HKSAR v. CHANG MU NAN

DCCC 134/2009
DCCC 511/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 134 & 511 OF 2009

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REASONS FOR SENTENCE

1.  The defendant pleads guilty to ten charges of dealing with property knowing or having reasonable grounds to believe the property represented proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Chapter 455.   

2.  Full particulars of the offences are set out in the summary of facts admitted by the defendant.  Briefly between the 2nd October and 15th November 2008 a scam was operated via the internet where gullible persons were deceived into depositing money into bank accounts or making cash remittances via Western Union, believing they were either investing in the stock market or that they had won a lottery prize.

3.  Three of the bank accounts in which money was deposited were opened with the Fubon Bank, the Standard Chartered Bank and the Hang Seng Bank in the name of the defendant, a Taiwanese citizen.  During this period a total of $1,638,926.17 was deposited into the three bank accounts.   As of the 15th November 2008 only $4,616.21 and $94,609.97 remained in the Fubon Bank and Hang Seng Bank accounts respectively.  No monies remained in the Standard Chartered Bank account.  In the same period of time the defendant was also the beneficiary of seven overseas remittances in the sum of $216,640.45 made via Western Union. 

4.  The defendant was arrested when he entered Hong Kong from the Mainland on the 14th November 2008.  Under caution the defendant said that at the request of a Mr Xu he came to Hong Kong and opened the three bank accounts.  Between the 3rd October and 14th November 2008 the defendant withdrew the monies from the bank accounts, which he then took to Shenzen and handed over to Mr Xu.  I am told that this occurred almost daily during this period.  In a later video interview the defendant admitted that he withdrew the remittances from Western Union and handed over the money to a person called HUI Man-keung. 

5.  In mitigation I am told the defendant committed the offences because he had incurred debt arising from medical expenses he needed to pay for both his parents.  At a neighbour’s wedding the defendant met Hui who promised to help him pay off his debts if he came to Hong Kong and dealt with money in bank accounts.  The defendant was promised his expenses and the equivalent of $6-7000 per month.  The defendant was suspicious how money could be earned so easily but still came as he wished to pay of his debts and help his family.

6.  Money laundering is a serious offence for which deterrent sentences are required not only to punish the defendants but also to deter others from behaving in this way.  It is not wrong in principle to impose an immediate custodial sentence on a first offender (see HKSAR v HUI Kam [2000] 3 HKLRD 211).

7.  As to the seriousness of the offence and the need for deterrence the Court of Appeal in HKSAR v XU Xia-li & another CACC 395/2003 said,

“The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities. Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced. Money laundering is therefore treated as a serious offence. If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong's reputation as a world-class financial and banking centre.”

8.  The Court of Appeal reviewed a number of cases in XU Xia-li, HKSAR v Javid Kamran CACC 400/2004 and in HKSAR v YEUNG Kin-chai CACC 341/2008.  In Javid Kamran as applied in HKSAR v Jain Nikhil [2007] 2 HKLRD640 and in HKSAR v LEONG Wai-keong CACC 476/2007 the court said that it was not possible to lay down guidelines, as there is a very wide range of culpability.  The court went on to set out some of the factors relevant in determining the culpability of a defendant including the nature of the offence that generated the laundered money, the extent to which the offence assisted the crime or hindered its detection, the degree of sophistication of the offence and perhaps the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence.  Another factor to be added is the degree to which an offence had an international dimension.

9.  In passing sentence I take into account everything said on behalf of the defendant by Mrs Yew.  I accept the defendant was not part of the scams operated on the victims.  I am told that the defendant never received the promised $6-7000 per month.  I must say I have my reservations that the defendant would stay in Hong Kong for almost six weeks just being paid little more than living expenses.  Whether or not the defendant received a reward is insignificant as a sentencing factor for the reality is the offence of money laundering is very serious (see HKSAR v CHEN Szu-ming CACC 270/2005 at paragraph 23).  

10.  In my view this was a carefully planned operation with a very clear international dimension, all the victims being contacted on the internet and came from places as far apart as Japan, Thailand, Austria and Canada.  The opening up of different bank accounts to facilitate the moving of the funds make the detection of the crime all the more difficult.  In a matter of weeks the defendant had dealt with just over $1.85 million.

11.  I am asked to take into account the defendant’s clear record.  Not only is the defendant not a Hong Kong citizen but also in my view is not to be regarded as a true first offender.  The defendant is a multiple offender, having pleaded guilty to ten offences (see Secretary for Justice v AU Man-kei, Alex CAAR 2/2000).  I am satisfied no discount is to be given on account of clear record.

12.  Taking into account the role played by the defendant and all the circumstances of the offences I am satisfied the appropriate starting points after trial are 2 years and 6 months imprisonment on charge 1; 18 months imprisonment on charge 2; 3 years imprisonment on charge 3 and 12 months imprisonment on each of charges 4-10.  I accept this was a course of conduct over a period of about 6 weeks and that in considering totality of sentence I should look at the total amount of the proceeds the defendant dealt with.  I am satisfied an overall starting point of 3 years imprisonment is appropriate. Giving the defendant full credit for his guilty pleas the overall sentence is reduced to 2 years imprisonment. 

13.  The defendant has cooperated with the police to enable the sums of $4,616.21and $94,609.97 to be withdrawn from the Fubon Bank and Hang Seng Bank accounts, which will result in one victim of the fraud receiving restitution.  I propose to give credit to the defendant by reducing the sentence on charge 3 by 2 months imprisonment.

14.  The defendant is sentenced as follows:

Charge 1 – 1 year and 8 months imprisonment;

Charge 2 – 12 months imprisonment;

Charge 3 – 1 year and 10 months imprisonment; and

Charges 4-10 – 8 months imprisonment on each charge.

I order all sentences to be served concurrently.  The defendant serves a total sentence of 1 year and 10 months imprisonment, which I am satisfied properly reflects his criminal culpability on the 10 charges.