HKSAR v. LAM YAT HO AND OTHERS

DCCC 353/2018

[2019] HKDC 1629

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 353 OF 2018

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REASONS FOR SENTENCE

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D1 (Charges 1, 4, 7)

1.  D1 was convicted of 3 counts of fraud after trial.  He is now 34 years old and has a clear record.  He resides with his father.  He has a girlfriend and they are expecting a marriage.

2.  He received education up to Form 5 and then took up different jobs, including an agent of a financial institution.  He also started his own business selling food in 2013.  For the time being, he is a driver.

3.  The 3 counts of fraud committed by D1 were heartless crime of dishonesty targeted on victims intending to apply for a loan from banks.  By claiming that the banks would approve a loan on condition of depositing a sum of security money for a short period of time, the victims were deceived huge sum of money.  For charge 1, the victim lost $1 million.  For charge 4, the victim lost $1.17 million.  For charge 7, the victim lost $910,800.  The victims were unable to get any loans from bank.  Some of the victims even raised a short term loan from financial institutions to afford the payment of security and ended up had to bear the interests and/or the early redemption fees thereby incurred.

4.  There is no tariff for the offence of fraud or conspiracy to defraud.  In HKSAR v Tsoi Shu, CACC 461/2003, a case concerning loco London silver fraud, the Court of Appeal said a starting point of 4 years’ imprisonment was usually adopted whereas the final sentence might have to be increased depending on factors such as the role and involvement of the individual defendant in the fraud, the duration of the fraud and the amount of loss suffered by the victims.  A heavier sentence would be imposed on a defendant who was the mastermind or had a greater involvement with the fraud.

5.  The frauds in the present case were carefully structured.  An office in Causeway Bay or Hennessy Road was used as a façade of a genuine commercial operation.  Documents bearing logo of banks were shown to victims.  When a victim was short of liquidity to afford the security, arrangement for a short term loan from financial institution would be made at a solicitors’ firm.  The victims were deceived huge sum of money.  The scale of the fraudulent operation could not be said to be small.

6.  In my view, the seriousness of the fraud of the present case was undoubtedly no less than the loco London silver fraud.  Both kinds of frauds were designed to cheat the gullible members of the public.  The sentence must have deterrent effect.  In each charge, D1 perpetuated the fraud with other persons.  Although I cannot say that he was the mastermind, he played an active and vital role.

7.  Anyone who joined in this kind of fraud will expect a sentence with imprisonment at a starting point no less than 4 years.

8.  Taking all the circumstance into account, I adopt a 4 years’ imprisonment as the starting point for each of charge 1, charge 4 and charge 7. I fail to find any mitigating factor that warrant any reduction in the sentence.  In other words, D1 is sentenced to 4 years’ imprisonment for each of charge 1, charge 4 and charge 7.

9.  The total sums deceived were about $3 million.  Taking the totality principle into account and the overall criminality of D1, 5 years’ imprisonment is appropriate.

10.  In the circumstance, I order 6 months of charge 4 to be run consecutive with charge 1 and 6 months of charge 7 to be run consecutive with charge 1 and charge 4.

D3 (Charge 7)

11.  D3 was convicted 1 count of fraud after trial.

12.  He is now 28 years old and has a clear record.  He resides with his parents.  In about May 2016, he worked as a sales executive for a financial institution.  Now, he is a deliver worker.

13.  D3 committed a carefully structured fraud together with other persons, including D1.  The victim was deceived $910,800.  Although I accept that he was not the mastermind, his role and involvement was active and vital.

14.  For charge 7, culpability of D1 and D3, being the fraud perpetuators, should be the same.  I adopt 4 years’ imprisonment as the starting point.  I fail to find any mitigating factor that warrant any reduction in the sentence.  In the circumstance, D3 is sentenced to 4 years’ imprisonment.

D4 (Charges 3 and 6)

15.  D4 was convicted upon his own plea of 2 counts of dealing with property known or believed to represent proceeds of an indictable offence, usually known as money laundering.

16.  D4 is now 58 years old.  He is a married man and is now residing with his wife.  He was a policeman and then a taxi driver.  In 2015, he was convicted of 6 counts of public servant accepting an advantage and was sentenced to CSO.  His old aged mother is now suffering from cancer.

17.  Money laundering is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime.  In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the money laundering offence.  Generally, the sentence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others.  In my view, culpability of D1 and D3 should be more severe than D4, D5 and D6, who were assisting the fraud(s) through laundering the proceeds.

18.  In HKSAR v Boma Amaso [2012] 2 HKLRD 33, the Court of Appeal said that because of the different circumstances that may arise in money laundering cases, it is not appropriate to provide a tariff of sentence.  Instead the sentence should be based on factors such as the nature of the predicate offence, knowledge of the offender, whether an international element is involved, the sophistication of the offence, whether an organised criminal syndicate is involved, the number of transactions and the length of the crime, the role of the offender and whether the offender continued with the offence after detection by the authorities or discovery by the offender of the nature of the offence.

19.  In the present case, I accept that D4 had no knowledge of the nature of the predicate offences.  However, he was the one who withdrew the sums from his bank account and must have known the exact amount of the “black money” involved, namely $1.1 million for charge 3 and $1.86 million for charge 6.

20.  In SJ v Wan Kwok Keung, CAAR 13/2010, the Court of Appeal cited HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536 and said that a sentence of about 3 years’ imprisonment is appropriate for money laundering case involving a sum of about $1 to $2 million and 4 years’ imprisonment is appropriate for $3 to $6 million.

21.  I read the mitigation letter written by D4’s daughter.  Although I accept that D4 offered to help the prosecution, no actual assistance was ultimately required.  In any event, I accept that he is now remorse for what did.

22.  Taking all the circumstance into account, I adopt a 3 years’ imprisonment as the starting point for each of charge 3 and charge 6.  Given a full one-third discount for his timely plea, he is sentenced to 2 years’ imprisonment for each count.  Taking into account of the totality principle and the total sums involved was about $3 million, I order that 4 months’ imprisonment of charge 6 is to be run consecutive with charge 3.  The total sentence is 2 years and 4 months’ imprisonment.

D5 (charges 8 and 10)

23.  D5 was convicted upon her own plea of 1 count of money laundering and one count of failing to surrender to custody.

24.  D5 is now 28 years old, divorced with 1 daughter aged 6.  She is now a clerical staff earning about $15,000 per month.  After her divorce, she has to shoulder the responsibility of bringing up the young daughter single-handedly as her husband fails his duty to pay for the maintenance as promised.  She has a previous conviction record of theft in 2012 and was sentenced to a 2 years’ probation order.

25.  In mitigation, I was told that she was not aware of the origins of the “black money” involved.  She committed the offence out of friendship and just gave a helping hand to a friend who was her secondary schoolmate and a good friend for the past 15 years.  She was granted bail originally but on 13 September 2018, she failed to make arrangement for the welfare of her daughter and decided not to attend court as scheduled.  She was then arrested in December 2018.

26.  Although I accept that she was not aware of the predicate offence, her participation in this case was low and was involved only a single act in one day, nature of the offence for which she committed is serious.  She knew the exact amount she was laundering because she withdrew the money from the bank.  Amount of the “black money” involved was $910,800.

27.  She wrote a mitigation letter expressing her remorsefulness and begging for a lenient sentence.

28.  Money laundering is a serious offence and taking into account of all the circumstance, I took a starting point of 2 years and 9 months’ imprisonment for charge 8.  Despite failed to appear in court as scheduled, her absence caused no delay in this case.  In the circumstance, I decide to give her a full one-third discount for her timely plea and sentenced her to 1 years and 10 months’ imprisonment.

29.  The substantive offence committed by D5 was a separate and distinct offence from failing to surrender to custody, which is an offence with no sentencing guideline but offenders must expect to face a sentence of some severity.  Having given a full one-third discount for charge 8, I consider the sentence for absconding has to be made wholly consecutive to the sentence for the substantive offence.  The period of absconding is not lengthy and I adopt a 3 months’ imprisonment as the starting point for charge 10 and reduced it to 2 months’ imprisonment, to be run consecutive with charge 8.  Total sentence is therefore 2 years’ imprisonment.

D6 (Charge 2)

30.  D6 was convicted upon her own plea of 1 count of conspiracy to money laundering.

31.  She is now 25 years old.  She grew up in a broken family with minimal parental support.  Effectively, she became an “orphan” at the age of 16 and then quitted school.  She worked as a clerk, fitness coach and nightclub hostess.  She co-habited with a man, who deserted her after their son was born last year.  For the time being, she resides with her 16 months’ old son and is living on CSSA.

32.  She has a previous conviction record of possession of a dangerous drugs for which she was sentenced to DATC in 2017.

33.  She wrote a mitigation letter expressing remorsefulness and determination to turn a new life.  I also read the mitigation letters from a doctor and a counselor asking me to impose a lenient sentence.

34.  D6 came from a very pity background.  She effectively received no parental support.  She stopped taking any dangerous drugs since realizing her pregnancy.  Her cohabitee deserted her and she is now a single mother. Obviously, if she is to be sent to prison, she will either separate from her son, who will then be placed in a foster home, or her son will be stayed with her in prison.

35.  I accept that the personal background of D6 was unfortunate and her life has been changing in a positive way since her son was born.  She is currently free from drug habit.  I also accept that she is remorseful for what she did and determines to turn a new life.  Actually, she is in the middle of reforming herself.  She committed the present offence because she was financially and emotionally deprived.

36.  I also take into account that her participation in this case was low and was involved only a single act in one day.  She was promised $10,000 as reward but has yet to receive anything.  She was not aware of the nature of the predicate offence.

37.  However, nature of the offence for which she committed is serious.  She obviously tried to cash the cheque and had actual knowledge of the exact amount she was laundering.

38.  The sentence for money laundering offence should mainly reflect the amount of “black money” laundered but not the benefit obtained by the defendant.  Therefore, even if D6 did not receive any reward, it is not an important mitigating factor.  The amount of “black money” involved was more than $1 million and it was only due to an irregularity on the face of the cheque that stopped D6 from withdrawing any money.

39.  Taking all the circumstance into account, I adopt a 2 years and 9 months’ imprisonment as starting point for charge 2.  Given the usual one-third discount, she is sentenced to 1 years and 10 months’ imprisonment.  I do not consider the personal background of D6 warrants any further reduction in sentence nor justify for imposing a suspended sentence.