HKSAR v. Yip Chi Kit

DCCC 828/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 828 OF 2015

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Reasons for Sentence

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1.The defendant pleaded guilty to two charges of dealing with property known or believed to represent proceeds of an indictable offence[1].

Outline of facts

2.Both offences took place on the same day, involving the same HSBC bank account.

3.The defendant opened bank account 032-3-099739 with the HSBC on 7th February 2004.

4.The account balance on 16^th  October 2013 stood at $8.18. On that day, the defendant deposited a cashier order for HK$4.5 million into the bank account at the bank’s Mongkok branch. The cashier order was purchased by one Lian Yuehong on 15^th  October 2013 and payable to the defendant.

5.The defendant withdrew $4.48 million from the bank account at around 5pm on 16^th October, the day after the deposit was made.

6.On the following day, 17^th  October, at around 7:32pm, the defendant withdrew another $20,000 in cash from the bank account at an ATM. The balance of the account after this withdrawal was $8.18.

7.The defendant was arrested on 3rd January 2014, almost 3 months later, in connection with a case of deception. At a video recorded interview held 2 days after his arrest, the defendant claimed the following.

8.The defendant had been unemployed since November 2013. He worked as a transportation worker earning about $10,000 per month. He was the only person who could operate the bank account in question.

9.The defendant owed a loan shark ‘Ah Wah’ $50,000 and was not able to repay the debt. It was ‘Ah Wah’ who told him to bank in the $4.5 million cashier order and to make the subsequent withdrawal. The defendant had no idea how the cashier order was acquired and did not make enquiries.

10.The $4.48 million that he had withdrawn was handed over to a ‘Sze Gor’ who had accompanied the defendant to make the withdrawal.

11.The $20,000 withdrawn from the ATM was his reward and the debt of $50,000 would also be settled.

Previous convictions

12.The defendant has 8 previous convictions, with 3 relating to dishonesty. The last conviction was for the possession of dangerous drugs in January 2016. The latest dishonesty related conviction was in May 2014 for theft when the defendant was sentenced to 20 months’ imprisonment in the District Court.

Mitigation

13.The defendant was 27 at the time of the commission of the offence. He is now 29 years and 4 months old.

14.The defendant was educated up to Form 1 level. He got married in 2010 to a mainland Chinese girl. They separated after 2 years. The defendant then developed a stable relationship with a Hong Kong girl. They cohabitated and gave birth to a daughter. the defendant is the sole breadwinner. The defendant looks after his mother who suffers from diabetes and high blood pressure. The defendant’s father passed away in 2012. Since the defendant’s younger brother was unemployed, the defendant shouldered the funeral expenses and had to borrow $50,000 from the loan shark.

15.Mr. Choi for the defendant submitted that the defendant knew nothing about the underlying offence, that there is no international dimension, and that the part in which the defendant was involved was not sophisticated. It was only a matter of time that he was arrested. He was not trusted by the syndicate and that was why someone had to go with him to the bank to collect the cash in charge 1. The defendant was only told that he was allowed to keep the $20,000, the subject matter of charge 2, no one told him the principle of $50,000 could be waived, it is the defendant’s belief that he still has to repay the money.

16.Mr. Choi also mentioned how the investigation of the case took some time and how the defendant had suffered from the pressure of the case.

Sentence

17.The maximum sentence for a section 25(1) offence on conviction upon indictment is a fine of $5,000,000 and imprisonment for 14 years.

18.The factors to be taken into consideration when sentencing for money laundering are discussed in the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545. They include the amount of money involved; the level of the defendant’s participation and number of occasions he was involved in the laundering activities; the nature of the underlying indictable offence; whether there is an international element; and the length of time the offence lasted.

19.In the case of HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal stressed that any sentencing exercise must recognize the maximum sentence of 14 years’ imprisonment; that deterrence is a paramount objective of the sentence; that the amount of money laundered is not the be-all and end-all of a case, but it is a significant feature. The Court also urge the sentencer to take into account other features including the nature of the predicate offence; the state of the offender’s knowledge; whether there is an international dimension; the sophistication of the offence including the degree of planning; whether the offence was committed by or on behalf of an organised criminal syndicate; whether there was one transaction or many and the length of time over which the offence was committed; whether the offender continued to launder after discovering the nature of the funds; and the role of the offender and the acts performed by him.

20.In the case of HKSAR v Lee Ka Ki (李家琪), CACC 148/2007, the appellant was convicted after trial of two charges for money laundering and was sentenced to 4 and 5 years’ imprisonment. The sentences were ordered to run concurrently.

21.There the appellant was 29 and worked as a security guard earning around $5,000 to $6,000 per month. He was of clear record.

22.The appellant had opened two bank accounts to assist a ‘Kwai Gor’ to deal with proceeds from illegal bookmaking. The appellant was paid a monthly sum of $8,000 for his part in the operation. The total money dealt with was some $17 million. The learned trial judge found that the appellant played an active role in the money laundering, that it was done for a reward, and that it lasted more than one year.

23.The Court of Appeal noted that there was no evidence to show that the appellant had taken part in the illegal bookmaking, and suggested that he might have been exploited by the illegal bookmakers to launder their money. The Court found that it was not the most serious case of money laundering and given the fact that the appellant was of clear record, the sentence imposed by the trial judge was excessive. The sentences for both charges were reduced to that of 3 years’ imprisonment and ordered to run concurrently. The sentence was thus reduced from 5 to 3 years’ imprisonment.

24.Turning to our present case. The total amount laundered is $4.5 million. The defendant only made one withdrawal for ‘Ah Wah’. The other withdrawal was his reward for helping out. The first withdrawal was made one day after the cashier order was deposited. The second was the day after. There is no evidence to suggest the nature of the underlying offence, nor is there evidence to suggest that the defendant knew about the nature of the underlying offence or had taken any part in it. There is no evidence to suggest an international element.

25.The use of the bank account was not sophisticated. The account was opened in the defendant’s own name and he was the only person authorized to operate the account. As Mr. Choi rightly pointed out, it was only a matter of time before the cash withdrawals were noticed by the bank and reported to the authority and the defendant traced and identified. There was no sophistication in the offence.

26.Lastly, there is no evidence to suggest that the money was laundered by or on behalf of an organised criminal syndicate.

Charge 1

27.In relation to charge 1, I adopt a starting point of 27 months’ imprisonment. I find that there are no aggravating factors.

28.Although the investigation of the case took some time, I find that given the nature of the offence, it was not an unreasonable length of time for investigation to be carried out. I find that the only mitigating factor is that of the defendant’s guilty plea.

29.The defendant is sentenced to 18 months’ imprisonment upon granting him the usual one-third discount for his guilty plea.

Charge 2

30.In relation to charge 2, I adopt a starting point of 18 months’ imprisonment. Given that there are no aggravating or mitigating factors other than the guilty plea, the defendant is sentenced to 12 months’ imprisonment on this charge.

Totality

31.I find that the two offences can be treated as part of one transaction. I order the sentences to run concurrently. The final sentence is therefore that of 18 months’ imprisonment.