HKSAR v. CHOW YING KI

CACC 378/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 378 OF 2004

(ON APPEAL FROM DCCC NO. 391 OF 2004)

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J U D G M E N T

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Hon Woo VP (giving the judgment of the Court):

Introduction

1. The applicant was convicted by Judge Gill in the District Court of a single charge of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455.  The judge sentenced the applicant to a term of 4 years’ imprisonment.

2. The particulars of offence against the applicant were that between 1 July 2002 and 26 February 2003, both dates inclusive, knowing or having reasonable grounds to believe that property, namely a total sum of $2,976,985.58, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the property.  The offence is commonly known as money laundering.

3. By a notice of application for leave to appeal, in Form XI, dated 31 August 2004, the applicant sought leave to appeal against conviction and sentence.  On 31 March 2005, Tang JA heard the application and refused it.

4. By a notice of application in Form XIII, dated 7 April 2005, the applicant has renewed her application for leave to appeal against conviction and sentence before this court.

Grounds of appeal

5. In her application dated 31 August 2004, the applicant wrote:

“I had no idea where the money came from.  I am of the opinion that I am innocent.  Besides, I should not be sentenced to 4 years’ imprisonment.  Even the previous lawyer from the Legal Aid Department wrote to support my applying for appeal.  Therefore, I request to apply for appeal against conviction and sentence.”

6. In her renewed application dated 7 April 2005, no ground or reason was mentioned.  Before us today, the applicant is still relying on the grounds as stated in her former application.  She has also told us something of no consequence.

Conviction

7. In the verdict delivered by the judge on 24 August 2004 after hearing all the evidence, he set out the findings he made and the reasons for convicting the applicant.  The findings are briefly as follows.

8. During the period for which the charge was laid, the applicant was in a boyfriend/girlfriend relationship with one Kwan Hoi-wan (“Kwan”).  On 16 October 2002, Kwan and a female named Yeung Yee-man were arrested for trafficking in dangerous drugs, being 410 grammes of heroin, found in their possession.  They were subsequently charged and convicted of the offence. 

9. During the course of 2002, the applicant held and operated four bank accounts, two each with the Heng Sang Bank and HSBC.  Between 1 July and 16 October 2002, cash deposits totalling $2,912,500 were paid into her accounts.  The average size of these deposits was in excess of $30,000.  A bank officer told the judge of five transactions in respect of which in every case cash in small denominations of totals ranging from between $15,000 and $100,000 was paid into one or another of the applicant’s accounts from 10 September to October 2002 and an unusual feature was noticed that the notes smelled of cigarette smoke.  The officer recognized the applicant as the depositor.

10. In her interview with the police after she was arrested on the 26 February 2003, the applicant admitted that she had no property, real or personal, and no significant liabilities.  During the two years before, the applicant had undertaken three forms of work, namely as a karaoke hostess, a sales lady in a boutique and participating in multi-level marketing, all of which produced insignificant income as compared with the amounts of the deposits she had made into her bank accounts.

11. In the interview, she also stated that many of the cash deposits into her bank accounts represented winnings from gambling in Macau, that she frequented Macau regularly, there engaging in gambling, and that the deposits were large because she accumulated the cash before banking it.

12. Telephone records produced at the trial revealed that between 16 September and 5 October 2002, there were 71 calls from the applicant’s mobile phone to Kwan’s mobile phone and 27 going the other way.  Immigration records also showed that between 5 May and 16 October 2002, Kwan made frequent trips into and back from the Mainland, and on 19 occasions, the applicant accompanied him, the last trip being on 30 September 2002.  Records kept of visitors to Kwan in jail revealed that between 19 October 2002 and 6 March 2003, the applicant visited him nearly every day, categorised as a “friend”.  

13. There was also evidence that the applicant was the tenant of a flat which might have been operated as a divan, although the judge was not satisfied beyond a reasonable doubt that it was a divan. 

14. The applicant elected not to give evidence or call any witness before the judge. 

15. The judge found that on her own admission, the applicant had no assets and no significant liabilities.  She made a modest income and clearly the funds, the subject of the charge, could not have been derived from her jobs.  As the immigration records revealed that the applicant only went to Macau on 3 occasions, in March 2002, December 2002 and February 2003, the judge rejected her explanation in the interview that the monies, the subject of the charge, were derived from winnings from Macau.  He held that the applicant lied about the source of the monies because she wanted to hide the source.

16. The judge referred to the mental element that is required for convicting the applicant.  He said:

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It is not necessary for the prosecution to prove the commission of a substantive offence, or that the sums were the actual proceeds.  What must be established is that the defendant knew or would have in the circumstances of the case had reasonable grounds to believe she was dealing in the proceeds of crime; …”

17. In conclusion, the judge stated:

“	71.	… it is not for the prosecution to have to prove the source of the funds.  It is the defendant’s knowledge or reasonable grounds of belief that counts.
	72.	Overall, the evidence is overwhelming that she did know what it was.  The deposits were huge by comparison with her legitimate financial status.  They comprise the only deposits, apart from some transfers from the drug trafficker she was romantically linked with.  She was also connected with an establishment that had all the hallmarks of being a kept divan.  She lied patently and transparently about the source of the funds.  She chose not to give an innocent explanation because, as I find, there could not have been one to give.
	73.	Given all the evidence before me, I draw the irresistible inference that the defendant did know that the deposits totalling $2,912,500 represented the proceeds of an indictable offence.
	74.	I find all the ingredients of the charge proved.”

18. The reason raised by the applicant in support of her application for leave to appeal against conviction is that she had no idea where the money came from.  She also makes the point that the prosecution had not proved that the monies deposited into her accounts were from Kwan.  These reasons are diametrically opposed to the judge’s findings.  The judge found that the defendant did know that the deposits into her bank accounts totalling $2,912,500 represented the proceeds of an indictable offence.  The judge came to that conclusion after examining the evidence very carefully.  We do not see any ground to interfere. 

19. Moreover, even if the applicant, as she says now, did not know where the money came from, it has to be noted that for the offence with which the applicant was charged and convicted, one should examine whether objectively reasonable grounds existed for the belief that the property she handled represented the proceeds of an indictable offence, and if so, whether subjectively she was aware of the existence of those reasonable grounds: see Seng Yuet Fong v HKSAR [1999] 2 HKC 833 at 837. 

20. The judge found that the applicant lied in connection with her relationship with Kwan in order to distance herself from Kwan, she lied in her claim that she did not know Yeung Yee-man, Kwan’s co-offender in the drug trafficking, and she lied about the source of the large sums of money she had deposited into her bank accounts.  In our judgment, the judge was fully entitled to come to the conclusion that he did.  At the very least, there were reasonable grounds that existed for any reasonable person to believe that the deposits were of monies that represented proceeds of an indictable offence and that in all the circumstances, the applicant subjectively was aware of such reasonable grounds. 

21. The applicant’s own view that she is innocent is entirely irrelevant, and so is her lawyer’s alleged support for her seeking an appeal.  These do not affect the propriety of the conviction at all. 

22. Moreover, her reason that she had no idea where the money came from contradicts what she had told the police: the money came from her winnings in Macau.  She made the same claim of having won the money from the casinos before Tang JA, which was rejected for the same reason as stated by the judge.

23. In the circumstances, the application for leave to appeal against conviction must be refused.

Sentence

24. In passing sentence, the judge stated that there was no guideline because each case must be determined on its own facts.  He adopted a starting of 4 years’ imprisonment for the following stated reasons:

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… I find this is a serious example of the offence.  Nearly $3 million was involved.  There is the overwhelming likelihood that these were proceeds from the dangerous drugs industry, and it need hardly be said that dangerous drugs are a blot on Hong Kong’s society.”

25. The applicant’s only ground on sentence is that she should not have been sentenced to 4 years’ imprisonment.  

26. On behalf of the respondent, Ms Anthea Pang refers us to HKSAR v Mak Shing, CACC 322/2001 (18 September 2002, unreported), where the applicant in that case was convicted of 3 counts of money laundering and was sentenced to 4 years’ imprisonment.  This court, differently constituted, took the view that a starting point of 4 years’ imprisonment would have been sufficient to reflect the seriousness of the offences.  Mayo VP said, which was apparently adopted by the judge in the instant case,

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There are no guidelines for offences of this nature.  The reason for this being that the circumstances of each case may vary almost infinitely.”

27. In HKSAR v Xu Xia Li and Another, CACC 395/2003 (2 September 2004, unreported) this court, differently constituted, examined various grounds as to whether they were relevant to sentencing in respect of offences of this nature.  The court came to the view that the nature of the indictable offence from which the money was derived should be of no particular significance in sentencing, save that if the defendant knew that the money was derived from very serious crimes, it would be an aggravating feature to be taken into account.  Moreover, there should be little relevance regarding the mental culpability of a money launderer which was based only on reasonable belief of the source of the money as opposed that based on actual knowledge.  The court also held that the relationship between the defendant and the person who conspired with him or directed him to launder the money should normally not feature as a mitigating factor in sentencing, unless the relationship is such that the defendant was subjected to undue influence or influence close to that. 

28. Turning to the facts of the instant case, it is to be noted that the applicant did not have a clear record.  While the judge was satisfied that the applicant was romantically connected with Kwan who would probably be the source of the deposits, the alternative claims of the applicant that either she had no idea where the money came from or she had won the money from Macau casinos do not admit of any allegation that she dealt with the money as a result of being subjected to undue influence or influence close to that exerted by Kwan.  Although as compared with the majority of the authorities referred to in Xu Xia Li, with starting points between 3 and 5 years, the starting point of 4 years’ imprisonment adopted by the judge seems slightly on the high side, one has to note that the applicant’s involvement in the instant case was quite frequent and for a relatively long period of time, which are aggravating features.  We do not consider that the sentence of 4 years’ imprisonment in the circumstances is either against principle or manifestly excessive.  We do not consider it appropriate for us to intervene.

Conclusion

29. For the above reasons, the application for leave to appeal against both conviction and sentence must be dismissed.