HKSAR v. Lam Hing Wan and Others

DCCC 378/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 378 OF 2014

-----------------

-----------------

-------------------------------------------

REASONS FOR SENTENCE

-------------------------------------------

1.The Defendants (D1 to D3 on the indictment and so termed throughout) were each charged with offences of dealing with property known or believed to represent proceeds of an indictable offence, contrary to Sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap. 455. D1 denied Counts 1 to 3 on the indictment but was convicted after trial in respect of Counts 2 and 3, but acquitted of Count 1, while D2 admitted Count 4 on the indictment and D3 Count 5 on the indictment from the outset.

2.Full particulars of the offences are set out in my verdict delivered on 15 November, 2016 in respect of D1.  D2 and D3 are sentenced on the basis of the facts admitted by them whilst D1 is sentenced on the basis of the facts found by this Court.  By consent of all parties, sentence of D2 and D3 was adjourned until the conclusion of the trial of D1.   After hearing Counsel in mitigation in respect of each defendant, I adjourned sentence until today, calling for a background report in respect of each defendant, and a medical report for D1 and D2, remanding all the defendants in custody. These reports are now before me.

3.This is a money laundering case that arose out of an operation conducted by the police at an illegal gambling establishment operated by D1 at the cockloft, Shop No. 2, Nos. 2 – 8A Yi Pei Square, Tsuen Wan, together with an examination of the bank accounts of D1 at HSBC and the persons who made cash deposits into those accounts in the relevant period.

4.The ‘Summary of Facts’ admitted by D2 and D3 disclosed that D1 operated the said illegal gambling establishment that police went to on 16 January, 2013 at the cockloft, Shop No. 2, Nos. 2 – 8A Yi Pei Square, Tsuen Wan to execute a gambling authorization.   The size of the premises was about 800 square feet in area and comprised a living room and bedroom. D1, D2 and D3 were in the sitting room when the police entered the premises. 17 other persons were seen playing mahjong or sitting at 3 electronic mahjong tables.  There were 3 other unoccupied mahjong tables, a quantity of cash ($2,550) together with 12 sets of mahjong tiles, gambling chips, 10 business logbooks and 50 bottles of drink found in a refreigerator at the premises.  There were also 3 LCD display screens and 10 CCTV cameras, 2 being at the entrance to the premises and 8 inside the living room. The police searched D1 and seized items from him, as well as from the premises. All the persons in the premises, including D1, D2 and D3 were arrested and they and the items that were seized were taken back to the Tsuen Wan Police Station for further inquiries.

5.D2 was arrested and cautioned in the afternoon of 23 January, 2013 for the offence of dealing with proceeds of an indictable offence and he said to the police officer “I worked for Lam Hing Wan, he asked me to deposit the money and thus I did so.” The police officer recorded what D2 said in his police notebook and read it over to D2, who signed on the police notebook.

6.D2 was video-interviewed under caution in respect of the offence set out in Count 4 on the indictment.  D2 admitted knowing D1 Lam Hing Wan since the 1970’s and to helping him since 2003.  He admitted to working for D1 at the premises and doing odd jobs such as cooking, cleaning and running errands. He placed bets on horses for D1 almost daily. He also played mahjong at the premises. He admitted that the logbooks seized by the police at the premises were used to record commissions collected. He also admitted that at D1’s request, he had on 9 occasions deposited cash into D1’s HSBC bank account 075309 9959 – he produced his identity card when depositing the money into D1’s bank account. He had deposited a total of HK$1,030,000.  He said that he thought that the money he had deposited into D1’s HSBC bank account came from D1’s betting on horses, playing mahjong and from commissions earned from operating the illegal gambling establishment.  He said he assisted D1 in the illegal gambling establishment 3 to 4 days in a week.  He had worked for D1 since 2010.  D2 was charged with and admitted the offence of assisting in the management of a gambling establishment pursuant to Section 5(c) of the Gambling Ordinance, Cap. 148 at the Tsuen Wan Magistracy on 13 September, 2013 and was fined $8,000.  He admitted that he knew or had reasonable grounds to believe that the property the subject of Count 4 represented the proceeds of an indictable offence and he dealt with the said property.

7.D3 was arrested and cautioned in the afternoon of 23 January, 2013 for the offence of dealing with proceeds of an indictable offence and she said to the police officer “Ah Sir, I don’t know what the money was”. The police officer recorded what D3 said in his police notebook and read it over to D3, who signed on the police notebook.

8.D3 was subsequently video-interviewed under caution in respect of the offence set out in Count 5 on the indictment.  She said she was unemployed and lived on a government allowance.  She had known D1 for 3 or 4 years.  She admitted going to D1’s illegal gambling establishment to play mahjong about once a month when she had money.  She also admitted that she had deposited cash at the request of D1  into D1’s HSBC bank account 075309 9959 – she identified her name and identity card number and amounts on the bank deposit slips used when depositing the money into D1’s bank account. She had deposited a total of $630,000 on 5 occasions. She said D1 gave her his bank account number written on a piece of paper and she deposited the money into that bank account and gave him back the deposit receipts. She did not receive any monetary gain for doing this for D1. She admitted that she ‘guessed’ the money that she deposited on behalf of D1 came from commissions from playing mahjong or from his earnings from his playing mahjong in his gambling establishment.  D3 knew or had reasonable grounds to believe that the property the subject matter of Count 5 were the proceeds of an indictable offence and she had dealt with that property.

9.D1 was convicted after trial in respect of two counts of dealing with property known or believed to represent proceeds of an indictable offence, namely Counts 2 and 3 on the indictment and acquitted in respect of Count 1 on the indictment.  As I have said, full particulars of the offences are set out in my verdict delivered on 15 November, 2016 in respect of D1.   D1 dealt with the property set out in the particulars of Counts 2 and 3 – these were the proceeds derived from an illegal gambling business. The ‘property’ in Count 2 and 3  relate to a police operation at the premises at the cockloft, Shop No, 2, Nos. 2-8A Yi Pei Square, Tsuen Wan, an unlicensed gambling establishment and relate to the funds subsequently discovered in the HSBC bank accounts of D1 that were dealt with through the said bank accounts of D1.  D1 himself admitted in his testimony in court that commission was paid and he kept this.  I drew an irresistible inference that in operating the illegal gambling establishment, he made profits and in the process, some of the monies that were being moved or distributed or dealt with by D1 through his 2 HSBC bank accounts were the profits and therefore the proceeds of an indictable offence. D1 dealt with the monies deposited into his two HSBC bank accounts as set out in Counts 2 and 3, namely HK$15,453,626.06 in Count 2 and HK$4,773,353.60 in Count 3. He knew that these ‘property’ in whole or in part, directly or indirectly, represented the proceeds from an indictable offence, the operation of an illegal gambling establishment.      At the material time, D1 was the sole account holder and signatory of the said two bank accounts set out in the particulars of Counts 2 and 3.  According to the records of the Inland Revenue Department, between February 2006 and January 2013, D1 had not filed any tax returns.  A search of the records of the Registrar of Companies disclosed that there was no record of D1 being the proprietor of any company.

10.I was satisfied beyond all reasonable doubt that the facts admitted by D2 and D3 supported Counts 4 and 5, and accordingly I convicted D2 of Count 4 and D3 of Count 5.  I was satisfied beyond all reasonable doubt that D1 had committed the offences as set out in Counts 2 and 3, and accordingly I convicted him on Counts 2 and 3.

Previous convictions

11.All the Defendants have previous convictions.

D1

12.D1’s criminal record dates back to 1974.  He has 14 previous convictions in 11 court appearances.  His most recent conviction was on 18 October, 2013 for an offence of operating a gambling establishment when he was fined $15,000 and sentenced to 3 months’ imprisonment suspended for 36 months.  This conviction relates to the police operation on 17 January, 2013 in the present proceedings.  He has no conviction similar to the present ones, but he does have a previous conviction in 1986 for operating a gambling establishment and one in 2006 for assisting in operating a gambling establishment.

D2

13.D2’s criminal record dates back to 1988, and they are all gambling related – he has 10 previous convictions in 10 court appearances, including 2 for operating a gambling establishment in 2000, and one for assisting in operating a gambling establishment in 2013, which relates to the police operation in the present proceedings.  His most recent conviction on 14 February, 2014 is for gambling in a gambling establishment, and he was fined $2,000.

D3

14.D3’s criminal record dates back to 2006 – she has 3 previous convictions in 3 court appearances, and they are all for offences of gambling in a gambling establishment.  Her most recent conviction was on 28 January, 2014 – the gambling establishment is not the one in the police operation in the present proceedings.

15.The Prosecution submitted a number of authorities on sentence in money laundering cases, including SJ v. Herzberg [2010] 1 HKLRD 502, HKSAR v. Hsu Yi Yi [2010] 5 HKLRD 545, SJ v Wan Kwok Keung [2012] 1 HKLRD 201, HKSAR v. Boma [2012] 2 HKLRD 33, HKSAR v. Wu Jianbing [2012] 1 HKLRD 781 and HKSAR v. Xu Xia Li [2004] 4 HKC 16, which set out the factors to be considered for offences of this nature.            

Antecedent Statement & Mitigation

16.calling for Background Reports for all the defendants, and Medical Reports as well for D1 and D2.  When the matter resumed before me on 29 November, 2016, all the reports were available. Counsel for the defendants informed the Court that they had explained the contents of all the reports to their respective clients and they each agreed with the contents. After hearing further mitigation from Counsel, I adjourned the matter until today for sentence.

D1

17.The Antecedent Statement of D1 disclosed, inter alia, that the D1 was born in China on 23-10-1954. He is therefore now aged 62 years.  He had been educated to Primary 1 level. He was unemployed at the time when the Antecedent Statement was taken (i.e. on 11-10-2016).  He suffered from heart disease and diabetes.  He was single, and lived with his co-habitee, and his daughter and son. No issue was taken by Mr. Wu on the contents of the Background Report, which set out the background of D1 in detail.  I do not propose to rehearse the contents again herein.

18.Mr. Wu submitted that the medical certificate D1 had submitted in the course of the trial supported what was disclosed in his Antecedent Statement that he had a heart problem.  D1 disclosed to Dr Lin Tsz-kin, the medical officer at the Lai Chi Kok Reception Centre that he had a medical history of hypertension, hyperlipidemia and diabetes Mellitus with follow-up and treatment received at the Baptist Hospital for 8 years, and Ischemic Heart Disease with Percutaneous Coronary Intervention done in 2012, 2014 and 2015 respectively in the Baptist Hospital.  He was admitted to the Centre Hospital of LCKRC for observation since his admission to the LCKRC on 15/11/2016. He was referred to the Accident & Emergency Department of the Queen Elizabeth Hospital on 16/11/2016, as he was found to have high blood glucose, for further management and discharged on 17/11/2016 and returned to the Centre Hospital of the LCKRC upon discharge. His general health condition was stable.

19.The Background Report set out D1’s background.  It was the opinion of the Probation Officer who interviewed D1 that all along he held a reserved and evasive attitude throughout the inquiry.  She opined that D1 was an adult from the Mainland who came to Hong Kong over 40 years ago. He commenced his illegal activities soon after he came to Hong Kong and continued his illegal activities in the following decades.  He did not learn from his previous convictions.  He denied the present offences and made up excuses for the present offences. He had no insight and poor law-abiding concept.

20.Mr. Wu accepted that the last conviction on D1’s criminal record of operating a gambling establishment related to the illegal gambling establishment in the proceedings herein and that the conviction related to the premises in the police operation on 17 January, 2013.  He asked the Court to consider to what extent the bank transactions reflected the gambling operation. D1 was fined and given a suspended sentence – it might be because of the size of the operation that he was given a more lenient sentence. Mr. Wu said he did not represent D1 for that hearing.  While he accepted that the Bankers’ Affirmations set out the cumulative amounts, he asked the Court not to consider the entire sums as ‘proceeds’.  Mr. Wu said that D1 in his testimony had said that he had operated the gambling operation for 15 months. D1 was in his 60’s and not in good health. His cohabitee Ms. Wong had committed suicide in 2015. The Court referred Mr. Wu to D1’s Antecedent Statement which disclosed that he was currently living with his ‘cohabited girlfriend’.  Mr. Wu said Ms. Wong had committed suicide because the property in Serenade Cove was in the joint names of D1 and herself, and she was worried. Mr. Wu did not answer the Court’s query.  Mr. Wu sought leniency on behalf of D1. He asked for a concurrent sentence – he submitted that the entirety of the Prosecution case was not disputed – it had not been a full contest.

D2

21.D2’s Antecedent Statement disclosed that he is now aged 82 years. He was born in China, and educated to Primary 3. He previously worked as a factory worker but is now unemployed. He has no health problems.  He is a widower and lives in Tsuen Wan.  The medical report of D2 discloses that the physical examination if his cardiovascular, respiratory and abdominal systems was unremarkable. D2 disclosed that he had a medical history of hypertension and diabetes mellitus with follow-up at the Lady Trench General Out-patient Clinic.  He had also had upper gastrointestinal bleeding and had been treated at the Princess Margaret Hospital in 2006 – no follow-up was indicated.  He was admitted to the Centre Hospital at the LCKRC for observation – his general health condition was stable.  The Background Report disclosed his background in detail. In paragraph 7 of the report, the Probation Officer opined that D2 had worked in the handicraft and service industry diligently following the transition of the local job market in the past half century.  He raised 4 children and retired about 20 years ago.  However he was a gambler, and on a number of occasions in the past had troubled his family to settle his debts.  His adult children had been careful not to give him excessive pocket money to discourage his gambling habit, and this had strained his relationship with his 2 younger children still living with him.  His wife died 14 years ago. D2 relied on old age allowance from the government and turned to playing mahjong in D1’s illegal mahjong parlour resulting in his previous gambling convictions.  He also did odd jobs for D1 to supplement his income. 

22.The contents of the Background Report confirmed much of what was said by Ms. Chow.   She submitted that at the time of the offence, D1 was suffering from high BP and had difficulties in walking. He asked D2 to make deposits into his bank account. D2 did so.  D2 admitted that he knew part of the money was from D1’s gambling establishment. Therefore he pleaded guilty.  Ms. Chow submitted 3 letters in mitigation, from D2 himself, his pastor and from D2’s children.  She submitted that the case had a long history – D2 was arrested in January, 2013. He was first brought to court in November 2014, and the matter adjourned to await the decision of the Court of Final Appeal in a similar case.  The delay was no one’s fault, but it had created an emotional strain on D2.  In the interim period, D2 has become a grandfather, as well as giving back to the Church.  His children speak of how he has improved and how attached he is to his granddaughter. D2 had indicated at an early stage his intention to plead guilty. His criminality was the lowest in the scale. She sought a non immediate custodial sentence for D2.  D2 had been dealt with for his role is assisting in operating the gambling establishment in these proceedings – TWCC 458/2014 refers.  He pleaded guilty to the charge on 14/2/2014 and was fined $7,000. 

D3

23.The Antecedent Statement of D3 discloses that she is now 58 years old.  She was born in China and has attained secondary level education. She is unemployed and relies on CSSA.  She has no health problems. She is divorced.  The Background Report sets out her background in great detail.  She lives with her 16 year old son, a Form 5 student.  She stopped working in 2000 when her son was born. She divorced her husband in 2005.  She and her son had been relying on CSSA since 2004. She liked playing mahjong, and since 2006, she had visited different gambling establishments.   The Probation Officer opined that D3 became involved in the present offence without thinking about it and with little legal concept.  D3 was very remorseful.

24.Ms. Nam had prepared her submission in writing on behalf of D3, and she supplemented her written submission in Court.  She has also submitted a letter written by D3 expressing her remorse and asking for leniency.   Apart from these, she has submitted a summary of assessment by an educational psychologist (at Tab 4 of the bundle submitted)  and the Cheung Sha Wan Dermatological Clinic Follow-up memo (at Tab 5 of the bundle submitted), both in respect of D3’s 16 year old son. Ms. Nam has also submitted 3 authorities in her bundle, at Tab 1, 2 and 3, namely HKSAR v. Boma [2012] 2 HKLRD 33, HKSAR v. Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v. Shum Kin Wing & Others, DCCC 175/2013.

25.Ms. Nam submitted that D3 was now aged 58 years.  She lived in a public housing estate with her 16 year old son from her second marriage who has been diagnosed to suffer from dyslexia and requires special attention at school. He also suffers from vitiligo and requires regular check-ups.  D3 herself suffers from gastroesophageal reflux and had thyroid problems.  D3 served as a volunteer in activities held by the Social Welfare Department including cleaning the homes of the elderly, etc.  She was also extremely remorseful, as D3 has said in her letter submitted in mitigation.

26.Ms. Nam submitted that the predicate offence here was the operation/management of a gambling establishment which attracts a maximum sentence of a fine of $5,000,000 and 7 years’ imprisonment if convicted on indictment, and a fine of $5,000,000 and 2 years’ conviction on summary conviction.  Here the predicate offence was dealt with summarily.  She submitted that the predicate offence concerned one gambling establishment in residential premises that measured about 800 square feet with a total of 6 electronic mahjong tables, reflecting the relatively small scale of the gambling establishment. Although D3 knew that it was an unlicensed gambling establishment, she was only a gambler who occasionally gambled at the premises and had no connection with the operation/management of the gambling establishment.  Her role was that on 5 occasions between 16^th November, 2009 and 18 August, 2011, she deposited a total of $630,000 into D1’s bank account at HSBC at his request. She provided her own identity card details when making the deposits, which led to her identity surfacing.  She did not in any way try to hide the funds.  She did not receive any financial benefit for doing what she did.  She did not know the source of the money, nor had D1 ever told her. She guessed the monies that she deposited into D1’s bank account came from commissions drawn from mahjong being played at the premises or from his winnings from playing mahjong.  She dealt with the money in ignorance of the law and the seriousness of the offence.  There was no international element involved.

Sentence

27.I have carefully considered all that has been urged upon me in mitigation by Counsel on behalf of each defendant as well as the authorities submitted by both Counsel for the Prosecution and the defendants, and the contents of the various Background Reports and Medical Reports now before me and the contents of the mitigation letters submitted on behalf of the defendants.

28.Section 25(3) of the Organized and Serious Crimes Ordinance, Cap. 455 provides that the maximum sentence on conviction upon indictment for the offence of dealing with property known or believed to represent proceeds of an indictable offence is that of a fine of $5,000,000 and 14 years’ imprisonment.  As the circumstances of each case may vary infinitely, there are no sentencing guidelines for these offences.  The offence of dealing with proceeds is a very serious offence. It legitimises proceeds of criminal activities and enables criminals to enjoy the fruits of their criminal activities with relative ease. The courts have said time and again that deterrent sentences are required not only to punish the defendants but also to deter others from behaving in this way. 

29.In delivering the judgment of the Court of Appeal in HKSAR v. Hsu Yu Yi, CACC 159/2009, [2010] 5 HKLRD 545, Cheung JA said:

“Sentencing Principles

9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

(1 ) It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant’s level of participation and the number of occasions on which he is involved in the ‘money laundering’ activities are relevant factors to be considered.

(3) The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence per se when determining the sentence of the dealing offence.

(4) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong’s reputation as an international finance and banking hub from being tarnished.

(5) The length of time the offence lasted.”

30.In Secretary for Justice v. Ngai Fung Sin Apple [2013] 5 HKLRD 104, the Court of Appeal held that in money laundering cases, the sentence passed was primarily to reflect the amount of the illicit money involved and not the benefit obtained by the defendant or others. 

31.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.

32.I shall deal firstly with D2 and D3.

33.D2 admitted Count 4 and D3 Count 5 at the outset.

34.Between 22 May, 2010 and 23 August, 2011, i.e. a period of about 15 months, D2 on 9 occasions deposited money into D1’s HSBC bank account, totaling $1,030,000.  D2 admitted when interviewed under caution that he had been working for D1 at the unlicensed gambling establishment where he was arrested in the early hours of 17 January, 2013.  He cooked, cleaned and ran errands for D1.  He admitted that he had deposited the money into D1’s bank account at D1’s request.  He provided his own identity particulars when he deposited the money as this was required as the sums were significant on each occasion - the sums he deposited ranged from HK$100,000 to HK$170,000. He knew the monies he deposited included the commissions D1 earned for operating the unlicensed gambling establishment.  D2 played a limited role in the money laundering as he simply deposited the monies into D1’s own HSBC bank account as he was told to do. There was no sophistication on the part of D2. No planning was involved.  The total amount involved in the charge is HK$1,030,000. While the amount is not small, it is by no means a large amount when compared to other money laundering cases.  There is no evidence to suggest that there was an international element. The nature of the predicate offence is the operation of the unlicensed gambling establishment.  D2 was charged with and on 13 September, 2013 admitted the offence of assisting in the management of a gambling establishment i.e. the unlicensed gambling establishment that he had been arrested in, and he was fined $8,000.  There is no evidence that D2 waspart of an organized criminal syndicate.I find that there are no aggravating factors in D2’s commission of the offence.     

35.Balancing all the above factors, I find that an appropriate starting point should be that of 15 months’ imprisonment.

36.Granting D2 the usual one-third discount would result in a sentence of 10 months’ imprisonment.

37.D2 was arrested for the offence in January, 2013.  Court records indicate he first appeared in the District Court on 27 May, 2014, when he was legally represented and a plea of not guilty was indicated.  Trial was set down for November, 2014, but on the first day of the trial, when D2 was represented by Ms. Chow, the Court was told that the Prosecution required time to obtain additional documents. Ms. Chow informed the Court there was some issue with the summary of facts.  There were further adjournments to await the outcome of a decision from the Court of Final Appeal.  The matter was only set down for trial on 29 January 2016. Even then, D2 through his Counsel had indicated that he intended to plead guilty. Ms. Chow accepts that the delay has been no one’s fault but submits this has caused an emotional strain on D2. In the interim period, a granddaughter has been born to him, to whom he is very attached. I am satisfied that there has been no delay by the Prosecution. Time was required to await the decision of the Court of Final Appeal.  However, I am satisfied that some credit should be given in sentence for the time it has taken for this matter to be brought to court.  In the circumstances, I would reduce the sentence by a further one month. I am satisfied that there are no grounds to further reduce the sentence. D2 is sentenced to 9 months’ imprisonment on Count 4.

38.I have considered whether there are circumstances to warrant my suspending this sentence.  D2 is now aged 82 years old. This is a ‘considerable’ age.  I have considered his role in the offence. He has also been in custody since 15 November, 2016.  I am satisfied that there are exceptional circumstances to warrant my suspending this sentence of imprisonment.  D2’s sentence of 9 months’ imprisonment will be suspended for a period of 2 years.

39.Between 16 November, 2009 and 18 August, 2011, a period of some 21 months, D3 on 5 occasions deposited money into D1’s HSBC bank account, totaling $630,000.  D3 admitted when interviewed under caution that she had known D1 for 3 to 4 years and she went to D1’s unlicensed gambling establishment about once a month to play mahjong when she had money.  She deposited the money into D1’s HSBC bank account at his request – he had given her a piece of paper with his bank account number written on it for her to deposit the money into that account and she would return the deposit receipt to him.  She did not receive any financial reward for depositing the monies into D1’s bank account.  She provided her own identity particulars when she deposited the money as this was required as the sums were significant on each occasion - the sums she deposited ranged from HK$100,000 to HK$200,000. She guessed that the monies she deposited included the commissions D1 earned for operating the unlicensed gambling establishment. D3 also played a limited role in the money laundering as she simply deposited the monies into D1’s own HSBC bank account as she was asked to do. There was no sophistication on the part of D3. No planning was involved.  The total amount involved in Count 5 is HK$630,000. While the amount is not small, it is by no means a large amount when compared to other money laundering cases.  There is no evidence to suggest that there was an international element. The nature of the predicate offence is the operation of the unlicensed gambling establishment.  There is no evidence that D3 waspart of an organized criminal syndicate.I find that there are no aggravating factors in D3’s commission of the offence.     

40.Balancing all the above factors, I find that an appropriate starting point should be that of 12 months’ imprisonment.

41.Granting D3 the usual one-third discount would result in a sentence of 8 months’ imprisonment.

42.Ms. Nam does not seek to say that there has been undue delay.D3 was arrested for the offence in January, 2013.  She first appeared in the District Court on 27 May, 2014, when she was legally represented and a plea of not guilty was indicated.  Trial was set down for November, 2014, but on the first day of the trial, when D3 was legally represented the Court was told that the Prosecution required time to obtain additional documents. There were further adjournments to await the outcome of a decision from the Court of Final Appeal.  The matter was only set down for trial on 29 January 2016. As I have said for D2 and D3, the delay has been no one’s fault.  I am satisfied that there has been no delay by the Prosecution. Time was required to await the decision of the Court of Final Appeal.  However, I am satisfied that some credit should be given in sentence for the time it has taken for this matter to be brought to court.  In the circumstances, I would reduce the sentence by a further one month. I am satisfied that there are no grounds to further reduce the sentence. D3 is sentenced to 7 months’ imprisonment on Count 5.

43.I have considered whether there are circumstances to warrant my suspending this sentence.  I have considered her role in the offence. She has also been in custody since 15 November, 2016. I have considered her family circumstances as well.  I am satisfied that there are exceptional circumstances to warrant my suspending this sentence of imprisonment.  D3’s sentence of 7 months’ imprisonment will be suspended for a period of 2 years.

44.D1 was convicted after trial in respect of Counts 2 and 3 on the indictment, offences commonly referred to as ‘money laundering’ offences. He has shown no remorse. I have borne in mind all that has been urged upon me on his behalf.  In my view, the only appropriate sentence must be an immediate custodial sentence.  The two counts together set out that between 1 October, 2009 and 17 January, 2013, a period of almost 3 years and 4 months, D1 dealt in 20,226,979.86 through his 2 HSBC bank accounts. Funds were held in these two bank accounts in D1’s names. Count 2 relates to a HSBC bank account between 1 October, 2009 and 17 January, 2013 and funds of $15,453,626.26 while Count 3 relates to a HSBC bank account between 3 September, 2011 and 17 January, 2013 and funds of $4,773,353.60. These charges arose out of an operation conducted by the police at an illegal gambling establishment operated by D1 at the cockloft, Shop No. 2, Nos. 2 – 8A Yi Pei Square, Tsuen Wan, together with an examination of the bank accounts of D1 at HSBC.  D1 admitted on 18 October, 2013 the offence of operating a gambling establishment in respect of these premises when he was fined $15,000 and sentenced to 3 months’ imprisonment suspended for 36 months. 

45.I found on the facts before me and on the evidence that there was compelling evidence to show that the property that D1 dealt with through his two HSBC bank accounts were the proceeds from his operation of the unlicensed gambling establishment in which he was operator.  When the police entered the premises to execute the gambling authorization on 17 January, 2013, D1 was present at the premises – there were mahjong players playing mahjong at three of the 6 electronic mahjong tables.   The whole set-up was that of an unlicensed gambling establishment where mahjong was being played. It was admitted under Section 65C of the Criminal Procedure Ordinance, Cap. 221 that the contents of the bankers affirmations (Exhibits P116 o P118) in respect of D1’s 2 HSBC bank accounts set out in Counts 2 and 3 that were admitted during the trial of D1 on Counts 2 and 3 were examined by investigators and found that each of the accounts received the total sums specified in each of the charges in the period outlined in the charges.  Investigators compiled two schedules, marked B and C, that were admitted by agreement during the trial, and these summarized the ways in which and the amounts of monies which were deposited into the two bank accounts in the relevant period.  Annex B related to the HSBC bank account in Count 2 while Annex C related to the HSBC bank account in Count 3.   There were large, frequent and numerous deposits and withdrawals involving cash and transfers in these two bank accounts over the charge period.  D1 filed no tax returns, and he was not registered as the proprietor or partner in any business.  I was satisfied beyond all reasonable doubt that D1 was engaged in the business of an unlicenced gambling establishment and the proceeds in his two HSBC bank accounts were the proceeds from his operation of the unlicenced gambling establishment.

46.The total amount involved in Counts 2 and 3 is $20,226,979.86 – D1 dealt with this amount over a period of almost 3 years and 4 months.  I accept that there was no international dimension or any sophistication and there is no evidence that the offences were committed by D1 on behalf of any organized criminal syndicate. D1 was the sole signatory of these two HSBC bank accounts.

47.Mr. Wu submitted that the gambling operation was not a big one, and not all the proceeds in the two bank accounts would be the proceeds of an indictable offence.  There is no way to calculate the proportion of the total proceeds which represent the proceeds derived from the unlicensed gambling establishment.  Counsel cannot propose any basis, documentary or otherwise, for the estimation of proportion.    There has to be a degree of speculation.  I take 30% to be a reasonable discount, and sentence D1 on that basis for the funds in the 2 HSBC bank accounts i.e. $10,817,538.82 in respect of Count 2 and $3,341,347.52 in respect of Count 3.

48.I bear in mind that D1 was the person in control of the business of the unlicenced gambling establishment and the property that he dealt with through the 2 HSBC bank accounts were the proceeds of his own unlicenced gambling establishment business – I view that as an aggravating factor.

49.Balancing all the above factors, I find that the appropriate sentence for D1 for Count 2 should be that of 5 years’ imprisonment and that for Count 3 should be 3 years’ imprisonment.

50.Although Mr. Wu has not raised the matter of delay, I have considered it. The delay has been no one’s fault.  I am satisfied that there has been no delay by the Prosecution. Time was required to await the decision of the Court of Final Appeal.  However, I am satisfied that some credit should be given in sentence for the time it has taken for this matter to be brought to court.  In the circumstances, I would reduce the sentence by a further one month in respect of Counts 2 and 3. D1 is sentenced to 4 years and 11 months’ imprisonment on Count 2 and 2 years’ and 11 months’ imprisonment on Count 3. I am satisfied that there are no grounds to further reduce these sentence.  Bearing totality in mind, I shall order that 1 year and 11 months’ of the sentence on Count 3 should be concurrent with that on Count 2, and 1 year should be consecutive.  Therefore the total sentence for D1 on both charges is 5 years and 11 months’ imprisonment.