HKSAR v. CHAN WING LAN

DCCC 1159/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1159 OF 2013

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Reasons for Sentence

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1.  The defendant was convicted after trial of one charge of money laundering.

2.  In a nutshell, the defendant participated in a scheme using her three bank accounts to deal with nine remittances from overseas totalling about $2 million.  She could receive 1 per cent of the moneys she handled as her remuneration.  One of the nine remittances in the sum of about $345,000 was the proceeds of an email scam.  There is no evidence that the remainder of the funds was the proceeds of an indictable offence. 

3.  According to the defendant, she came to know a mainlander known as Tsang through the introduction of a friend, Edward.  She agreed to receive funds for Tsang.  On 23 March 2011, at the request of Tsang, the defendant opened a bank account with HSBC for a company she had established a few months ago.  The first deposit was made on 19 April 2011.  After the nine overseas remittances had been received in the company’s account, the defendant dealt with the moneys according to the instructions of Tsang.  She had another two personal accounts.  She transferred the funds between the three accounts.  Some of the moneys were withdrawn by issuing cheques to Edward and another person known as Fan.

4.  On or about 12 May 2011, HSBC staff called her, indicating their suspicion on some overseas remittances.  The accounts were then frozen, leaving a total balance of about $368,000 in the three accounts.

5.  It is not the prosecution case that the defendant participated in the email fraud or any underlying offences.

6.  I find the defendant guilty on the basis that she had reasonable grounds to believe the moneys she dealt with represented the proceeds of an indictable offence.  It is also my finding that she must have suspicion or she turned a blind eye to the obviously unusual circumstances.

7.  The defendant had a clear record.  Her counsel, Mr Davies, tells the court that she is aged 28, single with a 9‑year-old daughter.  Taking care of her daughter, the defendant is living with her parents.  She previously worked as a salesperson in a jewellery shop, earning around $14,000 a month.  It is said that she has a medical condition of her heart.

8.  In mitigation, Mr Davies asked the court to consider that she was not involved in the deception case.  She had only a potential benefit of about $20,000 which she had not received.  The offence lasted only for about a month.  It was not the most serious type of such offence.

9.  Money laundering is a very serious offence. Time and again, it has been said that without the assistance of money launderers, the commission of offences by criminals would become more difficult and more easily detected.  Serious crimes are often motivated by financial gains.  Combating the crime of money laundering can be an effective measure against such serious crimes. 

10.  As there is a wide range of culpability, no sentencing guideline has been laid down for this offence.  However, the Court of Appeal has identified a number of factors in determining the culpability of a defendant.  See HKSAR v Hsu Yu Yi [2010] 5 HKLRD 525, HKSAR v Boma Amaso [2012] 2 HKLRD 33, and Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201.

11.  Generally speaking, the sentence is primarily to reflect the amount of the black money.  If there is evidence to prove the underlying offence and the defendant was aware of the origin of the black money, that would be an aggravating factor.  The fact that the defendant has not obtained any financial benefit is generally not regarded as a mitigating factor.  The extent of participation of a defendant in the money-laundering activities and whether there was an international element are also important relevant factors. 

12.  Mr Davies drew my attention to Secretary for Justice v Ngai Fung Sin Apple CAAR 1/2013, where the black money was about $1.9 million.  In that case, just within five days the respondent used her Hong Kong bank account to receive five sums of money being proceeds of Internet crime from overseas.  Each time after the respondent withdrew the money, she returned to the mainland.  According to her, she was only helping a good friend, who was a mainlander, to receive the money without remuneration.

13.  On the application of the Secretary for Justice for a review of sentence, the Court of Appeal increased the sentence to 2 years’ imprisonment, indicating that the sentence should not have been less than 2½ years’ imprisonment.  That case has some similarities with the present case.

14.  In the present case, the amount of black money is around $2 million.  I find that the defendant had reasons to believe all the money represented the proceeds of an indictable offence.  Indeed, I find that in the unusual circumstances of the case, she must have suspicion about the scheme and source of all the funds.  Part of the black money has been identified as the proceeds of a deception case. 

15.  There is also an international element in the case.  Moneys were remitted from overseas and taken back to China for a mainlander. 

16.  Although the scheme is not very sophisticated, it is highly suspicious that Edward and Fan also participated in the scheme. 

17.  The defendant’s participation is not small.  She personally dealt with the black money by withdrawing the money from the account in cash or by transfer.  She admitted she took $208,000 cash to Shenzhen with Edward.  While there were only nine deposits of black money, the defendant in a number of transactions transferred the funds between the three accounts. 

18.  She was motivated for a financial gain. 

19.  On the other hand, it is to be noted that the offence only lasted for about three weeks. 

20.  She was previously of good character.

21.  In all the circumstances, I find 2½ years’ imprisonment an appropriate sentence for the offence in this case. 

22.  The defendant has a very young daughter.  With sympathy for the defendant and her daughter though, I am afraid that I cannot reduce the sentence for the hardship they will face.  Otherwise, a wrong message might be given to encourage criminals to commit crimes.

23.  Mr Davies complains that there was a delay in prosecution.  PW1, the victim in the email scam, got into contact with Hong Kong Police by email in around early September 2011.  The defendant was first arrested on 4 November 2011.  She was released on bail and re-arrested on 10 December 2013.  She was first brought to court on 24 December 2013.  The police took about two years and three months for investigation.

24.  To decide whether there was a delay, the court needs to consider in the context of the size of the investigation the police had to conduct.  The nine deposits in question involved seven overseas payers. Mr Parry explains that the delay was a result of the investigation with overseas people, including those involved in the proven email scam and other overseas victims and banks.  There was also toing and froing of communication between the police and the Department of Justice.

25.  Given the number of overseas people who had to be contacted for investigation and the necessary time involved in getting information from various banks, I do not find that the prosecution was at fault or the delay unreasonable.  The defendant cannot have reduction of sentence on this ground.

26.  There is no medical evidence to suggest that the defendant’s heart problem is of a serious kind to justify any reduction of sentence. 

27.  The defendant is therefore sentenced to 2½ years’ imprisonment.