HKSAR v. EISA EISA-TALAL

DCCC 646/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 646 OF 2012

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Reasons for Sentence

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1.  D1 pleaded guilty before me to one count of conspiracy to deal with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455 and sections 159A and 159C of the Crimes Ordinance, Cap 200. The charge is also commonly known as “money-laundering” charge.

2.  D1 also faced two other substantive money‑laundering charges (Charges 2 & 3) and they were each an alternative charge to Charge 1.  However, in light of his plea and conviction in Charge 1, it is not necessary for plea to be taken in respect of the other two charges.  As a result, I am not concerned at all with the facts in relation to those two charges.

3.  The particulars of Charge 1 was that the defendant:

“...between the 1^st day of December 2011 and the 21^st day of February 2012, both dates inclusive, in Hong Kong, conspired with a person known as ‘Uri,’ opened and used three bank accounts in the name of Star Bright Effort Limited to deal with property, knowing or having reasonable grounds to believe that the property in whole or in part directly or indirectly represented the proceeds of an indictable offence.”

The Facts

4.  Briefly stated, the underlying offence to which the money‑laundering charge is related is an international email fraud.  According to the Summary of Facts which D1 has admitted, on 17 February 2012, a mainland seller in trade reported that he could not receive a sum of US$191,000 from his Panamanian buyer.  Enquiry with the buyer reveals that he in fact received an email purportedly sent by the mainland seller and was instructed to deposit US$191,069 into a Hang Seng Bank (“HSB”) account in the name of Star Bright Effort Limited (“Star Bright”) on 15 February 2012.

5.  Star Bright was incorporated in Hong Kong on 3 June 2011.  D1 became the sole director and shareholder of Star Bright since 30 November 2011.  Star Bright maintains three accounts, namely, a HSB account, a HSBC account and also a Bank of China (“BOC”) account in Hong Kong with D1 as the sole signatory.  According to the Summary of Facts, there was basically no or little activity in the HSBC and the BOC account.  Altogether only one transaction was recorded in the HSB account and it was the deposit of US$191,069. The total deposit sum of the three accounts in terms of local currency was HK$1,492,338.20. 

6.  On 21 February 2012, D1 was arrested by the police for deception when he attempted to withdraw US$10,000 and HK$100,000 from the HSB account over the counter at the bank.  After he was arrested, there was a subsequent video interview conducted during which he stated that:-

a) he was recruited by an Arabian male named Uri in the UK to set up a company and open bank accounts in Hong Kong to facilitate Uri’s trading business, for which he was promised to pay £5,000 as a reward;

b) he arrived in Hong Kong at around 6 December 2011 together with D2 and D3, the other two defendants in this case, whom he came to know only when they travelled together on the same flight from the UK to Hong Kong;

c) on arriving Hong Kong, the three defendants met a male named Yasar who arranged their accommodation and Yasar also asked him to sign on the documents in connection with the setting-up of the Star Bright. After that, Yasar took all three defendants to the three banks as named above to open bank accounts and also gave them the supporting documents and information, including address, email address and telephone numbers;

d) Yasar gave him HK$25,000 for the purpose of opening the bank accounts and after which Yasar took away all the bankcards, password and banking device after the bank account was opened. Then they were arranged to travel back to the UK after the opening of accounts. He lost contact with Yasar and Uri after returning to the UK, and the £5,000 that had been promised as a reward was never paid to him. That is why he decided to come to Hong Kong again with the other two defendants to check what was going on;

e) on the day of his arrest, he arrived at the HSB Mongkok branch with the other two defendants to check the balance of the Star Bright account. To his surprise, he found out that there was still US$191,100 remaining in the account and that was why he decided to withdraw HK$100,000 and US$10,000 (being the maximum withdrawal amount permitted) and he intended to close the bank account after withdrawing all the money. Before he was able to withdraw the money successfully, he was then arrested by the police; and

f) he stressed that he did not know the nature of the business and had not participated in the business of the Star Bright. He admitted and confessed that he believed that the source of the balance in the Star Bright account is suspicious but he nevertheless attempted to withdraw to compensate the travelling costs and the reward Uri had failed to pay.

The Background of the Defendant

7.  D1 has a clear record in Hong Kong.  He is now 49 years of age and he is a married man with nine children.  According to Mr Stirling, counsel for the defendant, D1 was actually born in Iraq and because of the war, he fled to various countries including Kuwait and later Lebanon where he met his wife and got married. Subsequently he went to the UK where he successfully sought political asylum from the government and was granted the permission to stay and live there since 2000.

8.  Before this offence, D1 was a builder by occupation earning an income of £3,000 to £4,000 per month.  

9.  In mitigation, Mr Stirling stressed the fact that D1 had pleaded guilty and also fully co-operated with the police.  After he was arrested, he had volunteered information to the whereabout of the other two defendants to the police.  Before the police went to the hiding place according to his information, the other two defendants had already fled away.

10.  Mr Stirling also urged the court to consider the fact that D1 has no actual knowledge of the underlying offence.  He submitted that for money-laundering offence for this present amount, the usual starting point is about 3 years and that he said, has already reflected the element of international dimension.

11.  Finally, Mr Stirling also has submitted to court family photos and also a couple of letters written by the children of the defendant.

Sentencing Considerations

12.  The court of course has much sympathy for the family members of D1.  No doubt they have a close family relationship and being the sole breadwinner of the family, the fact that D1 is now incarcerated here in Hong Kong means that the family circumstances, especially the financial condition, is seriously jeopardized.  However, the Court of Appeal has in many occasions said that for cases involving serious crime, family circumstances virtually play no part in mitigation.

13.  I was also told in mitigation that the youngest child of the defendant is only one-year-old which means that when D1 decided to take up this offer to come to Hong Kong to open the bank account, his son was only a newborn baby.  No doubt D1 should know that he is a man of family responsibility and he should think about the consequences before he acts.  Obviously, he took the risk and was caught and now he just has to face the consequences of his decision.

14.  In the past few years, the Court of Appeal has stated the relevant factors for sentencing money-laundering cases.  In a Chinese Judgment, Secretary for Justice v Wan Kwok Keung [2012]1 HKLRD 201, it has been held that:- 

“12. ‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimise the process of the crime. In order to crack down on serious crimes and to prevent offenders from getting financial gains, it is necessary to deter and prevent the offenders from getting financial gains. It is necessary to deter the commission of the ‘money laundering’ offence.

13. Generally, the sentence for a ‘money laundering’ offence should mainly reflect the amount of the ‘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’ is in fact derived. Of course if there is information to prove that the ‘black money’ originated from a serious crime, including drug trafficking, kidnap and blackmail, illegal human trafficking and other organised 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 other factors relevant to the sentence to be imposed including the number of offence, the length of the time the offence lasted, the degree to which the defendant participated in the offence involving the ‘black money’ and whether or not it was an organised and sophisticated crime.”

15.  In another case which the prosecution has supplied to the court, HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Cheung JA has set out the amounts of the money involved in the sentences imposed in a number of money-laundering cases in the past. It can be seen that the starting point is 3 years or so when the black money involved is between 1 million and $2 million.

16.  In HKSAR v Boma, CACC 335/2010, a more recent case, the Court of Appeal has further elaborated on the relevant factors to be considered as follows (at para 40):-

“The court should take into account some of the other significant features, inter alia:

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) where the operation involved an international dimension, this would be a significant aggravating feature;

(d) the sophistication of the offence, including the degree of planning;

(e) where the offence was committed by or on behalf of an organised criminal syndicate would be an aggravating feature;

(f) whether there was one transaction or many and the length of time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h) the role of the offender and the acts performed by him.”

The list was said to be non-exhaustive.

17.  In the present case, the nature of the underlying offence is of course serious.  As aptly described by the prosecution in the Summary of Facts, it has originated from international email frauds.  The victims were buyers and sellers in trade.  What the fraudsters did obviously, although not expressly stated in the Summary of Facts, must be that they hacked into the email accounts of the trading parties, obtained the details of the buyers and sent fake emails to them purporting to be their sellers, asking the buyers to deposit money into the designated bank account in Hong Kong, and in this present case, the HSB account.

18.  Thus, it can be seen that the underlying offence was highly sophisticated in its nature.  Deceit is practised by the fraudsters behind to achieve their objectives.  It also involved a high degree of planning. The setting-up of a Hong Kong company, for example, and the opening of company accounts in local banks to facilitate the withdrawal and transfer of the black money.

19.  Based on the above, the offence was obviously committed by an organised criminal syndicate behind and the operation involved international dimension as D1 is an Iraqi male, a construction worker living in the UK and he was recruited in the UK by an Arabian male, Uri, by a reward of £5,000 to come all the way to Hong Kong to set up a bank account for receiving the black money.

20.  I of course take into account that it was a common ground between both the prosecution and the defence that there was no evidence that D1 clearly knew the nature of the underlying offence. However, that does not mean that his culpability can be thereby significantly reduced although I bear in mind that the defendant is to be sentenced on the facts of the money‑laundering charge only and not the facts of the underlying offence.

21.  As commented by Stock VP in Boma (supra) at para 40(2)(a):-

“In such a case it must be recognised that he is nevertheless ‘assisting in the original crime, whether with knowledge or blind‑eye knowledge of it.’: R v Barsa at p 472. The scheme and the purpose of the legislation is to ensure care and honesty in the handling of other people’s money and those who are prepared to handle money on other people’s behalf and turn a blind eye to the source of that money do so at their own risk: see R v Farrow [2007] 1 Cr App R (S) 558, para 24. So the person who is aware of the fact that he is dealing with proceeds of an indictable offence but deliberately chooses not to ask questions is barely less culpable than the person who asks or who is told.”

22.  The money laundered in this offence is said to be close to HK$1.5 million.  The usual starting point is about 3 years’ imprisonment that I have just mentioned.  I have said Mr Stirling has submitted that the starting point here in this case should be also 3 years, even after taking into account of the international dimension.  I disagree.  The role played by D1 is so very important.  Without the co-operation of people like D1, it is difficult for the fraudster behind to withdraw and transfer the black money out of Hong Kong into the other jurisdictions.

23.  Having considered the above authorities and after applying the relevant factors into consideration, I come to the conclusion that the proper starting point on Charge 1 should be 3 ½ years.  I will not further discount the sentence just because D1 is a foreigner.  He came all the way from the UK to Hong Kong for the purpose of committing crimes.  Anyone who acts in this way to undermine the laws of Hong Kong deserves no sympathy.

24.   As said by the Court of Appeal in HKSAR v Hong Chang Chi [2002] 1 HKC 295at p 302:-

“It should be made clear to non-residents of Hong Kong, whether from the mainland (or Taiwan) or from far-flung jurisdictions, that if they come here in order to break the law, they will be treated no differently, and certainly no more leniently, than criminals who are normally resident here.”

25.  I took into account the fact that D1 had been very co-operative after his arrest.  However, the information he provided yielded no result on the arrest of the other two defendants.  While I can agree that no blame can be attached to him for the failure of the arrest, however, the case law has stated very clearly that the court shall not reduce any sentence unless the assistance or information provided by a defendant has actually produced fruitful result.

26.  The only effective mitigation therefore is the D1’s guilty plea and for which he would be given a full one‑third discount.

27.  Based on the above reasons, the sentence of D1 on Charge 1 is therefore reduced to 28 months’ imprisonment.