HKSAR v. Wong Wing Hung

DCCC 81/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 81 OF 2016

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Reasons for Sentence

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

Outline of facts

Charge 1

2.Charge 1 involves a total of around HK$19.3 million held in the account of Nice Alpha Limited with Bank of China (Hong Kong) Limited.

3.Nice Alpha was acquired by the defendant on 8^th July 2009. It had no business registration or taxable income in Hong Kong.

4.7 days later, on 15^th July, the defendant opened a multi-currency savings account for Nice Alpha at Bank of China (“the BOC account”) with himself as the sole authorized signatory. This BOC account was eventually closed on 15^th June 2012 by the defendant.

5.Between 31^st July 2009 and 15^th June 2012, a total of EUR€2,089,848.66, USD$50,005, and   HK$1,058,288.91 were withdrawn from the BOC account.

The EUR€2,089,848.66

6.Within 3 days in April 2010, two remittances from Germany and the U.K. injected a total of €1.99 million into the BOC account. Most of the money was then transferred to two local companies on the same day or the following day. The companies were both owned by the same individual and had no apparent business operation in Hong Kong. 

7.The remaining deposits of €89,834, being funds converted from the USD or HKD sub-account, were dissipated by way of transfers to local companies all of which did not have any apparent business in Hong Kong; remittances to mainland China and Israel; and cash withdrawals made by the defendant of over €90,000 in total.

The USD$50,005

8.USD$50,000 was converted from HKD and then remitted to a company in Israel on the same day.

The HK$1,058,288.91

9.Deposits totalling over HK$1.05 million were received mostly in cash. Nearly all the deposits were converted into EUR or USD and transferred to the sub-accounts either on the same day or within a few days of receipt. HK$100,000 was withdrawn in cash by the defendant on 5 occasions.

10.At the time of the closure of the BOC account, the then balance of EUR€533.23; US$5 and HK$5,438 were all withdrawn by the defendant in cash.

Charge 2

11.Charge 2 involves a total of around $11.75 million held in the account of a Nice Alpha with Standard Chartered Bank (Hong Kong) Limited.

12.7 days after opening the BOC account, on 22^nd July 2009, the defendant opened another multi-currency savings account for Nice Alpha at Standard Chartered Bank (“the SCB account”) with himself as the sole signatory. The SCB account was eventually closed by the defendant on 15^th June 2012.

13.Between 29^th July 2009 and 15^th June 2012, a total of EUR€593,429.90, US$854,827.50 and HK$33,810.34 were withdrawn from the SCB account.

The EUR€593,429.90

14.Deposits totalling over €0.59 million were received mostly from the United Arab Emirates and the Marshall Islands. Most of these deposits were soon dissipated by way of transfers to a local company with no apparent business operation in Hong Kong; remittances to mainland China; and over €10,000 was withdrawn by the defendant by way of 4 cash withdrawals.

The US$854,827.50

15.Deposits of over USD$0.85 million in total were received mostly from the Marshall Islands. Most of the deposits were soon dissipated by way of remittances to Israel and Switzerland. The remaining deposits were remitted to a local company with no apparent business operation in Hong Kong.

The HK$33,810.34

16.Over HK$33,000 in total was received and withdrawn, mostly in cash. All the withdrawals were made by the defendant in person at a SCB branch.

17.At the time of the closure of the SCB account, the then balance of EUR €651.91, US$31.35 and HK$6,460.30 were all withdrawn by the defendant in cash.

The defendant’s admissions

18.The defendant was arrested for the offence of ‘money laundering’ in August 2015. He admitted under caution that he had set up Nice Alpha and opened the BOC and SCB accounts as well as made the various withdrawals, all done pursuant to instructions from an unknown man.

19.The defendant came to know this unknown man when he answered a newspaper advertisement for a ‘trading partner’ in June 2009. The defendant never met the man and did not know his name. Apart from the first conversation which was held over the phone, they communicated only via email and SMS.

20.The defendant was instructed by the man to acquire Nice Alpha and to set up and operate the bank accounts. Whenever a deposit was made to the bank accounts, the man would notify the defendant and tell him how much and to where the money were to be withdrawn or remitted. The defendant did not know about the source of the money. He did ask the man about it but the man had refused to answer.

21.The man had promised to pay the defendant no more than 0.1% of each transacted sum as commission. Even if there was no transaction in a particular month, the defendant would still be entitled to around HK$10,000 per month as ‘basic salary’.

22.The defendant would notify the man after a withdrawal or remittance and would then be informed as to how much commission the defendant should take. The defendant would then withdraw his commission in cash over the bank counter. The defendant had received around HK$100,000 in total.

23.The defendant admitted that he believed that the ‘trading business’ that he was ‘employed’ for was in fact money laundering business. He believed that Nice Alpha was set up to facilitate improper fund transfers.

24.The defendant agreed and continued to help the man in the transfer of crime proceeds despite his belief that the funds in the accounts were not legitimate because he was then unemployed and needed the money.

25.The fact that the man refused to disclose the source of the funds, the substantial monetary reward given to him strengthened the defendant’s belief that what the man was doing was up to no good, which was why the defendant used a new pre-paid SIM card when he communicated with the man.

Previous conviction

26.The defendant is of previously clear record.

Mitigation

27.The defendant is 51 years old. He had worked as a service engineer, IT-support engineer, computer technician, customer engineer and stock keeper at various computer-technology related companies in Hong Kong since 1986.

28.The defendant was made redundant and remained unemployed between 3^rd June 2009 and 31^st March 2010. The defendant has been employed as a service engineer at One Asia Network Limited since March 2014.

29.The defendant is single. He has three younger brothers and two younger sisters. The defendant used to live with his mother and one of his younger brothers before his mother passed away in 2015.

30.Former colleagues of the defendant, as well as his siblings and nieces wrote in to explain to the court what kind of person the defendant has all along been. In gist, the defendant is a responsible and trustworthy employee, a loving brother who is always looking after his siblings.

31.It would appear that the defendant had committed the present crimes out of desperation and desire to be useful to the family and to be able to look after his ailing mother. 

Sentence

32.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. The maximum sentence is the same for a conspiracy to commit the crime.

33.In the case of HKSAR v Hsu Yu Yi (許有益) [2010] 5 HKLRD 545, the  Court of Appeal discussed the factors to be taken into consideration when sentencing money laundering cases. In summary, the factors are as follows: 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.

34.In the later case of HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal stressed that the paramount objective of the sentence in money laundering cases is that of deterrence. The Court then reiterated that the amount of money laundered is a significant factor to be considered.

35.Other features to be taken into account include 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.

36.In our present case, the total amount involved in the two charges together is around HK$31 million odd, which is a substantial amount.

37.The defendant’s involvement in the money laundering is serious. He was the person who acquired Nice Alpha, opened the two bank accounts, made the various transfers, remittances and withdrawals. The money laundering took place over a substantial length of time and there were multiple dealings in the funds of the accounts.

38.The defendant received around HK$100,000 in total for helping the unknown man deal with the money in the two bank accounts.

39.There is no evidence to show what the nature of the underlying indictable offence was, nor evidence to show that the defendant had participated in the crimes or that he even had any idea what the nature of the crimes was.

40.There is an international element in the dealings, since funds had come in from and then remitted to different countries.

41.The money laundering involved some planning and organisation on the defendant’s part but it was not very sophisticated. Given the fact that the defendant had used his own identity to acquire Nice Alpha and opened the bank accounts and made his own withdrawals from the bank over the counter, it was only a matter of time before the operation was noticed by the banks and the defendant apprehended.

42.There is no evidence to prove that there was an organised criminal syndicate behind the defendant’s operation of the two bank accounts, or that the defendant knew that there was one.

43.The defendant did continue to deal with the funds in the accounts despite his belief early on that the money was related to some illegitimate activities taking place somewhere.

44.Taking into consideration all the above factors, I find that a proper starting point for the total amount of $31 million odd involved in the two charges combined should be that of 4 years’ imprisonment.

45.I find that there are no aggravating factors in the defendant’s commission of the offences.

46.I find the fact that the defendant, who is 51, is of previously clear record a definite indication that the commission of the present offences was an exception. I accept that the defendant is the kind of person his former colleagues and family members claim him to be. I find that he did commit the offences out of character. I will reduce the starting point sentence by 3 months in view of these mitigating factors, taking the sentence down to 45 months’ imprisonment.

47.I must point out that it must not be forgotten that in helping those unknown people dealing with the money, it is highly likely that the defendant had inadvertently, and probably unintentionally, caused harm to other innocent people. We have no evidence as to what underlying crimes had been committed in relation to the funds, but it is the defendant’s own belief that the man must have been ‘up to no good’, and I think he is right in so thinking.

48.The defendant is sentenced to 30 months’ imprisonment on charge 1 and charge 2 after granting him the usual one-third discount for his guilty pleas. I order that the sentences in both charges to be served concurrently. The final sentence is that of 30 months’ imprisonment.