HKSAR v. WONG CHI WING

DCCC 977/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 977 OF 2014

----------------------

----------------------

---------------------

Reasons for Sentence

---------------------

1.  The defendant has pleaded guilty to four offences of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455.

2.  The offences arise out of the opening of the registration of a business called ECSI Gallery Trading Company on 31 March 2013 and the opening of two bank accounts of that company which are described as the BOC account and the Fubon account with those two respective banks. So defendant was the sole proprietor of the company and opened the two accounts in question.

3.  The first three charges (Charge 1 to 3) are charges arising out of money paid into the bank BOC account as a result of what I think can be described as an email fraud.  The particulars of that are that PW1 was the manager of a Wiamen Tongan Yanshui Sea Products Company Limited, and there PW1’s business party in Indonesia received an email purportedly from PW1’s company instructing a payment of US$114,658 should be paid into the company ECSI in the BOC account.  As a consequence of the email, two deposits of HK$330,000-odd and 557,000-odd were made into the BOC account of ECSI on 29 April 2013.

4.  It is common ground that the defendant made cash withdrawals from that account as follows.  On 29 April, he withdrew $300,000. On 30 April, he withdrew $300,000.  And again on 30 April, he made a cash withdrawal of $210,000, and those withdrawals form the first three charges to which the defendant pleaded guilty.  Of course, the email requesting payment though was never made by PW1’s company.

5.  The 4th charge concerns a company called MSA Motor Sport Accessories GmbH, a company in Germany.  They had arrangement with another company, MH Motorcycles in Spain.  On 24 April 2013, MSA received an email from company, MH Motorcycles, telling it it was using a different email, and they later received a further email purportedly from MH asking that €93,265 be transferred to the Fubon account of ECSI.  And on 7 May 2013, the sum of $943,974.02 was credited to the Fubon account of ECSI.  Again, the defendant admits that on 8 May 2013 he made a cash withdrawal of 860,000 from the Fubon account, and that is Charge 4.

6.  Defendant was subsequently arrested and subjected to video interview records.  In the video interview records, defendant was quite forthcoming.  He said the business registered address for ECSI was a false address.  A friend had transferred the money into the account.  He could not provide any particulars of the friend, and he admitted he had made the three withdrawals that form Charges 1 to 3.  He gambled 700,000 of the money in question in Macau, and he claimed to have spent 100,000 of the money in question on dental treatment.

7.  On 6 October 2014, the defendant gave a further video interview record.  In that video interview record, he said he had met an African male in Tsim Sha Tsui several years ago.  He allowed the African male to use the Fubon account in exchange for a fee of $10,000.  He was aware of the transfer into the Fubon account and made withdrawals from the account.  He had given the money from the Fubon account to the same African male on several occasions.  And the defendant admits he knew or had reasonable grounds to believe the money transferred into those two accounts represented the proceeds of an indictable offence, and he had dealt with them.  

8.  The defendant’s antecedent statement and record of conviction are admitted.  They show the defendant is aged 50, received education it says to Form 7 level, has worked most recently as a proprietor of a domestic helper employment agency.  His most recent discharge from prison was on 25 February 2012 in respect of a case of managing a vice establishment.  He is recorded as having diabetes, hypertension and heart disease.

9.  The record of conviction shows four previous appearances in court, and three of those are in respect of offences of dishonesty.  That is theft and fraud.  In 1995, the defendant received a sentence of 2 years’ imprisonment for obtaining by deception; and in 2006, for a number of offences of fraud and forgery, he was given sentences of 8 months’ imprisonment, some to be served consecutively.  And as the facts show, the most immediate conviction was in 2011 for managing a vice establishment.

10.  In mitigation, it was said the defendant was in financial difficulties and wanted quick money.  And in 2013, he met an African man in Tsim Sha Tsui who suggested he open bank accounts to receive money.  It is submitted by counsel that he did know what is described as dubious even though he did not know, he says, the precise nature of the predicate offences.  

11.  In mitigation, he said he was given $6,000 for the transactions in the BOC account and 7,000 for the transactions in the Fubon account.  

12.  The defendant in his first video interview record of course gave a different account in respect of the BOC account where he says that the money that he took, he gambled $700,000 of it in Macau and spent another $100,000 on dental treatment.  But it is consistent with what he said on 6 October in respect of the Fubon account.

13.  The mitigation letter put forward by the defendant discloses that he has a number of medical conditions such as diabetes, subject to having injections of insulin.  He has an angioplasty, a non-functioning kidney, and these appear to be complications from his diabetes. Nevertheless, more can be confirmed certainly while he is in custody receiving proper medical treatment.

14.  As far as the sentencing principles are concerned, I have been referred to the case of HKSAR v Boma, 2010 case, CACC 335/2010.  In summary, it said the court should initially have regard to three factors, that is, the maximum penalty available, the need for deterrence in cases such as this, and of course the amount of money laundered. There are additional factors referred to such as the nature of the predicate offence, state of the offender’s knowledge, did the operation involve an international dimension, the sophistication of the offence, was there an organised criminal syndicate involved, the number of transactions involved and their frequency, did the offender persist in money laundering after he knew a serious offence was involved, and of course the role of the offender in the acts performed by him.  That list is said to be non‑exhaustive.     

15.  Also, I have regard to the case of HKSAR v Hsu Yu Yi where the court reviewed a number of offences of money laundering, and when setting out the amounts of money involved in a number of money-laundering cases, the court observed where the money involved is between one to two million Hong Kong dollars, a starting point for sentence of 3 years or so has been adopted.  In this case, the grand total is 1.67 million.

16.  I note that in this case, the predicate offence is email fraud.  The defendant indicates that he was aware these were criminal transactions although not perhaps the details of how the email fraud was practised. 

17.  There is an international dimension.  These were overseas companies which were induced to send the money to the accounts in Hong Kong.   

18.  The offence itself involves some sophistication and planning, but it is unknown that this was a syndicated offence.  There were two main transactions with two companies, and the defendant made totally four withdrawals over what appears to be a couple of weeks.  The defendant can I think be described as the banker and legman in the setting-up of the accounts and collecting the money.

19.  As I observed earlier, the overall total sum of 1.67 million involved would suggest an overall starting point of, as the court said, 3 years or so.  And it is necessary of course to impose what is considered to be the correct sentence in respect of each of the charges and then adjust those sentences to achieve a correct overall totality.

20.  In the 1st and 2nd charges, the sums are $300,000; the 3rd charge, $210,000; and the 4th charge, $860,000.  In respect of the first three charges, the sums are similar.  In respect of each of those, I will adopt a starting point of 18 months’ imprisonment, reduce that to 12 months’ imprisonment for the plea of guilty.  On the 4th charge, it is a higher sum.  I will adopt a starting point of 30 months’ imprisonment, reduce that to 20 months’ imprisonment for the defendant’s plea of guilty.  

21.  I consider that the overall starting point should be in the region of 3 years’ imprisonment for these serious offences. So what I will do is order that 4 months of the sentences in the first three offences, which will run concurrently to each other, will be served consecutively to that in the 4th charge, giving an overall total sentence of 24 months’ imprisonment which after deduction of plea of guilty would suggest an overall starting point of 3 years’ imprisonment.  So overall total sentence will be 24 months’ imprisonment.