HKSAR v. WU YIHUI

DCCC 704/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 704 OF 2014

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

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

Reasons for Sentence

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

1.  The defendant, Wu Yihui, pleaded guilty before me to one count of “Conspiracy to deal with property known or believed to represent proceeds of an indictable offence”.

2.  The facts admitted by the defendant reveal that at around 2.20 pm on 6 June 2014, the victim in this case, Madam Chan, received a phone call at home in Siu Sai Wan, Hong Kong.  A male voice addressed Madam Chan as “Mum”.  The male then stated that he had been kidnapped and his hand was hurt.  The voice of another male then requested Madam Chan to repay HK$300,000, as her son had guaranteed a loan for another person who then fled.  Madam Chan then hung up. She first confirmed the safety of her son and then she called the police.

3.  Police officers then arrived to assist Madam Chan and confirmed the safety of the son of Madam Chan.  Upon the negotiation with the male over the phone, Madam Chan agreed to pay HK$150,000.

4.  At around 3.56 pm on the same day, Madam Chan arrived outside a bank in Chai Wan, Hong Kong, as instructed by the man.  Police officers were also present in the vicinity.  The defendant then appeared and approached Madam Chan and told her that he came to collect money.  The defendant further stated that the son of Madam Chan would return home after her payment.  Madam Chan then passed an envelope containing the fake money to the defendant.  The defendant was then arrested by the police officers nearby.

5.  The defendant had with him two mobile phones when arrested.  He admitted under caution that he came to collect money upon receiving instructions over the phone. 

6.  In his cautioned video recorded interviews, the defendant admitted being instructed by a friend called “Ng Wai-ling” to collect money in Hong Kong with 10% of the money collected as reward.  This was the sole purpose of his current visit to Hong Kong.  The defendant received around $2,000 from Ng Wai-ling to cover his expenses. 

7.  The defendant entered Hong Kong on 3 June 2014.  He bought two SIM cards soon in Prince Edward and inserted them into the two mobile phones seized to contact Ng Wai-ling.

8.  On 6 June 2014, the defendant collected money from a female outside the bank in Chai Wan upon receiving instructions from a friend of Ng Wai-ling over the phone.  The defendant knew that collecting money for the friend of Ng Wai-ling was illegal.

9.  Detective Chief Inspector Lam Cheuk-ho was responsible for the collection, collation and analysis of crime statistics of telephone deception in Hong Kong.  He confirmed the followings:

(1) cases of telephone deception such as the present one contained the following features:

(i) the culprit contacts the victim by telephone;

(ii) the culprit deceives the victim by persuading or threatening the victim to transfer or deposit money into a bank account or to hand over the money in person (the modus operandi known as “drop-off”);

(iii) for “drop-off” cases with money stolen, the police will classify it as “successful cases” and those without money stolen as “unsuccessful cases”;

(2) since October of 2008, there is a noticeable increase in cases of telephone deception using “drop-off”. In 2008, there were 38 successful telephone deception cases using “drop-off”. In 2009, there were 80 successful telephone deception cases using “drop-off”. In 2010, 126 cases; in 2011, 149 cases; 2012, 169 cases; and in 2013, 200 cases. In the first seven months of 2014, there were 112 successful telephone deception cases using
“drop-off”;

(3) as for the money involved, there was a steady increase. In year 2008, the total loss was over HK$3 million. In 2009, the total loss was over HK$7.4 million. For the years 2010, 2011 and 2012, for each of the aforesaid years, the total loss was over HK$10 million. For the year 2013, the total loss was over HK$13 million. The police recorded a total loss of over HK$8.5 million for the first seven months of year 2014;

(4) as for the profiling of the victims, in the second quarter of 2014, 64.3 per cent of the victims of telephone deception were over 60 years old. 49 per cent of the victims were retired persons and 44.8 per cent of the victims were housewives.

10.  The prosecution also submitted a statement prepared by Chief Inspector Lam Cheuk-ho.  Chief Inspector Lam opined that the modus operandi of “drop-off” in telephone deception cases and the associated money laundering activities are prevalent crimes in Hong Kong.  Chief Inspector Lam opines that these crimes are of obvious concern to the society of Hong Kong, both in terms of the harm caused to the community and the repeated occurrence.

11.  The prosecution furnishes the aforesaid information pursuant to Section 27(2) of the Organised and Serious Crimes Ordinance, Cap 455.

12.  The prosecution applies for an enhancement of sentence.

13.  The defendant has a clear record in Hong Kong.  The defendant is 21 years of age, born in China. He received education up to Form 1 level in China.  He was unemployed at the material time.

14.  Mr Lee, in mitigation, told me the defendant previously worked on a casual basis in a hair salon in China, earning RMB2,000 per month.  He was unemployed since March this year.

15.  The “Ng Wai-ling” referred to in the summary of facts told the defendant that the defendant could come to work in Hong Kong.  He told the defendant to collect debt for him in Hong Kong.  The defendant was given $2,000 by Ng and was promised that he would get 10 per cent of the money collected as reward.

16.  Mr Lee told me the defendant knew that collecting money for the friend of Ng Wai-ling was illegal. He had suspicion about the illegality of the job offered.  He agreed to work for Ng because he was unemployed at the time and he was in need of money.  He wanted to earn some quick money, so he accepted the offer and he came to Hong Kong.

17.  On the day in question, he received instructions to collect money from a female outside a bank in Chai Wan.  He did as he was told and he met the victim, Madam Chan.  He was arrested immediately by the police.

18.  After the defendant’s arrest, he cooperated with the police and he also pleaded guilty to the charge.

19.  Mr Lee told me the defendant is now remorseful for what he had done.

20.  In mitigation, Mr Lee drew my attention to the authority HKSAR v Wu Jianbing [2012] 1 HKLRD 781.  Mr Lee draws my attention to paragraph 10 of the judgment:

“In Secretary for Justice v Wan Kwok Keung” [2012] 1 HKLRD 201, “this Court pointed out that ‘money laundering’ was a serious offence. Generally, the sentence should mainly reflect the amount of ‘black money’ laundered and not the benefit obtained by the defendant or others. Other factors relevant to sentencing included the number of offences, the duration, the degree to which the defendant participated in the offence involving ‘black money’ and whether or not it was an organised and sophisticated crime, etc. See paragraphs 12 to 14 of the judgment.”

21.  Mr Lee also drew my attention to a sentencing decision of H. H. Judge G. Lam, HKSAR v Xie Jianwen, DCCC 105/2014.  Mr Lee draws my attention to page 8 of Judge Lam’s judgment, where he quoted a passage of the judgment of the Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201:

“‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimatise the proceeds of crime. In order to crack down on serious crimes to prevent offenders from getting financial gains, it is necessary to deter the commission of the ‘money laundering’ offences.

Generally, the sentence for ‘money laundering’ offences should mainly reflect the amount of ‘black money’ laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most ‘money laundering’ cases, there may not be evidence to show from what indictable offence the ‘black money’ are in fact derived. Of course, if there is information to prove that the ‘black money’ is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking or other organised crimes, etc, or the defendant’s benefit is huge, then the sentence should be adjusted upward.”

22.  Mr Lee took me through the facts of the case and drew my attention to the starting point of 15 months taken by Judge Lam.

23.  In paragraph 21 of the reasons for sentence, Judge Lam said:

“The circumstances under which the defendant approached PW4 to pick up cash would most certainly trigger her suspicion about the legitimacy of such money. However, it does not mean she knew that the cash she intended to pick up is proceeds of a deception. In the absence of such evidence, I take the view that the defendant’s role is similar to those who sell their ATM cards or lend their bank accounts to others for dealing with proceeds of crimes.”

24.  It was against the aforesaid background that Judge Lam took a starting point of 15 months’ imprisonment.

25.  In the present case, when the defendant approached Madam Chan and told Madam Chan that he came to collect money, the defendant told Madam Chan that the son of Madam Chan would return home after her payment.

26.  In my findings, the defendant knew not only that the money that he was going to collect was illegal, he also knew that the money originated from telephone deception, and that was why the defendant told Madam Chan Madam Chan’s son would return home after her payment.

27.  In the case HKSAR v a male known as Boma Amaso, CACC 335/2010, the Court of Appeal considered the relevant principles applicable in sentencing cases of money laundering. The Court of Appeal pointed out that the first factor to which any sentencing court should have regard is the maximum penalty available, ie one of 14 years’ imprisonment.  The second matter to which the sentencing court must have regard is the fact that, in this category of offence, deterrence is paramount.  Then, there is the question of the amount of money laundered.  This is not the be all and end all of a case, but is a significant feature.

28.  This case involved an agreement to pay $150,000 to a fraudster by Madam Chan and the predicate offence is known in this case:  it was a case of telephone deception using “drop-off”. There are authorities to the effect that a telephone deception using “drop-off” of this nature calls for a starting point of 4 years’ imprisonment after trial.

29.  As to the state of knowledge of the defendant, as the defendant knew not only the money he was to receive was illegal, he also knew the nature of the predicate offence, this made the defendant more culpable than otherwise.  As I said, the fact that the defendant told Madam Chan the son of Madam Chan would return home after the payment shows that the defendant knew that the money originated from a telephone deception case.  In my judgment, the defendant knew that the funds he was about to collect were proceeds of crime. 

30.  There was a cross-border dimension, as the defendant came to Hong Kong from China to collect the money.

31.  I bear in mind the modus operandi of the laundering act is not sophisticated.  A simple arrangement was made for the defendant to meet the victim and collect the money from the victim. 

32.  While there is no evidence that the defendant was working for an organised criminal syndicate, the facts show that he was obviously working with others. 

33.  I am aware that the defendant only committed the offence on one single occasion.

34.  As for the role played by the defendant, as Mr Lee put it, the defendant was very much a legman.  He dealt with the victim on the frontline.  He was given $2,000 for his expenses and was promised 10 per cent of the money collected as reward.

35.  Taking all matters into account, in my judgment, a starting point of 3 years’ imprisonment is appropriate.

36.  The defendant pleaded guilty to the offence and he has a clear record in Hong Kong.  He is entitled to the customary one-third reduction for his plea and clear record.

37.  I have considered the statement of Chief Inspector Lam.  I am satisfied that the modus operandi of “drop-off” telephone deception cases and the associated money laundering activities are prevalent crimes in Hong Kong.  They are also specified offences.

38.  This case calls for an enhancement of sentence.  In my judgment, an enhancement of 25% is appropriate.  I enhance the sentence by 25%.

39.  For the reasons given for the offence in question, I sentence the defendant to 30 months’ imprisonment.