HKSAR V LO KAI SING

DCCC 586/2023

[2025] HKDC 37

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 586 OF 2023

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REASONS FOR SENTENCE

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1.  The Defendant pleaded guilty to a charge of money laundering.

Summary of facts

2.  The BOC account was opened on 7 January 2020 and was closed on 1 February 2021. The Defendant was the sole account holder and signatory.

3.  Between 7 January 2020 and 1 February 2021, a total of $25,702,187.61 were deposited into the account, online transfers were about 98.69% of the deposit.

4.  During the same period, online transfers were about 94.65% of the withdrawal, while 5.21% were made by ATM withdrawal.

5.  Temporary depository patterns were observed in the account. On average, the funds stayed in the account for less than half a day before being withdrawn.

6.  The Defendant was arrested on 13 April 2021. He said under caution that :-

(a)  He was unemployed since October/ November 2020 and he took out a loan of $60,000.

(b)  Through the connection with his previous co-worker, he came to know “Ah Kam”. He opened the account and lent his account to “Ah Kam” by passing the bankcard and the password to him.

(c)  He closed the account in February 2021 as he learned that the account was involved in an online fraud in 2021.

(d)  He has no knowledge about most of the transaction in the account.

Criminal record

7.  The Defendant has 3 convictions records :-

(a)  Theft (2006)

(b)  Conspiracy to robbery (2009)

(c)  Handling stolen goods (2010)

Mitigation/background

8.  The Defendant is 35 years old. His parents separated when he was only 3 years old. His elder brother lives with his father while he lives with his mother at his younger age.

9.  Nonetheless, his father and brother wrote letter to this Court to show their support to him.

10.  His mother is particularly worried about him. In her letter to this Court, she asked for leniency on his behalf. She has retired and is living alone. Her mother passed away in last October. The Defendant has provided emotional support to her during that difficult period.

11.  The Defendant met his girlfriend for about 13 years and he has determined to stay clean to lead a meaningful life (his conviction was in 2010). He committed the present offence just out of stupidity to help others.

12.  He lives with his long-term girlfriend who told me in her letter that they have plan to get marry and start a family together. This plan has to be postponed after his release from prison.

13.  The Defence cited the following cases for consideration of sentence :-

(a)  Secretary for Justice v Lau Man Ying [2010] 4 HKLRD 435 that the money laundering sum was $530 million over a period of 2.5 years. Court of Appeal considered the appropriate starting point should be less than 5 years.

(b)  Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 – the money laundering sum was HK$14 million, the starting point was 4 years.

(c)  In addition, some other District Court decisions.

Sentence

14.  The present offence carries a maximum of a fine of 5 million and an imprisonment term of 14 years on indictment.

15.  In the case of HKSAR v Boma [2012] 2 HKLRD 33, the Court pointed out that given the highly variable circumstances in which the offence might be committed, it was difficult and undesirable to offer guidelines.  However, the Court of Appeal provided a non-exhaustive list of relevant sentencing factors for consideration.

16.   In the judgement of Hsu Yu Yi [2010] 5 HKLRD 545, the Court stressed that it was fact-specific nature of the offence regarding sentence. However, it also pointed out that it was the amount of the money involved, rather than the amount of benefit received by a Defendant, is the major sentencing consideration. Further, in the same judgement, the court also said that it was  “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.”

17.  With this information in mind, I now proceed to consider the sentencing factors in the present case :-

(a)  The predicate offence is unknown to this court.

(b)  There is no evidence to suggest that the Defendant was aware of the nature of the predicate offence until the Police informed him. However, as stated in HKSAR v Cen Huakuo CACC 21/2014 that “ignorance of the indicatable offence could not be treated as mitigating factor.”

(c)  The role of the Defendant was to open an account and provide the bankcard together with the password to “Ah Kam”. That means the Defendant was aware that “Ah Kam” would use his account. When he opened the account, he had to provide at least his ID card and he should have known that he would be held responsible for any use of it.

(d)  The summary of facts also tells me that the Defendant became unemployed just 2 to 3 months before he went to open the account. He also took out a loan of $60,000. It appears to me that there was a motive for the Defendant to take part in this illegal activities as he was financially vulnerable at that time.

(e)  According to the Defendant’s knowledge, he believed it was for the collection of some funds in this account. He subsequently came to know that the fraudster had used his account illegally.

(f)  He closed the account in 2021, that means for a year he did not care about what happened to the activities in the account.

(g)  The Defence did not say that the defendant obtained any remuneration as a result of lending his newly opened account to Ah Kam. However, when he closed the account, there was a balance of $3,000 of which he withdrew. In any event, As stated in the case of Secretary of Justice v Ngai Fung Sin Apple [2013] 5 HKLRD 104 that at paragraph 44, the fact that the Defendant of a “money laundering” case has not obtained any financial benefit is not a mitigating factor.

(h)  The period involved for money laundering was about 13 months and there were multiples transactions with deposits and withdrawals.

(i)  The amount was about 25 million.

(j)  There is no evidence to suggest an international element was involved or detail planning / preparation by the Defendant in the commission of the present offence.

18.  As said in many cases, money laundering offence is a serious offence and must be deterred.

19.  In the case of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201. The court said that :-

“15. …The sentencing starting point is 3 years or so where the “black money” involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.

20.  In the present case, the amount was 25 million over a period of 13 months. In such circumstances, a starting point of 4 years is warrant.

¹/₃ discount?

21.  The Defence submitted that the Defendant is entitled to ¹/₃ discount as the Prosecution had amended the charge and the Defendant is now pleading to the amended charge.

22.  The Defence only cited the case of HKSAR v Jibriil Samatar Diireye [2018] HKDC 798 to support its argument that is was not a late plea.

23.  As said in the case of HKSAR v 梁景祥 CACC 129/2022 (judgment on 27 October 2023)  that :-

“35. 本案無論在原審或上訴時，仍有大律師援引區域法院判案理由充當案例的不當做法。法律代表須細讀本庭在律政司司長訴溫達揚案第27 段的判詞。本上訴就正正顯示區域法院未經上訴肯定的判刑理由中所採用的量刑原則，並不一定正確。”

24.  That means it is inappropriate to cite the District Court decisions, bearing mind there is an existing leading authority from the Court of Appeal in HKSAR v Ng Van Nam [2016] and a subsequent decision of HKSAR v Lam Kai Man CACC 246 /2019.

25.  Be that as it may, in the reasons for sentence of Jibriil Samatar Diireye, the Court also referred to HKSAR v Barrow Lamin CACC 219/2017, but the Defence in the present case did not refer to this appeal case.

26.  In Barrow Lamin's judgment, the Court said that for a late plea, the discount of 20% cannot be criticized (para 17). The court went on to say :-

“…The judge was faithfully following, as he was required to do, the directions handed down by the Court of Appeal as to the appropriate discounts at various stages of the criminal trial process in the District Court.”

27.  HKSAR v Ngo Van Nam [ 2016 ] 5 HKLRD I is the leading case on the court's approach to various stages of pleas of guilty , Lunn VP, giving the principle judgment of the Court, referred to what Yeung VP had said in HKSAR v Lo Kam Fai [ 2016] 2 HKLRD 308:-

“A defendant who enters a timely plea of guilty is normally entitled to a sentence discount of one-third from the starting point because it is in the public interest to do so.

… it is in the public interest to facilitate pleas of guilty… Doing this helps ease the congestion in the courts that delay the hearing of such trials as must be held. It also encourages the clear-up rate for crime and so vindicates public confidence in the processes established to protect the community and uphold its laws.”

28.  In the present case, the Defendant indicated his plea of not guilty in the plea Court in January 2024. 3 days’ trial have been set down for hearing from today. That means the waiting time for a short trial is still one year.

29.  Had the Defendant indicated his plea to be a guilty one, it would be a short matter compared to a 3 days’ trial. Most likely, an early day would be provided for him.

30.  In April, 2024, the Prosecution informed the Court that the charge against the defendant will be amended :-

(a)  The original charge: Conspiracy to deal with property known or believed to represent proceeds of an indicatable offence

(b)  The amended charge: Dealing with property known or believed to represent proceeds of an indicatable offence.

31.  The particulars of the offence are all the same after amendment, except :-

(a)  The original charge:-

conspired with a person known as “Ah Kam”

(b)  The amended charge:-

together with a person known as “Ah Kam”

32.  Effectively, the Defendant knows there is no substantial change in the Prosecution case and the Prosecution intended to call the same witnesses in trial.  On the other hand, the Defence would not challenge the record of interview: which he said that he opened the account and provided all the details of the account to “Ah Kam”.

33.  Nonetheless, the Defence informed the Court that the defendant would plead guilty to the charge some 7 weeks before the trial date in writing. He pleads guilty to the sole charge today.

34.  To this end, it is clear to me, he is not entitled to the ¹/₃ discount, I assess the appropriate discount is 25%.

35.  The sentence is therefore 48 months x 25% discount = 36 months.

Enhancement of sentence

36.  The Defence does not object to the application by the Prosecution pursuant to s.27(2)  of Organized and Serious Crimes Ordinance, Cap 455 and accepted what was said in the statement by Chief Inspector Li but rather said that :-

(a)  At the time of the offence, the prevalence of such offence in 2020 was not as bad as it is now. The Defendant is less aware or alert of the consequences of committing the present offence.

(b) The sentencing policy as stated in HKSAR v Chung Chi King CACC 504/2001 was that the sentencing court must consider the prevalence of the offence at the time of sentence “since the purpose of an enhanced sentence is to impose a deterrence on potential wrong doers. Hence, the time of the commission of the crime is irrelevant.” (paragraph 24)

37.  Again, the Defence referred to a number of District Court decisions and asked for 20% enhancement.

38.  As said in the case of HKSAR v Hung Wing Chun [2011] 2 HKLRD 167 that an enhancement rate of ¹/₃ is to reflect the prevalence of the offence, I see no reason why I should depart from it.

39.  To this end, I enhance the sentence by ¹/₃ and the formula of the sentence is as follow:-

(a)  The sentence is 36 months after 25% discount

(b)  Enhanced by ¹/₃ , it arrives at 12 months (36 months x 1/3)

(c)  The total sentence is 36 months plus 12 months, equals to 48 months.

40.  The Defendant is to serve a period of 48 months’ imprisonment.

41.  As the Defendant was arrested in April 2021 and this matter has been hanging over his head for nearly 4 years, I reduce 2 months to take into account of his mental anxiety.

42.  The final sentence is 46 months’ (48-2)  imprisonment.