HKSAR v. AU YIM CHUEN

DCCC 369/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 369 OF 2014

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REASONS FOR SENTENCE

The defendant pleaded guilty to an offence of "money laundering". The sum involved is approximately $17.2 million.

Summary of Facts

2.  The defendant opened a bank account (No.381-162708-882) with Hang Seng Bank ("the Account") on 27 August 1998.

3.  According to his tax returns, the defendant was employed as a senior cook by a company from 1 April 2006 to 31 March 2009; and as a cook by another company from 31 October 2008 to 31 March 2009.  He earned a total sum of $485,133 during the offence period (namely 1 April 2006 to 31 March 2009).

4.  Analysis of the Account showed that during the offence period, a total sum of $17,211,916.23 was deposited into the Account; and a total sum of $17,213,822.11 was withdrawn therefrom.

5.  Amongst the deposits, there were 57 cash deposits in a total sum of $4,428,850.  Most of the remaining deposits were made by bank transfers, which involved a total of 85 transactions.  Two persons (namely NG Wai-man Conn and LEI Chong-leng) have transferred a total sum of $6,267,152 to the Account by 37 transactions.

6.  Whenever there was a large sum of money (i.e. over $100,000) deposited into the Account, a similar sum would be withdrawn from it by bank transfers within 1 or 2 days.  There were 110 withdrawals from the Account by way of bank transfers, involving a total sum of $16,406,901.61.  The Account was closed on 25 March 2009.

7.  In his video recorded interviews, the defendant admitted, inter alia, that he opened the Account for his brother and was the sole signatory of the Account.  He knew his brother had jumped bail in a wounding case and absconded to Taiwan 18 or 19 years ago. His brother called him from Taiwan asking the defendant to open a bank account for his business.  He was told that his brother's business was jewellery trading but did not know any further details.  He lent the Account to his brother and did not receive any reward for doing so.

8.  The defendant claimed that his brother conducted most of the transactions in the Account by internet or phone banking.  On some occasions, the defendant would transfer money by ATM according to his brother's instructions (including withdrawing money for their parents).  He was told that the transferees were his brother's friends and the money was loans to them.  The defendant did not know NG Wai-man or LEI Chong-leng.  He did not know who made the cash deposits into the Account.  The Account was closed at his brother's request.  The defendant has lost contact with his brother since 2012.

Mitigation & Sentence

9.  The defendant is 52 and has a clear record.  He is married with an 18-year-old daughter (who is receiving tertiary education).  He has been working for the same company as a cook since 2002.  He is currently deployed as a Department Chef at a school on Lantau Island.  His employer has many favourable comments for him.

10.  Defence counsel Mr. LAU submitted that the defendant is a family man with a stable job earning a stable income.  In relation to the offence, Mr. LAU stressed that there is no evidence of any underlying criminal offences; the defendant was merely helping his brother.  Of the $17 million which went through the Account, the defendant had only handled about $430,000[1] in total.

11.  Mr. LAU also submitted that the defendant only had a low degree of involvement, with a low degree of planning and organization.  Furthermore, all money transactions involved banks in Hong Kong only; there was no international element.

12.  Finally, Mr. LAU submitted that there was delay in prosecution.  The defendant was first approached by the Police on 18 January 2011 (when the 1^st video recorded interview was taken).  The 2^nd video recorded interview was taken on 5 July 2011; and the last one, 16 October 2013.  The defendant was arrested on 8 April 2014.  Mr. LAU pointed out that extensive admissions were made by the defendant in the 1^st and 2^nd interviews.  The Account was closed in 2009 (almost 2 years before the defendant was first approached by the Police).

13.  In reply to the issue of delay, prosecuting counsel Mr. WONG explained that the Police first sought legal advice in November 2012; and legal advice was given in March 2013.  Upon legal advice, the Police was instructed to check the tax returns of the holders of bank accounts which had significant dealings with the Account. Furthermore, the Police initially investigated the period from 2007 to 2009, but was advised to cover the period from 2006 to 2007 as well.  All these tasks took time.

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

"Money laundering" is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the "money laundering" offences.

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.[2]

15.  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 and HKSAR v Boma Amaso [2012] 2 HKLRD 33.  I have 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.

16.  I have also borne in mind the Court of Appeal's decisions in WAN Kwok Keung and SJ v LAU Man Ying [2012] 4 HKLRD 435.  In LAU Man Ying, Yeung V-P held :-

This Court has stressed on a number of occasions that "money laundering" is a very serious offence and that the court has the duty to deter the commission of this offence and to prevent offenders from getting financial gains.

In general, the elements of the offence of "money laundering"are centred upon the question of whether the defendant dealt with the money involved in the offence and if he did, then in dealing with the money, whether he had reasonable grounds to believe that the money was "illicit money"…

… The defendant’s ignorance of the actual source of the "illicit money" is not necessarily a mitigating factor.[3]

17.  In SJ v NGAI Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[4]

18.  In HKSAR v HUI Kam [2000] 3 HKLRD 211, Deputy High Court Judge Chu (as she then was) held :-

It is therefore important to impress upon members of the public the serious consequences of dealing in and disposing of proceeds of crime even when one is helping his family member.[5]

19.  I accept that in the present case, there is no evidence of any underlying criminal activities from which the funds "laundered" in the Account were originated.  There is no evidence of any international elements either.  I also accept that the defendant did no more than opening the Account for his brother and that he had minimal dealing of the funds which went through the Account.  All these factors warrant a slightly lower starting point.

20.  On the other hand, I cannot overlook the fact that over $17 million went through the Account in a period of 3 years.

21.  In the circumstances, I consider a starting point of 4 years' imprisonment to be appropriate.  A one-third discount is given for the guilty plea, reducing the sentence to 32 months.  Regarding the issue of delay, I accept that there was unnecessary delay.  From the 1^st video recorded interview with the defendant to seeking legal advice, there was a gap of 22 months.  It then took the Department of Justice 4 months to give its first advice.  Thereafter, another 13 months have lapsed before the defendant was formally arrested.  I understand investigation of money laundering cases is not easy and it takes time; however, 4 years in this case seem to be excessive.  On this basis, I will grant a discount of 4 months to reflect the delay in brining prosecution against the defendant.  In other words, the sentence I pass on the defendant is 28 months' imprisonment.