HKSAR v. SUEN MING HEI AND ANOTHER

DCCC 1067/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1067 OF 2016

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REASONS FOR SENTENCE

1.  The defendants stand convicted after trial of one joint charge of conspiracy to deal with property having reasonable grounds to believe the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1].

2.  Full particulars of the offence are set out in my verdict handed down on 6 September 2017.  In summary at 15:31 on 3 October 2014 $3,000,000 was stolen from the Bank of China (Hong Kong) account of Lee Kai Keung, Simon (“Mr Lee”). 

3.  Prior to the theft at about 12:30 that day an unknown male using a false Hong Kong identity card in the name of Mr Lee, went to a branch of ‘Smartone’ purporting to be authorised by Mr Lee to report the loss of his SIM card for telephone no. 60774044.  A new SIM card was issued as a result of which Mr Lee could not use his telephone and the bank could not contact him.

4.  At about 15:15 another unknown male, also using a false Hong Kong identity card in the name of Mr Lee, went to the Sha Kok Estate Branch of the Bank of China (Hong Kong) and requested to transfer $3,000,000 to the account of D1. 

5.  The request was successful $3,000,000 being transferred from Mr Lee’s account to D1’s account at 15:31.  Twenty-five minutes later D1 made the first of four withdrawals from his account by withdrawing $18,000 from the ATM.  Over the next fifty-seven minutes D1 made three counter withdrawals in the sums of $1,000,000, $1,600,0000 and $300,000 from three different branches of the Bank of China in Central.  

6.  After withdrawing the money D1, D2 and Wong Hoi Ngan (“Wong”) purchased iPhones to the value of $2,722,280 from Mr Pang Chun Wa, the proprietor of a mobile phone shop in Sin Tat Plaza.

7.  In the evening after discovering $3,000,000 had been transferred out of his account Mr Lee made a report to the police. 

8.  The next morning when D1 attempted to withdraw some more money from his account he was arrested by the police.  In a video recorded interview D1 admitted that he was told by Wong to use his account to receive the $3,000,000 and after withdrawing the money he used the money to buy iPhones together with Wong and D2[2]. 

9.  D2 was arrested on 14 October 2014 and Wong on 16 October 2014[3].  In a video recorded interview D2 admitted that he was asked for a Bank of China account number to receive $3,000,000; he then contacted Wong who gave him an account number and that after the money was withdrawn he used the money to buy iPhones together with Wong and D1[4].    

10.  I was satisfied both D1 and D2 agreed to deal with the $3,000,000 having reasonable grounds to believe the $3,000,000 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence.

Mitigation

D1

11.  I have carefully considered everything said on behalf of D1 by Mr Leung, including that D1 has a young daughter aged 1½ years and that his father has cancer[5].  I take into account D1 has no previous convictions.

D2

12.  I have carefully considered everything said on behalf of D2 by Ms Cheung together with the mitigation letters written by his employer, elder sister and a friend, all of whom speak very highly of the defendant.   I take into account that D2 was last before the court in 2004. 

13.  Money laundering is a serious offence for which deterrent sentences are required.  A number of significant factors have been identified as relevant in determining the culpability of a defendant, including the nature of the predicate offence that generated the laundered money; the extent to which the offence assisted the crime or hindered its detection; whether the defendant had knowledge of that underlying offence or has turned a blind eye to the source of the money; the amount of money involved; whether there was an international element to the commission of the offence; the degree of sophistication of the offence and the level of the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence (see for example Secretary for Justice v Jerome Yuval Arnold Herzberg[6]; HKSAR v Hsu Yu Yi[7]; and HKSAR v A male known as Boma Amaso[8]).

14.  Mr Leung and Ms Cheung both place emphasis on the fact that the defendants had no knowledge of the theft from Mr Lee’s account; they were not the masterminds behind the money laundering; there was no international element the theft being committed in Hong Kong; and that although the amount $3,000,000 is substantial this was a single isolated incident lasting several hours. 

15.  The courts have emphasised that a defendant is to be sentenced on the facts of the money laundering charge and not on the facts of the underlying offence(see for example HKSAR v Chen Szu-ming[9] and HKSAR v Yam Kong-lai)[10].  Further, sentence should mainly reflect the amount of the money laundered (see for example Secretary for Justice v Ngai Fung Sin, Apple)[11].

16.  The lending of bank accounts for someone else facilitates the laundering of money by disguising the true owner of the money passing through the bank accounts.  This makes difficult the detection of crime and at the same time undermines the integrity of the banking system.  

17.  Although the roles of the two defendants were different I am satisfied they both played an essential part in the conspiracy for which D1 received a reward of $82,000 and D2 a reward of $70,000[12]. I am satisfied there should be no distinction drawn between the defendants in sentencing. 

18.  Taking into account the amount involved was $3,000,000, the role of the defendants; both defendants received a reward; this was a single incident and that D1 has no previous convictions and D2 has no similar convictions and was last before the court in 2004, I am satisfied the proper sentence after trial is 3 years’ imprisonment. 

Delay

19.  Delay in bringing an offender to justice is a mitigating factor which may be taken into account in sentence.  All the circumstances must be looked at including whether the offender has acknowledged guilt; where the delay has given the offender the opportunity to rehabilitate himself; whether restitution has been made; whether there was a legitimate expectation the matter will not be further pursued; the size of the investigation and whether the time taken to bring the case to court was longer than necessary[13].

20.  Ms Alva has provided to court a chronology of major events.  D1 was arrested on 4 October 2014; D2 on 14 October 2014 and Wong on 16 October 2014.  The investigation took over eighteen months after which the police sought legal advice on 31 May 2016.  In the interim D1, D2, & Wong were released from police bail in April 2015. 

21.  Ms Alva explains the main reason for the time taken to investigate the matter was the location of persons involved in the theft of the money from Mr Lee’s account.  Clearly whilst the police needed time to investigate the matter eighteen months would appear rather a long time to complete the investigation. Arguably the matter could reasonably have been brought to court earlier than it was.        

22.  Legal advice was given on 19 September 2016.  D1 and D2 were rearrested and charged on 18 October 2016.  The defendants first appeared in the Shatin Magistracy on 28 October 2016. The case was transferred to the District Court on 11 November 2016. The first hearing in the District Court was on 2 December 2016 when the defendants indicated pleas of not guilty and the case was set down for trial on 14 August 2017. 

23.  The trial commenced on 14 August 2017 nearly 3 years after the defendants were first arrested.   No fault being attached to the defence for the time taken to bring the case to trial I am satisfied some credit should be given in sentence for the time taken to bring the case to trial[14]. I am satisfied the sentence of both defendants should be reduced by two months.

Agreement of the prosecution case

24.  Ms Cheung asks that credit be given for both defendants agreeing the entirety of the prosecution case.  In HKSAR v Hsu Yu Yi[15] the Court of Appeal approved of the reduction of one month on account of admitting the prosecution case.  Hsu Yu Yi was referred to in HKSAR v Tam Lap Shek & another[16] where the Court of Appeal said that a small discount ought to have been given for agreeing the prosecution case.[17]  In the circumstances I am satisfied the sentences are to be further reduced by one month.  

Sentence

25.  The defendants are convicted and sentenced to 2 years and 9 months’ imprisonment.