HKSAR v. TSAI SHIH MING AND OTHERS

 DCCC390/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 390 OF 2009

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Reasons for Sentence

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1.  Defendant 1, you pleaded guilty to six offences of dealing with property known or believed to represent the proceeds of an indictable offence contrary to section 25(1) of the Organised and Serious Crimes Ordinance Cap.455 and one offence of attempting to commit the same contrary to that section of that Cap. under section 159G of the Crimes Ordinance Cap.200.

2.  D2, you pleaded guilty to three offences dealing with property and one offence of attempting to do so contrary to the citations above. 

3.  D3, you pleaded guilty to the five offences of dealing with property, one attempting to do so again contrary to the same sections as mentioned above.  Additionally, and purely for the record, you pleaded not guilty to a single offence of possession of an offensive weapon in a public place contrary to section 33(1) of the Public Order Ordinance Cap.245 and that charge was dismissed on an offer of no evidence by the prosecution. 

4.  You each admitted the brief facts for the offences for which you pleaded guilty and I convicted you.  Those facts were as follows.

5.  Overseas Chinese people were contacted by email or telephone, the senders purporting to be from the Hong Kong Jockey Club.  The senders claimed the recipients had won lotteries or horse races.  They were to pay advance fees before their winnings would be sent to them.  They were to deposit the fees to the bank accounts of D1, D2 or D3 who were the holders of Taiwanese passports. 

6.  D1, you arrived in Hong Kong from the Mainland on 2 January 2008.  You opened a bank account with HSBC and another with the Bank of East Asia.  Between 2 January 2008 and 6 February 2009 a total of HK$1,082,765.72, HK$71,491.45 and US$27,524.48 were deposited in addition to the initial deposit into the Hong Kong and Shanghai Bank.  That is Charge 5.  Between 4 January 2008 and 6 February 2009 a total of HK$486,317.88 in addition to the initial deposit was deposited into the BEA account, Charge 6.  D1, you left Hong Kong to go to the Mainland on 7 January 2008 and returned on 13 January.  You opened two bank accounts at Citibank, two accounts at Standard Chartered Bank and one account with the Hang Seng Bank. 

7.  Between 14 January 2008 and 6 February 2009, HK$230,102.87 in addition to the initial deposit was deposited into Citibank, Charge 1.  Between 14 January 2008 and 6 February 2009, $43,230.82 and US$26,066.54 other than the additional deposit was deposited into the second Citibank account which is Charge 2.  Between 14 January 2008 and 6 February 2009, HK$60,040 other than the initial deposit was deposited into the Standard and Chartered account, Charge 3.  Between 14 January 2008 and 6 February 2009 other than the initial deposit, nothing was deposited in the Standard Chartered account which is Charge 4.  Between 14 January 2008 and 9 August 2008, HK$121,067.51 other than the initial deposit was deposited into the Hang Seng account which is Charge 7. 

8.  On 16 January 2008, D1, you left Hong Kong for the Mainland arriving back on 22 January.  On 27 January you departed once again. 

9.  On 31 March 2008, D2, you arrived from Taiwan.  You opened a bank account with the Hong Kong and Shanghai Bank and three with Citibank.  Between 31 March 2008 and 23 August 2008, HK$119,395.29 and US$11,752.69 other than the initial deposit was deposited into the Hong Kong and Shanghai Bank account which is Charge 8.  Between 1 April 2008 and 3 October 2008, HK$691,256.04 other than the initial deposit was deposited to one of the Citibank accounts, Charge 9.  Between 1 April 2008 and 3 October 2009, US$84,578.88 and 1,003.45 Euros, 200,000 Yen and CAD963.31 other than the initial deposit was deposited into the other Citibank account, Charge 10.  Between 1 April 2008 and 3 October 2008, other than the initial deposit nothing was deposited into the third Citibank account, Charge 11.  D2, you left Hong Kong on 2 April 2008. 

10.  On 10 April 2008, D1, you arrived from Taiwan and left that same day for the Mainland.  You arrived back on 15 July 2008.  On 16 July 2008, you D2 and you D3 arrived from Taiwan.  D3, you opened an account with the Hong Kong and Shanghai Bank, two with Citibank, and one with Standard Chartered Bank and one with Hang Seng Bank.  On 18 July 2008 all three of you defendants left Hong Kong.  Between 15 July 2008 and 28 December 2008, HK$$365,500.27 and US$32,809.88 other than the initial deposit was deposited into the Hong Kong and Shanghai Bank account, Charge 12.  Between 15 July 2008 and 17 January 2009, other than the initial deposit HK$282,716.13 was deposited into the Citibank account, Charge 13.  Between 15 July 2008 and 17 January 2009, US$36,492.82 other than the initial deposited was deposited into the other Citibank account, Charge 14.  Between 15 July 2008 and 17 January 2009, other than the initial deposit nothing was deposited into the Standard and Chartered Bank account, Charge 15.  Between 15 July 2008 and 1 November 2008, other than the initial deposit HK$15,000 was deposited into the Hang Seng account, Charge 16. 

11.  On 20 July 2008, D1, you arrived from the Mainland and returned on 24 July 2008. 

12.  On 1 October 2008, D2, you arrived and were arrested when you tried to depart on 2 October. 

13.  On 28 October 2008, D3, you arrived from Taiwan and opened another Hang Seng account the next day.  Between 29 October 2008 and 25 December 2008, HK$9,947.78 and US$599.78 other than the initial deposit was deposited to that Hang Seng Bank account, Charge 17.  On 29 October 2008, D3, you left Hong Kong for Taiwan.  You returned on 16 January 2009 and you were arrested. 

14.  On 5 February 2009, D1, you were arrested on your return from the Mainland.  In your possession were five mobile phones, seven SIM cards and a thumb drive which had an electronic document bearing the logos “The Hong Kong Government” and “The Hong Kong Jockey Club”.  They were false and identical to those sent overseas.  Other electronic documents were also found with script identical to the overseas communications.  They contain details of bank accounts of D2 and D3.  All deposits to the accounts of D1, D2 and D3 were made from overseas.  Once a deposit was made it was either withdrawn in whole in Taiwan or by repeated withdrawals on the same day in Shenzhen.  Under caution, D2, you said that around March 2008 D3 had told you to come to Hong Kong to open bank accounts.  You received TWD6,000 for each.  This was later reduced to 5,000.  On each occasion you opened an account you gave the passbook to two persons in Hong Kong.  You said D3 told you that the accounts were for overseas workers in Taiwan for tax purposes.  The ATM cards and statements were sent to you in Taiwan and you gave them to D3.  D3, you told police that a male in Taiwan told you to come to Hong Kong and open bank accounts for which your gambling debts would be wiped off. 

15.  Each of you are of hitherto clear record.  Miss Cheng on behalf of you, D1; Mr Kwan on behalf of you D2, and Mr Tse on behalf of you, D3, entered mitigation.  The mitigation common to all you three defendants was as follows.  All of you are of clear records and had pleaded guilty.  None of you knew or were involved in fraudulent schemes which allowed those responsible to collect funds.  All three of you had simply opened bank accounts and surrendered them for use.  D1, you had done so in the course of your employment as the manager of a shop in the Mainland.  You had been told to do so by your boss, Mr Lam, and initially believed that it was for tax purposes. 

16.  D2, you also believed that you were assisting in tax matters and opened bank accounts for a reward of TWD5,000 each.  You had come to Hong Kong to close those accounts when advised of their likely fraudulent nature by your ex-husband who is a policeman.  This had led to your arrest.

17.  D3, you had done so in order to discharge your gambling debts of some TWD200,000 which is approximately HK$50,000.  D3, you claim not to know D1 or D2. 

18.  Turning now to individual defendants.  Miss Cheng told me that you, D1, are 29 years of age and educated to the equivalent of secondary level.  In Taiwan you had undergone two years’ national service and then worked as an air-conditioning technician until you became unemployed.  You had gone to Hainan Island looking for work in the belief that the tourist industry would provide such employment.  There you became the manager of a food shop earning about RMB6,000 per month.  As I have previously mentioned, it was at the behest of your boss, Mr Lam, that you came to Hong Kong to open the accounts.  Mr Lam provided the initial deposits of 10 to HK$20,000 per account plus your travel and living expenses.  Initially you had believed that they were for legitimate business deals.  You were required to take the ATM cards, PIN numbers and documents back to Mr Lam. 

19.  Finally you realised from information you gleaned from the computer that there was a problem and tried to phone the banks to stop the accounts.  You were unable to do this.  Mr Lam became aware of your activity and dismissed you.  Your explanation for your possession of the memory stick was this was information that you had come across which led you to believe that the accounts were fraudulent.  In February of last year you came to Hong Kong and you were arrested.  Miss Cheng added that you are a divorcee who, because of your incarceration, you lost contact with your daughter and your mother had died whilst you were in custody.  She said you were truly remorseful for what you  had done. 

20.  Mr Kwan on your behalf, D2, told me you were 35, divorced with two children of 17 and 18.  Your mother is 67 years of age and resident in Taiwan, your father having died when you were 4.  Up until the time of your arrest you had been employed as a saleslady earning about the equivalent of HK$5,000 in Taiwan.  He emphasised that you had come to Hong Kong in an effort to put matters right.  You had offered to assist the prosecution and had given a statement to that effect, but that was not required.  Throughout you had been open and co-operative.  The amount of money passing through your accounts had been in the order of about HK$1.59 million or the equivalent.

21.  Mr Kwan referred me to the cases of HKSAR v Jain Nikhil CACC405/2006 and HKSAR v Zhan Jianfu CACC258/2007.  The cases taken together, but especially Jain Nikhil, lay down the main considerations for imposing sentences for money laundering cases, and taken together he suggested a starting point of 3 to 4 years to be appropriate. 

22.  Mr Tse then entered mitigation on behalf of you, D3.  He reminded me that you were guilty of Charges 12 to 17 inclusive.  He told me that you were the owner of a small food stall in Taiwan and had a low income.  You are 34 years of age, married with two young children.  He referred to you as a “small tool”.  He emphasised that your plea of guilty had saved witnesses coming from overseas.  He told me that you missed your family. 

23.  The prosecution then referred me to two cases, HKSAR v Yeung Kin Chai CACC341/2008 and HKSAR v Leong Wai Keung CACC476/2003.  I took all cases cited into account when considering the sentence.  I turn now to the sentence. 

24.  These are serious examples of what is commonly called “money laundering”.  I fully accept that none of you were or could be shown to have played any part in the fraudulent scheme which harvested the illicit funds but each of you were essential cogs in the processing of the money.  Without foot soldiers there would be no war.  I do note that each of you is of clear record and each of you has been co-operative with the police.  You have also assisted the court in your pleas of guilty by considerable saving of time.  D2, I accept that you took positive steps to extricate yourself from the scheme and, indeed, that led to your arrest.  I also note that you were prepared to assist the prosecution by giving information and evidence.  D1, I also accept that initially you acted you believe honestly and when you found out that something was wrong you too took steps to try to close the accounts but you were naïve in the extreme. 

25.  The approximate money laundered by the accounts held by each of you is as follows:  D1, approximately the equivalent of HK$2½ million; D2, approximately HK$1.6 million; and D3, approximately HK$970,000.  There is a clear international aspect to these offences.  All funds came from targeted overseas persons of Chinese ethnicity.  You, D1, pleaded guilty to seven offences; you, D2, to four offences and you, D3, to six offences.  All offences took place over a long time span.  In mitigation, I do accept that D1 especially and you, D1, to some extent did try to stop the scheme and that you, D3, you were forced into the situation by your gambling debts.  In respect of you, D3, your accounts harvested the least. 

26.  Taking all factors into account I can find no reason to differentiate between the degree of criminality of any of you.  You are all equally guilty.  I have taken an overall view of the situation.  Therefore, in each case I take a starting point of 3 years and 6 months which is 42 months.  You are each entitled to one-third discount for your plea of guilty.  That will be applied.  You will each, therefore, go to prison for a period of 2 years and 4 months on each offence that you have committed to run concurrently.