CHEUNG KAM SING v. HKSAR

CACC 380/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 380 OF 2010

(ON APPEAL FROM DCCC209/2010)

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BETWEEN

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JUDGMENT

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Hon Wright J (giving the judgment of the Court):

1.  The applicant, a 45 years old chartered accountant, of previous clear criminal record, was convicted after trial by HH Judge Yip in the District Court on a single charge of dealing with property known or reasonably believed to represent the proceeds of an indictable offence contrary to ss. 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455, and sentenced to undergo imprisonment for a period of six years. He seeks leave to appeal conviction and sentence.

THE BACKGROUND

2.  The prosecution evidence was admitted in its entirety pursuant to the provisions of s. 65C of the Criminal Procedure Ordinance. Aspects of the defence case were admitted, in turn, by the prosecution. The applicant elected to testify but called no witnesses.

3.  It is unnecessary to recite the admitted facts at length: with annexures they exceed 40 pages. The judge summarised them succinctly in his clear and concise Reasons for Verdict, which we found to be particularly helpful. We extract from them:

(a)  prior to 1993 the applicant was the employee in Hong Kong of a company established by one Bloemers who claimed himself to be a lawyer in the Netherlands. In 1993 the applicant left that employment and set about qualifying himself as a Certified Public Accountant;

(b)  in 2001 he commenced practice for his own account. In addition to that practice, the applicant operated a company, P.M.O. Ltd (PMO), which provided company secretarial services. Although not part of the admitted facts it was the applicant’s evidence that when he commenced practice he contacted Bloemers in the hope of receiving work from him. He met one Aalders through Bloemers;

(c)  in July 2003 the applicant opened a multicurrency savings account in the name of his firm with the Bank of China (Hong Kong) Ltd which was styled "Client’s Account". The applicant was the only signatory to that account. One of the currencies utilised in that account was Euro;

(d)  that account was used by both local and overseas clients of the applicant to make deposits and withdrawals. A comprehensive schedule, named as Ref. 3, agreed between the prosecution and the applicant as reflecting Euro transactions in the Client’s Account shows that, between November 2003 and November 2007, a period within the dates of the offence set out in the charge, €6,117,783.81 was credited to that account whilst  €6,119,990.97 was withdrawn from it;

(e)  in February 1998 a company, Elite Target Ltd, was incorporated in Hong Kong. One of its two shareholders was a company, M G Bloemers BV, whilst Bloemers was one of its two directors. By June 2000 the entire issued share capital was held by Bloemers either personally or through M G Bloemers BV. There were numerous changes of shareholding, directorships and company secretaries but it is clear from the admitted facts that Bloemers exercised effective control over the shareholding and directorships throughout. In January 2002 PMO became the company secretary. Soon after incorporation its name was changed to Acquaintance Enterprises Ltd;

(f)  on 6 November 2003 the applicant acquired a shelf company, Active Horse Ltd: PMO became one of its two directors and shareholders;

(g)  also on 6 November 2003 the applicant acquired a shelf company, Grade A Ltd: PMO became one of its two directors and shareholders and its company secretary. Shortly after its acquisition, W. Aalders Holding B.V. replaced the other shareholder and director. From late November 2003 the applicant and Aalders became the signatories to a bank account opened by the company, the signature of either one of them sufficing to operate that account;

(h)  on 16 October 2007 the applicant was served with a production order requiring him to produce to the police the business records of, inter alia, Acquaintance Enterprises Ltd and Active Horse Ltd;

(i)  Bloemers and Aalders had been arrested in the Netherlands in connection with offences of fraud, money laundering, forgery and participation in a criminal organisation some of which offences had occurred in Hong Kong; and

(j)  as a result of mutual legal assistance requests from the Netherlands the applicant was arrested on 20 November 2007. On searching the premises occupied by the applicant’s firm, various documents were seized. In March 2009 the applicant testified in Hong Kong before an examining magistrate from the Netherlands for the purpose of criminal proceedings to be instituted against Bloemers and Aalders.

4.  The judge also summarised the testimony of the applicant. He said:

16.  He had known Bloemers… since 1990s.  Bloemers was a well-known lawyer in the Netherlands.  He had assisted Bloemers in setting up a law firm in Hong Kong.  He had known Aalders since 2002 through Bloemers. Aalders was the deputy chairman of a trust fund in the Netherlands. 

17.  In July 2003, Bloemers instructed him to audit the books of accounts of a Hong Kong company, Shanghai Outerwear HK Ltd (“SOHK”).  SOHK was controlled by Bloemers.  Its books of accounts and senior management were both in the Netherlands.  As part of his auditing duties, he had to discuss the cash flow problem of SOHK with its majority shareholders and creditors.  They were actually the agent of TPC International BV (“TPC BV”).  Aalders was the managing director of TPC BV…. In ascertaining the background of various people such as Aalders, he had visited their offices to feel how the management was doing and communicate with the management in order to understand their background.  He would also check their background on the internet.

18.  From June to August 2003, he had lengthy conferences with Bloemers and Aalders to discuss a number of business opportunities.  They had to rely on his professional service.  Since July 2003, they instructed him to assist them to establish companies in Hong Kong.  They also used his Trust Account to handle deposits and withdrawals relating to their business. 

5.  One particular aspect of the applicant’s testimony was to the effect that, during the period covered by the charge, Bloemers and Aalders had used the Client’s Account in connection with 10 identified projects. The judge described, briefly, the nature of each of those projects, based upon the testimony of the applicant. We do not consider it necessary to repeat what the judge said about them.

6.  Thereafter the judge turned his attention to his findings in respect of each of those projects setting out what he described as the "salient features". He found nothing amiss with the first project but, in respect of each of the remaining nine projects, he expressed himself as seeing "no plausible reason" why certain events had occurred which involved the use of the Client’s Account or the mode in which it had been used. When considering the crux of the prosecution case, the judge noted:

There were deposits and withdrawals between companies which had their own bank accounts in Hong Kong.  There were pairs of deposits and withdrawals even within the same day.   There were cash deposits and withdrawals in huge amounts.  There was little documentation which could verify the legality of the moneys. 

7.  His detailed findings in this regard clearly illustrate just what was happening in the applicant's Client’s Account and bear repetition:

(b) Active Horse Project

I see no plausible reason as to why the alleged fund could not sit in Bucephalus BV’s own bank account until the eventual recipients were ready to receive it or why the alleged fund had to pass through Landmark, the Trust Account and Active Horse to the eventual recipients.

(c) TPC Brand Name Project

I see no plausible reason as to why the Defendant would accept the withdrawal of €500,000 deposit into his Trust Account on 30 December 2003, which was prior to his being advised of its purpose by Aalders’s email on 22 January 2004.  I see no plausible reason on the facts as to why generally speaking the alleged funds could not sit in the investors’ own bank accounts until the eventual recipients were ready to receive them or why the alleged funds had to pass through Trade Top and the Trust Account to the eventual recipients.

(d) TPC Discount Loan Project

I see no plausible reason as to why physical movement of cash, and such large sum of €75,000 and around €900,000 respectively, would take place in this investment project. I see no plausible reason as to why generally speaking the alleged funds could not sit in the investors’ own bank accounts until the eventual recipients were ready to receive them or why the alleged funds had to pass through the Trust Account to the eventual recipients. 

(e) Eternal Wealthy Project

I see no plausible reason as to why the alleged funds had to go through the Trust Account to the eventual recipients.  To be more specific, a sum of around €500,000 from Eternal Wealthy had to somehow pass through the Trust Account to SOHK on the same day of 13 July 2004. I see no plausible reason as to why generally speaking the alleged funds could not sit in the depositors’ own bank accounts until the recipients were ready to receive them. 

(f) Grade A Project

I see no plausible reason as to why the sum of around €170,000, in itself or as part of the sum of around €350,000, could not sit in Bucephalus BV’s own bank account on 17 November 2003 until Grade A opened its own bank account on 24 November 2003. I see no plausible reason on the facts as to why the sum of around €75,000 as alleged payments from Grade A on 8 December 2003 would have to go through the Trust Account and could not go directly to Absam NV’s own bank account on 9 December 2003 .

(g) Upper Asset/EOS Project

I see no plausible reason as to why Heyman would not pay the alleged purchase price to Acquaintance directly by its own bank account.   I see no plausible reason as to why Jan Verfaille would not pay the alleged purchase price to Upper Asset, Heyman and Neirinckx directly by their own bank accounts.  

(h) Liquidation in Bucephalus BV Project

I see no plausible reason as to why the two investors would not provide the alleged funds to SOHK or SFO directly by their own bank accounts. 

(i) Imeko Project

I see no plausible reason as to why the alleged dividend would not be paid directly into Acquaintance.  I see no plausible reason as to why Imeko Diary Product BV would not pay the various sums to the solicitors’ firm, CKS & Co or Imeko HK directly.    

(j) Acquaintance Project 

I see no plausible reason as to why Acquaintance had to deposit the alleged payments or withdraw the alleged fees by its own bank account which was already opened on 17 November 2003. 

8.  The judge was correct, in our judgment, to remark as he did upon the peculiarity of the uses of the Client's Account in respect of each project. The factual bases which gave rise to the judge’s findings in this connection were admitted by the applicant and were evident from the agreed schedule. Each transaction referred to by the judge was possessed of singular characteristics: it is unsurprising that the judge found no plausible reason as to why these various transactions should have occurred in the manner they did.

THE DEFENCE AT TRIAL

9.  The judge recognised that:

The prosecution does not have direct evidence on actual knowledge on the part of the Defendant.  The case is directed at his belief.  The test for mens rea is there were grounds that a common sense, right-thinking person would consider were sufficient to lead a person to believe that the property was linked to an indictable offence, and that these grounds were known to the Defendant. 

and identified the defence as:

5.  There is no dispute that he had dealt with the said sum. The contention takes 2 fronts.  The first front is that the objective element of mens rea should be as follows:

“Whether there were grounds that a common sense, right-thinking certified public accountant would consider were sufficient to lead a certified public accountant to believe that the property was linked to an indictable offence”

6.  The defence says that he had complied with all the requirements under the code of conduct applicable to a certified public accountant.  There were insufficient grounds for any certified public accountant or, as a fall-back position, any layman to hold such belief in the present case. 

7.  The second front is that the prosecution has failed to identify which of the sums, out of more than a hundred sums, was dealt with by the Defendant with such mens rea.  

10.  The judge acknowledged that the test to be applied is twofold, quoting from Secretary for Justice v CHOI Sui Hey [2008] 6 HKC 166 where we said, at §18:

It is well settled that the concept of having “reasonable grounds to believe” involves both objective and subjective elements: the objective element necessitates proof of the existence of grounds which a commonsense, right-thinking member of the community would regard as sufficient to lead a person to believe that property in whole or in part represented proceeds of an indictable offence; the subjective elements requires proof that those grounds were known to the particular accused.

11.  It had been the applicant's testimony and contention that he had complied with the requirements of the professional body of which he was a member in the operation of the clients account. The judge rejected the submission on behalf of the applicant that the objective test should be adjusted to reflect the state of belief not of a "member of the community" but of a person holding the same qualification as did he. The judge expressed himself to be of the view that the standard should remain that of a "layman" as he chose to phrase it, adding "I rather think... that a certified public accountant is trained to be more astute to pick out a doubtful transaction than a layman."

12.  The judge then addressed himself to the specific evidence that related to the state of mind of the applicant noting that, on the undisputed evidence:

45.  The moneys here were substantial.  There were deposits and withdrawals between companies which had their own bank accounts in Hong Kong for no plausible reason.  There were pairs of deposits and withdrawals even within the same day for no plausible reason.  There were cash deposits and withdrawals for no plausible reason.  Multiple tiers of companies were allegedly used for injection of capital for no plausible reason. The Trust Account was used for no plausible reason. 

46.  Those documents kept by the Defendant for the 10 projects contained only bare allegations of the purpose of the moneys or background of people making the deposits or withdrawals.   Examples of such bare allegations include the brochures of TPC BV and Bucephalus BV, and emails from Bloemers in vouching for the good background of some clients such as Holterman in the Imeko Project and that Aalders had a conversation in Cathay Airlines first class compartment with Li Ka-sheng. Visits to clients’ offices in the Netherlands would be of very little value.  There were no records of enquiries held by him, or explanations by his clients, referable to any independent or authoritative source, such as a set of audited accounts, to satisfy himself of the legality of the moneys and business operations.  The data he was given could hardly satisfy himself as required by the professional code of conduct or even a layman.   

13.  He was justified on the evidence before him in arriving at those findings. He then went on to conclude that the applicant "... had been turning a blind eye to the nature of the projects and moneys related to Bloemers and Aalders in the [Client’s Account]."  He expressed himself satisfied that there existed grounds that a common sense, right-thinking person would consider were sufficient to believe that the moneys were linked to an indictable offence and that these grounds were known to the applicant.

THE APPEAL AGAINST CONVICTION

14.  Three grounds of appeal against conviction were advanced: first, that the trial judge passed an inconsistent verdict; second, that the trial judge applied the wrong test in determining whether the applicant had reasonable grounds to believe that the funds represented the proceeds of an indictable offence; third, that the prosecution had failed to prove that a common sense right-thinking member of the public would believe that the property was linked to an indictable offence in Hong Kong.

Ground 1

15.  Mr. Lawrence Lok SC who, with Mr. Joe Chan, appeared for the applicant before us but not the court below, wisely abandoned the first ground of appeal: it is difficult to determine how, where only one verdict is returned, it can be described as "inconsistent".

Ground 2

16.  The second ground of appeal asserted that the judge "... was wrong to apply Secretary for Justice v CHOI Sui Hey [2008] 6 HKC 166 in the analysis of the applicant’s state of mind.", effectively a repetition of the first line of defence advanced in the court a quo.

17.  The judge, when turning to consider the evidence relating to the applicant’s state of mind, quoted the passage in CHOI Sui Hey which reads:

20.  If a person either allows another to use his bank account for the transmission of funds or accepts substantial funds from others which he then remits, without enquiry by him or explanation by the others, to third parties unknown to him then, in the absence of evidence to the contrary, the inevitable inference will arise that the holder of the bank account has reasonable grounds to believe that the funds passing through the account or the funds with which he has dealt represent proceeds of an indictable offence.

18.  It was the applicant's contention that a distinction necessarily is to be drawn between the situation where an individual allows his personal bank account to be used in such a manner compared with the situation in which a professional person operates an account specifically created for his clients to use for their convenience in connection with transactions in which he is advising or representing them.

19.  It was suggested in the applicant's written amended perfected grounds of appeal, that the phrase "the inevitable inference will arise" in that the judgment "... practically means that the burden of proof is shifted to the defendant.". Mature reflection resulted in this argument not being pursued before us.

20.  The applicant’s contention amounted, in effect, to the submission that it is to the description or nature of the account concerned that regard should be had: because this was an account established specifically for the use of the clients of the applicant’s practice as a certified public accountant and which had been established in accordance with the practice of the applicant's professional body, the judge erred in applying the same standard as that applied to a bank account opened by a non-professional person who then permitted third parties to use it for transmission of funds. In essence, the applicant contended that to disregard the inherent difference in the natures of the accounts operated unfairly towards the applicant.

21.  We reject that suggestion for it ignores the fact that, irrespective of the nature of or descriptive label applied to a given account, it is the transactions conducted in or through an account to which the court will have regard in order to determine objectively whether the requisite grounds to form the belief have been proven by the prosecution to exist.

22.  We do not, by that, mean to say that in every instance where a professional person makes a facility of this nature available, the fact that it is an account of a particular type will be irrelevant. There may be marginal cases where the inherent nature of the facility offered may be a factor which is sufficient, on the facts of that particular case, to raise a doubt as to whether the prosecution has succeeded in establishing the objective aspect of the test. We apprehend, however, that such an instance will be rare indeed for either a doubt will exist once the transactions have been subjected to scrutiny or, as in this instance, it will be manifest that those transactions establish the objective element of the test. It will be a fact-sensitive decision in each instance.

23.  It is necessary to keep in mind that the judge convicted the applicant specifically on the basis that he had "turned a blind eye" to the nature of the transactions in the Client’s Account. Such an approach has previously been held to be proper:

31.  It is, we think, self evident that having reasonable grounds to believe something indicates a firmer state of mind than having reasonable grounds to suspect it.  But that being said, having reasonable grounds to believe something rests on more slender evidence than being sure.  Accordingly, depending on the circumstances, a person may have reasonable grounds to believe something even though those grounds leave something to surmise or conjecture.  In this regard see George v Rockett 93 ALR 483 at 490, judgment of the High Court of Australia (per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ).

32.  In summary, to employ the analysis of Judge Line, if a person, although he cannot know for certain, nevertheless has reasonable grounds to believe that, having regard to all the circumstances, he may well be dealing in the proceeds of an indictable offence, and if that person goes ahead and deals then he commits an offence under s.25(1).  This is so even if there also exist reasonable grounds for believing in some alternative scenario.

33.  What cannot be ignored is that the money laundering is invariably a devious activity, its purpose being to appear what it is not.  In our view, it would therefore undermine the purpose of the legislation if a person was able to ‘turn a blind eye’ to a reasonably held belief that certain property represents the proceeds of an indictable offence by being able to focus instead on some alternative reasonably held belief as to its provenance.

[emphasis supplied]

per Hartmann JA in HKSAR v WAN Yet Kwai (unreported CACC372/2008, 5 May 2009)

24.  There are numerous instances in the consolidated schedule where funds are coming into the Client’s Account from individual, third-party investors for stipulated projects but the applicant, on the apparent instructions of Bloemers or Aalders, remits substantial portions of those funds to one of them or their companies. As but one example, the first illustration of this conduct appears from the first entry on the consolidated schedule which shows a payment into the Client’s Account of just under €350,000, relating to the Active Horse Limited project but from which just over €170,000 is paid, the same day, to Bloemers’s company, Acquaintance Enterprises Ltd, and from which seven days later a similar amount is paid to Aalders’s company, Grade A Limited, with only the remaining balance of just under €10,000 actually finding its way to Active Horse Limited.

25.  Perhaps, however, the most striking illustration of the applicant turning a blind eye to the nature of the instructions received by him from Bloemers or Aalders and the effect those instructions would have on the moneys of belonging to 8 identified individual investors in the Client’s Account occurred in May 2004 when, with funds steadily accumulating from December 2003 for the purposes of investment in the Brand Name and Discounted Loans Projects, the applicant receives an e-mail from Bloemers requesting to withdraw the accumulated amount of some €900,000 in cash "on short time notice". Bloemers tells the applicant that the cash would be returned to Hong Kong some days later except in US dollars. The applicant replies by e-mail. He says that because of the high bank charges which would be incurred in withdrawing cash a telegraphic transfer would be better.

26.  The applicant goes on to express concern about the promised return of the funds saying "For the cash deposit to my client account, there should be the problem of Inland Revenue Department. One day I should face the challenge of the questionaries of IRD to prove the source of fund.” (sic).

27.  A particularly important facet of this transaction is that the applicant prepared Exhibit P3 what may best be described as a cash flow analysis of the funds requested by Bloemers which shows that, excluding a reserve of just over €20,000 for bank and service charges, there was an amount of €884,000 which was paid over to Aalders at Bloemers’s direction. According to the applicant's own cash flow analysis, that amount of money "belongs to" five named individual investors.

28.  Despite the applicants advice, as well as his expressed misgivings about the return of those moneys, he complied with the request. It is an admitted fact that Aalders arrived in Hong Kong at 7:48 am on 29 May 2004 and left Hong Kong at 10:01 pm the same day. He collected the moneys requested by Bloemers.

29.  This incident must also be considered in the light of three aspects of the applicant's own testimony during cross-examination: first, that telegraphically to transfer the funds to the Netherlands would have resulted in them being received earlier than they were as a result of Aalders’s visit to Hong Kong - he testified that he had said that a telegraphic transfer was better but he had "no idea" why Bloemers/Aalders insisted on receiving cash; second, he denied that it had occurred to him that the demand for such a large sum in cash was "rather strange "; third, he accepted that his concern about possible enquiries by the Inland Revenue Department related to enquiries he appreciated it may make concerning possible money laundering transactions.

30.  The judge further had regard to other facets of the transactions which appeared from the documentation before him which he set out in §45 of his Reasons for Verdict, which is reproduced at §12 above. Those were all matters which he was entitled to take into account.

31.  The judge also noted, as pointers to the applicant’s state of mind, a number of features other than the transactions reflected in the Client’s Account.

32.  It seems to us that a particularly significant factor, which the judge properly took into account, was the applicant's reaction to and conduct after the service of the production order on him on 16 October 2007. Moreover, he plainly was concerned already by an e-mail dated 12 October received from one Josje van Huet requesting a copy of Bloemers’s resignation as a director of the company, Shanghai Outerwear HK Ltd, whose accounts the applicant had previously audited: on 16 October he forwarded that e-mail to Bloemers enquiring why such a request had been forthcoming, raising a number of other issues and specifically stating "A lot of questions caused me very uncomfortable. Is this civil or criminal?"

33.  It was submitted on behalf of the applicant that this communication was the first time which he had expressed concern over any of the transactions and was an indicator that, until then, his suspicions had not been aroused. We do not accept that to be so: he had already expressed concern that the Inland Revenue Department may make enquiries of him regarding possible money laundering activities as early as May 2004. He was also fully aware that the €884,000 which he had paid over to Bloemers/Aalders had been received from third-party investors whom he had identified: he went to the trouble of having signed by Aalders, as part of the cash flow analysis, Exhibit P3, what purported to be a release from liability consequent upon his giving effect to the payment instructions.

34.  It cannot sensibly be suggested that the service of the production order the same day as his e-mail to Bloemers would not have made it clear beyond peradventure to the applicant that, at the very least, serious suspicions abounded over the nature of the funds with which he was dealing. Despite the most bland of assurances which he was offered by Bloemers that he had "... never ever been involved in criminal activities" the applicant continued disbursing moneys unquestioningly including an amount of almost €150,000 to Bloemers personally from moneys which the applicant himself described as relating to Upper Asset/EOS Project.

35.  The judge further took into account the fact that it was the applicant's own evidence that he had not maintained individual ledgers in respect of the projects which had been the subject matter of his dealings although he accepted that this was the course which, professionally, he should have followed. The consolidated schedule which reflected the fund movements had been compiled retrospectively based on bank books, customers’ advices, instructions from Bloemers and Aalders and correspondence with them as well as a spreadsheet file retained in his own computer. The judge noted that the documentation kept by the applicant for the projects contained "... only bare allegations of the purpose of the moneys or background of people making the deposits or withdrawals."; there were no records of enquiries made by him or explanations by his clients which had been independently or authoritatively substantiated.

36.  After analysing the applicant's case and his testimony, and after considering the individual projects and making his findings in respect of each of them, it is plain that the judge then stood back and looked at the evidence as a whole. This was the appropriate approach for him to have adopted. It was then that he found that he was satisfied that the applicant had been turning a blind eye to the nature of the projects and moneys related to Bloemers and Aalders in the Client's Account.

37.  In our judgment he was fully justified in arriving at that decision. Nothing in the way the judge approached the evidence as demonstrated by his economical Reasons for Verdict resulted in any finding adverse to the applicant which the applicant had not had an opportunity of addressing. He was correct to apply the test as reflected in CHOI Sui Hey in unmodified form.

38.  We note that, regrettably, the judge made one factual error in his Reasons for Verdict when he said, at §33:

I see no plausible reason as to why the defendant would accept the withdrawal of €500,000 deposit into his trust account on 30 December 2003, which was prior to his being advised of its purpose by Aalders e-mail on 22 January 2004

apparently overlooking a written instruction which pre-dated the withdrawal.

39.  Although we recognise that this is an erroneous finding adverse to the applicant, in view of the numerous other accurate adverse findings it it has no impact on the safety of the conviction.

Ground 3

40.  What we have said in regard to the second ground of appeal is of equal relevance to the third: factually they are inextricably interwoven. All that need be said in addition is that it is well settled in this jurisdiction that there is no requirement that the prosecution establish that, as a fact, the property - being the funds passing through the Client’s Account - was the proceeds of an indictable offence.

41.  The complaint was made on behalf of the applicant that the judge had not analysed the extent of enquiries required to be made by the applicant in order to discharge his professional duty as an accountant towards Bloemers and Aalders. With respect, that is not a matter which in any way impacts on the state of the applicant’s mind in regard to the transactions occurring in his own Client’s Account.

42.  It was an admitted fact that some of the offences in respect of which the Bloemers and Aalders had been arrested in the Netherlands had taken place in Hong Kong.

43.  The application for leave to appeal conviction consequently is dismissed.

THE APPEAL AGAINST SENTENCE

44.  The sentence imposed by the judge was one of 6 years imprisonment which was arrived at by reference to a number of previously decided cases as result of which he adopted a starting point of 6 years 6 months imprisonment which he then reduced by 6 months for various factors. The sentence is appealed both on the basis that it is manifestly excessive and that it is wrong in principle.

45.  There is, of course, no tariff for offences of this nature. The judge performed a very careful analysis of earlier decided cases, categorising them into those where the predicate offence was established as being illegal bookmaking/gambling and those where it was another offence or the offence was not known. The judge’s exercise was performed in order to provide himself with an indication of the range of sentences imposed in respect of these offences both where the predicate offence had been determined and where not.

46.  He noted that decisions involving moneys demonstrated to have emanated from illegal bookmaking/gambling have seen sentences "significantly lower" than sentences where a different, or no, predicate offence has been established. He then took the view that it was not appropriate to have regard to sentences imposed in the former category for the purposes of sentencing the applicant. It was this approach which has been submitted to be wrong in principle.

47.  The judge was correct in his analysis of the trends of sentencing in cases of this nature, particularly the distinction that appears to be drawn between moneys emanating from illegal bookmaking/ gambling as opposed to other sources. He was correct in approaching the sentencing exercise on the basis that this was a matter in which the nature of the predicate offence had not been established. In the circumstances his recognition of the fact that it would be inappropriate to follow the general level of sentences imposed where the predicate offence had been established be illegal bookmaking/gambling is a valid approach. The sentence is not wrong in principle.

48.  After reminding himself of the general principles applicable to sentences for offences of this nature, the judge said in relation to the present matter:

34.  Bloemers and Aalders were charged as the leaders of a criminal organization with several members for scam, perjury, money laundering, bankruptcy fraud and forgery.   Whilst it is known that these crimes have caused loss to at least 10 victims who had come forward to give statements, their actual loss is, however, not revealed to this court.

35.  This is by any standard a very well-planned and well-orchestrated scam.  The offending period spanned over 4 years and 4 months.  There was a strong international element.  There were over 100 transactions.  The total sum was over HK$ 60 million.  There were multiple or, at times, layers of depositors and recipients in both personal and corporate entities.  The moneys were stowed under the trust account of a certified public accountant, a professional who is usually most respected and the least to be suspected.  It would be difficult for the police to detect such money laundering activities.  The Defendant had taken an active role in taking instructions from Bloemers and Aalders on how to handle the moneys in each transaction.  He had adopted a most accommodating attitude of never querying their sources.  He had received highly flexible fees for his service.  I take 6½ years as the starting point. 

49.  The judge was correct in his assessment of the essential features of the offence in this manner. The fact that the applicant was a practising certified public accountant is an aggravating feature for, as the judge had observed, he would be more likely than a layman to appreciate the nature of the transactions yet consciously chose to turn a blind eye to them. Moreover, we recognise that the fact that the funds were being moved through the account of such a professional would cloak them with an air of respectability greater than if they had been moved through an account of a private individual with the added advantage to the applicant of reducing the likelihood of detection.

50.  We see no utility in, once more, citing a list of sentences imposed in other matters: it is a task which this Court has performed on a number of occasions and was an exercise conducted by the judge. We have had regard to the authorities to which he referred as well as those to which our intention was invited by the respondent.

51.  The judge was alive to the personal circumstances of the accused and to the fact that the evidence did not suggest that he received any direct financial benefit from his actions other than being able to charge what the judge described as "highly flexible fees for his service". We recognise that the aggregate amount received by him in respect of fees as revealed by debits shown in the evidence was modest, especially when compared with the total amount of money in Euro that passed through the Client’s Account.

52.  The starting point was a robust one as, no doubt, it was intended to be both in order to act as a deterrent and to give recognition to the aggravating features. Sentences in respect of this type of offence generally are robust. We do not regard the starting point as being one which could properly be described as manifestly excessive as substantial as it may be.

53.  From that starting point the judge allowed a discount of 6 months. This was arrived at by allowing a reduction of 3 months in respect of the applicant’s co-operation with the authorities in the Netherlands by providing inculpatory evidence against those being prosecuted in that jurisdiction albeit that the exact value of that evidence is unknown at this stage; 2 months in respect of the delay in prosecuting the applicant for which there was no discernible reason, although the delay itself was not particularly long; 1 month for his agreement of the prosecution evidence. Those allowances appear to us to have been appropriate.

54.  The application for leave to appeal sentence similarly is dismissed.