HKSAR v. YU SING CHUNG

DCCC592/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 592 OF 2010

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Reasons for Sentence

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1.  Defendant, I have convicted you after trial of an offence of dealing with a property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance. This offence is otherwise commonly known as money laundering.

2.  I found that between 25 May 2009 and 3 July 2009, that you had reasonable grounds to believe that the sum of US$387,925.19 and AU$14,373.39 were in whole or in part directly or indirectly representing the proceeds of an indictable offence and that you dealt with the property.

3.  I found that you had deliberately set up a company called “Star Trade” and opened a bank account in the name of Star Trade, supposedly, you say, for the purposes of trading in dried seafood.  The company was set up on 21 April 2009 and ceased business on 1 July 2009.  The bank account was opened on 23 April and closed on 4 July 2009.

4.  Within a period, that is, a period of two weeks between 25 May 2009 and 10 June 2009 - there were 27 deposits made into a foreign currency account of this bank account. 26 of those deposits were made from overseas.

5.  In the same period, 21 remittances were made from that account to overseas accounts in countries such as Norway, India, Taiwan, China and the UAE.

6.  The amounts deposited from overseas was the amount as stated in the charge sheet, which amounts to approximately HK$3.1 million, and almost all that money was remitted overseas, which is US$397,003.70.

7.  I had found that you had at least made the withdrawal of $4,500 in cash the day before you closed the account.

8.  There was clear evidence before me that at least two people who had deposited money into this account deposited this money as a result of a fraud committed upon them, and that amount they deposited was a sum of about US$24,000.

9.  There was no evidence before me that you were actually involved in the actual indictable offence which was the fraud committed on those people.

10.  I had found on the evidence that there were obvious indicators that this account was used solely for the purpose of money laundering.  The account was used as a temporary repository for funds.  There was a period of significant activity.  There were frequent deposits in a very short time, and almost all the money deposited was withdrawn shortly after it was deposited, and I found that the money was, of course, withdrawn to and remitted out of Hong Kong to overseas countries.

11.  I have taken into account your counsel Mr Kenneth Chik’s mitigation on your behalf.

12.  You are aged 55 and, prior to the commission of this offence, you were a temporary construction site worker.

13.  You have been to court on 12 occasions and have 15 convictions. Most of those offences are related to drugs and none are similar to the present charge. The offences to which you have been sentenced to imprisonment were for trafficking in dangerous drugs. You have been out of trouble now for almost, by the time you committed this offence, 10 years.

14.  Mr Chik has mitigated quite heavily on that basis, that despite your previous criminal record, in the last 10 years you have been law-abiding and have tried to lead a decent life.

15.  He has rightly referred to the factors to be taken into consideration when considering money laundering offences, and he has quite correctly stated that for this type of offences, even if for a first offender, the sentence is one of an immediate period of imprisonment.

16.  One of the most recent cases, I believe, on this matter, is a Court of Appeal case in HKSAR v Hsu Yu Yi, CACC159/2009, a Chinese judgment which has been translated into English, and that judgment was given on 18 June 2010.

17.  In that case, the Court of Appeal considered 12 separate cases of sentencing in money laundering cases and set out the general principles applicable to sentencing and general starting points. The factors to be taken into account in determining the appropriate sentence is the amount of money involved.

18.  I just state from the outset:  there is no sentencing guidelines for this offence.  Each case varies on its facts.

19.  I go back again.

(i) The court held that the amount of money involved is a major consideration, and not the amount of benefit received by a defendant in the transaction;

(ii) the culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence, so a defendant’s level of participation and the number of occasions on which he is involved in the money laundering activities are relevant factors to be considered;

(iii) three, the offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However, if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence;

(iv) four, if the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished; and

(v) five, the length of time the offence lasted.

20.  In this case, defendant, the amount of money involved was about HK$3.1 million.  You had received a small amount, I found, of at least $4,500.

21.  Your culpability in this offence was in the assistance and support offered to whom you call “Kong Nga” in deliberately setting up your company, Star Trade, in your sole name and also opening the bank account in your sole name so that money could be laundered by Kong Nga.

22.  The offence, at least part of the monies was, of course, a fraud committed on the depositors in connection with investment trading.

23.  There was an international element here, as clearly the money was deposited from overseas and then remitted out to many overseas countries, although I say you took a backseat, or shall I say, turned a blind eye to all of this.  It would appear that Kong Nga was the one who was doing the remitting and he was doing that through the use of Internet banking.

24.  Taking all these matters into account and particularly at the culpability in your assistance and support to Kong Nga - I consider a term of 3 years’ imprisonment to be appropriate.

25.  In the circumstances, you are sentenced to 3 years’ imprisonment.