HKSAR v. QUAN MENGFAN

DCCC 355, 597, 637 & 1489/2024 (Consolidated)

[2025] HKDC 1865

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 355, 597, 637 AND 1489 OF 2024

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REASONS FOR VERDICT

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A. Introduction

1.  The Defendant, QUAN Mengfan (“D1”), is charged with two counts of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance (Cap 455).

2.  Both parties filed written closing submissions, which I have carefully considered. References in parentheses below (e.g. “P §§33” or “D §§22(7)”) denote paragraph references to the respective written submissions.

3.  Charge 1 concerns a Bank of China (Hong Kong) account (“BoC Account”) maintained by D1 between 3 January and 28 February 2023, through which a total of HK$ 6,544,402.49 was transacted. The charge is laid jointly with Tse Chi-wing.  Charge 6 concerns a Standard Chartered Bank (Hong Kong) account (“SCB Account”) maintained by D1 between 1 and 3 February 2023, through which a total of HK$ 529,500 was transacted (P §§2–3).

4.  D1 pleaded not guilty to both charges. The Prosecution proceeded wholly on admitted facts under section 65C of the Criminal Procedure Ordinance (Cap 221). No witness was called. D1 gave evidence in her own defence.

B. Issues

5.  The issues for determination are: —

(1) Whether D1 “dealt” with the property within the meaning of section 25(1); and

(2) Whether, at the material time, she “knew or had reasonable grounds to believe” the property represented another person’s proceeds of an indictable offence.

6.  The applicable principles are not in dispute. The test under section 25(1) is objective: whether a reasonable person, possessed of D1’s knowledge and circumstances, would have believed the property was tainted (P §§4–6; D §§4).

7.  “Dealing” includes opening, maintaining, and allowing the use of an account to receive or transfer tainted funds; actual physical possession of the money is unnecessary (P §§7).

C. Undisputed Facts

8.  D1 was the sole holder and authorised signatory of both accounts (P §§14–15, 19, 22).

9.  The BoC account received 148 deposits totalling HK$6.54 million and 545 withdrawals during an eight-week period; the SCB account received 23 deposits totalling HK$0.53 million and 33 withdrawals in three days (P §§20–21, 23).

10.  Numerous depositors were fraud victims who did not know D1. Her declared annual income was HK$175,000 (P §§13, 18).

11.  D1 was in Hong Kong when both accounts were opened (P §§17).

D. Good Character Direction

12.  D1 had no previous convictions. I remind myself that her good character is relevant both to her credibility and to her propensity to commit the offence.

13.  However, good character is not a defence in itself. It is merely one factor in the overall evaluation.

14.  I have reminded myself of both limbs of this direction in assessing her evidence and the inferences properly to be drawn.

E. The Defence Case

15.  D1 gave evidence in her own defence and relied on her written submissions.

16.  She says she was in an intimate relationship with “Kong” who told her he was engaged in bitcoin trading and needed more accounts for client funds. She says she opened the BoC and SCB accounts for him out of love and trust (D §§16–20, 22(3)–(9)).

17.  She believed Kong’s explanation that he was unable to open new accounts immediately and that each client needed a separate account. She opened both accounts and passed to him the cards, PINs, and online credentials (D §§16–19, 22(7)–(9)).

18.  D1 says she never used the accounts herself and did not monitor them; she received e-statements by email but seldom checked them (D §§17, 31).

19.  She maintains she received no benefit from the arrangement (D §§22(9)).

20.  As to the “ONC letter” of 14 March 2023 and the police VRI of 18 May 2023 naming Tse Chi-wing (“Tse”), she says she only repeated what Kong told her and omitted Kong’s name to protect him (D §§19–20, 35).

21.  She emphasises that Kong manipulated her emotionally, as reflected in the WhatsApp records (D §§24–25).

22.  D1’s case, therefore, is that she was naïve, acted under emotional influence, lent the accounts out of misplaced affection, and lacked both knowledge and reasonable belief that the funds were criminal (D §§21–23, 27).

F. Prosecution Reply and Court’s Analysis

(1) “Mere account lender”

23.  The Defence relies on 律政司司長 對 谢志建 (XIE ZHIJIAN) CAAR 4/2024 for the proposition that lending an account is not itself “dealing” if the Court accepts that the account was surrendered and the defendant knew nothing of the transactions (D §§7–8, 28(3)).

24.  The Prosecution argues that this case is factually distinguishable because D1 remained the sole holder and signatory, and the accounts were opened, maintained, and actively used under her name (P §§7–10, 66–70).

25.  I accept the Prosecution’s submission: once D1’s version is rejected, her control and the transaction pattern entitle the Court to infer “dealing” (P §§7–10, 69–70).

(2) “Love and trust”

26.  D1 says she acted out of love and trust in Kong (D §§22(3)–(9), 25, 27).

27.  The Prosecution criticises this as implausible: Kong’s alleged profit of HK$100,000 in 1–2 weeks and his supposed inability to open new accounts were obviously false; the “birthday opening” story was fabricated (P §§33–41). I agree with these criticisms.

28.  In particular, the claim that D1 opened the BoC account on 19 December 2022 because she was happy after her “birthday” is contradicted by the opening records showing 3 January 2023 and by her true birthday of 18 January (P §§38–41). This inconsistency seriously undermines her credibility.

(3) Lack of profit

29.  D1 says she received no reward (D §§22(9)). That does not affect criminal liability under section 25(1); motive is irrelevant (P §§4, 68(a)–(c)).

(4) Inconsistent versions (ONC letter, VRI, trial)

30.  The Prosecution sets out that D1 first named Tse in the ONC letter (14 March 2023) (P §§53–56), repeated that version in the VRI (18 May 2023) (P §§58–62), and only at trial substituted “Kong”.

31.  The Defence accepts that earlier statements were untrue but says they were intended to protect Kong (D §§19–20, 35).

32.  The explanations are not credible. The inconsistencies were not confusion but deliberate revisions. I accept the Prosecution’s analysis (P §§53–57, 58–62, 63–65).

(5) Failure to monitor and “blind eyes”

33.  The Prosecution notes that D1 elected to receive e-statements and admitted that transaction notifications would have been sent to her (P §§42). D1’s claim that she “never checked” her email is unreasonable. This is not negligence but wilful blindness amounting to belief.

(6) Role of Tse

34.  The Defence argues that no joint enterprise with Tse is proved, as there is “not a shred of evidence” of his background or role (D §§10–13, 28(1)–(2)).

35.  The Prosecution submits, correctly, that it is unnecessary to prove the identity of the principal launderer or predicate offender (P §§5, 67, 69). D1’s own conduct suffices.

G. Evaluation and Findings

36.  The transaction patterns—rapid inflows and withdrawals, unrelated depositors, near-zero balances—are consistent with a classic laundering operation (P §§20–21, 23, 66–71).

37.  D1 personally opened both accounts (P §§19, 22) and maintained them as active throughout the relevant periods. This required verifying her identity, replacing cards, and maintaining access. Such continuity is incompatible with her claim of complete detachment.

38.  Her “I did not check my email” explanation cannot withstand scrutiny in light of the admitted arrangement for e-statements (P §42). Her sustained inaction despite repeated alerts was deliberate indifference.

39.  D1’s explanation of “trust in Kong” (D §§22(3)–(9), 25) is inconsistent with the evidence and contradicted by her own changing versions. Her background in finance (P §31; D §22(2)) means she must have understood the suspicious nature of the transactions.

40.  Applying the test in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446, a reasonable person in D1’s position would have believed the property was tainted. Wilful blindness satisfies the statutory requirement of belief.

41.  In Charge 1 (BoC), HK$6.54 million passed through within less than two months. In Charge 6 (SCB), HK$529,500 moved within three days—after the earlier pattern had already emerged. Her continuing indifference shows belief under section 25(1) (P §§23, 66–71).

42.  The Prosecution has therefore proved both actus reus (dealing) and mens rea (belief). D1’s version is rejected as wholly unreliable (P §§33–41, 45–52, 53–65).

H. Conclusion

43.  All arguments in the Defence submissions (D §§7–8, 10–13, 16–28, 33–35) are rejected for the reasons given.

44.  The Prosecution’s submissions (P §§7–10, 33–41, 42, 53–65, 66–71) are accepted insofar as they accord with the above findings.

45.  I am satisfied beyond reasonable doubt that D1 dealt with property representing another person’s proceeds of an indictable offence, contrary to section 25(1) and (3) of Cap. 455, in respect of both charges.  D1 is convicted as charged.