HKSAR v. CHEUNG PO YI

DCCC 305/2023

[2024] HKDC 1570

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 305 OF 2023

________________________

________________________

________________________

REASONS FOR SENTENCE

________________________

1.  D1 pleaded guilty to two counts of money laundering, (Charges 1 and 2), whereas D2 pleaded guilty to two counts of money laundering (Charges 3 and 4). They admitted to the content of the summary of facts and are convicted accordingly for their respective charges.

2.  As D1 will give evidence for the prosecution against an accomplice, I would adjourn her sentencing until a time after she has provided assistance to the prosecution.

3.  In this hearing, I would only deal with D2’s sentence.

The Facts

4.  At all material times, Madam TSUI King Wai (“AP”)  was the proprietor of “Wai Wan Fashion Co.” (“Wai Wan”)  at Plover Cover Shopping Arcade, Tai Po.

5.  In 2014, the Police instituted an investigation against AP for Fraud in which she was suspected to have borrowed credit cards from numerous customers of Wai Wan to make fictitious purchases of goods at the company. In this regard, credit cards were purportedly used to make purchases but no goods were indeed sold. It was alleged by the customers that AP had in the end not settled the payments of the bills of their credit cards as agreed.

6.  D2 was one of the customers who made a report against AP. Upon investigation, the Police found suspicious transactions in the following two accounts which were held by D2:

Charge	A/C Owner	Bank	Account
3	D2	Citibank	C
4	D2	Nanyang Bank	D

7.  The transactions of the above two accounts have shown mirror patterns at the material time. After monies had been deposited into the accounts, they were often withdrawn in round up figures in a short period of time.

8.  When the police looked further into the transactions of these bank accounts, they found the following facts:

(i)  Between 5 November 2012 and 30 November 2013, D2’s Account C received a total of HK$3,134,067.46 by way of 125 transactions. The exact amount was withdrawn via 239 bank withdrawals.

(ii)  Between 28 May and 7 November 2012, D2’s Account D received by way of 76 deposits of HK$2,777,350.80. The sum was entirely withdrawn by way of 156 transactions.

9.  D2 was arrested on 14 July 2017 for conspiracy to defraud. She was given police bail. On 12 June 2019, she was temporarily released.

10.  On 17 June 2021, the police took a VRI with D2 for money laundering. Under caution, she stated inter alia that she could not remember if she was the person who opened Account C and D. Both accounts were lent to AP by her. She met AP about 1-2 years before the offence period. She did not receive any reward for lending the accounts to AP.

Criminal Record

11.  D2 is of clear record.  She had a binding over order of  theft in 1979.

Mitigation

12.  D2 was born in Hong Kong and is currently 63 years old. D2’s husband passed away due to leukaemia in 2024. D2 has two married daughters.

13.  D has been working as a clerk in a company since 1993 earning about $13,000 per month. Over 30 years, she has been working diligently, taking care of her family and raising her two daughters.

14.  D2 is the younger sister of D1.  At the material time, D1 was AP’s employee. D1 introduced D2 to AP in around 2009. Subsequently, D2 regularly shopped at the said fashion store for about once a week and became good friends with AP. 

15.  In around the end of 2009, AP borrowed money from D2 to address business liquidity issues.  D2 lent her credit card to AP for charging purposes as a form of loan without any actual delivery of goods. AP did not repay the money. D2 had paid off all the outstanding sums of $800,000 resulting from the transactions she made with the credit cards. In 2010, D2 even borrowed a large sum of money from the financial institutions to help AP.

16.  By 2012, AP informed D2 that her bank card were “eaten” and she needed the bank accounts of D2 to continue operating her fashion store.  D2 foolishly lent her own two bank accounts to AP without  any reward. 

17.  Later, around the end of 2013, she repeatedly tried to contact AP to retrieve her bank cards but she was unable to reach her as AP did not appear at the fashion store.

18.  D2 submits 7 mitigation letters that described D2 as a helpful person.  She cares towards those around her shows great concern for her family.  She has consistently taken on the responsibility of being a good mother and friend.

19.  Counsel for D2 submits that D2 did not know the nature of the offence that generates the laundered money in the present case. Her participation in the subject money laundering charges was direct and simple by lending accounts. D2 believed that she was assisting AP in overcoming financial difficulties. She had no knowledge about the transactions in the subject bank accounts and did not receive any reward or benefit from AP.

20.  From the time of reporting to the plea/sentence, a period of 10 years has passed.  Due to the significant stress faced by the D2 in this case, she developed the mental illness of mild depressive episode and required medical treatment.

Sentence

21.  Money laundering is a serious offence. The offence carries a maximum penalty of a fine of $5 million and an imprisonment term of 14 years on indictment.

22.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal set out the general approach and principles relevant to sentence in money laundering cases. There is a non-exhaustive list of  factors, such as the nature of the predicate offence; the state of the offender’s knowledge; any international dimension, involvement of an organised crime syndicate; sophistication and planning; the number of transactions; the length of time over which the offences occurred; and the role of the offender; whether the activity occurred after the defendant became aware of the nature of the funds. 

23.  In order to confirm if D2 has the requisite mens rea for money laundering, I clarify with D2’s counsel in this respect. Counsel for D2 confirms that although D2 did not (or claimed that she did not)  have knowledge of the bank transactions conducted with her bank accounts, she knew that her bank accounts were to be used for receiving money which she had reasons to believe they were proceeds of crime.

24.  In my view, D2 stated in the VRI that she had met AP for 1-2 years before the offence period. I have very great reservation that she would have entrusted her bank accounts to such a person.  Especially D2 had supported AP by her own credit card in 2009 and even lent a large sum of money to AP from the financial institutions in 2010.  The lending of accounts happened in 2012. In my view, no reasonable person would believe in AP’s allegation after the incidents happened in 2019 and 2010.  As confirmed by D2, she had reasons to believe the deposits of $5.91 million in Account C and D were proceeds of crime.

25.  There are no set guidelines for money laundering.  However, in Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the court referred to a review of money laundering cases in HKSAR v Hsu Yu Yi  [2010] 5 HKLRD 545. The sentencing starting point is 3 years or so where the “black money” involved is between $1 million and $2 million; 4 years or so where it is between $3 million and $6 million; and could be over 5 years where it is above $10 million.

26.  Wan Kwok Keung is not tariff yet it serves as a useful reference.

27.  In sentencing D2, I have borne in mind the facts of this case and the amount of laundered money is $5.91 million within a short span of time. I shall take a global approach. On the amount alone, an initial starting point 48 months’ imprisonment is appropriate. For Charge 3: 48 months’ imprisonment and for Charge 4: 36 months’ imprisonment.

Enhancement of sentence

28.  In this case, the prosecution applies for an enhancement of the sentence based on section 27(2)  of the Organized and Serious Crimes Ordinance.

29.  According to Chief Inspector Li, who is attached in the Financial Intelligence and Investigation Bureau, he stated in his statement that money laundering stooge has minimal or no involvement in the predicate offence or has little or no knowledge on the predicate. Most of them allow criminal to have full access in control of the bank accounts. The increasing number of stooge accounts interferes the normal operation of the banking system and encourages more crimes to be committed. The use of stooge is increasing in both figures and proportion. There is a rising trend in the use of stooge from 31.38% recorded in the year of 2020 to 70.19% recorded in the year of 2023. Just between January and June 2024, the proportion has increased to 78.43%.

30.  D2 has no objection to such an application.

31.  I have considered the statement of Chief Inspector Li, and I attach full weight to the statement.

32.  In my view, it is a case where enhancement should be made. I find that the enhancement of 22% is appropriate. After the enhancement, the sentence is as follows: Charge 3: 58.5 months’ imprisonment and Charge 4: 44 months’ imprisonment.

Guilty plea

33.  D2 is entitled to one-third reduction for her guilty plea.  For

Charge 3: 39 months’ imprisonment and for Charge 4: 30 months’ imprisonment.

Delay

34.  According to the chronology of events provided by Prosecution, D2 was arrested in July 2017.  The case file was sent to the DoJ for advice in May 2019 and it was only until January 2023 that the advice was given to prosecute D2. In my judgment, there are reasons why the police and DoJ took so long to advise as it involved 11 banks, 26 banks accounts and 17 credit cards. The case is not a straightforward and simple one. However, there has been a delay of 7 years.

35.  I find that the delay has resulted in significant stress for D2 or left her in uncertain suspense. The delay has nothing to do with D2.

36.  I would allow D2 an additional reduction of 6 months because of the delay in prosecution: see HKSAR v Chiu Chi Wing CACC 243/2012 at paragraph 37.

Ill health

37.  It is well-established that ill-health will seldom be a basis for reducing the sentence of crimes of gravity: Yip Kai Foon v HKSAR (2000)  3 HKCFAR 31.

38.  However, D2 is of clear record.  In view of her age and her present health condition, I exercise my discretion to give her a further deduction of 1 month.

Totality

39.  As a result, the sentence for Charge 3 is 32 months’ imprisonment and for Charge 4 is 23 months’ imprisonment after the above reduction. 

40.  Bearing totality in mind, a total term of 32 months should adequately reflect the overall criminality of the two offences. I order the sentences for Charges 3 and 4 to run concurrently with each other. The total sentence that D2 has to serve is one of 32 months’ imprisonment.