HKSAR v. TSANG SAI YAN

 DCCC325/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 325 OF 2009

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Reasons for Sentence

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1.  Defendant, I have convicted you after trial of three charges of offences of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to Section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap.455.  These offences otherwise commonly known as money laundering.

2.  I found after trial that you knew that what you had dealt with were the proceeds of an indictable offence.  I was satisfied that you had received reward for the money laundering.  I was satisfied that the reward that you and your parents had received was in a total sum of approximately HK$280,000.    

3.  I found that you had assisted your friend, alias Michael, otherwise known as James Yu, to launder this money from Australia and other places unknown.   

4.  I found that you had knowingly lent your bank account and your parents’ bank account for the moneys to be laundered through your accounts.

5.  I rejected your lengthy, verbose, rambling evidence of approximately four days in telling this court that you innocently and simply lent your bank account to your rich friends because you believed that they did not have bank accounts in Hong Kong and that they were remitting sums for legitimate business deals in China.

6.  As a university graduate with a bachelor’s degree, you spun the most incredible and implausible accounts as to your belief that you did not known nor had any reason to believe that these were proceeds of an indictable offence. 

7.  In your account, you had named numerous people that you had met and how you got involved with these people.  I found that at least some of them, particularly Michael was not a fictitious character.  It transpired that you had assisted Michael, alias James Yu, to open a bank account in Hong Kong some time in October 2007.

8.  This Michael is now serving a sentence of imprisonment in Australia.  After your conviction, I was informed by the prosecutor, counsel on fiat, Mr Laskey that Michael had in fact, or James Yu, pleaded guilty to a charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence between 28 September 07 and 18 October 07, in the sum of HK$9 million-odd.  

9.  Mr Laskey and your defence counsel, Mr Chang admitted that the charge itself is of no relevance to the present charges that you faced, save that this Michael, or alias James Yu, is a real person.  It can be seen that the relevant dates, they were after the dates of these offences to which you were involved.  The only relevance I can see, as Mr Chang pointed out, is that you, the defendant, had assisted Michael to open one of the bank accounts in that other case in October 07. 

10.  What I did find from your evidence in court which is wholly implausible and most astonishing is that, given the fact that you believed Michael was a very rich and wealthy man, that you yourself transferred to his account HK$10,000 to assist him to open an account.  You said you did that because he did not have any Hong Kong Dollars which I found wholly ridiculous.  What it does show to me is that you were in some way clearly connected with Michael, or alias James Yu, in laundering money.

11.  I cannot say here that you played the same role as Michael.  It appears to me that you, being in Hong Kong, were the person who was receiving money from Australia and huge sums in cash from the source unknown.  You then assisted in the movement of these sums either by receiving cash, depositing it into your bank account, then sending it off to Australia; or receiving money from Australia and then transferring it to different bank accounts of your own in Hong Kong. 

12.  You were a person who was in effect receiving the sums and transferring the sums out.  I found that this was a systematic series of money laundering transactions by using your and your parents’ account in an endeavour to hide the illegality of these transactions. 

13.  It had all the hallmarks of a money laundering transaction.  Large sums of money were placed into your bank account; they were remitted from or transferred to Australia or from sources unknown; there was a switching from one currency to another; there were transfers from one account to another and in some cases many times, known as “layering” which make it more difficult to trace; money moved in a short time to return to its source, known as “U-turn transactions”; there were cash transactions, either deposits or withdrawals of large sums, known as “breaking the audit trail”; there were deductions at each banking stage which were clear evidence of these accounts being used and receiving commission or rewards. 

14.  The amount of money involved was in the region of HK$3.4 million which was deposited into your or your father’s bank accounts over a six-month period between 13 March 2007 and 8 September 2007. 

15.  All in all, there were approximately deductions of about 10 per cent of the sums deposited, which were, as I found, commission paid to you.  This was, I have found, middle of the range of sophistication.

16.  There was clearly an international element.  Although I have found, you knew you were money laundering, there was no evidence before me that you knew what the offence or the proceeds of crime were.

17.  You are 28 years old and of clear record.  You are a university graduate in computer information systems.  You had gone to Australia in 2000 as a student and returned in 2006.  Upon your return you worked with your uncle in his business and earned $10,000 a month. 

18.  I have taken into account all that your defence counsel, Mr Geoffrey Chang had said on your behalf in mitigation. 

19.  As regards to your background, there was nothing more really he could add as I had heard much of it in your evidence.  Although Mr Chang had urged me to call for a Background Report, I did not think that that was necessary as it would not assist me in my sentencing of you, given the seriousness of this offence and in fact, I had heard much about your family background and yourself in the evidence in court and through Mr Chang.   

20.  Mr Chang took me through many cases that the court had sentenced in regard to money laundering.  They were:  HKSAR v Hui Kam [2000] 3 HKLRD 211, HKSAR v Au Hau Ching CACC146/2008, HKSAR v Yam Kong Lai CACC458/2006, HKSAR v Yeung Kin Chai CACC341/2008, HKSAR v Leong Wai Keong CACC476/2007, HKSAR v Choy Sui Hey CACC277/2007 and CAAR 10/2007.  And Mr Laskey, counsel on fiat, had also referred me to cases:  HKSAR v Mak Shing CACC322/2001, CACC395/2003 HKSAR v Xu Xia Liand HKSAR v Chen Szu Ming CACC270/2005. 

21.  As one can see, there is a broad, wide range of sentencing there.  What can be seen is that for money laundering offences, it is a serious offence of which deterrent sentences are appropriate and an immediate custodial sentence is appropriate even for those who are first offenders. 

22.  As to the seriousness of the offence and a need for deterrence, the Court of Appeal said in HKSAR v Xu Xia Li and another,

“The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain of their ill-gotten gains as if they were derived from legitimate activities.  Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced.  Money laundering is therefore treated as a serious offence.  If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties, it would mar Hong Kong’s reputation as a world class financial and banking centre.”

23.  From these authorities, one can see that there are tariffs and there was a very large range of culpability.  The relevant factors in determining the culpability of a defendant include the nature of the offence, the offence that generated the laundered money; the extent to which the offence assisted the crime or hindered its detection; the degree of sophistication of the offence; the offender’s participation; the length of time the offence was committed; any benefit the defendant derived from the offence; and if there was an international dimension.

24.  I have taken into account the wide range of sentencing passed in the cases as cited and in determining your sentence, I have taken into account the relevant factors as I have noted. 

25.  The amount involved was HK$3.4 million.  You had used your account and your parents’ account for the moneys which I found was in the middle range of sophistication.  You had knowingly participated in the offence for approximately six months and you had derived approximately $280,000 as a reward. There was a clear international dimension.  The moneys had come from Australia and were remitted back to Australia and in some cases, from an unknown source, perhaps being China.

26.  This was in my view, a carefully planned operation and in just over six months, you had dealt with some $3.4 million and you were at that time, only earning approximately $10,000 a month. 

27.  Taking into account the role played by you, defendant, and all the circumstances of this case, I am satisfied that the appropriate starting point and taking into account the principle of totality, should be 3 years’ imprisonment and an additional 4 months for the international element as an aggravating factor. 

28.  On Charge 1, you are sentenced to 30 months’ imprisonment; on Charge 2, you are sentenced to 20 months’ imprisonment; on Charge 3, you are sentenced to 30 months’ imprisonment. 

29.  The sentence shall run partly concurrent and partly consecutive to make up the total sum of 40 months’ imprisonment.  10 months of Charge 3 shall run consecutive to Charge 1 and the remaining shall be concurrent to each other, making a total of 40 months, which is 3 years 4 months’ imprisonment to which you are so sentenced.