HKSAR v. YEUNG CHUN PONG AND OTHERS

DCCC 438/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

Criminal Case No. 438 of 2005

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REASONS FOR SENTENCE

The case involves 2 charges of conspiracy to deal with ptoperty known or believed to represent proceeds of an indictable offence, contrary to sections 159A and 159C of the Crimes Ordinance, Cap 200 and section s25(1) of the Organised and Serious Crimes Ordinance, Cap 455. Charge 1 is against D1, D2 and D4 jointly while Charge 2 is against D3. The particulars of the offences are set out in the charge sheet and the court is not going to repeat them here.

2.  D1 and D4 plead guilty to Charge 1. The charges against D2 and D3 are left in court file and not to be activated without the leave of this court or the Court of Appeal.

Facts Admitted

3.  On 21.6.2000 D1 and D4 were found with others in a flat in Macau together with bookmaking paraphernalia. Calls to a Hong Kong mobile telephone number registered in the name of the mother of D1’s wife were diverted to lines connected to this Macau address. Hong Kong residents could place bets on horse racing from Hong Kong by calling this mobile telephone number and depositing stake money into a Hong Kong account. Winnings were paid out of the Hong Kong account to successful punters. D1 and D4 were convicted of bookmaking offences in Macau and were imprisoned for 18 months and 12 months respectively.

4.  D1 and D3 are husband and wife and D4 is the sister of D3. Hang Seng Bank account number 275-1-076874 (“the charge account”) was opened in the name of D4 on 30.6.1998 and was operated by her signature or a chop. Some of the proceeds of illegal gambling had flowed through the account and the profits were siphoned off to D1.

5.  From 30.6.1998 to 3.9.1999 when the charge account was closed, a total of HK$228,780,470 were paid into the account by 1,312 deposits and an equal amount of money taken out by 895 withdrawals which were all effected by means of the chop.

6.  HK$120,438,187 of the total deposits were in cash from unidentified third parties and HK$69,326,542 were from third parties by bank transfers and/or cheques. HK$181,854,030 of the total withdrawals were made to third parties by bank transfers and/or cashier’s orders. The remaining transfers were between the defendants or unattributable.

7.  As seen on the withdrawal vouchers, 231 of the withdrawals were made by D4 using the chop while the rest of the withdrawals were by persons of unknown identity or unattributable. All these amounts related solely to bookmaking activity and to the transfer of profits from that activity.

8.  147 of the withdrawals in the total amount of HK$28,820,715 were deposited into an account of D4 while 105 of the deposits into the charge account totalling HK$21,366,500 were from D4’s account, resulting in a net deposit of HK$7,454,215 in D4’s account.

9.  The pattern of the deposits and withdrawals indicated that the money generated was connected with horse racing in Hong Kong and Macau. D1 was the prime mover in the bookmaking business and HK$41,400,000 from the charge account was deposited into his account with Onshine Finance, a securities company in which he held shares. The money was profits of the bookmaking business and the majority of them were transferred to D1’s personal account.

10.  D4 acted on the instruction of D1 in the bookmaking and laundering of the money generated.

11.  D1 has agreed to the confiscation of HK$84.7 million.

Criminal Record

12.  D1 has a clear record while D4 has 1 previous conviction of bookmaking in 1983.

Chronology of Events

13.  Both the prosecution and the defence tender to court the chronology of events in the present case and the court is not going to repeat them here.

Mitigation

14.  D1 is aged 57, married to D3 and has 4 children. He started working at young age in the family restaurant and wholesale vegetable business. He later invested in VIP gambling room in Macau. He also invested in the stock market and holds 5% shares in the Onshine Finance. He financially supports his wife and his elderly parents.

15.  D4 is aged 58, married with 2 children. He suffers from a disease called achalasia which is an oesophageal disorder. He has known D1 for over 35 years. He worked as a clerk in Onshine Finance and also made small investment in VIP gambling room in Macau. He is now working for one Silver Way Enterprises Limited, a subsidiary of Onshine Finance, earning about $10,000 a month and he also has a part time job to supplement the income.

16.  Senior counsel for the defence submits to court letters of mitigation by D1 and D4. They express remorsefulness in the letters and point out that they have been put under prolonged pressure because of the present case. Letters of mitigation written by other people for the 2 defendants are also submitted to court. The court does not intend to go into the details of letters, suffice to say that they all have good comments on the 2 defendants and ask the court to treat them leniently.

17.  Senior counsel points out D1 is willing to take full responsibility of the case. He engaged in bookmaking at the suggestion of customers in the VIP gambling room as a service and no loan sharking and triad element were involved. The role of D4 was no more than a messenger. Both defendants did not know that what they did with the bank accounts constituted the offence of money laundering.

18.  Senior counsel emphasises that although the case has dragged on for a long time the defendants had only made the various applications and proceedings after obtaining legal advice and they genuinely has a sense of grievance. He asks the court to give the full 1/3 discount to the defendants.

19.  The defendants were convicted of bookmaking in Macau and served terms of imprisonment there, D1 for 18 months and D4 for 12 months. D4, however, served one month loner than the sentence he received. Senior counsel submits that the time served should be taken into account when considering the appropriate sentences for them in the present case, citing the case of HKSAR v Lam Chi Wa [2009] 1 HKLRD 483 in support.

20.  After citing a number of authorities to illustrate how the higher courts have dealt with sentences in money laundering cases Senior Counsel points out that the amount of money involved in the present case was HK$228 million, but there were no international aspects involved. He suggests the court to adopt a starting point of 4 ½ years imprisonment for D1 and deduct therefrom the 18 months imprisonment D1 served in Macau. The court should then give D1 the full 1/3 discount for pleading guilty and also the discount for his previous good character.

21.  As for D4 senior counsel emphasises that he was only a subordinate of D1. He asks the court to take into consideration his minor role and his health problem and to impose a fine on him.

Sentence

22.  There are no sentencing tariffs in the offence of money laundering and the court has to consider the circumstances of each individual case to arrive at the most appropriate sentence.

23.  With due respect to the senior counsel for the defence the court does not agree that bookmaking or money laundering are victimless offences. According the facts admitted by the defendants a substantial part, if not all, of the money laundered in the present case was generated by bookmaking connected with horse racing in Hong Kong. Such bookmaking activities no doubt will, and in fact, have adversely affected the revenue of the Hong Kong Jockey Club. This will in turn affect the charitable causes of the Jockey Club and may even result in the Jockey Club in having to lay off some of its employees.

24.  Although the present case did not involve international elements the defendants made use of Hong Kong and Macau to carry out their illegal venture. The purpose was obviously to make it more difficult for the offence to be detected. There was no doubt substantial planning and some degree of sophistication in the commission of the offence in the present case. The amount of money laundered was $228 million which was proceeds of bookmaking and is certainly a significant sum. The 2 defendants dealt with the money with the full knowledge that they were proceeds of bookmaking conducted in such a manner.

25.  The court accepts that D1 is the prime mover of the offence. Although D4 was his subordinate he was no doubt an essential clog in carrying out their sinister plot. Having considered the whole circumstances of the case and the relevant authorities the court adopts a starting point of 4½ years imprisonment for D1 and 3 years imprisonment for D4. The court is prepared to give a full 1/3 discount for the guilty pleas of the 2 defendants but considers that in a case of such a serious nature the clear record of D1 doe not constitute a valid ground for mitigation. The same applies to the health condition of D4. This takes the sentences of D1 and D4 to respectively 3 years imprisonment and 2 year imprisonment.

26.  The court accepts that the imprisonment served by the defendants in Macau for bookmaking should be taken into consideration. The money laundering offence in the present case covers the period of 30.6.1998 to 3.9.1999. There is no information as to whether the bookmaking for which the 2 defendants served sentences in Macau was for the same or a different period and there is also no information as to whether it was the source of the whole of the proceeds dealt with by the 2 defendants. The court, however, is prepared to give them some discount for the time served, so as to reflect what they would have got had they been charged with both bookmaking and money laundering in a Hong Kong court. The court accordingly sentences D1 to 2½ years imprisonment and D4 to 1 year 8 months imprisonment.