HKSAR v. LAM HING WAN

DCCC 378/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 378 OF 2014

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REASONS FOR VERDICT

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1.  The Defendant, D1 on the indictment and so termed throughout, is facing three charges on the Indictment (Counts 1 to 3) of dealing with property known or believed to represent the proceeds of an indictable offence contrary to Sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. He is legally represented and has pleaded not guilty to the charges. D2 and D3 on the indictment each faced 1 count (D2 faced Count 4 and D3 faced Count 5). They each admitted the charge that they each faced and the facts in support of the charges. I was satsified that the facts they had each admitted did support the charges they had each admitted and accordingly I convicted them of these charges. It was agreed by all parties that mitigation and sentence of D2 and D3 be adjourned until the conclusion of the trial of D1. Accordingly I adjourned mitigation and sentence for D2 and D3 until the conclusion of the trial of D1, and as there was no objection to their bail being extended, I extended their bail on the same terms. There was no objection to my continuing to hear the trial of D1 on the charges that he faced. Much of the Prosecution case was by way of facts admitted under Section 65C of the Criminal Procedure Ordinance, Cap. 221. There were two live Prosecution witnesses. At the conclusion of the Prosecution case, no submissions were made on behalf D1. I found that there was a case to answer on all the charges. Having had his rights explained to him by his Counsel, D1 elected to give evidence. There were no other Defence witnesses. Final submissions were by way of written submissions by the Prosecution and the Defence, which they supplemented in Court. At the conclusion of final submissions, I adjourned the matter until 11 November, 2016 to deliver my verdict. But whilst preparing my verdict, I had difficulty understanding the sketches Exhibit P205,which had been produced by agreement, and there being no objection from the Defence, the Prosecution was granted leave to re-open their case and call evidence from PW3, DPC 2127, Shek Lui, who had prepared the two sketches comprising Exhibit P205, to explain the contents. After hearing evidence from PW3 in respect of Exhibit P205, the matter was adjourned until today for verdict, and the hearing fixed for 11 November, 2016 was vacated by consent.

2.  At the outset, I was informed by Mr. Wu for D1 that the identity of D1 was not in issue.  Nor did the Defence require the video record of interview produced by agreement, Exhibit P21, to be played in open court and the parties indicated that they would be relying only on the transcripts, Exhibit P80.

The Charges

3.  The particulars of Count 1 are that D1, on 17 January, 2013, at the cockloft, Shop No. 2, Nos. 2-8A Yi Pei Square, Tsuen Wan, knowing or having reasonable grounds to believe that property, namely  cash of HK$27,000 and ¥14,300 Renminbi, 6 wrist watches and 25 pieces of jewels, in whole or in part directly or indirectly represented the proceeds of an indictable offence,  dealt with the said property. In respect of Counts 2 and 3, D1 is alleged to have dealt with property knowing or having reasonable grounds to believe that property in whole or in part directly or indirectly represented the proceeds of an indictable offence. The particulars of Count 2 related to the funds, namely a total of HK$15,453,626.26, in a bank account, namely account number 075-3-099969 held at the Hong Kong & Shanghai Banking Corporation Ltd., hereinafter referred to as the ‘HSBC’, in the name of D1 between 1 October, 2009 and 17 January, 2013 whilst the particulars of Count 3 related to the funds, namely a total of HK$4,773,353.60,  in a bank account, namely account number 632-094777-888 held at the HSBC in the name of D1 between 3 September, 2011 and 17 January, 2013.  

Prosecution Opening

4.  The Prosecution case was that this is a money laundering case stemming from an operation conducted by the police on an unlicenced Tsuen Wan gambling establishment situated at  the cockloft, Shop No. 2, Nos. 2-8A Yi Pei Square, Tsuen Wan operated by D1.  Police arrested a total of 20 persons at the premises, including D1, D2 and D3.  The ‘property’ in Count 1 relates to the items seized by the police during the operation, whilst the ‘property’ in Counts 2 and 3 relate to the funds subsequently discovered in the HSBC bank accounts of D1 that were dealt with through the said bank accounts.

Issues

5.  The Prosecution’s case in essence is that D1 dealt with the proceeds of an illegal gambling establishment in the relevant periods as set out in the particulars of Counts 1 to 3.  D1 denies that the properties set out in the 3 charges that he has denied were proceeds derived from an illegal gambling business.  In essence, it is not disputed that the items allegedly dealt with by D1 in the 3 counts, are ‘property’ and he ‘dealt’ with them as defined in Section 2 of the Organized and Serious Crimes Ordinance, Cap. 455. The Defence case is set out in Paragraph 10 of Mr. Wu’s closing submissions – D1 denies that the properties set out in the particulars of the three charges he has denied were proceeds derived from an illegal gambling business. His case is that he had been working as a small sub-contractor in the construction industry making profitable earnings. He was also a heavy gambler – he played mahjong, bet on horseracing and gambled in Macau casinos.  The monies in the two HSBC bank accounts set out in the particulars of Counts 2 and 3 were deposits and withdrawals to aid his construction sub-contracting business, gambling monies and winnings and loans to friends and repayment of such loans.  The valuables set out in the particulars of Count 1 were purchased by him or his wife.  For those items purchased by him, the payments were made from his winnings. These were all items that had been purchased for more than 10 years prior to his arrest.

Evidence

6.   Undisputed Facts (As set out in the facts admitted under Section 65C of the Criminal Procedure Ordinance, Cap. 221 and marked as Exhibits P206 and P207)

7.  Much of the Prosecution case was admitted at the outset.  There were two sets of facts admitted by the Prosecution and Defence under Section 65C of the Criminal Procedure Ordinance, Cap. 221, marked as Exhibit P206 and P207,  and these disclosed the following:

a) The exhibits listed, numbered and described in Annex A of the Admitted Facts Exhibits P206 were seized by the police officer/police officers/person identified at the time and place set out in Annex A and the exhibits as set out in Annex A were all produced by agreement and numbered according to the numbers set out in Annex A.

b) On 17 January, 2013, a party of police officers went to the premises as set out in the particulars of Count 1. They gained entry to the premises without obstruction and they conducted a search of the premises persuant to an authorization issued under Section 23(1) of the Gambling Ordinance, Cap. 148, Exhibit P119.

c) The premises set out in the particulars of Count 1 were not licenced as a gambling establishment pursuant to the provisions of Section 3 of the Gambling Ordinance, Cap. 148.

d) The police arrested a total of 20 persons in the said premises, including D1, D2 and D3. 13 of the arrested persons were observed to be playing mahjong at electronic mahjong tables when the police party entered the said premises. Four of the arrested persons were seen either wandering around or sitting in the said premises.

e) Police observed that there was a CCTV system that covered the entrance and the sitting room of the said premises.

f) All of the arrested persons together with a number of the items seized by the police when they searched the premises as well as the persons found in the said premises were subsequently taken back to the Tsuen Wan Police Station for further inquiries in relation to offences concerning illegal gambling at and the operation of an unlicenced gambling establishment.

g) A police photographer went to the said premises on 17 January, 2013 and took 70 photographs of the said premises and the items seized therein as well as the locations of the said seizures. These photographs were developed and placed in an album together with a description of what each photograph depicted. The album of 70 photographs including the description of what each photograph depicted was produced by agreement and marked Exhibit P192.

h) At 14.03 hours on 17 January, 2013, at the Tsuen Wan Police Station, D1 was interviewed on video under caution in relation to the offence of operating and managing a gambling establishment and refused to answer any questions.

i) At 14.50 hours on 17 January, 2013, at the Tsuen Wan Police Station, DPC 33617 and DPC 58752 conducted a second video recorded interview under caution with D1 in relation to the offence of money laundering. D1 had nothing to say.

j) At 10.44 hours on 23 January, 2013, at Tsuen Wan Police Station, DPC 33617 and DPC 58752 conducted a third video recorded interview under caution with D1. This third video recorded interview under caution was made freely and voluntarily by D1 without any violence, threats or inducement made to D1 by any person at any time in order to get him to say what was contained in the video recorded interview under caution. At the conclusion of the video recorded interview under caution, a DVD copy of the said interview was given to D1. That video recorded record of interview was produced by agreement and marked Exhibit P21, and its transcript and its certified English translation was produced by agreement and marked Exhibit P80.

k) The Bankers’ Affirmations, marked as Exhibits P116, P117, P118, P197, P198, P199, P200, P201, relating to D1 and listed in Annex A are all bankers’ affirmations made pursuant to Section 20 of the Evidence Ordinance, Cap. 8 and comply with the provisions of that section and are produced by agreement.

l) The contents of the Bankers’ Affirmations, Exhibits P116, P117 and P118 relating to D1’s 2 HSBC bank accounts numbered 075-3-099969 (in the particulars of Count 2) and 632-094 777-888 (in the particulars of Count 3) were examined by investigators. They found that each of these accounts received the total sums as specified in the particulars of each of the charges, Counts 2 and 3, in the periods outlined in the particulars of those charges.

m) Investigators compiled from the contents of the said Bankers’ Affirmations, Exhibits P116, P117 and P118, relating to D1’s 2 HSBC bank accounts referred to in paragraph (l) hereof two schedules to the Admitted Facts, Exhibit P206, marked as Annex B, together with the fund flow analysis, Annex B1, and Annex C, together with the fund flow analysis, Annex C1, which summarize the ways in which and the amounts of monies that were deposited into the two said bank accounts during the relevant periods. The two schedules and their contents were produced by agreement.

n) Investigators examined the contents of the Bankers’ Affirmations relating to each of the amounts deposited in D1’s two HSBC bank accounts set out in the particulars of Counts 2 and 3. They also examined the contents of the Bankers’ Affirmations marked as Exhibits P116 to P118 and P196 to P204 inclusive for the period relevant to Counts 2 and 3 to determine whether any of the amounts deposited into D1’s two HSBC bank accounts in the relevant periods were the result of the transfer of funds from the various bank accounts in the Affirmations marked as Exhibits P196 to P204. Investigators found that none of the monies deposited into either of D1’s two HSBC bank accounts set out in the particulars of Counts 2 and 3 came from D1’s other bank accounts as listed in the Bankers’ Affirmations Exhibits P196 to P204. They also found that none of the sums of monies deposited into either of D1’s two HSBC bank accounts set out in the particulars of Counts 2 and 3 during the relevant periods were the result of the transfer of funds between the two said HSBC bank accounts save that on 14 September, 2011, HK$1 million was transferred from D1’s HSBC bank account numbered 075-3-099 969 to his HSBC bank account numbered 632-094 777-888, and on 1 March and 8 July, 2011 and 2 February, 2012, $30,000, $500,000 and $30,000 respectively were transferred from D1’s HKSBC bank account numbered 075-3-099 969 to the HSBC savings bank account numbered 632-009-460-888 belonging to Ms. Wong So-la, who cohabited with D1 and their son during the relevant period.

o) The sums of money specified in Counts 4 and 5 of the indictment were deposited into D1’s HSBC bank account numbered 075-3-099 969 by D2 and D3 respectively in the relevant periods as set out in those counts and contained in the respective Bankers’ Affirmation, Exhibit P116, exhibited at LHW 38-51.

p) D1 did not submit any tax returns from February 2006 to January, 2013.

q) D1 was not the registered owner of any company registered with the Companies’ Registry during the relevant periods.

r) The Hong Kong Immigration Department maintains a computerized travel system that records the entries and exits of all persons to and from Hong Kong, including the date, time and location of their arrivals and departures. D1’s arrivals to and departures from Hong Kong in the period from 1 October, 2009 to 31 January, 2013 are set out in paragraph 2 of the Admitted Facts, Exhibit P207.

s) Exhibits P135, P139 to P144 inclusive being wrist watches and Exhibits P145, P147, P150-P161, P163-P166, P170-P184 inclusive being items of jewelry, seized by the police as set out in Annex A of the Admitted Facts, Exhibit P206 each had a value as on 8 March, 2013 in respect of the wrist watches and 15 March, 2013 in respect of the jewelry items as set out in the table marked as Annex D of the Admitted Facts, Exhibit P207.

t) Mr. Yip Yu-mo assessed the value of the gold items on 15 March, 2013. The price of gold on that day was HK$14,680 per tael (9999 gold).

8.  PW1, Sergeant Kwok Chi-hang (who was DPC 33617 at the time of D1’s arrest on 17 January, 2013)  testified that at the material time he was attached to the Tsuen Wan Police Station.  He and another police officer gained entry to the premises set out in the particulars of Count 1 at 0028 hours on 17 January, 2013 to execute a gambling authorization, Exhibit P119.  He and DPC 850 saw three men walking towards the entrance of the flat and followed them – the door to the flat was already opened. They stopped the three men and entered the flat.  On entry into the premises, he saw that there were 6 mahjong tables in a room off the sitting room. He saw people playing mahjong at 3 tables, 4 persons around each table. There were also others in the room – he remembered that two were sitting around a fourth mahjong table, where no mahjong game was being played.   In the living room, there were 5 people – 4 were sitting at a sofa and one was standing in the vicinity of a door to one of the rooms.  He identified the one standing in the vicinity of a doorway to be D1.  PW2 in his testimony said D1 was standing in the doorway near the sofa that is depicted in photograph 53 of Exhibit P192. PW1 asked all the people to stop playing and disclosed his police identity by producing his warrant card. Some persons were arrested, including D1 to D3 on the present indictment.  He declared arrest on D1 for the offence of gambling in a gambling establishment – he asked D1 if he had anything to say and D1 replied he had nothing to say – PW1 recorded this in his notebook and read it over to D1 and D1 signed on PW1’s notebook.  Soon thereafter, he declared arrest on D1 for the suspected offence of dealing with the proceeds of an indicable offence and cautioned him – D1 said he had nothing to say – PW1 recorded this in his notebook, read it over to D1 and D1 signed on his notebook.   At 0220 hours, D1 was searched in his presence - $6,200 cash (Exhibit P124) was one of the items seized from him – D1 was cautioned about this sum of money – he said he had nothing to say – PW1 recorded this in his notebook, read it to D1, and then D1 signed on his notebook.

9.  At 0230 hours, DPC 58752 was searching D1 and found on him a bundle of keys. One of these keys opened a wardrobe in the premises. The 1^st drawer of the wardrobe was locked and a key from the bundle of keys was used to unlock the drawer in the presence of D1 – the cash and valuables found from the drawer were some of the ‘property’ set out in the particulars of Count 1.  PW1 cautioned D1 in respect of these items – D1 said he had nothing to say – PW1 recorded this in his notebook, read it over to D1 and D1 signed on his notebook. His colleague found a small quantity of money in a drawer in a desk – PW1 cautioned D1 for this and again D1 said he had nothing to say – PW1 recorded this on his notebook and read it over to D1 and D1 signed on his notebook. PW1 also checked that a key from the keys seized from D1 opened the metal gate to the building on the Ground floor in D1’s presence.   After they left the premises, he and other police officers took D1 to his home in Tsuen Wan where his home was searched, but nothing related to the present proceedings were found.   D1 was then taken back to Tsuen Wan Police Station. PW1 was cross-examined as to whether this was the first police raid of these premises – he was not clear on this but confirmed it was the first raid of these premises that he had participated in.

10.  PW2, DPC 58752, gained entry to the premises together with PW1.   He was assigned to be the exhibits officer.  His task was to seize the items that were at the premises, and make a record of what was seized.  He was also present when photographs were taken by the police photographer and confirmed that the photo album Exhibit P192 consisting of 70 photographs were taken in his presence – the photo album was produced by agreement.  Photos 1 to 6 of Exhibit P192 depict the entrance to the premises in question at the Ground level and the steps leading up to the cockloft,  the premises referred to in the particulars of Count 1. There is also seen in these photos the CCTV cameras at the entrance to the premises. Photos 7 to 70 depict the inside of the premises, and the exhibits that were seized from the premises e.g. Photos 15 to 29, 33 to 37 depict the mahjong tables in the premises amd the baskets containing chips of various colours.  Also seen in these photos are the CCTV camera system that is there throughout the premises and the TV sets connected to the CCTV cameras. Photo 56 depicts a drawer of the bed depicted in Photo 55 which contained documents belonging to D1 such as bank documents and some PW2 believed were insurance documents.  Photo 60 depicts a wardrobe in the same room as the bed depicted in Photo 55.  Photo 61 depicts the clothes in the wardrobe, while Photo 62 depicts the locked drawer in the wardrobe  from where 4 wrist watches, 35 jewelery items, HK$27,000 and ¥14,300 Renminbi were seized,  Photo 67 depicts the wrist watch found inside a pocket (Photo 66) of the jacket depicted in Photo 65 which was in the wardrobe, while Photo 70 depicts another watch found inside a pocket (Photo 69) of another jacket depicted in Photo 68, also found in the wardrobe, although it was taken out of the wardrobe for Photo 68 to be taken.  These items found from the locked drawer and the 2 wrist watches found from the pockets of 2 jackets in the wardrobe are the ‘property’ set out in the particulars of Count 1.  Some of these items were contained in plastic bags or other containers. The items and their containers were all produced by agreement  and were marked Exhibits P136 to P185 in the Exhibits List Annex A of the Admitted Facts Exhibit P206.

11.  Cross-examination of PW2 was brief, as it was for PW1.  He was asked if he knew who owned the jackets depicted in Photos 65 and 68 and if he knew who were the owners of the two watches depicted in Photos 67 and 69.  He agreed he did not know who owned these.  It was suggested to him that when he first had sight of the TV screens depicted in Photo 7, he did not know whether they were on or off – he replied that to the best of his recollection when he first arrived at the premises, to his recollection the TV screens were on.  He agreed that he had not studied the contents of the books found in the drawer and on top of the desk, depicted in Photos 7, 8 and 12 at the scene.  

12.  Exhibit P205, consisting of 2 sketches with their certified English translations, which were produced by agreement, was drawn by PW3, DPC 2127. The one dated 17/1/2013 was drawn at the scene on the day of the raid and was a rough sketch, whilst the one dated 1/2/2013 was drawn subsequently at the police station – it was drawn setting out more clearly the contents of the earlier sketch.  He explained what he had drawn on the two sketches. He drew the layout of the premises on the sketches, setting out the positions of the various arrested persons and the locations from where he seized various exhibits.  Not all the exhibits he had marked with exhibit numbers on the sketch dated 1/2/2013 were produced by the Prosecution – only those relevant to the present proceedings were produced,  as set out in Annex A of Exhibit P206.  D1was referred to as AP1 on both sketches, and PW3 marked the position  he was standing at the doorway of the room at the top right hand corner of both sketches (the doorway is depicted in Photo 53 of Exhibit P192).  There was no cross-examination of PW3 by Mr. Wu.

13.  D1 elected to give evidence.  He testified that he lived at a flat in Serenade Cove that he had bought in 2000 but he started to live there in 2001.   He was born in Shenzhen, China and came to Hong Kong as a teenager with his father illegally.  His father applied for a Hong Kong identity card for him and wrongfuly put down his date of birth as 23 October, 1954 – he said his actual date of birth was 23 October, 1952 – he did not know why there was such a mistake.  He had completed Primary 1 in China.  He did not receive any education in Hong Kong.  He started to work as a decoration worker at the age of 18 years. In the 1990’s, he began to work as a sub-contractor for ‘board-nailing’ in the construction industry, He stopped working as a sub-contractor in January, 2013, 10 odd days after he had been arrested by the police on 17 January, 2013. 

14.  He said in his work as a sub-contractor, he did not have any written contracts with the contractor who sub-contracted work to him.  He recruited his own workers to do the work, friends who had worked for him before and who knew how to do ‘board-nailing’. He also had no written contracts with them – he recruited them on a job by job basis.  He said in his 20 odd years working as a small contractor, he did not register his business with the Business Registration Department.  He said in his trade as a small contractor, ‘it was not necessary to be registered’.  When asked by the Court why it was not necessary to be registered, he replied that it was only the main contractor in the trade that had to be registered.  He was asked if he had ever filed any tax returns for his business as a sub-contractor and after being warned about his right not to answer any questions the answer to which may incriminate him, he did answer and said he had never filed any tax returns for his business. He himself had physically worked at various sites in his business until about 2009, after which he himself did not physically do the work but checked the work that was done.   He was paid in cash at a restaurant on most occasions by the contractor sub-contracting the work to him.  He was paid $1,500 a day for each worker he recruited to work, and out of the $1,500,  he earned $300.  The number of workers he recruited for various jobs varied from 10 odd to 20 odd workers. He earned $500,000 to $600,000 on average each year from 2009 to 2013 in his sub-contracting business, sometimes more, sometimes less. He was paid every 3 to 4 days. The figure of $1,500 a day was for 2009, but by 2013, he was paid over $2,000 a day for each worker, out of which he received $300 for each worker.   He said he usually deposited the money he received from the contractor into his HSBC bank accounts.  Prior to 2009, he would pay his workers directly, but on one occasion, he lost the money he had been paid – a sum of $80,000 to $90,000. After that occasion, he would deposit what he received into his bank accounts – it was not the exact amount he received, but rather he would deposit the rounded up figure in the bank accounts and pocket the balance.   He would then pay his workers after 2 to 3 days.  He would withdraw the money from his bank accounts and go to the construction sites to pay the workers.

15.  In respect of the items found in the locked drawer that was opened with a key found on him, the items set out in the particulars of Count 1, he said he had placed them in the drawer and locked the drawer.   They were put there in mid-2012, on various occasions .  These items were originally in his home but he moved them from his home to the drawer in the wardrobe in the room in the cockloft as his co-habitee of 30 years, whom he described as his ‘wife’,  Wong So-la was taking their ornaments to sell or to throw them onto the street.  He was married to a woman on the Mainland prior to meeting Ms. Wong.  He and Ms. Wong had two children – a son and a daughter.  He was asked why Ms. Wong would ‘dump’ the valuables and he replied it was because she indulged in gambling, she was going through menopause, and she had fought with him.   She was not aware that he had removed the items from their home to the drawer in the cockloft. He said the ornaments for males were bought by himself for self-use, while the ornaments for females were either bought by his ‘wife’ or by himself for his ‘wife’. They were bought more than 15 years ago.  In respect of the watches in the drawer, these belonged to him – he had last bought a watch kept in the drawer more than 15 years’ ago.  The male watches he had bought for himself, whilst the ladies’ watches were bought by him as gifts for his ‘wife’, as a birthday gift.   The jade pieces in the drawer - these were also bought over 15 years ago, some by him and some by his ‘wife’.  All the valuables in the particulars of Count 1 were purchased from his winnings at gambling.  In respect of the gold coin Exhibit P147, contained in the box Exhibit P148, this was a birthday gift to him on his 60^th birthday in October 2012 (he said he was born on 23 October 1952 and not on 23 October, 1954 as set out on his identity card) from a friend called ‘Bat Chai’ but he did not know the full name of this friend who gave him a gold coin for his 60^th birthday.  He also explained about the cash in HK Dollars and Renminbi that was inside the drawer.  He said that as it was almost Chinese New Year, he had obtained the Renminbi from an exchange shop to use as he intended to go to China to visit his mother.  The Hong Kong Dollars in the drawer were in $100 banknotes, $50 banknotes and $20 banknotes – the money was to be used for red packets.  Cash had also been seized from his person, HK$6,200 – this was for his gambling.  This money found on his person was not included in the particulars of Count 1.  In respect of the two jackets in the wardrobe from the pockets of which the two watches were found, he said the jackets were his.  In respect of the watch he described as the ‘ladies’ Rolex’,  depicted in photo 70 of exhibit P192, which had been found in the pocket of one of the jackets,  he said his daughter had telephoned him about one week prior to 17 January, 2013, the day of his arrest, telling him that there was one more watch in his home that had to be collected – she told him to collect the watch as she feared that his ‘wife’ might ‘dump’ the watch.  He did collect it and put it in the pocket of his jacket and forget to lock it in the drawer. The gents’ watch found in the pocket of another jacket, depicted in photo 67 of Exhibit P192, was bought by him 10 odd years ago. He was asked about the watch he was wearing at the time of his arrest, a Rolex watch, Exhibit P135 – he said he had bought it in 1994 – he remembered the date specifically as he had bought the watch 2 years after the birth of his daughter as a momento.  The watch he was wearing at the time of his arrest was not included in the ‘property’ set out in the particulars of Count 1.

16.  When asked about his relationship with his ‘wife’, he said it was very bad – she suffered from depression and in 2015, she had jumped from the 26/fl and had injured herself fatally.

17.  The Defendant said he had always been fond of gambling since a young age – mahjong, horseracing as well as gambling in Macau.  He played in Mahjong schools almost daily after work in the evenings when he was working, from 6 p.m. to 10 p.m. winning more often than losing, the reason for winning being good luck – he said his biggest win was $100,000 odd.  He also bet at off-course betting centres – he described his biggest win as $1 million odd.  Even when he played in Macau, he would win overall, although he had not calculated how much he had won.

18.  He said he stopped physically working on construction sites himself in 2009 because of ill health, and after being arrested in 2013, he had stopped working as a sub-contractor altogether.  He supported his living from his rental income from his ancestral home in Mainland China, which was managed by his wife on the Mainland, Ms. Cheng Shun Kit.

19.  The Defendant had testified initially that he had been with his ‘wife’ Ms. Wong for some 30 years.  When asked by the Court when he and Ms. Cheng had got married, he replied in 1989.  The Court asked him if he had married Ms. Cheng after he had begun his relationship with Ms. Wong – he said he had married Ms. Cheng in China first. The Court queried this – if he had been with Ms. Wong for 30 years and she had died in 2015, then their relationship would have begun in 1985, the Defendant replied ‘more or less’. The Court then asked him if he had married Ms. Cheng in 1989, he should already have been with Ms. Wong – he replied ‘not yet’.  Mr. Wu than reminded him of his earlier testimony that he had bought a watch in 1994, when his daughter with Ms. Wong was aged 2 years,  so his daughter was born in 1992.  D1 then said he started his relationship with Ms. Wong in 1991. They had been together about 24 years by the time she died in 2015.

20.  He was asked about the answers he had provided during the video recorded interview under caution, Exhibit P21,  (the transcripts being Exhibit P80) on 23 January, 2013.  He confirmed that the voluntariness of this interview was not disputed.

21.  Mr. Wu asked him about the cockloft – he said he had rented it from Mr. Cheng Kwok-keung, but there was no formal written tenancy. He said he rented the cockloft for his friends to play mahjong there in 2011.  He had rented it for approximately 1 year and 3 months prior to the raid on the cockloft by the police on 17 January, 2013 i.e. towards the latter part of 2011, at a rent of HK$12,000 a month.  In respect of the CCTV system installed at the premises, he testified that he had had the system installed, about 4 to 5 months after he had rented the premises, and his reason for installing the system was some people quarelled and there was ‘arguments on the amount’, by which he meant that there were arguments amongst players about whether they had paid or not.  The CCTV camera was installed at the entrance on the Ground floor for convenience – so they could see the regular customers who were going up to the premises.  He aslso said that there was a kitchen in the premises and there were cooking utensils in the kitchen and these were used sometimes to cook food for the players.  The people who played mahjong at the premises were all people that D1 was acquainted with and they were served food and drinks that they paid for. The food they were served was cooked in the kitchen by D2, and if D2 was not present, take-away was ordered.

22.  Initially when asked if he had ever stayed at the cockloft before he rented it, he said he had. When asked why he went there before he had rented it, he said he had not gone there.  In response to a question from the Court he replied he had never been to the premises before formally renting the premises.  

23.  When asked about the time his acquaintances would play mahjong at these premises – he said they played at night, some time after 6 p.m. until 11 p.m.  He then said they started to play at 11 p.m. and when asked when they generally stopped playing, he said sometimes when there were people, they would play until 4 or 5 a.m.  If there weren’t so many people, they played until after 2 a.m. till 3 a.m.  When asked why people came to play after 11 p.m., he said they came after they had finished work and had their meals.  D1 said he himself went there at about 10 to 10.30 p.m.  During the time he had rented the cockloft so his acquaintances could play mahjong there, he had continued to play mahjong at mahjong schools, and would go to play almost daily.  He also played on the horses, and he bet through the off-course betting centres. He would ask D2 to place bets for him at the off-course betting centres.  He himself did not go as it was not convenient for him to do so owing to his ill-health and difficulty in walking. 

24.  He was shown photographs of the wardrobe in the cockloft and the clothes contained in the wardrobe – he said some were his clothes while some belonged to his friends who played mahjong at the premises.

25.  Mr. Wu asked him whether those who played at the premises paid him anything – after a long pause he replied there was no need.  If a player won a game, then commission was drawn, which he pocketed.  Mr. Wu asked him the percentage that was drawn, and after being warned of self-incrimination, he chose not to answer the question. 

26.  He was asked about some record books that were found at the cockloft and seized as exhibits.  These are depicted in some of the photographs in Exhibit P192 – in photos 7 and 9, one book is seen opened on the desk depicted in the photo, in photo 8, a pile of such books is seen on a small teatable, and this same teatable is depicted on photo 7,  although there is no pile of record books on it. There is a pile of 9 books inside a cabinet, shown in photo 12, and this same cabinet is depicted in photo 11. It is clear this pile of 9 books were placed on the teatable as we see on photo 8 to facilitate their being photographed.  In the sketch of Exhibit P205 dated 17/1/2013,  PW3 drew on the sketch the position of the pile of 9 books being inside the  mini cabinet next to the desk, the cabinet being  depicted in photo 11, and the opened cabinet drawer showing the books inside is depicted in photo 12.  I do note that in the sketch dated 1/2/2013,  these 9 books are marked as Exhibits 46 to 54,  with the legend ‘nine account books found inside the writing desk’  and on the sketch itself, these record books are marked as being found inside the writing desk , and not as being found inside the mini cabinet as they are marked on the sketch dated 17/1/2013.  PW3 was not asked about this discrepancy between the 2 sketches.   In my view, nothing turns on this.  D1 was asked about these record books, although there was no mention as to the exact location in the cockloft where they were found.  D1 said he had had the chance to look at the photocopies of the contents and he did not know whose record books they were, they did not contain his handwriting,  he did not know who had made the records contained in these books, nor did he know if they were already there when he had rented the premises.

27.  D1 was asked if D2 and D3 played mahojong in the premises, and he said they did.

28.  Mr. Wu also asked D1 if he had ever lent money to anyone. D1 replied he did lend money to friends, and he never charged interest for the loans. The largest sum he had lent was several hundred thousand dollars, and the repayment was spread over 7 to 8 years, and some of the money that was lent between 2009 and 2013 came from his two HSBC accounts, and when they repaid him, they deposited the money into his two HBC bank accounts.   He also withdrew money from his two HSBC bank accounts when he went to gamble in Macau, as he did when he played mahjong or bet on the horses. When he won at playing mahjong or at the races, he would ask D2 as well as D3 to deposit his winnings into his HSBC bank account.  If they were not available, he would deposit the money himself.  He also said he would pocket the money himself until the following day.

29.  He had come to know D2 more than 35 years ago, when they both played mahjong at a mahjong school. He had known D3 for more than 15 years, and also had met her in a mahjong school when they both played mahjong at the mahjong school.

30.  He was referred to Annex B in repect of the HSBC bank account set out in the particulars of Count 2 and confirmed he admitted Annex B and its contents.  He confirmed the deposits into his bank account by D2 and D3 (relating to Counts 4 and 5 on this indictment).  He also said that the interbank transfers were repayments of loans made by him.  He was referred to some large transfers made from the bank account – on 10/6/2010 a transfer of $460,000, on 17/6/2010  a transfer of $350,000 and on 23/7/2010 a transfer  of $280,000, all to account 163-296163-833. D1 explained that he had lost money gambling in Macau and he had to deposit money into the account of the ‘chip runner’ i.e. the person who had lent him Macau casino gambling chips. D1 further said that none of the transactions in the 2 bank accounts set out in the particulars of Counts 2 and 3 were related to indictable offences.

31.  He was also referred to a number of entries in the affirmation of Tang Wan Pong, Exhibit P118 and to Exhibit LHW76 of the affirmation, a cheque drawn by Ms. Liu So Mui for $20,000 that was deposited into D1’s HSBC bank account set out in the particulars of Count 3.  D1 described Ms. Liu as a friend and the cheque from her dated 7/1/2013  was the repayment of a loan he had made to her. D1 was referred to a number of other exhibits in Exhibit P118 -  LHW 69 was a cheque for $120,000 dated 25/9/2012 drawn on Keung Tai Logistics Ltd., LHW 71, another cheque drawn on Keung Tai Logistics Ltd. for $132,000 dated 27/11/2012. LHW74 was a cheque for $108,000 dated 4/1/2013 drawn on Mr. Lam Chun Hing. Mr. Lam was also the signatory of the two cheques drawn on the account of Keung Tai Logistics Ltd.  D1 described Mr. Lam as a friend  and the three cheques were the repayments of loans he had made to Mr. Lam.  Another exhibit was LHW 67 – a cheque for $20,000 dated 26/2/2012 from Grace Star Engineering Co. Ltd. – this was a company belonging to his friend Yeung Sum or his full name Yeung Loi Sum and also the return of a loan.

32.  He paid his workers from the money he received from the sub-contractors who paid him, and between 2009 and 2013, he deposited the money he was paid in his two HSBC bank accounts.  He also withdrew money from these two bank accounts to pay the workers.   He also said that the moneys D2 and D3 deposited into his bank accounts were proceeds from his own earnings as well as the earnings of his sub-contracting business, and his winnings fom playing mahjong, horse-racing and gambling in Macau.

33.  D1 was cross-examined on a number of areas.  One area was his date of birth – he said the date recorded on his identity card – that he was born on 23/10/1954 – was incorrect – and in fact he was born on 23/10/1952 i.e. 2 years earlier – therefore his current age is 64 years.  He agreed that his identity card was first issued in March,1973, so if he was born as he said in 1952, he would have been over 20 years old at that time.  He went to the Immigration Department with his father when he applied for the identity card. He agreed he was not a minor at that time.   He agreed he was asked questions by the Immigration officer and he provided the answers and signed the application form for the identity card.  He agreed that the information was provided by him to the Immigration officer, including the date that he was born i.e. 23/10/1954.   He was asked by Mr. Turnbull if that date 23/10/1954 was not his birthday and he replied he remembered it wrong.  When asked by the Court if he was saying that he gave the wrong year of birth when he applied for the identity card in 1973, he said ‘no’. When asked to clarify by Mr. Turnbull, to explain how the date of birth on the identity card showed he was born in 1954, he said it was his father who said he was born in 1954 to a ‘staff member’ in 1973.  At that time, he did not know how old he was.  He only learned his correct birth date when his mother told him on a visit to the Mainland, some 20 years ago.  He did not correct the birth date on his identity card as he did not know where to go to do it.

34.  Another area he was cross-examined on was his work in the construction industry where he said he had worked from the 1990’s  to 2013.  During that period, he said he was in a partnership to obtain Mainland vehicle licences and in 2012, he was in a partnership with someone to do catering.  He said he had not obtained a business registration certificate for his business as a sub-contractor, the reason being that only a main contractor needed to be registered, although he knew that Hong Kong law required every person operating a business in Hong Kong to be registered.  He believed only the main contractor needed to be registered as he was told that by a main contractor, but he did not remember which main contractor told him.   It was put to him that he did not get a business registration because he was not in the construction business, but he disagreed.  He agreed he had not filed any tax returns to the Inland Revenue Department and had not paid any taxes in the period set out in the charges or even before that – again because he said it was ‘not necessary’ for people in his trade to file any tax returns.  He disagreed that every one earning money in Hong Kong had to file tax returns, and he disagreed he  did not file any tax returns as he was running an illegal business – a gambling establishment. 

35.  He was asked about the money he said he was paid as a sub-contractor – he said he deposited what he received into his two bank accounts in HSBC for safety reasons – he employed between 10 to 20 workers, sometimes less – about 5 to 6. Sometimes there were more than 20 although that was not often – 3 to 4 times a year.  He said he would withdraw money from his bank accounts to pay the workers, ranging from $30,000 to $50,000, although sometimes it was more and sometimes it was less,  He even withdrew sometimes $100,000 to pay his workers, when he employed 10 odd workers – when asked to explain what that meant, he said 13 to 14 workers, and he paid them every 2 to 3 days.  In 2013, the rate for each worker that he was paid was $2,000, and he deducted $300 for himself, before paying the worker.  He was asked how much he would pay 10 men for 3 days – he replied he did not know how to calculate, and he agreed he was a keen gambler, but disagreed he was good with figures.  He said it was his younger brother who did the calculations for him. In his evidence-in-chief, he said he has stopped his sub-contracting business in January, 2013, shortly after his arrest on 17/1/2013.

36.  With regard to his relationship with Ms. Wong, he said it was not very good in 2013. It had been deteriorating even before that – at least 7 to 8 months prior to that.   Because of their deteriorating relationship, he had put the ornaments in the wardrobe drawer in mid-2012.  She had started to take ornaments to throw them onto the street  7 to 8 days prior to his bringing them to the cockloft in mid-2012.   The collective value of the ornaments and watches was set out in Annex D of the Admitted Facts Exhibit P207 in March 2013 to be HK$459,700.  There was a bed in the cockloft in the room where the wardrobe was, but D1 said he had never thought to stay in th cockloft despite all the troubles at home – the bed was for people to have a rest but not to sleep there. 

37.  He was asked how many persons would be playing mahjong at the premises at night – he said sometimes there were more, sometimes less – sometimes 3 tables, sometimes 2 and sometimes just 1 – with 4 persons playing at a table, the maximum would be 12 and the minimun 4.  The average would be 7 to 8 persons from the time he said he started to rent the premises in the beginning of 2012, playing from 11 p.m. to 3 a.m. and sometimes to 5 a.m.   He said he would stay in the premises throughout as he needed to watch the play and watch the drawing of commission – that the commission of $5 was put in the commission container  to make sure he was paid.  But he denied he was making money from this establishment.   He paid rent of $12,000 each month for the premises so his ‘friends’ could play mahjong ‘to maintain our relationship and just to have fun’.

38.  He was asked about his finances – he said he was earning $500,000 to $600,000 a year from his sub-contracting business, sometimes it was $700,000 to $800,000. He had no other income.  The monthly mortgage on his flat in Serenade Cove was about $12,000 each month and had been paid in full in about 2009.  His children went to a local school.  Proceedings were adjourned because of the time.  When the hearing resumed the following day, and he was asked when the mortgage had been paid off, he said he did not remember.  He was reminded by the Court that he had said the mortgage was for 10 years and had been repaid in about 2009 but he said he did not remember, and when asked if he would like to hear the tape of the proceedings from the previous day, he said he did not.

39.  He was asked about Ms. Wong and whether she worked till her death in 2015 – he replied that she did.  But he did not remember when she started working or whether she was working in 2006. He said she ceased working 5 to 6 years ago, in about 2011.  She had worked as a cashier in a restaurant and earned $11,000 to $12,000 a month.   He was asked about his monthly expenses from 2009 and he said including the mortgage it was $20,000 odd, and when pressed, he said it was $25,000. He said Ms. Wong gambled in baccarat in Macau – he was unable to say how frequently she went to Macau to play.   He knew baccarat was a game where one could win a lot, and also lose a lot.   When she lost, her losses were a few hundred thousand dollars, even a million dollars.  She paid the losses by borrowing from friends and relatives, and on one occasion from loan sharks, as well as from him.  She had borrowed a few hundred thousand dollars from him on more than one occasion.  He recalled that she had lost over $1 million 5 to 6 years ago, in 2010 or 2011, and he had assisted her to repay the money, by paying several hundred thousand dollars first, and the rest by installments. She was not charged any interest as the money was borrowed from a friend. She also lost money in casinos in Macau, and owed the casino money that he assisted her to repay, but he said the Macau casino did not charge interest on money was owed to them.  He assisted her to repay on a number of occasions with a few hundred thousand dollars, in 2009, 2010 and 2011, and he said the repayments of over $100,000 were made to people once every 2 to 3 months.  He said he assisted her to repay $200,000 to $300,000 every 2 to 3 months from 2009 onwards. When he was asked if he was saying he helped her with $800,000 to $900,000 a year from 2009 onwards to settle her debts, he said it was not that much each year - $600,000 to $700,000 or $500,000 to $600,000. 

40.  Mr. Turnbull used 2011 as an example and calculated D1’s expenses for 2011 for his household expenses as well as his loans to Ms. Wong and the expenses for the cockloft and his income from his sub-contracting business.  He was asked to explain how he could meet his commitments in respect of the expenses for the cockloft, and he said it was from the commission that was drawn, which he said did not exceed $2,000 each day.  D1 kept responding that he did not know how to calculate.  He disagreed that he was short of money to run his family as well as the establishment for 2012.  When it was suggested to him that he was not short of money because he was running an illegal gambling establishment in the cockloft which provided him with ample funds, he initially agreed, but disagreed when the question was repeated. 

41.  He was asked about his playing of mahjong.  He said he played almost daily at 6 different mahjong schools from 2009 onwards, and agreed he was an experienced player. He said he almost always won – he put it at at least 90% of the time. He was asked if the people who lost borrowed from other players or from the mahjong establishment - he disagreed they did so.   He said he had been playing for several decades – if one owed $1, one had to repay $9. No one was allowed to evade payment or to play on credit.  When one ran out of money, one had to leave the table.  He agreed he had seen players borrow from friends or from the people who ran mahjong schools if they put up security for the loan – he described the type of security he had seen given was a card but said he did not know if it was a credit card.  He had not seen anything else given as security. He said it was against the law in licenced mahjong schools to take security. But he agreed in unlicenced mahjong schools, people did take security for loans such as jewelry, watches and gold.

42.  Mr. Turnbull questioned D1 about the loans he said he had made. D1 said the loans were made 7 years prior to the present proceedings. When asked if it was 2009 that he had lent the money he said no.  When asked which year he had lent the money he said he had once lent money to people a long time ago – but he did not remember when.  He was asked about when the loans were made in respect of the cheque exhibited as LHW76 to Exhibit P118 – he said it was about a week before the date on the cheque.  He said she seldom came to the premises to play, although she was a friend.  In respect of the cheque exhibited as LHW69 for $120,000 dated 25/9/2012, he made the loan approximately 10 days before the cheque was deposited – again the person who signed the cheque was not a mahjong player at his establishment.  He made the loan because of the friendship between them – a cash loan of $120,000, as he did for the other two loans of $132,000 and $108,000 to the same person, cash he said he had withdrawn from the bank.   The borrower was ‘Hing Chai’ but D1 was a bit confused about his full name.

43.  In respect of the deposits made into his bank accounts by D2 and D3, he agreed that they had made the deposits and said these funds were from his winnings  - he gave them the money to deposit when they were in the cockloft – he trusted them and he did not deposit the funds himself as he did not have good health and had difficulty walking.   When he was asked that there were other deposits to his accounts on the same day as deposits by D2 and D3,  and he must have made them, he said he did for some but not for the others.  He agreed his alleged incapacity did not prevent him from making the deposits.  It was suggested to him that they deposited money that they owed him from gambling in the premises but D1 disagreed. 

44.  D1 was also asked questions about the answers he had given voluntairly when video interviewed under caution and he said the answers he gave were truthful answers. He was asked about Mr. Cheng Kwok-kan, the landlord of the cockloft (Counter 13 onwards of Exhibit P80).   He said he had known Mr. Cheng for more than 15 years – they socialized together occasionally and they had each other’s mobile phone numbers.   However, he told the police when he was interviewed that he did not have Mr. Cheng’s telephone number,  he had no means to contact him,  he had known him for 4 to 5 years, and he had been introduced by a friend (Counters 21 to 28).  When asked to explain why he said what he did to the police, he said the police had taken his mobile phone and the phone number of Mr. Cheng was on his mobile phone – he was not allowed access to his mobile phone – it was an exhibit.  He said he did tell the police when he was being questioned during the video recorded record of interview but this conversation is not recorded in the video record of interview under caution. When it was suggested to him that he had made it up D1 disagreed.   He was pointed to a number of areas in the video recorded interview under caution when his answers differed from his testimony.

45.  Under re-examination, D1 said he had given the money to D2 and D3 to deposit into his bank account at a restaurant in Tsuen Wan.

Consideration of the evidence

46.  In reaching my verdict, I remind myself of the burden and standard of proof  and that the burden is upon the Prosecution throughout.  D1 has to prove nothing. I direct myself that I must be sure of the guilt of D1 before I can convict. On the other hand, if I think that the Defence evidence pointing to innocence is true or may be true, it would follow that the Defence has raised sufficient doubt in the Prosecution case, and the Defendant is entitled to be acquitted.

47.  I remind myself that when drawing inferences from the evidence,  the inference must be a compelling one and the only one that no reasonable man could fail to draw from the direct facts proved. 

48.  I have carefully considered all the evidence adduced before me as well as the written and oral submissions of Mr. Turnbull and Mr. Wu. The fact that I have not dealt with each and every piece of evidence does not mean the same has escaped my attention; I say the same about the matters raised in the submissions made by counsel.

49.  The Prosecution must establish to the required standard the elements of each of the 3 charges that D1 faces, namely that D1 on the dates outlined in each of the charges dealt with the property knowing or having reasonable grounds to believe that the property represented the proceeds of an indictable offence.

50.  Indictable offence is defined in Section 25(4) of the Organized and Serious Crimes Ordinance, Cap.455 to include an indictable offence committed in Hong Kong or conduct which takes place elsewhere, which if it had occurred in Hong Kong would amount to an indictable offence.  Here, the indictable offence on which the Prosecution relies is the indictable offence of operating a gambling establishment without a licence contrary to Sections 5 and 22 of the Gambling Ordinance, Cap. 148.

51.  ‘Dealing’ insofar as it is relevant to the present proceedings is defined in Section 2 of the Organized and Serious Crimes Ordinance, Cap. 455  to mean, in relation to property referred to in section 25(1) as including receiving or acquiring the property and concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise).

52.  ‘Property’ is also defined in Section 2 of the Organized and Serious Crimes Ordinance, Cap. 455  to include both moveable and immoveable property within the meaning of Section 3 of the Interpretation and General Clauses Ordinance, Cap. 1.

53.  The test to be applied to determine whether a person ‘knew or had reasonable grounds to believe’ that property represents the proceeds of an indictable offence under Section 25(1) of the Organized and Serious Crimes Ordinance, Cap. 455 was recently dealt with by the Court of Final Appeal in HKSAR v. Salim Majed, FACC No. 1 of 2015, and HKSAR v. Yeung Ka Sing, Carson, FACC No. 5 & 6 of 2015.   The Court of Final Appeal endorsed the approach set out in its earlier decision in HKSAR v. Pang Hung Fai,  [2014] 17 HKCFAR 778.   The Court of Final Appeal approved of the ‘better and less complicated test’ set out in the earlier Court of Appeal decision in Seng Yuet Fong v. HKSAR [1999] 2 HKC 833 at 836:

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

In Paragraph 124, the Court of Final Appeal said:

“The Question suggests that there is a need to reconcile that test with “the formulation ‘knew or ought to have known’ set out in Pang Hung Fai”. Difficulty is seen to arise out of the following paragraphs in that judgment: “55. Although it is usually undesirable to substitute the words of a statute with an equivalent formulation, it is sometimes appropriate to do so, for purposes of clarification. For example, when an alternative formulation may assist a jury in its deliberations. On most occasions, the Seng Yuet Fong formulation will be all that is required.

56. However, another formulation may sometimes assist. In s. 25(1), the word ‘believe’ is used in the sense of ‘know’. The two mental elements in the subsection should be understood as if they read: ‘knew or ought to have known’.”

The Court of Final Appeal said at paragraph 128 that :

“......Those words are a reference to section 25(1) which lays down two alternative forms of mens rea. The first is the ‘knowledge’ limb and the second the ‘having reasonable grounds to believe’ limb. In paragraph 56 of the judgment, “knew or ought to have known” is evidently intended to refer to those two limbs. ‘Knew’ refers to the first limb and ‘ought to have known’ is offered as a rendering of ‘having reasonable grounds to believe’. They are words which are capable of being misunderstood because of the unintended connotation of negligence, but paragraph 56 is merely attempting to encapsulate the detailed mens rea analysis undertaken at length in the judgment. The phrase ‘knew or ought to have known’ should not be invested with any greater significance. The Seng Yuet Fong formulation presents a truer reflection of the mens rea analysis and, as paragraph 55 states, will usually be all that is required.”

54.  One of the other issues also considered by the Court of Final Appeal in the Salim Majed and Yeung Ka Sing, Carson cases, supra, was the question of whether the Prosecution could lay a single charge of money laundering contrary to Section 25(1) where there have been multiple deposits of monies into a bank account over a period of time and where the dates of thos deposits were known, as set out in the particulars of counts 2 and 3 herein. The Court of Final Appeal held that it was proper for the Prosecution to lay a single charge where the purpose of receiving and concealing the property comprising the deposits ‘known or reasonably believed to represent the proceeds of crime’, provided that the connection which made the individual deposits of a similar nature so they could fairly be regarded as forming part of the same transactional criminal enterprise. In such a situation, the rule against dulicity will not be infringed.  The Court did state that in certain situations if an accused was prejudiced by the laying of one single charge then the issue of duplicity could arise. It would depend upon the facts of each case.   The Prosecution herein submitted that the issue of duplicity did not arise as there was no prejudice to D1.  Nor was the issue of duplicity raised by Mr. Wu on behalf of D1.  I was satisfied beyond all reasonable doubt that the issue of duplicity did not arise.

55.  Much of the Prosecution case was admitted by way of Admitted Facts under Section 65C of the Criminal Procedure Ordinance, Cap 221.   There were 3 live Prosecution witnesses – in respect of PWs 1 and 2, there was little cross-examination by Mr. Wu, and no cross-examination in respect of PW3.  I found PWs 1 to 3 to be honest and credible witnesses and I accepted their evidence in its entirety. Insofar as Exhibit P205 is concerned, I did find a discrepancy between the location of the record books on the sketch drawn on 17/1/2013 and that drawn on 1/2/2013.  I was satisfied that this was an honest mistake on the part of PW3 – nothing turned on this – I accepted that the location of the record books were as he drew on his sketch of 17/1/2013, which he drew at the scene at the time of seizing the exhibits.  The photographs in the album Exhbit P192, also supported this.

Count 1

56.  It was admitted that the items set out in the particulars of Count 1 were seized by the police at the material time and place. Save for two watches, Exhibits P144 and P145, the other items were seized from a locked drawer in a wardrobe – the key to the drawer was seized from D1. The two watches, Exhibits P144 and P145, were found in the pockets of 2 jackets that were in the wardrobe – D1 in his testimony admitted that the jackets were his and he also admitted that all the items in the locked drawer were his, and it was he who had put them there. Apart from the items set out in the particulars of Count 1, D1’s personal documents were also found in the locked drawer.    It was not disputed that the items seized that are set out in the particulars of Count 1 is ‘property’ as defined in the Ordinance and D1 dealt with the ‘property’. The value of the jewelery, watches  and gold items  was admitted, in paragraph 3 and Annex D of the Admitted Facts II, Exhibit P207.

Counts 2 & 3

57.  D1 was the sole signatory of the 2 HSBC bank accounts set out in the particulars of Counts 2 and 3.  He was the owner of the monies in these two bank accounts. The Bankers Affirmations in respect of these two HSBC bank accounts were part of the Admitted Facts, Exhibit P206, and the Bankers Affirmations in respect of these two HSBC bank accounts were produced by agreement.

58.  In respect of the HSBC bank account set out in the particulars of Count 2,  it is the Prosecution case that between 1 October, 2009 and 17 January, 2013 (both dates inclusive) in Hong Kong, knowing or having reasonable grounds to believe that the property, namely a total sum of HK$15,453,626.26 in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the property.

59.  In respect of the HSBC bank account set out in the particulars of Count 3,  it is the Prosecution case that between 3 September, 2011 and 17 January, 2013 (both dates inclusive) in Hong Kong, knowing or having reasonable grounds to believe that the property, namely a total sum of HK$4,773,353.60 in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the property.

60.  It is not disputed that the funds in these two bank accounts are ‘property’ and D1 dealt with the ‘property’.

61.  It is the Prosecution case that the properties in these three counts in whole or in part directly or indirectly represented the proceeds of an indictable offence, that these were derived by D1 from his running of an unlicensed gambling establishment i.e. an illegal mahjong establishment.

62.  D1 denied that the properties set out in the three charges were proceeds derived from an illegal gambling business.  He testified that he had run a small sub-contracting business in the construction industry. He was also a keen gambler in mahjong, in horseracing and at the casinos in Macau. The property in Count 1 were purchased many years ago by Ms. Wong or himself, and those purchased by him were from his winnings at gambling and that in Counts 2 and 3 were deposits and withdrawals  in respect of his sub-contacting business and his winnings at gambling and loans to friends and the repayments of those loans. 

63.  When the police entered the cockloft on 17/1/2013 and  executed the gambling authorization, D1 was in the premises.  There were people found playing mahjong at three mahjong tables in the premises.  There were a total of 6 mahjong tables there, as well as mahjong tiles and chips.  There was a CCTV camera at the entrance of the building and CCTV cameras in the premises and these were connected to TV screens in the premises. These were in operation at the time when police officers entered the premises.   D1 was in possession of a set of keys, one of which opened the main door of the premises.  At the scene, PW2 cautioned him a number of times in respect of various offences – on each occasion D1 had nothing to say.  As set out in the Admitted Facts Exhibit P206,  D1 was video-interviewed under caution on two occasions after his arest on 17/1/2013 – he refused to answer questions or had nothing to say.  In the third video record of interview under caution on 23/1/2016, which was admitted to be a voluntary one, and produced by agreement (Exhibit P21 and the transcript Exhibit P80), D1 claimed he had rented the cockloft from a friend less than a year ago for $12,000, that he had no means to contact his friend, whom he had known for about 5 years, the purpose of renting the premises was for his friends to play mahjong, and he received $5 for every $100 won, and he would handle the commission by keeping it in his custody/pocket. He did not hand over this to anyone else.  He bought mahjong tables, tiles and chips for ‘convenience’ and one convenience of buying the chips was so there was no need to have so much small change – when asked under what circumstances small change would be required, he said no idea.  He said chips were required for playing mahjong but had no idea why, and no idea who would keep the chips and no idea how the chips were distributed to or obtained by his friends who came to play mahjong.   He had no idea to whom the closed circuit TV equipment belonged and who installed them or the purpose of having it.  He did not answer many of the questions that were put to him during the video record of interview under caution.

64.  In his testimony in Court, his answers were different from that in the video interview under caution e.g. he said he knew Mr. Cheng for some 15 years, they did socialize, he had a means to contact him i.e. he had his mobile phone number.  He explained that the mobile phone number was on his own mobile which had been seized and he was not allowed to access it and therefore could not give the number to the police when he was interviewed. He claimed that this conversation he had was during the video recorded interview under caution but it does not appear on the video record of interview under caution.

65.  He claimed in Court that the mortgage for his property at Serenade Court had been repaid in 2009 and then said he could not remember details of when the mortgage had been repaid.  When asked if he wished to hear his earlier answers which had been recorded by the Court recording system, he said he did not need to.  In the video record of interview under caution (Exhibit P20) he was asked about the mortgage of the property (Counter 245 to 258) and the repayments – his answers was ‘nothing to say’.  It would appear that he had taken out a total of 3 mortgages on the property as set out in the video interview.

66.  He claimed that his date of birth on his identity card was incorrect in the year – he had in fact been born in 1952 and not in 1954 as recorded.  He did not know when he was born – his father gave the particulars when he applied for his identity card for the first time in 1973.   But it was not until some 20 years ago that he realised the error as his mother told him during one of his visits that he had been born in 1952.  But he did not correct this on his identity card as he did not know how.

67.  He claimed that he ran a sub-contracting business from the 1990’s to 2013 – however, he never registered this business as there was no need to.  Nor did he file any tax returns, again because he did not need to, even when he was earning $500,000 to $600,000 a year, some times more than that.  He claimed that he deposited the monies he received into his two bank accounts and paid his workers from withdrawls from the said accounts.  There were no records of any of his receipts from the contractors that employed him or payments to his employees.  A perusal of the transactions in the two bank accounts and the deposits and withdrawals does not support his account.  He claimed some of the monies were winnings from his gambling and some were repayments of loans he had made.  He loan huge amounts of money interest free to friends. According to his testimony.  Ms. Wong was also a heavy gambler and he had helped her on a number of occasions to repay her debts -  the figures just do not add up.  D1 when questioned about his finances kept repeating that he did not know how to calculate.  Yet he has been an avid gambler for many years – he would definitely be someone of considerable mental ability.

68.  His explanation about why he kept the valuable items set out in the particulars of Count 1 at the cockloft is inherently incredible – he transferred them to the cockloft because Ms. Wong threw valuables onto the street or pawned them to feed her gambling habit.   He said some of these items were purchased by her. Some were female jewelry items and female watches. He said he had put them in the drawer for some time – how could she not be aware that the items were no longer in their home then if these had been kept in the cockloft for some time.

69.  D1 said he had given monies to D2 and D3 to deposit into his account – he had given these to them in the cockloft.  These deposits were identified in Annex B1 of the Admitted Facts Exhibit P206 – D2 had made deposits into D1’s bank account on 9 occasions – from 22 May, 2010 to 23 August, 2011.   D3 had made deposits on 5 occasions – from 16 November, 2009 to 18 August, 2011.  Under re-examination, D1 said he gave them the monies to deposit into his account in a restaurant in Tsuen Wan.  He did not explain why in his earlier answer he said  he had given them the money in the cockloft. 

70.  There were numerous inconsistencies in the testimony of D1 in Court and also between what he said in Court and what he had told the police when interviewed under caution.   I did not believe  D1. I rejected his testimony that he had a sub-contracting business from the 1990’s to 2013 and that he had winnings at gambling and made loans to friends that were repaid.  That I comment thus is not to misconstrue the burden of proof remaining throughout upon the Prosecution to prove guilt beyond all reasonable doubt but takes account of practical matters pertaining to the reliability of witnesses and the  weight to be attached to evidence.

71.  I was satisfied beyond all reasonable doubt that D1 was operating an unlicensed gambling establishment at the cockloft at Shop No. 2, No. 2-8A, Yi Pei Square, Tsuen Wan and he took commissions from other people’s winnings on 17 January, 2013 when the police raided the premises.   I was also satisfied beyond all reasonable doubt that D1 had operated an unlicensed gambling establishment during the relevant periods set out in the particulars of Counts 2  and 3 and he took commissions from other people’s winnings.  

72.  Insofar as the items set out in the particulars of Count 1, I am satisfied beyond all reasonable doubt that the items were in his possession and under his control. I am asked to infer that D1 dealt with these items knowing or having reasonable grounds to believe that these, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence.  The Prosecution  submits that D1 knew from his experience of gambling at mahjong establishments that in unlicensed gambling establishments where mahjong was played, when gamblers ran out of money they would borrow money from the operator of the establishment and use as security items of jewelry or watches. These items that were seized were such.  I find myself unable to draw such an inference on the evidence adduced before me.  Although I find it very suspicious, I am not satisfied that the Prosecution has proved this charge beyond all reasonable doubt, and D1 is acquitted on Count 1.

73.  D1 himself admitted that commission was paid and he kept this.  It must be an irresistable inference that in operating the gambling establishment, he had made profits and in the process some of the monies that was being moved or distributed or dealt with by D1 through his two HSBC bank accounts were the profits and therefore the proceeds of an indictable offence.  I find that D1 dealt with the monies deposited into his 2 bank accounts as set out in Counts 2 and 3, he knew that these property in whole or in part,  directly or indirectly,  represented the proceeds from an indictable offence – operation of a gambling establishment. D1 is convicted on Counts 2 and 3.