing so, which may include a direction for the loss of time spent in custody pending his appeal if the Court were to come to the view that there was no justification for the renewal of his application.