HKSAR v. CHENG CHUN LAM AND ANOTHER

DCCC 351/2020

[2021] HKDC 778

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 351 OF 2020

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REASONS FOR VERDICT

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(Relating to D2 and D3)

CHARGES

1.  D2 pleads not guilty to two counts of money laundering (Charges 8 and 9).  D3 pleads not guilty to one count of money laundering (Charge 7).  The Charges and the Particulars of Charges are as follows:-

“ 7^th Charge (against 3^rd accused only)

Statement of Offence

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.

Particulars of Offence

LIU Chi-ling, between about the 31^st day of July, 2017 and about the 29^th day of January, 2019, both dates inclusive, in Hong Kong, together with TSE Miu-ting, knowing or having reasonable grounds to believe that property, namely a total sum of $2,086,987.54 Hong Kong currency in the account held in the name of the said LIU Chi-ling with Hang Seng Bank Limited of account number 024-246-248876-668, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

8^th Charge (against 2^nd accused only)

Statement of Offence

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.

Particulars of Offence

CHENG Chun-lam, between about the 1^st day of August, 2017 and about the 30th day of January, 2019, both dates inclusive, in Hong Kong, together with TSE Miu-ting, knowing or having reasonable grounds to believe that property, namely a total sum of $740,179.64 Hong Kong currency in the account held in the name of the said CHENG Chun-lam with Bank of China (Hong Kong)  Limited of account number 012-391-1-005633-5, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

9^th Charge (against 2^nd accused only)

Statement of Offence

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.

Particulars of Offence

CHENG Chun-lam, between about the 15^th day of August, 2017 and about the 18^th day of January, 2019, both dates inclusive, in Hong Kong, together with TSE Miu-ting, knowing or having reasonable grounds to believe that property, namely a total sum of $4,226,704.3 Hong Kong currency in the account held jointly in the name of the said TSE Miu-ting and the said CHENG Chun-lam with Hang Seng Bank Limited of account number 024-774-628531-882, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.”

PROSECUTION’S CASE

Relevant Companies, People, and Banks Accounts

2.  In 5/2011, HAI Hiu Chu (“PW1”)  (the Director)  employed D1 as an accounting clerk in BAMBOOS PROFESSIONAL NURSING SERVICES LIMITED (“VTC1”).  In 7/2017, D1 was promoted to the post of Operation Manager with a monthly salary of $30,000.  D2 is D1’s husband.  D3 is D1’s mother.

3.  It is not in dispute that D1 was responsible for (a)  issuing salaries to the staff of VTC1, THE HONG KONG HEALTH CARE FEDERATION LIMITED (“VTC2”), BAMBOOS EDUCATION-SCHOOL FOR TALENTS LIMITED (“VTC3”)  and BAMBOOS MARKETING AND CONSULTING LIMITED (“VTC4”), and (b)  compiling the salary payment spreadsheets for PW1’s endorsement.  After getting PW1’s endorsement, D1 would send the same to the banks as payroll instructions.  However, D1 was able to amend the details after PW1’s endorsement.  Only PW1, KWAN Chi Hong (“PW3”)  (another director)  and D1 knew the online banking password and had the online security device for the bank accounts of VTC1 – VTC4.

4.  From 11/2018 to 2/2019, D1 was on maternity leave.  KWONG Yuk Ying (“PW2”)  (the Financial Controller)  reviewed the salary payment instructions. As a result, PW2 found discrepancies between the expected payroll and the actual payment amount.  PW2 informed PW1 and PW3 of the discrepancies.  TANG Yuen Yee Loren Gertrud (“PW4”)  (an accountant)  was engaged for an internal investigation.

5.  Following an audit check, PW4 found that a total of $4,888,698.80 consisting of 108 payroll transactions was transferred from the bank accounts held by VTC1 – VTC4 to the following bank accounts (in addition to D1’s monthly salary):-

(a)  The account held jointly in the name of D1 and D2 (D1’s husband)  with Hang Seng Bank Limited of account number 024-774-628531-882 (“Account 1”);

(b)  The account held in the name of D2 with Bank of China (Hong Kong)  Limited (“BOC”)  of account number 012-391-1-005633-5 (“Account 2”);

(c)  The account held in the name of D3 (D1’s mother)  with Hang Seng Bank Limited of account number 024-246-248876-668 (“Account 3”); and

(d)  The account held in the name of D1 with Hang Seng Bank Limited of account number 024-246-186043-882 (“Account 4”).

6.  PW1 and PW3 did not make these 108 transactions nor had any knowledge thereof.  These were unauthorized transactions.  D1 pleaded guilty to 6 charges of theft relating thereto.  The 108 unauthorised transactions consisted of the following:-

(a)  Between about 31 July 2017 and about 14 April 2018, a total of $932,915 consisting of 27 transactions was transferred from a bank account of VTC1 with The Hongkong and Shanghai Banking Corporation Limited of account number 004-541-592655-001, where a total of $561,208 consisting of 14 transactions was transferred to Account 1, a total of $172,845 consisting of 6 transactions was transferred to Account 2 and a total of $198,862 consisting of 7 transactions was transferred to Account 3. (Charge 1)

(b)  Between about 6 September 2017 and about 21 November 2018, a total of $1,900,920.20 consisting of 45 transactions was transferred from the account held in the name of VTC1 with The Hongkong and Shanghai Banking Corporation Limited of account number 004-541-592655-838, where a total of $1,451,538.80 consisting of 30 transactions was transferred to Account 1, a total of $379,381.40 consisting of 14 transactions was transferred to Account 3, and $70,000 consisting of 1 transaction was transferred to Account 4. (Charge 2)

(c)  On or about 28 November 2017, $60,000 consisting of 1 transaction was transferred from the account held in the name of VTC2 with Nanyang Commercial Bank Limited of account number 043-502-0-008746-8 to Account 1. (Charge 3)

(d)  Between about 30 November 2017 and about 2 November 2018, a total of $871,236.20 consisting of 16 transactions was transferred from the account held in the name of VTC3 with The Hongkong and Shanghai Banking Corporation Limited of account number 004-015-555741-001, where a total of $702,675.60 consisting of 12 transactions was transferred to Account 1, a total of $73,560.60 consisting of 2 transactions was transferred to Account 2 and a total of $95,000 consisting of 2 transactions was transferred to Account 3. (Charge 4)

(e)  Between about 7 February 2018 and about 3 December 2018, a total of $1,005,534.60 consisting of 16 transactions was transferred from the account held in the name of VTC2 with Nanyang Commercial Bank Limited of account number 043-502-1-032495-9, where a total of $962,784.60 consisting of 13 transactions was transferred to Account 1 and a total of $42,750 consisting of 3 transactions was transferred to Account 2. (Charge 5)

(f)  Between about 1 March 2018 and about 27 September 2018, a total of $118,092.80 consisting of 3 transactions was transferred from the account held in the name of VTC4 with Nanyang Commercial Bank Limited of account number 043-502-1-032444-1 to Account 1. (Charge 6)

7.  D1 used the following methods to facilitate the unauthorised transactions:-

(a)  D1 added extra entries onto the existing payroll list, in the names of D1, D2 or D3, with account details.

(b)  D1 added extra entries onto the existing payroll list in the names of others, but with Account 1’s details.

(c)  D1 made a new payroll list, adding D2 or D3’s name and account details.

(d)  D1 would increase the salary amount of an existing employee, but the increased amount would be transferred to D2’s accounts.

8.  PW1 confirmed that:-

(a)  D2 and D3 were not employed by VTC1 – VTC4.

(b)  Between about January 2017 and about November 2018, PW1 engaged D2 15 times for the delivery of goods for VTC1 – VTC4. Payment for the delivery service was made by cheque every time, not by bank transfer or payroll instruction. Therefore the sums remitted to Account 1 or Account 2 were not payments for D2’s courier services.

(c)  D1 would receive 2 bonuses per year in July/August and December/January respectively. D1’s salary and bonuses would be remitted to Account 4. This meant that the $70,000 remitted to Account 4 in the name of D (on top of D1’s salary)  was unauthorised.

9.  Case was reported to police on 4 February 2019.  On 17 February 2019, D1 was arrested.

Money Laundering

10.  During the investigation period between about 31 July 2017 and about 29 January 2019, Account 3 (held solely in D3’s name)  had a total deposit in the sum of $2,086,987.54 and a total withdrawal in the sum of $2,030,202.30.  Among the deposits, $673,243.40 (32.26%)  came from VTC1 and VTC3.  Among the withdrawals, $264,800 (13.04%)  was withdrawn in cash and $1,563,920 (77.03%)  was used for PPS payments. (Charge 7)

11.  During the investigation period between about 1 August 2017 and about 30 January 2019, BOC A/C 012-391-1-005633-5 Account 2 (held solely in D2’s name)  had a total deposit in the sum of $740,179.64 and a total withdrawal in the sum of $690,048.23.  Among the deposits, $289,155.60 (39.07%)  came from VTC1, VTC2 and VTC3.  Among the withdrawals, $336,400 (48.75%)  was withdrawn in cash. (Charge 8).

12.  During the investigation period between about 15 August 2017 and about 18/1/2019, Account 1 (held in D1’s and D2’s joint names)  had a total deposit in the sum of $4,226,704.30 and a total withdrawal in the sum of $4,203,425.90.  Among the deposits, $3,856,299.80 (91.24%)  came from VTC1 – VTC4.  Among the withdrawals, $3,905,000 (92.90%)  was transferred to Account 4 and $46,000 (1.09%)  was withdrawn in cash. (Charge 9).

13.  On 18 February 2019, D2 was arrested. The ATM card of Account 2 (held solely in D2’s name)  was found in D2’s wallet. In D2’s bedroom, the ATM card of Account 1 (held in D1’s & D2’s joint names)  was found inside the bedside table drawer.

14.  Under caution, D2 admitted the following at two video-recorded interviews:-

(a)  D2 held Account 1 jointly with D1 for savings purposes. There is an ATM card for Account 1, but it was kept by D1. D and D2 both knew the password of the ATM card for Account 1.

(b)  D2 held Account 2 for savings purposes. There is an ATM card for Account 2. D2 never authorised any person to use the ATM card. D1 also knows the password of this ATM card.

(c)  D2 did not own any real estate. D2 owned a car.

(d)  In 2018, VTC1 hired D2 to be a freelance courier at an hourly rate of $100. D2 usually works for VTC1 around once a month. D2 would be paid around $10,000 per month.

(e)  D2 also works part time in a restaurant. The salary would be paid by cash. D2’s usual salary from his part-time job would be around $10,000 to $20,000 per month.

15.  On 18 February 2019, D3 was arrested. Under verbal caution, D3 admitted that the money was remitted from D1, her daughter, as D3’s monthly living expenses.  Upon search, the ATM card of Account 3 (held in the name of D3)  was found in D3’s possession.

16.  Under caution, D3 admitted the following at a video-recorded interview:-

(a)  D3 was a housewife. D3 had never worked for VTC1 - VTC4 before.

(b)  Since 6/2015, D1 started to remit around $11,000 to $14,000 to D3 every month as living expenses and expenses to take care of D1’s son. D1 would also remit money to D3 to settle payments for a supplementary BOC card that D3 had applied for D1 due to D1’s poor financial record.

(c)  D1 told D3 that she would use the supplementary card to pay Alipay for purchases on behalf of VTC1. D1 normally spent around $20,000 to $30,000 per month on the supplementary card. Sometimes it would be around $50,000 to $70,000. D3 did not know the details of each purchase or see the receipts.

(d)  The amounts transferred to D3 would be the living expenses plus the supplementary card payments. D1 would not give D3 cash. D3 did not check where the money was transferred from.

(e)  D3 was the only one who used the ATM card for Account 3. D3 was the only one who knew the password.

17.  Bank record shows that:-

(a)  2 ATM cards were issued in respect of Account 1 (held in by D1’s and D3’s joint names). One was issued in January 2015 and the other was issued in July 2018.

(b)  The cheques issued to D2 for his courier services for VTC1 – VTC4 were deposited into Account 1.

18.  Record from the Inland Revenue Department shows that:-

(a)  D2 did not have income for the year 2017/2018. D2 received $72,000 as salary from 1 June 2018 to 30 November 2018.

(b)  D3 did not file any tax returns for the years 2017/2018 and 2018/2019.

19.  Vehicle registration record shows that D2 owned a private car at all the material times.

20.  The prosecution says that at all the material times, D2 dealt with the property of an indictable offence referred to in the particulars of Charge 8 and those of Charge 9 knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

21.  It is the prosecution’s position that in the event that the court is not satisfied beyond reasonable doubt that D2 had reasonable grounds to believe that the amount of $289,155.60 as specified in para 10 of the Prosecution Opening wholly or indirectly represented any person’s proceeds of crime, then D2 should not be convicted of Charge 8.

22.  As regards Charge 7, it is not in dispute that 23 deposits, $673,243.40 in total, were made from VTC1 - VTC4 to the bank account of D3 between July 2017 and November 2018[1].  It is the prosecution’s case that some of these funds were then used to pay off credit card debts incurred by D1 at BOC.  D3 was the primary credit card holder and D1 held the supplementary card.

23.  It is admitted that between 31 July 2017 and 29 January 2019 a total of $2,086,987.54 was deposited into Account 3 and a total of $2,030,202.30 was withdrawn, of which $264,800.00[2] was withdrawn in cash and $1,563,920 was withdrawn by way of PPS payments[3].

24.  The prosecution says that at all the material times, D3 dealt with the property of an indictable offence referred to in the particulars of Charge 7 knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

DEFENCE CASE

25.  D2 and D3 each have a clear record. They do not give evidence.  D3 calls D1 to give evidence.

26.  D1 is the daughter of D3.  D1 has pleaded guilty to various charges of theft and it is not disputed that D1 stole nearly five million dollars from VTC1 - VTC4 by adding D3’s name, to the payrolls of VTC1 - VTC4 and increasing the amounts payable to existing employees, and then transferring the money to herself or to the accounts of D2 or D3, as the case may be.

27.  In a meeting on 1 February 2019, she was confronted by PW1, PW2 and their lawyer.  She voluntarily confessed in writing that she had stolen money from VTC1 - VTC4.  She stated that D2 and D3 did not have any knowledge about her wrongdoings.  She repeats the same in court.

28.  On the subject of D2’s and D3’s knowledge of the state and affairs of the accounts, D1 says that except for the bonus of $500,000 given to her by PW1 in March 2017 for assisting in the listing of the company, she had not told D2 of her income.  D2’s income was irregular and not much.  D3 last worked as a factory worker.  She was not in regular employment.

29.  Consistent with D2’s version when interviewed under caution, D1 says that D2 only withdrew small amounts from Account 2 for family expenses and outgoings as well as his own use.  Sometimes, she asked D2 to withdraw money from Account 2 not only for her, but also for her colleagues.  She also put money into Account 2 for meeting family expenses.  Account 2 could be regarded as de facto joint account between she and D2.  She had used the account to subscribe and sell shares such as Meituan (美團), and Kingsley Education (皇岦國際教育).  Those transactions were evidenced by the bank statements.  She created the password and used the token to operate Account 2 via online banking.  In addition, there was a car loan raised by D2 from Hitachi Capital HK Limited.  Monthly repayments of $5,500 were repaid by her deposits in Account 2.  Between June 2017 and January 2019, there were 20 monthly instalments amounting to $110,000 in total.

30.  Consistent with D3’s version when interviewed under caution, D1 says that D1 transferred money into Account 3 as a reward for D3 taking care of her son and for her son’s expenses.  She initially paid D3 $11,000 per month but increased the amount each year.  Taking care of her second child increased the living expenses.  The living expenses ranged from a few thousand to tens of thousands of dollars per month.  D3’s husband and son also deposited money into Account 3.  After deducting living expenses, there was no money left from the transfers.  She started to transfer the money into Account 3 in 2015.  She would use the BOC supplementary card to purchase items for VTC1 - VTC4.  Sometimes she would exceed the credit limit. She would ask D3 to deposit amounts of between $50,000 and $70,000 which D1 later repaid to D3.  She told D3 that the Alipay purchases were made on behalf of VTC1 - VTC4.

LEGAL POSITION

31.  Two questions came before the Court of Final Appeal in HKSAR v Harjani Haresh Murlidhar [2019] HKCFA 47

Question 1: What is the meaning of “having reasonable grounds to believe that any property … represents any person’s proceeds of an indictable offence” (abbreviated to “the property is tainted”)  in section 25(1)  of OSCO?

Question 2: What is the relevance of the defendant’s actual belief in determining whether the statutory test is satisfied?

32.  The prosecution and the defence before me agree that although that decision was after the offences in our present case, it is applicable to our present case as it only clarified points of law rather than propounding new ones.  The Court of Final Appeal stated therein as follows:

26. In the interests of clarity, however, we would reformulate the test as follows:

(i)  What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his belief as to whether the property was the proceeds of crime (“tainted”)?

(ii)  Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

(iii)  If the answer to question (ii)  is “yes” the defendant is guilty. If it is “no” the defendant is not guilty.

27. Thus the first issue that the judge or jury (“the court”)  must address is what matters the defendant knew of that might have affected his belief as to whether the property was clean or tainted. This question is subjective only in as much as it requires the tribunal to make findings as to the knowledge of the defendant at the time of the relevant transaction. Where the defendant gives evidence of facts and matters that affected his belief about the nature of the property, the court has to decide whether he is, or may be, telling the truth about the existence of these facts and matters.

28. The second issue is whether any reasonable person who shared the defendant’s knowledge would have been bound to believe that the property was tainted. This question is objective. Where the court finds that the defendant was, or may have been, telling the truth about the existence of facts and matters that he claims affected his belief, the court must take those facts and matters into account when answering the question, would any reasonable person with knowledge of those facts and matters have believed that the property was tainted? If the answer to the question is “yes” the defendant is guilty. If it is “no” the defendant is not guilty.

29. Applying these principles in practice will normally be relatively straightforward where the defendant does not give or adduce evidence. The court has first to find what relevant facts or circumstances were known to the defendant and then decide whether those facts or circumstances would have led any reasonable person to believe that the property in question was tainted. If the answer is “yes” the defendant will be convicted. When the judge comes to sentence he or she will be likely to do so on the basis that the defendant must also have believed that the property was the proceeds of crime.

30. Difficulty can arise in practice where the defendant gives evidence that he did not believe that the property was tainted. Although the test in law is objective – “would any reasonable person believe the property was tainted?” – in applying that test the court must give due consideration to the evidence given by the defendant as to what he believed and why. The court has to consider two interrelated questions: (i)  is the defendant telling the truth when he says that he did not believe that the property was tainted and (ii)  could a reasonable person in the position of the defendant have failed to believe that the property was tainted?

31. Normally the court will give the same answer to each question. If the court concludes that no reasonable person in the position of the defendant could have failed to believe that the property was tainted the court is likely to reject the defendant’s assertion that he did not have this belief. Applying the statutory test the defendant will be convicted.

32. Conversely, where the court accepts that the defendant did not believe that the property was tainted, this is likely to be in circumstances where the court has concluded that a reasonable person in the position of the defendant would not necessarily have believed that the property was tainted. Applying the statutory test the defendant will be acquitted.

MY VIEW

Charge 9: Money Laundering in Account 1 (HSBC Account in D1 and D2’s Joint Names)

33.  This account was the first depository for stolen monies, $3,856,299.80 in total over a 17-month period, from VTC1 – VTC 4.  Together with other monies, $370,404.50 in total, not alleged to be crime proceeds, $4,226,704.30 in total was deposited into it.

34.  It is not in dispute that D1 stole $4,145,455.40 in total, from VTC – VTC4.  This is the account where D1 deposited most of it (93%).  From this account, $3,905,000 in total was eventually transferred to Account 4 (D1’s sole name account with Hang Seng Bank)  and another $46,000 in total was withdrawn in cash.

35.  Annex C of the Admitted Facts for D2 shows that there are 73 deposits from VTC1 – VTC 4 into Account 1 and 75 withdrawals from Account 1, I have identified 54 sets of mirror deposit(s)  and withdrawal(s)  of identical or very similar sums.[4]  Among them, the lowest deposit, $20,000 on 1 March 2018, was in Item No 21 whereas the highest deposit, $108,382 on 30 October 2018, was in Item No 64.  The repeated pattern of a substantial sum, or several sums bundled up, being deposited and then withdrawn shortly afterwards, in amounts identical or very similar to the deposit(s), was a signature of money laundering activities.

36.  The said mirror deposit and withdrawal part, the balance in Account was usually maintained at several tens of thousand dollars.  This aspect did not indicate money laundering activities. 

37.  As regards the issue of whether D2 was aware of the deposits and the withdrawals in Account, the starting point is that D2 was issued an ATM card with PIN by the bank.  He could check the balance and withdraw cash at the ATM.  However, in the account opening application form dated 10 March 2015[5], his correspondence address was that of Flat 3204 in Ma On Shan[6]. This was also his home address where he lived with D1 at all material times[7]. Despite that, the address for monthly statements of this account was Room 1810 in Shatin[8], the same as D3’s address[9]. That suggests that D2 had no access to the monthly statements on paper.  There is no evidence that he had other means of access to the state and affairs of this account, either.

38.  It is submitted by D2 in closing that D2’s ATM only enabled D2 to check the balance, so that he would not know the mirror deposit and withdrawal unless he checked the balance by ATM just between the deposit and the withdrawal.  The prosecution has not identified any change in the amount of her withdrawal in cash that may suggest her reward for helping to deal with the tainted money.

39.  I believe D1’s evidence that she had not told D2 of the state and affairs of Account 1.  I think D2 was not aware of what was going on in this account.  It follows that he could not have formed any belief, one way or the other, as to whether tainted monies were involved. I am not satisfied that any reasonable person who shared his knowledge would be bound to believe that the monies in Account 1 in whole or in part directly or indirectly represented money laundered[10].  

Charge 8: Money Laundering in Account 2 (BOC Account in D2’s sole name)

40.  This account was the first depository for stolen monies, $289,155.60 in total, from VTC1 – VTC3.  Together with other monies, $451,024.04 in total, not alleged to be crime proceeds, $740,179.64 in total was deposited into it over an 18-month period.

41.  The prosecution is trying to prove that, while D2 could have the peace of mind to deal with a deposit of $451,024.04 in total in D2 bank account, an extra deposit of $289,155.60 in total over an 18-month period would lead D2 to reasonably believe that the two sums together, $740,179.64 in total, in whole or in part directly or indirectly represented money laundered.

42.  It is the prosecution’s position that in the event that the court is not satisfied beyond reasonable doubt that D2 had reasonable grounds to believe that the amount of $289,155.60 as specified in para 10 of the Prosecution Opening wholly or indirectly represented any person’s proceeds of crime, then D2 should not be convicted of Charge 8.

43.  This account was used by D2 to withdraw cash by ATM.  According to Annex B of Admitted Facts for D2, $336,400 in total was withdrawn in cash.  The amounts were usually no more than $5,000.  There were 3 up to $10,000, 2 up to $15,000, and 1 up to $20,000.  D1 explains in court that she had instructed D2 on those occasions to withdraw those sums for her colleagues when they were short of cash in the petty cash system.  I believe her evidence.

44.  The prosecution has not identified any pattern of money laundering activities.  There was more clean money than tainted money in the mix.  The prosecution has not identified any change in the amount of his withdrawal in cash that may suggest his reward for helping to deal with the tainted money.

45.  I believe D1’s evidence that she had not told D2 of the state and affairs of Account 2. I think D2 was not aware of what was going on in this account.  It follows that he could not have formed any belief, one way or the other, as to whether tainted monies were involved. I am not satisfied that any reasonable person who shared his knowledge would be bound to believe that the monies in Account 2 in whole or in part directly or indirectly represented money laundered[11].      

Charge 7: Money Laundering in Account 3 (Hang Seng Bank Account in D3’s sole name)

46.  This account was the first depository for stolen monies, $673,243.40 in total, from VTC1 and VTC3.  Together with other monies, $1,413,744.14 in total, not alleged to be crime proceeds, $2,086,987.54 in total was deposited into it over an 18-month period. 

47.  Similar to the scenario above in Charge 8 relating to D2, the prosecution is trying to prove that, while D3 could have the peace of mind to deal with a deposit of $1,413,744.14 in total in D3’s bank account, an extra deposit of $673,243.40 in total over an 18-month period would lead D3 to reasonably believe that the two sums together, $2,086,987.54 in total, in whole or in part directly or indirectly represented money laundered.

48.  D1’s evidence is she paid D3 to take care of D1’s first son, and increased it when D3 also took care of D1’s second son.  D1 says she told D3 that the supplementary BOC credit card was to purchase items for her employer.  D1 deposited monies into Account 3 so that D3 could pay the credit card bills or maintain the credit limit for substantial purchase.  I believe her evidence.

49.  D3 may be queried for not asking D1 why her employer had to purchase company items by D2’s supplementary BOC credit card under D3’s name.  A more sophisticated person might have asked D3 or verified what items were bought.  But to a factory worker and baby-sitter and mother, it is plausible that upon being told of D1’s promotion to a senior post in the company, she had no suspicion that D1’s purchases were not made on behalf of her employer.  After all, there was more clean money than tainted money in the mix, a ratio of 2:1.  It would not be easy for anyone, even a sophisticated person, to become suspicious that the deposits, as a minor part of the whole, were from a dubious source.

50.  I believe D1’s evidence that she had falsely explained to D3 that the monies deposited into D3’s account were for reimbursement of purchases made on behalf of her employer.  D3 was taken in by her false explanation.  I am not satisfied that any reasonable person who shared her knowledge would be bound to believe that the monies in Account 3 in whole or in part directly or indirectly represented money laundered[12].

VERDICT

51.  D2 is acquitted of Charges 8 and 9.  D3 is acquitted of Charge 7.