HKSAR v. CHEN YISHAN

DCCC 456/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 456 OF 2014

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Reasons for Sentence

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1.  Defendant, you have pleaded guilty to one charge of money laundering, 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 you between 28 March 2013 and 22 April, the same year, knowing or having reasonable grounds to believe that the property, namely a total of US$199,147 in a bank account of Bank of East Asia held in the name of Speedy Prosperity Holdings Limited, in whole and or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property.

3.  The facts are as follows.  A fraud was committed by way of an email scam.  What happened was the victim who is a diamond merchant in India had a customer in France.  They had been doing business together for over 20 years.  Normally, the French customer would pay for the diamonds purchased by way of remittances to a bank account in India.

4.  On 23 and 27 February 2013, the victim issued two invoices to their French customer for US$333,038.95 and US$32,214.

5.  On 25 March somebody hacked into the French customer’s email account and sent an email to the French customer purporting to be the victim, instructing them to deposit payments for the two invoices into a bank account in the Bank of East Asia in Hong Kong under the name of Speedy Prosperity Holdings Limited. 

6.  As requested, the customer, the French customer made two payments; one for $167,038.95 and one of $32,214.  Payments were made on 27 March and 9 April 2013 respectively.  Collectively, the loss suffered was just over HK$1.55 million.  Not long after the fraud was discovered and a report was made to the Hong Kong Police.

7.  The police investigated the matter and uncovered the fact that the account for Speedy was opened in June 2012.  And although there were two directors of this company, that you, the defendant, was the sole authorised signatory where this bank account was concerned. 

8.  The first payment made by the French customer was withdrawn entirely by you, the defendant by way of four cheques on 2 and 3 April 2013.  The second payment in by the French customer was withdrawn by you in cash on 22 April 2013.  This Speedy account was closed less than one month later. 

9.  From the transactions in that account, it was clear that the account was not used by any legitimate business or trade.  Your identity was revealed by the bank records and you were ultimately arrested at the border on 15 January 2014. 

10.  Under caution in a video-recorded interview, you made a full confession.  You told the police that you were under the impression that the money was deposited by a Nigerian male called Sam and you withdrew it on his behalf.  For each withdrawal, you would receive 2.5 per cent of the amount withdrawn as a reward.  You told the police you had no idea of the source of the two remittances, nor did you know of the victim or the French customer. 

11.  The prosecution do not seek to say you had knowledge of the predicate offence but that you had reasonable grounds to believe the property was proceeds of an indictable offence. 

12.  Your best mitigation is your plea today.  I have heard full mitigation put forward on your behalf. 

13.  You have a clear record in Hong Kong, and I have been told that you have a clear record in mainland China where you are a resident.

14.  You are 42 years old, married, with a young son.  Your wife cannot work because she has to care for not only your young son but your elderly parents.  Your father in particular is very unwell and requires assistance in daily life.  You are the main breadwinner of the family; you were earning $8,000 a month.

15.  Your employer has written a mitigation letter on your behalf, describing you as an outstanding employee.  I have received letters from your entire family.  They are in court today to support you; all ask for leniency on your behalf.  They describe you committing this offence as acting out of character.  You have been described as a good son, father and husband. 

16.  Money laundering is a serious offence that does attract an immediate custodial sentence.  This is because money laundering is an attempt to legitimise proceeds of criminal activity.  The fact that you did not know of the nature of the predicate offence does not make it any less serious where you are concerned.  If you knew, it would be an aggravating factor.  There are no guidelines for sentences for this type of offence.

17.  Relevant factors exist to be considered such as the amount of loss involved, whether the offences are transnational, what role you played and benefit you received.  Here, those factors exist and have been taken into account. 

18.  I have been given the often referred to authorities of HKSAR v Hsu Yu Yi CACC159/2009 as well as HKSAR v A male known as Boma Amaso CACC335/2010.  The Boma authority identifies relevant factors for sentencing, and Mr Davies has highlighted what is relevant to you.  The Hsu Yu Yi authority is one where the Court of Appeal goes through numerous similar cases and their facts and sentences imposed, but ultimately reiterates that there are no sentencing guidelines. 

19.  Mr Davies has taken me to another authority, HKSAR v Lung Yun Ngan and another CACC482/2010 to highlight where a defendant’s role may not be the most important or serious where the money laundering or predicate offence is concerned, the court may exercise some leniency in what is inevitably a custodial sentence. 

20.  Here I accept that the amount is relevant.  The number of transactions and the period of time over which the offence took place is not many or long.  I also take into account that you have a clear record and there is no evidence you knew of or were involved in the predicate offence. Your reward was not significant, according to you.  I suspect you acted out of greed and a desire to make some quick and easy money.  You must have suspected the money was tainted but did not ask and turned a blind eye. 

21.  I accept that you co-operated with the police when you were arrested and I will take into account your family’s insistence that you are a good man who acted foolishly and greedily. 

22.  Defendant, please stand up.  After considering all of those factors, be they relevant to the offence and mitigation, I will take a starting point of 3 years’ imprisonment for this offence.  You have pleaded guilty and you are entitled to a discount of one-third.  Therefore, for this offence, you are sentenced to 2 years’ imprisonment.  Do you understand that sentence?

DEFENDANT: Understood.