HKSAR v. SUEN KIN WING

CACC 147/2024 [2026] HKCA 27

On appeal from [2024] HKCFI 1805

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 147 OF 2024

(ON APPEAL FROM HCCC NO 77 OF 2021)

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J U D G M E N T

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1.  In an indictment dated 14 September 2022, the applicant was charged with four offences: fraud, alleging that between a date unknown in 2016 and 2 February 2018, he defrauded Yu Quanli (Yu) and Lou Xiaojie (Lou) of RMB132,400,000 (Count 1); theft in the alternative, alleging that between 22 November 2016 and 12 June 2018, he stole RMB103,721,852.50, property belonging to Yu and Lou (Count 2); dealing with property known or believed to represent proceeds of an indictable offence, alleging that between 1 June 2016 and 28 June 2018, he, knowing or having reasonable grounds to believe that property, namely HK$50,621,075.91, US$5,149,262.34 and £160,963.00, in bank accounts in the applicant’s name with The Hongkong and Shanghai Banking Corporation Limited (HSBC), in whole or in part, directly or indirectly, represented any person’s proceeds of an indictable offence, dealt with the said property (Count 3); and dealing with property known or believed to represent proceeds of an indictable offence, alleging the same particulars as in Count 3 but with different property, namely HK$10,621,778.92, US$1,719,998.09 and £1,430,656.00 in bank accounts in his name with Hang Seng Bank Limited (HSB) (Count 4).

2.  On 30 January 2024, pursuant to a plea bargain, the applicant pleaded guilty to Counts 3 and 4 and was convicted of these offences by Johnny Chan J (the judge). Counts 1 and 2 were ordered to be left on the court’s file and not to be proceeded with without leave of the court, after the applicant pleaded not guilty to those counts.

3.  On 21 June 2024, the judge sentenced the applicant to a total term of 10 years’ imprisonment on Counts 3 and 4.

4.  On 10 July 2024, the applicant applied for leave to appeal against his sentence. On 9 May 2025, he filed the following perfected grounds of appeal:

Ground 1: The judge erred in principle by sentencing the applicant on an erroneous factual basis as to his knowledge of the predicate offence;

Ground 2: The judge erred in principle by sentencing the applicant on an erroneous factual basis as to the quantum representing the proceeds of an indictable offence; and

Ground 3: The overall sentence of 10 years’ imprisonment was manifestly excessive.

5.  The applicant seeks to admit fresh evidence under section 83V of the Criminal Procedure Ordinance (Cap 221), namely: (i) correspondence between prosecuting counsel and defence counsel in the form of three letters exchanged during the negotiations for a plea bargain, relating to the Summary of Facts[1], in support of Ground 1; and (ii) the forensic accountant’s report (Exhibit P244), together with the Notice of Additional Evidence signed by prosecuting counsel, the Additional Evidence Bundle List identifying the report, and correspondence between the appellate solicitors and the authorities in relation to the balance of the relevant bank accounts[2], in support of Ground 2.

The Summary of Facts

6.  In pleading guilty to Counts 3 and 4, the applicant admitted a Summary of Facts that set out the background and evidence as follows.[3]  On 9 December 2013, the applicant joined UBS, Hong Kong Office, as an associate director. On 25 March 2014, Yu and his wife, Lou, who conducted business in Nanjing and had moved to Hong Kong around August 2013, opened a joint account with UBS (the UBS joint account), for which the applicant acted as their client advisor. Between 2014 and October 2016, deposits into and withdrawals from the UBS joint account were made through the applicant “without any impropriety”.[4] 

7.  In October 2016, Yu and the applicant discussed the remittance regulations. Yu remarked that it was troublesome to remit RMB from the Mainland to Hong Kong, as it had to be converted into USD and HKD before the funds could be deposited into the UBS joint account. To simplify the process, Yu agreed to transfer RMB from his Mainland accounts to various other Mainland accounts designated by the applicant, who would then arrange for the money to be remitted to Hong Kong and deposited into a bank account in the name of his cousin, Chi Xingxin (Chi), with HSBC (Chi’s account) before transferring the funds into the UBS joint account.[5] 

8.  Between 22 November 2016 and 2 February 2018, acting on account information provided by the applicant, Yu instructed his staff to make 37 transfers totalling RMB132.4 million to 29 Mainland accounts designated by the applicant over 14 days, including RMB5 million transferred into the applicant’s account with China Merchants Bank on 12 May 2017. After the transfers, the applicant provided Yu with false photographic images of an “Application for Transfer” and purported bank statements of the UBS joint account, showing that equivalent amounts had been transferred from Chi’s account to the UBS joint account, although no such transfers had been made.[6]

9.  On 8 June 2018, the applicant resigned from UBS. Yu and Lou then compared the updated statements for the UBS joint account provided by the new client advisor with those previously supplied by the applicant, and discovered a shortfall of about HK$124.9 million and discrepancies in the deposit records.[7]

10.  On 11 June 2018, Yu repeatedly called the applicant and eventually confronted him about the shortfall and the discrepancies in the deposit records. The applicant initially blamed handover issues with the new client advisor. He claimed there was a separate UBS account in the name of “Empire Seals Limited” holding the HK$124.9 million for Yu, but UBS confirmed that no such account existed.[8]  

11.  On 12 June 2018, Lou confronted the applicant at his home regarding the shortfall of money. Yu spoke to him on the phone and demanded an explanation. He claimed that the money had probably been withheld by HSBC and had yet to be deposited into the UBS joint account. Yu and Lou were not satisfied with the explanation and arrangements were made for further enquiries with the bank. As a result, staff at the bank reported the matter to the police.[9] Later that evening, the applicant was arrested and remained silent under caution. He was found in possession of two bank cards for Chi’s account and a China Merchants Bank account, numerous car keys, and conveyancing documents for three properties in the United Kingdom and two in the Mainland, valued at about HK$29 million in total.

12.  A forensic accountant’s report concluded that the significant deposits and withdrawals in the applicant’s two bank accounts, namely HSBC account (A/C-1) and HSB account (A/C-2), were disproportionate to his income from UBS[10]. During the period particularised in Counts 3 and 4, deposits totalling HK$134,992,204.98 (amongst the deposits a sum of HK$63,264,192.74 had been transferred from Chi’s account (also referred to as A/C-3)) were made into the applicant’s HSBC and HSB accounts, for which he was the sole holder and authorised signatory. Withdrawals from these accounts were made to various counterparties for credit card repayments, securities trading, and overseas property purchases. At the material time, the applicant and two companies for which he was the sole shareholder and director owned six luxury vehicles, and he had also acquired 27 other properties in the United Kingdom.[11] 

The mitigation

13.  The applicant was 36 years old, single, and university-educated, with a clear record at the time of the offences. On 20 December 2023, he was sentenced to six months’ imprisonment for two counts of contempt of court in civil proceedings related to this case. He was previously registered to deal in securities, but lost his licence following his conviction.

14.  In mitigation, defence counsel suggested that the predicate offence was prostitution-related offences committed by Yu in the Mainland, and that there was no evidence that the applicant knew of this matter until Yu and his staff member, Zhu Lijuan (Zhu), were convicted and sentenced for running a prostitution ring in Nanjing in 2020, two years after the charged period. He contended that Yu and Zhu were unable to testify due to their convictions. He asserted that the applicant did not know about the illegal prostitution operation, and “he was tasked by Mr Yu to purchase the overseas properties as his trustee so that his wife, Lou, would not know” [12].

15.  It is submitted by Mr Jason Lau, for the respondent, that when the judge sought clarification as to the nature of the proceeds and indicated that the immediate predicate offence was fraud and theft, defence counsel accepted that this was relevant to the issue of knowledge “because it was committed by the defendant himself”.[13]  Mr Simon Young, for the applicant, submitted that this was defence counsel merely repeating what the judge was suggesting. I will discuss this matter in more detail later.

16.  As for the amount of the proceeds, defence counsel submitted that both Counts 3 and 4 arose from the initial transfer of RMB132.4 million from Yu. He argued that there would be double counting between the two charges, as the same proceeds were deposited and withdrawn by the applicant, noting that total deposits into his two accounts, HK$134,992,204.98, were roughly equivalent to the initial RMB transfer of RMB132.4 million. He also noted that there might be double counting within the applicant’s account in Count 4, where foreign currencies were exchanged and then redeposited into the same account.[14]

17.  While accepting that the case involved an international element, a breach of trust towards UBS and its clients, and spanned more than two years, defence counsel argued that the scheme lacked sophistication or advance planning, and was carried out within one month, between October and November 2016. He submitted that the applicant acted alone, as evidenced by his sole control of Chi’s bankcard, and that there was no evidence of his involvement in an organised criminal syndicate. He further submitted that the applicant should receive a 20% to 25% discount for the timing of his guilty pleas. He urged the judge to treat the HK$134,992,204.98 deposited into the applicant’s two accounts as a single sum, and to impose fully concurrent sentences on the two counts, reflecting that both accounts were maintained as a vehicle to receive and dispose of Yu’s RMB132.4 million under the same scheme.

18.  It appears that defence counsel, in his written mitigation submission, accepted that the total amount laundered was originally the monies Yu remitted to the applicant, amounting to RMB132.4 million. He set out the facts admitted by the applicant as outlined in the Summary of Facts, as follows:[15]

“15. … Mr Yu remitted funds into a personal, local Hong Kong bank account, including a HSBC account in the name of Chi Xing-xin, the defendant’s cousin.

16. Between 22 November 2016 and 2 February 2018 RMB 132,400,000 was remitted to Hong Kong in this manner: see paragraph 6 of the Summary of Facts. The actual breakdown of the funds can be found at page 00193 of the trial bundle and this identifies the funds remitted by Mr Yu’s staff member, Zhu Lijuan. …

…

20. On 12 June 2018 the defendant was arrested. He was found to be in possession of an ATM card in the name of his cousin, Chi Xingxin; car keys; and conveyancing documents for properties in the United Kingdom and mainland China.

21. Police enquiries revealed that he had been found with properties and cash deposits ‘incommensurate with his income’, see paragraph 27 of the Summary of Facts:

(a) control of six luxury cars (paragraph 27 of the Summary of Facts);

(b) the equivalent of HK$134,992,204.98 being deposited in his HSBC (Count 3) and Hang Seng (“Hase”) (Count 4) bank accounts (paragraph 20 of the Summary of Facts);

(c) the purchase of 30 properties in the United Kingdom, although the defendant asserts was simply the initial deposit (paragraph 23 of the Summary of Facts) and the purchase of three Mainland properties (paragraph 14 of the Summary of Facts).

22. The prosecution also pointed out that HK$63,264,199.74 from Chi Xingxin’s HSBC account to the defendant’s HSBC and Hase bank accounts (paragraph 21 of the Summary of Facts).”

19.  It was not in dispute that the amounts particularised in Counts 3 and 4 represented the proceeds of an indictable offence. In the written mitigation submission, it was accepted that the laundered funds in Counts 3 and 4 were “all derived from the initial transfer of RMB132,400,000”, and it was also accepted that the total amount of deposits in the two accounts of Counts 3 and 4 was “roughly the same figure, namely HK$134,992,204.98”.[16]

The reasons for sentence

20.  As for the quantum of proceeds, the judge found that the total amounts particularised in Counts 3 and 4 were HK$107,036,587.30 and HK$27,955,617.68 (in Hong Kong dollar equivalent), respectively, totalling HK$134,992,204.98 as laundered during the charged period.[17]  He rejected the defence claim of double counting, noting that each count reflected only the net deposits into the accounts in different currencies, with all interbank transfers and foreign currency exchanges excluded.[18]

21.  As for the applicant’s knowledge of the predicate offence, the judge made these findings:[19]

“For the information placed before me, I accept that the monies from Yu were very likely originated from organised, illegal prostitution for which Yu pleaded guilty to the related offences and was sentenced to 15 years’ imprisonment by the Mainland court.

However, for the proceeds laundered by the defendant, even if they originated from illegal prostitution perpetuated by Yu, the facts show that there were proceeds of fraud, Count 1, or theft, Count 2, practised against Yu by D, hence D had clear knowledge of the nature of the proceeds as well as the predicate offence, that is fraud, Count 1 or theft, Count 2. I am aware that D is to be sentenced for the two money laundering charges only, not for Count 1 or Count 2.

For D’s claim that he did not have knowledge of the predicate offence at the time, I reject his claim that he thought he was only helping Yu, that is his client, to hide his assets from Lou, that is Yu’s wife. Such claim is contrary to paragraphs 7, 8, 9 and 10 of the Summary of Facts admitted by D.

If D were acting under Yu’s instructions, he would not have to resort to the use of false bank statements to deceive Yu and Lou, paragraphs 7 and 9 of the Summary of Facts and Yu would not have to confront D on the shortfall and discrepancies in the deposit records. And D would not have to falsify the story that there was another UBS bank account in the name of Empire Seals Limited to hold the amount of HKD124.9 million for Yu, paragraph 9.” (Emphasis added)

22.  The judge also found that the applicant benefited financially from the proceeds of both counts. He had these funds entirely at his disposal and maintained a lavish lifestyle incommensurate with his income, as evidenced by the number of expensive cars he owned and properties he purchased overseas and in the Mainland. While accepting that the scheme lacked sophistication, the judge noted that the offences involved cross-border and international elements. Accordingly, he adopted a starting point of 10 years’ imprisonment for Count 3 and 6 years’ imprisonment for Count 4.

23.  Given that the applicant indicated his intention to plead guilty only after the prosecution had fully prepared its case for trial, the judge granted a 25% discount for his guilty pleas, reducing the sentences to 7 years and 6 months’ imprisonment on Count 3 and 4 years and 6 months’ imprisonment on Count 4.

24.  The judge rejected the claim of double counting between the two counts, regarding them as distinct and separate acts. Applying the totality principle, he concluded that a total sentence of 10 years’ imprisonment, representing a notional starting point of 15 years’ imprisonment, properly reflected the applicant’s overall culpability. He reached this total by ordering that 2 years and 6 months of the sentence on Count 4 be served consecutively to the sentence on Count 3.

Ground 1: The knowledge of predicate offence

25.  In advancing this ground, Mr Young stressed that the applicant, by pleading not guilty to Counts 1 and 2, denied that he had committed the fraud or theft against Yu and Lou. He points out that, in mitigation, it was submitted that the applicant had no knowledge that the funds were the proceeds of fraud, theft, or even prostitution, but believed they were part of a scheme by Yu to purchase properties overseas, with the applicant acting as trustee, in order to move money out of the Mainland and Hong Kong so that Yu’s wife would not know about it. This was rejected by the judge, who found that for the purpose of the element of knowledge, that is, he knew or had reasonable grounds to believe that the funds represented proceeds of an indictable offence―a fraud perpetrated on Yu by the applicant.

26.  Mr Young relies on the following three principles.

27.  First, where a defendant pleads not guilty to offence A but guilty to offence B, the sentencing judge must disregard facts covered by offence A and not sentence the defendant as if he were guilty of offence A. Mr Young contends that the judge erred in sentencing the applicant on this basis, because the applicant had pleaded not guilty to Counts 1 and 2 as part of a plea bargain. He argues that the judge was therefore not entitled to find that the proceeds were the product of the fraud or theft alleged in Counts 1 and 2.

28.  Secondly, the defendant must be sentenced on the basis of the offence to which he pleaded guilty, not on the basis of any other offence disclosed by the prosecution evidence.

29.  Thirdly, where an offender has admitted offences in an out-of-court statement, but those matters are not the subject of the counts in the indictment and are not admitted by the offender in court, the sentencer must not impose a sentence on the basis that the offender is guilty of those offences.

30.  Whilst the applicant pleaded not guilty to Counts 1 and 2, those counts had not been accepted by the prosecution as a determination of criminal liability, as the pleas were treated neutrally by the court, which ordered that they be left on the court file and not proceeded with without leave of the court. In other words, the counts could be resurrected with leave of the court if the circumstances warrant it. The money laundering offence has as an element that the applicant knew, or had reasonable grounds to believe, that the property represented the proceeds of an indictable offence (HKSAR v Harjani Haresh Murlidhar [20]).

31.  The judge did not sentence the applicant on the basis of the fraud or theft in Counts 1 and 2. The judge made it clear that whether the immediate predicate offence for the money laundering charges was fraud or theft was relevant only to the mental element of knowing or believing the property was the proceeds of crime. He emphasised that he was only sentencing the applicant on the money laundering charges. Defence counsel seemed to acknowledge that such a finding was available on the basis that the applicant had the requisite knowledge because it had been committed by himself.

“COURT: ... You suggest in the mitigation that the predicate offence was illegal prostitution in China by Yu and...

MR BOYTON: Yes.

COURT: ...his wife. But I think the facts of this case suggest that the money might have come from illegal prostitution in China by Yu, but the immediate predicate offence for the money laundering charges would be fraud and theft.

MR BOYTON: Committed by the defendant himself.

COURT: Yes, but, of course, I must emphasise that I am only sentencing the defendant on the money laundering charge.

MR BOYTON: Money laundering, yes.

COURT: Not the fraud charge.

MR BOYTON: Of course.

COURT: And the theft charge.

MR BOYTON: I understand that, my Lord. Yes.

COURT: And the prosecution do not...

MR BOYTON: Yes.

COURT: ...does not proceed against the defendant because -- but, of course, the nature of the proceeds -- the fact that the immediate predicate offences were fraud and theft were relevant to the issue of knowledge of...

MR BOYTON: Yes, because it was committed by the defendant himself.

COURT: Yes.”[21]

32.  The particulars of Counts 3 and 4 set out the basis of the applicant’s guilt for the two offences of money laundering. It was alleged that he knew or had reasonable grounds to believe that the sums of money held in bank accounts in his name represented a person’s proceeds of an indictable offence. The total amount alleged to be tainted property was the equivalent of HK$135 million. The particulars of the two counts were read out to him, which he accepted when he pleaded guilty to them. In the last paragraph of the Summary of Facts, it is stated:[22]

“29. D now admits that between the 1^st day of June 2016 to 28^th day of June 2018, knowing or having reasonable grounds to believe that property in various currencies deposited into A/C-1 and A/C-2 as particularised in Counts 3 and 4 respectively, in whole or in part, directly or indirectly represented any person’s proceeds of indictable offence, dealt with the said properties.”

33.  I am not persuaded that this ground has merit. First, I do not consider that these principles come into play as alleged. Secondly, it was open to the judge, on a proper consideration of the admitted facts, to draw the inference that the funds in Counts 3 and 4 were the proceeds of fraud or theft practised on Yu and that the applicant knew the nature and origins of these funds. It was admitted that the applicant had variously given Yu and Lou fabricated documents and false explanations regarding the shortfall of the funds. It was also admitted that the total amount of deposits into A/C-1 and A/C-2 during the period from 1 June 2016 to 28 June 2018 was HK$134,992,204.98, and amongst these deposits was a total of HK$63,264,192.74 from Chi’s account.[23] The money trail demonstrates conclusively that the funds had been laundered by the applicant. According to the facts, the applicant maintained a lavish lifestyle which was disproportionate to the income he derived from his employment with UBS. He had used the funds to purchase a fleet of expensive cars and numerous properties in the United Kingdom and in the Mainland.[24]  Moreover, it was not in dispute that the total funds in the two accounts, approximately HK$135,000,000, which the applicant admitted he had laundered, were roughly the equivalent of the original funds, RMB132,400,000. The amount of laundered funds is further discussed in the next ground of appeal.

Ground 2: The quantum of proceeds laundered

34.  Under this ground, Mr Young notes that Count 3 only refers to the funds deposited in A/C-1 and Count 4 to the funds deposited in A/C-2. He highlights that these two counts did not include the funds deposited in Chi’s account, A/C-3. However, Chi’s account played a key role in the laundering of the funds of RMB132,400,000 that were lost.

35.  Mr Young points out that the judge determined the total amount of the proceeds was HK$134,992,204.98, being the sum of the Hong Kong dollar equivalent of all the funds deposited in A/C-1 (HK$107,036,587.30) and A/C-2 (HK$27,955,617.68). He contends that the judge erred in taking this total sum as the value of the property representing the proceeds of an indictable offence and therefore sentenced the applicant on an erroneous basis. He argues that the error partly stems from the judge’s finding that the applicant defrauded Yu of RMB132,400,000, a figure close to the  amount of money the judge found had been laundered.

36.  The deposits in A/C-1 in Count 3 and A/C-2 in Count 4 were originally funds entrusted by Yu to the applicant. However, it appears that the Yu funds took a circuitous and layered route in various amounts and through various accounts by the applicant before they were deposited into the two accounts. Mr Young argues that, from the forensic accountant’s report, the original sum of RMB132,400,000 was eventually deposited into Chi’s account, and only approximately HK$65 million was transferred from this account to A/C-1 and A/C-2. He contends that this was the amount that was actually laundered, notwithstanding that the total amount deposited into these two accounts was approximately HK$135 million. According to Mr Young, the additional HK$70 million is unexplained.

37.  This is a new point that was not raised before the judge. However, all funds received by the applicant came from Yu and Lou, and he admitted laundering approximately HK$135 million through the two accounts by pleading guilty to the two counts and agreeing to the Summary of Facts.

38.  During the discourse of Mr Young’s submissions in respect of Grounds 1 and 2, the question arose whether, as a consequence of the points he was advancing, he was undoing the plea bargain. He explained that the object of his submissions was to show that, in the negotiations of the plea bargain, the applicant had denied he was guilty of fraud or theft. In the written mitigation submission, after asserting that the funds involved were the proceeds of prostitution, the applicant’s position regarding the predicate offence was encapsulated in the following paragraph:[25]

“40. It is the defendant’s instructions that, without the knowledge of this illegal prostitution operation, he was tasked by Mr Yu to purchase the overseas properties as his trustee, in order to ‘move his money out of China and Hong Kong’ so that his wife, Lou Xiaojie would not know. The defendant asserts that this is his knowledge of the predicate offence, rather than the fraud, or theft, or even prostitution for which there is no conviction.”

39.  It was not stated what the indictable offence was, if any, from which the funds were derived, according to this assertion. As already stated, it was open to the judge to reject this assertion based on the Summary of Facts and to find that the predicate offence was fraud or theft, and that the applicant knew that the funds were the proceeds of such offences.

40.  I grant leave on this ground. However, there is a countervailing argument that the amounts in the two accounts reflect the original funds of RMB132,400,000 and represent the proceeds of an indictable offence.

Ground 3: Manifestly excessive

41.  Mr Young submits that even if Grounds 1 and 2 are without merit, the final sentence was manifestly excessive. He points out that the judge adopted a notional starting point of 15 years’ imprisonment after trial to reflect the overall criminality of the two offences. He argues that the notional starting point is excessive, given that the statutory maximum for money laundering is 14 years’ imprisonment. He also argues that the individual starting points for Counts 3 and 4 were manifestly excessive and refers to a number of cases by way of comparison. He finally argues that the principle of totality did not require consecutive sentences in the circumstances of this case. This resulted in a manifestly excessive final sentence. On this point, he emphasises that this was a single scheme to receive and deposit funds from Yu; there were two counts only because the scheme happened to use two of the applicant’s bank accounts, and there was no differentiation between the two accounts in terms of the offence period, the criminal conduct, or the victim.

42.  Mr Young further submits that the judge should have approached the case as a single offence of money laundering, which appears to have been the judge’s thinking, as he referred to a notional starting point of 15 years’ imprisonment for the two offences. He further submits that the amount involved in Count 3 was substantially greater than that in Count 4, and the consecutive element was disproportionate to the difference in the amounts, and in any event did not require consecutive sentences even if separate and distinct acts were involved in the two counts.

43.  It is submitted on behalf of the applicant that a 10-year starting point for Count 3 was more than sufficient to reflect the overall criminality in this case.

44.  The arguments advanced regarding the overall sentence are reasonably arguable.

Conclusion

45.  For the reasons I have given, I grant the applicant leave to appeal against his sentence on Grounds 2 and 3. I refuse leave on Ground 1.

46.  If the applicant is successful with his appeal on Grounds 2 and 3, the Court of Appeal will be required to sentence him afresh and make its own assessment of the facts and circumstances of the case and the role and culpability of the applicant, in order to determine the appropriate starting point for each offence, as well as the aggravating and mitigating factors and any consequential adjustments to the notional starting points.

47.  The applicant is reminded of his right to renew his application for leave to the Court of Appeal on the refused ground, but he is also informed of the consequences of doing so, which may include a direction for any loss of time spent in custody pending his appeal, if the Court were to come to the view that there was no justification for the renewal of his application on the refused ground.