HKSAR v. XIE JIANWEN

DCCC 105/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 105 OF 2014

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REASONS FOR SENTENCE

1.  The defendant pleaded guilty to an offence of conspiracy to commit "money laundering". The sum involved is $150,000.

Summary of Facts

2.  About noon on 19 November 2013, Madam LEE (PW1), who was home alone in North Point, received a phone call. A male voice pretending to be her son (PW2 Mr. HUI) told her that he was scared, blindfolded and being assaulted.  Another male voice ("the Male") asked for her mobile phone number and she provided it to him.

3.  The Male called PW1 at her mobile phone telling her that her son had borrowed money from him and that she must repay $250,000.  PW1 agreed to pay $150,000 after negotiation.  The Male threatened PW1 to pay the remaining $100,000 later or he would harm her family members.  The Male told PW1 not to hang up and ordered her to go to the Hong Kong Museum of History after gathering cash.

4.  PW1 went to a bank and obtained $75,000 first.  Thereafter, she went to a 2^nd bank where she met Madam LEE (PW3), a staff member.  PW1 informed PW3 of the situation by written notes.  PW1 collected another $75,000 at the 2^nd bank.  The 2^nd bank notified the Police.

5.  About 2:00 pm the same day, police officers met with PW1.  By then, the Police had already contacted PW2.  PW2 confirmed that he was in his office in Hong Kong and did not call PW1 at all.

6.  About 2:30 pm, WDSPC 18582 (PW4), posing as PW1, went to Tsim Sha Tsui carrying with her PW1's mobile phone.  Upon arriving at the Museum, PW4 asked the Male over the phone as to where she should go to pay the money.  The Male told her to look for and follow a woman in black clothes.  At some point, PW4 saw 2 women (later identified as the defendant and a Madam CHEN).  The defendant indicated to PW4 that PW4 should follow her.  The defendant was talking on the phone.

7.  Upon reaching the podium of the Museum, the Male told PW4 (over the phone) to pass the money to the defendant.  After giving the defendant an envelope which contained only white paper, PW4 asked the defendant where her son was and when he would be released.  The defendant told PW4 to ask the Male, who was on the phone with the defendant.  The defendant passed her mobile phone to PW4.  At that moment, PW4 alerted her colleagues.  They approached the defendant and revealed their police identity.

8.  DSPC 54855 arrested the defendant.  Under caution, she claimed that a friend asked her to buy milk powder in Hong Kong.  But she told her friend that she did not have sufficient money.  Her friend then told the defendant to go to the Museum where a relative of her friend would give the defendant some money.

9.  In her video recorded interview, the defendant claimed that her friend told her over the phone what to do and who to look for at the Museum.  She admitted having approached a woman in a blue outfit and asking the woman to follow her.  Upon arriving at the podium of the Museum, the defendant's friend told the defendant to ask the woman for money, which the defendant did.  When the woman asked the defendant about her son, the defendant was surprised and passed her phone to the woman.  The defendant accepted the envelope from the woman and was then arrested by the Police.

Mitigation & Sentence

10.  The defendant is 32 and has a clear record.  She is married and has a 4-year-old daughter in the mainland. Prior to her arrest, she worked as a bank manager earning RMB2,000 to 3,000 per month.  Her husband works as a truck driver.

11.  Defence counsel Ms. TSANG submitted that the defendant was indeed asked by a male friend to help him buy some milk powder and cell phones in Hong Kong.  The defendant was puzzled by the arrangement that a relative of her friend would pass her the money, but it all happened within a short period of time.  Ms. TSANG accepted that the defendant did what her friend had told her and had dealt with the money under suspicious circumstances.  Ms. TSANG stressed that the defendant was only foolish.  She is the main financial support of her family.  Both her daughter and mother would suffer as a result of the defendant's wrongdoing.  The defendant's mother suffers from cervical cancer and she now dares not seek medical treatment.

12.  The prosecution has applied for enhanced sentence pursuant to section 27(2)(c) and (d) of the Organized and Serious Crimes Ordinance (Cap.455) on the basis of prevalence as well as the nature and extent of harm caused to the community.  Ms. TSANG objected to this application on the basis that the statistics provided by the prosecution are not related to "money laundering" offences but phone deception in general.  Furthermore, even if the court accepts the statistics provided by the prosecution, the "money laundering" aspect is by no means prevalent.

13.  In my view, the "Drop-off" mode phone deception cases always involve someone picking up the money left behind by the victim at a public place or collecting the money directly from the victim.  That "collector" may or may not have knowledge of the underlying phone deception incident.  But the circumstances under which the "collector" picks up or collects the money are usually peculiar and would thus arouse his/her suspicion about the legality of his/her collecting act and/or the nature of the money collected.  As a result, based on the strength of the evidence against the "collector" simpliciter, he/she is likely to be charged with an offence related to money laundering.  In other words, the money collection portion is part and parcel to the "Drop-off" mode phone deception. Hence, the statistics of the "Drop-off" mode cases are directly relevant.

14.  I accept that in the present case, the defendant might not have had any knowledge of the underlying phone deception incident or the nature of the money she intended to collect.  She nevertheless played a vital part in the overall scam.  The court must send a clear message to the general public that people who play the role of a "collector" will receive severe punishment, so that there is a deterrent effect.  When there are less or no willing "collectors", the "Drop-off" mode phone deception method would fail.

15.  I bear in mind of the Court of Appeal's decision in HKSAR v XU Mai Qing CACC 464/2005, whereas Yeung JA (as he then was) held "Under section 27(11) of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences." [1]

16.  As revealed in the latest statement of DCIP LAM dated 19 May 2014, the number of "Drop-off" mode cases in 2008 was 38, which accounted for 7.9% of the overall successful phone deception cases.  The numbers then gradually increased to 80 cases in 2009, 126 cases in 2010, 149 cases in 2011, 169 cases in 2012 and 200 cases in 2013.  The number of "Drop-off" mode cases in 2013 accounted for 27.5% of the overall successful phone deception cases in that year.  The amount of monetary loss also has a steady increasing trend from 2008 to 2013 (from $3.01 million to $13.75 million).  In my view, there is clear and cogent evidence before me that the "Drop-off" mode phone deception is still widespread and commonly being practised in Hong Kong today.  Given the role played by the defendant, the amount involved and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 20%.

17.  The Court of Appeal in SJ v WAN Kwok Keung [2012] 1 HKLRD 201 held:

"Money laundering" is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the "money laundering" offences.

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[2]

18.  In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v HSU Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33.  I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as her personal circumstances.

19.  For the purpose of sentencing, I accept that the defendant probably had no knowledge of and did not take part in the underlying phone deception offence.  On the other hand, she admitted that she had reasonable grounds to believe that the money she intended to collect from PW4 represented the proceeds of an indictable offence.

20.  In HKSAR v NG Tsz Ming HCMA 454/2005, the appellant allowed someone, whom he met on ICQ, to use his bank account to accept some funds in return for a commission.  As a result, a sum of $49,000, which was proceeds of a theft offence, was transferred into the appellant's account.  Deputy High Court Judge To (as he then was) upheld the starting point of 12 months' imprisonment.

21.  The circumstances under which the defendant approached PW4 to pick up cash would most certainly trigger her suspicion about the legitimacy of such money.  However, it does not mean she knew that the cash she intended to pick up is proceeds of a deception.  In the absence of any such evidence, I take the view that the defendant's role is similar to those who sell their ATM cards or lend their bank accounts to others for dealing with proceeds of crimes.  Hence, in this case, I adopt a starting point of 15 months' imprisonment.  A one-third discount is given for the guilty plea, reducing the sentence to 10 months.  Apart from this, I see no other mitigating factors which warrant any further discount.  With the 20% enhancement, the sentence is therefore 12 months.