HKSAR v. ZHANG WEIQIANG

DCCC 388/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 388 OF 2013

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Reasons for Sentence

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1. The defendant in this case, Mr Zhang, appears before me facing one charge of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap 455. The offence is commonly known as money-laundering offence.

2. The defendant pleads guilty to the charge and admits that between the 2nd day of August 2007 and the 11th day of October 2007, both dates inclusive, in Hong Kong, he together with a person known as Michael Yu, knowing or having reasonable grounds to believe that property, namely, moneys in the total sum of $747,694.21 Australia currency in account number 574‑11208605 of Standard Chartered Bank (Hong Kong) Limited held in the name of Zhang Weiqiang, ie the defendant, in whole or in part, directly or indirectly represented the proceeds of an indictable offence, dealt with the said property.  

3. The facts as admitted by the defendant reveal that the Hong Kong Police conducted an investigation and disclosed that there were suspicious money transfers between Australia and Hong Kong.  Various persons, including Mr Zhang Yongxi, Mr James Yu and Mr Tsang Yin-chiu, were arrested.  During the investigation with Mr James Yu, two telegraphic transfer forms in sum of AUD200,000 and AUD220 respectively were seized.  Both sums were transferred from a bank account in Standard Chartered Bank (Hong Kong) Limited, No. 574-11208605 (“the account”) to Australia on 8 October 2007.

4. The defendant was in fact the person who opened the account, and he did so on 2 August 2007.  He was the sole signatory.  Between 2 August 2007 and 11 October 2007, a total sum of AUD747,694.21 was deposited to the account on seven occasions.  Among the seven deposits, four were transferred from local account in the sum of HK$192,741.33 and three were transferred from overseas, ie Australia, in the sum of AUD554,952.88, namely, 17 September 2007:  AUD79,961.44; 18 September 2007: AUD389,991.44; 27 September 2007:  AUD85,000.

5. Meanwhile, a total sum of AUD610,234.20 was withdrawn from the account on seven occasions.  Among the seven withdrawals, three were transferred to overseas (Australia) in the sum of AUD610,000.  Particulars are as follows: 11 September 2007: AUD190,000; 8 October 2007: AUD200,000; 8 October 2007: AUD220,000.

6. On 11 October 2007, the closing balance was at AUD137,460.01.  Since then, there was no transaction in the account.

7. The immigration record shows that the defendant was a resident in the mainland China.  The movement record shows that on 2 August 2007, ie the account-opening date, and on 11 September 2007 and 8 October 2007 (dates of withdrawals), the defendant arrived in Hong Kong and then returned to China later on the same date.  The police put the particulars of the defendant in the immigration watch list.

The Arrest and Record of Interview

8. On 6 February 2013, when the defendant arrived at Hong Kong, he was intercepted and arrested. Under video-recorded interview, the defendant alleged that:

(1) He worked as a manager in a paper manufacturing factory in mainland China. His monthly salary was about RMB10,000.

(2) In 2007, upon his cousin Michael Yu’s request, he went to Hong Kong to open the account and let Yu use it to make money transfer from Australia to China via Hong Kong. Yu alleged that he prepared to do some business in China.

(3) He could not provide any means to contact Yu.

(4) He did not ask why Yu did not open the account by himself.

(5) The initial deposit was provided by Yu’s friend.

(6) Later, he gave the account book and bankcard to Yu.

(7) In several occasions, he came to Hong Kong to remit moneys from Hong Kong to Australia. The particulars of the beneficiaries were provided by Yu. He had no knowledge of any of them.

(8) He had some suspicion about why the moneys had to remit back to Australia if Yu intended to do business in China.

(9) He made no enquiry and had no knowledge about the reason of money remittance.

(10) He admitted that he had received the bank statements, which were mailed to his address in China by the Standard Chartered Bank, but he paid no attention to them because he could not read English.

(11) Later, Yu informed him not to come to Hong Kong again.

(12) He received no reward during the whole incident.

9. At all material times, the defendant dealt with property held in the account, knowing or having reasonable grounds to believe that the property therein in whole or in part, directly or indirectly, represented the proceeds of an indictable offence.

10. During the material period, given the exchange rate between Australian dollars and Hong Kong dollars, AUD747,694.21 was equal to HK$4,785,242.94.

11. The defendant has a clear record in Hong Kong.

12. The antecedent statement of the defendant shows that the defendant was born in Jiangmen, China in 1970.  He is now 42 years old.  He completed secondary education in China, and he worked as a manager in a paper manufacturing factory in China. The defendant is married and his daughter is 10 years old and resides in China with his family.  The defendant’s father is now 72 years old, a retired person.

13. Mr Li in mitigation submits that the defendant’s father suffers from poor health, and the defendant is in fact the sole breadwinner of the family.  Mr Li tells me the defendant is a traditional man.  He has a strong sense of family ties.  The person Michael Yu referred to in the particulars of the charge is in fact the same James Yu referred to in the Summary of Facts.  Yu is the cousin of the defendant, and the two grew up together in China.  They studied together and grew up together, and the Yus family had offered some financial assistance to the defendant’s family when they were at difficult times, and that is why when Yu asked the defendant to help him to open some bank accounts in Hong Kong, the defendant could not say no.  The defendant wanted to repay what he felt he owed to the Yus family.

14. Mr Li tells me in mitigation that the defendant had received no monetary reward throughout the whole incident.  He co-operated with the police as soon as he was arrested by the police.  He pleaded guilty to the offence at the first available opportunity.  Mr Li submits that the defendant played a minor role in the incident in that he was only the sole signatory of the bank account in question.

15. Mr Li also refers me to three authorities: HKSAR v Javid Kamran CACC No. 400 of 2004, HKSAR v a Male Known as Boma Amaso CACC 335 of 2010, and lastly a sentencing case in the District Court, HKSAR v Tsang Sai-yan DCCC 325 of 2009.  That Tsang Sai-yan is in fact the Tsang Yin‑chiu referred to in the Summary of Facts as admitted by the defendant.  He was convicted after trial of three charges of money-laundering offences, and he was sentenced to a total term of 3 years and 4 months’ imprisonment. 

16. In sentencing the defendant, I have borne in mind the facts as admitted by the defendant, the nature of the offence and all the matters urged on the defendant’s behalf by Mr Li.  I am aware that there is no sentencing tariff for the offence of money laundering.  As the Court of Appeal points out in the case HKSAR v Abayomi CACC 197 of 2005: 

“There are no guidelines for this kind of offences and it is difficult to see that there could be because of the infinite variety of circumstances that may exist which lead to offences of this kind.”

17. In the case cited by Mr Li, ie HKSAR v Tsang Sai-yan, Her Honour Judge Remedios referred to the case Xu Xia Li.  The Court of Appeal said in that case:

“The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain of their ill-gotten gains as if they were derived from legitimate activities. Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced. Money laundering is therefore treated as a serious offence. If money-laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties, it would mar Hong Kong’s reputation as a world class financial and banking centre.”

18. In HKSAR v Boma CACC 335 of 2010, the second case relied upon by Mr Li in mitigation, Stock VP says in that case that the first three factors to which any sentencing court should have regard are the maximum penalty available, ie 14 years’ imprisonment, the need for deterrence and the question of the amount of the money laundered.  See paragraphs 35 to 38 of the judgment.

19. In paragraph 40 of the judgment, Stock VP points out that the court should take into account some of the other significant features, inter alia:

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) where the operation involved an international dimension, this would be a significant aggravating feature;

(d) the sophistication of the offence, including the degree of planning;

(e) where the offence was committed by or on behalf of an organised criminal syndicate, it would be an aggravating feature;

(f) where there was one transaction or many and the length of time over which the offence was committed;

(g) where the offender continued to launder the funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved;

(h) the role of the offender and the acts performed by him.

The list is not an exhaustive one.

20. The maximum penalty for money laundering is one of 14 years’ imprisonment subject to the jurisdiction limit of 7 years’ imprisonment in the District Court.

21. It is important that Hong Kong’s reputation as an international financial centre must be closely guarded.  Money-laundering activities must be deterred.

22. In the present case, the nature of the predicate offence is not known, and I accept from what Mr Li submitted on behalf of the defendant that the defendant had suspicions, ie he had reasonable grounds to believe that the moneys he dealt with represented proceeds of an indictable offence, not that he knew they were proceeds. 

23. This case certainly involved some degree of international dimension and cross-border element.  The defendant is a resident in the mainland China, and he came to Hong Kong to open the account in question.  For the bank transactions involved, there were transfers from overseas, ie Australia, and there were transfers to Australia.  I am aware that only one bank account was involved, and it cannot be said that the offence was sophisticated albeit it involved some degree of planning.

24. There is no evidence that the offence was committed on behalf of an organised criminal syndicate.  I am aware that the time span was over two months, and there were seven deposits and seven withdrawals during the relevant period.  In my judgment, the defendant played a pivotal role in the commission of the offence.  He opened the account at the request of Yu, and he helped Yu to operate the account. 

25. It is important to note that the amount of the money laundered was HK$4,785,242.94, a very substantial amount by any standard. 

26. Taking into consideration all these factors, in my judgment, a starting point of 4 years’ imprisonment is appropriate.  The defendant has a clear record in Hong Kong and he pleaded guilty to the charge.  He is entitled to one-third reduction in sentence.  That would bring the starting point down to 32 months. 

27. For the reasons given, for the offence of dealing with property known or reasonably believed to represent proceeds of an indictable offence, I sentence the defendant to 32 months’ imprisonment.