HKSAR v. BHATTY MANOJ CHAINMAN RAI

DCCC 1108/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.1108 OF 2012

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Reasons for Sentence

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1.  The defendant pleaded guilty to one charge of Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to s.25(1) and (3) of the Organized and Serious Crime Ordinance, Cap.455.

2.  Particulars of the charge are that the defendant between 30^th June 2010 and 30^th March 2011 dealt with $62,925,194.47 deposited into the account held in the name of Stuttgart Capital Limited with HSBC while knowing or having reasonable grounds to believe that the property wholly or in part, directly or indirectly represented proceeds of an indictable offence.

3.  According to the Summary of Facts, the defendant had confessed to meeting a man at a party when he travelled to Dubai in May 2010 by the name of Narayan Bassnet who, upon the defendant’s return to India, called the defendant through a satellite phone and offered the defendant USD$1,000 per month in return for the defendant becoming the director and shareholder of a company, and for him to go to Hong Kong to open a bank account for the company.

4.  The defendant agreed and came to Hong Kong in June 2010 to open a ‘business integrated account’. He was met by some Chinese people whom he did not know. The account was held with HSBC in the name of Stuttgart Capital Limited. The defendant said he did not look at the documents and just handed them over to the said Chinese people.

5.  The defendant had nothing more to do with the operation of the bank account and had never seen any of the bank statements. He never asked any of the people involved why he needed to open the bank account.

6.  The defendant did however on 2 later occasions came to Hong Kong to deal with matters relating to the bank account. Each time he was met by Chinese people whom he did not know and each time he received instructions from Narayan Bassnet via satellite phone. He signed documents but did not ask what they were for.

7.  The defendant’s expenses for each of his 3 Hong Kong visits were paid for by Narayan Bassnet through Western Union. On the first visit the defendant was paid HKD$10,000 and HKD$5,000 for the next 2 visits. The defendant had also received 8 or 9 monthly payments of USD$1,000 through Western Union. The defendant had received a total of about HKD$90,000.

8.  The defendant has no idea what the bank account was for, nor the source of the money deposited into the account. The defendant was unable to contact Narayan Bassnet as the communication was always initiated by Bassnet via satellite phone.

9.  The defendant did feel uncomfortable about what he had been doing and felt that something was not right. In January 2011, when Narayan Bassnet contacted him again, he told Bassnet that he wanted to quit.

10.  As it turned out, the bank account opened by the defendant was being used for money laundering. Examination of the banking records showed that during the 9 month period that the account was in operation between 30^th June 2010 and 30^th March 2011, a total of HKD$62,925,194.47 had been transferred into and out of the various accounts under the business integrated account, either within 3 days or less, or sent and returned immediately in ‘U-turn’ pattern.

11.  One of the deposits was traced back to a theft which took place in Scotland and HKD$11.35 million was transferred to the defendant’s account.

12.  The defendant was arrested on 5^th September 2012 when he arrived in Hong Kong on a flight from India. As this court would learn later on in the defendant’s mitigation, he had in fact visited Hong Kong in April 2011 and July 2012 and was not arrested on those occasions.

Mitigation

13.  Mr. Midgley very helpfully provided the court with his notes on mitigation together with documents supporting. In gist, the defendant would like the court to understand that the defendant is a naïve person who just wanted to make some easy money. He had no idea what the account he had opened was for and did not realize the seriousness of his actions.

14.  A bundle of letters in mitigation was submitted. Through letters from those who are close to the defendant, it would appear that the defendant is a good man who is “naïve, trusting and very childlike”. There simply was no good reason why he committed the present offence other than his naiveness and all that he had to show for that is about HKD$90,000.

15.  The defendant has no knowledge of the crime in Scotland, nor of any of the many deposits and transfers in and out of the account. When the defendant felt uncomfortable about the arrangement, he decided that he wanted to get out.

16.  Upon the defendant’s arrest on 5^th September 2012, the defendant had cooperated with the Police in Hong Kong as well as Strathclyde. Mr. Midgley told the court that the defendant has continued to cooperate with the authorities after his arrest and that it should be considered a strong mitigating factor.

17.  The defendant is 50 years old and a retired travel agent. He and his wife and two daughters, aged 13 and 18, reside in India.

Sentence

18.  The maximum sentence for a s.25(1) offence is that of 14 years’ imprisonment. The defendant is of clear record.

19.  Mr. Midgley submitted that deterrence should not be a consideration since the criminal masterminds behind the scene would not care less what might happen to their foot soldier, the defendant.

20.  I am unable to agree with that. First of all, the defendant was hardly the pawn since he had on 2 different occasions after the opening of the account came back to Hong Kong to deal with the account.

21.  Secondly, the deterrence was meant towards those who might be tempted to make some easy money, just as the defendant did, by helping others to open accounts and not for those who tempt them to do it. It is therefore necessary that the sentence must incorporate the element of deterrence.

The defendant’s actions

22.  The defendant flew to Dubai in May 2010 and met the culprit behind the scene, a Mr. Bassnet at a party.

23.  The defendant just knew his name and nothing else about him or his job. After the defendant returned to India, he got a phone call from Mr. Bassnet who asked the defendant to assist him by acting as the director and shareholder of a company and by going to Hong Kong to open a bank account in the company’s name. The defendant was promised a not insubstantial sum of USD$1,000 per month.

24.  In around a month after his return from Dubai to India, the defendant flew to Hong Kong, all expenses paid, was met by some unknown Chinese people, and went with them to HSBC to open an integrated account in the name of a limited company that he was vaguely told traded in commodities. The defendant no doubt would have had to sign documents in the process of opening the account and were given documents afterwards, which the defendant did not even look at and passed straight on to the unknown Chinese people.

25.  The defendant then returned to India and got on with his life as the beloved stay home husband. Apparently unknown to his wife and good friends, he kept on receiving the monthly payments through Western Union, an international money transfer agent.

26.  According to Mr. Midgley as well as the amended summary of facts, it was not until some time in January 2011 that the defendant told Mr. Bassnet that he wanted to quit. It is not clear what the defendant actually did in order to quit. There is no evidence of cancellation of the account by the defendant.

The defendant as the naïve person

27.  It is the main thrust of Mr. Midgley’s mitigation on behalf of the defendant that the commission of the offence was as a result of the defendant being naïve and too trusting of others. I am afraid the evidence shows otherwise.

28.  The defendant holds a degree in Commerce. He has been working since 1985 and by 2008, he had been working as the Assistant Manager in Sales for Air France and Kuwait Airways, as well as having started a small scale business entailing professional cleaning, polishing of high end cars. He is therefore a man of considerable business knowledge and experience.

29.  The defendant is surrounded by very intelligent and able people as well. His wife is obviously one, as are his friends Madam Roshen Amin and Mr. Khambatta.  All are very successful business people and, as gleaned from their letters, highly intelligent. If the defendant was really naïve, he would no doubt immediately mention this incredible arrangement to at least his wife and perhaps seek her advice. Yet, from all the letters written on behalf of the defendant, none mentioned that the defendant had consulted any of them. It baffles one why the defendant did not think to mention anything about his Dubai/Hong Kong venture to any of his close friends and ask them for advice, or to share in the joy of his good fortune. The only reason I find that could explain the defendant’s failure to mention the arrangement was because he knew clearly what he was doing was illegal and he did not want those who love and look up to him to know that he was taking part in an illegal venture.

30.  The defendant is also someone of considerable organizing skills. As evidenced in the letters from Prashant Sangle and Romina Khambatta. In fact, according to Mr. Sangle, the defendant was the mentor of the defendant’s wife as well as those who were part of his wife’s team. Bearing in mind Madam Bhatty is a high ranking official of a sizable global company, I don’t think the defendant can be that naïve a person if he was considered a mentor by his wife and her team. A mentor by definition would require that a person to be experienced and trusted. One would not trust someone who is naïve for advice.

31.  What I find the real picture to be is this.

32.  The defendant is an intelligent and capable person. For some reason he flew to Dubai and there met this man Bassnet. When he was back in India he got the phone call and by reason of greed, he agreed to the proposal of Bassnet to be the director and shareholder of a company and agreed to travel to Hong Kong to open a bank account for the company and then to hand over everything to those unknown Chinese people, not bothering to find out what was going on to require them to open a bank account in Hong Kong by him, an Indian resident with no business or interest here.

33.  The defendant knew what he did was wrong. He knew or had reasonable grounds to believe that those who were asking him to open the account and then taking over the operation of the account would be up to no good. But he did not care. He got his money. It was not by any means a small amount. We heard in mitigation how his wife, a high ranking officer of a big company was earning USD$3,000 per month, and so the defendant must have realized that to be promised USD$1,000 per month for doing basically nothing would probably be too good to be true. He must have known that there was something wrong with the arrangement. Yet, the defendant carried on.

34.  I will accept that the defendant had no idea what the underlying indictable offence was in relation to the money laundering, but that is the beauty of any such schemes. The defendant would deliberately be kept out of the loop so that he would know as little as possible, distancing him from the proceeds, making him seemingly less culpable.

35.  The defendant is not in any way connected to Hong Kong. Even in his various letters of mitigation, it is alleged that it was his love for travelling that brought him to Hong Kong and not anything else. His ties are all in India and he travelled to Hong Kong on 3 occasions specifically to open the bank account and to deal with matters related to the account which was to be used for money laundering. He was requested to open the bank account by someone he met in Dubai and according to the defendant had contacted him via satellite phone, suggesting that they were not from India. There is therefore definitely a strong international element in the offence that the defendant had committed. I find that this is a significant aggravating feature as identified by the Court of Appeal in HKSAR v a male known as Boma Amaso, CACC 335/2010.

36.  As for the other factors that the Court of Appeal say a court should take into consideration when sentencing a money laundering case, I find that the nature of the majority of the money being laundered is not known, although HKD$11.35 million of the money could be traced back to a theft case which took place in Scotland. There is no evidence to suggest that the defendant had knowledge of the underlying indictable offence. Although the defendant was obviously opening the account for use by someone else, I do not think the court can infer that the offence of money laundering was committed by an organized criminal syndicate. I however very much suspect so, given that the defendant was requested by someone in Dubai to help commit an offence in Hong Kong with the help of unknown Chinese people.

37.  The money laundering was over a period of 9 months. It was suggested in mitigation that once the defendant felt something was wrong he told those involved he wanted out as soon as possible. For the reasons I referred to above as to how intelligent and able the defendant in fact is, I reject this suggestion that the defendant was slow in realizing what he was doing was wrong. I find that the defendant knew from day one what he was doing was wrong and he deliberately carried on doing it to make some more money, to take advantage of the situation. He allowed the account to be used for a period of 9 months. Even when he felt that something was wrong, he said he told Mr. Bassnet that he wanted to quit, the defendant could have gone to the Police in India or Hong Kong but he did not.

38.  I find that the role of the defendant is significant. Without him willingly coming to Hong Kong to open the bank account, those criminals behind will not be able to launder the money so successfully and for so long.

39.  As a result of the defendant’s actions, criminals from other parts of the world were able to launder money. The only reason that money needed to be laundered is that the money is tinted with illegality and are proceeds of crime. As in the case of the theft which took place in Scotland, there are bound to be victims of crime. They may come from similar family background as the defendant, they may be equally loving fathers and friends, yet they suffered as an indirect result of the defendant actively taking part in the crime of money laundering. The defendant must suffer the consequences of his actions.

40.  As I mentioned before, I find that a deterrence sentence is necessary. For the amount of money being laundered and for the length of time the laundering had gone on and for all the factors referred to above, I find that a starting point of 4 years’ imprisonment is appropriate.

41.  Given that the defendant had pleaded guilty, I will grant him the full one third discount. I have considered whether discount should be given to the defendant for any assistance given to the authorities but have come to the conclusion that, probably through no fault of the defendant himself, the so called assistance he had rendered are not significant enough to warrant a discount.

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