HKSAR v. SHAMSUDEEN SYED AHMED

DCCC 947/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 947 OF 2013

____________

REASONS FOR VERDICT

1. The defendant pleads not guilty to six charges of dealing with property knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1].

Introduction

2. In April 2011 Mr Owen John Shaw received a cold-call at his home in Australia asking him to invest in gold options through a German company called Weissmuller & Sons.  Believing this to be a genuine investment Mr Shaw agreed to purchase US$200,000 worth of gold options. 

3. Mr Shaw was instructed to remit the monies to the bank account of Golden Touch Trading Company (“Golden Touch”), held with the DBS Bank (Hong Kong) Ltd.  Mr Shaw remitted the sums of US$20,000, US$170,000[2]and US$10,000 on 13, 15 & 18 April 2011.  Later the same month Mr Shaw agreed to purchase a further US$300,000 worth of silver options and was again instructed to remit the monies to the bank account of Golden Touch, which he did on 29 April 2011.   

4. The remittances were credited to the Hong Kong dollar and the US dollar accounts of Golden Touch, held with the DBS Bank (Hong Kong) Limited (“the Golden Touch DBS accounts”). 

5. On 13 and 19 April 2011, after deduction of bank charges, the remittances of US$20,000 and US$10,000 were converted into Hong Kong dollars and credited to the Hong Kong dollar account.  On 15 and 29 April 2011 the remittances of US$170,000 and US$300,000, less banking charges, were credited to the US dollar account and then transferred to the bank account of Yauni Exports, held with the Bank of China (“the Yauni Exports account”).

6. Golden Touch was a sole proprietorship set up by the defendant in January 2011.  In the same month the defendant opened the Golden Touch DBS accounts[3] and was the sole authorized signatory of the accounts.  The four remittances to the Golden Touch DBS accounts form the basis of the first four charges. 

7. Yauni Exports was also a sole proprietorship which was set up by the defendant in June 2010.  In the same month the defendant opened the Yauni Exports account and was the sole authorized signatory of the account.  The transfers to Yauni Exports on the 15 and 29 April form the basis of the fifth and sixth charges. 

Prosecution case

8. In summary the prosecution case is that Mr Shaw was deceived into remitting the monies to the Golden Touch DBS accounts.  The prosecution say the four sums credited to the Golden Touch DBS accounts, part of which was transferred to Yauni Exports, are the proceeds of an indictable offence and that the defendant dealt with the monies, having reasonable grounds to believe the monies, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence.

Defence case

9. In summary the defence case is that the defendant believed the monies credited to the Golden Touch DBS accounts were payment for the sale of two diamonds.  The diamonds were given to the defendant by his father on the occasion of his wedding in December 2004.  In late 2010 the defendant decided to sell the diamonds to fund his business in Hong Kong.  In early 2011, through an acquaintance called Jailani, a buyer was found in Malaysia, who agreed to buy the diamonds for US$500,000.  After full payment was made the defendant delivered the diamonds to Jailani.

Evidence

10. Most of the prosecution case has been admitted,[4] pursuant to section 65C of the Criminal Procedure Ordinance[5], including that the monies were remitted by Mr Shaw; the business registration and banking records of Golden Touch and Yauni Exports; and flow charts of the bank accounts.  I will refer to the admitted evidence as I review the evidence. 

11. The evidence of Mr Shaw and his wife has been read pursuant to section 65B of the Criminal Procedure Ordinance[6]. Also read was the evidence of Mohamed S.L. Mohamed Noohu[7], relating to the address of Yauni Exports. 

12. The prosecution called one witness, Ms Fung Pui Pui,[8] an assessor of the Inland Revenue Department, who testified that the defendant did not file any individual tax returns between 1 April 2010 and the 5 June 2013.  Ms Fung explained individual tax returns should include all sole-proprietorship businesses.  No individual tax returns having been filed by the defendant Ms Fung confirmed there was also no tax returns filed on behalf of Golden Touch and Yauni Exports.

13. The defence objected to this evidence being called on the basis that the evidence was not probative of any issue to be determined by the court and that the failure to file tax returns being an offence, the evidence was more prejudicial than probative. 

14. I was satisfied that the failure to file tax returns was relevant to both whether Golden Touch and Yauni Exports had any business activity and whether the defendant had reasonable grounds to believe the monies credited to the Golden Touch DBS accounts represented the proceeds of an indictable offence.  I was further satisfied that any prejudicial effect by reason of the fact that the failure to file tax returns is an offence did not outweigh the probative value of this evidence.  I was satisfied that there was nothing unfair in admitting this evidence.  I therefore overruled the objection. 

15. Also admitted in evidence is a video interview[9], the voluntariness and accuracy of which has been admitted[10].  In reaching my verdict I have considered the interview, both the inculpatory and exculpatory parts, in accordance with the principles in R v Sharp[11]. A documentary exhibits bundle was prepared for trial, with a separate bundle for the video recorded interview [12].

16. The defendant elected to give evidence and called five witnesses, his father; his elder brother, his brother-in-law; his cousin and Jailani, whose evidence was taken in Kuala Lumpur, pursuant to a Letter of Request. 

17. Admitted in evidence is that the defendant has a clear record[13], as do all the defence witnesses.  I direct myself as to good character in accordance with the decision in HKSAR v Tang Siu Man[14].

18. In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  The defendant has to prove nothing.  I direct myself that I must be sure of the guilt of the defendant on each charge before I can convict, each charge to be considered separately. 

19. The main issue to determine is whether the defendant had reasonable grounds to believe the monies represented the proceeds of an indictable offence or whether the defendant believed the monies credited to the Golden Touch DBS accounts were for the payment of two diamonds.  If what the defendant says is true or may be true, it would follow that the defence has raised sufficient doubt in the case and the defendant entitled to be acquitted.

20. I remind myself that when drawing inferences from the evidence the inference must be the only reasonable inference to draw from the proved facts.  If from the facts proved there is a reasonable inference to draw against the defendant as well as one in his favour the adverse inference cannot be drawn. 

21. I have carefully considered all the evidence together with the submissions of Ms Ko and Mr Harris SC. 

Dealing with property

22. The actus reus of the offence is dealing with property.  Monies passing through a bank account are clearly property[15].

23. Dealing in relation to property is defined in section 2(1) of the Ordinance and includes, (a) receiving or acquiring the property; (b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise); and (c) disposing of or converting the property. 

24. Mr Shaw remitted the sums of US$20,000, US$170,000[16], US$10,000 and US$300,000 to the Golden Touch DBS accounts on 13, 15, 18 and 29 April 2011[17]. After deduction of bank charges the sums of US$20,000 and US$10,000 were converted into Hong Kong dollars with HK$151,285.93 and HK$75,471.70 credited to the Golden Touch DBS HK dollar current account on 13 and 19 April respectively[18].

25. After the deduction of bank charges from the remittances of US$170,000 and US$300,000 the sums of US$169,975 and US$299,965 were credited to the Golden Touch DBS US dollar current account on 15 and 29 April 2011 respectively.  On the same days the monies were then remitted to the Yauni Exports account[19].

26. The defendant was the sole proprietor of both Golden Touch and Yauni Exports and the sole signatory of the bank accounts of both companies[20]. On this evidence I am satisfied so I am sure the only inference to draw is that the defendant was aware of the four sums credited to the Golden Touch DBS accounts and that by allowing the bank account to be used to receive the remittances and thereafter transferring part of the monies to Yauni Exports, dealt with the monies. 

27. I also note in evidence the defendant admitted that he was aware of the monies credited to the Golden Touch DBS accounts and that he remitted part of the monies to Yauni Exports.  I am satisfied full weight is to be attached to the defendant’s admissions. 

Proceeds of an indictable offence

28. Although the prosecution do not have to prove the property represents the proceeds of an indictable offence, they are able to do so in this case.  In his closing submission Mr Harris SC stated in court that the defence do not challenge that the prosecution are able to prove, to the required standard, that the monies were the proceeds of crime. 

29. In the circumstances I do not propose to summarise the evidence of Mr & Mrs Shaw, as contained in their witness statements[21], save to say that I have carefully considered their evidence.  I accept the evidence of Mr Shaw and his wife.  I am satisfied so I am sure that Mr Shaw was deceived into remitting on 13, 15, 18 and 29 April 2011 the sums of US$20,000, US$170,000, US$10,000 and US$300,000 to the Golden Touch DBS accounts and that the sums credited to the Golden Touch DBS accounts are the proceeds of an indictable offence. [22]

Having reasonable grounds to believe

30. The mens rea of dealing has two parts “knowing” or “having reasonable grounds to believe”.  The prosecution proceed on the second limb only, that there existed reasonable grounds to believe the monies credited to the Golden Touch DBS accounts, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence.  

31. In HKSAR v Pang Hung Fai[23], Mr Justice Spigelman NPJ giving the judgment of the Court said[24], that the better and less complicated test was that propounded by the Appeal Committee of the Court of Final Appeal in Seng Yuet Fong v HKSAR[25], where Mr Justice Litton giving the judgment of the Court said,

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

32. In deciding whether the defendant had reasonable grounds to believe, the applicable standard is would those grounds lead to the belief and not could those grounds lead to the belief and in determining whether they would, the defendant’s belief, perception or prejudice are to be considered and given such weight as is warranted[26].

Defence evidence

Background

33. In summary the defendant testified that he was born in India in 1973 and moved to Hong Kong in 1992 to join his father[27] and elder brother[28].  The defendant is the holder of a permanent Hong Kong identity card. 

34. In December 2004 the defendant married in Malaysia and has two daughters and a son, aged 10, 8 & 4.  In 2005 the defendant moved to live in Malaysia, first in Langkawi and later in Kuala Lumpur.

35. Between 2009 and 2013 the defendant spent relatively limited time in Hong Kong.  Admitted in evidence is the movement record of the defendant for the period 1 January 2008 to 19 July 2013[29]. The defence also produced the movement record in diary form[30], highlighting in yellow the periods actually spent in Hong Kong.

36. Between 2005 and 2013 the defendant worked in Malaysia for a Malaysian company Mewah Technology Supplies & Services as a marketing assistant.  During this time the defendant also operated a number of businesses, including three in Hong Kong: Malar Trading Co; Yauni Exports and Golden Touch. 

37. The defendant was a sleeping partner in Malar Trading, which was run by his partner Mossa Sadat Syed Ahmed.  The business of Malar Trading was general trading and consumer electronics.  The address of Malar Trading was on the 9/F of Haiphong Mansion in Tsim Sha Tsui, which was also the residence of Mr Sadat.

Yauni Exports

38. On 7 June 2010 the defendant came to Hong Kong.  The next day the defendant registered[31] Yauni Exports to deal mostly in consumer electronics, mobile phones and accessories for mostly Indian customers he had made contact with while working in Malaysia. When registering the company the defendant stated the address of Yauni Exports was in Ma Wan, which was the home of the defendant’s friend, Mr Mohamed S.L. Mohamed Noohu[32].  The residential address given was the home of the defendant’s elder brother in Ho Man Tin where the defendant would usually stay when he came to Hong Kong. 

39. On 10 June the defendant opened the Yauni Exports account and was the sole signatory of the account[33]. The initial correspondence address was the Ma Wan address.  After a short trip to China the defendant returned to Hong Kong and on 22 June for convenience changed the correspondence address to the address on the 9/F of Haiphong Mansion.  After returning to Malaysia on the 26 June the defendant operated the bank account by means of internet banking.  Initially the business of Yauni Exports was okay but not very successful. 

Golden Touch

40. The defendant next came to Hong Kong on 24 January 2011.  The next day the defendant registered[34] Golden Touch, again to deal in consumer electronics, mobile phones and accessories, this time for Malaysian customers.  Golden Touch was established in order to separate the customers from the customers of Yauni Exports, who were mostly Indian.  The address on the 9/F of Haiphong Mansion was given as both the company address and the residential address of the defendant.

41. On 27 January the defendant opened the Golden Touch DBS accounts and was the sole signatory of the account[35]. After returning to Malaysia on the 30 January the defendant again operated the bank account by means of internet banking. The business of Golden Touch like Yauni Exports was initially okay but not very successful. 

The sale of the diamonds

42. The defendant testified that the sums of HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965[36] credited to the Golden Touch DBS accounts on 13, 15, 19 and 29 April 2011, were in payment for two diamonds which he sold to fund his business in Hong Kong. 

43. The diamonds together with their certificates[37] were given to the defendant by his father as a wedding gift in December 2004.  As far as the defendant could remember the day before the wedding, in the house of his wife, there was a discussion with his father about giving the diamonds as his wedding gift.  After the wedding the father gave the defendant the diamonds together with the certificates.  The defendant’s elder brother was present both when their father discussed about giving the diamonds as his wedding gift and when the father gave him the diamonds. 

44. In 2005 the defendant brought the diamonds together with the certificates to Hong Kong for safekeeping by his elder brother because he did not have anywhere to keep the diamonds safe in Malaysia.  The defendant thought the elder brother kept them in his safe at home[38].

45. The defendant experiencing cash flow problems decided to sell the diamonds to fund his business in Hong Kong.  The defendant telephoned his father in 2010 to ask him if he could sell the diamonds.  The father replied that as the diamonds belonged to the defendant he could do whatever he wanted with them.

46. With the help of his brother-in-law[39] and friends in Malaysia and Hong Kong the defendant looked for a buyer.  A friend in Malaysia, Jailani B Abdul Aziz (DW6) found a buyer for the defendant.  Jailani never told the defendant anything about the buyer. 

47. The defendant first met Jailani when living in Langkawi.  Initially their friendship was social.  Although the defendant did not regard Jailani as a friend he said he knew him very well.  The defendant thought Jailani was also doing some trading but was not quite sure of the particulars of his business. Initially Jailani enquired about some Chinese products to be imported to Malaysai but nothing worked out.  In cross-examination the defendant said he was introduced to Jailani in 2009.

48. The defendant understood Jailani to have a good reputation in the Indian community in Malaysia.  After moving to Kuala Lumpur the defendant remained in contact with Jailani.  He would see Jailani but not very often.  Contact would mostly be by telephone.  In answer to the court the defendant said Jailani lived in Kuala Lumpur.

49. After Jailani found a buyer he asked the defendant to quote him a price.  The defendant therefore telephoned his brother in Hong Kong telling him that he was selling the diamonds to a person in Malaysia and asked him to have the diamonds valued.  The defendant thought this was in early 2011.

50. Subsequently the brother called the defendant saying that their cousin[40], who was a diamond-grader and purchaser, happened to visit his home.  The brother therefore asked the cousin to value the diamonds.  The following day the cousin told the brother the diamonds were worth about US$500,000.  The defendant therefore told Jailani the price of the diamonds was US$525,000.  In cross-examination the defendant said he thinks he told Jailani in February 2011. 

51. After negotiations the defendant agreed to sell the diamonds for US$500,000.  The defendant thought this was probably the end of March 2011 but was not very sure.  The defendant agreed to pay Jailani 1% of the purchase price for helping find a buyer.

52. Jailani then asked for the bank details.  The defendant wrote down on a piece of paper the details of the Golden Touch DBS accounts, including the bank account numbers, swift codes and address of Golden Touch.  The defendant handed over the paper during a meeting in a coffee shop in Kuala Lumpur.   

53. The defendant also showed a copy of the diamond certificates to Jailani.  The defendant explained that when he handed over the diamonds to his brother he kept copies of the certificates.  Asked by Mr Harris SC if he just showed Jailani copies or gave him copies the defendant replied, “I think I gave him copies.” 

54. In cross-examination the defendant said that he thought he gave the copies to Jailani around the end of 2010 when he asked Jailani to look for a buyer for the diamonds.  The defendant also said that he thought this was before his cousin had valued the diamonds.  

Payment

55. Agreement was reached that payment would be by instalments and that delivery would be made after full payment.  The defendant became aware that the first instalment was made when Jailani rang him on 13 April 2011 to ask if he had received the sum of US$20,000.  The defendant checked the Golden Touch DBS accounts via e-banking and on seeing the HK dollar equivalent was credited to the account, confirmed receipt of the payment[41].

56. The next day, 14 April 2011, the defendant remitted the money through internet banking to World Tech Info being payment for the purchase of mobile phones[42].  The defendant said that World Tech Info belonged to Mr Sadat[43].

57. Similarly the defendant became aware of the second instalment when Jailani rang him on 15 April 2011 to ask if he had received the sum of US$170,000.  Having checked the Golden Touch DBS accounts the defendant confirmed receipt of the payment less US$25[44]. On the same day through internet banking the defendant remitted the monies to the Yauni Exports account to finance the purchasing operations of Yauni Exports [45].

58. After receipt of the second instalment the defendant told Jailani that he would be going to Hong Kong in a couple of days and that he would bring the diamonds with him when he returned to Malaysia.  The defendant arrived in Hong Kong on the 18 April 2011 and stayed until the 24 April. 

59. Whilst in Hong Kong Jailani rang to ask if the defendant had received the sum of US$10,000.  After checking the Golden Touch DBS accounts the defendant confirmed receipt of the HK dollar equivalent on the 19 April.  Two days after on 21 April the defendant remitted the monies to World Tech Info, again for the purchase of mobile phones[46].

60. The defendant returned to Malaysia taking with him the diamonds but not the original diamond certificates.  The defendant said that as he had already given Jailani copies of the certificates he did not think that it was necessary to take the originals to Malaysia. 

61. After returning to Malaysia the defendant contacted Jailani requesting payment of the balance of US$300,000.  After a couple of days Jailani called saying the balance would be received shortly.  When the defendant checked the Golden Touch DBS accounts on 29 April 2011 he became aware that US$299,965 had been credited to the account on that day and therefore confirmed receipt of the payment.  On the same day through internet banking the defendant remitted the monies to the Yauni Exports account, again in order to finance purchasing operations[47]. 

62. When checking through e-banking whether payment had been credited to the Golden Touch DBS account the defendant said that as far as he remembers he could only see the amounts on the screen and the corresponding bank but could not remember seeing the names of the remitting party, including the names Owen John Shaw and Lynne Maree Shaw. 

Delivery of the diamonds

63. On 30 April 2011 at his home in Kuala Lumpur the defendant gave Jailani the diamonds together with his 1% commission.  The defendant’s brother-in-law[48] was present because the defendant wanted someone from his family to witness the handing over of the diamonds to Jailani. 

64. In cross-examination the defendant said that he thought it was not necessary to give Jailani the original diamond certificates because he had given him copies.  Further Jailani had only asked for the original diamond certificates after the defendant delivered the diamonds.  The defendant told Jailani they were in Hong Kong and thinking that he would go to Hong Kong to collect the certificates asked Jailani to wait a little longer.  Due to pressing family issues the defendant was unable to go to Hong Kong to collect the original diamond certificates.  Afterwards Jailani asked once or twice for the original certificates but did not press the defendant for them.  In answer to the court the defendant said he did not ask his brother to post the certificates because he did not think this was safe. 

65. Afterwards, in the middle of 2011, the defendant experienced difficulty in accessing the internet banking for both the Golden Touch DBS accounts and the Yauni Exports account. The defendant telephoned both banks and was told that the accounts had been closed for administrative reasons.  After the bank accounts were closed both Golden Touch and Yauni Exports ceased operation. 

66. The defendant next returned to Hong Kong on the 14 July 2013 to visit his family; enquire about his banking affairs and to look for business opportunities.  The defendant had not returned earlier to inquire about the banking affairs because of pressing family issues; including a new born baby to look after in June 2011; all the family contracted chicken pox at the end of 2011 and the defendant had to travel to India because his father was sick. 

67. The defendant was arrested upon arrival at the airport[49].  The next day a video recorded interview was conducted[50]. The defendant was taken to court on 16 July when he was released on bail. After release on bail the defendant applied to the banks for copies of the bank statements.  On going through the bank statements the defendant realised that the charges related to the sale of the diamonds.  The defendant therefore telephoned Jailani, informing him that he had been arrested by the police. Jailani confirmed the monies related to the diamond deal and said that the purchaser was called Malek.  No other details were given about Malek by Jailani. 

68. The defendant did not file any tax returns for Golden Touch or Yauni Exports.  The defendant explained this was because there was hardly any trade and due to the family issues in Malaysia he did not give thought to filing tax returns because he was not able to go to Hong Kong.  In December 2013 the defendant filed a tax return for the year of assessment 2010/2011.  The tax return together with correspondence with the Inland Revenue has been produced as exhibits D1-D5.

69. The defendant had no idea the monies credited to the Golden Touch DBS accounts represented the proceeds of an indictable offence; did not know he was a wanted person when he returned to Hong Kong on the 14 July 2013; had done nothing criminal in the operation of the bank accounts; had no knowledge of any fraud practised on Mr & Mrs Shaw; and had not heard of or had any dealings with Mr & Mrs Shaw or with Alex Parker; Thomas James Weissmuller or a company called Weissmuller & Sons, who were involved in deceiving Mr Shaw. 

Consideration of the defendant’s evidence

70. I have no hesitation in rejecting the defendant’s evidence.  I do not find his evidence credible, for example I do not find credible that the defendant believed HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts on 13, 15, 19 and 29 April 2011, were payment for the sale of two diamonds  his father gave him as a wedding gift. 

71. I find inherently improbable that anyone would buy diamonds without first looking at the diamonds, let alone pay US$500,000 without first looking at the diamonds.  I reject that the defendant sold two diamonds for US$500,000, the payment for which the defendant believed was the four sums credited to the Golden Touch DBS accounts.

72. Further, I do not find credible the defendant’s evidence that he thought it was not necessary to take the original diamond certificates to Malaysia because he had already given copies to Jailani[51]. Not only would the buyer require the original diamond certificates, there was no need for the defendant to keep the original certificates, which had been kept together with the diamonds in the elder brother’s safe. 

Video recorded interview

73. In addition, the evidence that the defendant believed HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts was in payment for the sale of two diamonds differs from what the defendant told the police when interviewed on video on 15 July 2013.[52]  In the interview the defendant made no mention about the sale of diamonds saying he could not remember who transferred the four sums of money and why the monies were transferred to the Golden Touch DBS accounts[53].

74. In cross-examination the defendant said this was the only time he had dealt in diamonds and agreed that as the purpose of selling the diamonds was to resolve the financial difficulty of his company, the transaction was a critical one. Asked why he seemed to have no recollection of this critical transaction when interviewed by the police, the defendant replied that he wanted to answer all the questions but was so stressful having been locked up in the police station over night and being thrown so many questions, that he really was not able to answer anything because he could not recollect.

75. I do not find this explanation credible.  The defendant was accompanied by a solicitor[54]; said he was fit to continue the interview[55]; and understood the caution[56]. The police specifically told the defendant that the investigation was about four sums of money totalling US$500,000 credited to the Golden Touch DBS accounts; the date each sum was credited to the bank account and the amount; and that the monies were then transferred to Yauni Exports and World Tech Info[57].  When specifically asked about these sums the defendant was shown the account information, including the bank statements and the supporting documents relating to the four remittances[58].

76. Whilst accepting a person would be under a degree of stress arising from being arrested and detained overnight, especially a person who had not been in trouble with the law before, I find inherently improbable, notwithstanding that the interview was over two years after the four sums of money were credited to the Golden Touch DBS accounts, that the defendant would forget the monies totalling US$500,000 was the US$500,000 he received for the sale of the diamonds given to him by his father as a wedding gift. 

77. Further, the four remittances formed a substantial part of the deposits made to the Golden Touch DBS accounts.  As noted earlier Golden Touch was registered on the 25 January 2011[59]. The bank account was opened on the 27 January and closed on the 20 June 2011[60].  According to the business registration certificate Golden Touch ceased business on the 27 June 2011[61].

78. There were a total of 95 transactions in the three accounts.[62]  Apart from the initial cheque deposited into the HK dollar current account in the sum of $20,000 and interest payments there was five further remittances made totalling HK$382,310.41; twenty two remittances to the US dollar current account totalling US$721,261 and one remittance to the multi-currency account in the sum of US$500. 

79. The sums of HK$151,285.93 and HK$75,471.70 credited to the HK dollar current account on 13 and 19 April 2011 represented just over 56% of the total remittances made to the HK dollar current account.  The sums of US$169,975 and US$299,965 credited to the US dollar current account on 15 and 29 April 2011 were significantly higher than any other deposits made into the US dollar account and represented just over 65% of the total remittances made to the US dollar current account.  All other deposits ranged between US$100 and US$41,665.

80. Whilst one might forget every transaction in a bank account where there were many transactions over a long period of time, in particular small transactions, I find inherently improbable the defendant would forget these four remittances, in particular considering both Golden Touch had been in operation and the bank account open, for less than six months; the sums of HK$151,285.93 and HK$75,471.70 represented just over 56% of the total remittances to the Hong Kong dollar account; and the sums of US$169,975 and US$299,965 were significantly higher than any other remittances made to the US dollar account and represented just over 65% of the total remittances to the US dollar account.

81. The evidence that the defendant believed the sums of HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts, were in payment for the sale of two diamonds his father gave him as a wedding gift, was not the only matter the defendant forgot when interviewed by the police.  The defendant also forgot matters relating to Golden Touch, Yauni Exports and World Tech, matters one would expect the defendant to have remembered. 

Golden Touch

82. In evidence the defendant said that Yauni Exports and Golden Touch were both set up to deal mostly in consumer electronics, mobile phones and accessories, with Yauni Exports set up for Indian customers the defendant had made contact with while working in Malaysia and Golden Touch for Malaysian customers [63].  The defendant told the police that the business of both Golden Touch and Yauni Exports was general trading.  When asked what was the difference between the two companies the defendant said he did not remember why he opened Golden Touch [64].  I do not find credible the defendant could not remember why he opened Golden Touch. 

83. In evidence the defendant said one of the reasons he came to Hong Kong was to enquire about his banking affairs[65], whereas he told the police he did not remember which bank Golden Touch opened an account with; was not very sure about the account; and did not remember why the DBS bank account was opened[66]. The defendant also testified that he operated the bank account online yet he told the police he could not remember if there were online banking facilities[67]. 

84.  The defendant registered Golden Touch and opened the Golden Touch DBS accounts when he visited Hong Kong in January 2011[68]. I do not find credible that when interviewed by the police the defendant could hardly remember anything about the Golden Touch DBS accounts and that having operated the bank account in Malaysia via online banking, would forget whether the bank provided online banking. 

85. I do not find credible the defendant’s evidence that Golden Touch was set up mainly for Malaysian customers.  When pointed out by the court that there were no remittances to the Golden Touch DBS accounts from Malaysia and that most deposits were from Australia, the defendant replied that normally the Malaysian customers are also the agents doing the business and that he had no idea about their principal customers or where exactly the money came from.  As long as the money was received the defendant said he was satisfied.  I do not find this explanation credible.  I find inherently improbable if Golden Touch was set up mainly for Malaysian customers that most deposits to the Golden Touch DBS accounts were from Australia, without a single remittance from Malaysia.

Yauni Exports

86. In evidence the defendant said the sums of US$169,975 and US$299,965 credited to the Golden Touch DBS US dollar account were transferred to Yauni Exports for purchasing operations of Yauni Exports, whereas he told the police he did not remember the reason why these amounts were transferred to Yauni Exports[69].  I do not find credible the defendant would forget why these sums were transferred to Yauni Exports, which transfers were made the same day the monies were credited to the Golden Touch DBS US dollar account and which sums, as pointed out earlier, are significantly higher than any other sums remitted to the Golden Touch DBS US dollar account[70].

87. The defendant also told the police he could not remember if Yauni Exports opened a bank account in Hong Kong[71]. After being shown the account opening documents the defendant told the police that the signatures looked like his but he did not remember anything about the account as he had forgotten[72]. The defendant also told the police he could not remember the reason why the account was opened and whether he closed the account because this was so long ago[73].

88. The defendant registered Yauni Exports and opened the Yauni Exports account when he visited Hong Kong in June 2010[74]. Although this was over three years before the interview, I do not find credible that the defendant could hardly remember anything about the Yauni Exports bank account. 

World Tech Info

89. In evidence the defendant said that the sums of HK$151,285.93 and HK$75,471.70 credited to the Golden Touch DBS accounts on 13 and 19 April 2011 were transferred to World Tech Info on 14 and 21 April respectively.  The defendant said that World Tech Info belonged to Mr Mossa Sadat Syed Ahmed, his partner in Malar Trading and that the monies were remitted to World Tech in payment for the purchase of mobile phones[75].

90. When asked by the police why the monies credited to the Golden Touch DBS Hong Kong dollar account were transferred to World Tech Info, the defendant said he did not remember the company World Tech Info and did not remember why the monies were transferred to World Tech Info[76]. The defendant also told the police he did not remember a person called Mossa Sadat Syed Ahmed[77].

91. In cross-examination the defendant said that Mr Sadat was a trusted friend who he had known for almost 15 years.  Asked why he seemed to forget who Mr Sadat was when questioned by the police, the defendant replied that he was given so many names, long names and that he only recognised some names, the short names.  The defendant said he really did not remember Mr Sadat at that time so he told the police he did not remember.   

92. In answer to the court the defendant said that the initial cheque for HK$20,000 from Sam’s Trading, which was used to open the Golden Touch DBS accounts[78], was a favour given to him by Mr Sadat. 

93. I do not find credible the defendant would forget World Tech Info; why monies were remitted to World Tech Info and that he did not remember who Mr Sadat was, a person he had known for 15 years; his partner in Malar Trading; who helped him in giving a cheque to open the Golden Touch DBS accounts; and whose residential address was used as the address of Golden Touch and which was the correspondence address for the Yauni Exports account.   

94. After cross-examination the court asked the defendant if there was anything he wished to say about why he told the police he did not remember why he opened Golden Touch; which bank Golden Touch opened an account with; why the account was opened; that the bank provided online banking; the reason the money was transferred to Yauni Exports; whether Yauni Exports opened a bank account and; about World Tech Info and why money was transferred to World Tech Info. 

95. The defendant repeated his answer given in cross-examination that having been locked up overnight, although physically fit, he was so stressed out he could not remember these matters.  Again, whilst accepting a person would be under a degree of stress arising from being arrested and detained overnight and that the interview was over two years later, I have no hesitation in rejecting the defendant’s evidence he was so stressed he forgot that the monies credited to the Golden Touch DBS accounts and totalling US$500,000 was the US$500,000 he received for the sale of the diamonds given to him by his father as a wedding gift and matters relating to Golden Touch, Yauni Exports and World Tech Info.

Defence witnesses

96. In rejecting the defendant’s evidence I have carefully considered the evidence of all the witnesses called by the defendant.  The evidence of the defence witnesses falls into five main areas.  These are: the father’s retirement; the wedding gift; the valuation; the sale of the diamonds and the delivery of the diamonds.  

The father’s retirement

97. The father[79] gave evidence that the two diamonds were given to him on his retirement.  In summary the father was born in India in 1939.  He has two sons and one daughter.  After leaving university the father joined his relatives in the gem business.  Later the father worked for Hong Kong Gem House, first in India and from 1969 in Hong Kong.  In support the father produced his name cards[80] and photographs showing him working for Hong Kong Gem House[81]. 

98. The father worked for Hong Kong Gem House for more than 30 years as a manager and a partner in their sister companies, before his retirement in 2003.  Having worked for the company for over 30 years the father had earned commission, partnership shares and stock amounting to HK$3.2 million.  In 2004 instead of giving the father the money his boss, Mr Hameed, gave him two diamonds valued at HK$3 million, together with their certificates,[82] and some semi-precious stones valued at $200,000.  The father was very satisfied with the diamonds and stones. 

99. I do not find credible the father’s evidence that when he retired he was owed HK$3.2 million.  In cross-examination the father said that together with commission and profit from his stocks he would on average earn around HK$15,000 per month. The father would only draw what he required each month and therefore by his retirement he had accumulated HK$3.2 million.  I find inherently improbable that the father would have accumulated such a large sum of money, which would have amounted to around half his income over 35 years. 

100. In cross-examination the father said that when he left Hong Kong Gem House in 2003 the company had finished all operation.  In answer to the court the father said he could not remember exactly when in 2003 the company ceased operation, maybe the end of the year.  I do not find credible the evidence of the father that he was given both diamonds in 2004 after he had retired and after Hong Kong Gem House had ceased operation.  I note also one of the diamond certificates, exhibit D8, is dated 18 March 2004 and therefore could not have been given to the father on his retirement in 2003 or before Hong Kong Gem House ceased operation in 2003.   

101. I reject the father’s evidence that on his retirement he was given the two diamonds together with the certificates, exhibits D7 & D8. Nevertheless considering these events were over 10 years ago giving rise to the possibility of a lack of precision in calculation and errors in time and that the father was not asked to explain why one of the diamonds was certified after he retired and after Hong Kong Gem House had ceased operation, I will proceed on the basis that the father may have been given two diamonds after he retired.  I therefore go on to consider whether the father gave the defendant the two diamonds together with their certificates as a wedding gift.

The wedding gift

102. The defendant’s evidence that he was given the two diamonds together with their certificates by his father as a wedding gift is supported by the evidence of the father and the elder brother[83], who was present when the diamonds were given to the defendant by the father.  

103. The father gave evidence that the family the defendant was marrying into was of a much higher class and therefore the diamonds were given to satisfy the family.  The elder brother also gave evidence that the bride’s family were of a higher status and were a very good and reputable family in Malaysia.

104. In cross-examination the father said he had given gold ornaments to his elder son as his wedding gift.  The gold ornaments were not as valuable as the diamonds. When asked why he did not also give gold ornaments to his younger son the father repeated that because the status of the family of his younger son’s wife was very high he gave the diamonds to make them respect him. 

105. I have no hesitation in rejecting the evidence that the diamonds were given as a wedding gift.  At the beginning of cross-examination the brother-in-law[84]said that he was aware that the defendant’s family gave his sister some clothing, gold and precious stones as a wedding gift.  The brother-in-law said he was not aware that diamonds had been given to either his sister or to the defendant. 

106. Towards the end of his evidence-in-chief the brother-in-law said that the defendant told him the diamonds had been given to him by his parents.  Earlier in evidence the brother-in-law had said he did not know where the defendant had acquired the diamonds.  When the court clarified these answers the brother-in-law explained that he first became aware the defendant had the diamonds when the defendant called him to ask if he could find a buyer for the diamonds.  At the same time the defendant told the brother-in-law he had been given the diamonds by his parents. 

107. I find inherently improbable, if the diamonds were given as a wedding gift to attract respect from the family of the defendant’s wife, that the brother-in-law did not know diamonds had been given on the occasion of the wedding and only learnt about the diamonds six years later when asked to find a buyer for the diamonds.

108. Even if diamonds were given as a wedding gift, I have no hesitation in rejecting the defendant’s evidence that he believed HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts on 13, 15, 19 and 29 April 2011, were payment for the sale of two diamonds his father gave him as a wedding gift.

The valuation

109. The defendant’s evidence that he wanted to sell the diamonds is supported by the evidence of his father and elder brother.  The brother-in-law also gave evidence that in late 2010 the defendant contacted him to ask if he knew anyone who was interested in buying diamonds.

110. The father recalled that in 2010 the defendant phoned him asking whether he could dispose of the diamonds for his business.  The father agreed because he had already given the diamonds to his son as a gift. 

111. The elder brother gave evidence that in April 2005 the defendant brought the diamonds and the certificates to Hong Kong for safe keeping.  The elder brother kept the diamonds and the certificates in his safe.  In late 2010 the defendant called his brother asking if he would find someone to buy the diamonds because he wanted to raise capital for his future business. 

112. This was followed by another call in 2011 when the defendant asked his brother to get the diamonds valued.  In cross-examination the elder brother said that he could not recollect the defendant telling him the reason why he wanted the diamonds valued and that only when the defendant came to collect the diamonds did he know that he had found a buyer for the diamonds. 

113. The elder brother, having been out of touch[85] with the diamond business for a very long time, called his cousin, Thaika Mahmood (DW5).  The cousin went to the elder brother’s home on a holiday, although the elder brother was not so sure when that was.  In cross-examination the elder brother said that he did not recall calling the cousin and said that the cousin often visited his home and that it was during one of these visits that he showed the cousin the diamonds. 

114. When the court clarified whether or not the elder brother called his cousin the elder brother replied that the correct answer was that he did not recall calling his cousin.  Asked why he told Mr Harris SC that he did call his cousin the elder brother replied that maybe he did not hear the question properly and was confused but was very sure that during a visit he talked to the cousin about the diamonds. 

115. The elder brother showed the diamonds and the certificates to the cousin.  After the cousin made some notes he said he would inform the elder brother of the value after looking at the Rapaport diamond report.  The next working day the cousin called the elder brother informing him the value of the two diamonds was US$500,000.  The elder brother then called the defendant to inform him of the value.   

116. The cousin gave evidence that he was asked to value two diamonds.  In summary the cousin said since he was an apprentice in 1994 he had worked in the diamond business, as a diamond purchaser, until he was made unemployed in 2014. 

117. From time to time the cousin would visit the defendant’s elder brother.  On one such occasion in early 2011, on either a public holiday or a Saturday or Sunday, the elder brother showed the cousin two diamonds together with their certificates, identified as exhibits D7 & D8[86]. The elder brother asked the cousin if he could value the diamonds.  In cross-examination the cousin said that the elder brother did not ring him up and ask him to come and value the diamonds.

118. The cousin was unable to look at the diamonds properly because he did not have any tools with him.  After looking at the certificates the cousin told the brother that he needed to refer to the Rapaport diamond report before giving a valuation.  The next working day the cousin checked the report and calculated the value of the two diamonds to be about US$500,000.  The cousin then telephoned the elder brother and informed him of the valuation. 

119. The cousin explained that diamond merchants, when calculating the price, only referred to the Rapaport diamond reports, which were published weekly.  The cousin produced the weekly reports for 7, 14 & 21 January and 25 February 2011[87] and said that this was the information that was available to him when he made the valuation in 2011, although these were not the actual copies he looked at, at that time. 

120. In cross-examination the cousin said that he could not remember exactly when he valued the diamonds other than it was between January and early February 2011. The cousin therefore reprinted the available reports from his old records kept in 2011.  In answer to the court the cousin said he still had a good relationship with his boss and went back to his old office and printed the reports from the company’s Rapaport file.

121. The cousin explained how he calculated the figure of about US$500,000.  Both diamonds weighed over 8.00 ct.  The Rapaport diamond reports show only the price for diamonds weighing up to 5.99 ct and from 10.00-10.99 ct.  The cousin therefore used the price for diamonds weighing 5.00-5.99 ct.

122. According to the diamond certificates the colour of both diamonds is J and the clarity grade is VS2.  The price for diamonds weighing 5.00-5.99 ct in January/February 2011 where the colour is J and the clarity grade is VS2 was US$22,500 per carat. The two diamonds weighing over 8.00 ct each the cousin said that 30-35% was to be added to this price.  In cross-examination the cousin said that in the diamond trade 30-35% was added to the price of bigger diamonds because there was no certain value. 

123. A further 3% was added to the price because there were two diamonds.  The price was then multiplied by the weight of the two diamonds to give the final price of the diamonds.  Using 30% the cousin, in court, calculated the price of the two diamonds as US$494, 693.55[88].

124. In re-examination the cousin said the Rapaport diamond reports were used internationally.  In answer to the court the cousin said he did not know why the Rapaport diamond reports had no prices for diamonds weighing 6.00-9.99 ct and that he never gave any thought to whether this was because they were rare diamonds. 

125. In cross-examination the cousin was asked about the reference in the reports to premiums, including above prices for 5.00-5.99 ct, which states, “Prices for select excellent cut large 3-10ct+ sizes may trade at significant premiums to the Price List in speculative markets.”  The cousin did not know what the reference to premiums meant and said that in the trade these were not used and only the charts showing the prices were used to value the diamonds.  The cousin also did not know what W or T, seen below each of the charts, referred to.

126. I do not find the evidence of the cousin credible.  If the Rapaport diamond reports are internationally accepted, I find unbelievable the cousin did not know why the value of diamonds weighing 6-9ct were not included in the reports.  In cross-examination his knowledge of these reports was also shown to be limited when he was unable to explain what premiums meant.  I also do not find credible that by coincidence the cousin happened to visit the brother’s home at the time a valuation of the diamonds was required.  I reject the evidence of valuation. 

127. In addition the evidence of the brother-in-law casts doubt upon whether there was such a valuation in January/February 2011.  In cross-examination the brother-in-law said that when the defendant asked him to look for a buyer for the diamonds, which was at the end of 2010, he asked the defendant how much he wanted to sell the diamonds for and how many diamonds there were to sell.  The defendant told him he had two diamonds to sell for approximately around half a million US dollars.  On this evidence the defendant already knew the value of the diamonds when he decided to sell them in 2010. 

128. Even if the cousin valued two diamonds, I have no hesitation in rejecting the defendant’s evidence that he believed HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts on 13, 15, 19 and 29 April 2011, were payment for the sale of two diamonds his father gave him as a wedding gift.

The sale of the diamonds

129. The defence rely on the evidence of Jailani Bin Abdul Aziz (DW6). Jailani gave evidence on 2 March 2015 in the High Court of Malaya, Territory of Kuala Lumpur, pursuant to a Letter of Request issued on 13 December 2013.  The Certificate of the Registrar certifying receipt of the deposition of the witness together with other exhibits is produced as exhibit D12 (1-7). 

130. The deposition and exhibits are admitted into evidence pursuant to section 77F(1)(d) of the Evidence Ordinance[89]. The evidence was recorded on video[90], which has been played in court.  A full transcript of the evidence has been prepared together with a certified translation[91].

131. Jailani is the only defence witness who speaks directly to the fact that the monies remitted to the Golden Touch DBS accounts were made for the purchase of diamonds.  In summary Jailani testified that he was 37, an owner of a pest control company and involved in politics.  With his political and business contacts Jailani also acted as a middleman in other businesses[92]. 

132. At the end of 2009, through the introduction of a friend, Jailani came to know the defendant in Langkawi.  Jailani regarded the defendant as a friend.  Jailani was aware that the defendant was involved in importing goods into Malaysia and that his family were engaged in diamonds and jewellery business.  The defendant asked Jailani to help him import goods into Malaysia but the business was not successful[93].

133. At the end of 2010 the defendant contacted Jailani saying he had diamonds to sell and asked Jailani if he could find a buyer.  Jailani said he would try by spreading the news through his contacts.  No details of the diamonds were given at that time[94].

134. Around February 2011 a friend of Jailani called him saying there was somebody interested in the diamonds and asked to arrange a meeting to talk about the matter.  A meeting was arranged when Jailani met a person introduced to him as Malek.  Malek asked for the details of the diamonds.  Jailani told him that he did not have the details but if he was really interested he would get the details for him.  Jailani then contacted the defendant telling him he had a buyer. A few days afterwards the defendant called Jailani and gave him a copy of two diamond certificates and told Jailani the price was US$520 something.  Jailani said he expected commission of 1% from both Malek and the defendant[95]. 

135. After Jailani gave Malek the details, including the price and the certificates, Malek said that he would get back to Jailani after discussing with the buyer.  During the next 1-2 weeks negotiations took place over the price of the diamonds. Eventually the price was agreed at US$500,000.  Malek said that payment would be by instalments and would take about one month.  The defendant agreed saying that delivery would take place after he had received full payment.  The defendant then gave Jailani the bank account number of a company, which Jailani passed onto Malek[96].

136. After each instalment was made Malek would inform Jailani, who would then inform the defendant to check his account.  At the end of April 2011, after full payment had been made, the defendant told Jailani he could collect the diamonds[97].

Delivery of the diamonds

137. Arrangements were made for Jailani to collect the diamonds from the defendant’s home.  Around 4 p.m. Jailani arrived and was introduced to the defendant’s brother-in-law Mr Wasi[98]. Jailani was given two diamonds together with his commission[99].  In cross-examination Jailani said he asked for the original certificates.  The defendant told him that the certificates were not with him and that he will try to get the certificates[100].

138. The brother-in-law gave evidence that he was present when the defendant gave the diamonds to Jailani.  In summary the brother-in-law testified that in early 2011 he told the defendant he was not able to find a buyer for the diamonds at which time the defendant said he already had an interested party.  Not long after, the defendant called the brother-in-law and asked him to come over to his house to witness the delivery of the diamonds to the interested party. 

139. The brother-in-law went to the defendant’s home where he witnessed the defendant hand over two diamonds to Jailani.  The defendant had earlier told the brother-in-law the interested party was called Jailani but this was the first time the brother-in-law had met Jailani.   

Delivery of the diamonds to Malek

140. After leaving the defendant’s home Jailani telephoned Malek telling him he had collected the diamonds.  Arrangements were made to meet the following evening when Jailani handed over the diamonds to Malek.  Malek was with another guy, who examined the diamonds[101].

141. Malek said he would pay the commission to Jailani later.  Jailani believed this was because he had not brought Malek the diamond certificates.  Jailani called the defendant to ask for the certificates.  The defendant told Jailani he did not have the certificates and that he will try to get the certificates and give him later[102].

142. After a few days Jailani again asked Malek for his commission saying he had already delivered the diamonds.  Malek agreed and later gave Jailani an envelope with the commission inside.  Afterwards when Jailani got in his car and checked the envelope he found Malek had only given him RM12,000 instead of RM15,000.  Malek continued to ask for the certificates however Jailani did not bother to obtain them because he felt he had been cheated by Malek[103].

143. Malek told Jailani the buyer was someone overseas but did not tell him who and from where.  Jailani was not familiar with the names Owen John Shaw; Lynne Maree Shaw; Alex Parker; Thomas Weissmuller or a company called Weissmuller & Sons[104].

Discussion

144. I have carefully considered the evidence of Jailani.  I have taken into account the submission of Mr Harris SC that Jailani was a reputable political figure who was highly unlikely to risk his career and reputation by giving false evidence for a mere acquaintance[105].

145. I have no hesitation in rejecting the evidence of Jailani.  I do not find his evidence credible, for example I do not find credible Jailani found a buyer willing to pay US$500,000 in advance of seeing the diamonds.  

146. In cross-examination Jailani said payment was made before receipt of the diamonds and before verifying that the diamonds were genuine because the parties trusted each other[106]. I do not find this explanation credible.  The diamonds were not being sold by a reputable diamond trader who could be trusted.  Further, whilst there must always be trust in business, trust is built up over a period of time.  Jailani had never done business with the defendant or with Malek.  Malek and his principal had never done business with the defendant.   

147. I find inherently improbable that anyone would buy diamonds without first looking at the diamonds, let alone pay US$500,000 without first looking at the diamonds.  I reject that Jailani, on behalf of the defendant, brokered a deal to sell two diamonds for US$500,000, full payment for which was to be made in advance of seeing the diamonds.

148. Further, I do not find credible Jailani’s evidence as to why he did not obtain the original diamond certificates.  I find the evidence of both the defendant[107] and Jailani contrived, in an attempt to explain why the defendant, having sold the diamonds, was still in possession of the original diamond certificates.   

Statutory declaration

149. In addition, the evidence that the defendant asked Jailani to find a buyer for the diamonds differs from what Jailani said in a statutory declaration made on 10 October 2013[108].

150. No evidence has been given as to the circumstances in which Jailani came to make the statutory declaration.  When Jailani was cross-examined on the content of the statutory declaration the court was informed that the statutory declaration was exhibited to an affidavit filed in support of an order made on 17 December 2014 granting leave to examine Jailani[109].

151. In the statutory declaration, paragraphs 3-6, Jailani states that he was involved in buying and selling diamonds with a business man named Malek; Malek was acting for his principal in Australia, who was interested in buying diamonds; Jailani contacted the defendant because he knew the defendant’s family had been in the diamond business for a very long time; and that on confirmation of stock Jailani told Malek the price of the requested diamonds would be in the region of US$500,000, which sum Malek’s principal agreed. 

152. In cross-examination Jailani disagreed that the statutory declaration contradicted his evidence and said that the story in the statutory declaration was cut short[110].  When asked what he meant by “Upon confirmation of stock”, Jailani replied it means upon getting the certificate and again repeated that the story was cut short[111]. 

153. I do not find this explanation credible.  In my view, the plain meaning of paragraphs 3-6 of the statutory declaration is that Jailani, knowing the defendant’s family had been in the diamond business for a very long time, contacted the defendant on behalf of Malek and his principal; and that upon confirmation the defendant had stock, Malek’s principal agreed to buy the requested diamonds for US$500,000.  This is very different to the evidence of the defendant that he was the one who initiated the diamond deal by asking Jailani to find a buyer.

The evidence of the brother-in-law that he witnessed the handover of the diamonds

154. I have no hesitation in rejecting the evidence of the brother-in-law that he witnessed the diamonds handed over to Jailani.  The evidence of the brother-in-law materially conflicts with the evidence of both the defendant and Jailani that they had known each other since 2009 and that the diamonds were handed over at the end of April 2011. 

155. In answer to Mr Harris SC when asked whether the defendant told him why he wanted him to be a witness the brother-in-law replied:

“He told me because he never met this guy and he was a bit worried to be alone when meeting a stranger, even at home, the first time and he also want me to be a witness to the handover.”

156. When asked by Mr Harris SC when he went to the defendant’s home, the brother-in-law said he went in early 2011.  Cross-examination of the brother-in-law was as follows:

Q.Were you able to recall the date when the defendant called you to go to his house?

A. No, I do not recall the date but I…it was 2011, early 2011.

Q. Perhaps the month, would that be possible for you?

A. I really can’t remember exactly…it would be…it is January or February but I know it is early, early of 2011.

157. Giving allowance that these events were four years ago and mistakes can be made in respect of dates, I am nevertheless satisfied the brother-in-law was saying diamonds were handed over in early 2011, in either January or February, which is prior to the four remittances made to the Golden Touch DBS accounts. 

158. Even if the brother-in-law made a mistake as to the date, his evidence that he was asked to go to witness the handover of the diamonds because Jailani was a stranger, who the defendant had never met before, leads to the conclusion that the brother-in-law did not witness the defendant handover two diamonds in April 2011 to Jailani, who the defendant said he had known since 2009. 

159. Even if the brother-in-law witnessed the defendant handover two diamonds to Jailani, I have no hesitation in rejecting the defendant’s evidence that he believed HK$151,285.93; US$169,975; HK$75,471.70 and US$299,965, credited to the Golden Touch DBS accounts on 13, 15, 19 and 29 April 2011, were payment for the sale of two diamonds his father gave him as a wedding gift.

160. Nothing said by any of the defence witnesses causes me to doubt the findings I have made.  I reject the defence evidence that the defendant, with the help of Jailani, sold two diamonds for US$500,000, the payment for which the defendant believed was the four sums credited to the Golden Touch DBS accounts. 

161. I remind myself that the rejection of the defence evidence is not determinative of the issues in the case.  The defendant has to prove nothing.  A case in which defence evidence is called and is not believed is no different from one in which no evidence is called.  In either case the burden is on the prosecution to prove the defendant’s guilt beyond reasonable doubt.

Reasonable grounds to believe

162. Mr Shaw remitted the sums of US$20,000, US$170,000, US$10,000 and US$300,000 to the Golden Touch DBS accounts on 13, 15, 18 and 29 April 2011[112]. 

163. Golden Touch was a sole proprietorship set upby the defendant on 25 January 2011.  On the 27 January the defendant opened the Golden Touch DBS accounts and was the sole authorized signatory of the accounts[113]. 

164. After deduction of bank charges the sums of US$20,000 and US$10,000 were converted into Hong Kong dollars with HK$151,285.93 and HK$75,471.70 credited to the Golden Touch DBS HK dollar current account on 13 and 19 April respectively[114]. 

165. Save for the initial deposit of $20,000 there had, prior to the credit of HK$151,285.93 on 13 April, only been one other deposit in the account which was also made on 13 April in the sum of HK$37,735.85.  On 14 April, save for HK$8,621.78 the monies in the account were remitted to World Tech Info [115].

166. Apart from the sum of HK$75,471.70 being credited on 19 April there were only two other deposits made to the account on 18 and 21 April.  After the deposit on the 21 April, save for HK$1,830.41, the monies in the account were again remitted to World Tech Info.  Other than bank charges there was no other activity in the Hong Kong dollar account [116] prior to the bank closing the account on 20 June 2011[117].

167. The sums of HK$151,285.93 and HK$75,471.70 credited to the HK dollar current account represented just over 56% of the total remittances made to the HK dollar current account[118].

168. After the deduction of bank charges from the remittances of US$170,000 and US$300,000 the sums of US$169,975 and US$299,965 were credited to the Golden Touch DBS US dollar account on 15 and 29 April.  The sums of US$169,975 and US$299,965 were significantly higher than any other deposits made into the US dollar account and represented just over 65% of the total remittances made to the US dollar current account.  All other deposits ranged between US$100 and US$41,665[119].

169. After the monies were credited to the US dollar account they were transferred the same day to the Yauni Exports account[120]. Yauni Exports was also a sole proprietorship which was set up by the defendant in June 2010.  In the same month the defendant opened the Yauni Exports account and was the sole authorized signatory of the account[121]. 

170. Between 1 April 2010 and 5 June 2013 no individual tax returns were filed by the defendant, including returns for Golden Touch and Yauni Exports[122], indicating that Golden Touch and Yauni Exports were engaged in any lawful business, including during the period when the monies were credited to the Golden Touch DBS accounts.  I note that after the defendant was arrested he filed on 3 December 2013 individual tax return for the year of assessment 2010/11, in which he declared that both Golden Touch and Yauni Exports had no gross income[123].

171. Having regard to all the circumstances, including:

(a) the defendant was the sole proprietor of Golden Touch, which was set up by the defendant on 25 January 2011;

(b) on 27 January 2011 the defendant opened the Golden Touch DBS accounts of which he was the sole authorised signatory;

(c) the sums of HK$151,285.93 and HK$75,471.70 credited to the Golden Touch DBS HK dollar current account on 13 and 19 April, were two of only six deposits and represented just over 56% of the total monies deposited in the HK dollar account;

(d) within one or two days the monies were remitted to World Tech Info;

(e) the sums of US$169,975 and US$299,965 credited to the Golden Touch DBS US dollar account on 15 and 29 April, were significantly higher than any other deposits made into the US dollar account and represented just over 65% of the total monies deposited in the US dollar account;

(f) after US$169,975 and US$299,965 were credited to the US dollar account the monies were transferred the same day to the Yauni Exports account;

(g) the defendant was the sole proprietor of Yauni Exports and the sole authorised signatory of the Yauni Exports account;

(h) between 1 April 2010 and 5 June 2013 no tax returns were filed by the defendant, including returns for Golden Touch and Yauni Exports indicating that Golden Touch and Yauni Exports were engaged in any lawful business; and

(i) having rejected the defendant’s evidence, the sums of HK$151,285.93, US$169,975, HK$75,471.70 and US$299,965 credited to the Golden Touch DBS accounts on 13, 15, 19 & 29 April, remain unexplained;

I am satisfied so I am sure the only inference to draw is that the defendant had reasonable grounds to believe that the sums of HK$151,285.93 and HK$75,471.70 credited to the Golden Touch DBS HK dollar account on 13 & 19 April and the sums of US$169,975 and US$299,965 credited to the Golden Touch DBS US dollar account on 15 & 29 April and which were remitted the same day to Yauni Exports, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would believe the monies represented the proceeds of an indictable offence.

172. In reaching my verdict I have carefully considered everything said by Mr Harris SC, both individually and collectively, including that the giving of evidence is a test of truth and not a memory test[124] and that there is no evidence before the court as to what details the defendant would have seen when checking the account online[125].

173. Nothing said by Mr Harris SC causes me to doubt the only inference to draw is that the defendant had reasonable grounds to believe the monies, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence. 

174. I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution have proved all the elements of the charges beyond reasonable doubt, each charge being considered separately.  The defendant is convicted as charged.