HKSAR v. BASHIR ZAHID

DCCC 976/2024 & 583/2025 (Consolidated)

[2025] HKDC 1830

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NOS 976 OF 2024 AND 583 OF 2025

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REASONS FOR SENTENCE

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1.  The defendant pleaded guilty before me to two charges of dealing with property known or believed to represent proceeds of an indictable offence, both being an offence contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap. 455.

2.  The two charges involve different bank accounts owned by, and registered under the name of, the defendant.

3.  The first charge alleges that, between the 18^th day of December 2022 and the 17^th day of January 2023 (both dates inclusive), the defendant, in Hong Kong, together with a person known as “Dai Fong”, knowing or having reasonable grounds to believe that property, namely, money in the sum of $3,645,771 Hong Kong currency in the bank account held with PAO Bank Limited (the account number of which being 7522000511620), in whole or in part directly or indirectly represented proceeds of an indictable offence, did deal with that property.

4.  The second charge alleges that, between the 8^th day of December 2022 and 29^th day of March 2023 (both dates inclusive)  in Hong Kong, together with a person unknown, knowing or having reasonable grounds to believe that property, namely, money in the sum of $3,873,377.24 Hong Kong currency in the bank account held with Livi Bank Limited (the account number of which being 756057109125), in whole or in part directly or indirectly represented proceeds of an indictable offence, did deal with that property.

5.  For the sake of simplicity, the account held with PAO Bank Limited will, in this piece of writing, be referred to as “the PAO account”, whereas the account held with Livi Bank Limited will be referred to as “the Livi account”.

6.  The defendant agreed to the Summary of Facts submitted by the prosecution and read to him in open court.

7.  At the proceedings the defendant was represented by counsel Mr. Laskey.

8.  The facts revealed that, at all material times the defendant was the account holder and sole signatory of each of the said accounts.

9.  According to the bank records, the defendant opened the PAO account on 18^th December 2022. It was recorded that he opened the account for receiving salaries and savings purposes. In the account opening mandate, the defendant declared that he was a cook by occupation, nevertheless he did not mention anything about his salary. Such PAO account was closed on 17^th January 2023.

10.  According to the bank records, the defendant opened the Livi account on 7^th December 2022. In the account opening mandate, the defendant declared that he was a hotel waiter by occupation, with a monthly income of about $25,001 to $50,000. As a requirement, the bank had kept copies of the defendant’s identity card and also of images of his facial appearance.

11.  There is no evidence that the defendant was involved in any of the predicate offences leading to the transfers by the victims of their monies into the two respective bank accounts in question. However, as part of the sentencing exercise, the background of those predicate offences need be mentioned and stated here.

12.  The first victim was a Mr. Kwok. On 9^th December 2022, he received a phone call from an unknown person (hereinafter “WP1”), who claimed himself to be an officer from Hang Zhou Communication Bureau. Such person alleged that Mr. Kwok’s mobile phone number was involved in a deception case in the mainland, and therefore would refer the matter to the police for investigation. Thereupon another unknown person (hereinafter “WP2”)  spoke to Mr. Kwok on the phone. He claimed that he was an officer from Hang Zhou Security Bureau. This second person claimed that he could help Mr. Kwok settle the matter if he were to provide him with the login names, passwords and mobile security keys of five of his online bank accounts.

13.  Mr. Kwok did not realize that it was a deceit. He did as told.

14.  Investigations revealed that, during the period from 24^th December 2022 and 12^th January 2023, someone, without Mr. Kwok’s consent or knowledge, transferred a total sum of $2,932,100 from Mr. Kwok’s accounts to four different bank accounts. Among those 4 recipient accounts, one was the PAO account owned by and registered under the name of the defendant; and the amount transferred into that PAO account was $435,300.

15.  The second victim was a Madam Wu. On 18^th December 2022, she received a phone call from an unknown person (hereinafter “WP3”), who claimed that he was an officer from Shanghai Public Security Bureau. WP3 accused Madam Wu of having an involvement in a money laundering case, and would require her to furnish to him her bank account information, such as the credentials of her HSBC account, for the purposes of checking her assets and proving her innocence. Madam Wu did not realize that it was a deceit. She did as told.

16.  Madam Wu waited for long, yet she did not receive any update or news that her name was cleared. She made a report in Shanghai. It was not until then did she realize that, without her knowledge or consent, funds amounting to $500,000 were transferred from her HSBC account into the Livi account owned by and registered under the name of the defendant.

17.  Both Mr. Kwok and Madam Wu had made a report to the Hong Kong Police.

18.  On 28^th November 2023, police arrested the defendant on suspicion that he had laundered the monies in the PAO account. Police conducted a video-recorded interview with him. Under caution, the defendant said, amongst other things, that some time in December 2022, when he was gambling at a gambling parlour in Jordan, a friend of his, whose nickname was “Dai Fong”, asked him if he was willing to help him open an online bank account in return for a reward of $1,500. The defendant agreed, and therefore provided his personal particulars to Dai Fong, and further helped with the facial recognition procedure. He knew a bank account under his name was successfully opened with PAO, and because it was an online banking account, it did not have any paper statements or an ATM card. The defendant claimed that he was under the influence of drug when Dai Fong asked him to open the bank account.

19.  About 11 months later, on 15^th October 2024, police cautioned the defendant in connection with the Livi account, because police suspected that he had involvement in laundering the monies in that account. On this occasion police took a record of interview from the defendant, who, under caution, said, amongst other things, that some time ago he got acquainted with someone at a game amusement centre in Jordan, and that person (whose name he could not recall), asked him if he was willing to help him open a bank account, and in return he would be given some drugs for his own consumption. He agreed, and thus inputted his personal particulars or personal information on the webpage or Apps appearing on the screen of that person’s mobile phone. He also went through the facial recognition process. To his knowledge, a bank account under his name was successfully opened with Livi bank, and because it was an online banking account, it did not have any paper statements. He said he lost contact with that person after that occasion.

20.  Police had conducted fund flow analyses on both the PAO and Livi accounts. Both exhibited what is called a mirroring pattern, in that there was a corresponding withdrawal of an identical amount, or of a like amount, from the account in question not long after a deposit into the account was made. Alternatively, not long after a deposit into the account in question was made, multiple outward transfers of amounts making up the total amount of the deposit would ordinarily follow. Those patterns suggested that the accounts were merely used as temporary repositories.

21.  Insofar as the PAO account is concerned, during the period particularized in the first charge, there were 44 deposits and 50 withdrawals. Those 44 deposits involved a total amount of $3,645,771, and as a result of those 50 withdrawals that followed, there was only a closing balance of $101 in the account.

22.  Insofar as the Livi account is concerned, during the period particularized in the second charge, there were 30 deposits and 45 withdrawals. Those 30 deposits involved a total amount of $3,873,377.24, and such entire amount was withdrawn as a result of the 45 withdrawals that followed. In the end the Livi account only had a zero balance.

23.  Pursuant to section 27(2)  of the Ordinance, the prosecution applied for an enhancement of sentence to be passed on the defendant in respect of each charge. A notice was duly served on and received by the defendant. The grounds relied upon by the prosecution for the application were: (1)  the prevalence of the specified offence; and (2)  the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of this specified offence.

24.  In support of the application, the prosecution furnished this Court with a statement given by Chief Inspector Li Yiu Nam, who was an officer in charge of the Money Laundering and Terrorist Financing Risk Assessment of the Financial Intelligence and Investigation Bureau (FIIB), and also the Secretariat of the Money Laundering Expert Cadre. By way of two tables, Chief Inspector Li has set out the statistics which he collected and compiled in relation to, amongst other things, the number of deception and money laundering cases known to the police in the past few years. He has also placed particular emphasis on the number of money laundering cases involving the use of stooge accounts in the past few years.

25.  I shall discuss the quantum of sentence and the issue of sentence enhancement later. I now first of all mention the defendant’s background and the plea in mitigation advanced on behalf of the defendant.

26.  The defendant was born in Hong Kong. He is 50 years of age at the time of these proceedings.

27.  He has previous convictions for a total of 14 charges. Those were recorded as a result of 3 different court appearances. Among them, 11 convictions were recorded in January 1999, when he was about 23 years old. Those 11 convictions related to theft and deception offences. He received a suspended sentence for those charges. His second court appearance was in 2018. He was then sentenced by the District Court for two offences of trafficking in dangerous drugs. His third, and also, the last court appearance was in 2023. He was then sentenced by West Kowloon Magistrates’ Court to the Drug Addiction Treatment Centre for a shoplifting offence.

28.  In other words, he has no previous conviction relating to money laundering offences.

29.  He received education in Hong Kong, and attained secondary 5 level. Prior to the arrest he had been working as a cleaner.

30.  Mr. Laskey filed with this Court a document entitled “Skeleton Written Mitigation”. At the proceedings he adopted those written submissions as his plea in mitigation. Upon the request of this Court he also made oral submissions in regard to issues not already touched upon by his written submissions.

31.  In his written submissions, Mr. Laskey submitted that the defendant’s involvement, or culpability, was limited to the opening and selling (or “loaning”, which was the word he used in his oral submissions)  of two fresh bank accounts to persons whom he met at the gambling parlour and the game amusement centre respectively. Mr. Laskey agreed that the defendant was aware that those two persons would use the two fresh accounts for illicit purposes. However, Mr. Laskey drew this Court’s attention to the following factors, which, in his submission, would amount to mitigating circumstances:

(i)  On the facts disclosed, the prosecution could only tell that $435,000 deposited into the PAO account originated from the deceit practised on Mr. Kwok, and that $500,000 deposited into the Livi account originated from the deceit practised on Madam Wu;

(ii)  The defendant had no knowledge of any of those two deceits; and in any case, there was no evidence that the defendant knew anything about the predicate offences (even if the prosecution managed to identify all of them);

(iii)  There was no evidence that the defendant had control over the two bank accounts;

(iv)  The defendant had only received $1,500 as the reward for opening and selling the PAO account, yet he did not receive any reward or benefit as promised in respect of the opening of the Livi account; and furthermore the benefits he received were minimal;

(v)  Although both Mr. Kwok and Madam Wu were deceived into believing that they were under investigation by the Mainland authorities, the monies deposited into the PAO account and Livi account came from the local bank accounts of the two victims, and therefore no cross-border element was involved; and

(vi)  The transmissions into the PAO account took place between 18^th December 2022 and 17^th January 2023, while those for the Livi account took place between 8^th December 2022 and 29^th March 2023; the money laundering activities lasted for relatively short periods of time.

32.  Mr. Laskey also invited this Court to consider the ruling made by the High Court of Australia in Ostrowski v Palmer (2004)  206 ALR 422. There, it was held that a defendant’s ignorance of the law could, where appropriate, be recognized as a mitigating factor.

33.  It was submitted that it was only because of the defendant’s eagerness to earn quick money that he committed the instant offences. He is remorseful for his acts, and therefore entered his timely pleas at the earliest available opportunity.

34.  Mr. Laskey also referred to a letter which was written by the defendant only shortly before the hearing. There, the defendant said with sadness that his father passed away just a few days ago, and it was with regret that he was in jail custody, and could not personally see him at his bedside at the time of his passing. The defendant blamed himself for his foolishness in lending bank accounts to others. He said he had learnt a lesson, and asked this Court for leniency.

35.  In his written submissions, in respect of the starting point to be adopted, Mr. Laskey referred this Court to two Court of Appeal judgments: HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545; and Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201.  Mr. Laskey specifically drew my attention to the observation made by Court of Appeal in paragraph 15 of the judgment of Wan Kwok Keung, which read as follows:

“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.”

(The judgment was written in Chinese. This is the official English translation of the relevant paragraph).

36.  Mr. Laskey pointed out that there are no tariffs, or strait-jacket guidelines, when it comes to the sentencing of offenders of money laundering offences. It was submitted that, in light of the amount of money involved in this case, as well as the observation of the Court of Appeal as stated in the passage quoted above, the global starting point for the two charges of money laundering to which the defendant has pleaded guilty should be no more than 4 years and 3 months.

37.  Mr. Laskey had also made oral, but not written, submissions, with regard to the prosecution’s application for sentence enhancement.

38.  Mr. Laskey submitted that, according to the statistics provided by Chief Inspector Li in relation to the number of arrested persons who had provided stooge accounts to others for money laundering purposes, and also the number of cases involving stooge accounts, as a matter of fact, there has been a marked decline in the year of 2025 compared to the previous year. Mr. Laskey noticed that the statistics for the year of 2025 only ran from January to August, and therefore, assuming that the trend would remain more or less the same for the months from September to December 2025, then, on a pro rata basis, the total number of stooges arrested and the number of cases involving stooge accounts would still be much less than those in the year of 2024. He submitted that a simple arithmetic calculation would reveal a reduction of about 25% and 60% respectively.

39.  In the light of such declining trend, it was submitted that this Court had a discretion not to enhance the sentence notwithstanding the prosecution’s application. It was submitted that, if, in any event this Court was mindful of enhancing the sentence, the degree of enhancement should be no more than 10 percent. Nevertheless Mr. Laskey was not able to say from which authority he got such percentage.

40.  The prosecution agreed that, broadly speaking, there has been a decline in the number of money laundering cases involving stooge accounts in the year of 2025 when compared to the preceding year. Yet the prosecution still invited this Court to enhance the sentence.

41.  I now proceed to the discussion of the sentences to be passed on the defendant.

42.  At the proceedings I got the confirmation from Mr. Laskey that, when he submitted, or suggested, that the starting point should be no more than 4 years and 3 months, he was making a reference to the global starting point for the two charges in question, but not the individual starting point for each charge. It is worth noting that this suggested starting point has yet to encapsulate the element of sentence enhancement, if at the end of the day the prosecution’s application for sentence enhancement succeeds.

43.  Given the fact that the total amount of money involved in the two charges was $7,519,148.24 (or $7.52 million for simplicity), and in the light of the seriousness of this matter, I would say, with respect, that the suggested global starting point is on any view a bit on the low side.

44.  In Hsu Yu Yi, the Court of Appeal said the following at paragraph 9 of its judgment:

“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 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 pre 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.”

45.  Also, in Wan Kwok Keung (which has been referred to above)  and HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal discussed the factors relevant to sentencing in money launching cases.

46.  I accept the plea in mitigation put forward by Mr. Laskey. In short, I accept that there was no evidence that the defendant had knowledge of the predicate offences, or that he had control over the money being laundered in the two bank accounts registered under his name. I also accept that, insofar as the two charges are concerned, although the fraudsters used “Mainland authorities” as the pretence to deceive the two victims into surrendering their money, the monetary transfers only involved local bank accounts. Therefore, strictly speaking, the present case does not carry with it any cross-border element. I also accept that the offences lasted for short periods of time.

47.  Despite the foregoing, money laundering is a serious offence. There are authorities saying that it is not necessary for the prosecution to identify the source, or sources, of the money being laundered in the bank account in question in order to prove the offence. However, in the instant case, given the fact that both Mr. Kwok and Madam Wu encountered a similar experience when they received phone calls from persons holding themselves out as officers from the Mainland authorities, this Court can logically deduce and infer that a significant part of the monies deposited into the two accounts had some connection with phone deception cases.

48.  It is accepted that the defendant only received a minimal reward for opening and lending out those two bank accounts. Nevertheless, the significance of the role played by the defendant cannot be ignored. Stooge accounts are exactly what the scammers are looking for when they are mindful of practising fraud on victims of phone deception, because they can simply hide behind the scene and reduce the risk of being arrested by the police. Without anyone providing them with a stooge account, their plan can hardly succeed.

49.  In HKSAR v Tam Wai Pio [1998] 4 HKC 291, the Court of Appeal held that, in a case where the prosecution applies for an enhancement of sentence, the court should first of all state the starting point to be adopted for the offence, and then reduce the sentence on account of the guilty plea (if any)  and other mitigating circumstances. Only after those steps have been taken should the court proceed to consider the question of enhancement. The court should satisfy itself that the offence in question is a specified offence as defined by the Ordinance. If the court is so satisfied, then it should consider whether the circumstances warrant any enhancement, and furthermore, the percentage of enhancement should the court be mindful of granting the application for enhancement.

50.  I have given consideration to all the circumstances, including the facts, the mitigation advanced and submissions made, as well as the Court of Appeal authorities discussed above.

51.  For Charge 1, I consider that the appropriate starting point should be 4 years’ imprisonment. The defendant is entitled to a one-third discount. The sentence is first reduced to 32 months.

52.  Dealing with property known or believed to represent proceeds of an indictable offence is a specified offence. As evidenced by Chief Inspector Li’s statement, the offence is still prevalent in the territory, and there is no doubt that it causes much harm to the community. I am of the view that the application for enhancement should be granted.

53.  There is some force in the submission that there has been a decline in terms of both the number of stooges arrested and the number of money laundering offences involving the use of stooge accounts. I am aware that, in some Court of Appeal judgments, it was held that, the appropriate percentage of enhancement should be no more than one-third (See, for example, HKSAR v Hung Wing Chan [2011] 2 HKLRD 167; and HKSAR v Shum Wah Kwong [2015] 2 HKLRD 945).

54.  Having considered the circumstances, I would consider that the percentage of enhancement for Charge 1 should be 20 percent, which would increase the sentence to 38.4 months. I would round it up to 38 months. Therefore the sentence for Charge 1 is 38 months’ imprisonment.

55.  For Charge 2, I also consider that the appropriate starting point should be 4 years’ imprisonment. After giving him the one-third discount, the sentence is first reduced to 32 months.

56.  Likewise, I would enhance the sentence for Charge 2. The percentage of enhancement is the same as that for Charge 1, which is 20 percent. After enhancement the sentence for Charge 2 is increased to 38.4 months. Similarly I round it up to 38 months. The sentence for Charge 2 is 38 months’ imprisonment.

57.  I need to deal with the question of totality.

58.  In the light of all the circumstances, I am of the view that the global starting point, before any discount is given or any enhancement is made, should be one of 4 years and 6 months’ imprisonment, or 54 months. Notionally, after the one-third discount is given, the overall sentence is reduced to 36 months. Nevertheless that has yet to be enhanced by 20 percent. Therefore, in the end, the final sentence should be 43.2 months, or 43 months for sentencing purposes.

59.  In order to achieve such result, I order that 33 months of the sentence for Charge 2 should run concurrently with the sentence for Charge 1, and that 5 months of the sentence for Charge 2 should run consecutively to the sentence for Charge 1. The final sentence is 43 months’ imprisonment. This is the sentence I pass on the defendant.