HKSAR v. MOK WAI LOK AND OTHERS

DCCC 308/2025

[2026] HKDC 1636

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 308 OF 2025

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REASONS FOR VERDICT

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THE CHARGES

1.  The four defendants (D1-D4)  each faced one count of Dealing with property known or believed to represent proceeds of an indictable offence (“money laundering offence”), contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455. The particulars of the charges are as follows:

(1)  Charge 1 (against D1 only): D1, between 21 November 2014 and 29 March 2016, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of HKD 9,019,464.06 in the HSBC bank account in Charge 1 (“Account A”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

(2)  Charge 2 (against D2 only): D2, between 18 September 2014 and 30 March 2016, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of HKD 13,330,823.22 in the HSBC bank account in Charge 2 (“Account B”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

(3)  Charge 3 (against D3 only): D3, between 30 September 2014 and 18 November 2014, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of HKD 186,745.12 in the HSBC bank account in Charge 3 (“Account C”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

(4)  Charge 4 (against D4 only): D4, between 11 July 2014 and 16 November 2015, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of HKD 1,799,314.13 in the HSBC bank account in Charge 4 (“Account D”), in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

THE PROSECUTION CASE

2.  Most of the prosecution case is not disputed by the defence.[1]

Undisputed Facts

(Charge 1)

3.  D1 opened Account A on 15 July 2003 and he was the sole account holder and sole authorised signatory of Account A. Between 21 November 2014 and 29 March 2016, there was a total sum of over HKD 9 million equivalent deposited (mostly from overseas)  into Account A by 111 transactions and a total sum of over HKD 9 million was withdrawn by 225 transactions, mostly transferred to Account B owned by D2. Tax records showed the annual incomes of D1 from 2012 to 2015 were around $150,000-$230,000 for being a sales representative, pharmacy trainee and driver assistant; no tax return was filed for 2015/2016 and 2016/2017; no other reported income could be found for D1. D1 was the sole proprietor of KCM Trading (“KCM Trading”)  which was registered on 2 January 2016 but no tax record of the company could be found. D1 did not own any company, property or vehicle in Hong Kong.

4.  Under caution, D1 said voluntarily that: He had set up KCM Trading for trading household items but it had never been in operation. Account A was opened by him for savings purpose and he had exclusive control of the account; he had lent Account A to his secondary classmate Chan Chak Man (“CCM”)  for receiving overseas remittances in 2014-2016 without reward; he merely acted on the instructions of CCM via WhatsApp to transfer the money to a designated account, but did not know nor asked CCM why he had to receive such remittances (including remittances from Michael Hargreaves (“MH”)  and Home Entertainment), or why CCM did not handle the transfers himself; he did not know the sources and uses of funds received in Account A; he had no knowledge of the working and financial background of CCM despite knowing CCM for more than 16 years; he has lost CCM’s contact number. He did not know MH, Home Entertainment, D2 or Chan Ching Ho (“CCH”). Ko Chak Man (“Ko”)  was a friend at work and D1 had borrowed money from him for investment loss – Ko was not CCM. At the time, CCM needed an account to receive payments, and D1 believed him and trusted him since they had known each other since secondary school, so he did not ask further. 

(Charge 2)

5.  D2 opened Account B on 29 November 2013 and he was the sole account holder and authorised signatory; in the opening mandate, he had reported himself to be self-employed earning about HKD 15,000 per month. Between 18 September 2014 and 30 March 2016, there was a sum of over HKD 13 million equivalent including over $9 million from Account A and over HKD 1 million from Account D under D4’s name deposited into Account B by 228 transactions; and over $13 million was withdrawn by 133 transactions (including over $12 million to money service operators, including Po Yuen Foreign Exchange (“Po Yuen”)). Tax records showed the annual incomes of D2 from 2011 to 2013 were under $100,000; no tax return was filed for 2013-2017; no other reported income could be found for D2. D2 did not own any company, property or vehicle in Hong Kong during the charge period.

6.  Under caution, D2 stated voluntarily that: There should be transfers of $1-2 million from D1; D1 was his client of household items trading business in the Mainland; Ko and CCH were his business partners; the funds received from D1 were payments for purchase of household items and he sent the funds received from D1 to Ko via a money service operator.

(Charge 3)

7.  D3 opened Account C on 4 May 2004 and he was the sole account holder and authorised signatory. Between 30 September 2014 and 18 November 2014, there was a sum of over HKD 180,000 equivalent deposited into Account C by 6 transactions and the same was transferred to Account B. Tax records showed the annual income of D3 for 2013/2014 to be HKD 4,400 as a senior property consultant; no tax return was filed for 2014-2017; no other reported income or employment could be found for D3. D3 did not own any company, property or vehicle in Hong Kong during the charge period.

8.  Under caution, D3 stated voluntarily that: He ran a restaurant in Mainland on his own; he had worked in a company trading household items in the Mainland earning RMB 8,000 per month for half a year and he was responsible for procuring goods; he opened Account C in 2004 for receiving salary for his part-time job at McDonald’s in 2004 and also used it to receive salary when he worked as a property agent in 2010; thereafter, he did not use Account C; he had exclusive control of Account C.

(Charge 4)

9.  D4 registered a PayPal account (“D4’s PayPal Account”)  on 17 September 2012 and also opened Account D on 4 November 2008 which was linked with D4’s PayPal Account; she was the sole account holder and authorised signatory of Account D and the sole user of her PayPal Account; in the opening mandate of Account D, she had reported herself to be a flight attendant. Between 11 July 2014 and 16 November 2015, there was a sum of about HKD 1.53 million equivalent received from various PayPal users from different countries by 446 transactions in D4’s PayPal Account. During the same period, there was a total sum of over $1.55 million equivalent deposited into Account D by 70 transactions not belonging to D4’s other bank accounts, including over $1.3 million from D4’s PayPal Account, and a total sum of over $1.019 million (including over $1 million to Account B)  withdrawn by 28 transactions.[2] Tax records showed the annual incomes of D4 from 2011 to 2017 to be between $19,000 and $235,000. D4 purchased a public housing unit on 23 October 2015 at $280,000 with a mortgage of $240,000; she did not own any company or vehicle in Hong Kong.

10.  D4 was the sole proprietor of a business named MJ Workshop registered on 30 November 2015. The turnovers of MJ Workshop for 2015/2016 and 2016/2017 were around $314,000 and $87,000, respectively.

11.  Under caution, D4 stated voluntarily that: She ran a business known as MJ Workshop in Hong Kong; D2 was her husband; D4 worked as a flight attendant earning an average of $22,000 per month from 2008-2017; since June 2018, she worked in a local company as a clerk with a basic salary of $17,000 with commission; she has also been running MJ Workshop at home since November 2014 and the place of business on the Business Registration Certificate was in fact a virtual office.

The prosecution case

12.  The prosecution (“P”)  alleges that the scale or pattern of overseas remittances were incommensurate with the financial backgrounds of D1-4, and the defendants, as the sole holders of their respective accounts, having reasonable grounds to believe the money in their accounts represent proceeds of an indictable offence, dealt with the money.

13.  The statements of PW1, staff of PayPal, and PW2, Money Service Operator (Mr Chung Siu Kai), were produced under s65B of the Criminal Procedure Ordinance, Cap 221, with no cross-examination by the defence. The only witness called by P was the expert, PW3[3], who adopted the contents of his report, P38, as his evidence in chief. His evidence (save for his conclusion)  was not challenged by the defence, but he was only asked to clarify some matters in his report during cross-examination.

14.  The summary of PW3’s opinion evidence is as follows:[4]

(1)  Throughout the respective charge periods, the Syndicate[5] received frequent and significant inward remittances from overseas remitters with no apparent business relationships. Fund injection of HKD 9,595,688.16 equivalent was received from the top three overseas remitters. HKD 7,389,024.63 of the aforesaid amount originated from Home Entertainments in the UK.

(2)  The scale/pattern of overseas remittances occurred in the Syndicate’s accounts and D4’s PayPal Account were incommensurate with the background of the Syndicate in Hong Kong. The graphical analyses in Charts 1 to 3, together with Tables 3, 6, 9 and 12 in P38 revealed that the Syndicate’s accounts might have been used as temporary repository for funds during the respective charge periods, ie, a characteristic commonly associated with money laundering activities.

(3)  As visualised in Diagram 1 of P38[6], the deposits from the top three overseas remitters were firstly received by D3’s Account C, D1’s Account A, D4’s Account D and D4’s PayPal Account before converging at D2’s Account B, from which the funds were further channeled to Chung Pui Man’s HSBC account (Chung PM’s Account). Such depicted transaction arrangements appeared unusual if not suspicious, given that:

(a)  The inward remittances of over HKD 9.59 million equivalent were sourced from three overseas remitters with no apparent business relationships with the Syndicate. Even though D2 admitted under caution that he had engaged in trading of household items on the mainland, the given facts seemed to be inexplicable for the receipt of significant remittances from the UK. The significant worth of overseas remittances could hardly be explained by the financial background of the Syndicate in Hong Kong as far as known to PW3.

(b)  The aforesaid remittances apparently have routed through the Syndicate’s accounts in layers before discharging to Chung PM. To illustrate, the remittances from the three overseas remitters firstly went through D3’s Account C and D1’s Account A before being routed to D2’s Account B as the second tier account. Furthermore, the remittances from Waldie Enterprises Ltd to D4’s PayPal Account involved one more stop (ie D4’s Account D)  before consolidating at D2’s Account B. Channeling funds via different routes in a number of layers might hinder the traceability of funds.

(c)  The Syndicate’s accounts apparently took turns to receive funds from the three overseas remitters. For example, D3’s Account C received remittances from MH and Home Entertainment between 30 September and 18 November 2014 while D1’s Account A seemingly succeeded the former account to receive remittances from them since 21 and 28 November 2014, respectively. Similarly, the remittances from Waldie Enterprises Ltd were initially received by D4’s PayPal Account from 9 February to 16 November 2015. Shortly afterwards on 26 November 2015, D1’s Account A became the recipient account for the remittances from Waldie Enterprises Ltd. Such apparent switching of accounts to receive funds from the top three overseas remitters might indicate coordinated funds deployment through the Syndicate’s accounts.

(d)  As revealed by the witness statement of PW2, owner of Po Yuen (P45/45A), HKD 11,286,900 (out of HKD 12,286,900)  received by his son, Chung PM, from D2’s Account B were all requested by his customer, namely, CCH, to remit the RMB equivalent mostly to the designated mainland accounts held by CCH himself or Ko. In gist, the remittances from the top three overseas remittances (which were largely included in the aforesaid HKD 11.29 million)  were subsequently routed to parties other than any of the Syndicate members. It was worth noting that Ko and CCH in fact had their own accounts which interacted with D2’s Account B in both directions as shown in Table 10 of P38. Therefore, it appeared unusual for CCH having to arrange disbursements of funds from D2’s Account B to Po Yuen for remitting to himself or Ko. Also, the causation of such transaction arrangement still could not be substantiated by D2’s Account B declaration in the opening mandate dated 29 November 2013 that he was self-employed in Karl Trading Company[7] for which CCH was the sole proprietor. Apparently, the Syndicate’s accounts have been inexplicably interposed in a series of transactions to facilitate significant fund transfers from the three overseas remitters to CCH and Ko.

(e)  Another noteworthy observation was noted that HKD 151,000 deposited by Ko to D2’s Account B on 31 March 2015 were transferred to Chung PM’s Account on the same day for subsequent remittance to Ko himself, as indicated from the documents provided in PW2’s statement P45. The rationale for these suspected U-turn transactions, a situation where fund was circulated across accounts but the destination coincided with the origin, remained questionable.

The defence case

15.  After P closed its case, none of the defendants made midway submissions. I considered the evidence presented by P and ruled that there was a case to answer for D1-4 on charges faced by them.

16.  D1 and D3 elected not to give evidence but called DW1, Mr Chan Ching Ho (Karl)  (ie, CCH), to give evidence. D2 elected not to give evidence and did not call any witness. D4 elected to give evidence and did not call any other witness.

17.  In essence[8], CCH (“DW1”)  gave evidence that: His English name is Karl; he graduated from Jinan University in Guangzhou studying Finance in 2012. D2 and D3 were his schoolmates in university, and in around 2013, the three of them along with Ko, after doing research, started an online retail trading business on Amazon. Although DW1 set up Karl Trading Company the same year, the transactions did not go through this company – he traded in his own name. D1 was Ko’s secondary schoolmate; Ko’s name was Chan Chak Man (ie, CCM)  in secondary school; D1 worked for the business at some point. D4 was D2’s wife; DW1 already knew D4 when D4 was D2’s girlfriend, before they got married. At the beginning, the business of DW1, Ko/CCM, D2 and D3 (“the group”)  was less in retail on Amazon/eBay, and mostly in wholesale (with a customer named “Mike” (whose last name starting with an “H”)[9], and later with a customer named “Joe”); the group/DW1 would source goods from Mainland China (on Alibaba / wholesale market)  pursuant to the request of the customer, and if the customer orders the goods after seeing the quotation, an invoice would be sent to the customer[10], and the group/DW1 would place the order with the supplier[11] after the customer pays, and the supplier would then ship the goods to the customer (to addresses in Shenzhen). Trades between the group/DW1 and the customers were conducted and communicated through WeChat, and DW1 has since lost the relevant records (as the events took place more than 10 years ago)[12]. Customers initially requested to pay via PayPal, but PayPal charged fees on the seller, and after building up trust after some trades, DW1 would request the customer to use bank transfers instead. For those PayPal payments (including money received through eBay trades), D4 was the one who helped to receive them because none of the business partners in the group had a PayPal account. For bank transfer payments[13], it was initially D3 who received the payments, and later on, D3 was busy with another job, so D1 was the one who received the payments; D1 received various payments for the business such as from sales on Amazon (through Currency Direct)  and $200,000 from Lee Pan Leung[14] (being an investment by a partner for Amazon India business). In effect, all the payments received would be collected by D2[15], whose role was to consolidate the moneys and transfer the same via a money service (Po Yuen / Chung PM)  to Mainland China (in RMB)  so goods could be procured there to run the business; D2’s account was tied up with Po Yuen so he was the designated person to collect the funds and to send money to the Mainland via the money exchange service provider. D1 and D3 received salary on the Mainland for their roles; all the defendants knew the reasons for the sums passing through their accounts. Later on, the business grew very big and DW1 set up companies in 2018 to conduct the business; the online retail business on Amazon has greatly surpassed the wholesale business, with the audited financial statements showing the turnover to be over $20 million in 2025[16]. DW1 admits that the initial way of doing business by the group was not sophisticated because he did not have much commercial knowledge, and the documents (including invoices)  created by him during that period do not conform with industry standards. As to why he did not use a company/business bank account to operate the business, DW1 stated that they had to receive payment in USD and the foreign currency control in the Mainland was strict (each person could only receive USD 50,000); moreover, the suppliers requested payment to be made by using personal accounts. DW1 further stated that each person could only open one account/shop on Amazon and opening more shops (including one using the name/account of another university schoolmate, Law Ho Ching (“LHC”))  would spread the risk of being punished by the platform for poor service.  

18.  D4’s evidence[17] mainly pertained to (1)  the closeness of persons in the group, that they, together with D4, D1 and LHC, were old friends[18]; (2)  her own occupations and business ventures[19]; and (3)  her knowledge of the group’s business and the background of why she had lent her PayPal Account to D2 (her husband)  for conducting such business.

Directions and legal principles

19.  I bear in mind all the relevant directions (including directions in relation to burden and standard of proof, propensity and credibility regarding defendants with clear records, independently considering each charge/defendant, how admissions should be dealt with, and relating to inferences to be drawn, etc).

20.  Section 25(1)  of the Organized and Serious Crimes Ordinance, Cap 455 provides that: “Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person’s proceeds of an indictable offence, he deals with that property.”

21.  The actus reus of dealing with the subject property by each defendant for each charge is not disputed. Only the mens rea element is challenged.

22.  P confirmed that it is not relying on the “knowing” limb.

23.  For the “reasonable grounds” limb, it is not necessary for P to prove, as an element of the offence, that the property dealt with by a defendant in fact represents the proceeds of an indictable offence: HKSAR v Yeung Ka Sing Carson (2016)  19 HKCFAR 279 at [28], [90].

24.  The test for “having reasonable grounds to believe” as reformulated in HKSAR v Harjani Haresh Murlidhar (2019)  22 HKCFAR 446 at [26] is as follows:

(1)  What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his/her belief as to whether the property was the proceeds of crime (“tainted”)?

(2)  Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

(3)  If the answer to question (2)  is “yes” the defendant is guilty. If it is “no” the defendant is not guilty.

25.  It is not the law that a defendant is entitled to be acquitted on the ground that he/she believed or may have believed that the property was not tainted. The court needs to apply the test of “reasonable grounds to believe” from the viewpoint of the defendant, having regard to all the facts and circumstances known to him/her. The defendant’s belief is relevant to the extent that it reveals facts and circumstances upon which the belief is based. However, the actual question to be answered is: on an objective basis, do these facts and circumstances (known to the defendant which may have affected his/her belief)  establish “reasonable grounds to believe” that the property is tainted.[20]

Analysis and findings

26.  Most of P’s case (as shown by documentary evidence)  was not disputed by the defence. Save for the conclusion made by PW3 in his expert report, PW3’s evidence was not challenged by the defence. I accept the evidence of PW3 pertaining to the fund flow in the relevant bank accounts.

27.  As to the defence evidence, I have considered the submissions of parties. I do not accept the criticisms of P in relation to the evidence of DW1 and D4. For example, P criticises DW1 for having prepared the invoices without a signature when he knew to request a stamp from suppliers as confirmation of purchase orders – however, clearly, from DW1’s perspective, an invoice and a purchase order are very different in nature: the invoices are issued to Mike/Joe for payment; if Mike/Joe all along were willing to pay after seeing invoices without signatures, there would be no reason for DW1 to change the invoices (by signing them); on the other hand, the purchase orders are for orders made by DW1/the group; DW1 had to ensure that the suppliers had received the orders and that is why he requested they put a stamp on it and to scan it back to him to confirm receipt. All in all, I am of the view that DW1 and D4 were honest witnesses who gave evidence to the best of their recollections regarding the events/transactions relevant to the case. They have provided extensive documentary evidence in support of their evidence[21]. D4 is of clear record and her credibility has to be assessed in that light. I accept the evidence of DW1 and D4.

28.  Regarding the admissions by the defendants[22], P relies on the admissions of D1 (in P1 and P3), D2 (in P10)  and D3 (in P17).[23] There are parts of all three defendants’ cautioned statements that are inconsistent with the evidence of DW1 and D4[24] – the defence agrees that this is the case. Given what the documentary exhibits, fund flow and evidence of DW1 and D4 show regarding the business transactions and the background of the group, I find that the inconsistent parts are not the truth of the matter, and I shall not give them any weight.

29.  As to PW3’s conclusion (at §14 above)  that the transactions among the subject defendants’ accounts are unusual/suspicious, he bases such opinion mainly on the following:

(1)  D1-4 (the Syndicate)  receiving frequent and significant inward remittances from overseas remitters with no apparent business relationships.

(2)  The scale/pattern of overseas remittances occurred in the Syndicate’s accounts and D4’s PayPal Account were incommensurate with the background of the Syndicate in Hong Kong.

(3)  The deposits from the top three overseas remitters were firstly received by D3’s Account C, D1’s Account A, D4’s Account D and D4’s PayPal Account before converging at D2’s Account B, from which the funds were further channeled to Chung PM’s Account. The inward remittances of a large amount were sourced from three overseas remitters with no apparent business relationships with the Syndicate. The aforesaid remittances apparently have routed through the Syndicate’s accounts in layers before discharging to Chung PM. The accounts of D3 and D1 apparently took turns to receive funds from the three overseas remitters. The sums Po Yuen / Chung PM received from D2’s Account B were all requested by CCH to remit the RMB equivalent mostly to the designated mainland accounts held by CCH himself or Ko.

30.  As the Court accepts the evidence of DW1 and D4, these “unusual/suspicious” transfers/transactions/arrangements have been explained by their evidence, and are no longer unusual or suspicious. The pattern is consistent with DW1’s description of the legitimate business transactions conducted during the charge periods.

31.  On the evidence which is accepted by the Court, at the material time, D1-4 knew DW1 well, and they also knew each other well; they knew about the legitimate business (including the types of goods being bought/sold, the business model in general, the fund flow through the subject account(s)  and why). I find that P has not proved that any reasonable person who shared the defendants’ knowledge of the relevant facts and circumstances would be bound to believe that the property of any of the charges was tainted. I am of the view that a reasonable person would have the same beliefs and views as the defendants in the circumstances – that the transactions/sums were for legitimate purposes and not tainted.

32.  In the premises, D1-4 are found not guilty of Charges 1-4, respectively.