HKSAR v. CHAN KAI NAM AND ANOTHER

DCCC 172/2022

[2023] HKDC 1867

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 172 OF 2022

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REASONS FOR VERDICT

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The Charges

1.  There are 3 defendants in the present case.

2.  D1 faces two charges of fraud, contrary to section 16A of the Theft Ordinance, namely Charges (1)  & (2).

3.  D2 faces one charge of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance (“Money Laundering Charge”), namely Charge (3).

4.  D3 also faces one Money Laundering Charge, namely Charge (4).

5.  At the commencement of the trial D2 pleaded guilty to Charge (3).

6.  D1 and D3 pleaded not guilty to the respective charges they face. These charges are therefore subject matter of the present trial.

7.  Charge (1)  concerned with two civilian witnesses, namely Madam SIU Yuk-lin (“PW1”)  and Mr. POON Tai-cheung (“PW2”). Charge (2)  concerned with another two civilian witnesses, namely Madam CHUNG Wing-chi (“PW4”)  and Mr. LEUNG Hon-wai (“PW5”).

8.  By Charge (1)  the prosecution alleged that D1, between 16 & 24 of March 2017, by deceit, namely by falsely representing to PW1 and PW2 that DBS Bank (Hong Kong)  Limited (“DBS Bank”)  had pre-approved a low interest rate loan to PW2 which would be available on condition that a deposit of HK$1,455,000 was made to RIGHT FORTUNE Enterprises Limited (“RFEL”), and with intent to defraud, induce PW1 and PW2 to obtain HK$1,800,000 from a money lender and for PW1 to issue a cheque of HK$1,455,000 in favour of MAN Yun-fat (“MAN”)  who was accepting on behalf of RFEL, which resulted in benefit to D1 or others, or in prejudice or a substantial risk of prejudice to PW1 and PW2.

9.  By Charge (2)  the prosecution alleged that D1, between 23 of March 2017 and 4 April 2017, by deceit, namely by falsely representing to PW4 and PW5 that he would help securing a loan of about HK$5 million by improving the credit rating of PW4 and PW5 by using the money to be obtained from them to settle their outstanding debts, and with intent to defraud, induced PW4 and/or PW5 to commit an act or a series of acts, namely for PW4 and PW5 to obtain HK$1,200,000 from a money lender and for PW4 to issue a cheque of HK$500,000 in favour of LAM So-yi, Zoe who was accepting on behalf of RFEL for the purpose of settling their outstanding debts, which resulted in benefit to D1 or others, or in prejudice or a substantial risk of prejudice to PW4 and PW5.

10.  By Charge (4)  the prosecution alleged that D3, between 13 March 2017 and 12 April 2017, knowing or having reasonable ground to believe that property, namely sums totaling HK$2,970,000 in the account numbered 012-794-1-0281318 held in the name of D3 with Bank of China (Hong Kong)  Limited (“BOC”)  (“D3’s account”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

The Prosecution’s Case

Admitted Facts

11.  By virtue of section 65C of the Criminal Procedure Ordinance the following facts were agreed:-

11.1 The office of RFEL was located at 19/F., Southgate Commercial Centre, No.29 Granville Road, Tsimshatsui, Kowloon (“RFEL’s office”).

11.2 On 16 March 2017, PW1, PW2, and Miss POON Oi-ting (“PW3”)  attended RFEL’s office. They were greeted by D1. D1 explained a procedure they had to go through to qualify for low interest rate loans. D1 told them to firstly secure a loan of $1.8 million from a licensed moneylender.

11.3 PW1, PW2 and PW3 returned to RFEL’s office after securing the said loan and again met D1 on 24 March 2017. They signed an agreement authorizing RFEL to help them open a revolving loan account with DBS Bank. That document is admitted into evidence and marked as Exhibit P171.

11.4 On 23 March 2017, PW4 and PW5 attended RFEL's office. D1 greeted them. D1 advised PW4 and PW5 to obtain a loan of HK$1.2 million from a licensed moneylender for settling their previous outstanding debts with a view to improve their credit rating (before applying for a HK$5 million re-mortgage loan from banks). PW4 and PW5 managed to obtain a loan of HK$1.2 million on 3 April 2017 from a licensed moneylender.

11.5 At all material times, DBS Bank had no official dealing or business relationship with RFEL.

11.6 On 23 March 2017, PW4 and PW5 each signed authorisation letters authorizing RFEL to help them obtain their loan. The letters are admitted into evidence and marked as Exhibit P172-P173.

11.7 On 25 July 2017, D1 was positively identified in a properly conducted Identification Parade by PW1.

11.8 On 20 November 2017, D1 was positively identified in a properly conducted Identification Parade by PW3 and PW4.

11.9 At all material times, D1 and D3 were present in Hong Kong.

11.10 D3 is the sole account holder and signatory of D3's account. Bank records revealed the following transactions:-

11.10.1 On 13 March 2017, HK$1,320,000 was deposited by cheque;

11.10.2 On 14 March 2017, HK$1,320,000 was withdrawn by cash over-the-counter;

11.10.3 On 14 March 2017, HK$320,000 was deposited by cheque;

11.10.4 On 16 March 2017, HK$320,000 was withdrawn by cash over-the-counter;

11.10.5 On 30 March 2017, HK$830,000 was deposited by cheque;

11.10.6 On 31 March 2017, HK$830,000 was withdrawn by cash over-the-counter;

11.10.7 On 11 April 2017, HK$500,000 was deposited by cheque;

11.10.8 On 12 April 2017, HK$ 500,000 cheque withdrawal was rejected. HK$499,985 was re-deposited into D3's account by the bank on the same day (after deduction of HK$ 15 bank charges).

11.10.9 On 13 April 2017, HK$5 milliom was withdrawn by cash over-the-counter.

12.  D1 and D3 have clear criminal records.

Prosecution witnesses

13.  A total of 10 witnesses were called by the prosecution.

PW1

14.  PW1 is PW2’s wife and PW3’s mother.

15.  In early March 2017, PW2 received a cold call concerning financial matters and as a result of which the three family members went to RFEL’s office on 16 March 2017.

16.  At RFEL’s office PW1, PW2 and PW3 met D1.

17.  During their meeting with D1, PW1 was persuaded by D1 to borrow HK$1.8 million for repaying various debts and loans of PW1 and PW2 owed to other financial institutions as well as having some extras for other purposes.

18.  PW1 recalled that she was told by D1 that he knew a very trustworthy friend who was able to help in applying for a low interest rate loan. PW1 said that nothing was said by D1 concerning the relevant rate of interest. PW1 seemed to recall that D1 only said that an amount of HK$45,000 would be the interest and that was to be paid in one go.

19.  On 24 March 2017, PW1 & PW2 met two people whom PW1 believed to be from a financial institution called Master Finance. These two people took them to the office of a firm of solicitors K. B. Chau & Co. at the United Centre in Admiralty (“K. B. Chau”).

20.  PW1 confirmed that she did not see D1 at K. B. Chau on that very day.

21.  At K. B. Chau, PW1 received a cheque in the sum of HK$1,455,000, payable to her. She was requested to acknowledge the receipt of the same.

22.  PW1 seemed to have suggested that she was told by D1 at some stage that after the said cheque issued to her is honoured, she (PW1)  should then deposit the same sum of money into the account of MAN (albeit she did express that she does not quite remember about this aspect).

23.  PW1 confirmed that she did issue a cheque in the sum of HK$1,455,000, payable to MAN (Exhibit P8)  and deposited the same in the drop-in box of the bank.

24.  On 11 April 2017 she and PW3 headed to the DBS Bank at Central, with the expectation of meeting a Mr. YAU for the purpose of signing documents (for the bank loan). No Mr. YAU turned up that day. PW1 made enquiry with the bank and was told that there was no staff at that branch with the surname YAU.

25.  PW1 then proceeded to RFEL’s office the same day and discovered the premises was closed down.

26.  It was subsequently found out that none of her and/or PW2’s debt were paid-off.  As a result of her dealings with D1 and RFEL, she regarded her lose to be in the region of HK$1.5 million.

27.  In cross-examination, PW1 agreed to the defence’s suggestion that before getting the bank loan, she would be getting an interim loan from a moneylender.

28.  PW1 was repeatedly asked by the defence that the moneylender for the said interim loan was in the name of Master Finance.   PW1 was quite adamant in insisting that D1 only mentioned about a trustworthy friend for arranging the interim loan, the name of Master Finance was never mentioned.

29.  The defence further suggested to PW1 that amongst the document signed by her and her family members (Exhibit P171), the name of Master Finance was stated there. To that PW1 said that as there were so many documents coupled with the fact that no explanation was given to her by D1, Master Finance was a novice to her.

30.  As to the aspect her expectancy in meeting Mr. YAU on 11 April 2017 for signing documents, PW1 made a correction by suggesting that it was D1 who arranged to meet her at the bus-stop near the DBS Bank at Central. PW1 and PW3 waited there for an hour or so without seeing D1. They then proceeded to the bank to seek Mr. YAU but to no avail.

PW2

31.  On 6 March 2017，PW2 received a phone call from a male person who claimed to be surnamed Yau (“Mr. YAU”)  and was representing the DBS Bank. Mr. YAU said that he could help PW2 to pay-off his (PW2)’s outstanding loans from other financial institutions by offering a lowest rate loan. However, as to the rate being offered, PW2 did not seem to have recollection.

32.  As a result of that phone call plus other subsequent communications between him and Mr. YAU, PW2 went to RFEL’s office with his family members on 16 March 2017.

33.  At RFEL’s office, he and his family members met D1.  The financial situation of PW2 was discussed. D1 said he would help PW2 to pay-up all his debts.

34.  Insofar as PW2 was able to recall, D1 said that he (D1)  could introduce a relatively better interest to PW2.

35.  PW2 described that during the meeting with D1, D1 was mainly talking to PW1. However, as regards the details of their conversation, PW2 said he was not able to remember.

36.  The prosecution then invited PW2 to refresh his memory by reading his witness statement given in April 2017. After PW2 refreshed his memory, PW2 said that D1 told him that the amount of the pre-approved loan from DBS Bank was HK$800,000.

37.  PW2 understood that a loan in the sum of HK$1,455,000 was eventually taken out and he understood that PW1 was given such a cheque at K. B. Chau. He was told by PW1 that she transferred the money into another account. He himself, however did not go to K. B. Chau on 24 March 2017 as he needed to work on that day.

38.  In cross-examination, PW2 agreed with the defence that:-

38.1 D1 gave the advice that he (PW2)  would be applying and eventually obtain a low interest loan from DBS Bank.

38.2 RFEL would be helping him (PW2)  with such an application.

38.3 Part of D1’s advice to PW2 was: in view of the existing debts of PW2, it was difficult to get bank loan. Therefore, it was suggested by D1 that PW2 should get an interim loan from Master Finance.

38.4 RFEL would be helping him (PW2)  out to get the loan from Master Finance.

38.5 PW2 signed a power of attorney authorizing RFEL to handle the loan application.

38.6 D1 said that RFEL would help PW2 to apply loan from DBS Bank but never said it was pre-approved.

38.7 D1 said to PW2 that the loan from Master Finance had been approved.

38.8 PW2 eventually did get a loan from Master Finance.

PW3

39.  PW3 recalled accompanying her parents (PW1 & PW2)  to RFEL’s office on 16 March 2017.

40.  PW3 also recalled that D1 said to them that a low interest rate loan could be introduced to PW2.

41.  According to PW3’s understanding from what was being stated in the document, the lowest interest rate was 1.2%.

42.  PW3’s parents were persuaded by D1 to take up a loan of HK$1.8 million for paying-up the loan of HK$800,000 which PW2 owed to Prime Credit.

43.  On 24 March 2017, she accompanied PW1 to K. B. Chau.

44.  According to what PW3 was told by PW1, it was PW3’s understanding that:-

44.1 PW1 was handed a cheque in the sum of HK$1,455,000 (Exhibit P8).

44.2 That cheque was required to be deposited into the account of a person called MAN so that the HK$800,000 could be paid-up.

45.  When asked as to what involvement D1 had regarding the handling of the cheque (Exhibit P8), PW3 replied that K. B. Chau and Master Finance were both referred to by D1.

46.  PW3 seemed to recall that D1 explained to her parents that the HK$1.8 million was used for helping her father to make repayment to loans or debts owed outside whilst there was HK$300,000 to be refunded.

47.  In cross-examination, PW3 agreed with the defence that:-

47.1 D1 told her family that it would be difficult to obtain a loan from DBS Bank.

47.2 D1 never said at the time that he had already obtained a loan for PW3’s family with the DBS Bank.

47.3 Part of the plan outlined by D1 to PW3’s family was first getting a loan from another moneylender.

47.4 It was RFEL which was helping PW3’s family to get loan from moneylender and eventually tried to get a loan from DBS Bank.

PW4

48.  PW4 is the wife of PW5.

49.  On 20 March 2017, PW4 learned from PW5 that there might be a company which could be helpful in organsing their family’s financial matters. As a result of which the couple visited RFEL’s office on 23 March 2017 and sought to meet a Mr. CHOI.

50.  Upon arrival they were greeted by a female receptionist who informed them that Mr. CHOI was not there. Instead, it would be a Mr. Sam CHAN who would be responsible for explaining the loan matter to them.

51.  Subsequently they did meet this Mr. Sam CHAN, inside a room in the premises. It is not disputed that this person was D1.

52.  Through the suggestion of D1, the couple managed to secure a loan of HK$1.2 million from a licensed moneylender.

53.  PW4 then received HK$600,000 via transfer from Master Finance.

54.  On 4 April 2017, at the Club House of Sky Tower, PW4 was told by D1 to make a cashier order in the sum of HK$500,000 payable to Lam So Yi, Zoe.

55.  PW4 did not know who Lam So Yi was. She did enquire from D1 as to the reason to pay the cashier order in this person’s name. D1 explained to PW4: as it was near to the end of the financial year for his company, the money had to be deposited to Lam So Yi and at that time the said Lam So Yi was the Chief Financial Officer of RFEL.

56.  PW4 gave the cashier order to D1 believing that the cashier order was to be used to make repayment for the other outstanding loans or debts of her family.

57.  Shortly after 7 April 2017, PW4 caused a check as to whether her creditors had been paid-off and the result was negative.

58.  PW4 then tried to contact D1 but in vain. She also went up to RFEL’s office and found out that the premises was closed down.

59.  PW4 said that as a result of her dealings with D1 she lost HK$500,000.  

60.  In cross-examination, PW4 agreed that during her meeting with D1 at RFEL’s office, D1 handed her a business card with the name Sam CHAN, the company’s name and mobile phone number on it.

61.  PW4 further agreed that on 3 April 2017 she did have a phone conversation with a person whom she thought was D1 as it came from the same mobile phone number as that printed on the business card of D1. When asked as to whether this person expressly said during the phone conversation that he was Sam CHAN, PW4 said she was not certain.

62.  PW4 further said that as to whether it was possible that the person whom she talked to over the phone could be someone other than D1, PW4 said she was not certain.

63.  As regards events that took place on 4 April 2017, PW4 disagreed with the defence’s suggestion that the person whom she and her husband met at the clubhouse of Sky Tower was wearing a facemask. She further disagreed that this person was not D1.

64.  Insofar as her communication with D1 was concerned, PW4 said on 4 April 2017 Sam CHAN gave her a call (by using the same number as that on his business card). She insisted that she did meet Sam CHAN, i.e. D1, the same day at Sky Tower.

PW5

65.  PW5 confirmed that he went to RFEL’s office on 23 March 2017 with his wife (PW4)  with the view to find one Mr. CHOI for the consultation of dealing with his financial matters.

66.  Whilst at RFEL’s office, D1 came to meet them and said that Mr. CHOI was sick and that their case would be followed-up by him.

67.  After much discussion, PW4 and PW5 decided to accept D1’s suggestion and engaged the service of RFEL in securing a loan of HK$1.2 million from a licensed moneylender.

68.  PW5 recalled subsequently on 4 April 2017 that he and his wife (PW4)  met D1 again at the lobby of Sky Tower. PW5 said that prior to that meeting there was communication between him and D1 over the phone to the effect that D1 would like to receive a cheque of HK$500,000 first so that the procedure could be expedited. Eventually on 4 April 2017 they did meet D1 in person and the cheque of HK$500,000 (with the payee being Lam So Yi )  was wrote out by PW4 and given to D1. D1 also represented on that occasion that Lam So Yi was the Chief Financial Officer of RFEL.

69.  PW5 was then instructed by D1 to go to a solicitor’s firm at the United Centre for the purpose of signing loan document.

70.  It turned out that on 5 April 2017, PW5 only received a cashier order of HK$600,000 and not the HK$1.2 million as expected.

71.  After 5 April 2017, PW5 and his wife kept calling D1 in checking the progress of their loan repayment. However, D1 was not to be reached. Eventually on 11 April 2017 they managed to contact Mr. CHOI over the phone who told them that he was not able to find D1 either. By 18 April 2017 Mr. CHOI was not to be reached as well. PW4 and PW5 then went up to RFEL’s office and found the premises was closed.

72.  PW5 considered that they suffered a lose of HK$500,000.

73.  In cross-examination, PW5 agreed with the defence that in the month of April 2017, he was informed by Master Finance that a loan had been approved for him.

74.  It was PW5’s understanding that RFEL had arranged such loan for him.

75.  Insofar as events which took place on 4 April 2017, PW5 agreed that the person whom he met at the lobby of Sky Tower was wearing a facemask. He further agreed that this person was wearing the facemask throughout the meeting. When it was suggested to PW5 that this person was not the one whom he met on 23 March 2017 (i.e. D1), PW5 disagreed.

PW6

76.  Madam LAM Lai-ching (“PW6”)’s witness statement was adduced into evidence by way of section 65B of the Criminal Procedure Ordinance (Exhibit P9 & P9a).

77.  PW6 attended RFEL’s office. She followed the instruction of various staffs of RFEL and made payment with a view of getting low interest rate loan.

78.  On 13 March 2017, she complied with the instruction of RFEL’s staff and issued a cheque in the sum of HK$1,320,000 payable to D3 (Exhibit P 10). The back of the Exhibit P10 bore the account number of D3’s account.

79.  PW6 was informed RFEL’s staff that D3 was the boss of RFEL.

80.  In cross-examination PW6 confirmed that she never saw D3 at RFEL’s office.

81.  She further confirmed that she only affixed her signature on Exhibit P10, the rest was completed by the staff of RFEL.

PW7

82.  Mr. TO Shing-chik (“PW7”)’s two witness statements were adduced into evidence by way of section 65B of the Criminal Procedure Ordinance (Exhibits P11 & P11a and P12 & P12a).

83.  PW7 initially attended RFEL’s office on 3 March 2017. He subsequently followed the instruction of various staffs of RFEL and made payment with a view of getting loan to repay his existing debts.

84.  On 11 March 2017, he issued a cheque in the sum of HK$320,000 payable to D3 (Exhibit P13). The name of D3 had already been written for him by the RFEL’s staff at the time when he appended his signature on Exhibit P13. He was told by the RFEL’s staff that the money would be used as a deposit to apply for a HK$1,000,000 loan from another finance company. The back of the Exhibit P13 bore the account number of D3’s account.

85.  In cross-examination PW7 said that there was a receipt which bore the name of D3 as well as that written on Exhibit P13 at the time when he appended his signature on it.

PW8

86.  Mr. LO Chi-kwong (PW8)’s two witness statements were adduced into evidence by way of section 65B of the Criminal Procedure Ordinance (Exhibits P14 & P14a and P15 & P15a).

87.  PW8 initially attended RFEL’s office on 20 March 2017. He subsequently followed the instruction of various staffs of RFEL and made payment with a view of getting very low interest rate loan to repay his existing debts.

88.  On 30 March 2017, he issued a cheque in the sum of HK$830,000 payable to D3 (Exhibit P16). The name of the payee and the amount required were both furnished to PW8 by the RFEL’s staff. The back of the Exhibit P16 bore the account number of D3’s account.

PW9

89.  Mr. CAI Ruxiang (“PW9”)’s witness statement was adduced into evidence by way of section 65B of the Criminal Procedure Ordinance (Exhibit P17 & P17a).

90.  PW9 attended RFEL’s office on 25 March 2017. He subsequently followed the instruction of various staffs of RFEL and made payment with a view of getting very low interest rate loan to repay his existing debts.

91.  PW9 issued a cheque in the sum of HK$500,000 payable to D3 (Exhibit P18). The back of the Exhibit P18 bore the account number of D3’s account.

92.  Exhibit P18 was not honoured as PW9 did not have sufficient money in his current account. He subsequently received a call from the staff of RFEL and was asked to go to the bank to make a transfer in cash at the counter. PW9 complied and on 12 April 2017 made the transfer of HK$500,000.

PW10

93.  Madam SZE So-ching is the manager of Kintetsu World Express (“Kintetsu”). She joined Kintetsu in 1994.

94.  In March 2023 she caused a check of Kintetsu’s record upon enquiry from the police and retrieved the following:

94.1 D3 joined Kintetsu in 2007.

94.2 D3 was still employed by Kintetsu in 2017. His position being warehouse keepers with an annual income of HK$236,399.

94.3 D3’s Staff Record Card was produced and marked as Exhibit P19.

94.4 D3’s Pay Slip was produced and marked as Exhibit P20.

95.  In cross-examination PW10 said that she did not know D3 herself but can confirm that he is still working at Kintetsu.

Case to Answer

96.  At the conclusion of the prosecution’s case the defence made respective no case submissions on behalf of D1 and D3.

97.  I ruled that there were cases to answer for D1 in respect of Charges (1)  & (2)  and for D3 in respect of Charge (4).

The Defence Case

DW1 (D1)

98.  D1 elected to testify.

99.  D1 is a man of clear record. He is a divorcee and had a son aged 8.

100.  During the years of 2014 to 2015, he was working as a tele-sales person with a company named Quick Solution.

101.  In 2017, through the introduction of a friend, he applied for a job as a messenger in a company situated at Kowloon Plaza in Lai Chi Kok (“the Kowloon Plaza Company”).

102.  He worked there as a messenger for about 2 weeks and then he was approached by the boss, one Mr. Keith LEUNG (“LEUNG”)  for transferring to another post, responsible for having meeting with clients of the company. D1 understood that this post was on a temporary basis. D1 agreed to such switching of post.

103.  D1 described that the main duty of his new post was to help clients to resolve their financial issues.  The place where he met these clients was RFEL’s office. He was also told by LEUNG that he were to take over the work of a person called “Sam CHAN”. D1 was given a mobile phone which he was told only to be used for the company’s purposes and not to be taken back home but to be returned to the Kowloon Plaza Company once his work for the day was completed. D1 was also given the business card of Sam CHAN. He was told by LEUNG that as D1’s new post was temporary, there would be no new business card printed (with D1’s own information and telephone number)  for him. Instead, D1 was told by LEUNG to hand out those business cards of Sam CHAN to clients. D1 said that he himself had never met this Sam CHAN.

104.  As to the job nature of his new post, D1 said that RFEL’s office was the only place he met clients. He regarded the Kowloon Plaza Company as a place for operation of document and a call centre for clients enquiries, a back-up support department to RFEL. D1 said he worked at RFEL for about 3 weeks.

105.  As to the issuance of the cheque by PW1 and payable to MAN (Exhibit P8), D1 said that he was instructed by the company to request the same from the clients (i.e. PW1 and PW2). D1 said that he was told by LEUNG that: (i)  if the name of the company is written down then it may have an impact on the tax filing aspect and (ii)  it would speed up the time required for helping clients for their repayment. LEUNG further said that it would be more convenient and faster if the name of the CFO of the company is used. D1 said that he accepted such explanation from LEUNG and thus carried out his instructions.

106.  As to his dealings with PW1’s family, D1 said that documents were brought by them and he analysed their financial situation with them. He followed the company’s procedure and suggested to them to go to a financial institution for the repayment of their debts from outside so that they can pass the stress test by the bank in order to enable them to apply for the mortgage with the bank.  

107.  Regarding the handing out of business cards, D1 described that he would hand them out to clients during meetings. He would introduce himself as surnamed CHAN. D1 said he was told by LEUNG that if there is question by the clients, they would be able to call the number on the business card.

108.  With regard to PW4 and PW5, D1 recalled that he met them both on 23 March 2017 and their financial situations were discussed. He remembered telling them (as he was instructed by LEUNG)  that his company would be helping them with taking out a loan from a financial institution so as to enable them to make repayment to the loans they owed outside and eventually be able to obtain the mortgage and/or loan from the bank.

109.  PW4 and PW5 accepted D1’s proposed plan and documentations were signed afterwards.

110.  D1 said that 23 March 2017 was the last time he met either PW4 or PW5. There was no subsequent communication between him on the one part and PW4 and PW5 on the other after that day.

111.  D1 said that on 1 April 2017 he was told by LEUNG that he was no longer required to meet clients as the person whom he took over the job from came back.

112.  As to the company’s mobile phone, which had the contact details of PW4 and PW5, was with the company, D1 had no means to contact them subsequently.

113.  As regards 4 April 2017, D1 said he never went to Sky Tower nor did he meet PW4 and PW5. D1 said that he was at home all day and his ex-wife’s younger sister and her boyfriend plus some other children came to have a gathering at his home that day. D1 managed to retrieve several photographs stored in the cloud account of his ex-wife with regard to the said gathering (Exhibit D1).

114.  In cross-examination D1 was challenged as to why, at the time of his arrest, he did not tell the police that the very person whom the police should be after was LEUNG, to which D1 replied that: “I did think about telling everything about my boss and the incident but my legal representative at that time gave me advice and said that if I have anything I haven’t thought through then I had the right to exercise my right of silence”.

115.  D1 refuted the prosecution’s suggestion that his act of giving out of business cards to clients was trying to gain their trust. Instead, D1 explained that he was doing so due to the guidance of the company so as to leave a means of contact with the clients. D1 further added that as he was taking over the work of Sam Chan and his surnamed is also CHAN, D1 did not think that he was telling a lie in handing out those business cards.

116.  Prosecution also challenged D1 as to why there was a need for D1 to hand back the mobile phone of the company after each day’s work, to which D1 explained that that phone contained information of various clients. As D1 was not a formal employee, D1 thought it was reasonable that the company did not allow him to take the phone back home. Further, D1 was also told by LEUNG that such phone was the company’s property and thus he (D1)  should not be in possession of the same outside work.

117.  D1 was challenged by the prosecution as to why all of a sudden he decided to apply for a job in delivering document when he had no relevant experience before, to that D1 explained: at the time when he was applying for delivering documents, he did not know the nature of that company. D1 further said that as his ex-wife at the time wanted to go to work, he had to take up the task of taking care of their young son and therefore a temporary job would suit his needs.

118.  D1 also said that in relation to his handing out the business cards of Sam CHAN, he himself was not told by LEUNG to pretend to be such person. However, LEUNG did remind D1not to take the initiative to tell clients that that “Sam CHAN was not working at the time being” nor “I was just taking over for Sam CHAN for the time being”.

DW2

119.  Madam LAM Pui Fan (“DW2”)  is the ex-wife of D1.

120.  She and D1 got married in 2014 and was divorced sometime after 2017.

121.  They have an 8-years-old son.

122.  She is currently working in the business connected with eyelashes. Back in 2017 she was working as a fashion model.

123.  A regards 4 April 2017, she managed to retrieve from her cloud account 4 photographs (Exhibit D1)  concerning a gathering held at her residence whereby some friends and relatives paid a visit to her home.

124.  She recalled she took the photographs herself.

125.  She described to the court that in one of the photographs, the left arm of D1 was shown. She further supplemented by saying that the reason why she was sure that very person was her ex-husband (D1)  was because she was able to recognize his home-wear as shown in the photograph.

126.  Further DW2 said she was able to remember that the said gathering commenced at about 12 noon and finished some time after dinner. DW2 said throughout this whole time D1 was at home.

127.  In cross-examination, it was suggested to DW2 that D1 could have gone out some time during 4 p.m. on 4 April 2017 and come back subsequently. To that DW2 replied that D1 could not have gone out without DW2 noticing the same.

DW3 (D3)

128.  D3 elected to testify.

129.  D3 is a 40-years-old single man. He has no criminal record and had never been in trouble with the police before.

130.  After completing Form 5, D3 began his working life as a warehouse keeper. At the age of 18, D3 worked at the Jardine Aviation Services Company for about 5 years before working for his current employer Kintetsu.

131.  The essence of D3’s testimony was that the reason that he is now facing Charge (4)  all stemmed from a late friend of his, one Mr. Poon Wai Ho Jason (“POON”).

132.  According to D3, POON was his friend and schoolmate since the age of 12. They were close friends.

133.  After completing Form 3, D3 and POON studied at different secondary schools but they maintained their close contacts. When D3 started his working-life, their close relationship kept intact. D3 used to meet POON frequently because they worked in the same industrial building. D3 would sometimes bump into POON. They would play mahjong and have occasional meals together.

134.  As regards POON’s financial situation, D3 was of the view that back in 2015 POON was in financial difficulty. POON told D3 that his mother had cancer and she had to live at an elderly home, with high expenses.

135.  D3 also had suspicion that POON was probably in debt because he believed POON was an excessive gambler in horseracing and football matches. There were also occasions whereby POON asked to borrow money from their mutual schoolmates.

136.  D3 also recalled that there was occasion that D3 saw red paint being sprayed on the door of POON’s residence, though POON explained that it was due to his father’s debts.

137.  In 2016, POON revealed to D3 that he (POON)  was going to sell his family’s Apartment in the Mainland (“the Mainland Apartment”).

138.  It was D3’s understanding that the Mainland Apartment was vacant as D3’s mother had already came down to live in an elderly home in Hong Kong.

139.  POON said that he was intending to utilize the sale proceeds for his mother’s medical treatment though D3 suspected at the time that the same would be used to repay POON's gambling debts.

140.  POON said to D3 that the Mainland Apartment could be sold for about $4 to $5 million.

141.  POON enquired from D3 whether D3 has any bank account with banks in the Mainland. D3 said no.

142.  On 27 Feb 2017 (D3’s birthday), POON informed D3 that the Mainland Apartment was sold. POON then asked D3 to open a BOC account so that the proceeds of sale of the Mainland Apartment could be transferred to D3. This would help POON in withdrawing the said proceeds of sale.

143.  POON said he was not able to open a bank account himself as he had to stay in the mainland for long periods of time in order to follow up on the sale of the Mainland Apartment. POON seldom came back to Hong Kong.

144.  POON also said he would have problems/issues opening accounts in Hong Kong though he did not state what those problems/issues were.

145.  D3 acceded to POON’s request and agreed to open an account for him at BOC.

146.  D3 was informed by POON that the proceeds from the sale of the Mainland Apartment would be remitted to D3’s account in 4 to 5 installments.

147.  On 1 March 2017, D3 went to BOC with POON to open an account. After receiving bank card and cheque book from the bank, D3 passed them all to POON as he thought it was POON who asked him to open the account.

148.  D3 said the very first withdrawal was about 10 odd days after the account was opened. D3 described that on that occasion, POON asked D3 to meet up at Tsimshatsui. POON would take the direct train to Hong Kong from the Mainland. When the two of them met at Tsimshatsui, D3 would go into the bank whilst POON would wait outside. POON would inform D3 as to how much money needed to be withdrew. After D3 got the money in cash he would then bring it out and gave the same to POON.

149.  The subsequent withdrawals all followed the same pattern though they might have taken place at different bank branches of BOC.

150.  D3 recalled that there was one unsuccessful withdrawal but D3 did not know the reason. The bank did not tell D3 the reason either. As a result, D3 gave a phone call to POON, who replied he would make a phone call to clarify.

151.  After the last withdrawal was made, D3 was told by POON that all the monies had been transferred.

152.  A few days after the last withdrawal was made, POON told D3 that the account can be cancelled. POON then returned the bank card and cheque book to D3. D3 then cancelled the account.

153.  D3 received no compensation for assisting POON.

154.  D3 said he totally trusted POON. D3 believed that the monies involved were sale proceeds of the Mainland Apartment. He never suspected that such were illegal monies.

155.  D3 further recalled that in May 2017, he and POON met at a gathering of their mutual schoolmates. There D3 was told by POON that all his (POON)  father’s debts had been repaid and a better elderly home had been  found for POON’s mother. After that gathering, D3 lost contact with POON.

156.  D3 further said that after he was arrested on 6 November 2017, he tried to look for POON at his residence in Shan King Estate in Tuen Mun but to no avail.

157.  In December 2020, D3 was informed by schoolmates that POON had committed suicide. D3 contacted POON’s younger sister, via facebook, who said POON committed suicide due to his debt problems.

158.  D3 added that as far as he knew, POON was ever in trouble with the Police.

159.  D3 was not aware of POON doing anything dishonest.

160.  D3 stated that he trusted POON and had absolutely no reason to believe POON was not being honest with him when the monies were transferred to D3’s Bank Account.

161.  In cross-examination, D3 was asked whether he ever doubted the reliability of POON who was a compulsive gambler as far as D3 was concerned. To that, D3 said no.

162.  As to D3’s account, the prosecution challenged him that he must have had received letters and statements sent to his residential address registered with the bank. To which D3 replied that he did not look at any of them nor was he curious in what those documents were. D3 said that he probably had given all those letters to POON.

163.  When being challenged by the prosecution that he simply turned a blind eye to what was going on with his account, D3 replied in the negative and supplemented by saying that the account was for the use of POON for transferring money from the Mainland to Hong Kong.

164.  D3 was shown the cheques issued by PW6 to PW9 (Exhibits P10, P13, P16 & P18). D3 said he had never seen these cheques and has no idea what was written on or at the back of the said cheques. D3 did not know who wrote those cheques.

165.  D3 was also challenged (in respect of Exhibit P10)  that he must find it highly suspicious for a sum of HK$1.32 million to be withdrawn in cash. To that D3 replied: “Not highly suspicious. The money from the sale of his (POON’s)  Mainland Apartment was transferred to my account. Not suspicious” .

166.  D3 was also asked as to the manner in which he made withdrawals from the bank. D3 said that before going into the bank, POON would give him the bank book. D3 would then go into the bank whilst POON would wait outside. After cash was withdrawn, D3 would take the cash out and gave the same to POON who was outside of the bank. Each withdrawal followed the same procedure.

Submissions

167.  Mr. Cheung submitted on behalf of D1 that:-

168.  D1 did was simply following the instructions given to him by his company.

169.  Insofar as Charge (1)  is concerned, the particulars of the charge alleged that D1 had falsely represented to PW1 and PW2 that “DBS Bank had pre-approved a low interest rate loan to PW2 which would be available on condition that a deposit of HK$1,455,000 was made to RFEL”.

170.  Mr. Cheung submitted that the totality of PW1-3’s evidence suggested that D1 had told them that given their financial situation, it would be difficulty for them to obtain a loan. There was no mention of a “pre-approved loan” by D1.

171.  As to Charge (2), Mr. Cheung’s Submission focused on the assertion that D1 was not the person whom PW4 and PW5 met on 4 April 2017. The defence prayed-in-aid the testimonies of D1 and DW2 as well as the supporting photographs in Exhibit D1.

172.  Mr. Davies submitted on behalf of D3 that:-

173.  D3 and POON were long-time friends.

174.  D3 had never known POON for getting into trouble with the Police or doing anything dishonest.

175.  D3 fully trusted POON and believed that the monies deposited into D3’s account came from the sale of the Mainland Apartment.

176.  D3 had no way to check, nor did he have a reason to challenge POON’s claim that the Mainland Apartment was sold.

177.  The only suspicion that D3 had was that he thought POON was actually using the proceeds of sale of the Mainland Apartment to pay off his gambling debts. This suspicion, however, did not suggest reasonable grounds to believe that the proceeds of sale of the Mainland Apartment was actually ‘dirty’. If anything, it suggests D3 has more reason to believe that POON was in need to sell the Mainland Apartment to cover his debts.

178.  D3 truly believed that POON could not open an account himself and was occupied in the mainland.

179.  There was no reason for D3 to suspect that the money that was deposited into D3’s account was some kind of illegal fund.

180.  D3 has never been in trouble with the law in his life. He had very stable employment throughout his adult life and there is no evidence that he was in any financial trouble.

181.  The amount of money is no more than would be expected from the sale of an apartment.

182.  There is nothing unusual in receiving payments for the sale of an apartment in instalments.

183.  The transfers all happened within a fairly short period of time which would be consistent with the sale of an apartment.

184.  D3 helped POON to deal with what he believed to be POON’s financial and family troubles. He did not believe, nor did he have any reasonable grounds to suspect, challenge or disprove what POON claimed to be genuine proceeds of sale of the Mainland Apartment.

185.  D3 was not offered, nor did he ask for, any remuneration or other inducement for assisting POON.

186.  D3 was not a particularly sophisticated or highly educated individual. D3 was being used by his friend.

187.  The explanation given to D3 by POON about the source of the funds would not have raised suspicion, never mind giving D3 reasonable grounds “to believe” that these funds were the proceeds of an indictable offence. Similarly, D3 had no reason to doubt that POON would have trouble opening a BOC account in Hong Kong in light of POON’s financial situation.

Analysis

188.  The present trial concerns with 3 separate charges alleged against two defendants. I will give separate consideration to the individual charges as well as the individual defendants.

189.  I bear in mind that both D1 and D3 are men of good character, I therefore reminded myself in accordance with the direction set out in R v. Berrada [1989] 91 Cr. App. R. 131.

190.  As both defendant had testified, I reminded myself that if their respective account given in evidence is true or maybe true, they should be found not guilty.

Charges (1)  & (2)

191.  The material witnesses relate to Charges (1)  & (2)  are PW1 to PW5.

192.  I have considered their respective testimonies. I find all of them to be honest witnesses.

193.  Insofar as Charge (1)  is concerned, I find as facts that:-

193.1 On 16 March 2017, PW1 and PW2 were persuaded by D1 to apply for low interest rate loans.

193.2 D1 had recommended to PW1 and PW2 to secure a loan of $1.8 million from a licensed moneylender.

193.3 On 24 March 2017, PW1 confirmed with the plan as recommended by D1.

194.  I also find as facts that during the said meetings on 16 & 24 March 2017:-

194.1 D1 did inform PW1 and PW2 that before getting the bank loan, they would be getting an interim loan from a moneylender, namely Master Finance, and RFEL would be assisting PW2 in obtaining such loan.

194.2 D1 advised PW1 and PW2 that in view of the existing debts of PW2, it was difficult to get a bank loan.

194.3 It was suggested by D1 that PW2 should get an interim loan from Master Finance and RFEL would be helping PW2 out to obtain such loan.

194.4 D1 said that RFEL would help PW2 to apply loan from DBS Bank but never said it was “pre-approved”.

194.5 D1 said that the loan from Master Finance had been approved.

195.  One of the key elements of the offence in Charge (1)  is the alleged false representation by D1 that “DBS Bank had pre-approved a low interest rate loan to PW2 which would be available on condition that a deposit of HK$1,455,000 was made to RFEL”.

196.  The status of the loan being “pre-approved” in nature is crucial insofar as the alleged representation made by D1 was concerned.

197.  Likewise, the nexus between “the pre-approved loan” and the “deposit of HK$1,455,000” is essential in substantiating the prosecution’s allegation against D1 that he made a false representation to PW1 and PW2 as was particularized in Charge (1).

198.  As regards D1’s alleged representation that the DBS Bank loan had been pre-approved, there was no corresponding evidence of the same in PW1’s testimonies. 

199.  As for PW2, he clearly expressed to this court that D1 did say that RFEL would help PW2 in applying loan from DBS Bank but never said the same was pre-approved.

200.  Further, the testimonies of PW1 and PW2 do not suggest that D1 had ever represented to either of them that the availability of the DBS Bank loan was on condition upon a deposit of HK$1,455,000 being made to RFEL.

201.  The mentioning of the loan being “pre-approved” is of vital importance to D1’s alleged representation to PW1 and PW2. Equally, the alleged representation by D1 linking the availability of the loan with the depositing of HK$1,455,000 is crucial in a like manner.

202.  Without evidence to substantiate the aforesaid aspects, I have doubt as to whether the prosecution is able to satisfy this court, insofar as Charge (1)  is concerned, that all elements of the offence has been proved.

203.  As a result, I am not satisfied beyond all reasonable doubt that Charge (1)  has been proved to the requisite standard and I therefore find D1 not guilty of Charge (1).

204.  For Charge (2), I find as a facts that:-

204.1 On 23 March 2017, PW4 and PW5 attended RFEL's office. They were advised by D1 to obtain a loan of HK$1.2 million from a licensed moneylender for settling their previous outstanding debts with a view to improve their credit rating (before applying for a HK$5 million re-mortgage loan from banks).

204.2 On 3 April 2017, PW4 and PW5 did obtain a loan of HK$1.2 million from a licensed moneylender.

204.3 Neither PW4 nor PW5 meet D1 in person after the said meeting on 23 March 2017 and before 4 April 2017.

204.4 On 4 April 2017 both PW4 & PW5 met a person at the lobby of Sky Tower. To them this person was D1.

204.5 Prior to that meeting there was communication between PW5 and a person (whom he thought was D1)  over the phone to the effect that D1 would like to receive a cheque of HK$500,000 in advance.

204.6 A cheque of HK$500,000 (with the payee being “Lam So Yi”)  was wrote out by PW4 and given to this person. This person also represented to PW4 and PW5 that Lam So Yi was the Chief Financial Officer of RFEL.

205.  One of the key issue in Charge (2)  is whether the person whom PW4 and PW5 met on 4 April 2017 at the lobby of Sky Tower was in fact D1.

206.  PW4’s evidence in that regard was very clear. She rejected the defence’s suggestion that this person was wearing a facemask. She was adamant that it was D1.

207.  On the other hand, however, it was also the clear evidence of PW5 that this same person was wearing a facemask throughout the entirety of the same meeting.

208.  April 2017 was not the time when the wearing of facemasks being a common phenomenon in Hong Kong people’ daily life.

209.  No clarification was sought as to whether the facemask wore by this person was not properly worn. Nor was PW5 being ascertained as to whether he was able to recognize this person (as being D1)  despite the fact that a facemask was worn. There is also no suggestion from PW5’s testimony that he might have had made a mistake insofar as his recollection about the wearing of facemask by this person is concerned.

210.  As such, the respective evidence from PW4 and PW5 regarding the wearing of facemask by this person was incompatible.

211.  If this person was indeed wearing a facemask, it surely would cast a doubt in the evidence of PW4 and PW5 insofar as their identification of this person was concerned.

212.  I am therefore left with no option but to give the benefit of the doubt to D1 and find that the person whom PW4 and PW5 met on 4 April 2017 could have been someone other than D1.

213.  The alleged representation made by such a person on 4 April 2017 was of crucial importance to the prosecution’s case insofar as Charge (2)  is concerned  as it was this very person who gave the instruction to PW4 to issue the cheque of HK$500,000 payable to “Lam So Yi” and told PW4 & PW5 that “Lam So Yi” was the CFO of RFEL.

214.  If there is a doubt as to the identity of the person who made those representations on 4 April 2017, it must follow that the prosecution is unable to satisfy this court, insofar as Charge (2)  is concerned, that all elements of the offence has been proved.

215.  As a result, I am not satisfied beyond all reasonable doubt that Charge (2)  has been proved to the requisite standard and I therefore find D1 not guilty of Charge (2).

Charge (4)

216.  As regards Charge (4), most of the evidence adduced by the prosecution has not been challenged by the defence.

217.  The relevant witnesses insofar as Charge (4)  is concerned are PW6 to PW10. I find them all to be honest and reliable witnesses and I accept their respective testimony in full.

218.  I find as facts that PW6 to PW9 each had had dealings with RFEL and had been persuaded by staffs of RFEL to issue cheques or transferred money payable to or into D3’s account. They did so as a result of the deceitful acts on the part of the various staffs of RFEL.

219.  I also find as a facts that between 13 March 2017 and 13 April 2017 a total of HK$2,970,000 had been deposited into and withdrew from D3’s account as stated in the admitted facts.

220.  The testimony of D3 suggested that he was the person who dealt with the HK$2,970,000 in question. I therefore also find this a piece of fact.

221.  The key issue insofar a Charge (4)  is concerned is whether the prosecution is able to prove that D3 knew or had reasonable ground to believe that the money in question represented proceeds of an indictable offence.

222.  The essence of D3’s testimony, as put forward by Mr. Davies, was that he was helping-out a friend and opened a bank account for him. D3 did not believe, nor did he have any reasonable grounds to suspect, challenge or disprove what POON claimed to be genuine proceeds of sale of the Mainland Apartment.

223.  It is true, as was admitted by D3 himself, that he withdrew huge amount of monies in cash on several occasions within a period of one month.

224.  In considering the guilt of D3, the key question to be asked is: if it was the case that D3 was indeed helping-out a friend as was described by him, do I find this account of his to be true or may be true.

225.  It was revealed by D3 himself that POON to him was an excessive gambler who had sought to borrow money from their mutual schoolmates.

226.  D3 also revealed that POON did express to him that he (POON)  had difficulty in opening bank account in Hong Kong though D3 did not ascertain from POON the reason behind it.

227.  D3 also described that for each and every withdrawals of the monies in question, he was the one going into the bank and withdrew the cash whilst POON would be waiting outside for him.

228.  Bearing in mind the aforesaid, when assessing the entirety of D3’s testimony, insofar as D3’s assertion that he was helping out POON in opening an account for the purpose of transferring the sale proceeds of the Mainland Apartment, I find that there is nothing from the prosecution to contradict D3’s account.

229.  True that D3 had provided no corresponding evidence to support this very assertion of his. However, the pattern of the withdrawals of the monies in question is consistent with D3’s assertion.

230.  Bank accounts are important and private to most people. Opening a bank account for another person’s use is surely not common-place in every day’s life in Hong Kong.

231.  However, with the evidence before this court, I find that the account postulated by D3, is, at the very least, capable of being true.

232.  In the premises, I am therefore not satisfied that D3 knew or had reasonable ground to believe that the money in question represented proceeds of an indictable offence.

233.  I am not satisfied that all the elements of offence of Charge (4)  have been proved to the requisite standard and I therefore find D3 not guilty of Charge (4).

Conclusions

234.  D1 is acquitted of Charges (1) & (2).

235.  D3 is acquitted of Charge (4).