HKSAR v. YLAGAN ESTER P

DCCC 785/2022

[2024] HKDC 220

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 785 OF 2022

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REASONS FOR SENTENCE

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1.  The defendant was convicted of 4 counts 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, on her own plea and agreement to Summary of Facts.

Facts

2.  The defendant was a partner and manager of Emry’s Service Staff Employment Agency (“Emry’s”).  Mike’s Secretarial Services (“Mike’s”)  commenced its business in 2013 and the defendant was the sole proprietor.

3.  At all material times, both Emry’s and Mike’s were employment agencies in Hong Kong which assisted Filipino domestic helpers to find jobs.  A “Certificate of Accreditation” had been granted to Emry’s which only allowed Emry’s to refer Filipino domestic helpers in Manila to work in Hong Kong or other countries, and Emry’s was prohibited from referring Filipino domestic helpers in Hong Kong to work in other places, like the UK and Canada.

4.  Between December 2015 and May 2016, the defendant advertised through a Filipino community newspaper job offers in the UK and Canada, and held briefing sessions at the offices of Emry’s or Mike’s for interested applicants.  The defendant was the main person responsible for holding the briefing and explaining the details of the UK and Canada job offers (“the Employment Schemes”).

5.  During the briefings, the defendant made the following representations:

(i)  There were jobs available in the UK and Canada.

(ii)  For domestic helpers who were interested in the UK jobs, they should pay an application fee of HK$10,000, which include the air ticket, visa and release of a Foreign Immigrant Clearance Certificate (“FICC”)  which was issued by the UK Immigration and was a requirement to work in the UK.

(iii)  For domestic helpers who were interested in jobs in Canada, they should pay an application fee of HK$15,000, which included getting a Foreign Employment Canada Certificate (“FECC”).

6.  Over 500 domestic helpers applied for the Employment Schemes and each domestic helper paid cash of different amounts to the defendant for the application fee of the scheme.  It was estimated that the defendant had received over HK$6 million application fees from domestic helpers in connection with the Employment Schemes.

7.  In fact, it was not necessary for a FICC to be held before a person can apply to work in the UK as an overseas domestic worker, and the FECC never existed.

8.  Between 29 January 2016 and 8 July 2016, part of the application fees paid by the domestic helpers and received by the defendant for the Employment Schemes was remitted to overseas accounts, either by the defendant personally or by people instructed by her.  These form the subject matter of the 4 charges.

9.  The total sums remitted by the defendant and her agents was HK$2,633,181.52 and US$360,055 (approximately HK$2.8 million).

10.  No domestic helper successfully obtained a job offer from the UK or Canada via the Employment Schemes promoted by the defendant. 

11.  On 7 June 2018, the defendant was arrested.  468 sets of application forms, which bore the biodata of domestic helpers, were seized at her residence.

12.  Under caution the defendant admitted, inter alia, that:

(a)  A person named “William”, whom she had met online, promoted the said two employment schemes to her.

(b)  The domestic helpers who applied to the Employment Schemes first submitted their application forms and paid the application fee at Mike’s. She then scanned all the applicants’ application documents and sent them to William via email for finding jobs in the UK or Canada.

(c)  She acted upon William’s instructions to remit money to the specific recipients. She would then send the remittance documents to William as soon as possible. William would reply her email and ask her to find more applicants so as to increase the chance of hiring them.

13.  The defendant admits at the material times, she knew or had reasonable grounds to believe that the said properties, in whole or in part, represents the proceeds of an indictable offence.

Criminal Record

14.  The defendant has a clear record.

Mitigation

15.  The defendant is now aged 71.  She was born in the Philippines.  She did not finish her university education but came to Hong Kong in 1984 to work as a domestic helper in order to earn money for her family.  The defendant has four children, three from her first marriage, and the fourth one from her second marriage.  The defendant’s second husband died in October 2017.  The defendant is currently unemployed and wholly dependent on government benefits.

16.  Defence counsel said the defendant is a person of good character and has worked to support herself and others in the last 40 years.  It is said that the defendant has been extraordinarily naïve and gullible in the whole episode. She is now deeply remorseful and feels utterly stupid that she had fallen for the persuasive representations made to her by William Clinton (“William”).

17.  Defence counsel said in December 2015, the defendant came to know through advertisement on Facebook this “William” who identified himself as a recruitment agent with ties to the UK Government, and could find jobs for domestic helpers in both the UK and Canada, and also assist the domestic helpers with their visa applications.  It was said that the defendant was completely convinced that William was a genuine and bona fide individual as he was extremely articulate and persuasive.  William’s Facebook portal also gave the defendant the clearest impression that he had knowledge of the immigration matters with good connections in both the UK and Canada.

18.  Defence counsel said the defendant was promised benefits but no cash by William.  The defendant was informed by William that he could assist her to get a UK passport.  Further, she thought that the services that William offered would be a good opportunity for her to build a new business in Hong Kong to provide domestic helpers with opportunities to build better lives in the UK and Canada.

19.  As Emry’s was not allowed to undertake this work (only being accredited to recruit domestic helpers for Hong Kong), the defendant used Mike’s as the company to undertake this venture.  It was said that as Emry’s had a long established and good reputation in Hong Kong, and the local domestic helper community knew that Mike’s was an associated business, the defendant advertised for the visa opportunities in the UK and Canada between January 2016 and May 2016 and received extremely good response.

20.  It was said that the defendant’s seminars attracted more than 500 applicants.  Out of the over $4 million that was received for the application fees, she sent all the funds to the various accounts as instructed by William. In addition to the money received from the applicants, she also sent some of her own funds on the pretext provided by William that he could arrange tickets for her to fly to the UK and Canada.

21.  Defence counsel submitted that at the material time the defendant truly believed, through the various online conversations with William and his constant encouragement, that this was a legitimate business opportunity and William was to be trusted.  With hindsight the defendant admits that she was not simply naïve, as the whole thing was illogical and foolish.

22.  The defendant was informed by the Philippines Consulate in May/June 2016 that this “advertisement” by William was a scam.  She immediately ceased advertising, seminars and accepting new applications.  She confronted William online with the information from the Consulate, but was assured by him that everything was moving forward, and it was only because of the Consulate’s desire to divert the defendant’s opportunity to others that the Consulate had given the defendant this information.

23.  The defendant’s utter belief in the opportunity, blinded by the constant and very persuasive messaging from William, convinced her that she was right and everyone else was wrong, and the defendant sent one last payment to William in July 2016.  When nothing was forthcoming after all these applications, the defendant ultimately realised the truth of what happened.  She felt shocked, embarrassed, utterly ashamed and emotionally traumatised.

24.  She was then determined to refund as many people as possible.  She has refunded with the money on her hand to some of the applicants and intended to sell her flat in order to refund the others.  It was said that she was again defrauded by a solicitor, and she did not obtain any funds from the sale of her flat.  Defence counsel said up till this moment the defendant had refunded the total sum of HK$411,000 to 45 applicants.

25.  As for the sentencing, defence counsel referred this court to the cases of Secretary for Justice v Wan Kwok Keung [2012] HKLRD 201, HKSAR v Boma Amaso [2012] HKLRD 33, HKSAR v Pun Fung [2023] HKDC 1631, and HKSAR v Lam Ka Sin [2021] 2 HKLRD 32.

26.  He submitted that given the predicate offence involved in this case is obtaining property by deception and that the prosecution decided not to charge the defendant with this predicate offence, this supports the submission that the defendant did not at the time understand that William himself was a fraudster. Even when informed by the Philippines Consulate, the defendant still held the illogical hope that the opportunity was true and only fully realised the truth when the visas were not forthcoming later.

27.  Defence counsel submitted that the defendant was herself defrauded and she was not one of the syndicate, nor was she a willing participant in this deception exercise.  Defence counsel also submitted the defendant made no financial gain out of these transactions and she even lost some of her money. She was merely used by this organisation in the sophisticated scam and was a victim herself.  It was also said the defendant is now aged 71 and there is no risk of reoffending. 

28.  Defence counsel also submitted that there is a delay in prosecution of the defendant between the period when she was arrested in June 2018 and when she was charged in August 2022, which created significant stress for her. 

29.  While admitting the delay was not entirely unreasonable, he referred this court to the case of HKSAR v Ho King Nang and Others, CACC 445/2010, citing Mills v HM Advocate and The Advocate General for Scotland [2002] SCR 860, 877, (PC)  Lord Hope said that a “delay in bringing the accused to justice is widely recognised as a mitigating factor that can be taken into account when he is being sentenced.”

30.  Defence counsel also handed to this court mitigation letters.  The mitigation letters came from the former employer, clients, church counsellor and pastor of the defendant, as well as the defendant herself.  They all say the defendant is hard working, honest, competent and kind, and that she is deeply remorseful as to what she has done.

31.  He submitted that in view of the timeline and underlying facts of the 4 charges, the court should consider the sentence in its totality and to order the sentences of all charges to run concurrently.

Discussion

32.  On conviction upon indictment of this offence, a person is liable to a fine of HK$5 million and imprisonment for 14 years. 

33.  In the case of Boma, Stock JA (as he then was)  was explaining that it was not realistically possible or desirable to lay down guidelines in relation to the offence of money laundering because of the highly variable circumstances in which these offences were committed and the widely different roles played by those convicted of these offences.  He said that deterrence was paramount in the sentencing exercise as the criminality in laundering arose from the encouragement and nourishment it gives to crime in general.  He said that the amount of money laundered is a significant factor and the court should take into account of factors such as:

(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;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organised criminal syndicate, this would be an aggravating feature;

(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;

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

34.  In this case, the amount of money laundered is respectively HK$2,633,181.52 and US$44,658 for the 1^st charge, US$300,000 for the 2^nd charge, US$10,055 for the 3^rd charge, and US$50,000 for the 4^th charge, totalling roughly HK$5.43 million.

35.  Duration of the offence regarding the 1^st charge is less than 4 months, that of the 2^nd charge is 12 days, that of the 3^rd charge is 2 days, and that of the 4^th charge is 1 day.  The number of victims involved is over 500 domestic helpers.

36.  The defendant here pleaded guilty to the charges on the basis that she had reasonable grounds to believe that the property in question, in whole or in part, directly or indirectly, represents the proceeds of an indictable offence.  The scheme involved is sophisticated and clearly involved a criminal syndicate.  There is, however, no evidence the defendant was involved other than being used by William and the syndicate to defraud the victims.

37.  There is no evidence that she had actual knowledge of the predicate offence at the material times, although she did absolutely nothing to check the authenticity of the representations by William.  Further, despite being alerted by her staff as to why money was remitted to an account in Nigeria, when remittance companies refused to follow her instructions to remit money, she decided to find a new remittance company to complete the transfer.  Moreover, she chose not to believe the Philippines Consulate, but instead chose to believe in William when she was told by the Consulate that these schemes do not exist.

38.  From the agreed facts, it seems to this court that the defendant had received over HK$6 million, whereas the total of sums remitted, ie the total sums under the 4 charges was around HK$5.43 million.  There is a difference of approximately HK$570,000, so the defendant did receive more than what she remitted.

39.  In the case of Wan Kwok Keung, Cheung JA (as he then was)  said that money laundering is a serious offence and must be deterred.  The sentence should reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others.  However, it is also said that if the “black money” originated from various organised indictable offences or the defendant’s benefit was huge then the sentence should be adjusted upwards.

40.  In Wan Kwok Keung, the Court of Appeal referred to the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, where the sentencing starting point for laundering money between $1 million and $2 million is 3 years, and between $3 million and $6 million is 4 years.

41.  Considering the factors aforesaid, in particular, 500 victims are involved, the amount of money involved and the role of the defendant, the court finds that the appropriate sentencing starting point is 3 years for the 1^st charge and the 2^nd charge, 8 months for the 3^rd charge, and 15 months for the 4^th charge.

42.  It is well established that money laundering is a very serious offence and the personal background of a defendant is seldom a valid mitigating factor.

43.  The defendant indicated her guilty plea on the date of the pre-trial review, ie on 18 September 2023.  Trial was fixed prior to that date to 5 January 2024.  This court will exercise its discretion and give the defendant 23% discount by reason of her guilty plea.[1]

44.  This court, after considering the mitigation letters, is convinced that the defendant used to be a woman of good character, but the same has already been subsumed in the sentencing discount given to her by reason of her guilty plea. 

45.  It appears to this court that the defendant is now deeply remorseful and the risk of reoffending is low. It is also a fact that she has caused, on a voluntary basis, refunds to be made to 45 victims in the total sum of HK$411,000.  This court is convinced that she has tried her means to refund, although she has met with difficulty and not been able to get any further proceeds of sale from her flat.  For this reason, the court will further afford her a sentencing discount of 10%.

46.  Sentence for the 4 charges are respectively adjusted downwards to 24 months’ imprisonment for the 1^st and 2^nd charge, 5 months and 10 days’ imprisonment for the 3^rd charge, 10 months’ imprisonment for the 4^th charge.

47.  Defence counsel also urged this court to give the defendant further sentencing discount by reason of delay in prosecution.  They were, however, not alleging that the delay was entirely unreasonable.

48.  Prosecution said that the police needed to identify the victims and to check if they were still in Hong Kong as they were mostly domestic helpers and might have left Hong Kong.  They also liaised with the Filipino Consulate, UK Consulate and Canadian Consulate to check the fund flows of the money paid by the victims.  They did also interview the remittance agencies and check the bank accounts of the defendant and the recipient bank accounts of these remittances.  In the end, it was said the police managed to contact and take statements from 100 domestic helpers out of the 500 domestic helpers involved. Some domestic helpers refused to come forward and some had already left the jurisdiction.  The prosecution also explained further that these investigations were conducted during riot and COVID times.

49.  In the case of Secretary for Justice v Schmitt Charles Lee, CAAR 12/2006, Stuart-Moore VP said that “the real question is whether there has been an unreasonable delay, through no fault of a defendant, which has contributed to his punishment.”

50.  The court would also need to be satisfied that the delay has resulted in unfairness to the accused.[2]  If there is a delay resulting from a very extensive (and necessary)  investigation, it was said that the accused cannot expect to benefit therefrom.[3]

51.  Considering all that was before me, including but not limited to the nature of the case, and considering the pandemic measures at the relevant times, the delay is not unreasonable.  This court would therefore not afford the defendant further sentencing discount.

Totality principle

52.  The 4 offences all arose out of the same set of facts, and, in effect, the defendant laundered a total of around HK$5.43 million from 29 January 2016 to 8 July 2016, ie over 5 months period.

53.  Considering the authorities aforesaid, in particular the Wan Kwok Keung case, the circumstances of this case, the number of victims involved, and noting that these are all hard-earned moneys of the domestic helpers who have placed trust in the defendant who was a reputable employment agency, the amount of money laundered and the role of the defendant, this court finds that the overall culpability of the defendant in this case should attract a just and proportionate overall sentencing starting point of 4 years’ imprisonment.

54.  The defendant is, therefore, sentenced to 32 months’ imprisonment after the sentencing discount by reason of her guilty plea, her low chance of reoffending and her voluntary refund to some of the victims.

55.  Accordingly, this court orders that sentence for the 2^nd, 3^rd and 4^th charge to run totally concurrent with each other.  8 months of the sentence for the 1^st charge shall run consecutive to the sentence for these 3 charges, the rest to run concurrently.

56.  The defendant is therefore sentenced to 32 months’ imprisonment.