HKSAR v. MONDESIR JOHNNY

DCCC 434/2019

[2020] HKDC 276

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 434 OF 2019

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REASONS FOR SENTENCE

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1.  The defendant has been convicted after trial of two charges, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance.

2.  The offence alleged in both charges is commonly known as ‘money laundering’.  Put simply, the 1st charge relates to the receipt of about Canadian dollars (CAD) $827,000 in the defendant’s bank account with The HongKong and Shanghai Banking Corporation (‘HSBC account’) and then dealing with the money between 28 July and 1 August 2016.  The 2nd charge relates to his dealing with the deposits of CAD around $67,000 and HK$400,000 respectively in two separate accounts of the defendant kept with the Industrial and Commercial Bank of China (Asia) Limited (‘ICBC account’) between 29 July and 15 October 2016.

3.  On 28 July 2016, the money particularised in Charge 1 was deposited into the defendant’s HSBC account.  The deposit was made via the Toronto-Dominion Bank (‘TD Bank’) by deducting from the account of Agriteam Canada Consulting Limited (‘Agriteam’), the victim of a phishing email scam in Canada.  The Chief Financial Officer of Agriteam had been conned to enter the company’s bank account detail and password to give the false instruction of wiring.  As a result, the said deposit (the Agriteam’s deposit) was withdrawn from the victim’s account kept with TD Bank and transferred to the defendant’s HSBC account.

4.  From 29 July 2016 to 1 August 2016, there was a quick dissipation of the bulk of the Agriteam’s deposit.  Monies were withdrawn from his HSBC account either by the defendant personally in cash, or transferred from his HSBC account to other bank accounts via internet banking.  In particular, there were transfers of CAD$67,000 and HK$400,000 from his HSBC account to his ICBC account, and further transfers of CAD$100,000 and HK$1 million to the account of a company known as ‘Marquisa Limited’ kept with HSBC.

5.  On 1 August 2016, the defendant personally withdrew cash either at counters or through ATM machines on seven separate occasions, amounting to a total of about HK$1.33 million.

6.  Subsequently, the defendant withdrew a total of CAD$76,000 from his ICBC account to transfer into bank accounts in Canada held by his sister and his late mother.  He also made cash withdrawals on various occasions from his ICBC account for a total of more than HK$768,000.

7.  The defendant’s wife was the sole director and shareholder of Marquisa.

8.  On 1 August 2016, HK$1.4 million was transferred from Marquisa’s HSBC account to the defendant’s wife’s personal account with ICBC.

9.  Subsequently, HK$426,600 was transferred from her personal account to an account kept by Aeptis Hongkong Limited with Dah Sing Bank.  A total of almost HK$1 million was also withdrawn from her account in cash on many separate occasions.

10.  As a result of the swift withdrawals by the defendant, on 4 August 2016 there was only a total balance of about HK$1.17 million left in the defendant’s HSBC account.

11.  The defence was quite simple.  The defendant said he had sold a piece of land to a person claiming himself to be “Robert Francis”.  He received and dealt with the monies with the belief that it was the purchase payment of the land he sold. 

12.  The defendant’s claim of belief was rejected and I found the defendant’s assertion of having sold the piece of land untrue.  In the absence of acceptable evidence of his belief of the source of the Agriteam’s deposit, I found as the only reasonable and irresistible inference that the defendant knew the Agriteam’s deposit in Charge 1 and the monies particularised in Charge 2 were proceeds of crime.

13.  I also found that, objectively, the defendant had reasonable grounds to believe that the monies in Charge 1 and Charge 2 were proceeds of an indictable offence.

14.  When the defendant was arrested in April 2019, there was still a frozen balance of about HK$1.17 million in the defendant’s HSBC account.

Background and mitigation

15.  The defendant is a 41-year-old Canadian citizen.  He has a clear record in Hong Kong.  According to his testimony at trial, he is married with two children.  He received university education with a degree in IT Science.  He worked for a company in Canada and a company based in Shanghai concurrently when he was arrested.  He is not a resident of Hong Kong and has no business or relation here.

16.  In his mitigation on behalf of the defendant, Mr Beel asked the court to consider that the offences were not committed over a long period of time and should be regarded as one single transaction.  Counsel cited Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 to suggest that the proper starting point to be taken in the present case should be around 4 years’ imprisonment. 

17.  The court was also urged to give a further discount for the co-operative manner that the defence was conducted, which saved court’s time and resources. Mr Beel emphasised that the prosecution’s case was basically unchallenged, with the banking evidence wholly admitted.

Reasons for sentence

18.  Money laundering is a very serious offence, for which a deterrent sentence is required.  There is no sentencing guideline for the money laundering offence.  A number of significant factors have been identified as relevant in considering the proper sentence.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal stated that in considering the sentence, the amount of money laundered is a significant factor. 

19.  The court should also take into account other features, including:-

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) whether the operation involved an international dimension;

(d) the sophistication of the offence;

(e) whether committed by or on behalf of an organised criminal syndicate;

(f) whether there was one transaction or many, and the length of the time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of the funds;

(h) the role of the offender and the acts performed by him.

20.  Charge 1 involves around CAD$827,000, which was admitted to be equivalent to about HK$4.8 million.  Charge 2 involves a total of about CAD$467,000, which is equivalent to about HK$2.7 million.  These monies emanated from the deposit in Charge 1.  Both charges involve very significant amounts of money. 

21.  Moreover, the money originated from a fraud case in Canada and the defendant is a foreigner not residing in Hong Kong.  The operation therefore of the money laundering involved an international dimension. 

22.  I accept that the offences were not committed over a very long period of time and the operation by the defendant was not very sophisticated.  However, I found that the defendant dealt with the monies knowing that they were proceeds of crime.  This made the defendant more culpable than a mere conviction on the second limb of the offence.

23.  The defendant has also played a very active and significant role by using his bank accounts to receive and dispose of monies on many occasions. There is no suggestion that the defendant laundered the monies for others.  It is not known how much he benefited from the offences.  However, according to his evidence, he disposed of the money as his own.  The benefit he obtained could not have been small.

24.  For Charge 1, I take 4½ years’ imprisonment as the starting point.  For Charge 2, the starting point should be 3 years.  Both offences arose from the same set of facts and should be regarded as one transaction.  The sentences for both offences should run concurrently.

25.  I cannot accept that the conduct of defence has saved the court’s time and resources.  While all the local banking evidence in the case was admitted, the defence had put the prosecution in a situation that they had to call two witnesses from overseas to give evidence in Canada by live television link. 

26.  Mr Beel explained that it was necessary as the defence needed to ask about matters for clarification to assist the defence case.  Court record shows that at the pre-trial review hearing, Mr Beel told the court that he had questions to ask the witnesses.  No matter whether it was a correct judgment, the two overseas witnesses had to be called by the prosecution.  Extra efforts had to be made for the arrangement and the testimony of the two witnesses took two half-days.  The trial eventually took nine days to conclude. 

27.  With this background, I am unable to give any discount for the manner the defence was conducted.  Indeed, I cannot see any valid mitigating factors in this case to justify any reduction of the sentence.

Sentence

28.  The defendant is sentenced as follows:

1^st Charge: 4½ years’ imprisonment;

2^nd Charge: 3 years’ imprisonment, to run concurrently with the 1^st Charge.

The total term of sentence is 4½ years’ imprisonment.