HKSAR v. HU HONGDA

DCCC 732/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 732 OF 2015

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REASONS FOR SENTENCE

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1. The Defendant, Hu Hongda, pleaded guilty before me to 2 charges of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, Charge 1 and 2.

2. Charge 1, which took place on or about the 20th May 2015, concerned a conspiracy to launder HK$80,000.

3. Charge 2, which took place on or about the 8th June 2015, concerned a conspiracy to launder a sum of money.

4. The facts admitted by the Defendant reveal that on 20th May 2015 around 1:30 pm, the victim of Charge 1, Madam Wong, a 65 years old lady, received an anonymous telephone call.  The caller claimed that Madam Wong’s son was being detained as he had wronged someone.  Madam Wong then heard a voice over the phone which sounded like her younger son crying for help. Unsuspecting, Madam Wong negotiated with the caller and agreed on a ransom of HK$80,000, and informed the caller how she was clothed and that she would withdraw money from the Bank of China at Metroplaza, Kwai Chung.

5. The Defendant approached Madam Wong outside the bank where the latter withdrew HK$50,000, and handed a mobile phone to Madam Wong.  The party on the other end of the line asked Madam Wong to withdraw the remaining HK$30,000. Madam Wong gave the Defendant HK$50,000.  She then went to HSBC at Metroplaza and withdrew HK$30,000.  The Defendant appeared outside the bank, he took the money from Madam Wong and left. 

6. Madam Wong realized it was a scam after she contacted her younger son. She made a report to the police.

7. The CCTV outside the Bank of China captured part of the incident.

8. Madam Wong positively identified the Defendant at an identification parade held subsequently. 

9. On 8th June 2015 at around 12 noon, the victim of Charge 2, Madam Choi, a 85 years old lady, received a telephone call at her home.  The caller claimed himself to be Madam Choi’s son and he was being detained in the Mainland.  He asked Madam Choi to pay HK$30,000 for his release.  Unsuspecting, Madam Choi provided her mobile phone number to the imposter and agreed to withdraw money from the Kau Yuk Road branch of Bank of China in Yuen Long.  The imposter told Madam Choi someone would collect the money from her outside the bank. 

10. Madam Choi told the Bank of China staff about the purpose of her withdrawal of money.  The police was alerted.  Madam Choi confirmed with her two sons that they were safe.  A brown envelope containing dummy money was given to Madam Choi.

11. Madam Choi then waited outside the bank.  The Defendant approached Madam Choi thrice while talking on the phone, on the third time the Defendant approached Madam Choi, the Defendant asked Madam Choi if she was “Choi”.  Madam Choi asked the Defendant if he had detained her son, and the Defendant replied in the positive.  The Defendant asked Madam Choi to follow him to a place for the handing over of the money.

12. As Madam Choi followed the Defendant, the ambushing police officers immediately intercepted, arrested and cautioned the Defendant.

13. Under caution at the scene of arrest, the Defendant said someone in the Mainland introduced him to earn quick money in Hong Kong.  The Defendant was to collect money and was promised 5% of the money collected.  He was instructed on the phone to collect money from an old woman outside the Bank of China in question.

14. The police seized 1 mobile phone and 3 sim cards from the Defendant.

15. In the cautioned video-recorded interviews held subsequently, the Defendant admitted, inter alia, that:

a. He used to work as a factory worker but he became unemployed recently;

b. He met an “Ah Shing” in May, Ah Shing gave him RMB1,500. The Defendant then came to Hong Kong and collected HK$80,000 from a woman outside the Bank of China at Metroplaza upon instructions from a phone call. The Defendant overheard the woman ask for her son back so he realized the incident involved kidnapping. The Defendant took the money from the woman as he was in need of money. He kept HK$4,000 and remitted the remaining to the Mainland;

c. He was tricked to do “bad things” in Hong Kong. Ah Shing approached him on 4th or 5th June. Ah Shing asked him if he needed money and said he would receive 5% of the money collected as reward. The Defendant gave his contact as he was in need of money to pay for medication for his father’s heart decease;

d. On 7th June, the Defendant came to Hong Kong upon Ah Shing’s instructions, and was asked to collect money at the Bank of China in question at around lunch time on 8th June. He was also asked to remit the money collected. The Defendant was a little bit scared as he felt he was cheating someone of their money or he was robbing someone. Finally the Defendant spoke to the old woman after he had approached her twice;

e. The Defendant said the phone seized from him had been used to contact the person who instructed him to collect money.

16. The telephone record of the Defendant shows that he was in contact with a Mainland phone number at the material times.

17. It is admitted that the modus operandi of the present case, i.e. “Drop-off” in Telephone Deception cases and the associated money laundering activities are prevalent crimes in Hong Kong and are of obvious concern to the society, in terms of the harm caused to the community and the repeated occurrence. 

18. The Defendant has a clear record in Hong Kong.  The antecedent statement of the Defendant states that he is now 26 years old.  He entered Hong Kong on the strength of his China Two-way Permit.  He received education up to high school in China.  He had worked as salesman, waiter and factory worker after he graduated from high school.  He lived with his father in the Mainland before his arrest in Hong Kong.

19. The Prosecution makes an application for enhancement pursuant to section 27(2) of the Organised and Serious Crimes Ordinance, Cap. 455.  A notice of intention to furnish information had been served on the Defendant.

20. The information furnished consists of a statement prepared by Chief Inspector Lam Chek Ho.  The information concerns the prevalence of telephone deception and the nature and extent of harm, direct or indirect, caused by these crimes.

21. In paragraph 18 of the statement, CIP Lam says:-

“Statistic from the RCU KE information database indicates that the majority of victim of Telephone Deception is senior member of the society. There were 929 Telephone Deception victims indentified in the 2nd quarter of 2015 (i.e. April to June 2015), comprising 336 males and 593 females. All of the victims were Hong Kong residents. Most of them were retired persons (18.9%) and housewives (39.1%) and were vulnerable in the community.”

22. In paragraphs 20 and 21, CIP Lam sets out the age profiles of the victims and figures of total Telephone Deception cases reported and the accumulated monetary loss involved in each year since 2008.

23. In paragraph 22, CIP Lam states:-

“The total number of Telephone Deception cases reported between January and August 2015 already exceeded the total number of Telephone Deception cases reported for the whole year of 2014. The accumulated monetary loss of the same period was also increased for over 10 times to a record high of $262.98M.”

24. In paragraph 24, CIP Lam states:-

“According to Police record, there was no ‘Drop-off’ cases reported in 2006 and 2007. The ‘Drop-off’ cases only emerged in 2008 with 38 successful cases which accounted for 7.9% of the overall successful Telephone Deception cases. It then gradually increased to 80 cases in 2009, 126 cases in 2010, 175 cases in 2011, 173 cases in 2012, 200 cases in 2013, 183 cases in 2014 and 151 cases in between Jan-August 2015. Please refer to Annex A for details.”

25. Mr. Yip, who appears for the Defendant, indicates that the Defendant would not oppose the enhancement application. He agrees to the contents of the statement of CIP Lam.

26. Mr. Yip submits in mitigation that the Defendant is the sole bread winner of the family.  The Defendant’s father suffers from coronary artery disease and is unable to work.  The Defendant’s mother had left the family some 12 years ago.

27. Mr. Yip submits in mitigation that the Defendant had been co-operative with the police since his arrest.  He confessed everything, thus saving the police much time and manpower.  His guilty pleas to the offences show that he is remorseful.  Mr. Yip submits that the Defendant is a first offender.  The case does not involve a large amount of money; Charge 1 concerned HK$80,000.  The two victims are spared from giving evidence in court because of the guilty pleas.

28. Mr. Yip draws my attention to HKSAR v Chen Jianchao CACC 184/2014 and suggests a starting point of 3 years to 3 years and 3 months for Charge 1 and Charge 2.  Finally, Mr. Yip asks me to bear in mind the totality principle.

29. In Chen Jianchao, the case HKSAR v a male known as Boma Amaso CACC 335/2010 was referred to.  The Court of Appeal in Boma set out the relevant considerations in sentencing for money laundering offences.

30. The Court of Appeal pointed out that the first factor to which any sentencing court should bear in mind is the maximum penalty available.  The maximum sentence for conspiracy to deal with property known or believed to represent proceeds of an indictable offence is 14 years’ imprisonment.

31. The Court of Appeal reckoned that the second factor to which the sentencing court must bear in mind to is the fact that in sentencing for this category of offence, deterrence is paramount.  There is then the question of the amount of money laundered, this is not the be-all and end-all of a case but is a significant factor.

32. Then the sentencing court should consider if the nature of the predicate offence is known and the available penalty for the predicate offence.

33. Then the sentencing court should consider the state of knowledge of the offender.

34. An international or cross-border dimension will always be a significant aggravating feature.

35. The sophistication of the offence is also relevant and where the offence is committed by or on behalf of an organized criminal syndicate, it would amount to an aggravating factor.

36. The sentencing court should consider whether there is one transaction or many and the length of time over which the offence was committed.

37. The sentencing court should consider the role of the offender and the acts performed by him.  In this regard, the director of a laundering operation or scheme should receive a heavier sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds.  In the case of a person down the chain, the court will wish to have regard to whether a benefit has been received and, if so, the nature and size of the benefit.

38. In sentencing the Defendant before me, I have borne in mind the facts of the case.  I am aware of the maximum penalty is 14 years’ imprisonment.  I have reminded myself that in sentencing for this category of offence, deterrence is paramount.

39. Madam Wong, the victim of Charge 1, suffered a substantial loss of HK$80,000.  Madam Choi, the victim of Charge 2, suffered no monetary loss.  As the Court of Appeal said in Boma, the amount of the money laundered is not the be-all and end-all of a case but is a significant feature.

40. In the present case, the predicate offences behind Charge1 and Charge 2 were telephone deceptions designed to practise on elderly citizens who were and willing to part with their savings out of maternal love for their children.  I am sure the victims were both put in fear after they were told their sons were being held in detention.

41. As to the state of knowledge of the Defendant, while I accept there is no evidence to show that the Defendant was actually aware of the nature of the predicate offences, the Defendant knew he came to Hong Kong to earn quick money.  In fact, in the case of Madam Choi, she had asked the Defendant if he had detained her younger son and the Defendant replied in the positive, in other words, in the case of Madam Choi, the Defendant knew the money he collected from the victim concerned detention of the victim’s son.  In both cases, he knew he was to collect money from an old lady.  In my judgment, the Defendant was turning a blind eye to the crimes behind when he agreed to collect money from the victims.

42. The cross-border dimension in the present case aggravated the seriousness of Charge 1 and 2.  Clearly the Defendant was aware of the cross-border nature of the operation.

43. While the way the Defendant was asked to launder the money was not very sophisticated but there was a degree of planning.  In my judgment, the Defendant was working for a syndicate of unknown size.

44. The Defendant took part in two separate conspiracies on two dates between May and June 2015.

45. I have considered the role of the Defendant.  The Defendant was obviously not the mastermind of the money laundering operation, he played a pivotal role in the money laundering operation in that he was the person who would collect the money from the victims and remit the proceeds to the Mainland.  As the Court of Appeal said in Boma, sentences should be sufficient to deter those who might be prevailed upon by directing minds.

46. The Defendant committed the offences for monetary gain, he would receive 5% of the money collected.

47. In my judgment, Charge 1 calls for a starting point of 3 ½ years’ imprisonment (42 months); for Charge 2, a starting point of 3 years’ imprisonment (36 months) is appropriate.

48. The Defendant is entitled to the customary one-third reduction for his guilty pleas and clear record.  That would bring the sentence of Charge 1 down to 28 months and that of Charge 2 to 2 years.

49. Madam Choi, the victim of Charge 2, is an 85 years old lady, the guilty plea of the Defendant is commendable as it has the effect of sparing the 85 years old lady from giving evidence, I would allow the Defendant one month additional reduction.  That would bring the sentence for Charge 2 down to 23 months’ imprisonment. As for Charge 1, Madam Wong is 65 years old, I am not persuaded that I should allow the Defendant any further reduction over and on top of the one third reduction.

50. I have considered the information furnished by the Prosecution pursuant to section 72(2) of the Organised and Serious Crimes Ordinance.

51. I am satisfied that the offences in question fall within the definition of specified offences.  I am satisfied from the materials placed before me that the offences under consideration are prevalent.  I am also satisfied that the nature and extent of the harm caused by the offences was serious.

52. Each offence constituted an organized crime within the meaning of Cap. 455, I am satisfied that enhancement is called for, having regard to the nature of the offences and the prevalence of the offences.

53. In the instant case, a one-third enhancement is appropriate.  On Charge 1, a one-third enhancement would increase the sentence from 28 months to 37 months and 10 days’ imprisonment.  On Charge 2, a one-third enhancement would increase the sentence from 23 months’ imprisonment to 30 months and 20 days’ imprisonment.

54. In my judgment, a total sentence of 45 months’ imprisonment should adequately reflect the overall criminality of Charge 1 and Charge 2.  In order to achieve that end, I order 7 months and 20 days of the sentence for Charge 2 shall run consecutively to the sentence for Charge 1. 

55. The Defendant has to serve a total term of 45 months’ imprisonment for Charge 1 and Charge 2.