HKSAR v. CHENG LUT SING AND OTHERS

DCCC 1078/2021

[2023] HKDC 511

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1078 OF 2021

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REASONS FOR SENTENCE

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Background

1.  There are 3 charges of money laundering against the 3 defendants.  All of the 3 charges were occurred on the 26^th May 2021.

2.  Charge 1 : against D1, the amount was $199,000.

3.  Charge 2 : against D2, the amount was $250,000.

4.  Charge 3 : against D1, 2, and 3.  The amount was $20,455,000.

5.  All the 3 defendants pleaded guilty to their respective charges, D1 pleaded guilty on the first day of the trial.

Summary of facts

6.  Mr. Li Shouming ("PWl")  is the director of a trading company called "Indo Corporation Limited", which is located at Room 1903-1904, No. 909 Cheung Sha Wan Road, Cheung Sha Wan, Kowloon.  Mr. Cheng Chung Kwong ("WP")  was an employee of the company.

7.  Dl to D3 are family members of the WP. Dl is the father of the WP.  D2 is the sister of the WP.  D3 is D2's husband and the brother-in-law of the WP.

The Incident

8.  There were two safes in PWl's room in the office.  PWl  last found the two safes  in order in the afternoon on 24 May 2021. There were around HK$36 million cash in one safe and around HK$4 million cash in the other safe, i.e. a total of around HK$40 million cash in the two safes.

9.  In the morning on 26 May 2021, after returning to office, Ms. XIE Yingli ("PW2")  found that her desk was in a mess and her drawers had been ransacked.  Upon PWl's instruction, PW2 checked the two safes and  found that the cash  inside were missing.  PWl then returned to office and found that only around HK$50,000 cash were left in the safes.  PWl then reported the case to police.

CCTV

10.  In the vicinity of the company's building, CCTV captured the following on 26 May 2021:-

(a)  At around 7:04 am, WP alighted from the private car UH 1555 which was parked outside the office building "909 Cheung Sha Wan Road";

(b)  At around 7:07 am, WP entered the lobby of the office building "909 Cheung Sha Wan Road" with a suitcase in a blue cover;

(c)  At around 7:09 am, WP entered the company's office with the suitcase in a blue cover;

(d)  At around 7:34 am, WP left the company's office with a silver suitcase and a large nylon bag; and

(e)  At around 7:41 am, WP boarded the private car UH 1555 outside the office building "909 Cheung Sha Wan Road" and left.

11.  CCTV of various locations captured the following on 26 May 2021:-

(a)  At around 8:35 am, D2 and D3 picked up a suitcase in a blue cover near 52 Hoi Pa Street, Tsuen Wan and then returned home;

(b)  At around 9:49 am, Dl went to D2's home with a silver suitcase;

(c)  At around 11:31 am, Dl, D2 and D3 left home with two suitcases (one in silver and one in red and blue); and

(d)  From 11:55 am to 12:41 pm, Dl and D2 were inside Wealthy Safe Deposit Box Limited ("Wealthy Safe")  in Tsim Sha Tsui for registration of a safety box and storage of the two suitcases in the safety box.

The Arrests

D1

12.  Dl was arrested on 27 May 2021 at his home.  Under caution, Dl stated that WP asked him to go up to take something with D2 to a storage; he only knew the things were money after going up; D2 passed him a bag of money and informed him the money were living expenses provided by WP to him.

13.  D1 then pointed out the bag of money to the police in his home.  Cash of HK$199,000 inside a black shoulder bag in a red suitcase were seized.

D2 and D3

14.  D2 and D3 were arrested on 27 May 2021 at their home.  Under caution,

(a)  D2 stated that WP asked her to put the money inside a safety box, the money belonged to WP and she did not know how WP got the money; and

(b)  D3 stated that he only helped D2 move WP's suitcase to their home.

Search at Wealthy Safe

15.  In the morning on 28 May 2021, in the presence of Dl, police seized the following amounts of cash from Safe Box No. 6003 at Wealthy Safe:-

(a)  HK$8,655,000 in a red and blue suitcase; and

(b)  HK$ l l,800,000 in a silver suitcase.

16.  In total, HK$20,455,000 cash were seized from the safety box.

17.  Under caution, Dl said it was WP who asked him to put the money into the safety box.

Video-recorded Interviews

D1

18.  A video-recorded interview was conducted with Dl on 28 May 2021.  Under caution, D1 stated that:-

(a)  In the morning on 26 May 2021, WP called D1 and asked him to find D2 at her home to take something to a storage. Subsequently, D2 asked Dl to bring two suitcases. Dl then put a smaller suitcase in a bigger suitcase and brought the two suitcases to D2's home;

(b)  After arriving at D2's home, D2 told Dl that the suitcase in the living room contained money. The money in the suitcase were in piles. Then, D1, D2 and D3 moved the money from the original suitcase to the two suitcases brought by D1;

(c)  D2 also passed D1 a bag of money and told D1 the money was living expenses provided by WP to him;

(d)  D1, D2 and D3 then took the two suitcases to Tsim Sha Tsui by taxi. D3 then left. D1 and D2 then went into Wealthy Safe to open a safety box;

(e)  D1 registered for the safety box under his name as per D2's request and paid HK$50,600 for the fees. The HK$50,600 were money from the suitcase;

(f)  D1 and D2 then put the two suitcases, a trolley and the opening documents into the safety box. D1 kept the two keys of the safety box. D1 and D2 then left and went home separately;

(g)  After arriving home, D1 counted the amount of money in the bag passed by D2 to him and found there were around HK$190,000;

(h)  D1 thought the bag of money belonged to WP but he did not know the source of the money;

(i)  D1 did not know when WP passed the bag of money to D2;

(j)  WP had not given D1 any living expenses for a long time. WP used to have a successful business but later his business turned sour. DI knew WP had huge financial burden so he had doubted why WP could suddenly give him money as living expenses. D1 then thought he would keep the money for WP and return the money to WP when he needed it;

(k)  DI did not know how the original suitcase came to be in D2's home but he believed the money belonged to WP because WP asked him to take something to a storage. D1 did not know the amount and the source of the money in the suitcase;

(l)  The original suitcase containing the money was damaged. D1 believed the damaged suitcase had been thrown away later;

(m)  D2 had enquired with different safe companies and ultimately chose the safe company in Tsim Sha Tsui but D1 did not know why D2 chose that one;

(n)  D1 expected WP would take the things from the safety box later; and

(o)  D1 did not contact WP after opening the safety box.

D2

19.  A video-recorded interview was conducted with D2 on 28 May 2021.  Under caution, D2 stated that:-

(a)  In the morning on 26 May 2021, WP called D2 and said he had some documents or things to store at her home. WP asked D2 and D3 to meet him downstairs at Fuk Loi Estate, Tsuen Wan;

(b)  Upon arrival, D2 saw WP standing next to his private car. WP took a suitcase in a blue cover from the car and asked D2 to open two safety boxes. WP passed a paper slip to D2 with two addresses and telephone numbers on it, which were information related to Premium Safe Deposit Box in Ho Man Tin and Wealthy Safe in Tsim Sha Tsui;

(c)  D2 asked WP what was inside the suitcase and WP said it was money left from his previous business and asked her to count the amount after going home. D2 refused to help. WP told D2 that he would find D1 to help but still required her to accompany D1 to open the safety box;

(d)  WP then left the suitcase with D2 and passed a brown paper bag to D2 and left. D2 and D3 then took the suitcase and the brown paper bag home;

(e)  After returning home, D2 received a call from WP. WP told D2 that he had already contacted D1 and again requested her to jointly open a safety box with D1 but she refused again;

(f)  D2 then called the two safe companies for enquiry and ultimately chose Wealthy Safe due to size limitation of the safety boxes;

(g)  As WP's suitcase was broken, D2 asked D1 to bring two suitcases to her home. When D1 got to D2's home, D2 showed WP's suitcase to D1. After confirming D1's willingness to open a safety box for WP, D2 and D1 opened WP's suitcase and counted there were around HK$20-21 million of cash inside. Then, they put HK$12 million in the silver suitcase brought by D1 and another HK$9 million in the blue and red suitcase brought by D1;

(h)  D2 worried that the two suitcases would break so she asked D3 to buy two suitcase straps;

(i)  D2 then opened the brown paper bag and found there were around HK$250,000 cash inside. D2 intended to take HK$50,000 from the bag of money for opening the safety box and store the remaining HK$200,000 in one of the suitcases to be put in the safety box. However, Dl told D2 that he would keep the remaining HK$200,000 for WP. D2 then put the cash in another bag and passed it to D1 and threw away the brown paper bag;

(j)  Then, D1, D2 and D3 took taxi to Wealthy Safe at Hankow Road, Tsim Sha Tsui. D3 then left. D2 and Dl then entered Wealthy Safe to open a safety box. D2 and Dl placed the two suitcases inside the safety box. Dl was the registered owner of the Safe Box No. 6003 and kept the two keys of the safety box;

(k)  After going home, D2 threw away WP's suitcase;

(l)  D2 believed there was no problem with the money, but she refused to open safety box in her name because she had got a criminal record (conspiracy to defraud)  when she helped WP on some account matters in the past;

(m)  WP did not say when he would take the money back; and

(n)  When WP passed D2 the brown paper bag, she did not know what was inside at that time.

D3

20.  A video-recorded interview was conducted with D3 on 28 May 2021.  Under caution, D3 stated that:-

(a)  At around 8am on 26 May 2021, D2 received a call from WP who asked her to take a suitcase to a safety box. D2 refused immediately and later WP found D1 to help. As the suitcase was very heavy, D2 asked D3 to go down together to help take the suitcase;

(b)  When D2 and D3 arrived downstairs, WP was waiting next to his private car with a silver suitcase in a blue cover. D2 then asked WP what was inside the suitcase and WP said it was money from legitimate means;

(c)  WP then passed a paper slip to D2 which contained the addresses and telephone numbers of two safe companies in Ho Man Tin and Tsim Sha Tsui respectively. WP asked D2 to open a safety box and put the suitcase in it;

(d)  D2 refused and WP found D1 to help. WP then left. D2 and D3 then took the suitcase back home. D2 threw away the paper slip later;

(e)  After D2 and D3 returned home, they did not open the suitcase until D1 arrived with two suitcases at around 9 am on the same day. Then, D1, D2 and D3 moved the cash from WP's suitcase to the two suitcases brought by D1 in roughly equal proportion. D1 kept some money for the fees of opening the safety box. D2 threw away WP's suitcase later;

(f)  At around 10 am - 11 am on the same day, Dl, D2 and D3 went to Hankow Road, Tsim Sha Tsui by taxi. D3 helped take the two suitcases from the taxi and then left for work;

(g)  D3 did not know what WP did for a living;

(h)  D3 recognized "UH1555" was WP's car plate number;

(i)  When WP asked D2 to open a safety box, WP did not say when he would take the money back or what purpose keeping the money at the safety box was for;

(j)  D3 did not enter the safety box company;

(k)  The safety box was registered under D1's name as D2 had refused WP's request many times. D3 believed they opened the safety box successfully because he did not see the two suitcases after going home later;

(l)  D3 did not know how much money there was in the suitcases as he had not counted it;

(m)  D3 and D2 had not taken any money from WP's suitcase;

(n)  D3 did not know why WP asked them to put the money in the safety box and he did not know how WP got the money; and

(o)  While WP said the money was from legitimate means, D2 and D3 could not be 100% certain about it but they had no basis to rebut WP's claim.

Other Investigation

21.  Subscriber and Call Record showed that WP had called D1 and D2 on 26 May 2021.

Criminal record

22.  D1 and D3 has clear record.  D2 has one previous in 2008 for a charge of conspiracy to defraud and was sentence to 40 months’ imprisonment.

Antecedent and mitigation of D1

23.  He and his wife are both 84 years.  They both support each other in their daily living as they had gone through cancer treatments in 1999 and 2008 respectively.

24.  They have 4 sons and one daughter (D2), 3 of the sons live in China while one of them (the WP)  lives in Hong Kong.

25.  D1 graduated from the nowadays called the University of Science and Technology Beijing in 1966, it was a remarkable achievable in his times and earned him a respectable status in China.

26.  D1 and his family moved to Hong Kong in 1980 for a better future of his family.

27.  As to the commission of the present offence, the defence said that it did not fall into the most serious end of the similar kinds.  D1 did not know about the predicate offence, he only knew the cash in the suitcase when he arrived at D2’s home.  He was instructed to handle the money in a short notice to put the money into the safe, he was shocked at that time.  There was no premeditation, planning or international element in dealing with the cash.

28.  He was cooperative with the police investigation and pointed out the bag of which contained $199,000 cash to the police in his home.

Antecedent of D2

29.  D2 and D3 are 43 years old, they are husband and wife with a son that is 20 years old.  He is in his last year of study and will be graduated this summer from the Hong Kong Institute of technology.

30.  D2, D3 and their son have found faith in Christianity in 2021.

31.  D2 has 4 brothers, the wanted person was one of her brothers who is 10 years older than her.  He looked after her in many aspects of her life.

32.  In D2’s case, she said that she committed the last offence in 2008 because of her brother.  She chooses to forgive him and they still maintained a close relationship after she served a period of imprisonment.

33.  D2 committed the present offence due to misguide loyalty to her brother and the emotional blackmail from him. 

34.  Her brother told her that if she did not help him to take the suitcase to the safe, he would ask their elderly father (D1)  to help. His brother did.

35.  In view of D1’s age and health, the weight of the suitcases, D2 went ahead to do what was told to do.

Antecedent of D3

36.  He is now 44 years old. He is the husband of D2.

37.  From all the mitigating letters from his colleagues and his supervisor, they all said  the same thing that he is a quiet person, but he is diligent, motivated, responsible and hardworking.  He is an excellent staff.

38.  In D3’s own letter, he told me that he is an introvert, he talks very little, his wife takes care of everything in the family.  He has very little contact with the WP and hardly knows anything about him.  He has been a law-abiding citizen in his lifetime.  When he looks back in hindsight, he knows what he should do at that time, but the call from the WP was totally out of the blue.  He only helped his wife to move the luggage and went to buy 2 luggage straps as asked by his wife.

39.  He is extremely remorseful for what he had done.

40.  His wife said that he is a caring husband and a doting father. They both raised their son well.  Their son does not blame D2/3 , rather he learns from this experience and he will be careful in the future to live a law-abiding life.  He is also very supportive to his parents.  He is due to graduate this summer and understandably from now on, he has to stand on his own feet.

41.  From D2/3’ letter, I come to know that they are both extremely concerned of the wellbeing of their only child in the event that both of them are send to goal, their son will lose the financial and emotional support from them.  They work hard and save some money for him to continue his living.

Relationship between the Defendants

42.  In general, the relationship of the 3 defendants are father (D1), daughter (D2)  and husband of D2 (D3).

43.  The wanted person who stole about 40 million from his employer was the son of D1 and brother of D2.  D2 and D3 are husband wife.

44.  D3’ s involvement in this case is at the low end, he helped his wife (D2)  to move the suitcase from the street level to home.  He followed what he wife (D2)  instruction to go to buy a suitcase belt to secure the suitcase and took the taxi to the TST with D1 and D2, then he left and returned back to work.

45.  It was a one–off incident, no international element, no planning or premedication, all the defendants do not know that the wanted person had committed an offence before handing the suit case to them.

46.  All the defendants were cooperated with the police investigation.

Sentence

47.  The offence carries a maximum penalty of a fine of $5 million and an imprisonment term of 14 years on indictment.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court pointed out that given the highly variable circumstances in which the offence might be committed, it was difficult and undesirable to offer guidelines.  However, the Court provided a non-exhaustive list of the relevant sentencing factors as follows:-

(a)  the nature of the predicate offence;

(b)  the state of the offender’s knowledge;

(c)  where the operation involved an international dimension, that would be a significant aggravating feature;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organised criminal syndicate, that would be an aggravating feature;

(f)  whether there was one transaction or many and the length of time over which the offence was committed;

(g)  whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h)  the role of the offender and the acts performed by him.

48.  In the case of Hsu Yu Yi, CACC159/2009, the court also considered the sentencing principles in this type of offences.  Paragraph 9 of the judgment said:

“There are no sentencing guidelines for the offence of dealing with proceeds from an indictable offence because the facts vary from case to case. However, the following factors are to be taken into account when determining sentence:

(1)  It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2)  The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(3)  The offence of dealing with proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However, if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(4)  If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

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

49.  In the judgement of Hsu Yu Yi [2010] 5 HKLRD 545, the Court stressed that it was fact-specific nature of the offence regarding sentence.  However, it was also pointed out that the amount of the money involved, rather than the amount of benefit received by a defendant, is the major sentencing consideration.

50.  The defence have provided me a number of cases of which I have read them all.  We also discussed about those cases during mitigation and the facts are very much different from the present case.

51.  The fact of this case is really one of its kind.  The defence told me that they have done their research and could not find any case that is anything close to the facts of the present case.

52.  Be that as it may, I still bear in mind of the sentencing principle as stated in Boma and all the mitigating factors put forward by the defence.

53.  I first deal with the discount that the respective defendant is entitled to. D2 and 3 indicated their guilty plea before setting down the hearing date for D1.  D2 and 3 are entitled to customary 1/3 discount. 

54.  D1 indicated his plea just before the commencement of the Prosecution case.  In any event, D1 does not seek to challenge the Prosecution case and indicated that he would not give evidence.

55.  D1 changed his plea to guilty on the same day before the Prosecution case started.  I allow him a 25% on the 2 charges that he has pleaded quity to.

56.  In the present case, there is no evidence to suggest that the 3 defendants were aware of the origin of the 20 million cash.  However, they have reasonable grounds to believe that the 20 million cash were not WP’s money as he was not financially sound.  Any reasonable person would ask why he did not deposit the money into the bank and would ask D1 and D2 to take the trouble to open a safety deposit box and deposit in it.

57.  The cash in charge one and two were part of the bundles of money delivered by the WP to D2 and D3.

58.  The 3 defendants were related to the wanted person who is the black sheep of the family. He was the one stole money from PW1’s company.

59.  I agreed with the defence that there is no planning in the commission of the crimes, or involved an international elements or syndicate. 

60.  In sentencing each and individual defendants, apart from the amount concerns, it was the culpability and their level of involvement that matters.

61.  As to D2 and D3, there was no reward or financial benefit in dealing with the money in the suitcases.

62.  D1 received a bag which contained $199,000 and was told by D2 that was the living expenses for him.  However, D1 only intended to keep them for his son (WP)  in the event that he needs them in the future.

63.  From the CCTV footage as described in the summary of facts, the handling of the suitcase from the WP to the safety box company was from 8:45 am to 12:41 pm.  A total of about 4 hours.

64.  When D1 brought the 2 suitcases from home to D2’s place, he was not aware of the content of the WP’s suitcase.  It was when he arrived at D2’s home, he saw the suitcase was full of cash.  D1, 2 and 3 moved the money into D1’s 2 suitcases.  D1 and D2 went into the Wealthy Safe to open a safety box.  D1 registered for the safety box in his name and paid $50,600 cash from the suitcase.  D1 kept the key of the safe.

65.  D1 and D2 were all along dealing with the money from the WP’s suitcase.  D1’s participation in this matter began at the time when he arrived at D2’s home.  He opened an account with Wealthy Safe in his name and kept the key of it with him.

66.  As to D2, she knew that the WP had brought disgrace to her previously in 2008.  She should be on guard and be altered of what the WP was up to.  20 million was a huge sum, no one would carry such a large sum in a suitcase and asked her to put the suitcases into the safety box.  As such, I refused to accept what the defence said it was a misguided faith to her brother.  

67.  She verbally refused the WP two times, on the other hand, she physically and actively assisted the WP by asking her father D1 to bringing 2 more suitcases to her flat, moved the money into the other suitcases, counted the money and took the suitcases to TST, accompanied D1 to open the account and deposited the suitcases into the safety box.

68.  I viewed D2’s capability was the most serious amongst the 3 defendants.  She knew she was dealing with 20 million cash in charge 3.

69.  As to charge 1 and 2 – D2 handed the bag to D1, the money was also from the WP suitcase, D1 received the money and took it home without depositing it into the safety box.

70.  I accept that it is unlikely that D1 will re-offend again in the future.  However, as to D2, we have discussed during mitigation, that D2 has not leant from her 2008 experience, she committed the present because of the WP.  The WP knows her too well and she was the only trusted person he could turn to, without her assistance, there was no other way to keep the money.

71.  Charge 3 involved 3 defendants, this is an aggravating factor.

72.  Against this background, I take the following starting point for D1:-

a. Charge 1:- 6 months , reduce to 4.5 months after 25% discount;

b. Charge 3:- 17 months and enhance the sentence by 3 months in view of an aggravating factor, it adds up to 20 months, reduce to 15 months after 25% discount;

73.  I order both charges to run concurrently.  That is 15 months’ imprisonment.

74.  There is no doubt that D1 committed the present offence was due to the blind faith in his son, he is now 84-year-old, I take a generous approach to reduce the sentence by another 6 months, 3 months for his old age and 3 months for his relationship with the WP. 

75.  The final sentence for D1 is to serve a period of 9 months’ imprisonment.

76.  I do not agree with the defence that I should impose a suspend sentence as it will give the public a misconception that they can abuse the weak, the elderly relative to assist them to launder illicit money.

77.  I now come to sentence D2, having considered her role in this case and the amount involve, I take the following starting point for charge 2 and 3:-

a. Charge 2:- 6 months, reduce to 4 months after 1/3 discount;

b. Charge 3:- 2 years and enhanced by 3 months in view of the aggravating factor, it adds up to 2 years 3 months, reduce to 18 months after 1/3 discount.

78.  I order 2 charges to run concurrently.  As to her relationship with the WP, I further reduce 3 months. D2’s total sentence is 15 months.

D3’s sentence

79.  I consider D3 played a passive role in the present case.  He has an unblemished record.  The commission of the present offence was totally out of his character.  He is unlikely to reoffend again.  This is a one off incident.

80.  I consider that a starting point of 12 months is appropriate, in view of an aggravating factor, I enhance the starting point by 3 months, given his guilty plea, I reduce the sentence to 10 months.

In conclusion

D1

81.  Charge 1: 4.5 months

Charge 3: 15 months

Both charges to run concurrently, after 6 months’ reduction, the final sentence is 9 months.

D2

82.  Charge 2: 4 months

Charge 3: 18 months

Both charges to run concurrently, after reduction of 3 months, the final sentence is 15 months’ imprisonment.

D3

83.  Charge 3: 10 months imprisonment.