HKSAR v. MEREDITH GERALD SYDNEY

DCCC 885/2018

[2021] HKDC 199

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 885 OF 2018

________________________

________________________

________________________

REASONS FOR VERDICT

________________________

1.  The defendant pleads not guilty to two charges of dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1].

2.  The particulars of charges read as follows: 

Charge 1

“MEREDITH Gerald Sydney, between the 28^th day of January 2016 and the 29^th day of March 2016, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of $3,348,613.17 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of indictable offence, dealt with the said property.”

Charge 2

“MEREDITH Gerald Sydney, between the 22^nd day of August 2016 and the 31^st day of August 2016, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of $5,333,151.15 United States currency, in whole or in part directly or indirectly represented any person’s proceeds of indictable offence, dealt with the said property.”

Introduction

3.  The property referred to in the charges is money deposited in the bank accounts of Jade Décor Painting and Decoration Company held with the Bank of China (charge 1) and the Jade Group Trading (HK) Limited held with the China Citic Bank (charge 2).  The defendant was the sole director of both companies and the sole signatory of the bank accounts.   

Prosecution case

4.  In summary the prosecution case is that the monies deposited in the bank accounts were obtained by email fraud and that the defendant dealt with the monies having reasonable grounds to believe the monies, in whole or in part, directly or indirectly represented the proceeds of an indictable offence. 

5.  After reading the prosecution opening Mr Chau informed the court that the prosecution proceeds only on the basis that the defendant had reasonable grounds to believe and not that the defendant knew the monies were the proceeds of an indictable offence, namely the email fraud[2].

Defence case

6.  The defence case in summary is that in early 2015 the defendant was contacted by a Malaysian citizen Razaq Awang.  The defendant did not know Razaq Awang.  Razaq Awang was looking for a representative of his company which would be based in Hong Kong.  Razaq Awang asked the defendant to look into opening a new company so his customers could pay in Hong Kong.  The defendant agreed. 

7.  Before a new company had been incorporated and a bank account opened Razaq Awang told the defendant he had some customers who needed to make urgent payments into the new company in Hong Kong. The defendant agreed that payments could be remitted to the bank account of Jade Décor Painting and Decoration Company held with the Bank of China.  Acting on the instructions of Razaq Awang the defendant withdrew the monies, partly in cash and partly by way of transfers to different bank accounts (charge 1). 

8.  After Jade Group Trading (HK) Limited was incorporated and the China Citic Bank account opened, payments were made into the account which the defendant, acting on the instructions of Razaq Awang, withdrew partly in cash and partly by way of transfers to different bank accounts (charge 2).   

9.  The defendant believed all payments were for legitimate business.    

The law

Dealing with property

10.  The actus reus of the offence is dealing with property.  Dealing in relation to property is defined in section 2(1) of the Ordinance and includes, (a) receiving or acquiring the property; (b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise); and (c) disposing of or converting the property.

Having reasonable grounds to believe the property represented the proceeds of an indictable offence

Proceeds of an indictable offence

11.  The prosecution does not have to prove the property represents the proceeds of an indictable offence only that the defendant had reasonable grounds to believe the property represented the proceeds of an indictable offence[3].

Having reasonable grounds to believe

12.  The mens rea of dealing has two parts “knowing” or “having reasonable grounds to believe”.  As stated earlier Mr Chau informed the court that the prosecution proceeds only on the basis that the defendant had reasonable grounds to believe and not that he knew the monies were the proceeds of fraud.

13.  In HKSAR v Yeung Ka Sing, Carson[4] the Court of Final Appeal confirmed their earlier decision in HKSAR v Pang Hung Fai[5]that the better and less complicated test for determining whether the accused had reasonable grounds to believe was that propounded by the Appeal Committee of the Court of Final Appeal in Seng Yuet Fong v HKSAR,[6] namely that:

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

14.  In HKSAR v Harjani Haresh Murlidhar the Court of Final Appeal again confirmed that the Seng Yuet Fong test correctly represents the law[7].  In the interests of clarity, the Court of Final Appeal, however, reformulated the test as follows:

(i) What facts or circumstances, including those personal to the defendant, were known to the defendant that may have affected his belief as to whether the property was the proceeds of crime (“tainted”)?

(ii) Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

(iii) If the answer to question (ii) is “yes” the defendant is guilty. If it is “no” the defendant is not guilty.

Evidence

15.  Most of the prosecution evidence has been admitted pursuant to sections 65B and 65C of the Criminal Procedure Ordinance[8], including witness statements relating to the email fraud[9]; business registration documents[10]; Inland Revenue documents[11]; banker’s affirmations[12]; the arrest of the defendant[13] and the production of WhatsApp messages, emails and other documents seized from the defendant[14].  I will refer to the admitted evidence as I review the evidence. 

16.  Also admitted in evidence are seven video recorded interviews[15].   I have considered both the inculpatory and exculpatory parts of the interviews, in accordance with the principles in R v Sharp[16].

17.  Seven trial bundles have been submitted by the prosecution and one by the defence[17].   

18.  The prosecution called only one witness DPC 12613 (PW3) who produced flow charts of the relevant bank accounts[18]. Two witnesses: Inspector Hui Chung Hang (PW1) and WDPC 10605 (PW2) were tendered for cross-examination[19].

19.  The defendant elected to give evidence.  No witnesses were called on behalf of the defendant.  

20.  Admitted in evidence is that the defendant  has a clear criminal record in Hong Kong[20].  I direct myself as to good character both as to credibility and propensity in accordance with the decision in HKSAR v Tang Siu Man[21].

21.  In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  The defendant has nothing to prove.  I direct myself that I must be sure of the guilt of the defendant on each charge before I can convict, each charge being considered separately.  On the other hand, if the court thinks that the defence evidence pointing to innocence is true or may be true, it would follow that the defence has raised sufficient doubt in the prosecution case and the defendant entitled to be acquitted.  

22.  I remind myself that when drawing inferences from the evidence the inference must be the only reasonable inference to draw from the proved facts.  If from the facts proved there is a reasonable inference to draw against a defendant as well as one in his favour, the adverse inference cannot be drawn.  

Prosecution evidence

Admitted evidence

Jade Décor Painting and Decoration Company (“Jade Décor”)

23.  Admitted in evidence is that:

(i)  on 1 July 1996 the defendant set up Jade Décor[22];

(ii)  on 9 March 2007 the defendant opened a Flexi-Savings account with the Bank of China[23];

(iii)  on 14 May 2010 the defendant opened a Business integrated account for Jade Décor with the Bank of China (“the BOC account”) and was the sole signatory of the account[24].

(iv)  on 29 March 2016 the BOC account was closed by the bank[25];

(v)  on 29 June 2016 the defendant opened a bank account for Jade Décor with the Bank of Communications[26];

(vi)  on 25 May 2018 the Bank of Communications account was closed by the bank[27].

Jade Group Trading (HK) Limited (“Jade Group”)

24.  Admitted in evidence is that:

(i)  on 22 February 2016 Jade Group was incorporated and that the defendant was the sole founding member, sole director and sole shareholder[28].;

(ii)  on 27 April 2016 the defendant opened a Corporate Bank Account for Jade Group with the China Citic Bank International Limited (“China Citic account”) and was the sole signatory of the account[29].

(iii)  on 2 November 2018 Jade Group was dissolved[30].

Banker’s affirmations

25.  Banker’s affirmations from the Bank of China, Bank of Communications and the China Citic Bank have been produced[31].

26.  Specific transfers to and withdrawals, transfers and remittances from the BOC account and the China Citic account have also been admitted[32].

27.  DPC 12613 (PW3) produced flow charts of the BOC account and the China Citic account.  Flow charts of the bank account held by Jade Décor with the Bank of Communications and the defendant’s Flexi-Savings account with the Bank of China have also been produced[33].

Money Service Operator Licence

28.  Admitted in evidence is that Jade Décor, Jade Group and the defendant have not been entered on the Register of Money Service Operator Licensees[34].

Inland Revenue

29.  The Inland Revenue Department documents for Jade Décor, Jade Group and the defendant have also been admitted[35].

Emails and documents seized from the defendant

30.  Admitted in evidence are:

(i)  emails seized from the defendant on 27 September 2016 (exhibits P6, P33 & P34)[36];

(ii)  documents seized from the defendant on 25 October 2016 (exhibit P37)[37];

(iii)  emails handed to the police by the defendant on 27 October 2016 (exhibit P5) [38]; and

(iv)  documents seized from the defendant on 15 December 2016 (exhibit P35) and a selection of emails downloaded from the defendant’s computer (exhibit P8)[39].

Arrest/video recorded interviews

31.  Admitted in evidence are seven video recorded interviews (VRI-1 to VRI-7)[40].  The documents shown to the defendant and signed by the defendant in the interviews have also been admitted in evidence together with corresponding tables indicating which documents were shown to the defendant[41]. The documents are contained in two bundles[42].

32.  The following is a summary of the main areas the defendant was asked about in the interviews.    

First arrest

33.  Admitted in evidence is that on 17 July 2016 the defendant was arrested at the airport by SPC 23104 and was handed over to Wan Chai District Investigation Team 1 for investigation[43].

34.  The next day WDPC 10605 interviewed the defendant.

VRI-1 – 18 July 2016 (exhibit P16)

35.  The defendant was asked, inter alia, about Jade Décor; Jade Group; the business relationship with Razaq Awang and the three remittances to the BOC account.

VRI-2 – 27 September 2016 (exhibit P17)

36.  The defendant was asked, inter alia, about specific withdrawals and remittances from the BOC account.

Second arrest

37.  VRI-2 was concluded at 15:22 hours.  Admitted in evidence is that at 15:43 hours on 27 September 2016 the defendant was arrested by DPC 6849 of Team 2D, Fraud Section, Commercial Crime Bureau[44]. The next day DPC 6849 interviewed the defendant.

VRI-3/VRI-4 – 28 September 2016 (exhibits P18 & P19)

38.  In VRI-3 the defendant was asked, inter alia, about Jade Décor; Jade Group; the business relationship with Razaq Awang and the documents seized from his home on 27 September 2016.  

39.  In VRI-4 the defendant was asked, inter alia, more detail about the business relationship with Razaq Awang.

VRI-5/VRI-6 – 21 December 2016 (exhibits P20 & P21)

40.  In VRI-5 the defendant was asked, inter alia, about emails seized on 25 October 2016 and 27 October 2016 and downloaded by the police on 15 December 2016 and the business relationship with Razaq Awang.

41.  In VRI-6 the defendant was asked, inter alia, why he still trusted Razaq Awang having been arrested in connection with Jade Décor.

VRI-7 – 24 January 2018 (exhibit P22)

42.  The defendant was asked, inter alia, about the WhatsApp messages found on his mobile phone.  Admitted in evidence is that on 8 November 2017 the police took photographs of WhatsApp messages from the defendant’s mobile phone[45].

Email fraud/deception

Charge 1

43.  Charge 1 concerns three payments made by New Foundation SA (“New Foundation”) and Zeean Corporation (“Zeean”) remitted to the bank account of Jade Décor Painting and Decoration Company (the BOC account).

44.  Admitted in evidence is that New Foundation transferred HK$18,662.58 to the BOC account on 28 January 2016 and $488,408.70 on 1 February 2016 and Zeean transferred HK$2,841,541.89 to the BOC account on 2 March 2016[46].

45.  The witness statement of Chen Chun Ying (exhibit P1), the administration manager of Xiamen Rose Queen Garment Co., Ltd (“Rose Queen”) was read into evidence.  In summary Ms Chen details two business transactions with New Foundation in December 2015 and January 2016 for the supply of goods to Vietnam and France and one transaction with Zeean in September 2015 for the supply of goods to Korea[47].

46.  When Rose Queen did not receive payment for the shipments they made enquiries with both New Foundation and Zeean.  New Foundation and Zeean forwarded proof of remittance which showed that the monies had been wrongly remitted to the BOC account. 

47.  The email system of Rose Queen had been hacked. Both New Foundation and Zeean had received emails requesting a change of the remittance account to the BOC account. The email accounts used to request the change of the remittance account were not used by Rose Queen.  

Charge 2

48.  Charge 2 concerns three payments made by Aruba Networks Incorporated (“Aruba”) remitted to the bank account of Jade Group Trading (HK) Limited held with the China Citic Bank International Limited.

49.  Admitted in evidence is that Aruba transferred to the China Citic account US$761,788.32 and US$2,678,257.30 on 22 August 2016 and US$1,893,105.53 on 29 August 2016[48].

50.  Aruba is wholly owned subsidiary of Hewlett Packard Enterprise (“Hewlett Packard”).  The witness statements of Ying Tsang Wai (exhibit P2), a financial controller with Hewlett Packard; Chandan Dey (exhibit P3), the manager of Aruba Finance and Mohammed Azam (exhibit P4), an Accounts Payable specialist with Aruba, have been read into evidence. 

51.  In summary Hewlett Packard entered into a business deal with Taiwanese company Wistron Neweb Corp (“WNC”) for the purchase of goods.  Communication with WNC was conducted by William Ye from the Procurement Department.  Upon finalization William Ye would send an email to instruct the staff of Hewlett Packard India to settle payment.  Payment was the responsibility of Aruba.   

52.  When WNC did not receive payment they notified Hewlett Packard.  Internal enquiries revealed that Aruba had received emails requesting a change of the bank payment information to the China Citic account.  Aruba believing the emails to be genuine authorised the change and made the first two remittances. 

53.  When Aruba’s bank queried the transactions Aruba immediately sent an email to William Ye asking for confirmation of the change of bank payment information.  Aruba received an email purporting to be from William Ye confirming the change. Aruba again believing the email to be genuine made the third remittance. 

54.  Hewlett Packard/Aruba had not authorised the change of the bank payment information to the China Citic account.  The email address of William Ye had been hacked.  William Ye had not sent the emails authorising the change.  The address used was different to that used by William Ye by the addition of an extra letter ‘h’. 

55.  Admitted in evidence is that there is no evidence that the defendant had any contact with Chen Chun Ying, Ying Tsang Wai, Chandan Dey and Mohammed Azam[49].

Defence evidence

56.  In summary the defendant testified that he believed the payments transferred into the BOC account (Jade Décor) and the China Citic account (Jade Group) were payments in connection with the legitimate business of Razaq Awang and that in withdrawing the monies he acted on the instructions of Razaq Awang, whom he trusted.   

57.  The defendant was referred to the documents contained in the defence bundle.  For ease of reference I will refer to the documents as DB1 through to DB108.  Mr Sherry informed the court that all the documents in the defence bundle were shown to the defendant during the video recorded interviews and the index to the bundle shows in which of the two VRI bundles the documents are contained and the corresponding prosecution exhibit number. 

58.  The defendant was also referred to the photographs of the WhatsApp messages (exhibit P23, photographs 1-173).

59.  Mr Sherry did not however refer the defendant to what he said in the video recorded interviews[50]. I will therefore cross-reference the interviews by way of footnotes when summarising the defendant’s evidence.  

60.  The court having to find what facts or circumstances were known to the defendant, including those personal to the defendant, that may have affected the defendant’s belief as to whether the property was the proceeds of crime, necessitates a detailed summary of the defendant’s evidence which was given over four days[51].  The summary will basically follow the sequence in which Mr Sherry adduced the evidence. 

Background

61.  The defendant testified that he grew up in Northern Ireland and that after leaving school he went into the paint and decoration trade[52].  The defendant first came to Hong Kong for a visit in 1990.  The defendant returned again in 1991 when he settled in Hong Kong.  While in Hong Kong the defendant has, for more than twenty five years, worked in the building trade as a building contractor, mostly doing renovation and fit out works[53].

Introduction by Razaq Awang

62.  In early 2015 the defendant received an email from a person called Razaq Awang (“Razaq”)[54]. Razaq introduced himself regarding some future business saying that he was looking for a representative for his company which would be based in Hong Kong.  The company was a trading company dealing in import/export of various different merchandise. 

63.  Prior to receiving the email, the defendant had never met or encountered Razaq or knowingly met or encountered anybody Razaq knew.  Razaq said that he had got the defendant’s contact details from a friend who had been in Hong Kong doing some business and had met the defendant in a bar or restaurant[55].  The friend told Razaq that one evening he had been talking to the defendant for quite a while and suggested to the defendant that maybe his friend was looking for some business partner in Hong Kong and asked the defendant if he would be interested.

64.  The defendant would quite often talk to people he did not know in a bar or restaurant about business opportunities.  When he said he was a builder by trade, people would say they needed some work done and asked if he would be interested in doing the work.  Most of the time nothing came of these conversations but sometimes a contact would be made which he would follow up and possibly obtain a building project.

65.  After a few weeks the defendant replied asking Razaq for more details on the business relationship or the job offer and how Razaq had got his contact[56].  Razaq replied giving a bit more detail about the job offer and the type of business.

66.  In cross-examination when asked what details Razaq gave, the defendant replied that he believed Razaq told him he would be taking care of the incoming payments.  The defendant said Razaq did not send him a brochure about his company or details of a website.  The defendant did not think he sent Razaq his CV and that other than Razaq having his name card he did not think Razaq had much more information on him[57].

67.  Razaq said that he got the defendant’s contact from a friend who was travelling through Hong Kong on business and who had the defendant’s name card on which was the defendant’s details including his email, telephone and company name.

68.  In 2015 the defendant would hand out his business card four or five times a month when out having drinks with friends.  When socialising with other people in the bar he would be asked for his name card when he mentioned that he was a building contractor.

69.  Razaq asked the defendant to get back to him as soon as possible.  The defendant replied saying he was very interested in the job offer[58].

70.  The defendant was interested because it was a new line of business and that he was always interested in other business opportunities[59].  At first the defendant did not know much about the business having only been explained that it was a trading type of business and that to start Razaq wanted a representative in Hong Kong.  The defendant was willing to learn and Razaq said that for future business he would help the defendant develop different skills in the trading business.

71.  In cross-examination the defendant agreed the job proposal was simply to be a Hong Kong representative of Razaq with the opportunity perhaps of expanding into Mainland China[60].

72.  The defendant had no experience in import/export business[61].  Asked by Mr Sherry if he ever enquired or was ever told why he had been selected as the potential representative of the business, the defendant replied that Razaq said his friend told him that when he was in Hong Kong the defendant had said he had been in Hong Kong for many years and was the sole proprietor of a business[62].

73.  The defendant could not recall having such a conversation with the ‘friend’ of Razaq but he did have conversations in social settings where he would mention how long he had been in Hong Kong and that he was a sole proprietor of a business.

74.  The defendant thinks he did inform Razaq in the initial emails that he was a permanent resident.  The defendant had the impression Razaq needed someone who was a permanent resident to set up another company on his behalf because it would be easier as Razaq was Malaysian and not a resident of Hong Kong[63].

75.  When the job offer was made the defendant had to fill out an application form, which he sent by email, containing his personal details, including his address, telephone number and Hong Kong identity card number[64].

76.  In cross-examination the defendant agreed that except what was in the emails there was nothing in writing about the arrangement he had with Razaq and that everything was verbal[65].

77.  Razaq said he needed to discuss with his partners whether to accept the defendant as their representative.  The defendant said this was probably in the middle or the third quarter of 2015 but was not quite sure whether this was in the second email or a little bit after that.

Deleted emails

78.  The defendant no longer had copies of these emails because towards the end of 2015, having not heard any more from Razaq for a few weeks or maybe a couple of months, he considered the job offer was a “no go” and deleted the emails[66].

Out of the blue

79.  Out of the blue, probably at the end of 2015, the defendant received another email from Razaq saying that after discussion with his partners the job offer was his, if he was willing to accept.  The defendant replied he was still interested and asked what are the next steps.   Razaq replied saying there was some upcoming business in January 2016 and asked the defendant to get ready.  The defendant replied he was ready and asked Razaq to let him know what to do[67].

80.  The defendant was told his duties were to receive payments in Hong Kong and to remit the payments out to Razaq’s suppliers and agents for which he would be paid on a commission basis, initially two to three per cent of the incoming payments[68]. At this time the defendant did not have any idea of the size of the payments. Razaq said he would send to the defendant invoices and names of the companies to whom payment was to be made.

81.  In cross-examination the defendant agreed that his job was simply to receive the funds and disburse according to the instructions of Razaq and that he did not have to look for suppliers, source materials, find customers or organise shipping, such as containers[69].

82.  Razaq explained that payments were to be made in Hong Kong because he was in the process of opening a new company in Hong Kong with a Hong Kong business address and wanted his new customers to start paying in Hong Kong[70].

83.  Asked whether at this time he was told anything about Razaq’s business, the defendant replied Razaq’s business was in Malaysia; the business was import/export business trading with different companies around the world and that the company traded in building products and furniture but was not limited to these products and that in the future it could be quite a variety of different items[71].

84.  The defendant was told the name of Razaq’s company was Tana Singam Enterprise (“Tana Singam”)[72]. In answer to the court the defendant said that he knew of the name of the defendant’s company in 2015[73]. The defendant believed that Razaq was based in Malaysia.  Razaq also told the defendant that he quite often would reside in the UK in London[74].

85.  In cross-examination the defendant confirmed his answer in VRI-3 that he had never really done proper research into Razaq’s company[75].  The defendant was also referred to VRI-5 where he was asked about the checks he made on the company in Malaysia and said he did not check the directors or management of the company[76].   Asked by Mr Chau “Is that correct that you did not check anything?”, the defendant replied “That…that’s correct.”

86.  At the end of cross-examination Mr Chau referred the defendant to VRI-6 including where the defendant was asked whether he did anything to find out if Razaq, his money and his business were legal.  The defendant answered he did not do any checking[77]. Asked by Mr Chau if his answers were correct that he did no checking, the defendant replied, “I done no checking of that.” 

Jade Group Trading (HK) Limited (“Jade Group”)

87.  Razaq asked the defendant to look into opening a new limited company in Hong Kong[78].  The defendant asked Razaq if he was to be a director.  Razaq said that he travelled quite a lot with other businesses and getting new customers so he could not come to Hong Kong to sign for the new company and asked the defendant to do this on his behalf.  Razaq told the defendant that he was hoping to come to Hong Kong in about a year after the opening of the new company[79].  

88.  The defendant started to look around and went to Hanvic Corporate Services Limited (“Hanvic”), who assisted in setting up Jade Group[80].  The defendant told Hanvic that he wanted to set up a limited company on behalf of a Malaysian businessman called Razaq Awang; the company would be a trading company dealing in import/export; that Razaq Awang would be the other director but was unable to come to Hong Kong and that in the meantime he was asked to be the representative of the company and sign as the sole director.  The company secretary of Hanvic said that it was OK for the defendant to sign as the sole director.  The defendant also told Hanvic that the company was a trading company dealing in import and export.

89.  Jade Group was incorporated on 22 February 2016 after which the defendant started the process of looking for a bank account for Jade Group[81].

Jade Décor Painting and Decoration Company (“Jade Decor”)

90.  Before Jade Group was incorporated and a bank account opened the defendant received an email from Razaq saying he had some customers who needed to make urgent payments into the new company in Hong Kong and that he needed a bank account in order for the payments to come into Hong Kong[82]. The defendant told Razaq that he had a decoration business (Jade Décor) with a bank account in Hong Kong. 

91.  Razaq asked for the details of the bank account and whether the defendant was willing to accept the payments into the account.  Asked by Mr Sherry “What did you say?”, the defendant answered “I give it some thoughts and I was…didn’t really understand quite exactly where it was going but then he informed me it was quite urgent so then I agreed to give him my bank account details.”[83]

92.  In cross-examination when asked why the money could not go through Tana Singam, the defendant replied that Razaq said it had to come through the Hong Kong company[84].

93.  Razaq told the defendant that the payments were from some customers who he had already done some business dealings with.  At that time the defendant said he did not know anything about those business dealings.  After the money arrived in his bank account the defendant would receive further instructions from Razaq about making payments to the suppliers and agents.

94.  Mr Sherry then showed the defendant DB1, DB2 and DB3.  

DB1

95.  The defendant received DB1 by email from Razaq around the middle of January before receiving the email from Razaq saying that some customers needed to make urgent payments into the new company in Hong Kong.  Razaq said that DB1 was details of shipping of products to his customer in the US.  The defendant said this was sent to him just to confirm the details related to the upcoming payments possibly at end of January or early February.  The defendant had the impression DB1 contained information about Razaq’s customer and supplier from which he formed the impression that Razaq’s business was legitimate[85]. The defendant had not requested this information which had been volunteered by Razaq.

DB2/DB3

96.  In January the defendant asked Razaq for information on the upcoming payments such as invoices or details of his customers so that he would have a record of what payments were coming in and who they were coming from.  Razaq responded by sending a few invoices.  The defendant identified DB2 and DB3 as invoices sent by Razaq to him by email[86]. The defendant believed the invoices to be true and correct as they seemed to be correct as to dates, numbers and description of goods[87]. 

97.  In cross-examination when asked if the invoices (DB2/DB3) were sent to show the urgency of the need to borrow his account, the defendant replied, “I don’t think so.  I think they maybe came just shortly after the payments”.  The defendant went on to say he was not sure which payments they were for and that the payments made to the BOC account didn’t really relate to these invoices. In answer to the court the defendant said he was a little unclear what they were for because they did not match[88].

98.  The defendant noticed that the invoices bore the name of Jade Group.  When the defendant asked Razaq why, Razaq just said he needed to use the new company name[89]. 

99.  In cross-examination when asked when he received the invoices (DB2/DB3) the defendant said he could not recall the exact dates; Razaq seemed to use the same receipts twice; Jade Group could not have been on the invoices because he had not even come up with a name yet and he never told Razaq the name of the company until after the company opened and that Razaq resent the invoices with the name Jade Group on. 

100.  Mr Chau next drew to the attention of the defendant that his evidence the name Jade Group was not on when he received the invoices in January was different to what he had told Mr Sherry that he noticed the name Jade Group was on and that Razaq said he just needed to use the new company name.  Asked which was correct the defendant replied that he was confused about the names; he did receive the invoices in January; that when he presented them to the police these were the only ones he could find and thought that they were the same ones sent in January and that what he said to Mr Sherry that the name Jade Group was on in January was a mistake.

101.  After the defendant received these invoices Razaq sent the email saying that some customers needed to make urgent payments into the new company in Hong Kong. 

The BOC account (Jade Décor) (Charge 1)

102.  The defendant was referred to the admitted facts that on 28 January 2016 HK$18,662.58 was transferred into the BOC account; $488,408.70 on 1 February 2016 and HK$2,841,541.89 on 2 March 2016[90].

103.  In cross-examination asked whether prior to the remittance of $488,408.70 whether he had ever received the sum of half a million dollars in this account, the defendant replied probably not and said the highest amount ever remitted at one time was maybe $200,000-$300,000.  The defendant said that up to the date of the remittance of $2,841,541.89 that was the biggest deposit into any of his accounts[91].

104.  The defendant recognised DB4 which he probably saw one or two days after the date of the document.  Razaq sent DB4 to the defendant for confirmation of the payment and for the defendant to look out for the payment.  The defendant asked what the payment was for and Razaq said for products supplied to his customer in Korea but did not give details of the products.  The defendant thought this was said in a telephone call[92].

105.  The defendant was then referred to the twelve withdrawals particularised in paragraph 9 of the admitted facts[93]. The defendant explained in making the withdrawals he acted on the instructions of Razaq[94].

106.  The five cash withdrawals 9(1) - (5) were payments made to Western Union accounts. Razaq said that the payments were made to agents who did not have bank accounts.  When asked what impression he had after receiving these instructions, the defendant replied “I felt that it was a bit strange, but I trusted the guy, Razaq Awang, what he was telling me that these people did not have a bank account, so I followed his instruction.” [95].

107.  In cross-examination the defendant said Razaq told him that certain individuals, his agents, did not have any bank accounts and preferred cash straight away. Asked by Mr Chau if that struck him as being a bit strange, the defendant replied “No, that’s…..I had already trusted Razaq so I had no reason to question him at that time”.   Asked if he could think of any reason why an agent or a supplier would not have a bank account, the defendant replied “No.”[96]

108.  The defendant identified DB5 as an invoice sent by Razaq by email a few days after the date of the invoice, 2 March 2016.  The invoice was for the defendant to keep as his record of incoming payments.  The defendant again gained the impression that the invoice, containing a description of the goods and a name and telephone number, looked true and correct.

109.  The five transfers 9(6), (7), (8), (10) & (11) were transfers made to agents who worked for Razaq.  The defendant said he had no reason not to believe the arrangement was true and correct because he had been given the details of the bank and the bank account numbers which were traceable.

110.  In cross-examination the defendant said he did not know anything about these payees other than that they were agents and did not conduct any checks on them[97].

111.  The transfer 9 (9) & (12) were to Tana Singam.  Razaq said this was payment income for his company.   The defendant did not find this suspicious because Razaq had already told him about his company[98].

112.  In cross-examination when asked why the money had to come through Hong Kong only to straight away be disbursed to other countries, including Razaq’s own company in Malaysia, the defendant replied, “I don’t know the answer”; he did not ask Razaq why the money had to come through Hong Kong; Razaq just said the money needs to come through a company in Hong Kong and that at the time he did not find this suspicious or strange[99].

113.  When making the transfers the defendant went to a branch of the bank and signed the transfer request form on which he put down all his personal details and the information of the company name and bank account supplied by Razaq.

114.  The defendant said that unfortunately he did not have the emails from Razaq giving instructions for the transfers.

115.  The defendant identified DB6 as an invoice sent by Razaq by email a few days after the date of the invoice, 7 March 2016.  The invoice was also for the defendant to keep as his record of incoming payments for future reference.

116.  Asked by Mr Sherry if he used the invoices to compare against what money came in, the defendant replied not necessarily.  Asked why not, the defendant replied at that time he was not really concentrating on that part.

DB7-DB12

117.  On 15 March the defendant sent an email to Razaq informing him of the payments he had sent out (DB9 at 7:13 am).  Razaq replied asking the defendant if he had spoken to the bank about the old payment issue (DB9 at 06:53:51).  The day before when the defendant went to the bank to check whether the payment had cleared he was informed that there was some kind of issue with the payment in and asked him to follow up with the remitter.  The defendant relayed this to Razaq saying that the bank was waiting for instructions from the remitter before clearance is given (DB10/DB11/DB12 at 3:05 pm). 

118.  Razaq replied the next day 16 March attaching a bank swift message and a copy of the letter he had received from his customer (DB9/DB10)[100].  The defendant identified DB7/DB8 as the swift message which had been sent to him to confirm the monies had been paid in[101]. The defendant thought from the letter from Razaq’s customer that the money had been remitted and that there should be no issue.  The defendant had the impression this seemed to resolve the problem.  Following this the defendant had no difficulty in transferring the money out.   

119.  Razaq also sent two more replies to the same email enclosing a payment slip for USD366,127 (DB12) and informing the defendant that the bank was not letting the new payment through due to wrong information having been supplied (DB11).

120.  The defendant identified DB13/DB14 as another invoice sent by Razaq by email a few days or a week after the date of the invoice, 19 March 2016.  The invoice was also for the defendant to keep as his record of incoming payments for future reference.  Razaq told the defendant in a telephone call that this was his customer in the USA.  The defendant therefore wrote “customer in USA” on the top of the invoice.

121.  The defendant sent the email at DB15 notifying Razaq of a new email address because Razaq thought the defendant’s email may have been hacked because he was getting some strange emails, apparently from the defendant[102].

122.  The defendant identified DB16 as another invoice sent in April by Razaq by email. The defendant recognised the name BoriAra which he had seen on a previous invoice (DB5) and thought this was a repeat customer.

123.  The letter from New Foundation (DB17) was sent by email by Razaq (DB18) to confirm the earlier dispute with his customer had been resolved.  The defendant thought the dispute related to the swift message (DB7/DB8) but did not really know because the payments from New Foundation had cleared and the bank had not informed him of any issue about payments made by New Foundation[103].

Closing of the BOC account

124.  The defendant replied by email telling Razaq he would show the letter to the bank after the Easter holidays (DB18).  A couple of days later the bank informed the defendant the bank account had been closed so the defendant never really got an understanding of what the letter was about[104].

125.  Admitted in evidence is that the BOC account was closed on 29 March 2016[105].  The defendant received notification of the closing of his bank accounts (DB19/DB20)[106].

126.  In cross-examination the defendant said that he did not think the document at AE 549 (trial bundle 4) was attached to the letter from the bank; he did sign AE 550 on which is written “TAKE CASH”; he could not recollect seeing AE 549 and did not think the bank clerk showed him AE 549 when he collected the cash[107].

127.  When the defendant went to the bank the bank teller told him his account had been closed but gave no reason or explanation why the accounts had been closed except to say there was some internal investigation.  The defendant had no understanding whatsoever why the accounts would be closed.

128.  In cross-examination the defendant said he did not take the letter to the bank because the account had been closed saying that it would have been too late to show to the bank.  Mr Chau then referred the defendant to the email (DB18) in which the defendant also said that he called the bank to notify them of the letter[108].

129.  Cross-examination continued as follows:

Q. Did you call them to notify?

A. I think I did, yes.

Q. Did you present it to the bank?

A. No

Q. Why not?

A. Because at that time period I think was the Easter holiday and going into the next week I think it was when I got the notification of the bank account was closed, so by then the letter really meant nothing to me then.

Q. I would have thought it would be the other way round. They’d closed your account. You take the letter in and say “Look, it’s not my problem.” Wouldn’t that have been the sensible thing to do?

A. I didn’t think like that at that time because, as I said, the letter, I didn’t understand it because I always thought the dispute was the Korean customer, so I didn’t fully understand it.

130.  Later in cross-examination when Mr Chau put to the defendant he did not go back to the bank to reopen the bank account because he knew the Bank of China were investigating a fraud, the defendant disagreed and said that he thinks he was told by the bank clerk there was an investigation; he didn’t think the bank clerk said fraud and the word ‘investigation’ scared him enough[109].

131.  The defendant sent an email to Razaq enclosing the bank letters informing him of the closing of the bank accounts and asking Razaq if this may be related to payments from the French bank or the Korean customer (DB21/DB22).  The defendant said he made reference to mounting a legal case to get a response from Razaq.  The defendant thought Razaq’s reply seemed sincere because Razaq was also shocked (DB21).

132.  In cross-examination the defendant agreed that he did not check independently the reassurances given by Razaq that the business was genuine[110].    

133.  Admitted in evidence is that the defendant opened a new account for Jade Décor with the Bank of Communications on 29 June 2016 (“the Bank of Communications account”)[111].

134.  In cross-examination the defendant said this bank account was set up to replace the BOC account because he still needed a bank account for Jade Décor; he used the bank account to pay his suppliers and contractors and that this bank account had nothing to do with Razaq[112].

China Citic account (Jade Group)

135.  The defendant said he approached three to four banks about opening a bank account for Jade Group, including DBS; Bank of Communications, Wing Lung and Axis.  The response was mostly negative therefore the defendant asked the company secretary at Hanvic if she could help him.  The company secretary said she had a friend in the China Citic Bank she could approach.

136.  Subsequently a meeting with the manager of China Citic Bank was set up for 27 April 2016. Throughout the defendant kept Razaq posted about the arrangements for a meeting and requested invoices and a copy of Razaq’s passport to show at the meeting (DB23-DB29)[113].

137.  In cross-examination the defendant said he did not do anything to confirm that was the real person on the passport and if the passport was genuine[114].

138.  At the meeting the defendant completed the application form for business customer[115].  The defendant thought he completed this at the end of the meeting.   The bank manager asked the defendant some general questions about the import/export business and what the defendant thought the foreseeable income would be.  The defendant said the other partner was a Malaysian businessman who was not yet in Hong Kong.  The defendant showed the invoices previously sent by Razaq which the bank manager copied.  The defendant also took the copy of Razaq’s passport to the meeting. The defendant thought bank manager just took a brief look of the copy passport and did not make a copy.  The bank manager said they would look at all the documents and that it would take two to three weeks to process the application. The defendant informed Razaq about the meeting (DB 30).

139.  In cross-examination the defendant said that when the application form for business customer was filled out the sales turnover of US$500,000 was not given to him by Razaq but was made up because he could not foresee what the turnover would be; he made up the countries listed under location of counterparties; he just came up with a figure of HK$100,000 to $1 million for anticipated monthly activity amount and that he had no specific reason for that figure[116].

140.  Admitted in evidence is that the defendant opened the China Citic account on 27 April 2016[117]. While waiting for approval of the bank account Razaq requested the defendant to send some documents to China by courier (DB33-DB38).  The documents had nothing to do with Jade Group and the defendant did not know what the documents related to.  Razaq said that they concerned another of his businesses and requested the defendant to do him a favour.  The defendant agreed to send the documents.

141.  The defendant received a phone call from the branch manager in June informing him that everything had cleared and that he could now use the bank account.  The defendant informed Razaq of this by email on 8 June and sent the bank account details the next day (DB 39-DB41).

142.  In one of the emails the defendant told Razaq that the opening of the bank account had been a lot of hard work.  The defendant had been to many different banks and spent a couple of days a week trying to open a bank account[118].

Arrest

143.  The defendant was arrested at the airport on 17 July 2016 when he was about to leave for London.  The defendant was interviewed the next day[119].  Subsequently the defendant was released on bail. 

The payments made to the China Citic account (Jade Group) (Charge 2)

144.  After the defendant was arrested he started to use the China Citic Account.  The defendant recalled the first payment in was on 22 August 2016[120].  The receipt dated 19 August 2016 (DB42) was sent by Razaq to inform the defendant of two incoming payments.  The defendant said he probably received DB42 the same day, 19 August 2016 or the next day. 

145.  On 24 August 2016 Razaq sent by email invoices relating to the two incoming payments (DB43-DB82)[121]. Razaq also sent copies of wire transfer activities (DB83 & DB84).  The defendant thought the purpose of sending the wire transfers was to confirm payment had cleared from the US customer.  Razaq asked the defendant to check the new account.

146.  Admitted in evidence is that Aruba transferred to the China Citic account US$761,788.32 and US$2,678,257.30 on 22 August 2016[122].

147.  In cross-examination the defendant agreed he had never seen that amount of money in his bank accounts before; it was a lot of money; he never checked Aruba; when he received the money he did not know the source of the money and a little bit later he knew the source of the money[123].

148.  On 26 August 2016 the defendant carried out Razaq’s instructions and remitted USD1,000,000 to a bank in China (DB85 & DB86).  On the same day the defendant made further remittances again acting on the instructions of Razaq (DB87-DB95) [124].

149.  Since his release on police bail and prior to the funds being received in the China Citic account the defendant had heard nothing further from the police, save that he had to report to the police station every month to sign bail extension.   Asked by Mr Sherry why having been arrested by the police he continued to operate the Jade Group account, the defendant replied,

A. “Because I still believed it was ... my thinking at that time was I still had the belief it was legitimate business.

Q. Yes. And what was that belief based on?

A. Well from the very beginning I put my trust in this person and the time when we had a little bit of a problem with the Jade Décor bank account with one of the payments Razaq said he would take care of it and he seemed to take care of it and the issue was resolved. Then later after my bank account was closed he responded that he was quite shocked to hear of this also. So that further gave me confidence to keep my trust with him and at that time I still had no reason not to trust him.

Q. Was your trust affected by the fact you had been questioned by the police?

A. It wasn’t really affected, but I did think about it again.

Q. Yes. What did you think?

A. Was this arrest really related to anything that happened with Razaq. Then just later more information in the WhatsApp messages. We discussed about the problem, the trouble, and he give me his word that he’s an honest, legitimate businessman.” [125]

150.  In cross-examination Mr Chau referred the defendant to what he told the police in VRI-6, including that he did not tell Razaq he had been arrested; he thought something was seriously wrong; that Razaq had lied to him and that he totally thought that it probably wasn’t legal[126]. Asked why given all this trouble he still continued with Razaq, the defendant replied “Yes, because in between the time I was giving him the opportunity to make things right and I was really hoping and depending he would make things right.”

151.  After referring to the interview where the defendant said he was really angry and upset with Razaq for being involved in this and that Razaq assured him it was a total misunderstanding Mr Chau asked the defendant if he caused any further checks to be made on Razaq[127]. The defendant replied “No, at that time, no.  I just trusted him. That’s the only thing I can offer.  I just trusted him.”

152.  Mr Chau next referred the defendant to when the police asked him whether he thought Razaq was more reliable than the police.  The defendant answered that he believed everything the police told him but when Razaq got in touch with him again and assured him it was a big misunderstanding and he was an honest businessman he gave Razaq another chance and that when Razaq told him about the new transactions which were quite substantial he believed Razaq was trusting him with all this money[128]. Mr Chau then asked:

Q. Did it not appear to you to be rather strange that somebody you didn’t know trust you with over $44 million worth of money going through your accounts?

A. Not strange because we had built up a working relationship.

Q. HK$44 million to a stranger?

A. He’s not a stranger. We were in communication, so he wasn’t a stranger anymore.

153.  The invoices (DB42-DB84) gave the defendant the impression everything was correct and because the figures nearly matched the incoming payments the invoices looked legitimate business. So the defendant again kept his trust with Razaq. The request to remit USD1,000,000 (DB85) also gave the defendant more confidence in his trust of Razaq because the remittance was made out to a company. The defendant was of the opinion the company was traceable and so there was business[129].

154.  After the remittances were made the defendant received an email on 30 August 2016 from Razaq informing him that three of the remittances had not been received (DB96).  The defendant could not understand why because the bank told him all the outgoing payments had been cleared and had not notified him of any problems with the remittances.  This was also the subject of various WhatsApp messages (photographs 129-131, 134, 135 & 137-139).

155.  The defendant also followed Razaq’s instructions (DB96 & DB97) and made two further remittances on 31 August 2016 after which he sent copies of the remittances (DB98 & DB 99) by email to Razaq[130] (DB 100).

156.  In cross-examination Mr Chau asked the defendant whether he conducted any checks about the companies whom he remitted money to[131].  The defendant replied that at a later date he did a google search on some of the companies and found that they were official companies but did not do anymore searching after that. In answer to the court the defendant said this may have been a week or so later; he did not think of doing a search at the time the money was remitted and that he did the search a week later for his own peace of mind that everything Razaq was telling him was correct.   Asked by Mr Chau if his mind was put at ease, the defendant replied “When I see they were all official companies and addresses, yes, I was okay.” [132]

WhatsApp messages (exhibit P23)[133]

157.  Mr Sherry then took the defendant through the WhatsApp messages, first telephone number +44 7435 711607 (photographs 38-173) for the period 21 August 2016 – 10 September 2016.  Admitted in evidence is that this was a U.K. telephone number and one of the telephone numbers used by Razaq Awang to message the defendant via WhatsApp[134].

Telephone number +44 7435 711607

August 24, 2016 (photographs 41-56) )[135]

158.  Photographs 41-45 refer to Razaq saying he had received payment slips from his customers; the defendant requesting copies by email and Razaq asking the defendant to check the bank account. 

159.  Photograph 46 is a message from the defendant saying he got the receipts; asking for confirmation these are legal business transactions because he did not want any trouble with the new bank and requesting invoices and company receipts to show to the bank it was for legitimate business.

160.  The defendant sent this message because he wanted to be doubly sure they were not going to have any trouble or any more issues ever again.  Asked by Mr Sherry if he had in mind the previous episode with the police, the defendant replied “I still had that in the back of my head that I didn’t want to go through all that again”.    

161.  Photographs 47-48 refer to Razaq’s reply saying that everything he does is legal and asks the defendant to rest assured there won’t be any problem.  The defendant accepted the assurances because based on all the invoices together with the record of the payments the business seemed legitimate[136]. 

162.  The defendant sent the message in photograph 49 to emphasize to Razaq that he was really scared when told by the bank the money had been stolen.   Asked how he felt about the business when he wrote that message, the defendant replied he was still willing to go ahead with the business. 

163.  Razaq’s reply (photographs 50 & 51) gave the defendant the impression that Razaq seemed to know what he was doing and that this was enough for him to still continue.  

164.  The defendant explained that the message in photograph 52 was what he believed at that time and that Razaq’s reply (photographs 53 & 54) cleared his head going forward.  The defendant trusted Razaq’s explanation that the dispute was finally settled.   Just in case there was trouble the defendant again asked for more information. 

August 25, 2016 (photographs 56-67) [137]

165.  Photographs 56-58 refer to Razaq asking the defendant to go to the bank to confirm the payments and the defendant confirming receipt of the invoices.  The defendant was very confident on receipt of the invoices that it was a legitimate business.  Photographs 59-60 refer to the defendant contacting the bank manager who told him the transactions had cleared.

166.  From Razaq’s message (photograph 60) that he needed to carry out some transactions to the suppliers the defendant gained the impression that everything seemed good.  The defendant sent the message (photograph 61) on his own initiative asking for more information so that he could make sure he put as much detail as he could on the remittance form. 

167.  The defendant had no reason to doubt Razaq’s reply that the merchandise was computer parts (photograph 62) because the invoices had mentioned IT equipment.  Again on his own initiative the defendant asked for more information (photograph 63).  Razaq’s replies (photographs 63 & 64) gave the defendant more confidence everything was legitimate.  Photographs 65-67 refer to the defendant making the remittances.  

August 26, 2016 (photographs 68-80)

168.  Photographs 68-76 refer to the instructions given by Razaq where to send the money including bank account details; the defendant confirming he made five remittances and sending by email the payment details.  The defendant encountered no difficulties in making the payments. 

169.  Photographs 77-79 refer to Razaq saying that his suppliers have not received the payments and the defendant informing Razaq this maybe because he missed the cut off time. 

August 27, 2016 (photographs 80-85) [138]

170.  Photographs 80-83 refer to sending money via Western Union.  The defendant said that Razaq told him the money was for one of his agents but did not say what the agent had done.  The defendant withdrew USD from the savings account which he transferred to the HKD current account[139]. The defendant then transferred HKD500,000 to the Bank of Communications account (Jade Décor) from which he withdrew the cash to make the payments to Western Union.  The defendant encountered no difficulties in withdrawing the money. 

171.  Photographs 84-85 refer to Razaq saying that his agents had not received the money.    

August 28, 2016 (photographs 86-87)

172.  Photographs 86-87 refer to the defendant telling Razaq Western Union could not trace the payments.

August 29, 2016 (photographs 88-100) [140]

173.  Photographs 88-99 refer to Razaq informing the defendant of payments which had not been received by his suppliers and asking the defendant whether he had made a mistake in the remittance forms.  The defendant again had no difficulties in making the remittances. 

174.  The defendant asked about future business (photograph 93) because he was impressed by the financial side of the business as he had not expected such large amounts at first. 

175.  Photographs 92-95 refer to Razaq saying one of his suppliers wanted the bank statement for verification.  The defendant could not understand why the bank statement was needed and asked Razaq if he had some issues with payments to Jade Group.   The defendant accepted Razaq’s explanation “Not really.  Just to clarify. Brb” (photographs 94/95).  Asked by Mr Sherry why he accepted the explanation, the defendant replied “Because he didn’t really go any further with it, so it was good enough for me at that time.” The defendant sent a copy of the bank statement (photographs 98-100).

176.  Photographs 96-98 refer to whether the defendant had made a mistake when filling out the remittance form.   

August 30, 2016 (photographs 99-110) [141]

177.  Photographs 101-110 refer to Razaq asking the defendant to check payments.  After the defendant confirmed with China Citic bank that there was no issue and that the money had been sent he replied that there was no problem from the Hong Kong side.  The defendant felt a bit of pressure because money had gone missing and he was the one to blame. 

August 31, 2016 (photographs 109-129)

178.  Photographs 111-129 refer to Razaq saying his suppliers still have not received payment and insisting to recall the payment; the defendant triple checking the receipts to see whether there were any mistakes made; the defendant confirming the payments to China were correct and that there was a spelling mistake for Dubai.

179.  The defendant again felt responsible for the missing money and was feeling a lot of pressure.  When Razaq confirmed receipt of the USD1,000,000 the defendant felt a huge relief. 

180.  The defendant also sent two remittances on 31 August (photographs 125, 127 & 128) and said that he encountered no difficulties in making the payments. 

September 1, 2016 (photographs 129-152)

181.  Photographs 129-152 refer to problems about payments not being received.

182.  The defendant gained the impression from the messages that there was some issue about the suppliers not receiving payment.  The defendant’s replies were based on what he was told by the bank who confirmed there was no issue with the payments out and that the problems must be with the bank in China.  The defendant believed what the bank manager told him. 

183.  The defendant sent the message saying he felt stupid (photograph 147) because he had been to the bank a few times, asked the same questions and received the same response.   The defendant felt he could do nothing further because the bank had confirmed the money had been remitted. 

September 2, 2016 (photographs 152-162)

184.  Photographs 152-157 refer to the defendant informing Razaq that the bank manager told him the remitter from the USA wanted a refund of the payments into the China Citic account; the defendant asking Razaq if this was the same problem as before; whether he will be in trouble again and Razaq saying he would resolve the issue[142].    

185.  The defendant was not sure what Razaq meant when he asked the bank to hold on (photograph 157).  The defendant was not really worried at this time, just concerned what were the issues.  The defendant sent the message (photograph 158) because he was a little bit angry when he heard of the refund order and wanted to get a positive response from Razaq.  The bank manager had told the defendant that the only way to lift the refund order was to ask the US customer to stop the refund. 

186.  The defendant trusted Razaq would take care of this when he said “Yeah I’m doing this now” (photographs 158/159).  Asked by Mr Sherry what he was worried about when he sent the message saying he will get in very serious trouble (photograph 159) the defendant replied “Well, if he doesn’t get all this sorted, then it looks as if I’ve done something wrong when in my mind I had done nothing wrong at that time.”

187.  Asked by Mr Sherry what he was concerned about (photograph 161) the defendant replied “Because at that moment there was nothing really I could do.  It was out of my hands at that time and I was relying on Razaq to get it sorted.  So I was kind of worried.”

188.  The defendant wrote the account had been stopped (photographs 161/162) because the bank manager had told him as there was a refund order the account had to be on hold for now.  The defendant thought that the bank manager also told him that the US bank had said two payments had gone to the wrong bank account in Hong Kong. 

September 3, 2016 (photographs 163-169)

189.  The defendant sent the messages to Razaq (photographs 163-165) saying the bank will inform the police; they would be in deep shit; the bank does not want to be involved in money laundering and the US bank think they were doing something illegal, because he was starting to get angry and wanted to pressure Razaq into action to get the matter of the refund order resolved.  The defendant said the bank did not say these things to him and that they were his own thinking.    

190.  When Razaq replied to the defendant’s message saying he trusted Razaq and asked him not to let him down, the defendant had the impression that Razaq was starting to do something (photographs 166-169).

September 4, 2016 (photograph 170)

191.  Photograph 170 is the defendant’s reply to the message sent by Razaq the day before asking how much was left in the account (photograph 168).  The defendant calculated the balance by looking at the telegraphic transfers and deducting the amounts of the outward transfers.

Telephone number +60 11-1694 5955

September 4, 2016 (photographs 1-4) ) [143]

192.  Communication then switched to Razaq’s Malaysian number.    Admitted in evidence is that this telephone number +60 11-1694 5955 was a Malaysian telephone number and one of the telephone numbers used by Razaq Awang to message the defendant via WhatsApp[144].

193.  Photographs 1-4 refer to Razaq resolving the problem with the US bank. 

September 5, 2016 (photographs 4-17)

194.  Photographs 4-17 refer to messages concerning the lifting of the refund order.  When Razaq replied contact had been made with the US bank to lift the refund request (photographs 5 & 6) the defendant had the impression Razaq seemed to be taking care of the matter.  The defendant replied telling Razaq what the bank had said (photographs 6, 7 & 8). 

195.  The defendant asked Razaq if the two payments made on 31 August had gone through hoping to get a clear picture so he could try work out why some payments had gone through and the problem with the refund order (photographs 9-14). 

196.  After speaking to the bank again the defendant sent a message to Razaq informing him of what the bank manager had said and what they needed to do (photographs 15 & 16).  The defendant again said the bank were getting suspicious and making him feel guilty (photograph 17).  The defendant said it was just his feeling the bank was suspicious because he had been asking them questions and receiving no positive response, only being told that the US customer had to be the one who lifted the refund order.  Asked by Mr Sherry if the bank were doing anything to make him feel guilty, the defendant replied “Not really.  It was just my feeling.”  Asked why he said he was feeling guilty in the message, the defendant replied “I’m not sure why I said it.  It’s just a feeling.” 

September 6, 2016 (photographs 18-19)

197.  Photographs 18 & 19 refer to the defendant repeating what the bank had told him needed to be done.

September 7, 2016 (photographs 20-29)

198.  The defendant had the impression that the issue of the refund order was starting to really move forward to getting resolved and accepted Razaq’s message that the US bank had lifted the refund order (photograph 20-23).

199.  The defendant said he had no reason to take his commission because this was ongoing business and that in his mind he was waiting until the problem was resolved and all the business transactions finished which would be the time for his commission (photograph 24).

200.  Photographs 24-28 refer to the defendant informing Razaq that the bank had not yet received confirmation from the US bank; Razaq saying banks could be funny and the defendant replying that the HK banking system was very good.  The defendant sent this message so that Razaq would have nothing to worry about.    

September 8, 2016 (photographs 29-32)

201.  After speaking to the bank manager the defendant sent the messages informing Razaq that the bank still has not heard from the US bank (photographs 29-32).

September 9-23, 2016 (photographs 32-35 & 170 and DB 102-DB 108)

202.  The defendant sent further messages on 9 September, 10 September, and 12 September asking Razaq if there was any news (photographs 32-35 & 170) but received no reply.  The defendant wrote the message on 10 September saying he had been put in the shit with some illegal dealings because he was very worried that trouble was coming back on him. 

203.  Asked by Mr Sherry what “shit” he had been left with the defendant replied, “I wasn’t really sure.  It was just anger.”  Asked what he was angry about, the defendant replied, “That there was payments made into the company account, now there was a refund order.  I’d already made payments out under his instructions, so…I didn’t understand why the refund order was made in the first place.”  Up until that point the defendant said he never had the impression the business was not legitimate.  

204.  The defendant also sent an email on 9 September (DB102).  Razaq replied on 12 September asking for further communication by email.  The defendant sent an email the next day because he wanted to get more information about what Razaq was going to do in the US about the refund order (DB 103/DB104).

205.  The defendant was relieved to receive Razaq’s email on 13 September (DB105).  A lot of pressure was taken off the defendant because things were being done to get the issues settled.  The defendant did not doubt the legitimacy of the business at this point.

206.  On 14 September the defendant informed the bank manager what was happening.  The defendant had the impression from Razaq’s email sent on 16 September that the issues were getting settled (DB 105).

207.  The defendant received an email from Razaq on 18 September informing him the dispute had settled (DB107).  The defendant finding this good news and hoping the refund order would be lifted replied on 20 September asking if the bank had lifted the refund order (DB107). 

208.  On 21 September the defendant sent an email to Razaq requesting more details because the bank was asking him again what is the situation (DB106).  The defendant believed that the bank had called him earlier in the day asking what the situation was with the refund order. 

209.  When the defendant received Razaq’s email on 22 September (DB 107) saying the refund order had been lifted the defendant thought everything had been settled and the pressure was off him.  The same day the defendant asked when the order was lifted (DB 108).  When Razaq replied the US bank had contacted the Hong Kong Bank the defendant believed the order had been lifted (DB108).

210.  On 23 September the defendant sent an email to Razaq saying he had tried to get in touch with the bank manager (DB108).  The defendant said he never got to speak to the bank manager or hear from the bank manager before he was arrested. Admitted in evidence is that the defendant was arrested on 27 September 2016[145]. 

211.  The defendant testified that in January 2016 about 25% of his time was spent on the import/export business; between March to the end of April most of his time was spent working for Jade Décor; and around August and September most of his time was spent on the import/export business.

212.  In cross-examination the defendant said he had never met Razaq; never requested a video call with Razaq, whether by Skype or WhatsApp, and that it never occurred to him to have a video call[146].

Commission

213.  Apart from telling the court that initially he would be paid two to three per cent commission of the incoming payments and the reference to commission in photograph 24[147], the defendant was not asked by Mr Sherry about the payment of commission.

214.  In cross-examination the defendant said he did not declare the commission to the Inland Revenue Department in his tax returns.  Asked if this was deliberate, the defendant replied “Not deliberately, but I haven’t put it in, no”[148].

215.  The defendant also told the police that the initial commission was two to three per cent[149] and that this would be increased to five per cent when the business grew bigger/after the new company opened and seven percent after a year when opening an office in China[150]. 

216.  In VRI-3 the defendant said he had received approximately $500,000 commission[151].  In VRI-4 the defendant said he had received around $400,000 to $500,000 commission[152]. 

217.  In VRI-5 the defendant was shown bank statements and asked specifically which was his commission with regard to Jade Décor and Jade Group[153].  With regard to the BOC account (Jade Décor) the defendant was unable to say which payments/withdrawals were his commission.  With regard to the China Citic account (Jade Group) the defendant said possibly the transfer withdrawals of US$64,553.61 and US$12,909.05 were his commission but was not the full five per cent.

218.  In cross-examination the defendant agreed that five and a half million remitted to the China Citic account within the space of one week was a staggering amount and that if he was entitled to his full five per cent commission he would have been entitled to about US$260,000 for simply transferring the money to other accounts once the money had been received[154].

Discussion

219.  I have carefully considered all the evidence together with the submissions of Mr Chau and Mr Sherry.

220.  In considering the evidence due allowance is given to the defendant by reason of the fact the events he testified about were between four and five years ago.

Dealing with property

221.  The actus reus of the offence is dealing with property.  Monies passing through the BOC account (charge 1) and the China Citic account (charge 2) are clearly property[155].

222.  Admitted in evidence is that Aruba transferred to the China Citic account US$761,788.32 and US$2,678,257.30 on 22 August 2016 and US$1,893,105.53 on 29 August 2016[156].  In VRI-3 the defendant was asked when the monies were transferred to the China Citic account[157].  The defendant told the police he was only aware of the first two payments from Aruba and did not know anything about the third remittance of US$1,893,105.53 on 29 August 2016[158].

223.  Mr Sherry did not ask any questions about the third remittance.  When the court asked Mr Sherry if he wished to specifically ask about the third remittance, Mr Sherry asked the defendant if there was any difficulty in clearing that payment.  The defendant replied no difficulty[159].

224.  When the court clarified with the defendant whether he was aware of the third remittance[160], the defendant replied that Razaq Awang never told him of a third payment in; he was only told later by the manager of the China Citic account; he did not think he had been told this when he made the two transfers on 31 August 2016 and that he thought there was still enough balance to cover these two payments[161].

225.  I do not find credible the defendant’s evidence Razaq Awang did not tell him about the third remittance, which was for a substantial sum of money.  In what was a fraud on Aruba by diverting the payments to the China Citic account, I find inherently improbable the defendant would not be told about the third remittance.  Although there was enough balance from the first two remittances to make the two transfers on 31 August 2016, I note the beneficiaries are the same beneficiaries as two earlier transfers made after the first two remittances[162]. 

226.  Even if the defendant was not specifically told about the third remittance I am nevertheless satisfied the defendant dealt with the monies.  This is not a case where the defendant simply lent his bank account and did not know about the monies coming into the account.  The defendant was the only person who operated the China Citic account and was fully aware that payments were being made into the account which he would then withdraw.

Having reasonable grounds to believe the property represented the proceeds of an indictable offence

Proceeds of an indictable offence

227.  Although the prosecution does not have to prove the property represents the proceeds of an indictable offence I am however satisfied the prosecution have proved the monies passing through the BOC account and the China Citic Bank accounts were the proceeds of an indictable offence.   I accept the evidence that the monies passing through the BOC account and the China Citic Bank accounts were obtained by email fraud. 

Having reasonable grounds to believe

What facts and circumstances, including those personal to the defendant, were known to the defendant that may have affected his belief as to whether the property was the proceeds of crime (“tainted”)?

Charge 1

228.  I find the following facts and circumstances:

(a)  the defendant was contacted by someone called Razaq Awang (either by phone or email) who said he was looking for a representative for his trading company which would be based in Hong Kong[163];

(b)  the defendant did not know Razaq Awang and prior to being contacted by Razaq Awang had never met Razaq Awang or encountered anybody Razaq Awang knew[164];

(c)  the defendant did not know from whom Razaq Awang obtained his name, Razaq Awang telling the defendant he got his contact from a friend of a friend of a friend but could not remember who told him[165];

(d)  the defendant was asked to be the Hong Kong representative[166];

(e)  the defendant had no experience in trading[167];

(f)  the defendant was told his duties were to receive payment in Hong Kong and to remit the payments out to Razaq Awang’s suppliers and agents[168];

(g)  the defendant did not have to look for suppliers, source materials, find customers or organise shipping[169];

(h)  the defendant would be paid on a commission basis, initially two to three percent of the incoming payments[170];

(i)  Razaq Awang asked the defendant to look into opening a new limited company in Hong Kong because he was in the process of opening a new company in Hong Kong with a Hong Kong business address and wanted his new customers to start paying in Hong Kong[171];

(j)  Razaq Awang said he travelled a lot getting new customers and was therefore unable to go to Hong Kong and asked the defendant to open the company on his behalf[172];

(k)  no written agreement was entered into between Razaq Awang and the defendant[173];

(l)  before a new company was set up Razaq Awang said he needed a bank account because he had some customers who he had already done business with and who needed to make urgent payments into the new company in Hong Kong[174];

(m)  the defendant did not understand where this was going but because he was told it was quite urgent he gave Razaq Awang the bank account details of Jade Décor (the BOC account)[175];

(n)  the first two remittances made to the BOC account on 28 January 2016 ($18,662.58) and 1 February 2016 ($488,408.70) by New Foundation were all withdrawn in cash [176];

(o)  $300,000 was withdrawn in cashfrom the third remittance made to the BOC account on 2 March 2016 ($2,841,541.89) by Zeean Corporation[177];

(p)  the defendant made cash payments via Western Union because Razaq Awang said his agents did not have bank accounts which the defendant found a bit strange but nevertheless followed instructions [178];

(q)  remittances were made from the BOC account including to Tana Singam in Malaysia, who Razaq Awang told the defendant was his own company[179];

(r)  the defendant did not know anything about the payees except that they were agents of Razaq and did not conduct any checks on them[180];

(s)  apart from looking for the address of Tana Singam the defendant had never really done proper research into Razaq Awang’s company Tana Singam[181];

(t)  the defendant did not know why the money had to come through Hong Kong and did not ask Razaq why the money had to come through Hong Kong[182]; and

(u)  the defendant never met Razaq Awang or requested a video call[183].

Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

229.  I am satisfied that a reasonable person who shared the defendant’s knowledge was bound to believe that the property was tainted, in particular considering the approach was made by someone whom the defendant did not know, had never met and did not meet; apart from being asked to set up a company and open a bank account the defendant’s role was simply to receive the monies and distribute the monies; the first two remittances were all withdrawn in cash and paid out to persons who did not have bank accounts, something the defendant found a bit strange; the defendant did not know why the money had to come through Hong Kong and that no actual business was transacted in Hong Kong only the receipt in and payment out of the monies. 

230.  In HKSAR v Harjani Haresh Murlidhar the Court of Final Appeal stated that normally if the court concludes that no reasonable person in the position of the defendant could have failed to believe that the property was tainted the court is likely to reject the defendant’s assertion that he did not have this belief [184].

231.  I reject the defendant believed the monies were from legitimate business. 

232.  In reaching these findings I have carefully considered the submissions of Mr Sherry.  Mr Sherry submits that there has been no suggestion by the prosecution that the defendant has not been truthful[185]. In oral submissions Mr Sherry accepted that Mr Chau did put to the defendant that he had reason to believe the monies were tainted and that he did believe the funds were tainted or illegal.

233.  Mr Sherry submits that no reasonable person who shared the defendant’s knowledge would be bound to believe that the property was tainted because up until the first arrest the business relationship with Razaq had been going on for about one year[186]. In his oral submissions Mr Sherry submitted by this time Razaq was not a stranger anymore.

234.  I have no hesitation in rejecting this submission.  According to the defendant after the initial contact in early 2015 there was no real development until the end of 2015.  By the time the defendant received the urgent email in January 2016 from Razaq saying he needed a bank account for urgent payment, the business relationship had been very brief[187].

235.  The defendant did not know Razaq, had never met Razaq, never had a video conference call with Razaq and knew very little about Razaq or his business.  For all intents and purposes Razaq was a stranger who the defendant allowed to use the BOC account (Jade Décor).

236.  Mr Sherry submits that no doubt, the defendant’s job with Razaq sounded even more authentic when he was told that initially he would only be engaged on a trial basis[188]. 

237.  I have no hesitation in rejecting this submission.  At no time in evidence did the defendant say he was engaged on a trial basis.  The defendant’s evidence was that he was asked to be the representative of Razaq’s company in Hong Kong and to set up the company.  The reference by Mr Sherry to VRI-5 in which mention is made of the trial period is not a reference to being engaged on a trial basis but is reference to the initial payment of commission[189].  This submission does not cause me to doubt the findings I have made.   

238.  Mr Sherry submits that the defendant was clearly taken in given that he used his own money to pay Hanvic[190]. This evidence was given in cross-examination when Mr Chau asked if Razaq paid for setting up Jade Group.  The defendant replied that at the time he paid for it himself for which he was reimbursed.  In VRI-1 the defendant told the police that the expense of opening the company came out of the transactions/remittances[191].  This submission does not cause me to doubt the findings I have made.

239.  Mr Sherry relies on the evidence of WDPC 10605 (PW2), who conducted VRI-1, that after interviewing the defendant she was of the impression the defendant really believed that the money remitted into the BOC account had come from legitimate business[192].

240.  The evidence of WDPC 10605 was as follows:

Q. I am putting to you, do you agree with me officer, you agree with me that he gave the impression, gave you the impression that he was reasonably satisfied that the business he had done with Raz was genuine?

A. Yes, I have that impression.

Q. You further agree, I invite you, if you would like to, to look at counters 550 (549) where you enquired with him as to why he trusted the person you referred to as Raz, that was your question.

A. Are you asking me why I asked that question?

Q. No, I am just reminding you of the question, I don’t expect you to remember it.

A. Yes

Q. You agree that his answer at 551 also appeared to be reasonable to you, that’s the impression you had?

A. Because of his answer I felt that he really believed that that person was doing business with him.

241.  It is quite clear from VRI-1 that at that stage the police did not have the bank statements for the BOC account.  The only reference to how the defendant dealt with the monies remitted to the account was the defendant’s answer that Razaq gave him details of other bank accounts in the UK to transfer the money[193]. 

242.  No questions were asked about the cash withdrawals.  This was first asked in VRI-2 which was conducted just over two months later.  In VRI-3 the defendant told the police that he was instructed to send money via Western Union, to places like maybe Nigeria, because the customers never had bank accounts[194].

243.  The fact that WDPC 10605 formed an impression of what the defendant believed from his answers in the VRI-1 does not cause me to doubt the findings I have made.

244.  Reliance is placed on the receipt of documentation and invoices from which the defendant says he believed the business of Razaq was legitimate business (DB1-DB8)[195].   

245.  In cross-examination when asked about the invoices DB2/DB3, the defendant said he was not sure which payments they were for and that the payments made to the BOC account didn’t really relate to these invoices.  In answer to the court the defendant said he was a little unclear what they were for because they did not match[196].

246.  Asked by Mr Sherry if he used the invoices to compare against what money came in, the defendant replied not necessarily as he was not really concentrating on that part[197].

247.  The invoices were in the name of Jade Group, a company which had not yet been incorporated.  In examination the defendant said the name Jade Group was on the invoices when he received them, Razaq saying he needed to use the new company name.  In cross-examination the defendant said the name was not on and that he had not even come up with a company name when he received the invoices[198].  I do not find the defendant’s evidence about the invoices credible. 

248.  The defendant never really did any proper research into Razaq’s company Tana Singam nor conduct any checks on who he was asked to make payments[199].

249.  The fact the defendant received documentation and invoices does not cause me to doubt the findings I have made.  I am satisfied that a reasonable person in the position of the defendant would still be bound to believe that the property was tainted. 

250.  The defendant told the police he trusted Razaq because Razaq trusted him with his money[200].   I have no hesitation in rejecting this evidence.  A reasonable person in the position of the defendant would ask why is a person whom I have never met and do not know asking me to receive money when there was no guarantee I would not take the money.  A reasonable person in the position of the defendant would quickly conclude this is because the money was not Razaq’s to deal with and had been unlawfully obtained.

251.  The defendant says he was told by Razaq that he wanted his customers to pay in Hong Kong[201]. A reasonable person in the position of the defendant would ask why are customers paying to a company in Hong Kong when no business was transacted in Hong Kong.  A reasonable person in the position of the defendant would again quickly conclude this is because the money had been unlawfully obtained.

252.  Having carefully considered all the evidence, I find I am satisfied so I am sure that the defendant had reasonable grounds to believe that the monies remitted to the BOC account and disbursed by him, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Charge 2

253.  I find the following facts and circumstances:

(a)  on 22 February 2016 the defendant incorporated Jade Group at the request of Razaq[202];

(b)  Razaq Awang said he travelled a lot getting new customers and was therefore unable to go to Hong Kong to sign for the new company[203];

(c)  the BOC account (Jade Décor) was suddenly closed by the bank after nearly six years operation[204];

(d)  the defendant was scared when the bank clerk told him that there was an investigation[205];

(e)  on 27 April 2016 the defendant opened the China Citic account (Jade Group)[206];

(f)  the defendant was arrested on 17 July 2016 and interviewed on 18 July 2016 (VRI-1) when he was specifically told that the investigation was a money laundering case in which the informant had not received payment from New Foundation and Zeean who instead had remitted the monies to the BOC account (Jade Décor) and that their email had been hacked[207];

(g)  the defendant continued to deal with Razaq Awang, a person whom he had never met[208];

(h)  the defendant’s duties remained to receive payment in Hong Kong and to remit the payments out to Razaq Awang’s suppliers and agents[209];

(i)  the defendant did not have to look for suppliers, source materials, find customers or organise shipping[210];

(j)  the defendant would be paid five per cent commission[211];

(k)  no written agreement was entered into between Razaq Awang and the defendant[212];

(l)  US$761,788.32 and US$2,678,257.30 was remitted to the China Citic account on 22 August 2016[213];

(m)  US$2,984,100.57 was withdrawn on 25 August and 26 August 2016 including transfers to the Bank of Communications account and cash withdrawals[214];

(n)  the defendant made further cash payments via Western Union[215];

(o)  monies were remitted to China, United Arab Emirates and the United Kingdom[216];

(p)  the defendant only checked about the companies he remitted money to later when he did a Google search on some of the companies and found they were official companies but did not do anymore searching after that[217];

(q)  on 26 August 2016 the defendant remitted US$140,000 and US$160,000 to Tana Singam in Malaysia, who Razaq Awang told the defendant was his own company [218];

(r)  apart from looking for the address of Tana Singam the defendant had never really done proper research into Razaq Awang’s company Tana Singam[219];

(s)  after the closing of the BOC account and his arrest for money laundering, the defendant did not cause any further checks to be made on who Razaq was[220];

(t)  the defendant did not know why the money had to come through Hong Kong and did not ask Razaq why the money had to come through Hong Kong[221]; and

(u)  the defendant never met Razaq Awang or requested a video call[222].

Would any reasonable person who shared the defendant’s knowledge be bound to believe that the property was tainted?

254.  I am satisfied that a reasonable person who shared the defendant’s knowledge was bound to believe that the property was tainted, in particular considering Razaq was someone who the defendant did not know and had never met; the BOC account (Jade Décor) was suddenly closed after over six years’ operation; the defendant was arrested for money laundering in connection with the remittances to the BOC account at the request of Razaq; the defendant’s role remained simply to receive the monies and distribute the monies; further cash payments were made via Western Union; the defendant did not know why the money had to come through Hong Kong  and that no actual business was transacted in Hong Kong only the receipt in and payment out of the monies. 

255.  I reject the defendant believed the monies were from legitimate business. 

256.  In reaching these findings I have carefully considered the submissions of Mr Sherry.  Mr Sherry submits that after VRI-1 the defendant was not charged or warned by the police about his dealings with Razaq; was released on bail with no further follow up and that the first team of police officers did nothing further on the matter[223].

257.  Mr Sherry accepted in oral submissions that the first team of police officers did continue with the investigation.  WDPC 10605 who had conducted VRI-1 on 18 July 2016 also conducted VRI-2 on 27 September 2016.  Only after  VRI-2 had concluded was the defendant arrested by Team 2D, Fraud Section, Commercial Crime Bureau[224].

258.  In evidence the defendant said that after his release on police bail and prior to the funds being received in the China Citic account he had heard nothing further from the police, save that he had to report to the police station every month to sign bail extension[225].

259.  Mr Sherry also relies on the evidence of WDPC 10605 that she did not warn the defendant against any further contact or dealings with Razaq[226].  In VRI-1 when the defendant was asked whether there will be other new transactions or trading with Razaq using the China Citic account, the defendant answered that about four weeks ago Razaq said there may be some business coming but no dates were given[227].   After referring WDPC 10605 to this answer, WDPC 10605 agreed with Mr Sherry that she did not warn the defendant against doing that future business with Razaq.

260.  The defendant was warned not to contact Razaq.  In VRI-6 the defendant said that the other team who were doing the investigation had told him not to contact Razaq because it may give him some kind of warning[228].  VRI-6 was conducted by Team 2D, Fraud Section, Commercial Crime Bureau.  The other team referred to can only be Wan Chai District Investigation Team 1 who the defendant was handed over to after his arrest at the airport[229]. WDPC 10605 was attached to Wan Chai District Investigation Team 1.

261.  Further, with the sudden closing of the defendant’s bank account after nearly six years’ operation and the arrest of the defendant for money laundering, the defendant having specifically been told his arrest related to the remittances he received for Razaq, I am satisfied a reasonable person in the position of the defendant would regard this as sufficient warning not to have further dealings with Razaq.

262.  This submission does not cause me to doubt the findings that I have made. 

263.  Both Mr Sherry and Mr Chau asked the defendant why he continued to trust Razaq[230].   Mr Chau asked:

Q. Right. Now, this was somebody you didn’t know. What was it about him, apart from sending you invoices and the WhatsApp, that made you trust him?

A. Between the correspondence and the telephone calls, I thought we built up a trust in the relationship because the fact that he was getting some customers sending a lot of money to the accounts and trusting me with that money. I could very easily have, if I had the intention to commit a crime, very easily run away with it, but I didn’t. I kept the working relationship going based on trust.

Q. Now, Mr Meredith, there’s a huge difference between trusting somebody you’ve known a long time and somebody you’ve known for about a year. There’s a huge difference.

A. Yes.

Q. And this was a complete stranger. It wasn’t like a friend or a relative. It was a complete stranger.

A. Yes, but you still can make a relationship with a complete stranger.

264.  Mr Chau then referred the defendant to VRI-6 where the defendant  told the police that he believed everything the police told him but when Razaq got in touch with him again and assured him it was a big misunderstanding and he was an honest businessman he gave Razaq another chance and that when Razaq told him about the new transactions which were quite substantial he believed Razaq was trusting him with all this money[231].

265.  Again I have no hesitation in rejecting this evidence.  A reasonable person in the position of the defendant would again ask why is this person who I have never met and do not know still asking me to receive money, money which I could take at any time and disappear.  A reasonable person in the position of the defendant would quickly conclude this is because the money was not Razaq’s to deal with and had been unlawfully obtained.

266.  In reply to the prosecution submission that the defendant was desperate to open a new account Mr Sherry submits that before approving the account the China Citic Bank must have properly considered the defendant’s proposal based on everything the defendant had been told by Razaq[232]. The defendant did not however tell the bank how Razaq approached him and that he had never met Razaq.  The fact that China Citic bank approved the opening of the bank account does not cause me to doubt the findings I have made[233]. 

267.  Reliance is again placed on the receipt of documentation and invoices from which the defendant says he believed the business of Razaq was legitimate business(DB43-DB84)[234].

268.  When the invoices were shown to the defendant in VRI-5 the defendant told the police that he did not confirm whether the invoices were genuine or false because he just trusted Razaq who was the one that made the business deal[235]. 

269.  The defendant never really did any proper research into Razaq’s company Tana Singam; after the closing of the BOC account and his arrest for money laundering, the defendant did not cause any further checks to be made on who Razaq was; the defendant never checked Aruba and the defendant only checked about the companies he remitted money to later when he did a Google search on some of the companies and found they were official companies but did not do anymore searching after that[236].

270.  The fact the defendant received documentation and invoices does not cause me to doubt the findings I have made.  I am satisfied that a reasonable person in the position of the defendant would still be bound to believe that the property was tainted. 

271.  Having carefully considered all the evidence, I find I am satisfied so I am sure that the defendant had reasonable grounds to believe that the monies remitted to the China Citic account and disbursed by him, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Verdict

272.  In reaching my verdict I have carefully considered everything said on behalf of the defendant by Mr Sherry. Nothing said by Mr Sherry causes me to doubt the findings I have made. 

273.  I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution has proved all the elements of both charges beyond reasonable doubt, each charge being considered separately.  The defendant is convicted as charged.