HKSAR v. TSE CHEUK PUI

 DCCC647/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 647 OF 2010

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Reasons for Sentence

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1.  The defendant has pleaded guilty to three counts 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, commonly known as money laundering charges.

2.  The facts of this case fairly straightforward. An unknown and still at large male applied for a bogus mortgage with Fubon Bank. Many false documents must have been produced to scam this bank. There had to be a degree of sophistication to carry off this fraud. Ultimately, this unknown person was successful in obtaining a mortgage of HK$8.6 million. This amount of money was deposited in the fraudster’s Fubon Bank account opened specifically for this purpose on 26 February 2009.

3.  There is no evidence that the defendant knew of the particulars of this fraud or the unknown person involved. There is no direct evidence he was part of this fraud.

4.  On 27 February 2009, a Friday; on 28 February 2009, a Saturday; and on 2 March 2009, a Monday; on these three consecutive banking days, the defendant appeared at a branch of Fubon Bank. He presented the bank with cash cheques in the following amounts: 2.3 million, 1 million, 1.8 million and 1.18 million respectively. That is a total of $6.28 million. This is the loss suffered by the bank.

5.  The defendant, according to the records, left Hong Kong on 4 March 2009, two days after the last cheque was presented. He returned to Hong Kong a little over one year later and was arrested at the border on 9 April 2010. He has been in custody since his arrest.

6.  Under caution and in a video record of interview the defendant told the police that he entered the bank and presented these cash cheques as a favour for an acquaintance Chiu Gor. This man drove the defendant to the bank but because he had nowhere to park in Des Voeux Central, he asked the defendant to cash the cheques for him. The money was immediately handed over to Chiu Gor.

7.  He says that Chiu Gor explained to him the cash was for his boss’ payroll. The defendant did not ask where the money had come from but assumed that it was legitimate otherwise the bank would not have honoured these cash cheques. He did not do it for money but he did get some free dinners and entertainment out of Chiu Gor.

8.  The fact that the defendant left two days after the last cheque was cashed and did not return to Hong Kong for a year is very suspicious. The explanation is that he left Hong Kong to do some casual work in construction sites in China but I suspect it was purely to evade arrest and detection. I suspect the defendant knew he was dealing in the proceeds of a crime or dirty money, so he left to hide from the authorities.

9.  The defendant has chosen to plead guilty today which is a very wise decision. I have been given details of the defendant’s background. He is 53 years old, divorced and his son lives with his ex-wife in the mainland. He has been unemployed for a period of time. I have been given these details and others in a helpful written mitigation put forward on his behalf.

10.  The defendant is not a man of clear record and has two convictions of theft but some 20 years ago. Both convictions resulted in fine which shows they must have been fairly minor offences.

11.  For money laundering charges, there are no guidelines. However, there are factors that are relevant to sentence. For example, the amount of money involved, in this case $6.28 million. It is highly relevant to sentence. It is not an insignificant sum of money.

12.  I will take into account that there is no evidence the defendant was involved in or knew of the nature of the fraud on the bank. The fraud was a one-off transaction; it is not an ongoing money laundering situation. I will also consider the fact the three charges took place over a course of 5 days. There is certainly no sophistication in the money laundering aspect here, the defendant presented cash cheques in person. Nor is there any evidence of any international element or syndicate here.

13.  The court’s view of money laundering offences is very clear. It is a serious offence and deterrent sentences are required. The courts take a robust view and impose robust sentences in many cases. Seriousness of the offence can be seen in the fact it carries a maximum sentence of 14 years’ imprisonment.

14.  In the words of Mr Justice Woo, JA, in the authority of HKSAR v Xu Xia Li and Ching Yu Chiu CACC395/2003, I quote:

“The prohibition of the offence is to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities.  Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced.  Money laundering is therefore treated as a serious offence.  If money laundering offences were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong’s reputation as a world-class financial and banking centre.”

15.  I have looked at the facts here. They are not the most serious facts for a charge of this nature. I have taken into account the amount of loss suffered, the defendant’s mitigation put forward, the fact the three charges were committed in a matter of days and the proceeds came from a one-off fraud. A global approach to the whole amount of money is proper despite there being three separate charges.

16.  Defendant, please stand up. I find a 3-year starting point is appropriate for each charge. As you have pleaded guilty, you are entitled to a discount of one-third. Having considered that account, you for each charge will be sentenced to 2 years’ imprisonment.

17.  I have taken into account the totality principle and the facts of the case being over a course of 5 days, I would order that all three charges be served concurrently. That would mean a total sentence of 2 years' imprisonment.