HKSAR v. CHEN XIAOKANG

DCCC716/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.716 OF 2013

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Reasons for Sentence

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1.  The defendant was charged for Conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455 and sections 159A and 159C of the Crimes Ordinance, Cap.200.

2.  The defendant pleaded guilty and admitted the facts, he is convicted accordingly.  

Facts

3.  Both charges concerned proceeds from telephone deception. The prosecution case is that the defendant agreeing to collect the money (charge 1)and what was supposed to be the money (charge 2) was party to a conspiracy to deal with that money, knowing or having reasonable grounds to believe the money, in whole or in part, directly or indirectly represented the proceeds of an indictable offence.

Charge 1

4.  At about 12:20pm on 9 May 2013, PW1 was deceived over phone that her son studying abroad was detained by certain culprit, the ransom demanded was RMB¥170,000, but as PW1 only had $60,000 with her, she was told to give $60,000 first.  PW1 subsequently handed over the $60,000 to the defendant as directed over the phone.  After learning that the son was safe and was not kidnapped, the case was reported to the Police.

Charge 2

5.  At about 3:30pm on 10 May 2013, PW2 was deceived over phone that her son was kidnapped and was demanded ransom of $210,000 for her son’s safety.   She was directed to put the monies into a bay and drop the bag of money into a rubbish bin.  PW2 borrowed the monies from her uncle; the uncle found the circumstances suspicious and made a report to the Police.

6.  After receiving the complaint, the Police intervened and substitute the bag with monies with an empty bag.  At about 6:05pm the Police arrested the defendant after he took out the empty bag out from the rubbish bin.  At that time the defendant was still talking on his mobile phone, police took over his phone and heard a male voice from the other side saying “leave quickly after taking the money”.  Under caution, the defendant said someone asked me to come to the Sport Centre and to pick up the bag from rubbish bin.

7.  At the time of arrest, the defendant had in his possession:

1) 1 mobile phone;

2) 4 pre-paid mobile phone SIM cards;

3) Cash of RMB¥2,614; and

4) Cash of HK$424.

8.  According to TIC movement records, the defendant entered Hong Kong at around 9:41am on 6 May 2013 and was allowed to stay for 7 days.

Mitigation

9.  The defendant aged 20, with clear record.  He is a mainland resident who entered Hong Kong with a two-way permit.  He lives with his parents in mainland, his father aged about 50 is a casual worker and his mother aged 45 is a housewife.  The father suffers from high blood pressure and the mother has psychiatrics problem for some times.  The defendant’s elder brother works in a factory. The defendant himself used to work in a factory until January this year, earning ¥2,500 per month and would give ¥500 as family contribution.  

10.  In January this year the defendant was introduced to a person called “Jar Gore”, the defendant got close to this Jar Gore and the latter paid for all the defendant’s entertainment expenses.  In early April, this Jar Gore offered the defendant come to Hong Kong to collect gambling debts for 10% commission on top of all the expenses.  The defendant took up the job, partly because he felt he owed Jar Gore a favour, partly because of greed.  He knew the monies would be tinted but did not know that it involved telephone deception.  He is yet to receive the commission agreed by Jar Gore.

11.  The defence rely on the sentencing principle and reasoning in HKSAR v Wu Jianbing [2012] 2 HKLRD 781, CACC 32/2011, and urged me to take into account of the age of the defendant to impose a lower sentence in the present case.

Sentencing

12.  As summarized By HH Judge Dufton in KUO Yung-sen DCCC 341/2013 this July in paragraph 6 of the case “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 offence that generated the laundered money and 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; 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; and the amount of money involved (see for example Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502; HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545; and HKSAR v A male known as Boma Amaso [2012] 2 HKLRD 33).”

13.  IN HKSAR v Wu Jianbing, the defendant, who was aged 25, travelled from the Mainland, collected money on four occasions, over 4 days, which resulted in 4 charges of dealing with the proceeds of crime.  The sums collected being $200,000, $30,000, $20,000 and $60,000 respectively.  The $200,000 and $60,000 in the first and fourth charges were not lost, whereas the $30,000 and $20,000 in respect of the second and the third charges could not be recovered.  All monies arose from telephone deception cases.  The Court of Appeal, taking into account the circumstances of the case including the monies involved, and that there was no evidence to show that the defendant participated directly in the telephone deceptions, said that the proper starting point after trial was 3 years imprisonment on each charge.

14.  In the present case, the amount involved in each charge being $60,000 and $210,000 respectively and there is no evidence that the defendant participated directly in the underling offences.  Though the defendant also came to Hong Kong to commit the crime, he was only 20 at time of the offence. I consider the appropriate starting for each charge to be one of 33 months imprisonment. The defendant entitled to 1/3 discount for his plea, the sentence is thus reduced to 22 months, I do not consider there to be any mitigating factor that called for further deduction.

15.  The prosecution applies for enhancement of sentence pursuant to section 27(2) of the Organized and Serious Crimes Ordinance, Cap.455 on the grounds of the prevalence of the offence and the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of this specified offence.  The notice of the application was duly served to the defendant.

16.  In support of the application, the prosecution submits the statement of CIP Lam Cheuk Ho dated 2 September 2013 together with update statistics as of August 2013.  The defence did not object to the application and did not take issue of the content of the statement, and admitted the same.

17.  As shown in the statement of CIP Lam Cheuk Ho there has been a significant increase in what described as the “Drop-off” cases and the consequential loss in such cases.   The officer concluded that the modus operandi of “Drop-off” in telephone deception cases and the associated money laundering activity by culprits tasked to retrieve the money, is a prevalent crime in Hong Kong with obvious concern to the community.  After consideration, I am satisfied beyond reasonable doubt that both grounds for enhancement are made out.

18.  Taking into account of all the circumstances, I considered that the sentence should be enhanced by 7 months. Consequently, the sentence on each charge becomes 29 months.  The two charges were committed on different dates; part of the sentences should be served consecutively.  Having considered the totality principle, I order 1 month of the sentence imposed on the second charge to be served consecutively with that of the first charge, making a total sentence of 30 months imprisonment.

Order