HKSAR v. CHEN LONGXING

DCCC1063 & 1165/2011 (CONS)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1063 & 1165 OF 2011 (CONS)

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Reasons for Sentence

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1.  The defendant pleaded guilty to Charge 1, 2, 3 and 5, which are all offences of money laundering. The defendant pleaded not guilty to Charge 4. This court ordered this charge to be left on court’s file and not to be proceeded with without the leave of the court.

2.  The particulars of all these four charges:

Charge	Offence Date	Bank	The Amount Deposited
1	7 - 28 July 2011	Nanyang Commercial Bank	$452,845.35
2	9 - 28 July 2011	Bank of China	$1,008,973.36
3	9 July - 2 August 2011	Hong Kong Bank	$203,100.00
5	8 July - 2 August 2011	Chong Hing Bank	$590,012.80

Facts of the case

3.  On 25 July 2011, a Madam Liu in Singapore received a call saying that she had won a lottery prize of HK$980,000.  In response to this call, Madam Liu remitted SG$4,225 as service charge into Hong Kong Nanyang Commercial Bank, (and that is Charge 1’s account.) 

4.  Subsequently, she found out that she has been cheated and made a report to the police in Singapore, who then alerted the Hong Kong Police.  The Hong Kong Police put the defendant on stop list. 

5.  On 2 August 2011, the defendant was arrested in Lok Ma Chau.  In the record of interviews, the defendant admitted that:

(1) He was asked by his friends to come to Hong Kong to open the accounts with his PRC ID card and two-way permit.

(2) He passed all the bankbooks, bank cards and passwords of the bank accounts in Charge 1 to 3 to his friend.

(3) He would be paid $10,000 per month. However, he has not yet received any money yet.

(4) He had withdrawn money from the bank accounts and each time he handed all the withdrawals to his friends.

(5) He felt uneasy about the source of money but was told by his friend that the money belonged to his boss.

6.  As stated in the Summary of Facts and was admitted by the defendant, that at all material times he knew or had reasonable grounds to believe that the sums, in whole or in part, directly or indirectly represented the proceeds of an indictable offence of all the total sums deposited into the four bank accounts as stated in the particulars of the four charges.

Mitigation

7.  The defendant is 40 years old.  He has a clear record.  He lived with his wife and a 14-year-old son in China.  The defendant was a farmer in China and, due to poverty, he came to Hong Kong to commit the present offences.  He was told and was being used by others to open those bank accounts in return to earn quick money. 

8.  In his own letter to this court, he said that he lived in a very poor part of China and has very little knowledge about the laws in Hong Kong.  He accepted the job because $10,000 per month was a great deal of money to him.  He is now extremely remorseful.

9.  There is no doubt that the defendant had committed very serious offences.  In the case of HKSAR v Hsu Yu Yi, CACC159/2009, the background of the case was to a certain extent similar to the present case.  D2, D3, and D4 in that case faced a charge of money laundering, the amount involved was about $2.5 million. 

10.  The background of that case also concerned a false notification of winning a lottery prize in Singapore.  The victim also deposited SG$990,000 into various bank accounts.  Subsequently, the victim made a report to the police in Singapore.       

11.  The case in Hsu Yu Yi CACC159/2009 concerned D2’s appeal of sentence.  D2 was a Taiwanese who came to Hong Kong to open bank accounts to receive money which amounted to $2.5 million.  The Court of Appeal considered that the starting point of 3 years and 6 months was appropriate.    

12.  In the case of Hsu Yu Yi, CACC159/2009, the court also considered the sentencing principles in this type of offences.  Paragraph 9 of the judgment said:

“There are no sentencing guidelines for the offence of dealing with proceeds from an indictable offence because the facts vary from case to case. However, the following factors are to be taken into account when determining sentence:

(1) It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(3) The offence of dealing with proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However, if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(4) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(5) The length of time the offence lasted.”

13.  As appeared in paragraph 14 of CACC159/2009, the court also listed out the sentences of 12 different cases. 

14.  In the present case, the total amount involved in the four accounts was about $2.2 million.  The four accounts were opened on 7, 8 and 9 July 2011 with either $100 or $200 opening deposit. 

15.  Under caution, the defendant admitted that he was recruited in China to come over to Hong Kong to open the bank accounts with a view to earn $10,000 per month.  This clearly involved cross-border criminal activities.  He was also actively withdrawing money from these four accounts:

Charge 1 - six cash withdrawals;

Charge 2 - four cash withdrawals, 3 ATM withdrawals;

Charge 3 - five cash withdrawals and 3 ATM withdrawals;

Charge 5 - four cash withdrawals.

16.  He opened the bank accounts by using his PRC ID card and two-way permits.  His personal attendance was required to withdraw cash from these accounts from the bank counters.  He also said that every time there was someone with him to take the cash from him.          

17.  There is difficulty to trace these people as they were not responsible for opening the accounts.  That was a very well-planned scheme that, according to the version of the defendant, apart from himself, there were at least another three persons involved. 

18.  Having considered the case of Hsu Yu Yi, CACC159/2009, the defendant’s level of participation, and the amount involved in each account, I order the defendant to a term of imprisonment as follows:

(1) Charge 1: starting point 3 years, reduced to 2 years to reflect his guilty plea.

(2) Charge 2: starting point 3 years, reduced to 2 years, 2 months to run consecutively to Charge 1.

(3) Charge 3: starting point 2 years, reduced to 16 months, 2 months to run consecutively to Charge 1.

(4) Charge 5: starting point 3 years, reduced to 2 years, 2 months also to run consecutively to Charge 1.

19.  The total sentence is 2 years 6 months.