HKSAR v. Jonathan Edward Corners
Read the full judgment text of DCCC 97/2016 on BabelCite. This District Court judgment.
1. The Defendant pleads guilty to 16 charges of money laundering which took place from 5 June 2009 to 16 July 2009 (Charges 8 – 23).
Cites 2 cases
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DCCC 97/2016 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO. 97 OF 2016 -----------------------------------
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---------------------------- Reasons for Sentence ---------------------------- Charges 1.The Defendant pleads guilty to 16 charges of money laundering which took place from 5 June 2009 to 16 July 2009 (Charges 8 – 23). Facts The predicate fraud 2.In May 2009, Martin WEST (“the Victim”) received a cold call in the United Kingdom from an unknown person holding out as a staff member of a Hong Kong-based investment company. He was induced to trade in gold options and pay about US$2.5 million by 13 remittances between 21 May and 13 July 2009 to an account in the name of Logical Clearing Limited (“the Company”) held with the Standard Chartered Bank in Hong Kong (“SCB”). The alleged investment did not actually exist. He did not get back his money. The case was reported in November 2009. The Company 3.The Company was originally a shelf company in another name. On 3 February 2009, the Defendant emailed a company secretarial provider Moore Stephens Associates Limited (“MSAL”) for its assistance in setting up a Hong Kong company for business and arranging for a nominee director. MSAL therefore acquired the Company and arranged a nominee director for it. The Company was fully owned by Logical Design Inc. which appeared to be incorporated in the Philippines. 4.On 11 February 2009, the Defendant arrived in Hong Kong. On the next day, he attended MSAL’s office to sign various company documents. He also opened the Bank Account. On 13 February 2009, he departed Hong Kong. 5.On 26 February 2009, the Company opened a bank account with SCB (“the Bank Account”). At all material times, he was the sole authorized signatory of the Bank Account and beneficially owned the whole Company. 6.A search of the Company’s office and its company secretary yielded neither books of accounts or business operation records. The Company did not file any tax return for all material times. Activities in the Bank Account 7.In the period charged, the Bank Account had 101 transactions involving US$2.9 million deposits, 84% of which being from the Victim, and US$2.9 million of outward remittances. Charges 8 – 23 represented over US$2.26 million of those outward remittances. The majority of these activities were operated by internet banking except for an occasion on 6 June 2009 where he withdrew cash of US$18,000 in Hong Kong over the bank counter. 8.Deposits made into the Bank Account would be remitted outward in one to two days on average to various companies in the Philippines and once to a company in Thailand. The Bank Account was closed on 15 September 2009. Arrest of the Defendant 9.On 23 November 2015, he was arrested in Hong Kong International Airport when he was in transit from Japan to South Africa. Personal background and mitigation 10.He is a citizen and resident of the United States. He has a clear record in both Hong Kong and the United States. From a paper prepared by a firm of United States court consultants equivalent in substance to a background report, his background and social history are summarized with supporting documents and mitigating letters. From all perspectives, this is a man with an exemplary good character. The crime he committed is out of character. 11.He was born with a condition which made him blind in the left eye. He was hyperactive and had to take medicine to keep himself under control. His father was a physician and his mother was a very successful certified public accountant with a thriving business. They had started from an underprivileged background and had made a lot of struggle and efforts to attain that. In the process, his father had become an addict to drugs and alcohol due to work pressure. His fits of abuse and violence were visited upon his wife and children, with the Defendant being the eldest always on the receiving end as he stood up for his mother and his siblings. His parents divorced. His mother took charge of all the children with her minimum-wage as a bookkeeper and worked her way up. He received his father in his final days, otherwise a broken man, in his household, got him a respectable job, and reconciled with him before he died clean from drugs and alcohol. His mother is in declining health but still manages to attend court, together with his family members, friends and colleagues from the United States. 12.He was a brilliant achiever at school and became a senior IT professional. He had worked in high-calibre IT ventures in various countries for illustrious enterprises. His ex-wife is a Japanese, a classmate in the university. They have a daughter now 12, and a son, Riki, now 10. The family had been close and harmonious. Unfortunately, they had to divorce but it was an amicable one, as seen by her mitigating letter commending his sense of responsibilities and dedication towards the family. Riki was diagnosed with Attention Deficit Hyperactivity Disorder in 2015 but steadily improving as a result of the Defendant’s dedicated care. Sadly, his absence from home since arrest has begun to ill-affect Riki’s condition. 13.The offences originated from the heavy losses he suffered when he tried to start his own business in the Philippines. Eager to remedy the situation, he fell prey to a potential business venture promised by Siemens, a Canadian passport-holder, who used him as a front to set up the Company and the Bank Account. He had no knowledge of SIEMENS’s overall scheme but would have had reasonable grounds to believe that the Company and the Bank Account were vehicles to channel tainted monies from crimes upon noticing on an occasion in June 2009 that SIEMENS presented himself as SOUTHCOMBE on an Australian passport. 14.Despite what he did for SIEMENS, he got neither business nor reward out of it. There was a withdrawal of US$18,000 made by him over the bank counter in Hong Kong. His counsel Mrs Draycott SC submits that it did not represent his reward as the money was instantly handed over to SIEMENS, who was also present in the bank. The prosecution has no evidence to contradict this allegation. 15.Mrs Draycott refers to the lapse of 6 years from the commission of the offences in 2009 to his arrest in 2015 for two effects. First, he had not committed any offence during those 6 years. Secondly, he had taken up a senior position in a company Avanade and worked to his employer’s complete satisfaction as seen in Avanade’s mitigating letter. He would have continued with his employment, lasting 3 years by then, but for the arrest. Mrs Draycott submits that whilst he had to be answerable for past deeds, it was exceptionally harsh on him after he had turned over a new leaf for 6 years. 16.There is evidence of his voluntary work while working in Japan as an English teacher to students from low-income families there. The prison chaplain attached to CSD in Hong Kong has also noted that in his remand he has been actively campaigning colleagues and friends to post on blogs and social media sites and etc. in the United States to warn others against money laundering and, through his knowledge of the Spanish language, asking the Latin American prisoners to do the same. Sentencing considerations 17.The courts have always acknowledged the extensive permutations of money laundering cases. There are no sentencing guidelines. Comparisons between cases are difficult, if at all helpful. In HKSAR v. BOMA [2012] 2 HKLRD 33, 43, the Court of Appeal identified the features relevant in the sentencing of money launderers. Stock VP regarded, apart from the amount of money laundered, as relevant the following factors:
18.Mrs Draycott has included in the mitigation bundle the case of HKSAR v HSU Yu Yi [2010] 5 HKLRD 536, which contains a list of starting points of sentence corresponding to the quantum of money laundered. However, in the light of BOMA decided subsequent to it, its guidance value has paled considerably. Sentencing this Defendant 19.On the one hand, there is no evidence that he knew of the predicate fraud. It was not a sophisticated scheme insofar as his part was concerned. There was no sign of a criminal syndicate. The number of transactions was small. The duration between the offences was short. 20.On the other hand, there was an international element for the fraud to take place in the United Kingdom, and to use a bank account in Hong Kong for the outward remittances mostly to the Philippines and in one instance to Thailand. 21.I regard all 16 charges as part and parcel of the same scheme of money laundering. I take 5 years as the starting point for each charge. Mitigating factors include his plea of guilty, which attracts a one-third discount; the exceptional circumstances of having completely reformed himself for 6 years before he was held answerable for the offences, which attracts a 6 months’ discount in my judgment; the adverse effect of his incarceration on his son’s Attention Deficit Hyperactivity Disorder condition diagnosed only as late as in 2015, which attracts a 2 months’ discount; and lastly the voluntary work he has rendered in Japan and whilst in remand in Hong Kong, which attracts a 2 months’ discount. 22.The final sentence is 30 months for each charge on a concurrent basis.
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