HKSAR v SZE MEI MUN and others

DCCC 3/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 3 OF 2011

--------------------

--------------------

---------------------

Reasons for Sentence

---------------------

1.  You five have each been convicted after trial of conspiracy to export unmanifested cargo, contrary to section 18(1)(b) of the Import and Export Ordinance, Cap 60, and section 159A of the Crimes Ordinance, Cap 200, Laws of Hong Kong - that is Charge 1 - and consequential charges 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, Laws of Hong Kong.  They are Charges 2 and 6 against D1 and D2, Charges 3 and 7 against you, D3, Charge 5 against you, D4, and Charge 4 against you, D5.

2.  The unmanifested cargo involved marked oil which was collected by fishing boats mastered by the four PRC captains, on the instructions of Cheng Kam-shui from the mainland and picked up from predominantly three oil barges at Pak Shek Kok, which were operated by the Chi Shing group of companies and smuggled back into the PRC. 

3.  You embarked upon an elaborate system of fraud in an attempt to dupe the authorities into believing that what you were doing was quite legitimate and were it not for the diligence of officers from the Customs & Excise Department, you could have got away with it.  As a consequence, a quite breathtaking sum of over HK$2.6 billion was paid into the CSDL account over a short period of just eight months, a company in which you, D2, and you, D3, were the sole directors and you, D1, a co-signatory of the company accounts with your husband D2.

4.  You five entered into this conspiratorial agreement with others mentioned in the charge, which led to massive deposits being made into the CSDL account over the prosecution period.  In addition to the HK$2.6 billion paid into the CSDL account which you, D1 and D2, controlled, the sum of RMB 7,141,300 and HK$9,817,800 were found in your premises at Bel‑Air. This is the subject of Charge 6. 

5.  With regard to you, D3, a sum of nearly $118 million was paid into your account over the prosecution period, the vast majority of which was transferred out of your account to the CSDL account, indicating that you had received these funds on behalf of CSDL.  This relates to Charge 3.  In addition to this, with regard to Charge 7, a sum of over HK$600,000 was found in a briefcase in the Mei Fung Court premises, which you admitted belonged to you.  I have found that you were well aware that this money was the proceeds of the smuggling activities. 

6.  With regard to you, D4, you are the son of D3 and an employee of CSDL, taking on clerical rather than administrative duties in the company.  As such, whilst I am satisfied that you were clearly an active player in the conspiratorial agreement, as is evidenced by the Excel files extracted from your computer, I am also satisfied that, to a large degree, you were spurred on into joining this conspiratorial agreement under the influence and instructions of your father, D3.  You were the one who made the most deposits to the CSDL account at HSBC, nearly $104 million on 100 occasions.  This of course is the subject of Charge 5.

7.  You, D5, I find played an important role in this conspiracy because you are the wife, albeit estranged, of Cheng Kam-shui, who was one of the ringleaders of this criminal enterprise, and provided a link between CSDL in Hong Kong and those operating on the mainland. There is evidence, which I have accepted, that you provided food to the captains of the fishing vessels before they embarked on their journey from Ngau Tau on the mainland to Pak Shek Kok and you also deposited some $46 million into the CSDL account after having received a similar sum from RAMCs over the prosecution period into your own account.  This of course is the subject of Charge 4.

8.  There is before me an application from the prosecution that I should enhance sentences of imprisonment that I propose to pass on you five defendants, D1 to D5, pursuant to section 27(11) of the Organised and Serious Crimes Ordinance, Cap 455.  Whilst both conspiracy to export unmanifested cargo and money-laundering are schedule 1 offences of OSCO and therefore specified offences, I am not satisfied to the required standard, that is beyond reasonable doubt, that the evidence adduced at the trial was sufficient to establish that either or both of these offences were organised crime as defined by section 2(1) of OSCO and I therefore refuse to accede to this request.

9.  I may say that even in the event that I were to have been so satisfied, I do not consider there to be any need for the imposition of any sentence beyond that which would come within the normal range of sentences for similar criminal activity, taking into account the particular facts of the case.

10.  However, having said that, there are two aggravating features in this case which I will take into account in coming to my sentences.  They are the fact that there was indeed an element of sophistication in the execution of this conspiracy and, secondly, there is clearly an international element involved as the marked oil, in very substantial quantities, was being smuggled into the mainland from Hong Kong and therefore quite capable of having a destabilising effect on the good commercial ties between Hong Kong and the mainland.

11.  In sentencing each of you, I take into account all that has been said on your behalves by your respective counsel. 

12.  In respect of D1, D2, D3 and D5, on Charge 1, I adopt a starting point of 5 years’ imprisonment.  I will increase that sentence by 12 months to reflect the aggravating features that I have identified, coming to 6 years’ imprisonment on Charge 1. 

13.  In relation to D1 and D2, you will each be sentenced to 5 years’ imprisonment on Charges 2 and 6 which I order to run concurrently with each other and concurrently to Charge 1, arriving at 6 years’ imprisonment in all in respect of each of you.

14.  In relation to D3, you are sentenced to 5 years’ imprisonment in respect of Charges 3 and 7, to run concurrently with each other and concurrently to Charge 1, arriving at 6 years’ imprisonment.

15.  In relation to you, D5, you will be sentenced to 5 years’ imprisonment in relation to Charge 4 to run concurrently with Charge 1, arriving at 6 years’ imprisonment in relation to you.

16.  In relation to you, D4, to reflect the fact that you played a lesser role in this conspiracy and, as I have found, to some extent were acting on the instructions of your father, the 3rd accused, I propose to take a lower starting point in relation to Charge 1 of 3½ years’ imprisonment.  This will be increased by 12 months to reflect the aggravating features that I have already identified, coming to 4½ years’ imprisonment in relation to Charge 1. 

17.  However, in your case, I am concerned that as a result of your imprisonment, this will have a serious impact on your immediate family.  Your wife will now need to go out to work to help support not only herself and her 5-year-old son, but also her parents as well, as I have received a letter from Tai Po Hospital which confirms that your father-in-law has indeed recently become seriously ill, is bedridden and needs assistance from other people in relation to his daily activities. 

18.  Accordingly, I am prepared to discount the sentence of 4½ years’ imprisonment on Charge 1 by 6 months to reflect this fact, arriving at a sentence of 4 years’ imprisonment on Charge 1.

19.  In relation to charge 5, I adopt a starting point of 4 years’ imprisonment which will be similarly discounted by 6 months for similar reasons, arriving at 3½ years’ imprisonment on Charge 5, which I order to run concurrently to the sentence on Charge 1, arriving at an overall sentence of 4 years’ imprisonment.

20.  In addition to these orders, I disqualify D2 and D3 from being a director of a company for a period of 5 years pursuant to section 168E of the Companies Ordinance.