HKSAR v. Cheung Wai Chun

DCCC 1131/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1131 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.

Summary of facts

2.On 5^th June 2013, the defendant presented two cheques issued in favour of himself at a DBS branch office and successfully withdrew $500,000 and $400,000 respectively from the DBS account which was held in the name of one ‘Cheung See King Kenneth’ (hereinafter referred to as ‘the DBS account’). The defendant used his own identity card in support of the withdrawal.

3.The two check withdrawals form the basis for charge 1 and 2 respectively.

4.As it turns out, the DBS account was opened on 29^th May 2013 by one Leung Tsz Wai who had falsely identified himself as ‘Cheung See King Kenneth’. This Leung Tsz Wai used an identity card in the name of Cheung See King Kenneth and a letter from AXA Insurance Company to open the DBS account.

5.The money that was withdrawn by the defendant from the DBS account was part of a loan of $1.2 million granted by the Standard Chartered Bank to the said ‘Cheung See King Kenneth’, which was transferred into the DBS account per the instruction of the said Leung Tsz Wai.

6.The $1.2 million loan application was made by the said Leung Tsz Wai, again falsely claiming himself to be ‘Cheung See King Kenneth’. A copy of a Hong Kong identity card with false information, false employment details, a false Inland Revenue Department assessment and false telecom bill, all in the name of ‘Cheung See King Kenneth’ were used by Leung in the loan application with SCB.

7.The scam was exposed when a senior manager of SCB contacted the real Cheung See King Kenneth who denied making the loan application. A copy of the identity card of the real Cheung See King Kenneth was obtained for comparison with the one presented by Leung Tsz Wai. The photo and Chinese name of Cheung See King Kenneth are different, although both have the same identity card number.

8.The defendant was arrested on 2^nd November 2015. In the subsequent video recorded interview, the defendant claimed that a friend of his, Fat Guy (肥仔), asked him to withdraw some money from the bank for him for a reward of $10,000.

9.Fat Guy gave the defendant two checks on 5^th June 2015. The defendant then presented the checks to withdraw cash of $900,000 from a branch office of DBS.

10.The defendant then passed the money to Fat Guy, who then gave the defendant $10,000 as his reward.

11.The defendant claimed that he did not the source of the $900,000, although he knew that the money was ‘questionable’ and should have come from illegal means.

Previous convictions

12.The defendant is of previously clear record.

Mitigation

13.The defendant is 31. He was educated up to Form 7 level in Hong Kong. The defendant’s biological mother left the family when the defendant was very young, his present family comprises of his father, stepmother and a younger sister.

14.The defendant went to Queen’s College from Form 1 to 5. He went on to Rosaryhill School for his matriculation. He did not get into university bit went on to IVE for pharmaceutical studies. He did not complete the course because he decided to start working to help out the family since he is the only son and eldest of the family.

15.The defendant worked various jobs, including ground staff at the airport and hotel staff.

16.At around the time of the offence, he made the acquaintance of some friends who persuaded the defendant to invest in something involving activities in Macau. The defendant thought he was investing in the casinos in Macau when in fact his money was just being used in gambling. Time and again, the defendant was tricked into handing over money for this so called investment.

17.It took some time before the defendant found out that he had ben deceived. The defendant still had to repay the loans from his father as well as moneylenders.

18.It was at this juncture that the defendant met Fat Guy, who lured the defendant into earning some quick money. The defendant thought it was easy money, and he could smell something was wrong but he still committed the crime.

19.The defendant went to mainland China after the withdrawals and stayed there as he knew he had done something wrong.

20.In the year before his arrest, the defendant had found a job in a shanghai hotel as their deputy F&B manager. There he met a Shanghainese girl whom the defendant wanted to become serious with.

21.The defendant did not want to be a fugitive anymore, and he wanted to bring his girlfriend to Hong Kong to meet with his parents, so he decided to come back to Hong Kong.

22.The defendant informed the hotel about his decision and they promised to keep his job for him. The defendant’s girlfriend has also promised to wait for the defendant to be released from imprisonment.

Sentence

23.The maximum sentence on conviction upon indictment for the present offences is that of a fine of $5,000,000 and 14 years’ imprisonment.

24.In the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal discussed the factors relevant for consideration when sentencing money laundering cases. The factors would 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.

25.In the case of HKSAR v Boma [2012] 2 HKLRD 33, it was stressed that deterrence is a paramount objective of the sentence and that the amount of money laundered is a significant feature. The sentencer should also take into account features such as 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.

26.In our present case, there is no evidence to prove that the defendant had taken part in the underlying frauds practiced on SCB and DBS. There is also no evidence to prove that the defendant knew about the underlying frauds. It is likely that the defendant was being exploited for his greed in order for those who perpetrated the frauds to get their hands on the money. Having said that, the defendant did commit the offences for a reward of $10,000.

27.The defendant played a limited role in the money laundering. He simply cashed the checks and then handed the money over to Fat Guy. There was no sophistication involved on the part of the defendant.

28.The total amount involved in the two charges is $900,000. While the amount is not small, it is by no means a large amount when compared to other money laundering cases.

29.The withdrawals were made on the same day and was a one-off situation.

30.In relation to the money laundering, there was not much planning involved. There is no evidence to suggest that there was an international element. The nature of the predicate offence is that of fraud. Although the frauds were obviously premeditated and planned, there is no evidence that the defendant had knowledge of them. There is no evidence that the money laundering was committed by or on behalf of an organised criminal syndicate.

31.Balancing all the above factors, for the combined total of $900,000, I find that an appropriate starting point should be that of 26 months’ imprisonment.

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

33.I find that the fact that the defendant had voluntarily come back to Hong Kong, despite knowing that he will be arrested and tried and likely locked up, a mitigating factor. For this, I will reduce the sentence  by 2 months.

34.Granting the defendant the usual one-third discount would result in a sentence of 16 months’ imprisonment.

35.I therefore sentence the defendant to 16 months’ imprisonment on both charge 1 and 2, the sentences to run concurrently.