HKSAR v. CHAN KIM CHUNG, NELSON

DCCC772/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 772 OF 2010

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Reasons for Sentence

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1.  This morning, the Defendant pleaded guilty to two charges of blackmail, contrary to section 23(1) and (3) of the Theft Ordinance, Cap. 210 (charges (1) & (3)), and one charge of dealing 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 (charge (2)).

2.  The facts which were admitted by the Defendant and which formed the basis of these charges are as follows : the victim, X, was a senior marketing director of an investment bank. In the course of his work, X came across a client surnamed LIU, and LIU’s assistant, Raymond. In early 2006, Raymond told X that LIU wished to obtain a diplomatic passport. As a result, X introduced Stanley, another client of his, to Raymond and LIU so that the arrangement could be made. Although X knew that Stanley and LIU had signed two agreements in July 2006 for Stanley to provide LIU with the passport at the cost of US$500,000, X was never a party to those agreements and he did not get any benefit from that.

3.  In the afternoon of 22 December 2008, the Defendant and two other males arrived at X’s office. They produced the aforesaid agreements to X and told him that they were instructed to collect a debt of US$350,000 from X. In reply, X said he was not the one responsible and asked them to look for Stanley. However, one of the males in the Defendant’s group told X that if he failed to settle the debt, they would have X’s limbs cut off and X would not be able to leave Central. A further threat of splashing red paint at X’s home was also issued. X asked for more time to deal with the matter and the three of them then left. This is the subject matter of charge (1). Later, when X proposed to make the payment by instalments, the male from the Defendant’s group told X over the phone that if X did not want any mishap on his wife, he better made the payment quickly.

4.  Fearing that his family members might be harmed, X decided to make the payment of US$350,000 demanded by the Defendant’s group. Negotiations then took place between 27 and 29 December 2008 as a result of which X and the Defendant’s group of three met up on 29 December 2008. X then followed the Defendant to Hang Seng Bank where he transferred HK$1,000,000 to the Defendant’s account. Subsequently, on 20 and 22 January 2009, X transferred two further sums of HK$1,003,000 and HK$712,500 to the Defendant’s account. Amongst the payments made, a sum of HK$3,000 was paid as “tea money” to the Defendant’s group as demanded by them. Therefore, X had transferred a total of HK$2,715,500 to the Defendant’s bank account. This is the subject matter of charge (2). The relevant bank transaction records showed that once the deposits were made, the Defendant withdrew cash from his account on the same day.

5.  In the afternoon of 22 January 2009, one of the males from the Defendant’s group called X again and asked X to meet him. X turned up and was asked to make a further payment of HK$5,000 as “tea money”. As X only had HK$2,000 with him at that time, the male took that sum from X. Shortly afterwards, the Defendant and two other males, who had not appeared before, then arrived. The Defendant told X that his boss requested X to pay HK$3,000,000 to him as interest and again produced to X the agreements between Stanley and LIU. At that time, one of the two males who arrived with the Defendant asked X to give them the personal particulars of his family members. When X refused, X felt a hard object being pressed against his waist. X was shouted at and eventually, X surrendered the particulars to them out of fear. The Defendant’s group then escorted X to his residence in order to have his address verified. X made a report to the police on 24 January 2009. This is the subject matter of charge (3).   

6.  The Defendant was born in Hong Kong and is now aged 39. He was educated up to Form 3 level and had worked as a hair stylist for about ten years. From 2008 onwards, he worked as a bar tender and waiter, earning about HK$9,000 per month at the time of his arrest.

7.  Between 1988 and 2006, the Defendant has been before the court on 2 previous occasions in relation to one count of attempted theft, 3 counts of theft and one count of driving a motor vehicle with alcohol concentration above the prescribed limit. He was put on probation in 1988 and was given a fine in 2006. He has no similar conviction like the present offences.

8.  The Defendant has a son of 10-month old with his cohabitee. The son suffers from a bone problem and requires regular follow-up treatments. The Defendant is the sole breadwinner of the family.

9.  In mitigation, it was said that the Defendant was approached by a friend who asked him to help collecting a debt and who promised him a reward of HK$50,000. The Defendant, who needed the money to hold a wedding banquet in October 2009, foolishly agreed. It was urged upon this court that the present case is not the type of extortion of monthly protection money from shops or proprietors, and there were no triad overtones. Further, although the Defendant was present during both occasions when the blackmail took place, he was not a key player and he was not aware that any hard object was being used to press against X on the second occasion.

10.  Insofar as the money laundering charge is concerned, Ms. Li for the Defendant said that he merely allowed his own bank account to be used for the sake of convenience. Moreover, the period during which the account was being used was a relatively short period, that is, less than a month, and the operation was not sophisticated, there being only one bank account involved and that the Defendant used his genuine personal particulars at the material time.

11.  Finally, it was said that as a substantial amount of the sum received by the Defendant was paid to LIU, the Defendant was not the major beneficiary of this crime. In this respect, it was confirmed by the prosecution that a sum of HK$1.9M was given to LIU. The prosecution also told the court that although the Defendant has given a non-prejudicial statement to the police, they found the statement to be of no use and no follow-up action would be taken.

12.  All in all, Ms. Li asked for a lenient sentence to be imposed on the Defendant.

13.  I shall firstly deal with the blackmail charges. I note that in each of the two incidents, the Defendant did not act alone. He was with at least two other males. No doubt, this was to give X the impression that they were a powerful gang and they would be able to do what they threatened to do.

14.  In respect of charge (1), the facts disclosed that when the Defendant’s group of three arrived at X’s office, it was during the office hours of a working day. However, in X’s office, they kept urging X to repay the money, and they were bold enough to utter there and then, that is, under broad daylight in an office setting, words to the effect that X would not be able to leave Central and they would have X’s limbs cut off if he did not make the payment. This shows that the Defendant’s group had no respect at all to the law and order. I regard this as an aggravating factor.

15.  Insofar as charge (3) is concerned, the facts are even worse as this time, X was asked to provide the personal particulars of his family members to the Defendant’s group. When he refused, a hard object was pressed against him and he was shouted at. Eventually, out of fear, X then acceded to their request. However, the Defendant’s group was still not satisfied and they escorted X back to his home in order to have his address verified. The shock and fear which X must have experienced during that time is not difficult to imagine. The acts of the Defendant and his accomplices are highly condemnable as they, again, under broad daylight and in a restaurant, uttered all these threats as if they had no fear of the law enforcement agency at all.

16.  I should say the fact that this Defendant might not have been the one doing the talking does not materially affect the seriousness of these offences as, on the facts, the Defendant was acting with the others in a group, and it was, through their collective presence and collective acts, that the threats were issued and were meant to have effect on X so as to make him yield to their requests.

17.  Having considered the facts of this case, I consider that a starting point of 3 years is appropriate for charge (1) and because of the further aggravating features mentioned above, I consider a starting point of 4 years to be appropriate for charge (3).

18.  In respect of the money laundering charge, charge (2), I find, on the facts, that the Defendant was fully aware that the money deposited into his bank account was the money derived from the blackmail but he nevertheless, dealt with it, not only by allowing his bank account to be used for the deposit but he was the one actually withdrawing the money. The fact that he knew of the source of the proceeds as compared with one who only has reasonable grounds to believe that the money represented proceeds from an indictable offence should make it a more serious case here.

19.  Having considered all the facts of this charge, I consider a starting point of 3 years to be appropriate.

20.  The Defendant pleaded guilty and will be given a 1/3 reduction for his pleas. The fact that he needed money to hold a wedding banquet is no excuse for committing these offences. I also note that the first blackmail was committed in December 2008 whereas the banquet was said to have taken place in October 2009, which was almost one year after the commission of the offence, but be that as it may, as I said, such is not an excuse.

21.  Apart from the pleas, I find no other mitigating factors which warrant a further reduction in the sentence. I therefore impose the following terms :

(a) charge (1) : 3 years reduced to 2 years on account of the plea;

(b) charge (2) : 3 years reduced to 2 years on account of the plea; and

(c) charge (3) : 4 years reduced to 32 months on account of the plea.

22.  As these offences are separate and distinct, the terms should be ordered to run consecutively. However, such will no doubt result in too excessive a sentence. Therefore, having considered the totality principle, I take the view that an overall sentence of 54 months for the three charges is the appropriate sentence. I therefore order that :

(a) 16 months of the 2-year term in respect of charge (2) are to run consecutively to the term in respect of charge (1); and

(b) 14 months of the 32-month term in respect of charge (3) are to run consecutively to the terms in respect of charges (1) and (2), thus making a total of 54 months’ imprisonment.