HKSAR v. NG WAI CHUEN

DCCC 737/2022

[2023] HKDC 1453

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 737 OF 2022

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REASONS FOR SENTENCE

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1.  The defendant is convicted on his own plea and agreement to Amended Summary of Facts to a charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, and sections 159A and 159C of the Crimes Ordinance, Cap 200.

Facts

2.  On 30 October 2002, the defendant opened a Hong Kong dollars savings account in his own name with The Hongkong and Shanghai Banking Corporation Limited, account number 106-0-046438 (“Account”). The defendant was the sole signatory.

3.  Bank records revealed that a total of HK$14,282,776.78 (in a total of 77 transactions)  was deposited into and a total of HK$14,311,421.97 (in a total of 130 transactions)  was withdrawn from the Account between 1 January 2015 and about 30 June 2017. The mirror transactions showed that the Account was used as a temporary repository of funds. There were no over-the-counter withdrawals during this period.

4.  The defendant was arrested on 19 September 2017 for fraud. He was later released unconditionally on 19 April 2018, and was re-arrested and charged for the present offence on the same day on 18 May 2022. Under caution, he admitted that he lent the Account to a friend.  He had no idea how his friend used the Account.

5.  In a video-recorded interview, the defendant admitted under caution that:-

(a)  he lent the Account to his friend “Hung Gor”, who was a mainlander from mainland China;

(b)  his friend did not state why he needed to use the Account;

(c)  he handed over to his friend the ATM card and login details of the Account, which included the user name and password.

6.  At all material times, the defendant conspired with a person named as “Hung Gor”, knowingly or having reasonable grounds to believe that the property, namely the sum of HK$14,282,776.78 in the account particularised in the charge, in whole or in part directly or indirectly represented the proceeds of an indictable offence, to deal with the said property.

Criminal Record

7.  The defendant has a clear record.

Mitigation

8.  The defendant is now aged 46. He works as a storekeeper earning a monthly salary of about HK$15,000.

9.  The defendant has a clear record. He also performed voluntary work and had made donations to charitable organisations.

10.  Defence counsel submitted to court mitigation letters from the defendant’s elder brother, current employer, a friend, a preacher and a Legislative Council member. There was also proof of the defendant making donations to charity. Defence counsel said these letters support that the defendant is a filial son, good brother, responsible employee and a good citizen.

11.  It was said that the defendant committed the present offence as he was unaware of the seriousness of the charge, being naïve to believe his friend would introduce potential business opportunities to him and that he received no benefit.

12.  It was said that the defendant had also provided a non-prejudicial statement to the police, although the same did not result in the arrest of any person.

13.  Defence counsel referred this court to the Court of Appeal case of HKSAR v Boma [2012] 2 HKLRD 33 and the case of HKSAR v Lam Hing Wan, CACC 387/2016. It is submitted that there is no aggravating feature in this case. The defendant was not part of a criminal syndicate. It was also said that the defendant knew nothing about the nature of the funds and this case lacked the international dimension and sophistication.

14.  It is also submitted that there is no rigid sentencing guideline for the offence.

15.  Defence counsel urged this court to adopt a sentencing starting point of less than 5 years’ imprisonment. He also urged this court to give the defendant one-third sentencing discount by reason of his guilty plea.

16.  Further, defence counsel submitted that the defendant was first arrested on 19 September 2017, unconditionally released on 19 April 2018, then was re-arrested and charged for the present offence on 18 May 2022 and was convicted today. It was said that there was a delay in prosecution and that the defendant had started a new law-abiding life since August 2018 when he was employed as a storekeeper in an aquarium.

17.  He urged this court to give the defendant certain sentencing discount by reason of the prosecution delay which was not caused by the defendant. He referred this court to the cases of HKSAR v Chiu Chi Wing, CACC 243/2012 and Secretary for Justice v Schmitt Charles Lee, CAAR 12/2006.

Discussion

18.  On conviction upon indictment of this offence, a person is liable to a fine of HK$5 million and to imprisonment for 14 years.

19.  In Boma, Stock JA (as he then was)  explained that it was not realistically possible or desirable to lay down guidelines in relation to the offence of money laundering because of the highly variable circumstances in which such offences are committed and the widely different roles played by those convicted of these offences. He said that deterrence was paramount in the sentencing exercise as the criminality in laundering arose from the encouragement and nourishment it gave to crime in general. He said that the amount of money laundered is a significant factor and the court should take into account of factors such as:-

(a)  the nature of predicate offence;

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

(c)  where the operation involved an international dimension, this would be a significant aggravating feature;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organised criminal syndicate, this would be an aggravating feature;

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

(g)  whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved;

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

20.  In this case, the amount of money laundered is HK$14.28 million. The predicate offence is fraud which attracts a maximum sentence of 14 years’ imprisonment. The bank account of the defendant was lent to a mainlander for use, but there is no evidence that the money laundering involved foreign bank account.

21.  The fraud in question concerned 5 persons (including the defendant)  and about 40 Hong Kong bank accounts owned by various bank accountholders. The flow of funds was operated on internet and despite protracted police investigation, the police were unable to trace the destination of the funds.

22.  The scheme involved is sophisticated and clearly involved a criminal syndicate. There is no evidence that the defendant was involved other than the lending of the bank account for money-laundering purpose, but the offence was committed for an organised criminal syndicate. There is no evidence that the defendant had actual knowledge of the predicate offence, but clearly, he turned a blind eye as to how the bank account was to be used during this period.

23.  There were 77 deposits and 130 withdrawals made from the account. These transactions took place over a period of 2½ years.

24.  There is no evidence of benefit or gain to the defendant for commission of this offence. In the case of Wan Kwok Keung [2012] 1 HKLRD 201, Cheung JA (as he then was)  said that money laundering is a serious offence and must be deterred. The sentence should reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others. However, it is said that if the “black money” originated from various and organised indictable offence or the defendant’s benefit was huge, then the sentence should be adjusted upwards.

25.  In Wan Kwok Keung, the Court of Appeal referred to the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 where the sentencing starting point for laundering money over HK$10 million is over 5 years’ imprisonment.

26.  Considering the above, the court finds the appropriate sentencing starting point is 4 years and 6 months’ imprisonment.

27.  Money laundering is a very serious offence and the personal background of the defendant is seldom a valid mitigating factor.

28.  The defendant has pleaded guilty. He is therefore entitled to full one-third sentencing discount. The fact that he used to have a clear record, however, has already been subsumed in the one-third sentencing discount.

29.  This court now considers mitigation letters from the defendant’s brother, friend, employer, church pastor, and the legislative councillor. These letters say that the defendant is a filial and responsible person. He is also a compassionate and considerate person and has been a volunteer, helping people in need and stray cats.

30.  The letters lodged with court, however, does not support that these deeds were committed before the commission of the present offence. Defence counsel conceded that there was no evidence of the defendant’s involvement in voluntary work or donation to charity prior to the commission of the offence.

31.  We now come to the assistance to police by reason that the defendant gave the non-prejudicial statement in May this year. The defendant was first arrested in September 2017 and he gave this statement nearly 6 years later. The same did not result in the arrest of any person. In fact, the defendant was unable even to tell the telephone number or contact details of “Hung Gor”, whom he lent the bank account, save that he knew the telephone number of introducer. The statement, therefore, did not really in effect assist the authorities and the same cannot constitute a valid mitigating factor.

32.  Defence counsel also urged this court to give the defendant sentencing discount by reason of delay in prosecution. Initially, defence counsel submitted that there was a delay from the date of the defendant’s first arrest to the date of conviction, ie today. Later, he revised the period of delay from the date of first arrest to the date when the defendant was charged and rearrested. He conceded that there was no delay since the date of the defendant’s second arrest. The period in question was therefore from 19 September 2017 when the defendant was first arrested to 18 May 2022 when he was rearrested and charged (4 years and 8 months).

33.  Considering the chronology of events submitted by the prosecution, one could see that investigation of the case involved a total of 5 persons (including the defendant), application for search warrants, application for production orders, application for movement records from Immigration Department as well as tax records from Inland Revenue. There were also numerous applications for bank statements of various bank accounts, fund flow analysis on these internet transactions, obviously taking of witness statements from alleged victims and potential prosecution witnesses. It is said that even up to this date, a few of these suspects, mainly from the mainland, are still at large.

34.  Prosecution conceded that there is prosecution delay, but they said that the same is not unreasonable or undue.

35.  From the chronology of events presented before this court, this court notes that there was never a hold or a cessation in the whole investigation period. One must accept that the activities in Hong Kong during this period is very much restricted and regulated by Covid measures which would undoubtedly seriously hinder the progress of investigation.

36.  In the case of Schmitt Charles Lee, Stuart-Moore VP said that “the real question is whether there has been an unreasonable delay, through no fault of the defendant, which has contributed to his punishment”.

37.  I must say that after perusing all the documents before me, the chronology of events, the nature of the case, and considering the pandemic measures at the relevant times, the delay is not unreasonable. The defendant is therefore not entitled to further sentencing discount by reason of the delay in prosecution.

38.  This court, however, accepts that the defendant has since August 2018 been in gainful and lawful employment and that his performance at work was well received by his employer, whom agreed to reemploy him upon his release from prison. This court accepts that the defendant is now deeply remorseful and would not reoffend in future, and that he is already trying to embark on a law-abiding life. For this reason, the court is willing to further discount his sentence by 2 months’ imprisonment.

39.  The defendant is therefore sentenced to 34 months’ imprisonment in this case.