HKSAR v. TSE WAI KIT

DCCC 224/2024

[2024] HKDC 2098

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 224 OF 2024

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REASONS FOR SENTENCE

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1.  The defendant has entered a plea of guilty to the 2^nd charge on this indictment, namely dealing with property known or believed to represent the proceeds of an indictable offence, contrary to Section 25(1)  and (3)  of the Organised and Serious Crimes Ordinance, Cap 455, now the particulars of that offence being that the defendant, being 9 March 2021 and 3 May 2021 in Hong Kong, knowing or having reasonable grounds to believe that property, namely a chose in action in a total of some HK$2,256,604.06 and another US$132,615.80 in a numbered account held under his name in Standard Chartered, in whole or in part directly or indirectly represented the proceeds of an indictable offence, and he dealt with the said property.

2.  The facts agreed by the defendant are straightforward and can be simply stated.  On 11 March 2021, PW1’s evidence shows that he received a call from a person purporting to be the Shanghai Public Security Bureau demanding him to deposit some HK$300,000 into the defendant’s Standard Chartered bank account. This was to do with a deception case.  PW1 in fact only deposited $9,000 cash. He realised this was a scam and reported the matter to the police.  Then the police conducted an investigation of that account.  The account was opened by the defendant as a sole signatory on 24 February 2021.

3.  At the time he was unemployed and living in a public housing estate in Kwun Tong.  The investigation period was 9 March 2021 to 7 May 2021.  The total sums of money disclosed in the particulars in the indictment were deposited into the account and that money was withdrawn during the same period and throughout that period the account was only active for a total of 7 days and once the deposits accumulated to a certain level, most of the money would be transferred to some other person’s bank account on the same day leaving a low balance in the bank account.  This is a pattern of quick dissipation of funds, temporary repository funds and test payment.

4.  Accordingly, the defendant was arrested on 16 September 2022 and under caution he remained silent.  The defendant himself admits in the 6^th paragraph that he knew or had reasonable grounds to believe the property, that is the property particularised, in whole or in part directly or indirectly represented the proceeds of an indictable offence and he dealt with the property.  Of course the facts admitted by the defendant show beyond reasonable doubt that the property itself were the proceeds of indictable offences.

5.  As far as the background of the defendant is concerned, there is an antecedent statement produced by the prosecution.  It shows the defendant is now 47 years old.  He has a total of six disclosed previous court appearances for offences such as possession of dangerous drugs and managing a gambling establishment.  He has no similar convictions to the present offence.  He was educated up to secondary level in Hong Kong and was unemployed at the time of his arrest.  Apparently he has a good health condition and is single.  The defendant has produced, wrote a letter to me and also mitigation.  I now deal with the mitigation as being put forward.

6.  He, at this time, lives with his parents in a public housing community in Kowloon and is single.  He does have one daughter, educated up to Form 3 level in Hong Kong, worked in various hair salons and other sorts of employment and also worked as an amusement games centre keeper in Kowloon with an average income of around $15,000 per month.

7.  The defendant gives his explanation for becoming involved in this offence as follows.  While he was working in an amusement games centre in Mong Kok at the end of 2020, he became acquainted with a young woman from the Mainland who he became involved in an intimate relationship with.  The girl suggested she would need access to a bank account in Hong Kong as she was a frequent patron in various games centres and in that light the defendant set up a bank account at the Standard Chartered Bank, handing over to her the bank documents and the passcodes and the ways of using that account.  His mitigation says he was madly in love with her and never questioned what she was doing, never queried her as to how she operated the bank account and it was operated by her throughout.  Of course, as happens in these cases, she disappeared without a trace and left the defendant with the bank account that he had opened.

8.  The defendant is regretful becoming involved in this way in this, what was clearly an unsuitable and unwise relationship and allowing the bank account to be used by her in this way.  He does concede, however, his guilt in this offence and points out that he was arrested on 19 December 2020 and this case has been hanging over his head now for what is quite a long time and he has suffered from depression as a result of that over the years and he asks for leniency so that he can be returned to look after and assist in the upbringing of his daughter.

9.  Turning now to the approach to sentencing in cases such as this, I note, and this will need dealing with in the course of sentencing, the prosecution have applied for an enhancement of this sentence, pursuant to Section 27(2)  of the Organised and Serious Crime Ordinance, Cap 455.  I will deal with that later on.

10.  The defendant has pleaded guilty to a single offence of dealing with property known or believed to represent the proceeds of an indictable offence. The approach to sentencing in these offences generally set out of the case of HKSAR v Boma, which is a Court of Appeal case, CACC 335/2010.  There is no guideline sentence for offences of this nature.  The factual situations which can give rise to these charges are so varied that no practical guideline can be set out.

11.  The amount of money laundered is not the be-all and end-all of the case but it is a significant feature in the court’s assessment of the appropriate starting point.

12.  Boma sets out a number of significant features that the court should take into account.  Firstly, the nature of the predicate offence.  We know in this case one predicate offence which was of a fraudulent nature involving this familiar allegation relating to a possible arrest in a deception case in the Mainland and the use of the Public Security Bureau’s identity to threaten the victim.

13.  Secondly, the state of the offender’s knowledge, that is of the predicate offence.  There is no evidence here that the defendant himself had any knowledge of the predicate offence.  It is not necessary for the prosecution to establish that however.

14.  Did the offence involve a significant international dimension?  That is a significant aggravating feature.  It does not appear to be a feature of this case.

15.  Another factor is the sophistication of the offence, including the degree of planning.  Well, that could be seen, as far as the defendant is concerned, in simply opening the bank account.

16.  Was the offence committed on behalf of an organised crime criminal syndicate?  It would appear that most of these offences would be.

17.  Whether there was one transaction or many and the length of time over which the offence was committed.  There appear to have been a number of transactions committed between the dates of 9 March 2021 and 3 May 2021.  The defendant did not continue to launder funds after he discovered the nature of the funds and the extent of the money laundering operation that was conducted with his account.

18.  The role of the offender and the acts performed by him.  The role of the defendant in this case was simply to provide the bank account and allow it to be operated by another person.

19.  Although the amount of money laundered is not as it says here the be-all and end-all of the case, it is a significant factor and the courts are often referred to cases involving similar amounts of money and asked to take that as a baseline for sentencing.  In this case, I have been referred to the case at HKSAR in Chow Ying-ki CACC 378/2004 which involves an amount similar or slightly larger than the present figure, involving the money laundering involving drug offences where the defendant was subjected to a starting point of 4 years' imprisonment which was described by the Court of Appeal in that case as being on the high side, which urges on me to take that into account both the nature of the offence from which the money laundering arose, and secondly, the Court of Appeal’s description of that being on the side when considering an appropriate starting point for this defendant in this case.

20.  Taking what I know about the offence into consideration, I am going to take a starting point for sentence in this case of 45 months' imprisonment. The defendant is of course is entitled to a full one-third from that at this stage, which would lead to a sentence at this stage of 30 months' imprisonment.

21.  I now have to consider the question of the enhancement of this sentence.  I have a statement provided by the prosecution from a chief inspector of police, Mr Li Yiu-nam, who is providing a statement to court pursuant to Section 27(2)  of Cap 455 with regard to two things. The prevalence of the use of stooge accounts, which has what has happened here in the commission of the specified offence, namely dealing with property known or believed to represent the proceeds of an indictable offence contrary to Section 25 at Cap 455, and the nature and extent of any harm with a direct or indirect cause to the community by recent occurrences of the specified offence.

22.  In this brief summary of the statement provided by Chief Inspector, clear evidence is provided of the prevalence of the use of stooge accounts in the commission of the offence of dealing with property known or believed to represent the proceeds of an indictable offence.  Not only is the offence of the use of stooge accounts prevalent but it is on the increase.

23.  Secondly, the statement deals with the nature and extent of the harm, whether direct or indirect, caused to the community by the commission of this type of money-laundering operation and the Chief Inspector provides quite clear evidence of the nature and harm caused by that.

24.  Having read this statement, I consider the prosecution have provided ample evidence of that this is a case in which an enhancement of sentence should occur.  In fact, the enhancement of sentence is not opposed by the defence who take a realistic approach.

25.  I must now consider the appropriate enhancement in this case.  It is a discretionary matter and all offences are differently considered by the court where the matter is discretionary.

26.  In respect of offences of dealing with the proceeds of an indictable offence, enhancement of sentence up to 33.3 per cent have been considered by the court.  Having regard to the facts of this case and the fact that when considering the enhancement there should still be a clear deduction from the starting point for sentence to represent the plea of guilty by the defendant, I am going to in this case enhanced the sentence by 25 per cent which would lead to a figure of 7.5 months' imprisonment to be added.  However, I consider that the figure should be a rounded figure so will add a total of 7 months' imprisonment by way of enhancement to the original figure of 30 months' imprisonment, leading to a final sentence of 37 months' imprisonment for the 2^nd charge on this indictment.