COURT: The defendant pleaded guilty to two counts of dealing with property known or reasonably believed to represent the proceeds of an indictable offence contrary to section 25 of the Organised and Serious Crimes Ordinance, Cap 455. This offence is commonly known as money laundering.
The particulars of offence in Count 2 alleged that the defendant, between 2 January 2010 and 30 April 2012, together with other persons laundered in 342 pieces of 1 kilogramme gold bar, two diamonds and 5 kilogrammes of silver grain.
The particulars of offence in Count 3 alleged that the defendant between 23 April 2010 and 30 April 2010, laundered in about HK$2.68 million.
According to the Summary of Facts, the defendant, holder of Israeli and Australian passports, entered Hong Kong between January 2010 and April 2012 on 21 occasions. On each occasion he entered as a visitor and spent varying periods of time in Hong Kong. Between July 2010 and April 2012, the defendant, using a false name of “Justin”, went regularly to one Hong Kong secretarial company, collected and signed for documentations relating to three companies, namely, Southern Ace Limited, GX Port Limited, and Ajax Technology Limited.
Between January 2009 and August 2011, Southern Ace Limited and GX Port Limited purchased on 81 occasions, a total of 1,007 pieces of 1 kilogramme gold bar valued at HK$303 million from one Metalor Technologies (Hong Kong) Limited.
The summary of facts also reveals that, between 7 and 15 June 2011, the defendant collected on three occasions three 5‑carat diamonds valued at HK$8.5 million from a company called TACHE Asia Limited, on behalf of Ajax Technology Limited.
Between April 2010 and April 2012, the defendant also received into his personal bank accounts in Hong Kong, a total sum of HK$2.68 million. Of that HK$2.68 million, HK$2.51 million had been withdrawn since then.
On 30 April 2012 the defendant was arrested at the office of Ajax Technology Limited. Inside the office premises, the police seized a number of items, among them keys to two village houses. A search of the defendant’s residence later that day resulted in the seizure of many items, among them title deeds and keys to the two village houses, and 5 kilogrammes of silver grain.
Shortly after his arrest, gold bars purchased by Southern Ace and GX Port Limited were removed from the two village houses. Between 2 and 4 May 2012, 181 gold bars were sold back to Metalor by accomplices of the defendant.
On 7 May 2012, the police arrested two of the defendant’s accomplices, namely, Gavish Omer and Daniel Fadlon. 161 gold bars and two diamonds were found on them and at the guesthouse they were residing in. The two diamonds, the 5 kilogrammes of silver grain and the gold bars sold and recovered in May form the subject matters as particularised in Count 2.
The summary of facts also reveals that none of those companies or persons mentioned above had filed any tax return with the Hong Kong Inland Revenue Department. In fact, when the defendant opened his bank accounts in Hong Kong, he claimed himself to be a student only.
The defendant is now 28, grew up in Zimbabwe, Australia and Israel. Three years after graduating from high school, he joined the Israeli Special Forces Unit. Between 2006 and 2009 he was with the military. After his discharge in 2009 he was offered a “security job” in Hong Kong with a salary of US$5,000 a month by one of the accomplices, Daniel Fadlon. It is this job that put him into the present situation.
It is submitted by Mr Poots that because of the defendant’s military background, he was trained to follow orders without any questions. The defendant was told by Daniel Fadlon, a non-commissioned officer of the Israeli Forces, to look after some valuables in Hong Kong and that he did it diligently without any question. Being simple and without experience in finance he landed himself into deep trouble.
It was urged by Mr Poots that the defendant should be sentenced more or less on the same footing as the other accomplices who had been dealt with separately in the District Court. In the course of his mitigation, Mr Poots also produced to this court a large number of mitigating letters. They were written from friends and relatives of the defendant.
I have the benefit of reading my brother, his Honour Judge Kwok’s reasons for sentence and share most of what he had expressed about the seriousness of the offence. I also do not intend to repeat what had been said by the Court of Appeal in the Bomo case. In sentencing the defendant, I bear all the factors articulated by Mr Justice Stock in that case in mind.
The defendant’s role in this case is, in my view, significantly more serious than his accomplices in the District Court case. First of all, the other accomplices were only charged for their role undertaken in May 2012, shortly after the defendant’s arrest, in their assistance in handling the gold bars and diamonds.
In the present case against the defendant, his role was much wider than theirs. Although I accept that the defendant was not a director or shareholder of Southern Ace, GX Port and Ajax Technology, he nevertheless was found to conduct businesses on their behalf. The defendant signed for and collected documents and diamonds. Some keys to the two village houses were also seized from the defendant’s residence. One must also not forget that a substantial amount of money had also been passed through his personal accounts.
The value of the gold bars, diamonds and silver grains, as particularised in Count 2, amounts to just over HK$144 million, not a small sum.
Although there is no evidence to suggest that the defendant was aware of the nature of the underlying indictable offence, the period that the defendant operated was lengthy, almost two years, far in excess of a few days than his accomplices in the District Court case.
Looking at the case globally, one can see that the defendant played a more significant and pivotal role in the whole operation. He was entrusted with keys and legal documents of the two village houses and, in my view, can be regarded as a custodian of all those gold bars, diamonds and silver grains. Any person with the right mind no doubt will question,given the storage of such valuables in such primitive premises, if they indeed come from legitimate sources.
The operation also involved an international dimension. Apart from the defendant, one Tanzanian was also involved in renting out premises where Ajax Technology was situated. The defendant’s accomplices, Israeli citizens, were flown in soon after his arrest.
The operation, namely, the buying and selling of gold bars, diamonds, using various companies in Hong Kong, though straightforward, nevertheless required sophisticated planning. The operation lasted over a period of nearly two years and involved many transactions.
All these sophisticated planning also added to the seriousness of the offence.
In sentencing the defendant, I am of course mindful of the friends and relatives’ plea for leniency. Undoubtedly they were in shock and disbelief. However, personal circumstances play very little role in a case as serious as the present one. As pointed out by the Court of Appeal, deterrence is still the prime objective in sentencing.
Taking all matters into account, in particular the sentences that the defendant’s accomplices received in their District Court cases, I am of the view that the appropriate starting point in this case for Count 2 and Count 3 is one of 8 years and 4 years’ imprisonment respectively.
Although Count 2 and Count 3 are targeting distinct and separate properties, the underlying operation is essentially the same. In my view, the two sentences should therefore be run concurrently.
The real mitigating factor in this case, if I may say so, is the defendant’s plea. For that the defendant will be given the usual one-third discount.
As such, for the two counts that the defendant pleaded to, he is sentenced to 64 months and 32 months’ imprisonment respectively. Both sentences are to run concurrently.
These are my reasons for sentence.