HKSAR v. YU YEN CHENG AND OTHERS

DCCC 869/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 869 OF 2010

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REASONS FOR SENTENCE

1.  The defendants plead guilty to charges of dealing with property knowing or believing the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Chapter 455. D1 pleads guilty to Charge 1, D2 to charges 1, 3, 4 & 5, and D3 and D4 to charges 1, 4 & 5.

Background

2.  Full particulars of the offences are set out in the summary of facts admitted by the defendants.  Briefly the defendants, who are all from Taiwan, came to Hong Kong in April this year.  D1 and D4 opened bank accounts with different banks, which bank accounts were then used to receive remittances from overseas.  The monies would immediately be withdrawn by D1 and D4.  D2’s role was to arrange the withdrawal of the monies. D3 looked after all the documentation relating to the bank accounts, the bank cards and the passports of D1 and D4 and was present when the monies were withdrawn. 

Charge 1

3.  On the 27th April this year D1 opened two bank accounts with the Citibank, a savings account and a foreign currency account.  The next day an elderly Taiwanese lady was deceived into transferring US$150,000 into the foreign currency account.  On the 29th April D1 attended the Wheelock House branch of the bank and requested the bank to exchange the US$150,000 into Hong Kong dollars and transfer the same to the savings account, from which he wished to withdraw HK$800,000. 

4.  Citibank finding this suspicious reported the matter to the police and in the meantime allowed D1 to withdraw only HK$100,000, telling him to return the next day for the balance.  Outside the bank D1 met up with D2 and D3.  Approaches were then made to two other branches of Citibank in an attempt to withdraw the money.  They then met D4, shortly after which all four defendants were arrested.

5.  Under caution D1 admitted that he responded to an advertisement requiring him to open bank accounts in Hong Kong for a reward of NT$20,000-30,000 per account.  D1 opened the savings account with HK$10,000 given to him.  After withdrawing the $100,000 D1 handed over the money to another male.

6.  On the mobile phone seized from D2 was an SMS message to D1 giving the particulars of the elderly lady in Taiwan.  D2 admitted under caution that he picked D1 up from the airport and was the one who gave instructions to D1 to withdraw the money. D2 received HK$7,000 reward for assisting D1.

7.  On arrest D3 was found in possession of an envelope bearing D1’s name and the details of the savings account together with the pin number.  Inside the envelope was an ATM card.  D3 admitted under caution he was responsible for keeping the passport, account documents and bank cards of D1 and to accompany D1 to the bank to withdraw the money.

8.  On arrest D4 was found in possession of the withdrawal slip for the HK$100,000.

Charge 3

9.  At the time of arrest D2 was found in possession of HK$49,000.  Under caution D2 admitted the money was given to him by a person called Da Ge, who instructed him to remit the money to Taiwan.  D2 intended to remit the money to his wife’s account in Taiwan, although he did not know the source of the money.

Charge 4

10.  On the 22nd April this year D4 opened a bank account with the Standard Chartered Bank. The next day a remittance in the sum of HK$1,111,996.23 was deposited in the account, which sum, save $996.23 was withdrawn the next day by a combination of withdrawals from the bank and ATM machines.  On the 26th April another remittance in the sum of HK$618,441.12 was deposited in the account.  This sum was withdrawn the same day, again by a combination of withdrawals from the bank and ATM machines.  

Charge 5

11.  D4 also opened two bank accounts with The Hongkong and Shanghai Banking Corporation Limited, a savings account and a foreign currency account.  On the 26th April the same elderly Taiwanese lady was also deceived into transferring US$150,000 into this foreign currency account.  The monies were transferred to the savings account the next day after which they were withdrawn the same day except for HK$1,782.54. 

12.  Under caution D4 admitted he was recruited in Taiwan through newspaper advertisement. On arrival in Hong Kong D4 realised he was to open bank accounts in Hong Kong and withdraw monies from the accounts for a reward of HK$10,000 per account.  Initially D4 did not sense anything wrong but later he did after making multiple withdrawals from the same accounts, including the accounts with the Standard Chartered Bank and The Hongkong and Shanghai Banking Corporation Limited. 

13.  D2 admitted under caution that after picking up D4 from the airport he accompanied him to open the bank accounts.  D2 would inform D4 when to withdraw monies from the accounts, which monies would be given to him or Da Ge. 

14.  On arrest D3 was also found in possession of two envelopes bearing D4’s name.  On one envelope was written the details of the Standard Chartered Bank account with the bank passbook and ATM card inside the envelope.  The other envelope bore the details of The Hongkong and Shanghai Banking Corporation Limited accounts and contained the ATM card and pin number.  D3 admitted under caution his responsibility was to keep the passport, account documents and bank cards of D4 and to accompany D4 to the bank when money was to be withdrawn.  D3 further admitted he received rewards of between HK$500 and $2,500, on four to five occasions.

15.  Money laundering is a serious offence for which deterrent sentences are required not only to punish the defendants but also to deter others from behaving in this way.  As to the seriousness of the offence and the need for deterrence the Court of Appeal in HKSAR v XU Xia-li & another CACC 395/2003 said,

“The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities. Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced. Money laundering is therefore treated as a serious offence. If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong's reputation as a world-class financial and banking centre.”

16.  In HKSAR v Javid Kamran CACC 400/2004 the court, stressing the need for deterrent sentences, said that it was not possible to lay down guidelines, as there is a very wide range of culpability.  The court identified a number of factors relevant in determining the culpability of a defendant, including the nature of the offence that generated the laundered money, the extent to which the offence assisted the crime or hindered its detection, the degree of sophistication of the offence and perhaps the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence. 

17.  In the Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502 the Court of Appeal said that other relevant factors are the amount of money involved; the degree of sophistication of the operation; the defendant’s knowledge of the underlying offence and whether there was an international element to the commission of the offence.

18.  In my view this was a carefully planned operation, albeit not very sophisticated, with a very clear international dimension.  The defendants are all from Taiwan, who came to Hong Kong specifically in connection with opening bank accounts, which were used to launder proceeds of fraud.  Monies were remitted from Taiwan through Hong Kong bank accounts and almost all the money then immediately withdrawn.  Within days a total of HK$4,262,845.53 was laundered through the three accounts.  The opening up of different bank accounts to facilitate the moving of the funds make the detection of the crime all the more difficult.  Only due to alert staff at Citibank were the criminal activities of the defendants discovered.

19.  In passing sentence I take into account everything said on behalf of the defendants together with the various letters submitted to court.  All the defendants are young, in their early twenties and have clear criminal records in Hong Kong.  This however carries little weight where the defendants are only visitors, having very recently arrived in Hong Kong.  Further in the case of D2, D3 and D4 they are not to be regarded as true first offenders having pleaded guilty to multiple offences. 

20.  I have sympathy with the families, some of the members suffering from serious illness, some with elderly grandparents and I note D2’s fiancé is pregnant.  As always the family is the one that will suffer, in particular where the family is not in Hong Kong.  The defendants however all came to Hong Kong and committed the offences in full knowledge of these matters.   I am satisfied this does not amount to a mitigating circumstance affecting the length of sentence.  As was said in HKSAR v CHO Ah-mui CACC83/2003,

“While I have great sympathy with the family members of the applicant, that they might have been thrown into difficulties because of the applicant’s absence in jail in Hong Kong from them, such sympathy should not, in my view, amount to mitigation or be reflected in any way in the sentence that the applicant herself fully deserves.”

21.  I accept there is no evidence the defendants were the masterminds or were part of the scam to deceive the elderly lady in Taiwan of her money.  I am told however all defendants are likely to face proceedings in Taiwan for which they may receive a further three years imprisonment.     I am satisfied this is not a factor to be taken into account in sentencing.

22.  Mr Lee submitted the benefit received by D2 was only $7000.  Miss Lau submits D3 and D4 will receive no benefit because their rewards will be confiscated.  Whether or not the defendants received a reward is insignificant as a sentencing factor for the reality is the offence of money laundering is very serious (see HKSAR v CHEN Szu-ming CACC 270/2005 at paragraph 23).  

23.  All defendants are entitled to full credit for their pleas of guilty. Mr Lee submits D2 was cooperative on arrest by giving details of others involved in the money laundering and says that he is willing to give evidence against them.  The fact however is no one else has been arrested.  This does not entitle D2 to further discount. 

24.  Miss Lau submits D3 played a lesser role than the other defendants, in particular that D3 did not open any bank accounts or make any withdrawals.  D3 was however present when withdrawals were made.  Although the roles of the defendants are different, each played a specific role in the commission of the offences.  I am satisfied in passing sentence no distinction should be drawn between the defendants. 

Starting points

Charge 1

25.  The amount involved is $1,173,457.90.  Taking into account the international dimension I am satisfied the appropriate starting point after trial is 3 yearsimprisonment. 

Charge 3

26.  Charge 3 concerns cash in the sum of $49,000.  I am satisfied the appropriate starting point after trial is 12 months imprisonment. 

Charges 4 & 5

27.  Charges 4 & 5 relate to the bank accounts opened by D4.  The amounts involved are $1,731,437.35 and $1,164,782.54 respectively.  Taking into account the international dimension I am satisfied the appropriate starting point after trial is 3 years imprisonment on each charge. 

Totality of sentence

28.  The joint offences concerning D2, D3 and D4 (charges 1, 4 & 5) involve bank accounts with three different banks and are therefore separate and distinct from each other, for which consecutive sentences are appropriate.  The total amount of money laundered in the three accounts is HK$4,262,845.53.  I am satisfied an overall starting point of 4 years imprisonment is appropriate (see for example HKSAR v ZHAN Jian-fu              CACC 258/2007 and HKSAR v YAM Kong-lau CACC 458/2006).  As for charge 3 which D2 faces alone the amount involved is much smaller and in my view does not increase D2’s overall criminality.  The total sentence therefore to be served by D2, D3 and D4, after full credit for their pleas of guilty, is 2 years and 8 months imprisonment, which I am satisfied properly reflects their criminal culpability on the charges.

29.  The defendants are sentenced as follows:

D1

Charge 1 – 2 years imprisonment;

D2

Charge 1 – 2 years imprisonment;

Charge 3 – 8 months imprisonment concurrent to charge 1; and

Charges 4 & 5 – 2 years imprisonment concurrent with 8 months consecutive and 1 year and 4 months concurrent to charges 1 & 3;

D3

Charge 1 – 2 years imprisonment; and

Charges 4 & 5 – 2 years imprisonment concurrent with 8 months consecutive and 1 year and 4 months concurrent to charge 1;

D4

Charge 1 – 2 years imprisonment; and

Charges 4 & 5 – 2 years imprisonment concurrent with 8 months consecutive and 1 year and 4 months concurrent to charge 1.