HKSAR v. MARQUEZ CHARITY ALONZO AND OTHERS

DCCC 894/2022

[2023] HKDC 1307

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 894 OF 2022

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REASONS FOR SENTENCE

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A. Charges

1.  All defendants pleaded guilty to one or more charges of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to s25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, and s159A and 159C of the Crimes Ordinance, Cap 200, as follows:

Charge 1 against D1 and D2: between 8 February and 26 July 2021 in Hong Kong, they conspired together with Julia and other unknown persons to deal with property by withdrawing money deposited into a set of accounts under their control, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented proceeds of an indictable offence.

Charge 2 against D3: between 17 April and 26 July 2021 in Hong Kong, D3 conspired together with Teofilo Jeniffer Inoc and other unknown persons to deal with property, namely HK$319,200 in the account numbered 805-768587-292 held under D3 with The Hongkong and Shanghai Banking Corporation Limited (HSBC), knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Charge 3 against D3: between 28 November 2020 and 26 July 2021 in Hong Kong, D3 conspired together with other unknown persons to deal with property, namely HK$858,400 in the account numbered 206-273773-668 held under D3 with Hang Seng Bank Limited (HSB), knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Charge 4 against D4: between 6 January and 26 July 2021 in Hong Kong, D4 conspired together with other unknown persons to deal with property, namely HK$1,382,200 in the account numbered 776-388712-888 held under D4 with HSB, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Charge 5 against D5: between 2 March and 27 July 2021 in Hong Kong, D5 conspired together with Maria and other unknown persons to deal with property, namely HK$660,900 in the account numbered 776-398216-888 held under D5 with HSB, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Charge 6 against D5: between 1 February and July 2021 in Hong Kong, D5 conspired together with Maria and other unknown persons to deal with property, namely HK$330,000 in the account numbered 103-108700-833 held under D5 with HSBC, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

B. Facts

B.1. Overview

2.  This case involved a money laundering syndicate which recruited foreign domestic helpers as stooge bank account holders to receive crime proceeds (“the Syndicate”). Between 8 February and 26 July 2021, D1, a core member of the Syndicate, withdrew a total sum of HK$30,072,100 from 68 stooge accounts controlled by the Syndicate. Annex 1 is a summary.

3.  D2 assisted D1 in withdrawing a total sum of HK$196,300 from 10 of those accounts on 26 July 2021.

4.  D3 to D5 were three of the stooge account holders who had sold their accounts to the Syndicate.

B.2. D1 and D2

5.  On 26 July 2021 at 1105, D1 and D2 went to a HSBC automatic teller machine (ATM)  at 378 Nathan Road and withdrew money therefrom. Then they returned to United Mansion, 37 Jordan Road (“the Building”).

6.  They made the following cash withdrawals:

	Time	A/C	Amount (HK$)
1	11:18:24	27	100
2	11:22:05	2	100
3	11:32:36	12	100
4	11:37:16	6	20,000
5	11:37:54	33	500
6	11:39:40	33	9,500
		Total:	30,300

7.  Between 1248 and 1256, D1 and D2 went to Metro Foreign Exchange Limited where they appeared to be making remittance.

8.  At 1354, D2 went to a HSB ATM in Jordan MTR station by herself and left at 1405. Between 1415 and 1424, D1 and D2 returned to that ATM and appeared to be withdrawing money therefrom. After that, they went to a Bank of China (BOC)  ATM in the same station. Upon completing their transactions, they returned to the Building.

9.  At 1616, they made the following cash withdrawals at the said HSBC ATM again:

	Time	A/C	Bank	Amount (HK$)
7	16:18:19	2	HSBC	40,000
8	16:20:15	2	HSBC	4,200
9	16:21:56	21	HSB	500
10	16:24:47	21	HSB	19,500
11	16:27:21	36	HSB	500
12	16:32:14	36	HSB	19,500
			Total:	84,200

10.  Between 1655 and 1704, D1 and D2 made the following cash withdrawals at the HSB ATM at 363 Nathan Road:

	Time	A/C	Bank	Amount (HK$)
13	16:56:24	27	HSBC	1,200
14	16:58:45	27	HSBC	600
			Total:	1,800

11.  Between 1708 and 1712, they made the following cash withdrawals at an ATM inside Chiyu Bank Branch, 117-119 Shanghai Street:

	Time	A/C	Bank	Amount (HK$)
15	17:07	58	BOC	30,000
16	17:10	54	BOC	30,000
17	17:12	49	BOC	20,000
			Total:	80,000

12.  D1 operated the 68 accounts on at least 1,260 occasions at ATMs, withdrawing a total of HK$15,765,400. Annex 2 sets out the details of these withdrawals captured by CCTV between 8 February and 26 July 2021.

13.  At 1908, D1 and D2 went to Mirador Mansion in Tsim Sha Tsui where a pink plastic bag was passed to an unknown male.

14.  At 1943, they met with two males, one of which was NNAKWE Okechukwu Cyril, and passed a plastic bag to them (“the Bag”). Then D1 and D2 were arrested, while Nnakwe was intercepted and HK$72,000 was found in the Bag.

B.3. D1’s items

15.  The following items were found in D1’s flat in the Building:

(a)  73 ATM cards, 64 of which were related to the 68 accounts;

(b)  Cash in the sum of HK$65,900 and US$200;

(c)  22 bank advice slips;

(d)  A handwritten note on the wall listing out the cash withdrawals therefrom and transfer limits of BOC, HSBC and HSB. It also had a reminder that HK$500 should first be transferred before transferring a larger amount;

(e)  2 mobile phones; and

(f)  2 pair of jeans, a white Polo t-shirt, a white Levi’s t-shirt, a Nike hoodie and a pair of black sneakers which D1 wore when she made the said withdrawals.

16.  In addition, HK$1,700 and PHP 20 were found on D1.

B.4. Stooge accounts

17.  The 68 accounts were opened by foreign domestic helpers, the majority of which were Filipinos. A/C 44, 47 and 11 belonged to D3, D4 and D5 respectively.

18.  Upon receipt of the police’s letter of no consent, the account balance of HK$193,652.37 in A/C 11 was frozen. There were cash withdrawals in a total sum of HK$330,000 from D5’s account in Charge 6 between 1 February and 27 July 2021.

19.  According to the bank records of the above accounts, the transactions therein had the following patterns:

(a)  the majority of the cash withdrawals and transfers were done via ATMs;

(b)  there were swift withdrawals after deposits had been made into the accounts, as a result of which most accounts maintained low balances, indicating that the accounts were used as temporary repository of funds;

(c)  there were a lot of interbank transfers between these accounts; and

(d)  there were a lot of withdrawals in the amount of HK$500 or less before larger withdrawals were made on the same day.

20.  26 of these accounts were connected with 21 online scams reported by PW1 to PW21 who deposited a total of HK$4,352,817.76 into those accounts, the details of which are set out in Annex 3.

21.  The activities in the above accounts were incommensurate with the backgrounds of D1 to D5 and of the account holders.

B.5. Arrest and cautioned video-recorded interview (VRI)

22.  D1 said the followings in 2 VRIs:

(a)  She came to Hong Kong to work as a domestic helper in 2017 and terminated her contract in June 2021. Her visa expired on 30 August 2021.

(b)  D1 made a living by laundering money for Julia, a Filipino and one of the masterminds who paid for the surgery expenses of D1’s mother.

(c)  From October 2020 to February 2021, D1 recruited around 15 domestic helpers to open bank accounts for Julia. After those helpers had done so, they gave D1 the bank cards and passwords in return for 4% of the amounts deposited into their accounts. There were others who helped Julia with such recruitment.

(d)  Starting in February 2021, Julia gave D1 the bank cards of different accounts, instructed her to withdraw money therefrom and told her to whom the money should be passed. D1 could not remember how much she had withdrawn for Julia. D1’s flat, rented by Julia, kept all the bank cards. There were others who withdrew money for Julia.

(e)  After deducting 4% for the account holders, 6% for Julia and 1% for D1 herself as reward, D1 usually passed the money withdrawn to 4 contacts of Julia, namely Desmon, Pusip, Hugo and Solomon, in Tsim Sha Tsui. D1 made about HK$4,000 to HK$5,000 per week. D1 did not know the source of those deposits.

(f)  Two weeks ago, she started training D2 and another, both arranged by Julia, to replace her because she wanted to stop working for Julia and return to the Philippines.

(g)  On 26 July 2021, D2 withdrew money from ATMs because D1 was teaching her how to do so as D1 planned to leave Hong Kong for the Philippines on the next day. Then they went to Mirador Mansion to pass the money to Erene and Philip. Thereafter, they gave the money to Pusip. D1 also passed to Nnakwe a total of $72,000 which was withdrawn by her on 23, 24 and 26 July 2021.

(h)  The bank cards found in her flat belonged to the account holders who had passed the same to Julia. They were used by D1 to withdraw money.

(i)  The HK$2,900 found in the red bag was what she made from laundering money.

(j)  She used the blue mobile phone seized on her and a mobile phone seized in her flat for money laundering.

(k)  She did not submit tax return, own company or asset, or have employment apart from being a helper. She earned the minimum wage of a helper and the rewards from money laundering.

(l)  She recognized herself in the screenshots of the CCTV footages and said that she was withdrawing money from ATMs for Julia at those times.

23.  D2 was a Form 8 holder and she said the followings in VRI:

(a)  She came to Hong Kong in 2013 to work as a domestic helper, but she no longer had a job.

(b)  She had no income or bank card, did not own any company or asset, and was living on food coupons and cash subsidy provided by the International Social Service.

(c)  She did not recall why she was with D1 on 26 July 2021.

24.  D3 was arrested on 26 July 2021 and she said the followings in VRI:

(a)  She came to Hong Kong to work as a domestic helper in 2017 and was still working as such.

(b)  She opened the account in Charge 2, sold it and handed the ATM card as well as password to Teofilo, a Filipino friend, in April 2021 for monetary reward.

(c)  She opened A/C 44, lent it to a friend and gave the latter the bank card and password. The friend bought her snacks in return. She did not handle the money in the account.

25.  D4 was arrested on 26 July 2021 and she said the followings in VRI:

(a)  She came to Hong Kong to work as a domestic helper in 2018, earning a monthly salary of HK$4,630.

(b)  She opened A/C 47 and deposited HK$500 for saving purpose. But she never used it because she had lost the ATM card in February or March 2021 and the paper on which the password was written. Nonetheless, she did not seek help from the bank or police for these losses.

(c)  She did not know anything about the transactions in the account.

26.  D5 was arrested on 27 July 2021 and she said the followings in VRI:

(a)  She came to Hong Kong in 2013 to work as a domestic helper which was her source of income in the sum of about HK$4,300.

(b)  She opened A/C 11 and the account in Charge 6 as requested by her friend Maria in return for HK$5,000 and HK$6,000 respectively.

(c)  Both she and Maria could operate the Charge 6 account but she could not operate A/C 11.

B.6. Conclusion

27.  At the material times, D1 and D2 conspired with Julia and other unknown persons to deal with the relevant property as set out above in the respective accounts, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 1)

28.  At the material times, D3 conspired with Teofilo and other unknown persons to deal with the relevant property, namely HK$319,200 in D3’s HSBC account, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 2)

29.  At the material times, D3 conspired with other unknown persons to deal with the relevant property, namely HK$858,400 in A/C 44, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 3)

30.  At the material times, D4 conspired with other unknown persons to deal with the relevant property, namely HK$1,382,200 in A/C 47, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 4)

31.  At the material times, D5 conspired with Maria and other unknown persons to deal with the relevant property, namely HK$660,900 in A/C 11, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 5)

32.  At the material times, D5 conspired with Maria and other unknown persons to deal with the relevant property, namely HK$330,000 in D5’s HSBC account, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence. (Charge 6)

C. Criminal records

33.  All Ds have clear records.

D. Mitigation

34.  Mr Polson for D1 submitted the followings:

(a)  D1 is single and her family is in the Philippines. Mitigating letters from D1, her daughter, a pastor from Christian Prison Pastoral Association Ltd and the chief ministry officer at the Hong Kong Christian Kun Sun Association Ltd were submitted.

(b)  D1 did not know that the money in question was proceeds of crime. No international element was involved in this case.

(c)  A starting point of around 3 years is appropriate.

35.  Ms Zahir for D2 submitted the followings:

(a)  D2 is aged 51, single and educated to Secondary School. Her family is in the Philippines. Her contract as a domestic helper was terminated in 2015 and she has remained in Hong Kong as a Form 8 holder since then. In 2017 and 2018, she had 2 surgeries for stage 2 uterus cancer and her uterus was entirely removed. Her mitigating letter was submitted.

(b)  D2 did not know the predicate offence or receive any benefit in this case.

(c)  D2 dealt with only HK$196,300 on 26 July 2021 and has been remanded since 22 June 2022, thus a starting point of 14 months’ imprisonment is appropriate.

36.  Mr Corlett for D3 submitted the followings:

(a)  D3 is aged 46, educated to Grade 12 and married with 1 daughter in early 20s and 2 teenaged sons. The mitigating letter of her employer at the time of arrest and that of the prison chaplain were submitted.

(b)  D3 opened the account in Charge 2 in return for a HK$3,000 loan from Teofilo for the medical expenses of D3’s mother in the Philippines.

(c)  D3 did not know that the account in Charge 3 was not used by her friend but Teofilo.

(d)  She also did not know that these accounts were used for laundering crime proceeds.

(e)  She has been remanded since 21 June 2022.

(f)  A starting point close to 2 years’ imprisonment is appropriate.

37.  Mr McCoy for D4 submitted that D4 is aged 42 and educated to High School. She has been remanded since 21 June 2022. A starting point less than 3 years’ imprisonment is appropriate.

38.  Ms Herbert for D5 submitted the followings:

(a)  D5 is 55 years old, educated to high school, and married with 2 grown-up children.

(b)  D5’s husband aged 52 has been unable to work for the last 7 years because of heart and kidney disease, stomach ulcer and high blood pressure. He has follow-up medical appointments every month and blood transfusion every year. Therefore, he relies on D5 for daily and medical expenses.

(c)  Mitigating letters of D5, her husband, sister, sisters-in-law, daughter, son and town head were submitted.

(d)  D5 had no knowledge of the predicate offences, the Syndicate or how money was laundered. But after learning of similar cases on social media, she tried to cancel her account in Charge 5.

(e)  She assisted the police by providing them with the full name of Maria who was nevertheless not arrested.

E. Considerations

39.  The maximum sentence for the offences in this case is 14 years’ imprisonment and $5 million fine.

40.  I have considered all the cases cited by the Defence, including HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, HKSAR v Boma [2012] 2 HKLRD 33 and HKSAR v Lam Ka Sin [2021] 2 HKLRD 32, and the following principles:

(a)  For sentencing the subject offences, deterrence is paramount because the criminality arises from the encouragement and nourishment they gave to crime in general.

(b)  The amount of money laundered is a significant feature and the major consideration.

41.  In Hsu Yu Yi, the money laundering activities, involving $25.8 million, lasted over 2 months. The Court of Appeal adopted a starting point of 3 years and 6 months’ imprisonment.

42.  In Wan Kwok Keung, the defendant laundered $14 million on thousands of occasions for 7 years. The Court of Appeal held that, given it was an application for review, the sentence after deduction for guilty plea should be 2 years and 6 months or 30 months’ imprisonment. This means that the starting point should be 45 months’ imprisonment.

43.  In Lam Ka Sin, the defendant agreed to deal with $1.1 million in return for $10,000. The Court of Appeal adopted a starting point of 24 months’ imprisonment.

44.  I have also had regard to the following matters relevant to sentencing according to the authorities.

45.  First, this case involved an organized crime syndicate.

46.  Second, 26 of the stooge accounts were connected with 21 online scams.

47.  Third, the Prosecution agreed that there was no international element.

48.  Fourth, the periods of the offences and the amounts of money involved, Ds’ respective roles and the benefits they derived, if any, are summarized thus:

Charge	D	Periods	Amount of money	Role	Benefits
1	D1	8 Feb to 26 Jul 2021	HK$30,072,100	Withdrew money from 68 stooge accounts, including withdrawing a total of $15,765,400 on at least 1,260 occasions at ATMs	about $4,000 to $5,000 per week
	D2			Assisted D1 in withdrawing a total sum of $196,300 from 10 of those accounts on 26 July 2021	No evidence
2	D3	17 Apr to 26 Jul 2021	HK$319,200	Sold account to the Syndicate	Unknown amount of money
3		28 Nov 2020 to 26 Jul 2021	HK$858,400		Snacks
4	D4	6 Jan to 26 Jul 2021	HK$1,382,200		No evidence
5	D5	2 Mar to 27 Jul 2021	HK$660,900		HK$5,000
6		1 Feb to 27 Jul 2021	HK$330,000		HK$6,000

F. Sentence

49.  Having considered all the circumstances of this case, the submissions and case authorities, the sentences are as follows.

F.1. Charge 1

50.  For Charge 1 against D1, a starting point of 3 years and 9 months or 45 months’ imprisonment is adopted. It is reduced by 1/3 for her guilty plea, the only mitigating factor, to 30 months’ imprisonment.

51.  For Charge 1 against D2, I disagree with 14 months’ imprisonment as starting point because this cannot reflect the criminality of the charge.

52.  Nonetheless, I am aware that D2’s direct involvement was only in assisting D1 to withdraw a total sum of $196,300 from 10 out of the 68 stooge accounts on a single day. This was comparatively a substantially lesser role than D1’s in the conspiracy. On this basis, a starting point of 24 months’ imprisonment is appropriate. It is reduced by 1/3 for her guilty plea, the only mitigating factor, to 16 months’ imprisonment.

F.2. Charges 2 and 3

53.  For each of Charge 2 and Charge 3 against D3, a starting point of 24 months’ imprisonment is adopted. It is reduced by 1/3 for her guilty plea, the only mitigating factor, to 16 months’ imprisonment.

54.  Both charges of the same nature cover periods that overlap to a certain extent, and involve D2 providing her accounts to others. Therefore, they should run totally concurrently. Hence, the total sentence for the 2 charges is 16 months’ imprisonment.

F.3. Charge 4

55.  For Charge 4 against D4, a starting point of 24 months’ imprisonment is adopted. It is reduced by 1/3 for her guilty plea, the only mitigating factor, to 16 months’ imprisonment.

F.4. Charges 5 and 6

56.  For each of Charge 5 and Charge 6 against D5, a starting point of 24 months’ imprisonment is adopted. It is reduced by 1/3 for her guilty plea to 16 months’ imprisonment.

57.  Concerning D5’s provision of Maria’s full name to the police, this does not amount to a mitigating factor that warrants reduction of sentence because it did not lead to Maria’s arrest. Hence, D5 is sentenced to 16 months’ imprisonment for each of Charge 5 and Charge 6.

58.  Both charges of the same nature cover periods that overlap to a large extent, and involve D5 providing her accounts to others. Therefore, they should run totally concurrently. Hence, the total sentence for the 2 charges is 16 months’ imprisonment.