HKSAR v. CHAN TONG KAI

HCCC 407/2018

[2019] HKCFI 1151

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 407 OF 2018

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REASONS FOR SENTENCE

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Background

1.  On 31 December 2018, the Accused pleaded guilty in the Eastern Magistrates’ Courts to 4 charges of “dealing with property known or believed to represent proceeds of an indictable offence”, in short, “money laundering” offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455.  

2.  It is, however, to be noted that while the Accused pleaded guilty to all 4 charges on that occasion, he did not accept certain paragraphs of the summary of facts prepared by the prosecution.  Therefore, when the case was committed to this court for sentence, there was an application by the prosecution for a Newton Hearing to determine those disputed matters.  Parties estimated that the Newton Hearing would take about 5 days.  

3.  On 12 April 2019, having heard both parties’ submissions and having considered all the relevant matters, I ruled that there would not be a need to conduct any Newton Hearing since, in my view, the disputed matters would not have any potentially significant effect on the level of sentence to be imposed on the Accused.  I shall come back to my reasoning on this when I later deal with the applicable sentencing considerations.  Suffice for me to say the established principle is that if the disputes between the parties would not materially affect the sentence, then no Newton Hearing would be required. 

4.  Following my ruling and upon indication from the defence that they were ready to proceed with the case, the Accused’s earlier pleas tendered at the magistrates’ courts were confirmed and, with his admission of the amended summary of facts, he was formally convicted of all four charges of money laundering.  

Facts Admitted

5.  The amended summary prepared by the prosecution did not only cover the events of the money laundering charges but also the background facts leading to those offences.

6.  Briefly, the Accused admitted that he and his girlfriend “Poon” met in July 2017.  One month later, they became lovers with intimate relationship. In early December 2017, Poon was around 5 weeks pregnant.  

7.  In the morning of 8 February 2018, the Accused and Poon departed HK for Taiwan.  The Accused was the one who paid for the air tickets and the hotel accommodation.  

8.  In the small hours of 17 February 2018, Poon’s mother received a WhatsApp message from Poon, saying that she would return to HK later that night.  However, Poon then became out of touch.  On 5 March 2018, Poon’s mother made a missing person report to the police.  She had also found at her residence a copy of the Accused’s Taiwan Entry and Exit Permit. 

9.  As for the Accused, he returned from Taiwan to HK on the night of 17 February 2018.  On 13 March 2018, he was interviewed by the police.  In the course of the interview, the Accused admitted that he had killed Poon in Taiwan.  Therefore, he was immediately arrested for the offence of murder and was cautioned.  

10.  Under caution, the Accused disclosed that he had buried the body of Poon at a piece of grassland in Taipei.  The Accused also revealed further particulars during the subsequent video-recorded interviews, including his claim that he had an argument with Poon in the early hours of 17 February 2018 over how their luggage should be packed; as well as an assertion that they later had another argument during which Poon had told him that the baby belonged to her former boyfriend and that Poon had shown him a video capturing Poon and a male having sex. 

11.  According to the Accused, feeling agitated at the time, he hit Poon’s head against the wall and strangled her from behind with both hands.  There followed a struggle with Poon on the floor for about 10 minutes until Poon was dead.  The Accused then put Poon’s body into a suitcase and packed her personal belongings into four plastic bags. 

12.  The Accused, however, admitted that he had kept Poon’s HSBC ATM card; digital camera and iPhone.  The following morning, the Accused first disposed of Poon’s belongings at different refuse collection points near the hotel.  He then took the suitcase with Poon’s body and travelled by train to search for a place for disposal which he eventually did at a park. 

13.  Concerning Poon’s properties which he had taken away, the Accused admitted that he had used Poon’s ATM card to withdraw TWD 20,000 cash in Taipei with a view to buying some new clothes for himself.  However, he did not do so eventually.

14.  When the Accused returned to HK, he had brought with him the ATM card, the camera, the phone and the cash of TWD 20,000.  These are the properties the Accused dealt with in respect of the first charge and their total value was about HK$13,500. 

15.  In respect of the 2^nd to the 4^th charges, they respectively concerned the Accused’s use of Poon’s ATM card to withdraw cash in HK.  All three instances were captured by the relevant CCTV footages. 

16.  Individually, on 19 February 2018, the Accused withdrew HK$10,500.  Out of this sum, he deposited HK$10,300 into his Bank of East Asia credit card account.  This is the subject matter of the 2^nd charge.

17.  On 20 February 2018, the Accused withdrew HK$8,500 and he then deposited the same amount into his DBS credit card account.  This is the subject matter of the 3^rd charge. 

18.  On 21 February 2018, the Accused withdrew HK$200 from the bank by using Poon’s ATM card.  This is the subject matter of the 4^th charge.

The Accused’s Background and Mitigation

19.  The Accused was born in the Mainland and is now aged 20.  He has obtained an Associate degree from the Hong Kong Polytechnic University and was working part-time at the time of his arrest.  Prior to the commission of these offences, the Accused had a clear record in Hong Kong. 

20.  Mr Ronny Leung for the Accused confirmed those particulars and emphasized that the Accused pleaded guilty at the committal stage and has been detained since March 2018.  Other than these, Mr Leung did not put forth any particular mitigation on behalf of the Accused.

Sentencing Considerations

21.  In setting out the relevant sentencing considerations, it is convenient to first explain why I did not consider a Newton Hearing to be necessary in this case.

22.  As set out above, the charges which were laid against the Accused are all money laundering charges. It is to these money laundering charges that the Accused pleaded guilty. The mens rea required for the money laundering offence is “knowing or having reasonable grounds to believe that the properties dealt with represented the proceeds of an indictable offence”. The actus reus is the act of dealing.

23.  There is no tariff for this type of offence because of the wide range of culpability involved.  Therefore, although in the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the court had, using the amounts dealt with as a basis, tabularized a number of past cases to show the different sentences passed, I have to bear in mind that the amount laundered is but just one of the relevant factors to be taken into account in sentencing money laundering offences.

24.  The Court of Appeal, in HKSAR v Boma Amaso [2012] 2 HKLRD 33, identified at paragraph 40 of the judgment some of the significant features, although not an exhaustive list, for which the court should look and take into account in sentencing money laundering cases.  They include the nature of the predicate offence, if known, and the penalty available for the predicate offence; any international dimension; the sophistication of the offence, including the degree of planning; whether there is one transaction or many and the length of time over which the offence was committed; whether 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; and whether a benefit has been received and if so, the nature and size of the benefit. 

25.  Therefore, if an offender was aware of the predicate offence which generated the proceeds or if there was a certain degree of planning involved, both are relevant factors to be taken into account in the sentencing exercise.  Further, if the facts demand, and if the accused had full knowledge that the proceeds arose from a serious crime, a more severe sentence may be called for although the amount he dealt with was relatively small.

26.  In this case, there is no dispute that the properties dealt with by the Accused were derived from his own criminal conduct.  In the circumstances, it is helpful to reiterate what Stock VP, as he then was, said in the case of HKSAR v Chan Kim Chung, Nelson [2012] 2 HKLRD 263.  In that case, the accused had been charged with both the offence of blackmail and that of money laundering in respect of the money he had obtained from the blackmail.  The following were the observations made by the court:

“12. The problem raised by this ground of appeal stems from the fact that s. 25 of the Organized and Serious Crimes Ordinance, Cap. 455, is broadly drafted so that it is capable of including a wide range of conduct by the perpetrator of the predicate offence some of which is beyond what most people think of as money laundering. …

13. What most people understand as money laundering, however, is where the proceeds of crime are dealt with for a specific purpose, namely, to create distance between the crime and the profits it generates so that no link between the two can be detected. …This we shall refer to as a dealing with the proceeds for a money laundering purpose.

14. When money laundering in this sense takes place then it should be separately charged because it represents a course of criminal activity that is clearly additional to the criminal acts that make up the predicate offence. ...

15. …

16. …

17. These considerations lead naturally to the approach which a court should adopt in sentencing an offender who is guilty both of the predicate offence and a connected s. 25 offence. The question for the purpose of sentence of the s. 25 offence must always be whether its commission adds anything to the culpability disclosed by commission of the predicate offence. If it does, then that extra culpability must be reflected in the overall sentence imposed. If, however, the s. 25 offence adds nothing, then an effective additional sentence for the s. 25 offence should not be imposed, for doing so would in effect be to punish the offender twice the same conduct.

18. …

19. …where the s. 25 offence evidences no more than the mere obtaining of funds already reflected in the predicate offence, it is unlikely – unless the prosecutor is able to show otherwise – that additional culpability is demonstrated.”

27.  In the present case, for charge 1, I trust the offence of money laundering, and not theft, was laid because the actus reus of the theft actually took place in Taiwan, not in HK.  In respect of charges 2-4, it might be that money laundering was laid with theft as the alternative primarily because the prosecution took the view that the predicate offence was murder or manslaughter and therefore, by dealing with the deceased’s properties, the Accused had done something additional to the killing. 

28.  I mention this because the amended summary contained matters covering the killing, the theft and the money laundering.  I therefore find it necessary to set out clearly whether I consider the money laundering charges to have disclosed any additional culpability on the part of the Accused on top of the predicate offence which I find, as I explain below, to have been one of theft and not murder or manslaughter. 

29.  In this respect, if one accepts that the predicate offence was theft, the facts clearly disclosed no more than the mere obtaining of properties from the offence of theft, and not anything additional. 

30.  This then brings us to the question of the predicate offence which generated the proceeds, the subject matters of the four charges in this case. 

31.  At the hearing on 12 April 2019, it was the prosecution’s primary contention that the predicate offence was murder or manslaughter but was that correct? 

32.  As Ms Claudia Ko for the prosecution acknowledged at that hearing, if there had just been the killing of Poon and that her belongings had been left untouched by the Accused, there could not have been any proceeds generated from the killing, nor any dealing with proceeds by the Accused. 

33.  On the other hand, if there had just been the taking away of the properties from Poon without the killing, then when the Accused arrived in HK with those properties, he would still have been liable to be charged with dealing with the proceeds generated by the theft.

34.  Similarly, the cash withdrawn and dealt with by the Accused in HK all arose from the theft of Poon’s bank deposits.

35.  It is therefore clear that the killing was not the predicate offence in this case but theft was.  Without the theft, there was simply no basis to frame any money laundering charge against the Accused. 

36.  Ms Ko, in the end, accepted that it was the taking away of Poon’s properties and the withdrawal of money from her bank deposits, the conduct of theft, which generated the proceeds in question.  She, however, submitted that the killing, irrespective of where it took place, formed the necessary backdrop to the money laundering charges and that the killing should be taken into account in this sentencing exercise. 

37.  I shall come back to this submission later.  Suffice for me to say that if the prosecution had appreciated that the predicate offence was theft and not murder or manslaughter, it should have been clear that the disputed paragraphs did not add anything to the factual matrix of the money laundering offences because there was nothing in those disputed paragraphs which showed or tended to show that the Accused had planned the theft or had planned to lure Poon to Taiwan in order to take away her properties before his departure from HK. 

38.  If there was such material in those disputed paragraphs, it might be that the paragraphs would then be relevant to this sentencing exercise because, in such circumstances, it could be said that when the Accused dealt with the properties, he had the knowledge that such properties arose from a planned predicate offence of theft committed on a deceased person, not just an opportunistic theft. 

39.  Nonetheless, the above is academic in the present case because, as accepted by the prosecution, such a plan to steal was not the type of material covered in the disputed paragraphs. 

40.  It is for the above reasons that I came to the conclusion that no Newton Hearing would be necessary.  In this connection, I note that in the original charge sheet, theft, and not any other offence, was pleaded as an alternative charge in respect of the 2^nd to the 4^th charge of money laundering.  Therefore, it must have been the view of the prosecution that the offence of theft was relevant to and associated with the money laundering charges. 

41.  If this view had been anchored, and if it had been appreciated that the predicate offence was one of theft and not murder or manslaughter, I trust that the prosecution would not only have dropped its contention for a Newton Hearing but might also have considered it not necessary to bring the case to the Court of First Instance because, on the material available, the killing was quite separate from the thefts and it was the thefts which gave rise to the money laundering charges, not the killing. 

42.  That said, it is understandable that great frustration and a genuine sense of unfairness, to say the least, would be felt when an accused’s admission about killing someone outside this jurisdiction could not be a basis to bring a murder/manslaughter charge in HK.  However, justice equally demands that an accused is to be sentenced on the basis of the offences with which he has been charged and of which he has been convicted, not on any other offences or matters, albeit matters which may disclose much greater criminality than the offences charged. 

43.  We should never lose sight of the fact that no matter how likely an accused has actually committed a most heinous crime, he is entitled to the full protection of his rights associated with a fair trial.  If it were otherwise, it would mean short-circuiting our criminal procedure and this affects not only the accused, but also the integrity of our entire criminal justice system.  These are fundamental principles which should always be borne in mind. 

44.  Now, other than the disputed paragraphs, there is full acceptance on the part of the defence that the Accused knew that the properties he dealt with were proceeds arising from the thefts he committed on the deceased whom, admittedly, he himself had killed. 

45.  This acknowledgment, in my view, fully answers Ms Ko’s point about the killing being the backdrop to the money laundering charges and this will, no doubt, be a factor which should be taken into account when considering if the Accused had any knowledge, at the time of the dealing, that the properties came from a serious offence. 

46.  In HKSAR v Zheng Liang Xin CACC 507/1996, 18 July 1997 (unreported), the Court of Appeal, when refusing the Applicant’s application for leave to appeal against his sentence of 2 years imposed after a guilty plea in respect of a theft charge involving a necklace, a bracelet, a ring and cash of about HK$3,400, which the Applicant committed after killing the deceased, pointed out that, “It is sufficient for us to state that ransacking a dead woman’s body for her possessions is a serious matter. We think that the sentence imposed by the judge was within the appropriate range.  It was neither manifestly excessive nor wrong in principle.” 

Sentencing in this Case

47.  In the present case, the Accused was charged with money laundering and not theft but the above case illustrates that stealing from a deceased person whom an accused has killed is a serious offence.  In other words, the predicate offence of which the Accused in this case was aware is a serious one. 

48.  This mental element, as pointed out in Boma, is an aggravating factor to be taken into account in the sentencing exercise. 

49.  Further, it is also not disputed that the Accused took the properties in charge 1 all the way back from Taiwan to Hong Kong.  I therefore consider that there is an international element in his dealing although we are not talking about any international syndicate at work.  Again, this is another aggravating factor. 

50.  As to the benefits the Accused received, according to the amended summary, he was the only one who benefitted from his dealings with the properties.  The cash, the camera and the mobile phone were all recovered from the Accused’s residence. 

51.  Having considered all the relevant matters, including the Accused’s knowledge of the serious nature of the predicate offence; the international dimension involved, the benefit the Accused obtained; the value of the properties; and the period over which the dealing took place, I have come to the conclusion that a starting point of 39 months is appropriate for charge 1. 

52.  In respect of the remaining charges 2-4, although all concerned the withdrawals of money in HK by using Poon’s ATM card, it is to be noted that the card was obtained from a theft committed on the deceased and was brought all the way back from Taiwan to HK which then made the withdrawals possible.  In addition, based on the facts admitted, the Accused was the only one who benefitted from these dealings as the money withdrawn was either deposited into his own credit card account or was for his own use. To recap, the money involved in charge 2 was HK$10,500; charge 3 was HK$8,500; and charge 4 was HK$200.    

53.  Thus, having considered all the relevant matters, including the Accused’s knowledge of the relevant background and the predicate offence; the benefit he obtained; and the amount of cash laundered, I take the view that a starting point of 2½ years is appropriate for charges 2 and 3.  However, in view of the very small amount of cash dealt with in charge 4, I consider that a starting point of 1 year is appropriate.

54.  The Accused pleaded guilty at the committal stage. I would grant him the full one-third reduction in sentence.  Other than the plea, I do not consider the Accused’s clear record and his other personal background to be matters warranting any further reduction in this case.  

55.  Therefore, the sentences are as follows:

- for charge 1, 39 months reduced by 1/3 is 26 months’ imprisonment;

- for charges 2 and 3, 2½ years reduced by 1/3 is 20 months’ imprisonment; and

- for charge 4, 1 year reduced by 1/3 is 8 months’ imprisonment.

56.  These four charges, as they are currently framed, are separate charges involving different properties and separate acts of dealing which took place at different times.  In principle, wholly consecutive sentences could be imposed.  However, having considered the totality principle and that all four charges could be said to have arisen from the same set of facts, I take the view that an overall sentence of 29 months should sufficiently reflect the Accused’s criminality in all these four charges. 

57.  To achieve this result, I order that 3 months of the term of 20 months imposed in respect of charge 2 are to run wholly consecutively to the 26 months for charge 1, the rest to run concurrently. In respect of the terms for charge 3 and 4, they are to run wholly concurrently with those imposed for charges 1 and 2, thus giving an overall term of 29 months.