HKSAR v. NG WING WA

HCCC 189/2023

[2023] HKCFI 2726

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 189 OF 2023

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Transcript of the Audio Recording
of the Sentence in the above Case

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COURT: Defendant, on 13 July 2023, you pleaded guilty to two charges of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organised and Serious Crimes Ordinance and section 159A and 159C of the Crimes Ordinance. You pleaded guilty before a magistrate sitting at the Eastern Magistracy. As a result of your pleas of guilty, you were committed here to the Court of First Instance for sentence.

The 1^st count to which you pleaded guilty to was between 16 October 2013 and 8 January 2014 in Hong Kong or elsewhere, you conspired with a person known as “Sze Ah Yat” to deal with property, namely, a total sum of HK$1,456,212,839.19 currency in an account held in the name of Dinghong Trading Company Limited, with the Bank of China Limited, knowing or having reasonable grounds to believe that the said property, in whole or in part or directly or indirectly represented any person’s proceeds of an indictable offence. For this sum, I shall refer to it as approximately HK$1.4 billion.

The 2^nd count, the dates are slightly different, but the particulars are similar. The dates are between 16 October 2013 and 7 January 2014, with the same Sze Ah Yat and others in a total sum of US$59,104,452.57 in another account, that is, a US dollar account, in the same name, that is, Dinghong Trading Company Limited. For this amount, I shall refer to not in US dollars but in Hong Kong dollars as HK$462 million, so that is 0.5 billion.

So for these two counts, totally, the total amount is about HK$1.9 billion.

The Summary of Facts to which you had admitted in support of these charges is that you were the sole shareholder and director of the company Dinghong Trading Company Limited. It was incorporated in Hong Kong on 3 September 2013 and was dissolved on 26 September 2014. It is this company that held these two accounts as stated in Counts 1 and 2, Count 1 being the Hong Kong dollar account, and Count 2 being the US dollar account.

According to the bank opening mandate, the Dinghong Trading Company business was trading of garments. The estimated income of its trading income was $50 million to $100 million as annual turnover, and online banking was opted for. Paragraph 4 of the Summary of Facts details the opening dates, closing dates, the total cash deposits, withdrawals, and transfer transactions to which I shall not refer to in detail.

For Account 1 that is in Count 1, that account had been in operation for only 72 days and during that period, it received incoming payments of a total as stated in the charge, approximately $1.4 billion, via 1,591 transactions. The whole amount was withdrawn in 1,512 transactions, including the closing account withdrawal of $156.30 made by you defendant. Deposits were followed by withdrawals of almost identical amounts on the same days. On average, the funds were withdrawn in less than one day after they were deposited.

As for Account 2, the total amount in Count 2 being $590-odd million was by 304 transactions deposited and withdrawn in 259 transactions. This account mirrored the account in Count 1 in terms of deposits and immediate withdrawals.

The Treasury Accountant Report obtained showed that the financial background of Dinghong Trading Company did not support the fast movements of funds and concluded that the accounts were used as a temporary repository for funds. Transactions of larger amounts were noted. Some were more than or equal to HK$1 million. Dinghong Trading Company had never carried on any business in Hong Kong during the examined period.

The treasury accountant found that in Account 1 and 2, there were transactions with other counterparties which appeared to operate money changing services. In total sums of over $400 million and $50 million received and paid respectively in Hong Kong dollars. There were also transactions with other counterparties which appeared, I quote, “to operate investment related services”. In total amounts of over $100 million received and paid to those counterparties.

The treasury accountant concluded that these transactions were not normal, particularly as Dinghong Trading’s account had engaged in the trading of garments according to the opening account and not to these services. And shortly after its incorporation, the company was dissolved without commencing any business.

On 22 December 2015, defendant was arrested and under caution regarding his Dinghong Trading Company accounts at the bank regarding Counts 1 and 2, he said these were set up for the use by his niece known as Sze Ah Yat in the mainland for a garment business. He said he was not familiar with many of the transactions.

In subsequent video-recorded interviews, the defendant said that the company did not have any office or employee in Hong Kong and he did not file any tax returns for the company. He said his niece could not set up a bank account in Hong Kong because she did not possess a Hong Kong ID card. After setting up the account, he passed the e-banking password and token to his niece, he said he is not familiar with the business of the company and/or the actual turnover of the company.

Later, however, the defendant admitted that both bank accounts were used by him for money remittance purposes in favour of his business counterpart. He offered a rate of $100 to 119 RMB. Defendant said he did not know what businesses his clients were engaged in and he did not make enquiries about it. He explained that it is business norm that one should not ask about it. Defendant earned commissions and also the differences in exchange rates. Every day, he will check the correct remittance and cash out amount, online. The remittance business came to an end when he was requested by the bank to close the accounts. He withdrew the account balances at the counter when he closed the accounts.

Defendant acknowledged that a license is needed to conduct a money remittance business in Hong Kong and confirmed not having obtained one in this case.

The defendant in this case is represented by Mr Victor Ho, counsel. He has submitted his written mitigation. In the course of these hearings, I had asked Mr Ho a number of questions and one of those was in respect of the admissions by the defendant that both of the accounts were used by him for money remittance purposes and that he checked the bank balances online every day. Mr Ho informed this court that the defendant did say that in his record of interview to the police.

However, Mr Ho now mitigates on the basis that the defendant was not involved in a money remittance business. At the time, the defendant said he was involved in the money remittance business because he knew that the niece was involved in a money remittance business and he admitted that he was involved because he was scared and had no legal representation.

I had asked Mr Ho if he wished to dispute that this fact was the truth, that he did engage in money remittance business and whether a Newton hearing should be held. Mr Ho informed me that he had taken instructions from the defendant and the defendant did not wish to have a Newton hearing and would accept what the court concludes. I informed Mr Ho that should the court conclude that the defendant was involved in any sort of money remittance business, then this would be a much more serious matter given the fact that he knew the volume and substantial sums involved in his accounts at the time. And that these accounts were not, as it is put in mitigation only used by his niece. Mr Ho understood that.

It is clear to me that had the defendant, which he does not dispute, checked the bank balances every day, he admits that he had checked the bank balance every day, that would mean that defendant is involved with this account. If he was not involved in and with this account at all, there would be no reason for him to check this the bank account balances daily. If this account was as he says only set up for use by his niece as her trading garment business, of which he had no interest, there would be no reason or explanation for him to check the balances every day.

Mr Ho submits that it was only a month before the accounts were closed that the defendant came to know that his niece used these accounts for bank remittance purposes. Once again, I do not accept that. I find that what the defendant admitted to the police very shortly after his arrest that both accounts were used by him for money remittance purposes in favour of his business counterparts. He was part and parcel, whether on his own or with his niece, Sze Ah Yat, in these money laundering activities to which he has pleaded guilty to.

The maximum sentence allowed under law for this offence is 14 years’ imprisonment. In considering sentence, I have had before me the well-known case heard by the Court of Appeal of HKSAR v Boma [2012] 2 HKLRD 33. The Court of Appeal in that case recognised that guidelines were inappropriate due to the variety of circumstances which prevail in money laundering cases. However, in that case, the Court of Appeal identified some of the significant features to which the court should look and take into account, though it was not possible to produce an exhaustive list.

In turning to the list of features, the first factor to consider is the nature of the predicate offence. Mr Michael Ma, Senior Public Prosecutor, has informed me that the prosecution do not know of the nature of the predicate offence. There was only one transaction, I am informed, of a small amount of some US$34,000 of which was a romance scam from Taiwan, but that is a very small amount in the grand scheme of the money in the Accounts 1 and 2. So in this case, it is not known what the predicate offence is, although the defendant himself has suggested it was a money remittance business. One knows the money remittance business is, in fact, a cover for some money laundering activities.

In this case, although it is not known whether the predicate offence is known to the defendant, it would appear to this court that the defendant was well aware of the balance of these accounts. He was checking them daily and he did know of some scheme and purpose, but it is not known what it was.

The third feature to look at is an international dimension. The court held in Boma that it would be a significant aggravating feature and by “international dimension” they include money laundered from all those operating in the mainland. In this case, Mr Ma has suggested there is an international dimension in that the co-conspirator, his niece, Madam Sze, was from mainland China and she had asked the defendant to open up this bank account of the company for her use.

Mr Victor Ho submits that this is not an international element. Mr Ma has informed the court there is no evidence that any of these funds came from abroad, from overseas, which I am somewhat surprised given the details of the Treasury Report. On that basis, I accept that the conspirator, Madam Sze, was from China and there is some international dimension involved in that she is from mainland. But I do not consider it a significant aggravating feature in this case.

The next feature is the sophistication of the office, which includes the degree of planning and whether deceit is practiced to achieve the objective. I cannot see on the facts of this case to be much sophistication, only that the account was deliberately opened and set up for the money laundering purposes.

The fifth factor is whether the offence is committed by or on behalf of an organised criminal syndicate. That is an aggravating factor. There is no evidence that this offence was committed by or on behalf of an organised criminal syndicate.

The sixth feature is to take into account whether there was one transaction or many and the length of time over which the offence was committed. As I already mentioned, in the facts there were numerous transactions, over 1,500, in Account 1 over a period of approximately 87 days, 3 months. And in the second account, Account 2, over a period of 50 days, about 304 transactions.

As to the next feature, the court should have regard to the role of the offender and the acts performed by him. In this case, as I have mentioned, the defendant appears to be part of the money laundering operation as he has admitted in his record of interview that he has dealt with the funds that are going in and out. He is not, as it is put forward by him, the person who is further down the chain.

In the case of the defendant’s admission, the benefit he received was some 20,000 RMB for opening the account. That is an extremely small amount. And although that may be the benefit for opening the account, as I have already mentioned, I do not accept that he did not play a part in these money laundering activities given his role in dealing with the funds in the account. So he is a more culpable person in this case than he has suggested.

Turning to the case of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal there said also that money laundering was a serious offence and must be deterred. The sentence should mainly reflect the amount of black money laundered and not the benefit obtained by the defendant or others. In this case, the amount of money involved in Count 1 and 2 in any terms can be called substantial and significant. As I mentioned, it was about HK$1.4 billion and a half a billion in Count 2. I consider this to be a very serious case of money laundering.

Submitted in the sentencing bundle by the prosecution and relied upon by Mr Victor Ho is Madam Justice Esther Toh J case similarly of money laundering, whereby she sentenced a 19-year-old defendant in 2013 after trial to 10 years and 6 months’ imprisonment for laundering approximately $10 billion.

In that case, the defendant was a 19-year-old boy who was far down in the food chain, but slightly more than a person who had opened an account and lent it to someone else to use. She found during the eight months he had opportunity and means to find out what was happening in the bank account. He participated at least on one occasion in physically taking money, that is, 2.6 million, from his personal bank account and deposited it into an Ace Creation account.

That case of HKSAR v Luo Juncheng, HCCC 159/2012, in terms of money is, of course, significantly more than this amount in this case. I have not been presented by counsel to any other case which is similar to this amount, but in this case, as I mentioned, the defendant I consider is much further up the chain than the defendant in the case of Luo Juncheng.

Defendant, you are 52 years of age. You received lower secondary education. You were an electric worker, earning daily wages of $700 a month. You are married and have two sons.

I have received heartfelt letters in mitigation from your wife and your two sons expressing on your behalf your remorsefulness and apologies for committing this serious offence of money laundering. They have said you have learnt a big lesson from this and hope you are given a chance to reflect yourself during remand. You further learnt a valuable lesson during this miserable incident. Your wife suggests that you are not the mastermind of this case and you were all along a good husband and good father. She suggests that you just played a minor role behind the scene to which I have already said that I do not accept that you played a minor role.

Having gone through the factors, defendant, as I mentioned, money laundering is a very serious offence and the Court of Appeal said deterrence is of utmost importance. In total, you had laundered HK$1.9 billion. I and have taken into consideration the relevant factors and features I have mentioned, I consider the total term of imprisonment, had you been convicted after trial for these two offences, to be 10 years’ imprisonment.

The strongest mitigating factor in this case is your early plea of guilty and for that you shall be awarded the full one-third discount. In the circumstances, you shall serve a term of 6 years and 8 months’ imprisonment.

In respect of Count 1, I will sentence you to 10 years’ imprisonment had you been convicted after trial. That would be reduced to 6 years 8 months’ imprisonment. For Charge 2, I would have taken a starting point of 7 years’ imprisonment had you been convicted after trial. Giving you the full one-third discount, that would be reduced to 4 years 8 months’ imprisonment. Those terms of imprisonment shall run concurrent to each other.

That means, as I have mentioned earlier, you will be sentenced to 6 years and 8 months’ imprisonment.