HKSAR v. CHUI HI YEUNG AND ANOTHER

DCCC 724A/2017

[2018] HKDC 713

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 724A OF 2017

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REASONS FOR SENTENCE

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1.  The case relates to offences 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. Such offences are commonly known as “money laundering” offences. The third defendant pleaded guilty to two counts of “money laundering” (charges 4-5) while the fourth defendant pleaded not guilty to one count of “money laundering” (charge 6). Upon the prosecution’s application, charge 6 is left on court file and not to be proceeded with without the court’s leave.

Facts

2.  The third defendant is the sole authorized signatory of a BOC savings account (“BOC account”) which was opened on 30 July 2002.  Between 4 January 2007 and 4 February 2013, 430 deposits in the total sum of HK$24,358,053.80 was deposited into the BOC account and 398 withdrawals in the total sum of HK$23,047,328.90 was withdrawn from the same account.  Series of substantial deposits were followed by series of substantial withdrawals.  One of the transfer depositors as well as funds recipients was a person named Ng Kin-keung (“WP”). 

3.  The third defendant had maintained a HKJC account since 17 August 2007.  Between 10 January 2010 and 28 February 2013, he had placed bets amounting to HK$7.67 million and suffered a net loss of HK$2.11 million.

4.  The fourth defendant was the sole authorized signatory of a Hang Seng Bank account (“HSB account”) which was opened on 13 March 2006.  From 13 March 2006 to 12 March 2012, 401 deposits amounting to HK$33,438,650 was deposited into the HSB account and 205 withdrawals in the total sum of HK$31,641,000 was withdrawn from the same account.  Series of substantial deposits were followed by series of substantial withdrawals.  WP was again one of the transfer depositors as well as funds recipients.  Amongst withdrawals by cashier orders, one was cashed in a casino in Macau for HK$3 million.

5.  The fourth defendant conducted 7 over the counter transactions.  A total of HK$1,642,500 was withdrawn on those 7 occasions. 

6.  On 16 June 2013, the third defendant was arrested.  Under caution, he admitted the BOC account belong to him but denied knowing any defendants or WP. 

7.  In December 2017, at the request of the third defendant, 2 further video-recorded interviews were conducted.  In the interviews, the third defendant admitted that he lent his BOC account to “Shing Gor” to assist his purported garment business.  He received HK$5,000 per month as reward.  As “Shing Gor” requested him to get one more bank account for his use and promised him an additional HK$3,000 reward per month, he thus took the fourth defendant to open the HSB account in the fourth defendant’s name. The fourth defendant had no knowledge about his deal with “Shing Gor”.  After the HSB account was opened, he kept the bank card and password. For the 7 over the counter transactions conducted by the fourth defendant personally, they were all conducted on the instruction of “Shing Gor” and he brought the fourth defendant to the bank and instructed her to conduct the transactions.    

8.  At the material times, the third defendant had not filed any tax returns and did not own any property or company in Hong Kong.

Mitigation

9.  The third defendant is aged 56, divorced and lives with his mother.  He worked as an aluminum window worker prior to the arrest.  He has 18 criminal conviction records, none of which relates to money laundering.  His last conviction was in 2001 for the offence of bookmaking.

10.  In mitigation, it was submitted that the underlying offence was bookmaking and the third defendant was aware of that.  The third defendant was in financial difficulty at the material times and he therefore committed the offences.  The defence referred to a number of authorities and submitted that the sentences ranging from 3 years to 5 years 6 months.  It was conceded that charge 5 involved an international element but it was submitted that money was transferred outside Hong Kong on only one occasion.  The court was urged to take into consideration that the third defendant had not got into trouble with the law for 17 years before the present case and impose lenient and concurrent sentences on the third defendant.

Sentence

11.  There is no sentencing guideline in respect of money laundering offence.  The Court of Appeal has on many occasions expressed that money laundering is a very serious offence as it is an attempt to legitimize proceeds from criminal activities and deterrence is paramount.  In HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal stated that the sentence for money laundering offence should mainly reflect the amount of money laundered and not the benefit obtained by the offender.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal elaborated on the relevant factors to be considered and provided a non-exhaustive list of such factors (at para 40):-

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) where the operation involved an international dimension, this would be a significant aggravating feature, and Mainland is included for the purpose of international dimension;

(d) the sophistication of the offence;

(e) where the offence was committed by or on behalf of an organized criminal syndicate, that would be an aggravating factor;

(f) whether there was one transaction or many and the length of time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h) the role of the offender and the acts performed by him.

12.  In the present case, the amount of money laundered is around HK$24 million and HK$33 million for charges 4 and 5 respectively.  Both offences spread over a period of 6 years with numerous deposits and withdrawals and the third defendant was personally involved in the withdrawals / transfers of the money from the accounts to some third parties.  In respect of charge 5, one of the cashier order of HK$3 million was cashed in a casino in Macau.  I consider this to be an international dimension.   In committing the offences, it was conceded that the third defendant knew the money came from bookmaking activities.

13.  I have considered the 3 authorities relied on by the defence.  In HKSAR v Leung Chi Fai, CACC 490/2011, the amount of money laundered was HK$2 million as opposed to HK$20 million as submitted by the defence.  In that case, the starting point of 3 years was upheld. 

14.  In HKSAR v Leung Wai Wah, CACC 201/2011, the amount of money laundered was about HK$38 million from bookmaking.  The offender took active part in the money laundering activities.  The offence lasted over 18 months involving multiple deposits and withdrawals.  The Court of Appeal considered the appropriate starting point to be 5 years and 3 months.

15.  In HKSAR v Ng Man Yee, CACC 278/2013, the applicant was convicted after trial of laundering a total sum of about HK$77.9 million over a period of 6 years.  On appeal, the sentence of 5 years and 6 months was upheld.

16.  Having considered the circumstances of the present offences and the cases above, I consider the appropriate starting point for charge 4 should be 4 years while the appropriate starting point for charge 5 should be 4 years and 6 months.  For the international dimension, the starting point for charge 5 is enhanced by 3 months.  Apart from the third defendant’s guilty plea, there is no other mitigating factor justifying further reduction of sentence.  The sentence for charge 4 is reduced to 32 months while the sentence for charge 5 is reduced to 38 months given the third defendant’s plea.

17.  The two offences are separate and distinct offences involving two different bank accounts and different amount of money.  Taking into consideration the totality principle, I am satisfied that a total sentence of 42 months is sufficient to reflect the criminality of the third defendant’s act.  I therefore order 4 months of charge 4 to run consecutive to the sentence for charge 5, making a total sentence of 42 months’ imprisonment.  I hereby sentence the third defendant to 42 months’ imprisonment.