HKSAR v. NG TOK MAN (also known as WU TUOMIN)

DCCC 110/2019

[2020] HKDC 448

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 110 OF 2019

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REASONS FOR VERDICT

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1.  The defendant NG Tok Man (also known as WU Tuomin) pleaded not guilty before me to one charge of Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.

2.  The particulars are that he, between 24 October and 20 November 2014, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a sum of $422,108 United States currency in the account numbered 652-271008-838 held in the name of Rich World Financial Group Co, Ltd with The Hongkong and Shanghai Banking Corporation Limited, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property.

The law

3.  The law on money laundering is as restated in HKSAR v Harjani Haresh Murlidhar (2019) 22 HKCFAR 446.

Prosecution case

4.  The prosecution case in brief is that the defendant having reasonable grounds to believe that a sum of USD422,108 or part thereof represented proceeds of an indictable offence, dealt with it by receiving it into his company account and one day later transferred the bulk of it into his personal account; that under caution, the defendant admitted he lent the company account to a friend Luo Ling for receiving that sum and subsequently transferring a like amount in RMB to her by way of Mainland bank accounts.

Defence case

5.  The defence case is that the version under caution was made up by the defendant on the spot; that the truth was that the USD sum was a repayment of a debt previously loaned by the defendant to Luo Ling.

Procedural history

6.  The voluntariness of the Records of Interview was dealt with by way of alternative procedure.

7.  There was no half-time submission after the close of the prosecution case on the special issue.  I ruled that there was a case to answer on the special issue.

8.  The defendant elected to give evidence on the special issue.

9.  After hearing final submissions on the special issue, I ruled the defendant voluntarily took part in the two video recorded interviews and that the answers given by the defendant therein were voluntarily given by him.  I could not see any grounds on which I could exercise my discretion to exclude these two records of interview.  For the avoidance of doubt, I also found the verbal utterance by the defendant at the scene of arrest was also given by him voluntarily.  Consequently, all the PP exhibits became formal P exhibits.  The reasons for the ruling in the special issue are at Annex 2.

10.  The prosecution closed its case on the general issue.  There was no half-time submission on the general issue.  I ruled that there was a case to answer on the general issue.

11.  Defendant elected to give evidence and produced some exhibits.

Summary of the evidence

12.  A set of admitted facts is produced as P8.

13.  A summary of the two VRIs is at Annex 3.

PW1 DSPC 53116

14.  On 9 May 2017 at about 1520 hours, at the Immigration office of HK-Macau Ferry Terminal in Sheung Wan, PW1 arrested the defendant for money-laundering.  Under caution, the defendant said he was also a victim.  Then the defendant was taken back to Central Police Station and passed over to the Duty Officer.  At 1538 hours, PW1 signed the defendant out from the Duty Officer.  He then issued a Notice to Person in custody (PP4) to the defendant at 1550 hours.  At 1645-1701 hours, he conducted a VRI (PP5 and transcript PP5A) with the defendant.  Afterwards, PW1 returned the defendant to the Duty Officer.

15.  Next day (10 May 2017), at 1253 hours, PW1 signed out the defendant from the Duty Officer.  Then he took the defendant to 2^nd floor video room for VRI.  Before that, he issued to the defendant a Notice to Person in custody (PP6).  The resulting VRI is produced (PP7 and transcript PP7A).

16.  No threat or inducement was ever exerted or offered to the defendant.  Other allegations made in the “Outline of the Grounds of objection to the admissibility of the Video Recorded Interviews” were denied.

17.  On 20 November 2014, the two bank accounts of the defendant were frozen.

18.  No investigation was made into the 12 HKD deposits into the company bank account (Account 1) of the defendant.  No investigation was made into the withdrawals either.

19.  No investigation was made into the account with number 499-000966-006 to which three sums namely HK$105,000, HK$105,000 and HK$3,333.34 were transferred from the defendant’s personal HKD account (the HKD account of Account 2).

20.  PW1 left the investigation of this case in March 2018.

21.  PW1 did not make investigation into the Agricultural Bank of China account mentioned by the defendant in the VRI.

22.  On 9 May 2017, at about 1520 hours, PW1 arrested the defendant for money laundering at the HK-Macau Ferry Terminal in Sheung Wan.  PW1 told the defendant the reference number, the offence name, the material time, the name and company of the victim.  Then PW1 cautioned the defendant.  The defendant replied, “I am also a victim.”

23.  PW1 recorded the course of arrest on his notebook there and then.  He read it over to the defendant but did not ask him to read or sign in acknowledgement.  Reason for not asking him to sign was that PW1 needed to put the defendant under control lest he escaped.

24.  PW1 disagreed the general practice was to ask an arrested person to sign and acknowledge the course of arrest in the notebook.

25.  PW1 did mention in the first VRI that a post-record was made of the course of arrest in the notebook.

26.  The reason why he had not asked the defendant to sign to confirm what was said under caution was he wanted to take the defendant back to the police station.

27.  PW1 did not think it was necessary to ask the defendant to read the notebook himself and confirm the contents at the police station because he was about to take a VRI from him.

28.  PW1 only made a preliminary record in the notebook while the post-recorded cautioned statement including the details was done in the VRI.  The reason for the brief record in the notebook was that he was afraid of defendant’s escape and assaulting police.

29.  Before the first VRI, PW1 asked if the defendant needed to go to toilet or have food or water.  The defendant did go to the toilet but did not require food or water.  There was no record of his asking nor of the defendant going to the toilet because there was no need to so record.

30.  After the first VRI, at 1820 hours, PW1 returned the defendant to the Duty Officer.  The defendant did not have dinner when he was in PW1’s custody.

31.  PW1 took the 2^nd VRI from the defendant the next day.  After the 2^nd VRI, the defendant was released on police bail.

(It is accepted by prosecution and defence that the defendant was released on 24 January 2018.)

32.  On 8 January 2019, the defendant was re-arrested.

33.  When asked if he had an interview with the defendant on 9 January 2019, PW1 initially said he believed so but later corrected to saying that he had already been transferred out and he would not deal with the case.

34.  Before setting off to arrest the defendant, PW1 checked the police computer and did find out the defendant was a person of clear record.

35.  After viewing the VRI taken on 9 January 2019 showing he was in the interview room with the defendant, PW1 insisted that he had not made a mistake about being involved in the 3^rd VRI.  PW1 explained that he had already been transferred out from the unit to Team 6. The colleague who conducted the interview was a newcomer in CID work who needed to be accompanied by a senior CID man.  That is the reason why PW1 could not recall about this VRI.  It was the Team 4 OC Case who asked PW1 to be present.

36.  According to his investigation report, PW1 recorded at 2115 hours on 2 February 2018 that the complainant Yang Bo had said that he had chased back the money, that he would not provide any further statement; but Yang did not say that was the end.

37.  In re-examination, PW1 agreed that he wrote in the investigation report: “Contacted Yang Bo.  He said the money had been chased back; that’s why he would not pursue; that he would not provide further statement.”

Summary of the defendant’s evidence in the special issue

38.  For defendant’s evidence in the special issue, refer to Annex 1.

Summary of defendant’s evidence in the general issue

39.  Defendant adopted his evidence given in the special issue.

40.  Defendant is aged 55, born in Mainland, studied Ocean Navigation in university, later on underwent further studies in financial field, both in Mainland.

41.  Defendant is married with a son born in 1994, now aged around 26; he graduated as a research student in Melbourne University now in real estate management in Melbourne.  Defendant’s wife is a housewife. Wife used to be person in charge of the accounts department in Agricultural Bank of China, Guangzhou branch.  She quitted her job after son was born.

42.  Round about the time of Hong Kong and Macau’s Handovers, he applied to migrate to Macau on investment programme.  He bought four residential units (for HK$6M) three of which he later sold making over 60% profit and he also deposited HK$500,000 to a bank designated by the Macanese government.  He obtained his Macau ID card after 7 years.  The residential unit he held on to was worth HK$5M in 2014 and is now worth HK$10M which he uses as residence.  He also got back his HK$500,000 deposit.  He also has one residential unit in Guangzhou which has been transferred to his son’s name.  He purchased it in 1994-5 for around RMB5M.

43.  Defendant worked in financial field in Macau; that means he worked in insurance, funds, real estate investment agency and family trust.  He started it in 1998.  In 2013, defendant came to set up three companies in Hong Kong, namely Rich World Financial Group Co Ltd (for real estate investment agency), Rich King (for financial products), and Global Financial.  Because of problems in the market, defendant did not start the businesses in Rich World and Global Financial.  In 2014, he was a self-employed boss.  He was financially sound.  He did not owe any debts.

44.  In 2014, defendant had 3 accounts in HSBC including a personal Premier and a personal Advance accounts.  Premier account was opened later than Advance account.

45.  Defendant’s wife also had bank account in Hong Kong.

46.  Defendant constantly travelled to and from Hong Kong because he needed to accompany clients there to sign insurance policies.

47.  When clients paid for insurance policies, they could pay by credit card in the first year; in subsequent years, defendant would pay on their behalf to be reimbursed later by the clients.  Clients paid the defendant either by cash or transfer made into his personal account. Defendant would go to the counter at HSBC to make direct transfer to insurance company; that explains why some monies were remitted to his HSBC account(s). He was acting as a self-employed broker for insurance company and would receive commission when policies were signed.

48.  Defendant went through the banking documents attached to the two banker’s affirmations and gave explanations where appropriate.  In particular when commenting on the deposit into his company account on 24 October 2014 of USD422,075.61, defendant said that it was repayment of loan from Luo Ling.  On the next day, he transferred USD410,000 into his personal account leaving the balance of USD12,075.61 in his company account which was never touched.  His accounts were frozen on 20.11.2014; but he only found this out in middle to end of January 2015.

49.  Referring to a deposit of $470,007.50 into his personal account on 18.3.2014, defendant said it probably came from a remittance agency because payment by Mainland clients could not go to Hong Kong directly but had to go through a remittance agency.

50.  Defendant produced a number of copy bank vouchers as defence exhibits D1 to D11 as supporting evidence of bank deposits and transfers.  In particular, on at least one of these vouchers, the account number of AXA (Insurance) was shown to be 499-000966-006.

51.  In relation to the USD410,000 that went into his personal account on 25.10.2014, that was from his company (Rich World) account.  That amount was never touched by him.  On the same day, there were 3 sums that went out from his HKD personal account totaling $263,333.34 (D11 vouchers refer).  They went to AXA account for insurance premium payments.

52.  About the USD420,000 odd that went into his company account, it came from Luo Ling; it was repayment of a loan.  Defendant did not know it came from a company in Dubai.

53.  Luo Ling was a Mainlander, born in the 70s, a few years younger than defendant.  He came to know her in 1995.  Both worked in Sunrider.  Defendant was at a very senior level.  Luo was a salesperson.  In 1995, defendant organized a leader training meeting in Guangzhou.  Defendant was her senior by many generations.  They were together working at Sunrider for 5 years.  She took care of Shenzhen market whereas defendant the whole country.  Defendant left Sunrider in 2000.  Luo was very capable very fast when doing business.  They put up funds together to speculate in Shenzhen unfinished properties when in Sunrider.  Each of them made profit of RMB2M.

54.  After he left Sunrider in 2000, they lost touch.  Later, they met when joining club activities in 2012 at yacht club in Mei Sha (later changed to Dai Mei Wan), Shenzhen.  By this time, Luo was the agent for beauty and skin care products and she set up a company by herself. She was doing very well, very rich and owned a private club herself.  Luo invited him to go to her club to talk about the changes during those 12 years. He came to know she had become a boss with a lot of clients and resources. They exchanged contacts.

55.  Thereafter, defendant helped her arrange training in her business on 5 occasions on a voluntary basis.

56.  In early 2013, Luo asked him to visit her club. She told him there was a good investment programme called EURO FX.  She said she made a lot in investment and asked the defendant to make investment too. She said the programme involved high frequency remittance transactions in the UK.  At that time, defendant was busy with his business so he declined.  She told defendant she had invested RMB3M already.  In mid-November 2013, she asked defendant to meet again at her club.  He did and she told her she had made big profit from the programme.  She said including those made in marketing and daily profit, the profit was almost up to RMB5M.  she asked defendant to invest.  After returning home, defendant transferred RMB1.19M through 3 transactions from his Agricultural Bank account to her account at the same bank by online banking.

57.  On the first day of 2014, Luo told him to go over there again.  She told him EURO FX was promoting a premier account which could earn profit 50-100% higher.  Defendant declined to take out any more money.  Luo said she would go ahead and take out RMB2-3M.  She asked him to lend her the money which he did.

58.  Altogether defendant lent her RMB2.884M (including some amounts required for her payment for goods to someone) in total by way of transfer with the black gold card of the Agricultural Bank through 6 transactions beginning on 7.1.2014 and ending on 1.3.2014.  The goods was some skin care products of European and US brands of which she was the main agent. Defendant insisted to her that the exchange rate should be 6.8 rather than 7. So Luo should owe him USD424,117.65.  Luo repaid him in USD ie the USD422,000 odd deposited into his company account.  Luo informed him by phone about this after repayment was made.  Defendant asked Luo to repay in USD because RMB would be devalued.  Defendant trusted she would repay.  Defendant had on other occasions lent and even given her smaller sums (with supporting documents produced as D12-D13).  Luo’s copy ID card and passport and correspondence address proof were produced as D14.

59.  After defendant found out his accounts had been frozen, he managed to contact Luo by phone.  Luo said there should not be any problem with the repayment amount.  Defendant therefore on his own initiative went to police stations 3 times to make enquiries.

60.  Defendant insisted that he made lies in the VRIs; that he never lent his account to Luo.  He lost contact with Luo in July/August 2015.  He went to her office in Luohu, Shenzhen but it was closed. Her phone number was not in use and was cancelled.  He understood that she and EURO FX were in trouble and she had run away.

61.  D15 ie defendant’s company and personal bank account monthly statements for August 2017 was produced to show that USD422,075.61 had been withdrawn from these 2 accounts to pay back to rightful owner.  On day of first arrest, defendant signed a document from police agreeing that this money would be given back to the victim if he could be found.  He was always willing to return this money when he knew that this money did not belong to Luo Ling.  He came to know that the money did not belong to Luo when he was given a pile of documents including a statement of the victim on the way to Eastern Magistracy.

62.  Defendant’s tax-related documents were produced as D16-D18.

63.  Apart from some small credit card debts, he was not in debt to anyone.

64.  D19 was produced to show the defendant made requests to Agricultural Bank of China, Guangzhou branch, for particulars of transactions of 3 bank accounts for the two years 2013-2014.  The resulting document consisting of a notarial certificate and transaction statements of 2 bank accounts only of the 3 requested accounts is sought to be produced but was met with an objection from the prosecution.  So it was produced as MFI-1 meanwhile and some questions were asked of the defendant on a de bene esse basis.

65.  For the EURO FX investment of RMB1.19M (USD170,000) that the defendant himself made, it was never repaid by Luo.

66.  Defendant did not have reason to doubt the USD422,000 odd deposited into his company account did not belong to Luo.

67.  Under cross-examination, defendant admitted that the only reason he could remember the individual amounts with dates making up the total sum he lent to Luo Ling ie RMB2.884M was he had read the bank statement forming part of MFI-1.

68.  Defendant has no idea if Luo Ling ran a business in US.

69.  Defendant’s net worth was more than $10M.  His two properties in Macau and Guangzhou were worth more than $10M in 2014. Although he did not have much cash in the bank, his wife had.  He earned the money he lent to Luo.

70.  Defendant had made investment in automobile in Shanghai with a Chairman Tang and made a profit of about 10M.  Tang made payment to him in cash and in transfer.  Part of it was made to his Agricultural Bank account to the tune of 5 or 6M in 2013-4.

71.  When asked to point it out in MFI-1, defendant looked at it and said it only showed outgoing sums not incoming ones.

72.  Defendant made profit from 3 Macau properties too.  Defendant disagreed that the loan of RMB2.884M was a big sum in terms of business dealings.  No contract was signed for easing the cash flow problems with friends.

73.  Luo did not give him receipt for she was in Shenzhen and he in Guangzhou and the transactions were done online. To the defendant, as long as there were records kept in the bank, that would be fine.

74.  EURO FX’s account could no longer be opened and the defendant did not have monthly statement.  No one from EURO FX could be contacted.

75.  As far as the defendant understood, Luo had business in Hong Kong.

76.  The defendant disagreed that he must have reason to believe USD420,000 odd was not legitimate and highly suspicious.

77.  The defendant disagreed that he was telling the truth in the 2 VRIs.

78.  The defendant disagreed that the story he told about Luo Ling (Luo Chiu Mei) especially about EURO FX and payment for goods is not true.

Ruling on the admissibility of MFI-1 the Mainland transaction statements

79.  Defence prayed in aid two bases for admitting MFI-1, namely (a) section 22 of the Evidence Ordinance, Cap 8; and (b) common law under the principle in Oei Hengky Wiryo v HKSAR (No 2) [2007] 1 HKLRD 568 recited in Holding No 4 of the Headnote.

80.  After considering submissions, I rule that MFI-1 is not admissible and is therefore rejected.  The simple reason is that first, the transaction statements attached to the Notarial Certificate are not in the normal format of monthly bank statements as we understand them in Hong Kong; and secondly, that even according to the notarial certificate, the transaction statements have been specially prepared for the need of litigation; and this obviously has contravened section 22(2) of Cap 8 regarding prohibition against documents made in connexion with criminal proceedings.

81.  There is a third reason, and this is important. It transpired during cross-examination of the defendant in the general issue that the transaction statements only contained outgoing transactions and not incoming ones.  To admit the transaction statements into evidence would be wholly unfair to the prosecution who might wish to cross-examine regarding the source of funds.

82.  I therefore exclude MFI-1 from the evidence.

Considerations of the general issue

83.  I have considered the admissible evidence and the final submissions of both parties.

84.  I bear in mind the burden and standard of proof.  I bear in mind the defendant’s clear record and the double implications of that.

85.  I note the charge focuses squarely on sum of USD422,108 which was deposited (though a lesser sum after deduction of bank charges was actually received) into the defendant’s company account on 24 October 2014 and which was frozen on 20 November 2014 (the period in between was the charge period).

86.  I note that the defendant upon first arrest and caution, said “I am also a victim.”  That is of course wholly exculpatory and because of that, it is not an exception to the hearsay rule and cannot be regarded as evidence of truth.  It is, at best, evidence of reaction of the defendant on arrest.

87.  The prosecution case is unremarkable.  A large sum of USD had been deposited into the defendant’s company account from a Dubai company.  Later a complainant lodged a police report.  The defendant was arrested and investigated for money laundering.  Under caution on arrest, defendant said he was a victim too.

88.  Back at the station, defendant under caution explained that the money was deposited into his company account by Luo Ling (aka Luo Chin Mun) because, with his consent, the USD sum which was, according to Luo, a payment for goods sold by Luo was received into the defendant’s company account to avoid PRC tax; the arrangement between Luo and the defendant was that the latter upon receipt of the money would transfer the equivalent RMB amount to Luo in the Mainland.  According to the VRI, the defendant did so transfer.  According to the VRI, and this was confirmed by the bank statements, the defendant transferred USD410,000 out from the amount received to his personal account.  The prosecution says that this is money laundering because the defendant had lent a bank account to Luo for the receipt and had made movement of at least part of the sum received, having reasonable grounds to believe that the USD sum, or part thereof, directly or indirectly represented the proceeds of an indictable offence.

89.  It is of course unknown what the nature of the indictable offence was or was reasonably believed to be but it appears that the USD sum was subsequently refunded to the rightful owner pursuant to a court order.

90.  The defendant elected to give evidence and the defence case was that the version under caution was in large part a lie made up by the defendant on the spot under the urge of PW1.  The true version, according to the defendant in the witness box, was that the USD sum was a repayment of debt loaned by the defendant to Luo Ling between January and March 2014 for Luo’s use in investment and payment for goods.

91.  It is of course a fact that aside from the actual receipt of the USD sum into the defendant’s company account and the subsequent transfer one day later of the bulk of it into his personal account, neither version of the defendant, ie the VRI version or the witness box version, had any documentary proof to back it up.

92.  From the surrounding circumstances, ie the Hong Kong banker’s evidence and the defence exhibits D1 to D18, I am unable to say which of the versions is possibly true.  I am particularly struck by the shameless admission in the witness box that the VRI version was largely false and was made up by the defendant in the video interview room.  Because of this, and in spite of his clear record, I am satisfied that the defendant is a smart liar and could and will lie to his advantage whenever the occasion suits him.  Sadly, so far as it relates to the charge, I am unable to rely on his evidence or whatever he said in the VRI to any degree which is unsupported by documentary evidence.

93.  So what am I left with?  From examining the banking transactions in Hong Kong, as disclosed by the Hong Kong bank statements and the related bank vouchers exhibited by the defence, there is simply insufficient evidence to show that the defendant’s bank accounts had been used as a money laundering tool; nor is there sufficient evidence to suggest that the other monies (or their movement)  in the bank accounts not subject of the charge had any suspicion about them.  So what is left really is a large sum of USD was deposited into his company account and one day later the bulk of it was transferred into his personal account which was untouched for one month before it was locked by HSBC no doubt under instructions from police.  In August 2017, the USD sum was withdrawn from the defendant’s accounts no doubt pursuant to a court order.  It is not known what the nature of that related civil action was.

94.  In the premises, even bearing in mind the tax-related documents exhibited by the defence, I am left with a doubt as to whether, when receiving the sizeable USD sum and transferring the bulk of it into his personal account one day later, the defendant had reasonable grounds to believe that the USD sum or part thereof, directly or indirectly represented the proceeds of an indictable offence.

95.  In reaching this conclusion, I find the fact that the defendant left the entire USD sum untouched in his bank accounts for almost a month before its being locked significant.  My view is that any reasonable person who shared these limited facts or circumstances would not be bound to believe that the property was tainted.

Verdict

96.  For the above reasons, I rule that the defendant is not guilty of the offence charged.

Annex 1

Summary of the defendant’s evidence in the special issue

1.  At the time of arrest, defendant was aged 50, a person of clear record, never been in trouble with the police.

2.  On day of arrest, defendant arrived from Macau to Hong Kong after 9 am, the immigration red light was on.  He was detained. At around 3:20 pm, PW1 came and confirmed his name and his company name.  Then PW1 confirmed if his company had received a sum of $420,000 odd USD.  Defendant said it was a repayment from a friend.  PW1 said defendant had committed the crime of money laundering and PW1 needed to arrest him.  Then PW1 produced a card and said he was such and such and said defendant had to follow him back to the police station; that defendant had to be cooperative or PW1 would shoot him with a gun to death.  Defendant then said he himself was a victim.  PW1 then said, “Look at your fucking face, you should be cheated by someone.  No problem.  We the police in Hong Kong are very good.  We will help you if you are victim.”  Defendant was told to follow them back to the station.  He did not see PW1 write in a notebook.  PW1 never read to him anything from a notebook.  On the way to police station, PW1 said to defendant, “You said the sum of money was repayment from Luo Ling.  Can you show me the IOU?”  Defendant said no.  When asked if he had a lawyer, defendant said no.  PW1 asked defendant to cooperate later and that PW1 will help him.  PW1 said back at the station, he will conduct a VRI with the defendant.  PW1 instructed defendant to say no if latter was asked if he required a lawyer, because PW1 said hiring a lawyer was complicated and expensive.  PW1 said his case was very simple and PW1 would get it done for him; that the defendant had to be cooperative.  PW1’s demeanour was quite good.  Defendant was dazed and thought he was wrong and believed PW1.

3.  Before first VRI, some young officers came to see him.  Defendant said to four officers (unsure if PW1 was there) he was very hungry; that he set off at 7 am and did not have any food up till then.  The younger officers replied that they had not had any food either.  Defendant would usually have low blood sugar level if hungry.  Defendant had not had breakfast or anything to eat after waking up.  He was not allowed to eat; he had no chance to eat.

4.  Defendant would feel palpitation and nervous and he could not concentrate as a result of low blood sugar level.

5.  PW1 never offered food or water.  Defendant did not use washroom before the first VRI.  Before the interview, PW1 said to him the interview would start soon and he has to remember what PW1 had coached him which was he should say he did not need a lawyer, that he should relax and be natural.  Before the machine started, he was told to do some practice.

6.  Defendant said that apart from stating under initial caution that he was also a victim, he also said the sum of money was repayment from Luo Ling.

7.  Defendant was in fact not willing to take part in the 1^st VRI.

8.  Because PW1 said he would otherwise be guilty, that was why he made up a story in the 1^st VRI about Luo Ling being a casual friend met from insurance and real estate.  In fact, Luo Ling was his old friend of over 20 years’ standing whom he first met in 1995.  Answer 138: “She asked me if I had a Hong Kong account” was made up by defendant.  Answer 140: “She asked me before 2012” was made up by him.  Answer 150: “She said that if I had one, it would be more convenient for her to accept overseas payments for goods when doing business” was made up by the defendant.  Answer 154: “At the beginning, I didn’t lend it to her” was made up by defendant.  Answers 156-158: “Later, she beseeched me, saying that the sum of money was relatively hefty.  Er, I said, “You can deposit it into the mainland; why do you have to do it in Hong Kong?”  She said, “If it is deposited into Hong Kong, tax can be avoided”” was made up be defendant.  Defendant made up the story of subsequently lending the account to her.  Answer 166: “I lent it to her.  Then she said when the money would be transferred, er, there to me, and asked me whether I could exchange it to RMB for her on mainland, had any RMB to exchange for her.  I said, “Yes, I can.  If you credit it to my account number and I confirm it has been credited, I can exchange to RMB for you”” was made by defendant.

9.  Answer 182: “After she had deposited money to me, HSBC informed me, and later asked me to further provide those, which were the company with purchase contract(s); only then would HSBC be willing to credit the money.  I later informed her.  I said, “HSBC said that it would be fine only when you give me the purchase contract(s), something like that and I give it to HSBC.”  Later she send it to me” was made up by defendant. Defendant did not receive the purchase contract and the answer about receiving it and forwarding it to HSBC was not the truth.  Answer 190: “Ah, our Agricultural Bank exchanged around, equivalent to the exchange rate at that time, that is, in RMB the value transferred to her was roughly RMB2.5M or so” was made up by defendant.  Answers 239-242 to the effect that Rich World Financial Group had business dealings was incorrect because the company wasn’t in operation.

10.  After the interview, defendant had food at around 8 pm when he was with the guarding officer.

11.  Next day, he had breakfast and lunch while in police custody.

12.  Before the 2^nd VRI, PW1 asked him to add information in a simple way to explain how and why Luo Ling had money in order to make people believe he lent account to her.  PW1 also instructed him to say he did not need a lawyer.

13.  Regarding bail, on the journey from ferry terminal to police station, defendant was asked if he had money to which the defendant replied he had it in the bank card.  Defendant was told that that was no good so he was asked to get his family to bring money to the police station.  So at about 8 pm on day of arrest, defendant’s brother-in-law came to the police station on the instruction of defendant’s wife with about $50,000. However, bail was only granted at $300,000 so defendant was not allowed to go and he was kept in custody overnight.

14.  Contrary to what was recorded in the 2^nd VRI, defendant was in fact not willing to take part in the interview.  The reason why he took part was he was told to cooperate.

15.  Answers 39-40 to the effect that he first met Luo Ling in Shenzhen Yacht Club was not true although they did meet there sometime later.  Contrary to what was recorded, he had not in fact lent her his account.  Answer 48 to the effect that she engaged in skincare and beauty products, that was the truth.  Answers 51-52 to the effect that according to Luo Ling, the money to be deposited into his account was payment for her own goods was made up by defendant.  However, she was in fact rich as was recorded in the VRI.  Answer 90: “She also bets on horse races” was made up by defendant.

16.  To the extent that answer 102 provided another name of Luo Ling viz LAW Chin-mun, the correct transliteration should be Luo Chiu Mui – it is the ID card name of Luo Ling.

17.  After the 2^nd VRI, defendant was released on police bail and he reported once a month until 24 January 2018 when bail was stopped.  He was re-arrested on 8 January 2019 by officer of Tung Chung Police.  PW1 was not present.

18.  On 9 January 2019, there was another VRI in which PW1 and another officer were present.

19.  Prior to the interview, PW1 told the defendant that he would be brought to court on the following day; that they had to get this case done; that they were going to conduct the last VRI with the defendant; that he did not need to answer anything; that whenever he was asked a question, he would just refuse to answer.  PW1 coached the defendant to the effect that after PW1 has asked him several question, defendant was to say he refuses to answer so that the VRI could be concluded quickly.  Defendant did accordingly because he believed PW1 all along and he thought PW1 would help him.

20.  Under cross-examination, defendant agreed that he knew he could have access to a lawyer.

21.  Defendant did not ask for food while waiting at the immigration for 6-7 hours.  Reason was that he thought he might be released very quickly.

22.  PW1 asked for food from PW1 once he sat down in Central Police Station.  He felt cold and hungry and trembled because the aircon was set at low temperature

23.  The young officers replied that they had not had food either.

24.  Defendant was educated to university level and could read and write very well and could understand the Notice to Persons in custody.  First defendant said that there was no mention of food in the Notice to Persons in custody but when reminded about para 7 thereof, he said he did make request after reading this notice.

25.  Defendant agreed that it was his own decision to make up a lot of answers in the interview because PW1 said he the defendant had to put his story in a simple way.

26.  Defendant agreed that deciding not to tell the truth and to tell lies is the simple way.  The reason is that defendant thought telling the truth would lead him to be guilty and to be in serious trouble.

27.  Defendant agreed that he had no problem making up the story because he was fully alert.

28.  Defendant had mobile phone with him when at the immigration zone.  He could make calls to and communicate with anyone.  In fact he did inform his family he got some problem.

29.  PW1 did not teach him the story he only told the defendant to put it in a simple way.  It was the defendant who made up the whole story.

30.  At first, when defendant told PW1 that he first met Luo Ling in 1995, PW1 said there is no need to go back that far; so in a simple way defendant said his relationship with Luo Ling started at the yacht club.

31.  Defendant made up the story about the money in the company account was payment for goods received on behalf of Luo Ling.  PW1 “guided” him to think that way and to say so.

32.  Defendant agreed that the notices to person in custody were understood and voluntarily signed.

33.  When it was suggested that he was ordered by a court to pay back USD422,108 (HCMP 801/2017 order dated 31.5.2017) to Metal Win (HK) Co Ltd which was previously transferred from Standard Chartered Bank Dubai on or about 22.10.2014 by SWIFT, defendant said that he decided to pay after the officer asked if he was willing to make refund; and he was asked to sign something which he signed before the money was refunded.  He was told that after refund had been made, the matter would be over.

34.  In re-examination, defendant said he was willing to pay back as early as 9 May 2017, the date of arrest.

35.  When his accounts were frozen on 20.11.2014, he was not aware of it.  Later when he went to the bank to make enquiries, he was told so.

36.  Up to this day, the accounts were still frozen.

Annex 2

Reasons for Ruling in the Records of Interview and the related Notices to Persons in custody

1.  It is a matter of credibility of the witnesses. Even taking into account the defendant’s clear record, I do not believe him in matters running through the voluntariness of the two VRIs.

2.  Defendant was a mature, educated and successful business man.  I found it impossible that he could just stay hungry while being detained by immigration for 6-7 hours without making a request for food.  I found it impossible he could have put up with a police threat that he be shot with a gun while still under the custody of immigration.  He knew he could have access to a lawyer and he had his mobile phone with him.  I found it impossible that he would give up the rights to call for a lawyer just because PW1 asked him not to.  In chief, defendant never said he had asked for food from PW1; only under cross-examination did he say so.  I carefully looked at his composure in the two VRIs especially the first one; he did not look cold, trembled, or downtrodden.  He appeared free to say whatever he wanted.  Indeed, he had the boldness to say that he made up the majority of answers in the two VRIs.  It took somebody with a degree of intelligence and alertness to be able to do so without a realistic time for rehearsal.  If he did lie as he claimed, then he would be a smart liar.  I cannot regard him as a credible witness in the special issue.

3.  PW1 on the other hand gave his account of the course of arrest and the subsequent investigation procedure in a matter-of-fact manner without exaggeration or attempts to hide anything.  I believe him.  In particular, I found that he was truthful when he said he did not deal with the case and was not involved in it after he was transferred. That was why he could not recall he was physically present in the 3^rd VRI only as an assistant to a new CID colleague.  I found nothing sinister in PW1 not writing the details of the allegations in his notebook nor allowing the defendant to read and sign it.  Neither could I see anything significant in the officer’s failure to make a record of asking the defendant if he needed food/water or his having used the toilet.  I accept his evidence in the special issue.

Annex 3

Summary of the two VRIs

1^st VRI

1.  Defendant re-iterated that he was also a victim.  He set up Rich World Financial Group Co Ltd in 2012 or 2013 and it mainly acted as a real estate and insurance agency.  He had an ordinary friend, a female called Luo Ling, who was also in the field of insurance and real estate whom he has known for 10 odd years.  Sometime before 2012 (sic), she called the defendant from the Mainland asking if he had a Hong Kong company account.  This was at a time when Rich World had already been set up.  She said it would be more convenient for her to accept overseas payments for her goods when doing business.  He did not lend the account to her in the beginning.  She besought him saying that the sum was relatively hefty and that routing it through Hong Kong could avoid tax.  Then he lent it to her without charging her.  The arrangement was that after he received the sum he would exchange it into RMB for her.  Later HSBC informed him that a sum of USD420,000 had been credited but also asked him to provide purchase contract(s) before they could complete the receipt.  Defendant relayed the message to Luo who later sent it to him.  Defendant then forwarded it to HSBC and the transfer was confirmed complete when defendant paid a visit to HSBC.  Defendant then transferred RMB2.5M or so from his personal account at Agricultural Bank to Luo’s personal account at China Merchants Bank on the Mainland.  He treated the USD as his; that was why he transferred USD410,000 of it from his company account to his personal account so he may use the USD for payment of insurance premiums for clients after receiving RMB from them.  When he tried to use it one or two months later, he was informed by HSBC that it could not be used.  HSBC referred him to the police.  He contacted Luo but could not reach her because the phone was no longer in use.

2^nd VRI

2.  Defendant first met Luo Ling at the Shenzhen Yacht Club.  She besought him several times for using his company account.  She was in the business of skincare and beauty products.  She is very rich.  He told her the money could be deposited into his account as long as it was legit. He knew she was rich because she owned companies, houses and many chain beauty parlours in Shenzhen.  He had been to her office in Luohu.  She bet on horse races.  He thought the money was legit.  He said to her that it had to be her own money and legit payment for goods.  Her other name is Luo Chin-mun (transliteration).