HKSAR v. WU ZHIBANG

DCCC 912/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 912 OF 2014

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REASONS FOR SENTENCE

1.The defendant pleaded guilty to a "money laundering" offence (Charge 1) and a "conspiracy to commit money laundering" offence (Charge 2). The sums involved are $50,000 and $30,000 respectively.

Summary of Facts

Charge 1

2. About 12:15 pm on 4 August 2014, Madam OR (PW1; aged 65) received a phone call at home.  A voice pretending to be her youngest son (PW2) asked her to save him as he was being held hostage.  Another male voice (Male 1) told PW1 that her son owed him $280,000 and she must pay $50,000 to set her son free.  Male 1 then communicated with PW1 via her mobile phone.  PW1 withdrew $50,000 from her bank account.

3. About 1:10 pm, PW1 arrived at a park in Kowloon according to Male 1's instructions.  Over the phone, Male 1 further instructed her to pass $50,000 to a male who would approach her. About 3:00 pm, PW1 phoned PW2 and confirmed his safety.  She realized that she was deceived.

Charge 2

4. About 2:40 pm on 5 August 2014, Mr. SO (PW3; aged 61) received a phone call at home.  A voice pretending to be PW3's son (PW4) told PW3 that his son owed someone money and was beaten up.  Another male voice identifying himself as "Choi Gor" told PW3 that his son owed him money and PW3 must pay him to avoid his son getting hurt. Choi Gor initially requested $100,000 and increased the sum to $200,000.  The phone conversation then ended.  The Police was alerted.  PW3 confirmed PW4's safety in the meantime.

5. Using a mobile phone provided by the Police, PW3 communicated with Choi Gor.  After negotiation, Choi Gor agreed to accept $30,000 from PW3.  According to Choi Gor's instructions, PW3 went to Tuen Mun Hospital; he also described what he was wearing to Choi Gor.

6. About 5:00 pm, Choi Gor directed PW3 to go to a store in the hospital.  A few minutes later, the defendant approached PW3 requesting him to pay up.  Having described the defendant's clothes to Choi Gor, Choi Gor instructed PW3 to pass the money to the defendant.  PW3 then passed an envelope containing scrap paper to the defendant.  The police officers waiting in the vicinity immediately arrested the defendant.

Admissions

7. In his video-recorded interview for Charge 2, the defendant admitted that a person named WU Weining ("Ning") instructed him and a fellow villager named WU Weiliang" ("Liang") to collect money at Tuen Mun Hospital.  Initially, Ning communicated with Liang and him.  Later, another person communicated with them regarding the collection of money in Hong Kong.  Ning covered the transportation and lodging expenses for Liang and him.  The defendant arrived at Hong Kong around 10:00 am on 4 August 2014.  He and Liang then purchased phone cards and informed Ning of their numbers.  About 3:00 pm on 5 August, he and Liang received instructions to collect money from an old man wearing purple at Tuen Mun Hospital.  Later, the defendant collected an envelope from an old man at the hospital whilst Liang was standing nearby.  The defendant knew that the envelope contained money.  He was supposed to remit the money away.

8. In his video-recorded interview for Charge 1, the defendant made similar admissions about how and why he came to Hong Kong.  About 2:00 pm on 4 August 2014, Liang received a phone call.  He and Liang then went to a park to collect money from an old woman. The defendant (who was about 100 metres away from Liang) saw Liang talking to an old woman for about a minute.  After that, he and Liang left by taxi.  On taxi, Liang counted the cash ($50,000) in the defendant's presence.  Later, they went to a currency exchange shop where Liang remitted the money away.

9. At the time of arrest, amongst other things, a PRC identity card in the name of Liang was found in the defendant's shoulder bag.

10. Immigration records showed that the defendant entered Hong Kong at 11:32 am on 4 August 2014.  Someone bearing the name of Liang also entered Hong Kong around the same time via the same checkpoint and was processed by the same immigration officer.  Liang still remains at large.

Mitigation & Sentence

11. The defendant is 24 and has a clear record.  He was a kitchen worker in the mainland, but became unemployed a few months before coming to Hong Kong.  Defence lawyer Mr. SIT informed me that the defendant's parents do not earn much; the defendant is the main source of income for his family.  He was in need of money so he agreed to come to Hong Kong to help his friends. 

12. Mr. SIT submitted that before coming to Hong Kong, the defendant knew that the money he would collect was unlawful, but did not know about the underlying crime.  Most importantly, he did not take part in the phone deception.  When I asked about the defendant's admissions[1], Mr. SIT explained that the defendant had thought of "deception" being a possibility of the source of the money, but it was only an impression that he had; he was not involved in the phone deception.  Mr. SIT asked the court to treat the defendant as a collector who did not know about the details of the underlying crime.

13. The prosecution has applied for enhanced sentence pursuant to section 27(2)(c) and (d) of the Organized and Serious Crimes Ordinance (Cap.455) on the basis of prevalence as well as the nature and extent of harm caused to the community.  Mr. SIT did not object to the application.

14. I bear in mind the Court of Appeal's decision in HKSAR v XU Mai Qing CACC 464/2005, whereas Yeung JA (as he then was) held "Under section 27(11) of OSCO, what the prosecution has to prove is the prevalence of the offence, not the increase in the number of such offences." [2]

15. According to the witness statement of DCIP LAM dated 20 November 2014, the number of "Drop-off" mode cases in 2008 was 38, which accounted for 7.9% of the overall successful phone deception cases.  The numbers then gradually increased to 80 cases in 2009, 126 cases in 2010, 149 cases in 2011, 169 cases in 2012 and 200 cases in 2013.  The number of "Drop-off" mode cases in 2013 accounted for 27.5% of the overall successful phone deception cases in that year.  In 2014, there are already 148 "Drop-off" mode cases from January to October, accounting for 26.1% of the overall successful phone deception cases so far.  The amount of monetary loss in "Drop-off" mode cases also has a steady increasing trend from 2008 to 2013 (from $3.01 million to $13.75 million).  And for 2014, the monetary loss is already $10.44 million as at October.

16. The "Drop-off" mode phone deception cases always involve someone picking up the money left behind by the victim at a public place or collecting the money directly from the victim.  That "collector" may or may not have knowledge of the underlying phone deception.  But the circumstances under which the "collector" picks up or collects the money are usually peculiar and would thus arouse his/her suspicion about the legality of his/her collecting act and/or the nature of the money collected.  As a result, based on the strength of the evidence against the "collector" simpliciter, he/she is likely to be charged with a money laundering offence.  In other words, the money collection portion is part and parcel to the "Drop-off" mode phone deception.  Hence, the statistics of the "Drop-off" mode cases are directly relevant.

17. In my view, there is clear and cogent evidence before me that the "Drop-off" mode phone deception is still widespread and commonly being practised in Hong Kong today. Given the role played by the defendant, the amount involved and the overall circumstances, I grant the prosecution's application and will enhance the sentence by 20%.

18. I accept that in the present case, the defendant might not have had taken part in the underlying phone deception.  He nevertheless played a vital part in the overall scam.  The court must send a clear message to the general public that people who play the role of a "collector" will receive severe punishment, so that there is a deterrent effect.  When there are fewer or no willing "collectors", the "Drop-off" mode phone deception method would fail.

19. The Court of Appeal in SJ v WAN Kwok Keung [2012] 1 HKLRD 201 held:

Generally, the sentence for "money laundering" offences 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.[3]

20. In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v HSU Yu Yi [2010] 5 HKLRD 545, HKSAR v WU Jianbing [2012] 1 HKLRD 781, HKSAR v Boma Amaso [2012] 2 HKLRD 33 and HKSAR v LIN Zong Yue CACC 141/2014 (unreported Chinese judgment).  I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

21. In SJ v LAU Man Ying [2012] 4 HKLRD 435, Yeung V-P held "The defendant’s ignorance of the actual source of the "illicit money" is not necessarily a mitigating factor." [4]

22. For the purpose of sentencing, I accept that the defendant probably did not take part in the phone deception against PW1 or PW3.  To this extent, his culpability is perhaps less than the perpetrator(s) of the underlying phone deception.[5]  

23. In the present case, the 2 sums of cash involved are relatively small; PW1 lost $50,000 and PW3 did not suffer any monetary loss. For each charge, I adopt a starting point of 2.5 years' imprisonment.  A one-third discount is given for the guilty plea, reducing the sentence to 20 months.  Apart from this, I see no other mitigating factors which warrant any further discount.  With the 20% enhancement, the sentence for each charge is therefore 24 months' imprisonment.  Having considered the totality principle, I order 4 months in Charge 2 to run consecutive to Charge 1; arriving at a total prison term of 28 months.