HKSAR v. MENG CAIYI

DCCC 1283/2024 & 680/2025 (Consolidated)

[2025] HKDC 2201

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NOS 1283 OF 2024 AND 680 OF 2025

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REASONS FOR SENTENCE

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1.  The defendant is, upon his plea and agreement to Amended Consolidated Summary of Facts, convicted of 2 charges of dealing with property known or believed to represent proceeds of an indicatable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.

Facts

2.  The defendant was the sole signatory of a Standard Chartered Bank (Hong Kong) Limited (“SCB”) account numbered 257-8-726010-1 (“AC1”), and a Hang Seng Bank Limited (“HSB”)  account numbered 967-086513-888 (“AC2”). 

Predicate offence relating to AC1 (2^nd Charge)

3.  On 8 August 2023, PW1 fell prey to an online cryptocurrency investment scam.  The fraudster instructed him to transfer a total HK$2,167,828 to 13 bank accounts through 15 transactions between 24 August 2023 and 8 September 2023.  Amongst those 15 transactions, PW1 deposited via FPS HK$51,480 into AC1.  The scam was later revealed and the case was reported to police on 9 September 2023.

4.  The defendant later was intercepted at Lo Wu Control Point when he was entering Hong Kong on 10 July 2024.  Under caution, he denied the offence. 

Analysis of AC1

5.  AC1 was opened on 19 July 2023 by the defendant by providing his copy of Exit-Entry Permit for Travelling to and from Hong Kong and Macao.  According to the bank opening mandate, the defendant’s phone number was +86 19589457941.  He was a salaried manager/executive, earning HK$50,000 a month, and the purpose of setting up the account was for savings. 

6.  The transaction records of AC1 between 17 August 2023 and 24 February 2024 were obtained.  It revealed active transactions between 17 August 2023 and 31 August 2023 (“Relevant Period 1”).  AC1 remained idle with a low balance of HK$90.55 since 31 August 2023. 

7.  During Relevant Period 1, which was only 15 days, there were a total of 71 deposits credited (in the total sum of HK$4,023,123.07), which included the remittance of HK$51,480 from PW1’s account on 31 August 2023.  The largest single deposit was HK$467,703.01 while the smallest was HK$0.58.  During Relevant Period 1, there were a total of 73 withdrawals debited (in the total sum of HK$4,023,035.52).  The largest single withdrawal was HK$300,000 while the smallest was HK$10.  The transactions were either in Hong Kong dollars, US dollars, or Euro currency.  The inward transfers and outward transfers were transactions with unknown third parties/ entities (except PW1).  Suspicious transaction patterns, namely mirroring, were noted.  Besides, there were quick speed withdrawals and low day-end balances. 

The defendant’s cautioned statement for AC1

8.  The defendant under caution stated, inter alia, that:

(1)  He was a mattress salesperson in Guangzhou, making RMB5,000 a month;

(2)  As he had financial need, he accepted payment of RMB1,000 from a casual friend “Ah Lung” for opening an account with SCB in Hong Kong, which would be used for receiving proceeds from deception cases;

(3)  As instructed, the defendant came to Hong Kong on 18 July 2023 and opened AC1 in the Wan Chai branch of SCB on 19 July 2023 on his own;

(4)  He also used his own mobile phone number (+86 19589457941)  to activate the FPS function of AC1;

(5)  He handed over the bank card, internet banking credentials and the SIM card of +86 19589457941 to “Ah Lung” in Baiyun, Guangzhou, and he also got paid RMB 1,000;

(6)  He denied knowledge of PW1’s fraud case; and

(7)  He denied having control over AC1 and he claimed he had no knowledge of activities in AC1.

Predicate Offences Relating to AC2 (1^st Charge)

9.  On 10 May 2023, PW2 was deceived into remitting a total of HK$6,600,000 into various bank accounts under the belief that he was making investment into cryptocurrency.  Amongst these transactions, there was a transfer of HK$400,000 into AC2 on 11 August 2023.  The scam was later unveiled and the case was reported. 

10.  On 17 July 2023, PW3 was deceived into remitting a total of HK$605,000 into various bank accounts under the belief that he was making investment into cryptocurrency.  Amongst these transactions, there was a transfer of HK$80,000 into AC2 on 14 August 2023.  The scam was later unveiled and the case was reported. 

11.  On 19 December 2024, the defendant was arrested in prison.  Under caution, he stated he had no knowledge of the scam. 

Analysis of AC2

12.  AC2 was opened on 18 July 2023 by the defendant by providing copies of his mainland identity card and Exit-Entry Permit for Travelling to and from Hong Kong and Macao.  According to the bank opening mandate, the defendant was a salaried project manager in Guangzhou with an annual income of HK$600,000, and the purpose of opening the account was for investment. 

13.  The transaction records of AC2 between 18 July 2023 and 13 November 2023 were obtained.  There were active transactions between 18 July 2023 and 15 August 2023 (29 days in total)  (“Relevant Period 2”).  AC2 became idle with a low balance of HK$214.28 since 15 August 2023.  No transaction was recorded between 16 October 2023 and 23 November 2023. 

14.  During Relevant Period 2, a total of 190 deposits were credited (in the total sum of HK$2,253,049.36), which included the remittances from PW2 and PW3.  The largest single deposit was HK$400,000 while the smallest was HK$1.36.  During Relevant Period 2, there were a total of 131 withdrawals debited (in the total sum of HK$2,253,833.72).  The largest single withdrawal was HK$229,000 while the smallest was HK$100. 

15.  The inward transfers and outward transfers were transactions with unknown third parties (except PW2 and PW3).  No company bank account was involved.  Suspicious transactions patterns, namely mirroring, was noted. Besides, there were quick speed withdrawals and low day-end balances. 

Criminal Record

16.  The defendant has a clear record in Hong Kong. 

Mitigation

17.  The defendant is currently 37 years old.  He was a salesperson before his arrest, earning about RMB5,000 per month.  He is married with a son of 5 years old, and his parents are both in their 60s.  His wife is a full-time housewife. 

18.  Defence counsel produced to court a mitigation letter from the defendant.

19.  He also invited this court, in sentencing, to consider the case of HKSAR v Boma [2012] 2 HKLRD 33; HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545; HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201; HKSAR v Luo Jiayou, DCCC 755/2024; 香港特別行政區訴張金水, DCCC 1594/2024; and 香港特別行政區 訴 趙卓霖, DCCC 53/2025. 

20.  Defence counsel submitted that in the present case, the total amount of money laundered was HK$6,276,172.43.  The predicate offence appears to be fraud, and there appears to be little evidence that the defendant knew about the predicate offence.  The durations of the offences were less than 1 month.  Defence counsel accepted the fact that the defendant came from Mainland China is an aggravating feature in sentencing. 

21.  Defence has no objection to the prosecution’s application for enhancement of sentence under OSCO.  Defence does not dispute the prevalence of the crime in question, nor do they dispute the statement of Chief Inspector Li Yiu Nam. 

22.  He urged this court to adopt a sentencing starting point of 3 years for the 1^st charge, and 4 years for the 2^nd charge respectively.  He also asked this court to consider the totality principle, and submitted that the court may consider a global starting point of 51 months.  Further, he submitted that the court may consider an enhancement of around 20 to 25%. 

Discussion

23.  Before sentencing, the court has considered all that was said on behalf of the defendant in mitigation as well as the mitigation letter from the defendant and the authorities cited. 

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

25.  In the case of Boma, Stock VP (as he then was)  explained that it was not realistically possible or desirable to lay down sentencing guidelines in relation to the offence of money laundering because of the highly variable circumstances in which these offences were 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 the crime in general. 

26.  He said that the amount of money laundered is a significant factor, and the court should also take into account factors such as: 

(a)  the nature of the 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 an organized criminal syndicate would be an aggravating feature;

(f)  whether there was one transaction 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; and

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

27.  In this case, the predicate offence for part of the money deposited into each of these two bank accounts referred to in the 1^st and 2^nd charge arose from online cryptocurrency investment scam, ie fraud, for which upon conviction on indictment, a person is liable to imprisonment for 14 years, or obtaining property by deception, for which a person upon conviction on indictment is liable to imprisonment for 10 years. 

28.  The defendant under caution stated that he knew AC1 was to be used for receiving proceeds from deception cases.  Further, from the transaction records of AC2, ie the HSB account, AC2 was very active for 29 days, during which PW2 and PW3, both victims of the cryptocurrency investment scam, deposited money into AC2.  There is, however, no evidence that the defendant knew the details of the operation of the scam. 

29.  There is cross-border element involved as the defendant was recruited from Mainland China.  On what was before me, the bank accounts were clearly planned for laundering of proceeds of indictable offences. 

30.  The court was aware that apart from HK$400,000 from PW2 and HK$80,000 from PW3 both to AC2, and apart from HK$51,480 from PW1 to AC1, there is no evidence of the source of the funds for the rest of money for these two bank accounts. 

31.  Considering the operation of the cryptocurrency investment scam and the money laundered in this case, a criminal syndicate was clearly involved. 

32.  The defendant committed the 1^st charge offence over 29 days and the 2^nd charge offence over 44 days. The two offences were committed over a period of 45 days. 

33.  According to the Amended Consolidated Summary of Facts, the number of transactions involved in the 1^st charge offence was 190 deposits and 131 withdrawals involving HK$2.25 million.  For the 2^nd charge offence, there were 71 deposits and 73 withdrawals involving HK$4.02 million. The withdrawals in these two bank accounts were all made within short period of time of deposits. 

34.  Evidence before this court limits the role of the defendant to merely lending the relevant bank accounts for use by others.  The defendant said he received RMB1,000 for the lending of one of these accounts. 

35.  Further, the defendant here is a two-way permit holder to Hong Kong from Guangzhou.  From what he said in his cautioned statement to police, it is clear that he came to HK pursuant to instructions from “Ah Lung”, who also resides in Mainland China, to open the two bank accounts in question for the purpose of committing the two serious offences.  It was clearly his plan to come to Hong Kong to open the two bank accounts for the purpose of lending them for the use of others.  This serves as an aggravating feature in sentencing[1].

36.  In the case of Wan Kwok Keung, Yeung JA (as he then was), said that money laundering is a serious offence and must be deterred.  In considering the sentence, the emphasis should be on the amount of “black money” laundered and not the benefit obtained by the defendant.  Paragraph 13 of the judgment stated: 

“… 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, and other organized crimes etc, or the defendant’s benefit is huge, then the sentence should be adjusted upwards.”

37.  In that case, the Court of Appeal had referred to the case of Hsu Yu Yi, where the sentencing starting point for laundering money between $1 million and $2 million is 3 years, between $3 million and $6 million is 4 years, and could be over 5 years if the “black money” involved is above $10 million. 

38.  Considering the factors aforesaid and the circumstances of the present offences, in particular, the amount of money involved, the number of victims involved, the number of transactions, the period within which the offences were committed, and the role of the defendant, the court finds that the appropriate sentencing starting point would be 3 years for the 1^st charge, and 3 years and 4 months for the 2^nd charge. 

39.  The starting point is aggravated by 3 months by reason that the defendant came to Hong Kong to commit these offences, ie 3 years and 3 months for the 1^st charge, and 3 years and 7 months for the 2^nd charge. 

40.  It is well established that money laundering is a serious offence and the personal background of the defendant is seldom a valid mitigating factor. Immediate custodial sentence is the only appropriate option. 

41.  The defendant has pleaded guilty and is therefore entitled to one-third sentencing discount.  He is therefore sentenced to 26 months’ imprisonment for the 1^st charge, and 28.6 months, which is 28 months and 18 days’ imprisonment, for the 2^nd charge. 

Enhancement of Sentence

42.  The prosecution has applied for enhancement of sentence pursuant to section 27 of the Organized and Serious Crimes Ordinance, Cap 455, on the grounds of the prevalence of the use of stooge account in the commission of this specified offences, and the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of this specified offences. 

43.  In support of the application, there is a statement from Chief Inspector Li Yiu Nam dated 11 December 2025 lodged with the court.  Defence has no objection to the application. 

44.  According to the statement: 

(a)  The total number of deception and money laundering cases (both detected and undetected)  remains high for the period from year 2023 to October 2025. The number of cases were respectively 42,004, 47,063 and 39,510 for the first 10 months in the year 2025 (or 47,412 cases by projection for the whole year of 2025).

(b)  The total number of stooges arrested represented 70.19%, 75.10%, and 71.81% of the arrested person (detected cases)  for the year 2023, 2024, and January to October 2025.

(c)  For the period from 2022 to January to October 2025, amount of reported losses and/or proceeds laundered via stooge accounts represented 99.11%, 82.97%, 73.04% and 38.09% of the total amount of reported loss and/or proceeds laundered in deception and money laundering cases (detected with arrest).

45.  Although the figure appears to have fallen for the first 10 months of 2025 statistically, the same could not be interpreted as a falling trend as it involved only a few months.  The note to Table B stated that but for a deception cases reported in July 2025 which involved HK$1.06 billion, the amount relating to stooge accounts would then represent 56.84% of the total. 

46.  The use of stooge accounts is clearly still very prevalent in deception and money laundering cases.  Having considered the statement of Chief Inspector Li, including the tables and the notes to the tables, the court is satisfied that the grounds of application for enhancement has been made out by the prosecution, and that the enhancement of sentence at 25% is appropriate. 

47.  Accordingly, the defendant is sentenced to 32 months 15 days’ imprisonment for the 1^st charge, and 35 months and 21 days’ imprisonment for the 2^nd charge. 

Totality Principle

48.  The two offences are identical in nature.  In essence, the defendant committed money laundering by lending to others his two bank accounts over a period from 18 July 2023 to 31 August 2025, involving a total of HK$6,276,172.43.

49.  Having regard to the overall culpability of the defendant, in particular, the total amount of money laundered, referring to the case of Hsu Yu Yi, the court finds that the total sentence (after plea and after enhancement)  of 42 months and 15 days’ imprisonment is just and appropriate in this case.  Accordingly, 10 months’ imprisonment of the 2^nd charge is to run consecutive to the sentence of the 1^st charge, the rest to run concurrently. 

50.  The defendant is therefore sentenced to a total of 42 months and 15 days’ imprisonment.