HKSAR v. KWAN YIN WAH

DCCC 566/2023

[2025] HKDC 300

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 566 OF 2023

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REASONS FOR SENTENCE

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1.  Ms Kwan pleaded guilty before me to two charges on a Charge Sheet as follows.

2.  Charge 1 is Conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455, and sections 159A and 159C of the Crimes Ordinance, Cap 200.  Particulars are that she, between 1 April 2014 and 23 September 2015, both dates inclusive, in Hong Kong, conspired with a person known as “Mr Ko”, to deal with property, namely a total sum of $5,691,068.5 Hong Kong currency in an account numbered 16799950 held in the name of Ms Kwan with Hong Kong Jockey Club, knowing or having reasonable grounds to believe that the said property, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

3.  Charge 2 is Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.  Particulars are that she, between 1 April 2014 and 25 September 2015, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of $418,176.82 Hong Kong currency in an account numbered 012-721-1-013662-6 held in the name of Ms Kwan with Bank of China (Hong Kong)  Limited, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

Facts admitted by Ms Kwan

4.  On 15 March 2013, Ms Kwan opened a bank account numbered 012-721-1-013662-6 with the Bank of China (Hong Kong)  Limited (“the BOC Account”).

5.  On 1 April 2013, Ms Kwan opened a betting account numbered 16799950 with the Hong Kong Jockey Club (“the Jockey Club Account”).

6.  The BOC Account was connected to the Jockey Club Account.

7.  Between 1 April 2014 and 23 September 2015, a total sum of $5,691,068.50 was deposited into the Jockey Club Account by way of 5,226 cash deposits and bank transfers, and $5,699,868.50 was withdrawn by way of 869 cash withdrawals and bank transfers.  Each sum of money being deposited into the Jockey Club Account ranged from $20 to $42,700; whereas each sum of money being withdrawn ranged from $1 to $20,000.

8.  Between 1 April 2014 and 25 September 2015, a total sum of $418,176.82 was deposited into the BOC Account by way of 325 cash deposits and bank transfers, and a total sum of $429,035.90 was withdrawn by way of 340 cash withdrawals and bank transfers.  Each sum of money being deposited into the BOC Account ranged from $20 to $25,204; whereas each sum of money being withdrawn ranged from $26 to $6,000.

9.  The general transaction pattern in the BOC Account revealed that a large amount of transactions occurred nearly every day.  Whenever money was remitted into the BOC Account, it would be quickly withdrawn.  The number of deposits and withdrawals was unusually substantial and frequent during a relatively short period of time.

10.  On 23 September 2015, Ms Kwan was arrested and cautioned.

11.  In the subsequent cautioned interviews, she made the following admissions:

(a)  She was a laboratory technician and her monthly income was $23,000;

(b)  She was declared bankrupt in around April or May 2014;

(c)  Before she was declared bankrupt, she owed debts to various banks, second-tier financial institutes and she also owed money to some callers who lent her money over the phone;

(d)  She opened the Jockey Club Account in late 2013;

(e)  She had borrowed $3,000 from a Mr Ko over the phone; she had to repay Mr Ko several hundred dollars every 10 days;

(f)  She repaid Mr Ko by depositing money into the designated Jockey Club betting account(s);

(g)  In around early 2014, she was unable to repay the debt she owed to Mr Ko, so she surrendered the card and password of the Jockey Club Account to Mr Ko;

(h)  Only she and Mr Ko knew the password of the Jockey Club Account;

(i)  The BOC Account was for receiving her monthly salary; and

(j)  The ATM card of the BOC Account was seized from her at the time of arrest.

12.  Investigation revealed that (a)  Ms Kwan was declared bankrupt in 2014; (b)  the tax paid by her for fiscal years of 2013-2014 and 2014-2015 was $3,510 and $370 respectively; (c)  her monthly salary ranged from $10,000 to $20,000; (d)  she travelled between Hong Kong and Macau frequently between 2014 and 2015.

13.  Ms Kwan now admits fully the particulars of offence of Charges 1 and 2.

Criminal record

14.  Ms Kwan has a clear record.

Antecedents

15.  Ms Kwan is aged 53 (44 at the time of the offences), educated to secondary level, was working in a laboratory at the time of the initial arrest with a monthly salary of $23,000.

16.  She was first arrested on 23 September 2015 and further arrested on 21 April 2023.

17.  She is married with two daughters.  She resides with her family in private housing in Shatin.

Mitigation

18.  Mr Alan Tang of counsel mitigated on behalf of Ms Kwan.  The following is a summary of the mitigation submissions.

19.  Charge 1 spanned a period of 18 months.  Charge 2 also spanned a period of 18 months.

20.  After arrest and caution on 23 September 2015, Ms Kwan cooperated fully with the police and provided detailed statements regarding the allegations.

21.  It is pertinent to note that:-

(a)  No international element was involved;

(b)  The role of Ms Kwan falls squarely within the ambit of a passive launderer of funds for the purpose of Charge 1; no evidence suggests she had received any pecuniary interests and/or rewards;

(c)  She never encountered the victims face-to-face;

(d)  She made frank confessions that she acted out of financial hardship; and

(e)  She has since learnt a sharp and bitter lesson.

22.  Ms Kwan has a clear record.

23.  Ms Kwan’s daughters are now aged 25 and 20 respectively.

24.  At the material time, she was employed as a medical laboratory technician, earning a monthly salary of $23,000.

25.  As early as April or May 2014, Ms Kwan faced serious financial difficulties, ultimately leading to her bankruptcy.  She frankly admitted to borrowing substantial sums from loan sharks and/or various financial institutions.  Ms Kwan told the police that she merely recalled having a few telephone conversations with Mr Ko but could no longer remember his contact details.

26.  Over the past 9 years (since her initial arrest in September 2015), Ms Kwan has worked extremely hard to resolve her financial problems.  The bankruptcy order against her expired on 28 May 2019.  The family is currently living in a property in Shatin and she has continued to fulfil her role as a devoted and caring mother of two daughters, who were merely 19 and 15 years old at the time of her arrest.

27.  Ms Kwan is now working in a private institution as a Product Manager, earning a monthly salary of $37,000.

28.  Ms Kwan has now turned over a new leaf, establishing a stable family life and career.  A long-term imprisonment would certainly have a devastating impact to her family.

29.  Ms Kwan’s actions were entirely out of character.  At the material time, her judgement was clouded by hopelessness and a misguided sense of self-reliance in resolving her financial struggles, leading her to commit the impugned acts.

30.  There is no sentencing guideline for the present offences.  Generally speaking, the main sentencing factor is the amount of “black money” involved in the individual cases.

31.  In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal emphasized that the amount of money being laundered is a major sentencing consideration.  Cheung JA, in giving the judgment of the court, also had the following observations at para 9:

“9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

(1)  It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2)  The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indicatable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(3)  The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indicatable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(4)  If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(5)  The length of time the offence lasted.”

32.  In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, Yeung JA (as he then was)  observed that:

“12. ‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the ‘money laundering’ offence (see Court of Appeal cases HKSAR v Javid Kamran (CACC 400/2004), HKSAR v Xu Xia Li and another [2004] 4 HKC 16, etc).

13. Generally, the sentence for “money laundering” offence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most ‘money laundering’ cases, there may not be evidence to show from what indictable offence the ‘black money’ are in fact derived. Of course if there is information to prove that the ‘black money’ is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc or the defendant’s benefit is huge, then the sentence should be adjusted upward.

14. This court has, in a number of other similar cases, also listed other factors relevant to the sentence to be imposed including the number of offences, the length of time the offence lasted, the degree to which the defendant participated in the offence involving ‘black money’ and whether or not it was an organized and sophisticated crime, etc.

15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of ‘money laundering’ cases. The sentencing starting point is 3 years or so where the “black money” involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars.”

33.  In fact, the sentencing framework of money laundering cases keeps on evolving in Hong Kong.  In Boma, the Court of Appeal emphasized that at para 38 that “the question of the amount of the money laundered is not the be-all and end-all of a case, but is a significant feature”.  The Court went on to list out other relevant factors that should be taken into account at para 40:

“(1)  The nature of the predicate offence for generating “black money” and the sentence to be imposed;

(2)  Whether the defendant knew what the predicate offence was;

(3)  Whether there is an international element;

(4)  Whether the offence of “money laundering” involves elaborate steps, schemes or fraudulent means;

(5)  Whether there is a criminal syndicate;

(6)  The number of transactions and the length of time during which the offences were committed;

(7)  Whether the defendant continued to launder money after knowing the nature of the predicate offence;

(8)  The role and remuneration of the defendant.”

34.  By applying the salient principles above, the defence submits that:-

(a)  Applying a global approach, the two charges involved a total sum of HK$6,109,245.32; and

(b)  Having regard to the circumstances and uniqueness of the present case, the court is invited to adopt a starting point of 4 years’ (48 months’)  imprisonment.

35.  In HKSAR v Lam Ka Sin [2021] 2 HKLRD 32, having regard to the long-standing principles set out in Hsu Yu Yi, Wan Kwok Keung and Boma, the Court of Appeal at paras 27-28 said the following:

“27. Notwithstanding there is no formal tariff for sentencing of money laundering offences, it has been held that generally the sentence should mainly reflect the amount of black money laundered, and where there are present circumstances that justify the sentencing court taking a lenient approach, the means by which this should be achieved is by reducing the starting point that would otherwise be appropriate for the gravity of the offending. There may be cases where a sentencing court is satisfied there are present “exceptional circumstances” to warrant consideration of alternative sentencing options. The concept of “exceptional circumstances” for the purposes of suspending a sentence of imprisonment, was wide enough to allow a sentencing court to take into account all relevant circumstances surrounding the offence, the offender and the background. Accordingly, ‘exceptional circumstances’ may arise because of the prominent effect of an individual factor or the cumulative effect of several factors, but whatever the situation, it requires taking an overall or holistic view of the case.

28. The facts and circumstances of the present case highlight the importance of individual justice when sentencing an offender. The classical principles of sentencing have been characterized by the objects of retribution, deterrence, prevention and rehabilitation. It will depend on the particular circumstances of the offence and the offender which of these objects apply and to what level and degree. There is a tendency when sentencing offenders for serious crime to place emphasis on deterrence, for the very important primary object of protecting the community, but rehabilitation should not be overlooked, particularly when the circumstances of the case cry out for a more individualized sentence. As stated by Stock JA (as he then was)  in HKSAR v Leung Pui Shan the sentence a court imposes must carefully be moulded not only to the category of the offence but to the offender. There will be cases, because of the gravity of the offence and the culpability of the offender, where little if any weight is given to mitigating factors that would otherwise be taken into account. But Stock JA also stressed the need for individual justice in such a case, having regard ‘to the policy considerations that might dictate in a category of case a stern general approach but never forgetting the fact that the courts are on each sentencing occasion dealing with an individual whose peculiar circumstances, if they exist, always deserve careful attention’.”

36.  The principle of “rehabilitation should not be overlooked, particularly when the circumstances of the case cry out for a more individualized sentence” was illustrated in earlier case laws, such as HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 165.  In that case, the appellant was implicated in a money laundering operation involving HK$4.2 million, yet the Court of Appeal determined that the appropriate sentence would be 1 year’s imprisonment.

37.  By applying the principles in Lam Ka Sin and Teresa Lai:-

(a)  Ms Kwan was a passive launderer of funds – for which she had received no pecuniary interests and/or reward from Mr Ko at all. More importantly, her position could easily be replaced by any other individual;

(b)  At the time of her arrest, Ms Kwan fully cooperated with the police and provided a frank confession. Clearly, she underestimated the seriousness of her actions at the material time;

(c)  Subsequent to the initial arrest, Ms Kwan was temporarily released by the police on 24 March 2016; seven years later, on 21 April 2023, she was re-arrested and was brought to the West Kowloon Magistracy; and

(d)  Ms Kwan has turned over a new leaf for the past nine years. Her unwavering determination to support her family is highly commendable. Despite facing significant challenges, she has worked tirelessly to maintain a stable and harmonious family life. Her efforts demonstrate her genuine remorse and commitment to rehabilitation. The court is urged to impose a lenient sentence, granting Ms Kwan one final opportunity to rebuild her life. As enunciated by the Court of Appeal in Lam Ka Sin, “… where there are present circumstances that justify the sentencing court taking a lenient approach, the means by which this should be achieved is by reducing the starting point that would otherwise be appropriate for the gravity of the offence”.

38.  In relation to delay of prosecution, it is trite that mere delay in the processing of a case is not sufficient to be a mitigating factor (see HKSAR v Choi Ki Shun [2003] 2 HKLRD 575, headnote at 576).  It is equally well-settled that delay of prosecution alone should never be regarded as a mitigating factor.  For delay to be considered relevant, it must be unreasonable and not attributable to the defendant, while also having an impact on him/her, such as causing significant additional stress or hindering his/her efforts to rehabilitate during the intervening period.  It has further been suggested that delay caused by the prosecution’s dilatory or neglectful conduct may warrant a sentencing discount if the court deems it an appropriate means of marking its disapproval of that conduct (See: HKSAR v Chiu Chi Wing CACC 243/2012).

39.  The Pol 155 (submitted)  and antecedent report provided by the prosecution reveal that:-

(a)  The period between Ms Kwan’s initial arrest and subsequent arrest (namely, between 23 September 2015 and 21 April 2023)  lasted for a total of 2,757 days (equivalent to approx 7.58 years). There is an issue of serious delay on the part of the prosecution;

(b)  The Pol 155 revealed that in 2019 the police authorities were heavily occupied by various operations, including the “Tide Rider Operation”, suicide cases, arson cases in MTR station, robberies, theft as well as murder cases;

(c)  As regards the duration of legal advice, the Pol 155 revealed that the 1^st DOJ advice was obtained by the police authorities on 22 November 2017; whereas the 2^nd advice was acquired on 12 January 2023. It was not until 28 March 2023 that the DOJ finalized its position and formally lodged the charges against Ms Kwan. It is submitted that there was a serious and unjustifiable delay between the acquisition of the 1^st and 2^nd legal advice; and

(d)  The said delay cannot be attributable to Ms Kwan’s conduct and has clearly caused her significant additional stress and disruption, particularly in her attempts to rehabilitate during this period. As evidenced by the Pol 155, Ms Kwan was repeatedly reminded over a prolonged period that she faced the possibility of arrest, subject to the outcome of DOJ’s legal advice. The prolonged uncertainty further exacerbated her psychological burden, thus undermining her ability to move forward and rebuild her life.

40.  Mr Tang further submitted that the reason Ms Kwan committed the offence subject of Charge 1 was that she lost a great deal of money in investment of stocks including margin trading and some gambling in Macau.  Ultimately, she had to borrow from loansharks resulting in safety threats against herself and her two teenage daughters.  Ms Kwan now wishes to apologize to the victims of money laundering for her role in it by surrendering her personal information to Mr Ko.

41.  Mr Tang emphasized that he is not asking the court to suspend Ms Kwan’s imprisonment sentence.

42.  Mr Tang has submitted on behalf of Ms Kwan a total of 4 mitigation letters written in Chinese by respectively Ms Kwan herself, her husband, her elder daughter and younger daughter.  The contents generally are that Ms Kwan was a selfless mother who contributed much to the family.  The writers asked for a lenient sentence and a chance for reform.

43.  Mr Tang also handed up two reference letters written in English respectively by Ms Kwan’s former and present employers.  They spoke highly of her and acknowledged her good work performance.

Sentence

44.  Before pleas were taken, Mr Tang informed that court that in relation to Charge 2, he was no longer relying on the mitigation ground of Ms Kwan being a “passive launderer”.  Mr Tang further told the court his instructions were that as for the sum of $418,176.82 under Charge 2, part of it was Ms Kwan’s settlement of debts to loansharks; the rest she could not remember the purpose of.

45.  In Lam Ka Sin, the headnote at p32 had this to say about the appellant D:

“D had an extremely difficult and traumatic life. Leaving school at the age of 16, she took up work at a bar. She suffered acute depression, had suicidal episodes and engaged in drug abuse. The man with whom she was cohabiting deserted her and their son. Motivated by a desire to care for her son, she changed her lifestyle and stopped consuming drugs. As to the circumstances of the present offence, the money laundering conspiracy involved D, who was aged 20, agreeing for a fee to process a cheque through her bank account. She appeared to have had a change of mind, and to have had to be forced to process the cheque. As it happened, the cheque did not go through because of a fault on its face. D then withdrew from the arrangement, and a new cheque was negotiated through someone else’s account.”

46.  At first instance, the sentencing court sentenced her to 22 months’ imprisonment after a plea of guilty.  On successful appeal, the Court of Appeal said it would have adopted a starting point of 24 months’ imprisonment, reduced it by a third for the guilty plea to arrive at 16 months’ imprisonment and suspended it for 2 years by reason of exceptional circumstances.

47.  In Teresa Lai, the headnote at pp165-166 had this to say about applicant A (who pleaded not guilty at first instance):

“[A]’s former husband, H, was arrested in the PRC for trafficking in a dangerous drug. The Hong Kong Police Force, on information from the PRC, conducted an investigation into [A], which revealed deposits and withdrawals of a total of HK$4,205,925.30 within a 28-month period, beginning in 2005, into and out of three bank accounts operated by her. All monies were connected with H, and [A] only dealt with those monies on H’s instructions. [A] claimed that she had no idea that the monies represented proceeds of H’s illegal activities and that after their divorce, she did not know what H did for a living (except she heard that he was engaged in investment business and had witnessed him winning money from gambling)…

…

“Held…

Sentence

(2)  The present case differed from the ordinary case of dealing with property that represented proceeds of an indictable offence in that [A] did not make a profit by dealing with the monies in question. She merely acted on H’s instructions. The present offence was an isolated incident and [A] had acted out of character. These special circumstances meant that [A] should be given a higher discount. In addition, she cooperated fully with the police investigation and the evidence the prosecution adduced against her came mostly from the information she had given to the police, which also formed the basis for the Court’s determination as to her mens rea. The appropriate sentence in light of the special circumstances should be imprisonment for about a year…”

48.  The personal circumstances of Ms Kwan came nowhere near to those of either D or A in the above two cases.  I don’t see how Ms Kwan could legitimately ask for an individualized sentence so different from the usual sentences passed on the rest of other money laundering defendants.

49.  I note that although Ms Kwan might be described as a passive launderer in relation to Charge 1, she did relinquish control of her Jockey Club betting account in return for settlement of her existing debt to Mr Ko, a doubtless loanshark.  That is a kind of reward or remuneration.

50.  I further note that although Charge 1 was framed as a conspiracy with Mr Ko, Charge 2 was not.  There is nothing to indicate that Charge 2 was committed by anyone other than Ms Kwan herself.  There was no admission in relation to Charge 2. There was nothing said by Ms Kwan either to the police or to the court by way of mitigation as to how the BOC Account was operated or by whom it was operated for the purpose of money laundering.  The natural and only reasonable inference drawn from the fact that there were numerous withdrawals (including cash withdrawals)  from that account was that it was Ms Kwan herself who operated the account.

51.  So the roles Ms Kwan played in the two offences appeared to be very different – Charge 1 by selling her Jockey Club Account and Charge 2 by directly operating the BOC Account.

52.  I also found from the Summary of Facts and from her mitigation that Ms Kwan must have known that the predicate offence for both money laundering offences was illegal money lending which carries a maximum penalty of 10 years’ imprisonment.

53.  Having considered the various factors identified in the authorities and the different roles played by Ms Kwan in the two offences, for Charge 1, I adopt a starting point of 4 years’ imprisonment, and for Charge 2, one of 15 months’ imprisonment.

54.  Ms Kwan pleaded guilty in good time for which she shall be entitled to the customary 1/3 sentencing discount.  For her clear record, I will further take off one month from each sentence after the 1/3 discount. 

55.  I have read the Chronology re Investigation Progress submitted by the prosecution.  There is a substantial delay in prosecution between the date of first arrest and the subsequent charging.  There appears to be some unreasonable delay between September 2015 and September 2017, and between November 2017 and February 2019, though I take into account that even normal investigation would take some time.  The apparent delay between 2020 and 2022 was explicable on the basis of COVID and social events and is therefore not unreasonable.

56.  During the time that Ms Kwan was waiting, she has started a new life and has obtained a better-paid job.  It appears that she has resolved her earlier financial crisis.  She has obviously tried to rehabilitate herself.  Sending her to prison now for a substantial period will obviously affect in a negative way her efforts in rehabilitation.

57.  For the above reasons, I hold that the mitigation ground of unreasonable or undue delay in prosecution is made out to the extent indicated.  Because of this, I shall grant Ms Kwan an additional 3 months off each of the sentences after the 1/3 discount.

58.  There are no other mitigating factors of weight to justify another sentence reduction.

59.  The offences were committed at roughly the same time period.  However, the modes of Ms Kwan’s participation are very different.  Partial consecutiveness in the sentences is inevitable even after taking into account the principle of totality.

(Ms Kwan, please stand)

60.  For Charge 1, the sentence is 28 months’ imprisonment.

61.  For Charge 2, the sentence is 6 months’ imprisonment.

62.  I order that 3 months of the sentence on Charge 2 are to run consecutively to the sentence on Charge 1, making an aggregate sentence of 31 months’ imprisonment.