HKSAR v. XIAN JIANCHAO

DCCC 336/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 336 OF 2015

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REASONS FOR SENTENCE

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1. The defendant, Xian Jianchao, appeared before me facing two charges of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, Charge 1 and Charge 2.

2. Charge 1 concerned a conspiracy to launder HK$50,000 whilst Charge 2 concerned a conspiracy to launder HK$200,000.  Charge 1 took place on 27 January 2015 whereas Charge 2 took place on 26 January 2015.

3. The facts admitted by the defendant reveal that on 27 January 2015 at around 4 pm, the victim of Charge 1, Madam Wong, was alone at home.  She received an anonymous telephone call, the incoming number of the caller to her mobile phone was not shown, claiming to her that her son was detained, saying that her son owed a financial company around HK$200,000.

4. Madam Wong is a 70 years old elderly lady.  She asked to talk to her son, then another voice over the phone called Madam Wong “mother” and asked for her help otherwise they could beat him to death.  Madam Wong recognised the voice was not her son’s voice.  She ended the call and called her son immediately.  She confirmed her son was safe at his own home, then she called the police to report the matter. 

5. At around 4:24 pm, there was another incoming call to the landline while the police officers were already at Madam Wong’s flat.  The caller asked Madam Wong why she had ended the call and said they would beat her son to death.

6. Madam Wong said over the phone that she did not have HK$200,000 but was only able to pay HK$50,000.  The caller asked Madam Wong to get to the bank to get the money, ie HK$50,000, and at the same time the called asked for her mobile telephone number and reminded her not to report the matter to the police.

7. At around 5:15 pm, Madam Wong arrived at exit B of Chai Wan MTR Station.  She was told over her mobile phone that someone would come up to pick up the money.  She waited at exit B of Chai Wan MTR Station. 

8. At around 5:43 pm, the defendant arrived to meet Madam Wong.  The defendant passed his mobile phone to Madam Wong, the voice at the other end told Madam Wong to give the money to the defendant and then they would release her son. 

9. Madam Wong gave a brown envelope which contained some papers to the defendant.  The defendant took the envelope and put it into his rucksack, then he turned and tried to leave.  He was immediately arrested by the police ambushed there.

10. Under caution, the defendant said, “I was just coming here to collect money for others only.”

11. In a video-recorded interview, the defendant admitted the following. About two months ago he met someone called Ah Wah in a bar in mainland China. Ah Wah asked him whether he wished to earn quick monies which the defendant understood that it would be by illegal means.  On 26 January 2015, the defendant took a morning coach to Hong Kong and arrived in Hong Kong at around 9 am.  He was given 1,000 renminbi by Ah Wah.  He bought a Hong Kong SIM card when he arrived in Hong Kong.  He received a phone call from Ah Wah at noon on 27 January 2015.  Ah Wah asked him to take a taxi to Chai Wan and he was told he was to get some money from an old lady.  He did as told but was arrested by the police.

12. On 26 January 2015, in the afternoon, Mr Leung who is a 70 years old gentleman was working at his office.  He received a phone call.  The caller claimed to him, “Father, help me, I would be beaten to death.”  Then there was another voice claiming, “Your son is a guarantor of HK$200,000.  You have to help to pay otherwise you better prepare to take his corpse.”  Mr Leung thought his younger son was calling for help.

13. The other voice asked for Mr Leung’s mobile telephone number.  Soon there was an incoming call with no number shown on the screen of the mobile phone to Mr Leung’s mobile phone.  The caller asked Mr Leung to go to the bank to get HK$200,000.

14. Immediately Mr Leung went to a bank to get the money.  While he was on the way to the bank, he received another incoming call.  Mr Leung was told over the phone that he had to get to exit A of Mong Kok MTR Station to wait there. Mr Leung was also asked how he was dressed that day.

15. Mr Leung waited for around 30 minutes at exit A of Mong Kok MTR Station.  The defendant arrived and approached Mr Leung and told him that Mr Tang had asked him to come to collect the money.  Mr Leung then gave HK$200,000 to the defendant.  The defendant then walked away with the money.

16. Mr Leung, however, received another phone call asking him that there was another bill that Mr Leung had to pay.  At that point he realised he was deceived and he reported the matter to the police. 

17. In a video-recorded interview, the defendant admitted that he met someone called Ah Wah in a bar in mainland China.  Ah Wah asked the defendant whether he would like to make some quick money.  The defendant understood Ah Wah meant through illegal means.

18. On 26 January 2015 the defendant took a morning coach to Hong Kong and he arrived at around 9 am on the same day.  He was given 1,000 renminbi by Ah Wah and he bought a Hong Kong SIM card upon arrival.  At around 11 am on the 26th, Ah Wah called him and asked him to get to Mong Kok MTR Station.  The defendant was asked to locate Mr Leung and asked him for the money.  The defendant received a white envelope from Mr Leung and he noticed that there was HK$200,000 inside the envelope.  He then remitted HK$184,000 to mainland China to Ah Wah.  He pocketed HK$16,000 and used part of the money to buy a iPhone 6. He still had $7,880.30 with him at the time of arrest.

19. Mr Leung positively identified the defendant during an ID parade held on 2 February 2015.

20. The defendant has a clear record in Hong Kong.  The antecedent statement of the defendant shows that he is now 22 years old.  He entered Hong Kong on the strength of a China Two-way Permit.  He received education up to junior high school in China.  He worked as a factory worker earning 3,000 renminbi per month.  He was living with his parents and his siblings in China before his remand in Hong Kong.

21. The prosecution made an application for enhancement pursuant to section 27(2) of the Organised and Serious Crimes Ordinance, Cap 455.  A notice of intention to furnish information had been served on the defendant.

22. The information consists of a statement prepared by Chief Inspector Lam Cheuk-ho.  The information concerns the prevalence of telephone deception and the nature and extent of harm direct or indirect caused by these offences.

23. In paragraph 18 of the statement, Chief Inspector Lam states that the recent statistics indicate that the majority of victims in telephone deception cases tend to be the more senior members of the society.  Among the telephone deception victims in the first quarter of 2015, a significant number of them were retired persons, 25.5 per cent, and housewives, 44.3 per cent.

24. In paragraph 22, Chief Inspector Lam states:-

“Owing to the police stringent enforcement action against the culprit using a local bank account for committing bank deposit modus operandi telephone deception, the trend of it has been successfully and significantly reduced in previous years. Therefore, the culprit turned to the relatively high risk drop-off modus operandi since 2008.”

25. According to police record, there was no drop-off case reported in 2006 and 2007.  The drop-off cases only emerged in 2008 with 38 successful cases which accounted for 7.9 per cent of the overall successful telephone deception cases.  It then gradually increased to 80 cases in 2009, 126 cases in 2010, 149 cases in 2011, 169 cases in 2012, 200 cases in 2013, 183 cases in 2014 and 93 cases in January to May 2015. 

26. As Miss Tam for the defendant told me, she has not come across cases of enhancement.  I asked the prosecution to provide me with cases of enhancement so that I can provide copies of the same to Miss Tam so that she could familiarise herself with the procedure for an enhancement application. 

27. Mr Cho has helpfully provided me with HKSAR v Chen Jianchao CACC 184/2014, HKSAR v Wu Jianbing 吳建兵, CACC 32/2011, and HKSAR v Cen Huakuo 岑華擴, CACC 21/2014. 

28. Miss Tam in mitigation told me that the only cogent mitigating factor in this case is the guilty plea of the defendant and that he has a clear record in Hong Kong.  She submitted that the defendant was not the mastermind of the scam to launder money.  Madam Wong, the victim of Charge 1, did not suffer any loss.  As for Charge 2, though the proceeds concerned HK$200,000, the defendant was only given HK$16,000 as a reward. 

29. Miss Tam accepted that Charge 1 and Charge 2 were separate and distinct offences but she asked me to consider totality in sentencing the defendant for the two offences. 

30. The Court of Appeal in HKSAR v a male known as Boma Amaso CACC 335/2010 set out the relevant considerations in sentences for money laundering offences.

31. The Court of Appeal pointed out that the first factor to which any sentencing court should have regard is the maximum penalty available, and the maximum sentence for conspiracy to deal with property known or believed to represent proceeds of an indictable offence is one of 14 years’ imprisonment. 

32. The Court of Appeal reckoned also that the second factor to which the sentencing court must have regard is the fact that in this category of offence, deterrence is paramount.  Then there is the question of the amount of money laundered, this is not the be-all and end-all of a case but is a significant signature.

33. Then the sentencing court should consider the nature of a predicate offence is known and the penalty available for the predicate offence.  In the present case, the predicate offence was a telephone deception practised on elderly citizens of Hong Kong.

34. Then the sentencing court should consider the state of knowledge of the offender. 

35. An international dimension will always be a significant aggravating feature, and by international dimension the Court of Appeal included money laundered from or for those operating in the mainland. 

36. The sophistication of the offence is also relevant and where the offence is committed by or on behalf of an organised criminal syndicate, that is an aggravating factor.

37. It is relevant to take into account whether there is one transaction or many and the length of time over which the offence was committed.

38. The sentencing court should have regard to the role of the offender and the acts performed by him.  In this regard, the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds.  In the case of a person down the chain, the court will wish to have regard to whether a benefit has been received and, if so, the nature and the size of the benefit.

39. In sentencing the defendant, I have borne in mind the facts of this case.  I have borne in mind the maximum penalty available.  And I have reminded myself that in sentencing for this category of offence, deterrence is paramount.

40. Madam Wong in this case suffered no loss, but Mr Leung suffered a huge loss of HK$200,000.  But as the Court of Appeal said in Boma, the amount of money laundered is not the be-all and end-all of a case but is a significant feature.

41. In the present case, the predicate offences behind Charge 1 and Charge 2 were telephone deceptions practised on elderly citizens. 

42. As to the state of knowledge of the defendant, there is no evidence to show the defendant was aware of the nature of the predicated offences.  But the defendant knew he was going to earn quick monies by illegal means and he was also told he was to get the money from an old lady.  In my judgment, the defendant was obviously turning a blind eye to the crimes behind, when he was asked to launder the money.

43. The cross-border dimension in the present case aggravated the seriousness of the two offences.  The way the defendant was asked to launder the monies was not very sophisticated but there was a degree of planning.  To a certain extent, the defendant was working for a syndicate. 

44. The facts reveal that the defendant took part in two conspiracies on two consecutive dates. 

45. I have regard to the role of the defendant who was obviously not the mastermind of the laundering operation.  But as the Court of Appeal indicated in Boma, sentences should be sufficient to deter those who might be prevailed upon by directing minds.

46. The facts admitted by the defendant show that the defendant committed the offences for monetary reward. 

47. In my judgment, Charge 1 calls for a starting point of 3 years’ imprisonment.  As for Charge 2, a starting point of 4 years’ imprisonment is appropriate. 

48. The defendant is entitled to the customary one-third reduction for his clear record and guilty plea.  That would bring the sentence for Charge 1 down to 24 months and that of Charge 2 to 32 months. 

49. I have considered the materials placed before me by the prosecution pursuant to section 27(2) of the Organised and Serious Crimes Ordinance.

50. First of all, the offences in question fall into the definition of specified offences.  I am satisfied from the materials placed before me that the offences under consideration are prevalent.  I am also satisfied that the nature and extent of the harm caused by the specified offences was serious. 

51. Each offence constituted an organised crime within the meaning of the ordinance, I am satisfied that enhancement is called for, having regard to the nature of the offences and the prevalence of the offences, in my judgment, an enhancement is appropriate.

52. In my judgment, a one-third enhancement is appropriate in the present case.  On Charge 1, an enhancement of 8 months is appropriate, and that would increase the sentence from 24 months to 32 months.  On Charge 2, a 10 months’ enhancement is appropriate and that will increase the sentence from 32 months to 42 months.

53. I have borne in mind the totality principle.  In my judgment, an overall sentence of 50 months’ imprisonment should adequately reflect the overall criminality of the two offences.  I order 8 months of the sentence for Charge 1 shall run consecutively to the sentence for Charge 2.