HKSAR v. LI KA HO

DCCC 664/2022

[2025] HKDC 425

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 664 OF 2022

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REASONS FOR SENTENCE

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Introduction

1.  There are four defendants in this case. This Reasons for Sentence concerns only D4 who, on the first day of trial, pleaded guilty before me to 5 charges of “dealing with property known or believed to represent proceeds of an indictable offence”, contrary to sections 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, in short, “money laundering” offences and he admitted the facts pertaining to those charges (Charge 12 to Charge 16[1]). The Prosecution asked that the charges against D3 (D4’s wife), namely Charge 8 to Charge 11 be left on file, and I directed that these charges be left on file and were not to be proceeded with without leave from the Court.

2.  The two remaining defendants D1 and D2 pleaded not guilty and went to trial on their respective charges.

The Facts

3.  Facts admitted by D4 disclosed that he solely owned one current account and 3 savings accounts in Hong Kong. Charges 12 relates to Hang Seng Bank: 788-102960-001 (“Charge 12 Account”). Charge 13 relates to Hang Seng Bank: 788-102960-888 (“Charge 13 Account”). Charge 14 relates to Bank of China: 012-878-1-079960-1 (“Charge 14 Account”). Charge 15 relates to HSBC Bank: 411-847130-292 (“Charge 15 Account”).

Charge 12

4.  D4’s Charge 12 Account was opened on 16 December 2011 and closed on 4 October 2016. D4 reported himself as a sales manager. The only transactions took place between 25 August 2015 and 26 November 2015 in which the total deposits and withdrawals were both HK$2.84 million. They were in connection with the purchase of a property at Double Cove Grandview in Ma On Shan in D4’s name.

5.  Between 25 August 2015 and 26 November 2015, the Charge 12 Account had possessed for the purpose of Charge 12, HK$2.84 million in total by cash/cheque deposit or bank transfer in 10 transactions, of which HK$1.7 million was in cash.

6.  After deducting the legitimate source of deposits, the amounts of deposits (ie HK$2.6 million)  were not commensurate with D4’s known source of income or assets and his financial position.

Charge 13

7.  D4’s Charge 13 Account was opened on 16 December 2011 and closed on 4 October 2016. D4 reported himself as a sales manager.

8.  Between 16 December 2011 and 3 October 2016, the Charge 13 Account had possessed for the purpose of Charge 13, HK$2,812,623.36 in total. All was withdrawn when the Charge 13 Account was closed.

9.  Out of the total deposits, approximately HK$1.5 million has been identified to be transfers from BB Unit Company Limited (“BB Unit”), a total of HK$917,000 were loans from Hang Seng Bank and HK$107,348.63 were deposited from China Life Insurance upon the cancellation of insurance account. Yet D4 only reported HK$93,000 as his income from BB Unit.

10.  Amongst the withdrawals, HK$1,571,000 was withdrawn in cash (55.86%)  by way of 16 transactions, including 6 of which each in the amount over HK$180,000. HK$190,000 was also transferred to BB Unit.

11.  After deducting the legitimate source of deposits, the amounts of deposits (ie HK$159,249)  were not commensurate with D4’s known source of income or assets and his financial position.

Charge 14

12.  D4’s Charge 14 Account was opened on 31 August 2011 and closed on 23 August 2016. D4 reported himself as marine transportation manager.

13.  Between 6 March 2013 and 23 August 2016, the Charge 14 Account had possessed for the purpose of Charge 14, HK$555,316.30 in total and the total withdrawals were HK$556,589.91.

14.  Out of the total deposits, HK$74,510.83 was identified to be deposited by AXA, HK$25,000 deposited by a solicitor’s firm and HK$20,000 being return of bail money from Court.

15.  After deducting the legitimate source of deposits, the amounts of deposits (ie HK$535,310.83)  were not commensurate with D4’s known source of income or assets and his financial position.

Charge 15

16.  D4’s Charge 15 Account was opened on 7 June 2010 and closed on 16 September 2017.

17.  Between 3 June 2010 and 28 December 2016, the Charge 15 Account had possessed for the purpose of Charge 15, HK$7,964,989.42 in total of which HK$990,000 was identified to be a deposit from a finance company for D4’s mortgage; and HK$3,172,053.80 was cash deposits and around HK$4,747,475.12 was bank transfer, but soon partly or entirely withdrawn in cash or transferred out within the same day or a few days afterwards.

18.  After deducting the legitimate source of deposits, the amounts of deposits (ie HK$7,492,175.92)  were not commensurate with D4’s known source of income or assets and financial position.

Charge 16

19.  Between about 1 January 2009 and about 28 November 2017, D4 came into possession of the following items for which he subsequently passed to D3 (D4’s wife): -

(1)  HK$507,650.00 Cash (“exhibit P214”);

(2)  RMB¥77,050.00 Cash (“exhibit P215”);

(3)  One Gold (colour)  marked with word “Heraeus Feingold 999.9, 1000g HH56287” Bar (“exhibit P225”);

(4)  HK$1,010,000.00 Cash (“exhibit P239”);

(5)  RMB¥3,200.00 Cash (“exhibit P240”);

(6)  JPY¥44,000.00 Cash (“exhibit P241”);

(7)  USD$308.00 Cash (“exhibit P242”);

(8)  BHT฿7,270.00 Cash (“exhibit P243”);

(9)  UAE$300.00 Cash (“exhibit P244”);

(10)  WON₩14,000.00 Cash (“exhibit P245”);

(11)  TWD$10,500.00 Cash (“exhibit P246”);

(12)  MYR$533.00 Cash (“exhibit P247”);

(13)  AUD$200.00 Cash (“exhibit P248”);

(14)  One Silver with some transparent stone and purple strap Rolex Watch, S/N M230203 valued at HK$987,000 (“exhibit P251”); and

(15)  One Black / Silver with some transparent stones Audemars Piguet Watch, S/N H36328 valued at HK$417,360 (“exhibit P253”).

20.  At about 0657 hours on 28 November 2017, a police party, led by Senior Inspector Chan, who had a search warrant, entered D3’s residence, Flat H, 6^th Floor, Block 6 Whampoa Gardens site 5. At the above location from 0740 to 0840 hours, DPC6723 Yeung PW10 found and seized the above items exhibits P214, P215 and P225.

21.  D3’s Bank of China Safe Box which was numbered 4908 at 471 Nathan Road Yau Ma Tei was searched by the police. It contained, amongst others, the above items exhibits P239 to P248 inclusive, exhibits P251 and P253.

22.  D4, between about 1 January 2009 and about 28 November 2017, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely all the cash (including foreign currency)  and valuables set out in the particulars of Charge 16, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property[2].

23.  Eventually D4 was arrested by the police for money laundering on 28 November 2017.

Background and Criminal Record

24.  D4's antecedent statement and CRO record were not provided to the court by Mr Tracy, the prosecuting Fiat, on the day of mitigation although my Learned Clerk had conveyed my request for those documents. The request was ignored without any reasonable explanation. Therefore, the case had to be stood down for about 30 minutes. Time was undoubtedly wasted for his urgent preparation of those documents.

25.  D4 is now 43 years old and was educated up to Form 1 level. He is the husband of D3 of the present case and they have a daughter aged 9 who is now a primary four student. D4’s mother is now 83 years old, and his father passed away in 2006. It is claimed that there is a harmonious relationship developed with his mother and siblings. D4 has one elder brother who is a truck driver and also one elder sister who is a teacher.

26.  D4 was sentenced on 5 previous occasions between 2003 and 2020 in respect of 5 charges, two of which were trafficking in dangerous drugs, two of which were using a false instrument and one possession of dangerous drugs. The last conviction was for trafficking in dangerous drugs in 2020 to which he received a sentence of 90 months’ imprisonment. None of them are similar to the present charges.

27.  Mr Ng, who appears on behalf of D4, said that after D4 was released from prison in 2023, he remained unemployed for a few months until he found a job as a food delivery worker earning about HK$30,000 per month.

Mitigation

28.  In his first written mitigation dated 14 February 2025, Mr Ng simply quoted the multiple factors relevant to sentence identified in HKSAR v Boma Amaso [2012] 2 HKLRD 33 without assisting the court by applying those factors to the present case, such as the degree to which D4 participated in the offence involving “black money”, whether he knew the source of the money or whether there is an international element to aggravate the situation. Subsequently Mr Ng, at my request, filed two supplemental mitigation submissions both dated 19 February 2025 for clarification.

29.  In his supplemental written mitigation dated 19 February 2025, it was claimed by Mr Ng that during the charge period, D4, through his company BB Unit, was engaged in smuggling business by exporting baby related products into Mainland China from overseas through Hong Kong without the knowledge of the customs in both jurisdictions. It appears that the profits he earned from his smuggling business in Mainland China were then remitted into Hong Kong through underground illegal channel and exchanged into Hong Kong currency. Such cash was subsequently deposited into his Charge 12 to Charge 15 Accounts, instead of BB Unit’s bank account.

30.  Mr Ng further submitted, in his supplemental written submission, that D4 derived benefits from his smuggling activities and such benefits were in fact the savings that were found in his relevant bank accounts in this case and also the cash (in different currencies), gold bar and watches found in D3 and D4’s residence and D3’s safe box in the bank.

31.  Mr Ng, stressed that D4 did not waste the court’s time. Letters written by D4’s wife, his mother-in-law, his aunt and his half-brother were given to the court. I had the opportunity of reading them all. They all speak very highly of D4, saying that he is a responsible husband and a caring father, doing all his best for the family. All comment that he looks after the family well.

32.  I was also shown a letter written by D4 himself. I am not going to refer to the content of the letter. Suffice it to say that D4 himself was very remorseful towards his unlawful acts and was sorry for what he had done. I was also told that he made a report of lost property that he surrendered one Apple iPhone to the Report Room of Tsim Sha Tsui Police Station on 6 February 2018. He urged the court to exercise mercy to pass a non-custodial sentence so that the family could get back together soon and he was determined to turn a new leaf.

33.  Mr Ng was alive to the fact that D4 did not plead guilty at the earliest opportunity and according to HKSAR v Ngo Van Nam(吳文南) [2016] 5 HKLRD 1, he was not entitled to the full one-third discount. He only indicated his pleas of guilty on the first day of trial on 20 January 2025 and according to that authority, he was entitled to a discount of 20 per cent.

Sentencing considerations

34.  Under section 25 of the Organized and Serious Crimes Ordinance, the offence is punishable on indictment with a fine of $5,000,000 and imprisonment for 14 years. There is no tariff for this type of offence because of the wide range of culpability involved.

35.  A number of significant factors have been identified as relevant in determining the culpability of a defendant, including the nature of the predicate offence that generated the laundered money; the extent to which the offence assisted the crime or hindered its detection; whether the defendant had knowledge of that underlying offence or has turned a blind eye to the source of the money; the amount of money involved; whether there was an international element to the commission of the offence; the degree of sophistication of the offence and the level of the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence, see Boma Amaso and HKSAR v Hsu Yu Yi (許有益) [2010] 5 HKLRD 545.

36.  In Hsu Yu Yi, Cheung JA has set out the amounts of money involved and the sentences passed in a number of money-laundering cases.  The sentencing starting point is 3 years or so where the money involved is between $1 million and $2 million, 4 years or so where it is between $3 million and $6 million, and could be over 5 years where it is above $10 million.

37.  In Secretary for Justice v Wan Kwok Keung (雲國強), [2012] 1 HKLRD 201 the Court of Appeal stated, in paragraph 13 of the judgment, that:-

“…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.”

38.  The same principle was reiterated by the Court of Appeal in Secretary for Justice v Ngai Fung Sin Apple (倪鳳仙）[2013] 5 HKLRD 104. In paragraph 44 of the judgement, the Court of Appeal stated:-

“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. On the other hand, if there is evidence which can prove from what serious crimes the “illicit/black money” was derived and if the defendant was aware of the origin of the “illicit/black money”, that would be an aggravating factor (see Secretary for Justice v Lau Man Ying [2012] 4 HKLRD 429 and HKSAR v Xu Xia Li & Anor [2004] 4 HKC16). Based on the same rationale, the fact that the defendant of a “money laundering” case has not obtained any financial benefit is not a mitigating factor.”

39.  Applying the sentencing authorities cited above to the present case, I bear in mind the following factors (all of which were conceded by Mr Ng, counsel for D4):

(1)  The predicate offence was smuggling of baby related products;

(2)  D4 actively participated in the predicate offence;

(3)  He had full knowledge of the nature of the predicate offence;

(4)  The “black money” laundered was from his smuggling business in which he had participated;

(5)  There was cross-border dimension in the operation of the business;

(6)  D4 had “laundered money” for almost 9 years from January 2009 to November 2017; and

(7)  The total amount of money and valuables “laundered” in five charges against D4 were approximately HK$14 million.

40.  In sentencing, I have considered the whole circumstances of the case, including the nature of the predicate offence, the facts and D4’s role, the background of the defendant, mitigation put forward on behalf of D4. The monies and valuables were admitted to be proceeds of D4’s smuggling activities and he was no doubt actively involved in this money laundering operation. In respect of Charge 12 to Charge 15, the money laundering charges concern four bank accounts and all of which were held in D4’s sole name during the charge period and the money laundered through the said bank accounts belonged to him. The total money laundered in Charge 12 to Charge 16 is said to be approximately HK$14 million and the total period of the 5 charges spanned over a period of nearly 9 years.

41.  Having considered the above authorities, the starting point suggested by Mr Ng on each charge, and after applying the relevant factors into consideration, I come to the conclusion that the proper starting point on each charge is as follows:

	Amount of Money Laundered (HK$)	Starting Point Adopted
Charge 12	2.6 million	3.5 years (42 months)
Charge 13	159,249	18 months
Charge 14	535,310.83	2 years (24 months)
Charge 15	Around 7.5 million	4.5 years (54 months)
Charge 16	Around 3.5 million	4 years (48 months)

42.  As Mr Ng rightly said, the strongest mitigating factor was D4’s pleas of guilty which was an indication of his remorse. As a result of Ngo Van Nam, the Court of Appeal set down the appropriate discount for pleas of guilty given on the first day of trial being 20 per cent from the starting point. So in the circumstances, I have decided that an appropriate discount would be one of 20 per cent.

43.  Thus, the sentences on each charge, after deduction for pleas of guilty, are as follows:-

	Starting Point Adopted	After Discount of 20%[3]
Charge 12	42 months	33 months
Charge 13	18 months	14 months
Charge 14	24 months	19 months
Charge 15	54 months	43 months
Charge 16	48 months	38 months

Delay in prosecuting

44.  In HKSAR v Cheung Suet Ting CACC 226/2009, the Court of Appeal said at paragraphs 24 and 25 of the judgment of the court that delay in bringing an offender to justice is a mitigating factor which may be taken into account in sentence. However, delay by the prosecution in bringing an offender before the court is not a mitigating factor per se: but delay in the prosecution of an offence after the offender has acknowledged guilt; and where the delay has given him an opportunity to rehabilitate himself, and to make restitution, may carry substantial weight in mitigation. All the circumstances must be looked at also including whether there was a legitimate expectation the matter will not be further pursued; the size of the investigation and whether the time taken to bring the case to court was longer than necessary.

45.  Mr Ng, for D4, said there had been the 4.5 years delay between the arrest and the charges, as well as the 7 years taken to reach a conclusion of the proceedings and the 7 years taken to bring the case to court has been stressful for D4 and asked the court to exercise its discretion and further reduce the sentence.

46.  Mr Tracy, the prosecuting Fiat, only at my request in the course of mitigation, urgently submitted a hand-written note of the chronology of events after a short adjournment was granted to him as he did not prepare it in advance. From the chronology, I note that after D4’s arrest on 28 November 2017, the police began to conduct the examination of the phones from February 2018 to June 2018 and also the bank fund flow analysis from June 2018 to March 2019. The investigation was impeded by public order crisis between June 2019 and December 2019. Thereafter, the police had taken about 12 months between February 2020 and February 2021 to make further investigation which appeared to have been completed by February 2021 when the covering report was sent to the Department of Justice for legal advice. I note also that the Department of Justice had taken about 14 months between 26 February 2021 and 1 April 2022 to prepare the legal advice. On 6 June 2022, D4 was formally charged with Charge 12 to Charge 15 and his first appearance in court was on 28 July 2022.

47.  Mr Ng also particularly drew my attention to the fact that D4 was sentenced to 90 months by the Court of First Instance for one count of trafficking in dangerous drugs in August 2020 and he had served his sentence and be released from prison in December 2023. It was submitted that he, having come out of prison, would now have to go back to prison again for the offences that he now faced. Since coming out from prison in 2023, D4 was not involved in any criminal activities and made steady progress towards rehabilitation. Mr Ng urged the court to consider that apart from his guilty pleas, certain discount should be given to him in sentence. He cited the following authorities to assist this Court in determining the appropriate sentence:

(1)  HKSAR v Sham Kwok Kee CACC 142/2013, 11 April 2014, unreported, there was a delay of almost eight years between the arrest and charging of the accused, and that attracted a sentencing discount because of the prolonged anxiety it had caused to the accused; and

(2)  HKSAR v Cheng Kelly Kit Yin [2014] 4 HKLRD 34, there occurred a period of unjustifiable delay in the prosecution process, which endured to the disadvantage of the appellant and that attracted further sentencing discount of 4 months.

48.  Returning to the present case, I do not lose sight of the fact that D4 first appeared in the District Court on 16 August 2022 in respect of the present case. According to the records, various adjournments were actually sought by D4 himself, and therefore his pleas were only taken on 8 February 2024, almost 18 months after his first appearance in District Court. He pleaded not guilty to all the charges on that occasion and maintained his not guilty pleas at the pre-trial review on 7 November 2024. He only indicated to plead guilty to the relevant charges on 20 January 2024 that was the first day of the trial. Had D4 pleaded guilty to the charges at an earlier stage, I am sure that the matter could have been brought to the court much earlier.

49.  That said, five years from arrest to deciding to charge D4 (November 2017 to June 2022)  does seem rather long. I also take into account the hardship to him of having to go back to prison after having come out, going back in respect of offences committed before he was sent to prison for his trafficking case in 2020. In the circumstances, I am prepared to give him a further discount. For each of the 5 charges, I would allow D4 an additional reduction of 6 months.

Sentence

50.  For the reasons given above, I sentence D4 as follows:

	After Discount of 20%	Reduction of 6 months for delay
Charge 12	33 months	27 months
Charge 13	14 months	8 months
Charge 14	19 months	13 months
Charge 15	43 months	37 months
Charge 16	38 months	32 months

51.  There are no other mitigating factors that I can see for D4 that will justify any further reduction in sentence. 

Totality

52.  I consider that there is some degree of overlap between the criminality of Charges 12 to 16, it is appropriate to make sentences run partly concurrently and partly consecutively.

53.  Bearing in mind the totality principle, I consider a global starting point of 5 years and 3 months’ imprisonment (ie 63 months)  to be appropriate. A 20 per cent discount is given for the guilty pleas, reducing the overall sentence to 50 months. For the delay factor that I have mentioned above, I shall further reduce the overall sentence by 6 months to 44 months. I am of the view that a total term of 3 years and 8 months’ imprisonment (44 months)  should properly reflects the overall criminality of D4 on the five charges.

54.  To achieve that, I order 2 months of the sentence for Charge 12 shall run consecutively to the sentence for Charge 15, making a subtotal of 39 months. 1 month of the sentence for Charge 13 shall run consecutively to the sentences for Charges 12 and 15, making a subtotal of 40 months. 1 month of the sentence for Charge 14 shall run consecutively to the sentences for Charges 12, 13 and 15, making a subtotal of 41 months. 3 months of the sentence for Charge 16 shall run consecutively to the sentences for Charges 12, 13, 14 and 15, thus making a total sentence of 44 months.