HKSAR v. WU CHI CHUNG

DCCC 1118/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1118 OF 2008

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Reasons for sentence

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The charge

1. The Defendant pleads guilty to the charge of money laundering in the total sum of $2.6 million in a bank account, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. 

The facts 

2. In June 2008, the Defendant registered a business known as Hip Lee Engineering Co. (“the Company”).  On 14 July 2008, in the name of the Company, he opened a bank account with Hang Seng Bank (“Account-1”).

3. On 14 August 2008, an unknown female and an unknown male approached a Hong Kong Bank teller’s counter to transfer $2.6 million from an account there (“Account-2”) to Account-1.  The transfer was completed. 

4. On 3 September 2008, the account-holder of Account-2 read from her bank statement and discovered that $2.6 million had been transferred to another person’s account without her knowledge.  She reported to the police. 

5. On 9 September 2008, the Defendant, being the account-holder of Account-1, was arrested.  Under caution, he admitted that:

(1)   Three people, “Ah Wing”, “Ah Fei”, and “Ah Kwun” had brought him to Central to withdraw $2 million.

(2) He received $20,000 as a reward from them. 

6. Subsequently and also under caution, he admitted that:

(1)  He came to know Ah Wing in November 2007.  In June 2008, Ah Wing promised to give him $20,000 if he could set up a company and open a bank account for thesaid company to receive proceeds of illegal gambling. 

(2)  As instructed, he set up the Company and opened Account-1.  He passed the

business registration certificate, cheque books and ATM card to Ah Wing.

(3)  On 18 August 2008, he, Ah wing, Ah Fei, and Ah Kwun went to Hang Seng Bank to withdraw $2 million cash.  Accompanied by one of them, he withdrew the said sum and passed the same to Ah Wing, who then gave him $10,000.

(4)  On 20 August 2008, he met the trio.  Accompanied by one of them, he withdrew $400,000 cash.

(5)  On 25 August 2008, he met the trio.  As instructed by Ah Wing, he went to Hang Seng Bank and withdrew $100,000 cash.  The money was passed to Ah Wing, who then gave him $10,000.

7. The bank record of Account-1 revealed that:

(1) On 14 August 2008, $2.6 million was transferred from Account-2 into Account-1.

(2) On 18 August 2008, $2 million cash was withdrawn by the Defendant.

(3) On 20 August 2008, $400,000 cash was withdrawn by the Defendant.

(4) On 25 August 2008, $10,000 was withdrawn by the Defendant.

(5) The remaining $100,000 in Account-1 had been dissipated as a result of 8 withdrawals at ATM between 21 and 26 August 2008.

(6) After Account-1 had been opened, there was only $3,000 balance in it before the transfer of $2.6 million from Account-2 into Account-1 on 14 August 2008.            

The sentencing principles

8. A conviction in the Magistrate Court carries with it a maximum sentence of $500,000 and 3 years imprisonment. If convicted on an indictment, the maximum sentence is $5,000,000 and 14 years imprisonment.

9.  There are no tariff sentences.  Wright J in HKSAR v Lee Wai-yiu CACC 100/2006 cited HKSAR v Javid Kamran CACC400/2004, where Yeung JA said:

30.      Money laundering is a very serious offence as it is an attempt to legitimize

proceeds from criminal activities.

31.      Serious criminal offences are very often motivated by financial gains and those who assist criminals in laundering money, indirectly encourage them in their criminal activities. This is even more so when the laundered money is the proceeds from drug trafficking activities as it is often commented: “Those who launder money from drugs are nearly as bad as those who actually deal in them. It is merely one step along the line.”

32.      Successful deterrents against money laundering could be effective measures against crime.

33.      The maximum sentence for a money laundering conviction on indictment is a fine of $5 million and 14 years’ imprisonment, which is perhaps a reflection of how such an offence is viewed.

34.      On the other hand, it is not feasible to lay down guidelines for sentence of money laundering offence as there is a very wide range of culpability.

35.      Other factors include the nature of the offence that generated the laundered money, the extent to which the offence assisted the crime or hindered its detection, the degree of sophistication of the offence and perhaps the defendant’s participation, including the length of time the offence lasted and the benefit he derived from the offence.

10. In HKSAR v Choi Sui Hey CACC 277/ 2007, the Court of Appeal observed, at para. 34 as per Wright J sitting as an additional justice on appeal, that:

[W]here a court is dealing with an offence under section 25 of the Organised and Serious Crimes Ordinance and the nature of the indictable offence which generated the funds dealt with by the convicted person is not proven before the court, that should not be regarded as a matter for the mitigation of sentence: rather, if that indictable offence is identified to the court then, depending upon its nature, that may be an aggravating feature.

11. Cross and Cheung’s Sentencing in Hong Kong, 2007, 5th ed. refers to R v Monfries [2004] 2 Cr App R (S) 9 where the English Court of Appeal regarded that the amount of money laundered is one of the relevant sentencing considerations.  It was echoed in HKSAR v Lee Wai-yiu CACC 100/2006 where Wright J, at para. 64, regarded that:

A review of other cases in which sentences have been considered demonstrates that the quantum of the moneys laundered is a factor which may properly be considered for the purposes of the sentence.

12. In HKSAR v Hui Kam [2000] 3 HKLRD 211, the defendant was summarily charged with dealing with $6.5 million, the proceeds of illegal bookmaking activities, over a period of 17 months.  Chu J considered an appropriate starting point should be 15 months’ imprisonment.

13. In HKSAR v Lor Kar Win & Others [2000] HKLRD 733, the defendants were professional footballers. They were involved in a match-fixing scheme when they were representing Hong Kong in an international soccer match. They took part in a plan whereby Hong Kong would lose the match and in return each of them received $30,000. On a summary conviction of a money laundering charge, a starting point of 15 months’ imprisonment was considered appropriate.

14. In HKSAR v Mak Shing CACC 322 of 2001, the defendant handled in his 3 bank accounts the equivalent of around HK$2.5 million out of RMB14.56 million, the proceeds of a major theft in China.  The other people in the scheme handled the remaining sum.   A starting point of 4 years was considered to be apposite to reflect the seriousness of the offences in which there was an international element. The Court commented that Hong Kong had to take a very serious view of such matters if its international reputation was not to be sullied.

15. In HKSAR v Shing Siu-ming and others [1999] 2 HKC 818, there was a major drug trafficking conspiracy case over a lengthy period with an international element. The 1st and the 2nd applicants rendered considerable assistance to the drug trafficker and took an active part in sharing the proceeds of over $2.6 million and over $1.5 million respectively.  A starting point of 7 years’ imprisonment was considered appropriate. 

16. In R v Lo Chak-man and Others CACC 744 of 1995, a starting point of 9 years’ imprisonment was adopted. The case was described as the “worst case situation”, involving drug money of US$84.3 million plus and HK$16 million. One of the applicants was the brother of the drug trafficker and he assisted his brother and laundered over US$5 million. The other applicant laundered HK$15 million.

17. In HKSAR v Choi Sui Hey CACC 277/2007, the offence yielding the proceeds was identified to be the trafficking of the dangerous drug, “ice”.  Defendant transmitted $1.1 million to Fiji on six occasions over a 6-month period.  He had in his possession $750,000 to be remitted in due course.  The Court of Appeal regarded 3 years as the proper starting point.   

18. In HKSAR v Lam Chi Wa CACC 94/2008, the offence yielding the proceeds was identified to be the trafficking of “ice” and ketamine.  The amounts involved in the each of the two money laundering charges (Count 3 and Count 4 respectively) were about $4 million and $1 million over a period of more than one year.  In Count 3, there were about 429 deposits and 315 withdrawals from the bank account.  In Count 4, there were 48 deposits and 28 withdrawals.   The Court of Appeal considered that the starting point of 4 years in each case was not manifestly excessive. 

The Defendant’scircumstances

19. He is 41 years old now.  He has 10 previous convictions, none similar to the present offence.  He is single.  He only finished part of P. 6 education.  He took up various unskilled jobs.  He mixed with undesirable peers and engaged in various criminal activities.  His parents have died.  He has lost contact with his siblings.   

20. He explained in the Background Report that when he was serving time in prison, he came to know of a man called Ah Wing.  Upon release, he got a job through Ah Wing.  His job was to open a company and a company bank account.  The company was to collect money from unknown sources.  He suspected that the money came from illegal sources.  He would receive $30,000 as reward.  He was escorted to the bank 3 times to withdraw a total of $2.5 million.  He would receive $20,000 as reward.  So far, Ah Wing still owes him $10,000 as reward.  

The sentence I pass

21. The Defendant took all the trouble of opening a company for the sole purpose of facilitating the opening of a bank account to be used by others.  The amount of the money ($2.6 million) transferred was also substantial.  I take a starting point of 24 months.  I reduce it to 16 months because of the plea of guilty.  There are no other mitigating factors.  This is the sentence I pass on the Defendant.