HKSAR v. KAN CHI WING

DCCC1346/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.1346 OF 2009

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Reasons for Sentence

1.  The defendant faces one charge of attempting to deal with property known or believed to represent proceeds of an indictable offence, contrary to s.25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455 and s.159G of the Crimes Ordinance, Cap.200.

2.  It is alleged that the defendant on 25^th September 2009, in Hong Kong, together with a person unknown, attempted to deal with property, namely a sum of $1.2 million US currency in the bank account numbered 36410018364 held at Standard Chartered Bank (Hong Kong) Limited, knowing or having reasonable grounds to believe that the said property in whole or in part directly or indirectly represented the proceeds of an indictable offence.

3.  The defendant pleaded guilty to the charge, admitted to the summary of facts and was duly convicted.

Summary of facts

4.  PW1 was at all material times holder of the bank account named in the charge (“the SCB account”). PW2 was at all material times a bank teller working at the Yaumatei branch of Standard Chartered Bank (“SCB”), while PW3 was a service manager at the Wanchai branch who had been managing PW1’s bank accounts with SCB including the SCB account.

5.  On or about 21^st September 2009, SCB received by post a Change of Client Information Form dated the same day purportedly signed by PW1, requesting a change of PW1’s correspondence address and all her telephone numbers, including a change to her mobile number to ‘92309325’. The request was processed by SCB accordingly.

6.  At about 09:33am on 25^th September 2009, the defendant went to the Yaumatei branch of SCB to submit to PW2 a Remittance Application Form purportedly signed by PW1 for the remittance of US$1.2 million from the SCB account to a bank account numbered 6860183968 in the name of one PT. BUMI CITRA PERMAI at Bank Central Asia in Jakarta, Indonesia.

7.  As the remittance amount was substantial, PW2 made enquiry with the defendant who indicated that he was submitting the Remittance Application Form for his boss. Upon PW2’s request, the defendant showed his Hong Kong identity card to PW2 who recorded the name and number shown thereon. The defendant left the branch after PW2 returned the identity card to him and gave him a duplicate Remittance Application Form.

8.  PW2 referred the remittance request to PW3 for verification. Later on the same day, when PW3 dialled the new residential and office telephone numbers shown on the Chan of Client Information Form, she discovered that neither of those numbers belonged to PW1. When PW3 called the new mobile number of ‘92309325’, an unknown female answered and claimed to be PW1. The female declined PW3’s invitation to meet in person claiming that she was busy. As PW3 had just met with PW1 in person a few days ago, she felt suspicious about the circumstances.

9.  After a brief conversation over the phone, PW3 hung up. PW3 then called the original mobile phone number of PW1 and reached PW1. Later on the same day, PW3 met with PW1 in person and showed her the Change of Client Information Form and the Remittance Application Form. PW1 confirmed that she had never requested the SCB to change her client information or made the application. A report was made to the police.

10.  The record of the Immigration Department revealed that the Hong Kong identity card shown to PW2 belonged to the defendant.

11.  Travel record showed that the defendant entered Hong Kong at 08:11am on 25^th September 2009 and returned to the mainland at 10:30am on the same day.

12.  On 23^rd October 2009, the defendant was arrested while returning to Hong Kong via Lo Wu Control Point.

13.  At the identification parade conducted on 28^th October, PW2 identified the defendant as the person who submitted the Remittance Application Form to her at the material time.

14.  At the subsequent video recorded interview, the defendant admitted under caution that he was a dutiable goods smuggler. At about 07:30am on 25^th September, a male casual friend Ah Ching, who was a Hong Kong resident and fellow dutiable goods smuggler, requested the defendant to submit the Remittance Application Form to the SCB for Ah Ching’s boss because Ah Ching himself was busy and could not attend the bank. Ah Ching offered to pay him a transportation fee of $300 and promised to reward him with $5,000 after he completed the task. The defendant felt suspicious over the large reward but nevertheless accepted the task because he needed the money.

15.  At about 09:30am on the same day, the defendant arrived at the SCB Yaumatei branch and submitted the Remittance Application Form to the bank teller. Upon the bank teller’s enquiry, the defendant showed his Hong Kong identity card to her and told her that he was submitting the Form for his boss but in fact he did not know who his boss was.

16.  At all material times, the defendant together with a person unknown, attempted to deal with the sum of US$1.2 million in the SCB account, having reasonable grounds to believe that the said sum of money in whole or in part directly or indirectly represented the proceeds of an indictable offence.

Previous conviction

17.  The defendant has 1 spent previous conviction back in 1986 for aiding and abetting in the management of a vice establishment.

Mitigation

18.  The defendant is 43, born in Hong Kong. His mother passed away when the defendant was still a baby. His father remarried when he was 15, now he has a step-younger sister. As disclosed in his antecedent, the defendant was educated up to primary 6. He started to work when he was still a teenager, working as delivery worker, bartender, construction site worker and transportation worker.

19.  The defendant got married in 1996 but the marriage did not work out. He separated with his wife in 2006, and they have yet to complete the formal divorce procedure. They do not have any children. In August 2008, the defendant met his present girlfriend and started living together in Shenzhen later that year. He plans to marry his girlfriend after completing his divorce.

20.  Mr. Boey for the defendant referred to paragraph 41-75 of Archbold and submitted that the crime that produced the property was that of fraud and when compared to other cases, not particularly serious. Counsel accepted that the amount of US$1.2 million is not a small amount, but submitted that there was not much planning or organization in the defendant’s attempt to launder the money and that it was an isolated incident. It is submitted that the defendant was but a “cog in the machinery” and clearly there was another mastermind behind the attempted money laundering. It was also submitted that although the defendant was given $300 transportation fees and was further promised a reward of $5,000, the benefit was small compared to the money to be laundered.

21.  Having reminded this court that there are no guideline tariffs for sentencing in money laundering cases, Mr. Boey referred to 5 cases where the money laundering mechanism were more elaborate and the amount involved was more than in our present case and suggested that this court should adopt a relatively lower starting point than some of those cases.

Sentence

22.  Prior to sentencing, the prosecution confirmed that the US$1.2 million were property already in PW1’s account when the defendant attempted to launder it and they were property belonging to PW1.

23.  In our present case, what the defendant did was not to simply allow the use of a bank account for money laundering. The plan is quite sophisticated with some organisation involved. Although the charge states that the defendant committed the offence with one other person, the summary of facts disclosed that Ah Ching had a boss who wanted the form to be handed in and so Ah Ching asked the defendant to do it. I think it is safe to infer that the engagement of the defendant to hand in the form was for those behind the scheme to protect themselves rather than for the lack of time to do so.

24.  It must also be noted that, some reconciliation work must have been done before targeting the account of PW1 since it cannot be pure chance that those attempting to remit the money had chosen the account belonging to PW1 that just happened to have US$1.2 million (HK$9.36 million) available.

25.  Having identified an account, those behind the scheme decided to arrange for an application form to change all the personal details of the account holder. All they needed was someone to hand in the application form who would not be linked back to them. They had arranged for someone of the right gender to answer the substituted phone. The money were to be remitted to a bank in Indonesia, thus adding an international dimension to the case.

26.  I find that the crime underlying the attempted money laundering is serious in that, the account of a totally innocent person was targeted and had the remittance been successful, PW1 would have suffered substantial losses and it would be extremely difficult for her or the bank to recover the money once it left the jurisdiction. There was substantial planning and organization. I would however agree with Mr. Boey’s submission that it is obvious that the defendant was but a “cog in the mechanism”. The defendant was promised $5,000 in return for his part in the attempted money laundering. He was clearly motivated by greed to take part in the one off action of submitting the Form.

27.  But for the vigilance of the bank officers, PW1 or the bank would have suffered substantial losses. Taking into consideration all the circumstances of the case, I find that although it is not the most serious of its kind, a deterrent sentence is necessary to send out a clear message that those who allow themselves to be exploited by others and become a cog in the mechanism of such criminal activities will have to face the consequences.

28.  I will adopt a starting point of 2 years and 6 months’ imprisonment, granting the full one third discount in recognition of the defendant’s guilty plea, I sentence the defendant to 20 months’ imprisonment.