HKSAR v. LO WING HONG

DCCC 343/2024

[2025] HKDC 105

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 343 OF 2024

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REASONS FOR SENTENCE

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The defendant pleaded guilty to a charge of "Dealing with property known or believed to represent proceeds of an indictable offence". In short, he lent his bank account to someone.

Summary of Facts

2.  On 12 January 2013, the defendant opened a bank account (No.012-710-1-022093-3)  with the Bank of China (Hong Kong)  Limited ("the BoC Account").  It was held in his sole name.

e-Commerce deception

3.  In late April 2021, Madam Wong (PW1)  saw a post on Instagram selling watches and parts.  She decided to buy a watch.  The seller provided details of the BoC Account to PW1 for receiving the purchase money.  On 6 May 2021, PW1 transferred $1,500 to the BoC Account.  Having waited for a few days but received no reply from the seller, PW1 also found the seller's Instagram and Whatsapp accounts having been blocked.  She reported the matter to the Police.

4.  The Police arrested the defendant on 26 April 2022.  Under caution, he claimed that he was a telecommunication technician earning $15,000 per month and that he started the job 2 months ago (i.e. in February 2022).  Regarding the BoC Account, the defendant admitted that it belonged to him for receiving his salary.  He also admitted having signed 2 forms for contact method amendment between February and November 2021.  Statements related to the Boc Account (between 7 April and 8 May 2021)  were found in the defendant's residence.

Deposits and withdrawals

5.  Between 24 April and 14 May 2021, the BoC Account received a total of 2,452 deposits, which aggregated to a sum of $4,073,751.18 (including the $1,500 from PW1).  A total sum of $4,072,251.18 was withdrawn by 807 transactions.  Fund flow analysis of the BoC Account showed that there were around 168 to 325 transactions per day during the offence period.  On 30 April 2021 alone, there were 325 transactions, which aggregated to a sum of $531,985 in deposits.  On 13 and 14 May 2021, there were 5 transfer withdrawals from the BoC Account to another bank account belonging to the defendant.

Mitigation & Sentence

6. The defendant is 34 and has 2 conviction records involving 3 offences unrelated to "Money laundering". Defence counsel Mr. Choi informed me that the defendant is married and resides with his wife, parents and younger sister. He was unemployed during the pandemic. He worked as a technician in February 2022. From June 2022 to February 2024, he was a delivery worker.

7. In mitigation, Mr. Choi submitted that the defendant lent the BoC Account to a friend in April 2021 in return for a reward of $1,500, without thinking too much about the serious consequences of doing so. About a month later, the defendant realized that lending his bank account to someone could be a criminal offence, he immediate took steps to regain control of the BoC Account. Mr. Choi explained that the defendant had only given the ATM card and password of the BoC Account to his friend.

8. The prosecution has applied for an enhanced sentence pursuant to section 27(2)(c)  and (d)  of the Organized and Serious Crimes Ordinance (Cap.455)  on the basis of prevalence as well as the nature and extent of harm caused to the community. Mr. Choi has no objection for the enhancement, but submitted that the number of deception/ML cases has plateaued since 2023 and that there was no sharp increase in the first 10 months of 2024, probably due to the strengthening of public awareness.

9. I bear in mind the Court of Appeal's decision in HKSAR v Xu Mai Qing CACC 464/2005, whereas Yeung JA (as he then was)  held "Under section 27(11)  of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences[1]."

10. I have read the witness statement of CIP Li dated 13 December 2024. I am satisfied that in 2021, money laundering cases were prevalent in Hong Kong in terms of the number of cases as well as the total value of monetary loss.

11. There is clear and cogent evidence before me that money laundering by bank accounts opened by "ML Stooges" is still widespread and commonly being practised in Hong Kong today. What true criminals need are gullible scapegoats like the defendant who would take the blame for them when the law enforcement takes action. The court must send a clear message to the general public that people who play the role of "ML Stooge" will receive severe punishment, so that there is a deterrent effect. When there are fewer or no willing "ML Stooges", the criminal activities which rely on their bank accounts would fail.

12. This is a typical case of money laundering by way of a stooge bank account. The defendant claimed complete ignorance of any transaction of the BoC Account (including the e-commerce deception against PW1)  during the offence period; however, the scam would have been meaningless without the BoC Account. Assuming what he said is true, given his role, the total sums which went through the BoC Account and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 25%.

13. The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[2]

14. In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33. I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

15. In SJ v Ngai Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[3]

16. Mr. Chau for the prosecution confirmed that only the sum of $1,500 from PW1 was related to a crime; the other deposits had no reported victims. He also informed me that of the 2,452 deposits made to the BoC Account, the sums ranged from $1 to $80,000; whereas the next amount higher than $1 was $50 or $100. Hence, I accept there is no evidence showing that: (i)  except the $1,500 from PW1, the funds received by the BoC Account were related to any predicate offence; and (ii)  either the defendant was involved in or had any knowledge of any predicate offence.

17. On the other hand, I cannot overlook the fact that $4.07 million went through the BoC Account within a period of less than 3 weeks. By lending his bank account to someone and thus allowing funds of unknown origins to pass through the BoC Account, the defendant played a pivotal role in helping the mastermind(s)  of criminal activities to access their illegal funds without revealing their identities.

18. In the circumstances, I adopt a starting point of 4 years' imprisonment[4]. With the timely guilty plea, the sentence becomes 32 months. I would grant an additional discount of 2 months for the defendant's taking steps to regain control of the BoC Account, reducing the sentence to 30 months. Apart from this, I see no other mitigating factors which warrant any further reduction. With the 25% enhancement, I sentence the defendant to 37 months and 2 weeks' imprisonment.