HKSAR v. CHOI CHI MAN

DCCC 734/2023

[2025] HKDC 1919

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 734 OF 2023

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REASONS FOR VERDICT

1.  The defendant pleaded not guilty to a charge of "Conspiracy to deal with property known or believed to represent proceeds of an indictable offence". The subject property is $6.4 million odd which went through a bank account held by Madam Zhou Jielian ("Madam Zhou").

The Prosecution Case

Background

2.  On 2 October 2013, Madam Zhou opened a personal savings account (No.078-530375-292) with HSBC ("the HSBC Account").

3.  Mr. Leung Ka Man (PW3) and Madam Zhou are husband and wife.  They married in Hong Kong in 2009.

4.  Citi Gold Finance Advisory Limited[1] ("Citi Gold") was incorporated in Hong Kong on 1 February 2013.  The defendant was a 70% shareholder of Citi Gold since its incorporation.  He was also the sole director from 1 February 2013 to 14 August 2014.  On 14 March 2013, the address of Citi Gold's registered office became Nos. 5 & 6, 10^th Floor, Boss Commercial Centre, 28 Ferry Street, Kowloon[2].

5.  City Advisory Company[3] ("CAC") commenced business on 27 November 2013.  The defendant was its sole proprietor.  CAC's business address was Units 1005-06, Boss Commercial Centre, 28 Ferry Street, Kowloon (same address as Citi Gold's registered office[4]).

The predicate offence

6.  Mr. Chung Kar Keung (PW1) gave evidence under immunity granted by the prosecution[5].  Around December 2004, PW1 became a member of a Mandatory Provident Fund ("MPF") scheme run by Manulife.

7.  According to his evidence, in January 2015, PW1 received 2 phone calls promoting loans. He refused the 1^st caller because he was busy at the time.  He told the 2^nd caller that he was bankrupt[6]. The 2^nd caller suggested that he could help PW1 withdraw his MPF early.  The 2^nd caller then sent PW1 an address via WhatsApp.

8.  On the following day, PW1 went to Citi Gold's office at Ferry Street.  He was received by a Mr. Choi, who suggested PW1 to withdraw his MPF on the ground of permanent departure from Hong Kong.  Mr. Choi also told PW1 that if his withdrawal application was successful, he would charge 30% of the amount of MPF received by PW1 as his fees.  PW1 agreed to let Citi Gold handle the matter on his behalf. As a result, PW1 signed the claim form[7] (in blank) contained in Exhibit P1.  Before he left Citi Gold's office, PW1 picked up Mr. Choi's business card[8].

9.  Pursuant to Mr. Choi's instruction, PW1 went to the Home Affairs Department in Mongkok to make a statutory declaration[9] (also contained in Exhibit P1) on the same day.  Afterwards, PW1 returned to Citi Gold's office and handed the signed statutory declaration to a staff member since Mr. Choi was not around.

10.  It is not in dispute that PW1's MPF withdrawal application was approved by Manulife.  A cheque in the sum of $394,854.55 was given to PW1 on 25 February 2015[10].  PW1 deposited the cheque into his own Hang Seng Bank account.

11.  Respectively on 4, 5 and 6 March 2015, PW1 transferred a total sum of $110,500 into the HSBC Account by ATM as payment of the service fees due to Mr. Choi/Citi Gold[11].  According to PW1, he informed Mr. Choi after depositing the MPF cheque.  Mr. Choi then sent a bank account number to PW1 via WhatsApp.  A day or two after the last ATM transfer, Mr. Choi asked PW1 to collect his receipt.  PW1 collected the receipt from Mr. Choi at Citi Gold's office[12]. PW1 explained that before making the withdrawal application, Mr. Choi had checked the amount in PW1's MPF account and agreed to charge PW1 $110,500 only (which was a few thousand dollars less than 30% of the actual MPF sum). 

12.  PW1 claimed that Mr. Choi had asked him when he would leave Hong Kong and suggested him to go to the mainland.  PW1 admitted in the witness box that he went to Shenzhen alone in mid-March 2015 and stayed there for 3 days.  He then returned to Hong Kong and resumed his normal life working as a room attendant in a hotel.

13.  PW1 was not asked to identify Mr. Choi in court.

Money laundering

14.  PW1 admitted having made a false statutory declaration and having withdrawn his MPF by fraud.  In other words, the $110,500 transferred to the HSBC Account by PW1 constituted proceeds of an indictable offence.

15.  Between 11 November 2013 and 31 July 2017, the HSBC Account received a total of 1,062 deposits, which aggregated to a sum of $6,437,963.90.  During the same period, withdrawals which aggregated to the same amount were made from the HSBC Account.

16.  Between 11 November 2013 and 29 January 2015, a total sum of $289,220 was transferred from the HSBC Account to the defendant's 2 personal bank accounts (namely HSBC account 030-9-298875[13] and Hang Sang Bank account 227-438199-882[14]).

17.  On 4 December 2014, a total sum of $11,200 was transferred from the defendant's 2 personal bank accounts to the HSBC Account (by way of 2 deposits).

18.  Respectively on 28 April and 8 September 2014, two sums of $10,000 and $28,000 were transferred from CAC's Hang Seng Bank account[15] (228-707295-883) to the HSBC Account.  Between 30 December 2014 and 16 February 2015, a total sum of $198,750 was transferred from the HSBC Account to CAC's Hang Seng Bank account.

19.  The prosecution relied on PW3's evidence, which stated that the defendant had asked to borrow an HSBC account from him.  And out of friendship, PW3 lent the defendant the HSBC Account by giving him the bank card and password.

The Defence Case

20. The defendant elected to give evidence but did not call any defence witness.

21. In gist, the defendant denied having borrowed the HSBC Account from PW3. He claimed that he wanted to run his own show, so he started CAC on 27 November 2013. He formally resigned as a director of Citi Gold on 14 August 2014 and Mr. Yam Hau Yin was appointed as the sole director of Citi Gold on the same day[16].

22. The defendant claimed that by January 2015, he was already running his loan referral business as CAC. He did not meet PW1 in early 2015 and was not involved in PW1's MPF withdrawal application in any way. The defendant mentioned that when he left Citi Gold, he had packed the surplus of his business cards in a brown carton box and left it in the office. He did not bother to take his business cards away and did not know what others had done with them.

23. Regarding the payments he made to the HSBC Account from his personal bank accounts and CAC's bank account, the defendant said they were loans to PW1 out of friendship.

Assessment and Analysis of Evidence

24. The burden of proof is on the prosecution to prove each element of the offence beyond reasonable doubt. The defendant has a clear record; I have directed myself on his good character.

25. PW3 has pleaded guilty to a charge of "Conspiracy to commit money laundering" in DCCC 735/2022 (which is the same charge in the present case) and was sentenced to 30 months' imprisonment by me in June 2024. I am aware that PW3's guilty plea resulted in the prosecution offering no evidence against his wife (Madam Zhou) and in his receiving a sentencing discount for agreeing to testify against the defendant at this trial. I have directed myself on PW3's credibility and reliability accordingly.

26. At first glance, this case seems to be a contest between PW3's allegations and the defendant's denials. Counsel for both sides have spent considerable time analysing the evidence of PW3 and the defendant and identifying flaws in it. I, however, prefer to take a more pragmatic approach.

27. The following facts are undeniable :-

(i) PW1's MPF became proceeds of an indictable offence when he withdrew it by fraud.

(ii) PW1 deposited a total sum of $110,500 (taken from his MPF) into the HSBC Account.

(iii) PW1 and PW3 have no relations. There is no evidence suggesting that they knew each other in early 2015.

(iv) Citi Gold and CAC shared the same address[17]; their names in Chinese are almost identical, except CAC's does not contain the 2 characters "有限" ("Limited").

(v) Between 11 November 2013 and 16 February 2015 (a period of about 15 months), a total sum of $487,970 was transferred from the HSBC Account to the defendant's 2 personal bank accounts and CAC's bank account[18].

28. PW1 did not know the defendant. The only way which PW1 came to know the number of the HSBC Account was the Mr. Choi who served him at Citi Gold's office. Why would Mr. Choi ask PW1 to deposit the service fees into the HSBC Account? How did Mr. Choi expect to retrieve the $110,500 from PW3 or his wife?

29. In reply to my rhetorical questions, defence counsel Mr. Khosa submitted that PW3 probably knew other people in Citi Gold (for example, Alex Lau[19]); and PW3 "had a cut" of Citi Gold's "dirty money". Furthermore, Mr. Khosa suggested that Mr. Choi was running a "side show" on his own. The $110,500 probably did not belong to Citi Gold, but Mr. Choi and his enterprise. As a juror, I find no factual basis to support Mr. Khosa's propositions. There is simply no evidence hinting such possibilities.

30. Mr. Khosa has also criticized the authenticity of the Citi Gold receipt produced by PW1. I find no force in Mr. Khosa's remarks. The lack of a serial number, a signature or a company chop does not suggest that it was not issued by Citi Gold or that Mr. Choi was running a "side show".

31. Regarding the total sum of $487,970 which was transferred from the HSBC Account to the defendant's 2 personal bank accounts and CAC's bank account, the defendant claimed that it constituted PW3's repayments on a "revolving loan" which he had extended to PW3. Yet, the defendant has admitted in the witness box that he made no record of such loans; there was no IOUs; and the loans were interest free. As a juror, I do not believe the defendant on this issue. I do not find PW3 having any legitimate financial ability to repay $487,970 within 15 months. The transactions between the HSBC Account and the 3 bank accounts controlled by the defendant clearly established a financial connection between PW3 and the defendant, legitimate or otherwise.

32. Similarly, I find PW3's assertion that the laptop computer and paper notebook (Exhibit D1) found in PW3's home belonged to the defendant absurd. This portion of his evidence, however, does not undermine the credibility or reliability of his evidence on other matters.

33. As a juror, I see flaws in the evidence of both PW3 and the defendant; however, the crux of this case is NOT whom to believe.

34. It is trite law that circumstantial evidence is to be considered as a chain, and each piece of evidence as a link in a chain, but that is not so, for then, if any one link broke, the chain would fall. It is more like the case of a rope composed of several cords. One strand of the cord might be insufficient to sustain the weight, but three stranded together may be quite of sufficient strength. Thus it may be in circumstantial evidence ‒ there may be a combination of circumstances, no one of which would raise a reasonable conviction, or more than a mere suspicion; but the whole taken together, may create a strong conclusion of guilt, that is with as much certainty as human affairs can require or admit of[20].

35. It has also been said that circumstantial evidence works cumulatively, in geometrical progression, eliminating other possibilities[21].

36. Despite his claim that he had left Citi Gold in November 2013 to run his own business as CAC, the defendant picked a Chinese name for CAC, which was almost identical to Citi Gold's. He did not find a new office for CAC and continued to use Citi Gold's address. He did not resign as a director of Citi Gold until August 2014; and did not sell his shares in Citi Gold to the other shareholder. All of the above lead to one conclusion ‒ the defendant did not cut his ties with Citi Gold.

37. Based on the undeniable facts mentioned above, I, as a juror, draw the irresistible inference that the defendant had borrowed the HSBC Account from PW3. I also find that the defendant is the Mr. Choi who served PW1. It is too much of a coincidence that there was another Mr. Choi at Citi Gold; PW1 happened to pick up one of the defendant's business cards left behind; Mr. Choi gave the number of the HSBC Account to PW1 for receiving payment of his fees; and Mr. Choi had access to the $110,500 deposited by PW1. Even if I had erred in finding the defendant to be Mr. Choi, the defendant no doubt had knowledge of PW1's fraudulent MPF withdrawal and had conspired with PW3 to deal with its proceeds using the HSBC Account.

38. Based on the reasons stated above, I find the defendant guilty as charged.