HKSAR v. CHAN KAI CHUNG

DCCC483/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 483 OF 2010

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Reasons for Sentence

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Charge

1.  The defendant was charged with and pleaded guilty to a count of “Dealing with property known or reasonably believed to represent proceeds of an indictable offence” under section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455.

The facts

2.  The facts of the case are summarized as follows.  At all material times the defendant was the holder of the bank account No. 239-285323-882 with the Hang Seng Bank.  During the period between 19 April 2007 and 3 April 2008, there were 253 deposits totalling $14,889,081 paid into and 96 withdrawals totalling $14,889,081 made from the said account. The transactions ranged from a few hundred dollars to $1.2 million. 

3.  At about 10 am on 27 February 2009, police officers raided the defendant’s residence with a Gambling Authorisation.  The defendant was arrested shortly on the same day.  Upon search, a bank card of the said account was found in the defendant’s wallet, such card was never used to make any withdrawal from the same account. 

4.  Under caution, the defendant claimed that he had sold the account to another man a few years ago and he had no knowledge of the transactions.  At all material times, the defendant, as the holder of the said account, dealt with a total sum of $14,889,081, being the proceeds of an indictable offence.

Background of the defendant and mitigation

5.  The defendant aged 31, married.  He has a conviction record in 1998 for offences concerning dutiable commodities.  Such case was dealt with by way of fine and a 60 hours’ community service order. This court would in any case treat the defendant as if he has a clear record. 

6.  The defendant had been working as a construction site worker, a salesman and a tour guide before his arrest.  His wife, mother, siblings and friends are in court to show their support.  By letters they spoke highly of the defendant and described him as a kind, warm-hearted, responsible and obliging person.  At the same time they asked for a lenient sentence. 

7.  The defendant claimed that he had sold his account in question a few years ago for a sum of $1,000.  

8.  There is no sentencing tariff for the present offence.  However, due to the serious nature, an immediate custodial sentence is called for.  The Court of Appeal in HKSAR v Hsu Yu Yi, CACC159/2009, stated that:

“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 indictable 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 indictable 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.”

9.  In the present case, the defendant was facing a single charge where only one bank account of the defendant was involved.  There was no evidence to show the following:

(1) The defendant had knowledge of the involvement of the criminal activities in this case and the source of the money;

(2) The defendant had actively participated in the offence; and

(3) The case involved cross-regional criminal activities or international scams.

10.  The bank card of the said account was found in the defendant’s possession.  The prosecution has confirmed that such card was never used to make withdrawals from the said account.  Nevertheless, it is undisputed that the defendant was dealing with a considerably large sum of money amounting to about HK$14.89 million.  The money laundering activities were carried over for a period of one year.

Sentence

11.  The court has carefully considered all the circumstances including the background of the case and that of the defendant, his guilty plea, mitigation, sentencing principles, the case of Hsu Yu Yi and the Court of Appeal cases mentioned therein. 

12.  A starting point of 36 months, i.e. 3 years’ imprisonment would be adopted.  Such term would be reduced by one-third for the plea to 24 months’ imprisonment.  There were no other mitigating factors which would justify a further reduction in sentence.  As such, the defendant has to serve a term of 24 months’ imprisonment.