HKSAR v. HUI LOK TO, KEVIN AND OTHERS

DCCC 431/2017

[2018] HKDC 750

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 431 OF 2017

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REASONS FOR SENTENCE

1.  D2 stands convicted after trial of one charge of conspiracy to deal with property knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1] and sections 159A and 159C of the Crimes Ordinance[2] (charge 3).

2.  D3 stands convicted after trial of two charges of conspiracy to deal with property knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence (charges 5 & 9). 

3.  D4 stands convicted after trial of three charges of dealing with property known or believed to represent proceeds of an indictable offence (charges 6, 7 & 8). 

4.  Full particulars of the offences are set out in my reasons for verdict delivered on 31 May 2018. 

5.  In summary D2 conspired with D1 and a person called Joe to set up Asia Trading Co and open a bank account to deal with monies remitted to the account, knowing or having reasonable grounds to believe the monies represented the proceeds of an indictable offence[3] (charge 3).

6.  Two overseas remittances in the sums of $284,489.34 and $241,349.11 were credited to the account on 22 January and 24 January 2013, the majority of which was withdrawn by D2 in cash shortly after and given to D1 to give to Joe.

7.  D3 conspired with Okafor Joek Kingsley to set up Asia Supply Resources and open a bank account to deal with the monies remitted to the account, knowing or having reasonable grounds to believe the monies represented the proceeds of an indictable offence (charge 5).

8.  Between 1 December 2012 and 3 January 2013 eight overseas remittances in the total sum of $7,403,697.38 were credited to the account.  Shortly after each remittance D3, on the instructions of Okafor Joek Kingsley, issued cheques transferring the monies. 

9.   D3 also conspired with Okafor Joek Kingsley to deal with $523,382.67 remitted to his personal account on 17 September 2012, which sum he withdrew and gave to Okafor Joek Kingsley knowing or having reasonable grounds to believe the monies represented the proceeds of an indictable offence (charge 9).

10.  On three occasions in December 2012 and January 2013 D4 used the bank accounts of Grace Garcia Casia, a domestic helper, to receive a total of $650,000.  Miss Casia came to know the defendant in mid-October 2012 through an online dating site “hongkong cupid.com”. After initial contact by telephone Miss Casia met the defendant and thereafter the relationship developed into a sexual relationship. 

11.  At the request of the defendant Miss Casia allowed the defendant to use her bank accounts to receive money, which monies Miss Casia withdrew and gave to D4, D4 knowing or having reasonable grounds to believe the monies represented the proceeds of an indictable offence (charges 6, 7 & 8).

12.  Money laundering is a serious offence for which deterrent sentences are required (see for example HKSAR v Javid Kamran[4] and HKSAR v Xu Xia Li & another[5]).  In HKSAR v Javid Kamranthe court, stressing the need for deterrent sentences, said that it was not possible to lay down guidelines, as there is a very wide range of culpability.

13.  A number of significant factors have however been identified as relevant in determining the culpability of a defendant, including the nature of the predicate offence that generated the laundered money; the extent to which the offence assisted the crime or hindered its detection; whether the defendant had knowledge of that underlying offence or has turned a blind eye to the source of the money; the amount of money involved; whether there was an international element to the commission of the offence; the degree of sophistication of the offence and the level of the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence (see for example Secretary for Justice v Jerome Yuval Arnold Herzberg[6]; HKSAR v Hsu Yu Yi[7] and HKSAR v A male known as Boma Amaso)[8].

14.  The courts have emphasised that a defendant is to be sentenced on the facts of the money laundering charge and not on the facts of the underlying offence(see for example HKSAR v Chen Szu-ming[9] and HKSAR v Yam Kong-lai)[10]. 

15.  Sentence should mainly reflect the amount of the money laundered and not the benefit obtained (see for example HKSAR v Wu Jianbing[11] and Secretary for Justice v Ngai Fung Sin, Apple[12]). In HKSAR v Yeung Kin Chai the Court of Appeal held that a starting point of 30 months’ imprisonment was appropriate for a single transaction of $500,000 involving a simple transfer procedure[13].

16.  The opening of bank accounts for someone else facilitates the laundering of money by disguising the true owner of the money passing through the bank accounts. This makes difficult the detection of crime and at the same time undermines the integrity of the banking system.  

D2

17.  I have carefully considered everything said on behalf of D2 by Mr Cheng including that he has two young children to look after, the mother of the children having deserted the family[14]; and that the money laundering took place over a period of one month involving half a million dollars and that the defendant took the initiative to stop further money laundering activities[15].

18.  I take into account that D2 has a clear record.

19.  Taking into account:

(a) the role of D2 in setting up Asia Trading Co, opening the bank account and withdrawing the money;

(b) the total amount credited to the account was $530,840; and

(c) $525,838 was remitted from overseas thereby adding an international element to the charge,

I am satisfied the proper sentence after trial is 3 years’ imprisonment.

D3

20.  I have carefully considered everything said on behalf of D3 by Mr Cheung, including that the defendant is aged 69 and has a wife and young daughter to support and that in 2014 and 2015 the defendant underwent operations on his heart.  I note from the medical reports submitted by Mr Cheung that when the defendant last attended the hospital in March this year he was enjoying good exercise tolerance with no chest pain. 

21.  Mr Cheung submits apart from receiving some tea money for delivering goods there is no evidence that D3 received any benefit.  In the video recorded interviews D3 referred to receiving tea money[16]. In reaching my verdict I made no finding as to any benefit D3 may have received.  As noted earlier sentence should mainly reflect the amount of the money laundered and not the amount of any benefit obtained.

22.  I take into account that D3 has no similar previous convictions having been convicted of engaging in bookmaking in 1981 and more recently in 2013 of possession of a Part 1 poison. 

Charge 5

23.  Taking into account:

(a) the role of D3 in setting up Asia Supply Resources, opening the bank account and transferring the money;

(b) the total amount credited to the account was $7,653,697.40; and

(c) $7,403,697.38 was remitted from overseas thereby adding an international element to the charge,

I am satisfied the proper sentence after trial is 4 years and 6 months’ imprisonment.

Charge 9

24.  Taking into account:

(a) the role of D3 in lending his personal savings account;

(b) the amount involved was $523,382.67; and

(c) that this was a single transaction,

I am satisfied the proper sentence after trial is 2 years and 6 months’ imprisonment. Taking into account totality of sentence to be served by D3, I am satisfied concurrent sentences are appropriate.

D4

25.  I have carefully considered everything said on behalf of D4 by Mr Laskey, including that there was no international element; the total amount involved was $650,000 which sum while significant is at the lower end of the scale of money laundering offences and that the duration of the money laundering occurring in December 2012 and January 2013 was relatively short. 

26.  I take into account that D4 has no similar previous convictions having been convicted of breach of condition of stay in 2000; drink driving in 2005 and making a false representation to an immigration officer in 2006.  

27.  Taking into account:

(a) that D4 took advantage of the affections of Miss Casia so he could use her bank accounts; and

(b) the amounts involved were $130,000; $280,000 and $240,000 which Miss Casia withdrew and handed to the defendant,

I am satisfied the proper sentence after trial on each charge is 2 years’ imprisonment and that a total sentence of 3 years’ imprisonment properly reflects D4’s criminality on the three charges.

Delay

28.  Mr Cheung on behalf of D3 submits that the court should take into account the delay in bringing the case to trial.  This submission was also adopted by Mr Cheng on behalf of D2. 

29.  Delay in bringing an offender to justice is a mitigating factor which may be taken into account in sentence.  All the circumstances must be looked at including whether the offender has acknowledged guilt; where the delay has given the offender the opportunity to rehabilitate himself; whether restitution has been made; whether there was a legitimate expectation the matter will not be further pursued; the size of the investigation and whether the time taken to bring the case to court was longer than necessary[17].

30.  D3 was first arrested in May 2013; D1 and D2 in June 2013 and D4 in December 2013.  All the defendants were charged on 9 January 2017 and first appeared in court at the Tuen Mun Magistracy on 10 January 2017, over three years after the defendants were first arrested.  The case was transferred to the District Court on 12 May 2017.  The first hearing in the District Court was on 1 June 2017.  The trial commenced on 4 December 2017 and verdict delivered on 31 May 2018, five years after D3 was first arrested.   

31.  Mr Chau explains that the investigation involved several overseas companies and eight bank accounts in Hong Kong.  Legal advice was first obtained in February 2015.  Between that time and January 2017, when the advice was to charge the defendants, the police regularly sought advice from the Department of Justice.

32.  Clearly the police needed substantial time to investigate the matter.  Mr Cheung does not attribute fault to the prosecution in the time taken to investigate the matter but asks that this be taken into account in passing sentence. 

33.  No fault being attached to either the prosecution or the defence for the time taken to bring the case to trial I am satisfied some credit should be given in sentence for the time taken to bring the case to trial [18].  In the circumstances I further reduce the individual sentences by 1 month.   

Sentence

34.  The defendants are convicted and sentenced as follows:

D2

Charge 3 - 2 years and 11 months’ imprisonment;

D3

Charge 5 - 4 years and 5 months’ imprisonment; and

Charge 9 - 2 years and 5 months’ imprisonment concurrent to charge 5;

Total sentence to be served by D3 is 4 years and 5 months’ imprisonment.

D4

Charge 6 - 1 year and 11 months’ imprisonment;

Charge 7 - 1 year and 11 months’ imprisonment concurrent to charge 6; and

Charge 8 - 1 year and 11 months’ imprisonment with 12 months consecutive and 11 months concurrent to charges 6 & 7;

Total sentence to be served by D4 is 2 years and 11 months’ imprisonment.