HKSAR v. WONG CHI LEUNG

DCCC 608/2019

[2020] HKDC 872

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 608 OF 2019

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REASONS FOR SENTENCE

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1.  The defendant faced three charges of money laundering (charges 1 to 3). He pleaded guilty to charges 2 and 3, admitted to the summary of facts and was duly convicted.

2.  Upon his convictions, charge 1 was ordered to be kept on file, not to be proceeded with against the defendant without the leave of court.

The Facts

3.  The defendant set up a company called Nikko Investment Management (“Bogus Nikko”) on 29 December 1997 and that the defendant was the sole proprietor of this company.  He then opened bank accounts in the name of Bogus Nikko on the following dates:-

(i)  Bank of East Asia Limited account (a/c number 015-514-20-10323-6) on 25 February 1998 (“Charge 2 A/C”); and

(ii)  Standard Chartered Bank account (a/c number 959-2-053181-5) on 9 March 1998 (“Charge 3 A/C”).

4.  A male Chan Chi-sang (“Chan”) joined Nikko Securities Company (Asia) Limited (“Genuine Nikko”) in 1995 and this company was engaged in financial and securities business.  Chan was responsible in approving bank account settlement instructions.  Genuine Nikko held a bank account at the Bank of Tokyo-Mitsubishi Trust Company, New York (“Bank of Tokyo”).  In March 1998, Chan sent a series of unauthorized telex instructions to the Bank of Tokyo to transfer money from the bank account of Genuine Nikko to the bank accounts of Bogus Nikko (Charge 2 and Charge 3 A/Cs).

5.  The total sum of transfers was US$5,216,980. They were as follows:-

(i)  To Charge 2 A/C:-

      13 March 1998: US$33,800

      20 March 1998: US$1,826,300

(ii)  To Charge 3 A/C:-

      12 March 1998: US$72,980

      21 March 1998: US$3,283,900

6.  After the transfers, the money was then converted into Hong Kong dollars and multiple cash withdrawals were made on various dates from Charge 2 and 3 accounts (total sum HK$17,828,000).  Also, a sum of HK$10,000,000 was deposited into the defendant’s time deposit account and a sum of HK$5,900,000 was deposited into the defendant’s other personal accounts.  The defendant subsequently withdrew a total sum of HK$330,000 from his personal accounts.  The total cash withdrawals sum was $18,158,000.

7.  Investigation revealed that after making cash withdrawals, between 14 March 1998 and 23 March 1998, the defendant and Chan had departed from Hong Kong and went to Macau on 4 occasions together.

8.  Genuine Nikko was able to recover a sum of HK$22.5 million from various bank accounts.

9.  Chan was arrested in April 1998 and he was charged with 6 counts of “Theft”, 3 counts of “False accounting” and 2 counts of “Forgery”. Chan pleaded guilty to the charges and he was sentenced to 8 years’ imprisonment and that there was an international element in the present case.

10.  The defendant left Hong Kong on 23 March 1998.  He returned to Hong Kong on 25 March 2019 and was arrested by the Police.

Previous conviction

11.  The defendant is of previously clear record.

Mitigation

12.  Miss Lam mitigated that the defendant returned to Hong Kong on 25 March 2019 voluntarily after he left Hong Kong for 20 years. It is submitted that the defendant had turned a new leaf and he had been working as a tour guide in Thailand for 20 years.

13.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal held that:-

“There were no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts varied from case to case. However, the following factors were to be taken into account:

(a)  The amount of the money involved was the major consideration, not the amount of benefit received by a defendant in the transaction;

(b)  The culpability of the offence lay in the assistance, support and encouragement offered to the commission of an indictable offence so a defendant’s level of participation and number of occasions on which he was involved in the “money laundering” activities were relevant factors;

(c)  The offence of dealing with the proceeds from an indictable offence did not necessarily have any direct correlation with the indictable offence in question, but if the latter offence could be identified, the court could take into account the sentence imposed on it per se when determining the sentence for the former offence;

(d)  If the case had an international element involving activities carried out across different regions, the court might impose a more severe sentence so as to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished; and

(e)  The length of the time the offence lasted.”

14.  Miss Lam relies on the case of HKSAR v Zheng Zhi Long CACC 167/2018 in which the applicant was charged with an offence of money laundering and the amount involved was about US$5 million.  The Court of Appeal upheld the starting point of 5 years 6 months’ imprisonment as the case involved a substantial amount of “black money”, the presence of international element and the fact that the predicate offence was identifiable and was a serious fraud.

15.  Miss Lam also refers to HKSAR v Leung Wai Wah CACC 201/2011, the amount involved was about HK$40 million.  The trial judge adopted a starting point of 6 years’ imprisonment and the Court of Appeal held that the appropriate starting point having looked at the circumstances and all the mitigating factors should be 5 years and 3 months’ imprisonment.

16.  Miss Lam submitted that a starting point in Zheng Zhi Long should be applied and that a sentence of no higher than 5 years 6 months is appropriate. 

Sentence

17.  Money laundering is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimise the process of the crime. In order to crack down on serious crimes and to prevent offenders from getting financial gains, it is necessary to deter and prevent the offenders from getting financial gains. It is necessary to deter the commission of the ‘money laundering’ offence.

18.  There are no sentencing guidelines for this kind of offence because of the variety of circumstances in which this offence can be committed and the widely different roles played by those participating in the offence.

19.  In this case, the total amount of “black money” involved was huge, namely US$5,217,000, which is equivalent to the sum of HK$40,692,600. The predicate offence was identifiable and was a serious breach of trust case. Besides, the operation involved an international dimension, this would be a significant aggravating feature.

20.  The defendant’s culpability was that he had opened a company which was in similar name with Genuine Nikko and that he opened the bank accounts to facilitate the withdrawal and transfer of the black money.  In my view, the offence is premeditated and well-planned.  The amount of money that the defendant had personally dealt with was substantial of about $18,158,000.  

21.  The two charges were committed in a span of only 12 days between 12 March 1998 to 23 March 1998. Yet a huge  sum of money of over $40 million was dissipated. This is a major consideration.

22.  The defendant took an active part in deposing the money swiftly once deposited into his accounts with multiple withdrawals.  Without the defendant performing his role as the holder of the accounts of Bogus Nikko, it would not be possible for the proceeds from the theft case to be taken away.

23.  As far as mitigation is concerned, I note the defendant returned to Hong Kong after 20 years committing the offence and arrested by the police upon his return.  I believe he should have known that Chan was arrested and sentenced for his offences in 1998. However, the defendant chose not face the legal consequences but decided to hide himself and gained 20 years of freedom.  Apart from his guilty plea, I do not regard this as a mitigating factor.

24.  Having considered the amount of money laundered, the role played by the defendant in these money laundering exercises, the length of time during which the offence had been perpetrated, and the money that the defendant dealt with personally, I am satisfied that the proper sentence after trial is a term of imprisonment for 5 years and 6 months (66 months). It will reduce to 44 months’ imprisonment for the defendant’s pleas of guilty.

25.  I impose the following terms:

(a)  Charge 2: 3.5 years reduced to 28 months on account of the plea; and

(b)  Charge 3: 4.5 years reduced to 36 months on account of the plea.

26.  To achieve the overall sentence as 44 months, I order that 8 months of the imprisonment term imposed in relation to Charge 2 to run consecutively to the term of 36 months imposed in relation to Charge 3, making a total of 44 months’ imprisonment.