HKSAR v. MO LIUCHUN

DCCC770/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 770 OF 2011

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Reasons for Sentence

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The Charge and the Facts

1. The Defendant pleaded guilty before me to one charge of “conspiracy to deal with property known or reasonably believed to represent proceeds of an indictable offence”, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 and sections 159A and 159C of the Crimes Ordinance, Cap. 200.

2. In gist, PW1 in this case was the victim of a telephone deception who was told that her son had been kidnapped and beaten up. After some negotiation, PW1 agreed to give a ransom of HK$30,000 in order that her son could be released. It was, however, made clear in the Summary of Facts, that there was no evidence to suggest that the Defendant was aware of the deception practised on PW1 at the time when she was asked to go to collect the “ransom”.

3. What happened was that, PW1, while at home, received a telephone call from an unknown man in the afternoon of 5 May 2011. When she picked up the call, she heard a man shouting over the phone, “I am beaten up and I am captured. I don’t know where I am.” PW1 thought that it was her son and she became concerned. Another man then took over the phone and told her that they had kidnapped her son. As mentioned above, a ransom of HK$30,000 was agreed after negotiation.

4. Unbeknownst to the men, PW1 made a report to the police and the police were following her when she went to hand over the money in that afternoon. PW1 first received a call from one of the men, asking her what she was wearing and telling her that their accomplice was nearby. Then, PW1 saw the Defendant talking on the phone and approaching her. The Defendant also opened her rucksack and asked PW1 to put the money inside. PW1 then placed a brown bag with newspapers inside the Defendant’s rucksack and asked, “Is it you? Don’t hurt my son.” After the Defendant zipped up her rucksack, the police officers approached the Defendant and arrested her.

5. During subsequent video-recorded interviews, the Defendant made various admissions, including that she came to Hong Kong from the Mainland on 3 May 2011 and that a man called her on 4 May 2011, telling her that she would be given a reward of RMB ¥8,000 if she were to pick up something from a woman in Central. She agreed and as instructed, she approached PW1 and asked her to put the money inside her rucksack.

Mitigation

6. The Defendant is a Mainland resident and is now aged 24. She has a clear record in Hong Kong.

7. In mitigation, it was said that the Defendant was brought up by her father as her mother left her when she was 3. The Defendant had to take up part-time job when she was only 6 as the family was poor. Therefore, after receiving lower secondary education, the Defendant started to work at the age of 16. When she was 19, the Defendant was the one who supported the whole family by working as a factory worker. Prior to her arrest, the Defendant had to look after her 62-year-old father who is suffering from ill health and also her grandmother who is in her nineties.

8. Ms. Chan told the court that in April this year, the Defendant opened a beauty salon in the Mainland with half of the funds given by her boy-friend who is a Hong Kong resident and the other half being a loan. However, at the time of the offence, the salon had serious cash flow problems and the Defendant was in financial difficulties. One of her friends nicknamed “uncle” knew about her situation and suggested to her that she could go to Hong Kong for a “mission” with a reward of RMB¥ 8,000. The Defendant agreed. At around that time, she had a row with her boyfriend and she therefore also wanted to come to Hong Kong to see him.

9. It was said that the Defendant is a naïve person who does not have much life experience. She foolishly committed the offence but she is now remorseful. Ms. Chan also told the court that the Defendant had provided the particulars of “uncle” to the Hong Kong police, including his description and his address in the Mainland. Therefore, it was said that the Defendant was fully co-operative.

10. On this aspect, Ms. Lau confirmed that the information had been passed to the Mainland police for follow-up and if there is any material development, the Hong Kong police would be so informed. However, up to the present, the Hong Kong police have heard nothing from their Mainland counterpart.

11. Ms. Chan also submitted various letters written by the Defendant, her adopted sister, her village head, her fellow villagers, and her friend to the court. In gist, all of them described the Defendant as a very dutiful daughter who gave up her studies in order to earn money to support the family. She was also described as easy-going and straight-forward, easy to be made use of by others.

Sentencing Considerations

12. For telephone deception cases, the Court of Appeal in HKSAR v Hung Yung Chun & Another [2011] 2 HKLRD 167 laid down a guideline sentence of 4 years. However, in this case, not only was the Defendant not charged with any “deception” or “fraud” offences, it was made clear in the Summary of Facts, and Ms. Lau acting for the prosecution also accepted this position, that there was no evidence to suggest that the Defendant was, at the time, aware of the deception practised on PW1 or of any particulars concerning the dealings PW1 had with those who pretended to be the kidnappers of her son. In other words, it could not be shown that the Defendant was a party to the telephone deception. Therefore, on the facts of this case, I do not consider the 4-year guideline to be applicable here.

13. The Defendant pleaded guilty to the offence of “conspiracy to launder proceeds of an indictable offence”. She is going to be sentenced for that based on the facts she admitted.

14. Certainly, “money laundering” is a serious offence. In HKSAR v Hou Shun Hsiung CACC 472/2009, 22 October 2010, (unreported), the Court of Appeal referred to HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and reiterated that,

“13. … There is no sentencing guideline for this offence because of the wide range of culpability involved but the following are considered to be relevant factors for sentencing :

(1) The amount involved in the transaction is a very important consideration and not merely the benefit received by the defendant.

(2) The gravamen of the offence is the assistance given to the commission of the indictable offence, therefore the extent of the defendant’s participation and the number of transactions in the money laundering are relevant.

(3) The indictable offence and the money laundering charge may not necessarily have a direct connection but if the indictable offence can be identified then the Court in considering the penalty for the money laundering offence may take into account the sentence related to the indictable offence.

(4) The Court may adopt a more serious sentence if the case involves an international element in order to ensure that the reputation of Hong Kong as an international financial and banking centre may not be damaged.

(5) The length of the time of the offence.”

15. In the present case, while the amount involved was just a sum of HK$30,000 and that the Defendant did not seem to have received any reward or benefit, I cannot lose sight of the fact that the Defendant was recruited by others while she was in the Mainland and she deliberately came to Hong Kong to commit the offence. Also of significance is that although there was nothing to suggest that the Defendant was aware of the deception or was a party to the deception, it remains a fact that she was aware that she was acting with others when committing this offence.

16. Taking into account the facts admitted and the Defendant’s background, I consider a starting point of 2 years to be appropriate in this case.

Application for Enhancement of Sentence

17. In this case, the prosecution has filed a “Notice of Intention to Furnish Information Pursuant to section 27(2) of the Organized and Serious Crimes Ordinance, Cap. 455”. In the Notice, it was stated that the Prosecution intends to furnish to the court information relating to the prevalence of the specified offence (referring to the offence with which the Defendant was charged, that is, of conspiracy to launder proceeds of an indictable offence).

18. This morning, after the Defendant’s conviction, Ms. Lau for the prosecution read out, with no objection from Ms. Chan acting for the Defendant, a statement of Mr. Chan Che-man, CIP RCU 3 KE, dated 3 August 2011.

19. Mr. Chan’s statement mainly concerned the prevalence of “telephone deception” cases in Hong Kong which, for the period between 2006 and 2010, accounted for about one-third of all deception cases reported in Hong Kong. Mr. Chan explained in his statement that, although telephone deception reports received by the police are classified as ‘obtaining property by deception’, the charges ultimately laid could be “fraud”, “dealing with proceeds of an indictable offence”, “conspiracy to defraud”, etc., depending on the facts of each case.

20. Mr. Chan also stated that the victims in telephone deception cases were usually asked to either deposit money in a given bank account (“bank deposit”) or to leave the cash in a given place (“drop-off”). The modus operandi of “drop-off” was not common until October 2008. Between 2009 and 2010, there were 206 out of 1,017 “successful cases” of telephone deception (that is, about 20.3%) reported to the police which involved the adoption of “drop-off”. However, in the first seven months of 2011, there were 87 out of 259 such cases, accounting for about 33.5%. In terms of losses suffered by the victims between 2009 and 2010, the drop-off modus operandi involved a total of HK$17.85 million which accounted for 32.5% of the total losses in such telephone deception cases. However, between January and July 2011, the proportion rose to 54.8%.

21. Mr. Chan further stated that between 2009 and July 2011, a total of 45 males and 2 females were arrested in connection with the modus operandi of “drop-off”, including 19 Taiwanese nationals and 28 Mainland residents.

22. At the end of his statement, Mr. Chan stated that, “I conclude that Telephone Deception and the associated money laundering activity is a prevalent crime in Hong Kong and that this crime is an obvious concern to the society of Hong Kong.”

23. While, based on Mr. Chan’s statement, I accept that “telephone deception” cases are prevalent in Hong Kong and also that there is an increasing trend of adopting the “drop-off” method in such deception, I have difficulty in linking the information with the case before me.

24. As mentioned above, the Defendant was convicted of “conspiracy to launder proceeds of an indictable offence”. It is true that the offence of “money laundering” is a “specified offence” under the OSCO, Cap. 455. However, apart from offering his comment that,“Telephone Deception and the associated money laundering activity is a prevalent crime in Hong Kong”, Mr. Chan’s statement did not deal with, in terms of statistics, the prevalence of this “specified offence” of “money laundering”. His statement mainly concerned “telephone deception”. It was also not mentioned in his statement the percentage of telephone deception cases being prosecuted by way of “money laundering” offences, and there was no information as to whether or not, in those cases when the Defendants were prosecuted for “money laundering” in connection with telephone deceptions, the Defendants were aware of the deception or were a party to the deception.

25. Section 27(1) and 27(2)(c) of the OSCO, Cap. 455, respectively refers to “convicted of a specified offence” and “the prevalence of that specified offence”. In this case, there is nothing in Mr. Chan’s statement which related to the prevalence of the “specified offence” of “money laundering”. Mr. Chan’s statement, no doubt, pointed to the prevalence of telephone deception cases. However, as I have said at the very beginning, not only was the Defendant not charged with any deception offence, there was also nothing to suggest that she was aware of such deception at the time when she committed the “conspiracy to launder proceeds”.

26. In short, based on Mr. Chan’s statement, I do not see how it could be said that the offence in respect of which the Defendant was convicted in the present case, that is, “money laundering”, is prevalent, but this is the basis upon which the prosecution is making the application for enhancement.

27. I am aware of the case of HKSAR v Wu Jianbing, CACC 32/2011, 28 June 2011, (unreported) where the facts described in the judgment appeared to be rather similar to the facts in this case and where an enhancement of sentence was granted. However, as the application for enhancement was not a ground of appeal and the issue was not discussed in the Court of Appeal, I am unable to say that the case is of assistance to the prosecution in the application before me.

28. Having carefully considered the prosecution’s application for enhancement of sentence, I refuse to grant such an application for the reasons detailed above.

The Sentence Imposed

29. The Defendant pleaded guilty and she would receive a one-third reduction in sentence for her plea.

30. Although the court is sympathetic over her family situation, she should have taken all those into consideration before committing this offence.

31. Having considered all that was said on the Defendant’s behalf, other than her plea, I do not see any matters which would warrant a further reduction in sentence.

32. 2 years reduced by one-third is 16 months’ imprisonment. The Defendant is therefore to serve a term of 16 months for this charge.