HKSAR v. LIANG HAOGUI

DCCC 858/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 858 OF 2014

____________

REASONS FOR SENTENCE

The defendant pleaded guilty to an offence of conspiracy to commit "money laundering". The sum involved is $25,000.

Summary of Facts

2.  About 2:30 pm on 6 August 2014, Madam CHAN (PW1), who was home with her daughter in Sheung Wan, received a phone call.  A male voice pretending to be her son (PW2 Mr. LAI) shouted "Mum, I'm in big trouble.  I'm being held hostage."  Another male voice (WP2) told PW1 that her son would die unless she agreed to pay $200,000 as ransom.

3.  PW1 told WP2 that she could only afford $25,000.  At the same time, she asked her daughter to confirm PW2's safety and to call the Police.  PW2 turned out to be having lunch in Central; his safety was confirmed.

4.  About 3:30 pm, WP2 called PW1 again.  PW1 told him that the money was ready.  At WP2's request, PW1 went to Ho Man Tin Plaza.  She also prepared a bag of dummy money by placing a pile of newspaper in a black plastic bag (the "Dummy Bag").

5.  WP2 later asked PW1 to go to Prince Edward MTR Station Exit A instead.  Upon arrival, WP2 directed PW1 to go to Playing Field Road, throw the money into the rubbish bin at a road junction, and return to Prince Edward MTR Station. 

6.  Meanwhile, DPC 7990 (PW3) and other police officers observed in the vicinity.  About 4:50 pm, they saw PW1 at Prince Edward MTR Station Exit A holding the Dummy Bag and talking on the phone.  PW3 saw PW1 and the defendant walking along Playing Field Road.  The defendant was looking around and talking on the phone.  When PW1 arrived near the junction of Fa Yuen Street and stopped next to a rubbish bin, the defendant was looking at her closely.

7.  PW1 put the Dummy Bag into the rubbish bin and left.  About 2 minutes later, the defendant walked towards the rubbish bin.  He lit a cigarette and looked around.

8.  After a while, a taxi pulled up and parked next to the rubbish bin.  The driver alighted from the vehicle.  The taxi became empty with its doors closed.  At that moment, the defendant took the Dummy Bag from the rubbish bin and put it in his shoulder bag.  He opened the left rear door of the taxi and closed it almost immediately.  He did not board the taxi but began to walk along Playing Field Road.  PW3 intercepted him and retrieved the Dummy Bag from his shoulder bag.

9.  Under caution, the defendant said he only picked up the Dummy Bag without deceiving anyone.  The Police subsequently confirmed that the taxi driver was not related to this case.  In his video-recorded interview, the defendant gave an entirely exculpatory explanation about his trip to Hong Kong as well as what he did and why he did those things.

10.  Immigration records showed that the defendant had come to Hong Kong in May and June 2014.  This time, he entered Hong Kong from the mainland on 4 August (2 days before the offence) and was allowed to stay for 7 days until 11 August.   

Mitigation & Sentence

11.  The defendant is 33 and has a clear record.  He is married with no children.  Prior to his arrest, he worked as a truck driver earning RMB5,000 to 6,000 per month.  His parents are aged 67 and 65; both retired.

12.  Defence lawyer Ms. KWOK submitted that the defendant's father had surgery in August.  He came to Hong Kong to buy medicine for his father.  Upon the defendant's arrival at Hong Kong, the mastermind used the prospect of quick money to allure him.  The defendant's reward was $2,000 to $3,000.  Ms. KWOK further submitted that PW1's potential loss was $25,000.  The defendant only went to pick up the money.  At the material time, the defendant did not know why the money was dropped at the location. Ms. KWOK stressed that the defendant had no knowledge of the phone deception and was arrested before he could receive any reward.

13.  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. KWOK did not object to the application.

14.  I bear in mind 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]

15.  According to the witness statement of DCIP LAM dated 28 October 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.  In 2014, there are already 139 "Drop-off" mode cases from January to September, accounting for 27.1% of the overall successful phone deception cases so far.   The amount of monetary loss in "Drop-off" mode cases also has a steady increasing trend from 2008 to 2013 (from $3.01 million to $13.75 million).  And for 2014, the monetary loss is already $10.17 million as at September.

16.  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.  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 a money laundering offence.  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.

17.  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%.

18.  I accept that in the present case, the defendant might not have had any knowledge of the underlying phone deception or the nature of the Dummy Bag he collected.  He 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 fewer or no willing "collectors", the "Drop-off" mode phone deception method would fail.

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

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]

20.  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, HKSAR v WU Jianbing [2012] 1 HKLRD 781, HKSAR v Boma Amaso [2012] 2 HKLRD 33 and HKSAR v LIN Zong Yue CACC 141/2014 (unreported Chinese judgment).  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 his personal circumstances.

21.  In SJ v LAU Man Ying [2012] 4 HKLRD 435, Yeung V-P held "The defendant’s ignorance of the actual source of the "illicit money" is not necessarily a mitigating factor." [3]

22.  It is plain that the circumstances under which the defendant picked up the Dummy Bag would no doubt trigger his suspicion about the legitimacy of its contents.  It does not, however, mean he knew that the "purported cash" in the Dummy Bag is proceeds of a phone deception.  For the purpose of sentencing, I accept that the defendant probably had no knowledge of and did not take part in the phone deception against PW1.  To this extent, his culpability is perhaps less than the perpetrator(s) of the underlying phone deception.[4]  

23.  In the present case, PW1 did not suffer any monetary loss and the sum of cash involved is relatively small.  I adopt a starting point of 2.5 years' imprisonment.  A one-third discount is given for the guilty plea, reducing the sentence to 20 months.  Apart from this, I see no other mitigating factors which warrant any further discount.  With the 20% enhancement, the sentence is therefore 24 months' imprisonment.