HKSAR v. Ling Kai Man and Another

DCCC 157/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 157 OF 2016

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REASONS FOR VERDICT

1.D2 pleads not guilty to one charge of conspiracy to deal with property knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance[1] (charge 2). D4 also pleads not guilty to one charge of conspiracy to deal with property knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence (charge 5).

Introduction

2.The property referred to in the charges is money deposited in the bank accounts of Nation Top Holdings Limited (charge 2) and Good Plus Trading Limited (charge 5), which monies the prosecution say were obtained by email fraud[2].

Conspiracy

3.Conspiracy is an agreement between two or more persons to do an unlawful act or to do a lawful act by unlawful means with the intention of carrying it out.  A party may join a conspiracy at any stage provided the conspiracy is a single, ongoing one.  The agreement may be proved by direct evidence, or by proving circumstances from which the court may presume it.  Proof of the existence of a conspiracy is generally a matter of inference, deduced from certain criminal acts of the parties accused.

4.The unlawful act alleged in both charges is to deal with money knowing or having reasonable grounds to believe the money, in whole or in part, directly or indirectly represented the proceeds of an indictable offence. 

5.The prosecution must prove in respect of each charge that:

(a) the defendant agreed with one or more of the named conspirators to deal with property with the intention that the agreement be carried out; and

(b) that at the time of making the agreement the defendant and one or more of the named conspirators knew or had reasonable grounds to believe the property represented or will represent, the proceeds of an indictable offence[3].

Dealing with property

6.Monies are clearly property[4]. Dealing in relation to property is defined in section 2(1) of the Ordinance and includes, (a) receiving or acquiring the property; (b) concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any rights with respect to it or otherwise); and (c) disposing of or converting the property. 

Knowing or having reasonable grounds to believe

7.The mens rea of dealing has two parts “knowing” or “having reasonable grounds to believe”.  In HKSAR v Yeung Ka Sing, Carson[5] the Court of Final Appeal confirmed their earlier decision in HKSAR v Pang Hung Fai[6]that the better and less complicated test for determining whether the accused had reasonable grounds to believe was that propounded by the Appeal Committee of the Court of Final Appeal in Seng Yuet Fong v HKSAR,[7] namely that:

“To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the grounds must be reasonable: That is, that anyone looking at those grounds objectively would so believe.”

8.In deciding whether the defendant had reasonable grounds to believe the applicable standard is would those grounds lead to the belief and not could those grounds lead to the belief and in determining this the defendant’s belief, perception or prejudice are to be considered and given such weight as is warranted.[8]    

D2 (charge 2)

9.The particulars of the charge read as follows: 

“Ling Kai Man, on or about the 4^th day of August 2014, in Hong Kong, conspired together with a male called Tony, Lau Ka Fai, a male called Kwan Gor and a male called Ching Gor, knowing or having reasonable grounds to believe that property, namely a sum of $200,000 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, to deal with the said property.”

Background/Prosecution case

10.In March 2013 Nation Top Holdings Ltd was incorporated in Hong Kong.  On 18 June 2014 Lau Ka Fai (D1)became the shareholder and sole director of Nation Top[9].

11.Between 9 July and 18 July 2014 D1 opened a total of nine bank accounts on behalf of Nation Top with the Chong Hing Bank; Nanyang Commercial Bank and the Wing Lung Bank.  D1 was the sole signatory of all the bank accounts.

12.The $200,000 was withdrawn from Nation Top’s Chong Hing Bank Hong Kong dollar current account.  On 2 August 2014 the sum of US$25,530.00 was remitted from overseas to Nation Top’s Chong Hing Bank US$ savings account.  After deduction of bank charges, the monies were exchanged to Hong Kong dollar and transferred by internet banking to the Hong Kong dollar current account on 4 August.  On the same day a cheque signed by D1 in the sum of HK$200,000 and made payable to D2, was presented for payment.

13.The prosecution case is that the bank accounts were used to receive monies from email fraud and that D2 agreed with the conspirators named in the charge to deal with the $200,000, having reasonable grounds to believe the money, in whole or in part, directly or indirectly represented the proceeds of an indictable offence[10].

Defence case

14.In summary the case of D2 is that he did not know and was not told where the money for the $200,000 came from. 

Evidence

15.Only one witness was called, D1.  Evidence has been admitted pursuant to section 65C of the Criminal Procedure Ordinance,[11] including company records of Nation Top Holdings Limited[12]; bankers’ affirmations of the Nanyang Commercial Bank; the Chong Hing Bank and the Wing Lung Bank[13]; movement and immigration records of D1 and D2[14]; D1, D2 and Nation Top did not file any tax returns; CCTV footage and photographs showing D1 and D2 in the Nanyang Commercial Bank and the Guangdong Roast Restaurant[15]; the arrest of D2 and seizure of documents from D2’s home.  I will refer to the admitted facts as I review the evidence[16].

16.The evidence relating to the email fraud was read and/or admitted[17].   Also admitted in evidence were five video interviews given by D2[18], the voluntariness and accuracy of which were admitted together with the documents shown during the interviews[19]. In reaching my verdict I have considered the interviews, both the inculpatory and exculpatory parts, in accordance with the principles in R v Sharp[20].

17.D2 elected to give evidence.  No witnesses were called on his behalf. 

18.In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  D2 has to prove nothing.  I direct myself that I must be sure of the guilt of the defendant before I can convict. On the other hand, if the court thinks that the defence evidence pointing to innocence is true or may be true, it would follow that the defence has raised sufficient doubt in the prosecution case and the defendant entitled to be acquitted.  

19.The main issue to determine is whether D2 agreed with any of the named conspirators to deal with the $200,000, the conspirators, including D2, knowing or having reasonable grounds to believe that the monies represented the proceeds of an indictable offence.

20.The prosecution rely not only on the evidence that D2 withdrew the $200,000 but also that D2 assisted D1 in opening the bank accounts[21].  Evidence was also adduced that three days after withdrawing the money D2 accompanied D1 to one of the banks, the Nanyang Commercial Bank, at which time D1 and D2 were arrested. Although D2 is not charged with the same conspiracy as D1, I am satisfied these acts were admissible in evidence to prove the setting and context in which D2 came to withdraw the $200,000[22].

21.I remind myself that when drawing inferences from the evidence the inference must be the only reasonable inference to draw from the proved facts.  If from the facts proved there is a reasonable inference to draw against a defendant as well as one in his favour, the adverse inference cannot be drawn.  

22.I have carefully considered all the evidence together with the submissions of Mr Ryan and Mr Wu. 

Agreement to deal with property

23.The prosecution rely on the bank documents to show that D2 withdrew the money and admissions made by D2 in the video interview (exhibit P214) that acting on the instructions of a male called Ching Gor he cashed the cheque and handed the money over to a male called Kwan Gor[23].

24.Admitted in evidence is that on 4 August 2014 a cheque in the sum of HK$200,000, signed by D1 and drawn on Nation Top’s Chong Hing Bank account was issued to Ling Kai Man (D2)[24]. A copy of the cheque is attached to the banker’s affirmation[25].  The name endorsed on the reverse of the cheque is Ling Kai Man together with his identity card number G677122 (9), which is the identity card number of D2[26]. 

25.In the video recorded interview conducted on 22 June 2015[27], D2, inter alia, admitted that he made the withdrawal[28]; Ching Kwo asked D2 to withdraw the money[29]; Ching Kwo arranged for a staff member of his called Kwan Chai to collect the money[30]; the cheque was given to D2 by Kwan Chai during a meal in Mongkok the night before[31]; Kwan Chai was introduced by Ching Kwo[32]; D2 was told as he had opened the account for D1 he might as well withdraw the money[33]; and the money was handed over to Kwan Kwo at the Maxim’s restaurant in Kwun Tong[34].

26.On this evidence I am satisfied so I am sure the only inference to draw is that D2 withdrew the $200,000.  Further, D2 also testified, inter alia, that he withdrew the money but said that the cheque was given to him in Shenzhen by Ching Gor, who asked him to pass the money to Kwan Gor[35]. 

27.I am satisfied full weight is to be attached to D2’s admissions that he withdrew the money.  Whether the cheque was given to D2 by Ching Gor or Kwan Gor, I am satisfied so I am sure the only inference to draw is that not only did D2 agree with Ching Gor and Kwan Gor to deal with the $200,000 but that D2 also carried out that agreement by withdrawing the money and giving it to Kwan Gor. 

28.The conspiracy charged particularises that D2 also conspired with D1 and Tony to deal with the $200,000.  The prosecution rely on the evidence of D1 that D2 assisted him in opening the bank accounts for Nation Top and the admissions by D2 in the video interviews that he assisted D1 in opening the accounts. 

29.D1’s evidence was largely unchallenged, in particular that he allowed his name to be used for setting up Nation Top; Tony instructed him to open various bank accounts to offset his gambling debt; Tony told him he could earn quick money of between $80,000-$100,000 if he helped him to open the bank accounts; Tony instructed him to sign documents; Tony assigned D2 to accompany him to open the bank accounts and to withdraw monies from the accounts; on every occasion D1 went to the bank he was accompanied by D2; apart from his identity card and proof of address D2 brought along all the documents necessary for opening the bank accounts and all documents given by the bank were kept by D2 or Tony; he did not need to say anything in the banks, everything being said by D2; on each occasion D2 gave him $500 saying the money was from Tony; Tony instructed him to sign blank cheques, one of which he identified as the cheque for $200,000 and that he was arrested together with D2 inside the Nanyang Commercial Bank having first met D2 and Tony in the Guangdong Roast Restaurant[36]. 

30.In the video interviews D2 details how he came to assist D1[37].  For example, in the first video interview[38]D2, inter alia, admits being asked by Ah Ching to help D1 to open the bank accounts in return for a reward of $500 per day[39]; receiving instructions from either Ah Ching or Tony[40]; and how he assistedD1[41].  Similarly, in the third video interview[42] D2, inter alia, admits he was asked by Ching Gor to open bank accounts for someone and that he would be given several hundred dollars each time[43]; he received instructions from Ching Gor via Tony[44]; and that he went to the banks with D1[45].

31.I accept the evidence of D1 and attach full weight to the admissions made by D2. Further, D2 also testified, inter alia, that he was asked by Ching Gor to help D1 to open bank accounts; he accompanied D1 to the banks and that he received documents from Tony[46].

32.I agree with the submission of the prosecution that D1’s agreement with Tony to participate in setting up Nation Top; the opening of the bank accounts with the assistance of D2; and the signing of blank cheques for withdrawing monies from the accounts, are acts showing D1 was in agreement with D2 and Tony to deal with the monies in the accounts, including the $200,000[47].  I am satisfied so I am sure the only inference to draw is that D2 also agreed with Tony and D1 to deal with the $200,000. 

Knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence

Proceeds of an indictable offence

33.The prosecution do not have to prove the property represents the proceeds of an indictable offence[48]. The prosecution are however able to prove that monies passing through the Nanyang Commercial Bank and the Wing Lung Bank accounts were the proceeds of email fraud.

34.Admitted in evidence is how the Canadian Imperial Bank of Commerce in Canada was deceived into remitting, on behalf of Peter Van Stolk, the sum of US$51,302.90 to Nation Top’s account with the Wing Lung Bank[49].  The witness statements of Christian Garcia detailing how Halliburton Energy Services Inc were deceived into remitting US$431,657.29 to Nation Top’s account with the Nanyang Commercial Bank were read[50]. I accept this evidence. 

35.There is however no direct evidence that the monies deposited in Nation Top’s account with the Chong Hing Bank were from email fraud. 

36.On 2 August the sum of US$25,530.00 was remitted from overseas to Nation Top’s US dollar savings account with the Chong Hing Bank.  After deduction of bank charges the sum of US$25,510.80 was credited to the account[51].  The following Monday 4 August the sum of HK$197,472.90 was transferred to the Hong Kong dollar current account.  After the sum of HK$246 was transferred from the Hong Kong dollar savings account and the sum of $500 deposited in the current account, the cheque for $200,000 was presented for payment the same day at 09:43[52].

37.The bankers’ affirmations of the Chong Hing Bank; the Nanyang Commercial Bank and the Wing Lung Bank[53] show that these three sums were the only substantial deposits made to the accounts.  Admitted in evidence is that Nation Top did not file any tax returns[54].  Further, the unchallenged evidence of D1 is that he was requested by a person called Tony to open the bank accounts in order that he could make money to pay off his gambling debts and that he was instructed by Tony to sign blank cheques, one of the cheques D1 signed being the cheque for $200,000.  

38.On this evidence I am satisfied so I am sure the only inference to draw is that the $200,000 was the proceeds of crime and that all three bank accounts were used to launder proceeds of crime[55].

Knowing or having reasonable grounds to believe

39.The prosecution submits that D2 and the other conspirators must have had reasonable grounds to believe the $200,000 was the proceeds of an indictable offence[56].  The prosecution also submit that Ching Gor must have known that the monies in the bank accounts were from illicit sources[57].

Prosecution evidence

Evidence of D1

40.The evidence of D1 was largely unchallenged and can therefore be briefly summarised[58].  D1 pleaded guilty to one charge of conspiracy to deal with property having reasonable grounds to believe the property represented the proceeds of an indictable offence (charge 1).  The particulars of the charge read as follows: 

“Lau Ka Fai, between the 9^th day of July 2014 and the 20^th day of October 2014, both dates inclusive, in Hong Kong, conspired together with a male called Tony, knowing or having reasonable grounds to believe that property, namely a total sum sum of about $3,976,270.12 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, to deal with the said property.”

41.Excluding interbank transfers and interest the sum of $3,976,270.12 is the total sum of money deposited in the bank accounts of Nation Top from which D2 withdrew the $200,000 from the Chong Hing bank account. 

42.When pleading guilty D1 admitted a summary of facts, including that he was the sole director and shareholder of Nation Top; he opened nine bank accounts for Nation Top with the Nanyang Commercial Bank; the Wing Lung Bank and the Chong Hing Bank; he was the sole account signatory of the accounts; and admitted to the police that he was indebted due to gambling; and that Tony instructed him to open various bank accounts to offset his gambling debt; sign documents which he had no knowledge of the content and sign blank cheques.  D1 also admitted to the police that Tony assigned Ling Kai Man to accompany him to open the bank accounts and to withdraw monies from the accounts and that he passed all the documents to Tony.

43.In evidence D1 confirmed all these facts and said he did not want to correct anything.  Admitted in evidence is that D1 was the sole shareholder and director of Nation Top and opened nine bank accounts of which he was the sole signatory[59].

44.D1 testified that he told Tony his gambling debt was about $100,000.  Tony told D1 he could earn quick money of between $80,000-$100,000 if he helped him to open the bank accounts.  At the time D1 did not know the person who accompanied him was called Ling Kai Man.  D1 said the person Tony instructed to accompany him to the banks was called Ah Ching, who he identified in court as D2.

45.On every occasion D1 went to the bank he was accompanied by D2.  Apart from his identity card and proof of address D2 brought along all the documents necessary for opening the bank accounts and all documents given by the bank were kept by D2.  D1 did not need to say anything in the banks, everything being said by D2.  On each occasion D2 gave D1 $500, saying the money was from Tony.

46.D1 testified photographs 5 & 11, exhibit P224 showed him together with D2 on 2 July 2014 opening the bank accounts at the Nanyang Commercial Bank[60]. 

The cheque for $200,000

47.Admitted in evidence is that D1 signed the cheque made payable to D2 in the sum of $200,000[61]. D1 identified his signature on the cheque and explained this was one of the cheques Tony asked him to sign.  D1 only signed the cheque and did not fill out the name of the payee, the amount or the date.   

Arrest of D1 & D2

48.Admitted in evidence is that on 7 August 2014 D1 and D2 were arrested inside the Nanyang Commercial Bank[62]. Photograph 15, exhibit P224 shows D1 and D2 in the bank prior to their arrest[63]. 

49.D1 testified that prior to going to the bank he met Tony and D2 in the Guangdong Roast Restaurant, photograph 34 showing D2 and Tony having arrived first and photograph 35 showing the time after D1 had arrived[64].  Before going to the restaurant D1 had been told on the phone he only needed to sign some documents and confirm his identity.  In the restaurant Tony and D2 discussed who would accompany D1 to go to the bank.  D2 said to Tony “Let me accompany him there as well.”  Tony said all right.    

Documents seized in D2’s home

50.Admitted in evidence is that the police found in D2’s home documents relating to the transfer of shares of Nation Top and name cards of D1 and D4[65].  D1 testified that D2 gave him name cards, some of which he used.  In cross-examination D1 disagreed that D2 never gave him any name cards and explained that they were given to him before entering the banks; he would give the card if asked by the bank staff; and that D2 told him he had them printed for him. 

51.D1 also testified that before opening any bank account D2 gave him a piece of paper[66]listing what accounts to open.  D1 kept the note in his wallet.  D1 did not actually use the note because he was able to remember what was written on the note. 

Video recorded interviews (exhibits P209-215)

52.Reliance is placed by the prosecution on admissions made by D2 in the video recorded interviews.  The defendant gave a total of five video interviews.  As noted earlier a detailed summary of all the video recorded interviews is annexed to the prosecution closing submission at Annex B. 

53.I have already in part summarised the first[67], third[68]and fifth[69] interviews, which largely concern how D2 came to assist D1 in opening the bank accounts; how he assisted D1 and the withdrawal of the $200,000. 

54.The second interview[70] largely concerns documents found in D2’s residence.  In the second part of the interview[71] D2 was shown the video recorded interview of D1.  D2 had nothing to say because he agreed with what D1 said.  D2 did however point out D1 misunderstood he was called Ah Ching.  The fourth interview[72]also deals with documents found in his home and how he came to meet Tony.

Defence evidence

55.In summary [73]D2 testified that he was called Ah Man and that he had no other names.  In 2013 and 2014 D2 was doing part-time work in a registration company delivering and receiving documents and also selling Korean ginseng products. 

56.By January 2014 D2 was selling ginseng products on a full time basis.  This involved delivering products to the Mainland.  One of his customers on the Mainland was called Ching Gor.  D2 had business dealings with Ching Gor for about half a year, commencing at the beginning of 2014. 

57.D2 regarded Ching Gor as an ordinary friend with whom he did business.  D2 was not clear about what other business Ching Gor did.  D2 did not know if Ching Gor was a Hong Kong resident or whether he came to Hong Kong between December 2013 and June 2014. 

58.Sometime before July 2014, while in Shenzhen, Ching Gor asked D2 to help his friend open company bank accounts.  D2 explained that he was chosen because when he first met Ching Gor he was working part-time in a registration company, delivering documents; going to the business registry and assisting people to open company accounts.

59.On a later day Ching Gor arranged for D2 to meet D1.  This was at the end of June or the beginning of July 2014.  D2, at the request of Ching Gor, assisted D1 in opening accounts with three banks, the Wing Lung Bank, the Chong Hing Bank and the Nanyang Commercial Bank.  Ching Gor paid D2 tea money of $500 each time he accompanied D1. 

60.Ching Gor told D2 the time and place to meet D1 and what clothing D1 would be wearing.  D2 went to the Maxim’s restaurant in Kwun Tong where he met D1.  On arrival at the restaurant D2 told D1 he was sent by Ching Gor to meet him to open company accounts.  After eating D1 and D2 went to open the first bank account. 

61.D2 could not remember the name of the first bank but said it seems to be the Wing Lung Bank[74]. On  9 July 2014 the account at the Kwun Tong branch of Chong Hing Bank was opened[75]. D2 accompanied D1 to the Chong Hing Bank.  D2 gave the company documents to the bank for checking.  The documents were contained in a box and were given to D2, sometimes by Ching Gor and sometimes by a person called Ah Tung, who D2 believed was Tony.  Sometimes Tony delivered the documents to D2 or arranged for someone to give him the documents.  After finishing, the documents would be given back to Tony. 

The cheque for $200,000

62.As noted earlier when discussing the agreement to deal with property D2 testified that Ching Gor gave him the cheque in Shenzhen.  D2 said at the time he was given the cheque he was not aware the cheque was drawn on the account of Nation Top.  Ching Gor said he was not free to come to Hong Kong and asked D2 to cash the cheque for him.  Ching Gor told D2 to give the money to Kwan Gor after deducting $2000, being the price difference that Ching Gor owed him. 

63.Kwan Gor was a friend of Ching Gor, who D2 had first met in February or March 2014 when Ching Gor introduced him to D2 in a karaoke in Shenzhen.  Since that time D2 had seen Kwan Gor two to three times.  After withdrawing the money D2 arranged with Kwan Gor to hand over the cash to him in the Tai Hing restaurant in Yue Man Square, Kwun Tong.

64.D2 was not aware where the money came from; Ching Gor did not tell him when passing him the cheque; nor did D2 make any enquiries about the money.  In cross-examination when put that D1 was only a puppet/stooge and not the real owner of Nation Top D2 said he was not clear about things behind.  D2 disagreed he knew Nation Top did not have any genuine business; disagreed that he knew the $200,000 came from illegal sources saying if he had known he would not have withdrawn the money and disagreed that he had good reason to believe the $200,000 came from illegal sources.

The arrest

65.Three days after withdrawing the money D2 was arrested together with D1.  In a house search the police seized various documents which had been given to him in an envelope by Ching Gor.  D2 was aware the envelope contained some company documents, name cards and some cheques. 

66.The company documents included the transfer of shares which the banks required when opening bank accounts.  D2 said he took no notice of the name cards.  and that the cheques had been given by Ching Gor for paying the initial deposit when opening the bank accounts.  D2 did not, however, use the cheques because Ching Gor gave him cash to give to D1 for paying the initial deposit. 

Consideration of the evidence

67.I accept the evidence of D1. 

68.Mr Wu submits that D1 made a fundamental mistake, namely the identity of D2.  In the circumstances Mr Wu submits that D1 was not a credible witness; his evidence was not reliable and no weight should be given to his evidence, which was given simply to ask the court for a reduction in sentence[76].   

69.In evidence D1 referred to D2 as Ah Ching.  In the second video interview D2 told the police D1 might have misunderstood he was called Ah Ching[77].  In cross-examination when put that D2 was not called Ah Ching, D1 replied he only knew D2 was called Ah Ching.  When put at the end of cross-examination that D2’s name was Ah Man, D1 replied that D2 introduced himself as Ah Ching and that he never knew D2 was called Ah Man. 

70.I have no hesitation in rejecting Mr Wu’s submission.  I accept the evidence of D1 that he knew D2 as Ah Ching.  Even if D1 was mistaken as to the name of D2 this does not make his evidence unreliable.  As stated D1’s evidence was largely unchallenged, in particular that D2 did accompany D1 to open the bank accounts for Nation Top.  D2 himself also testified he accompanied D1 to open the bank accounts.

71.In considering D1’s evidence I have borne in mind he is an accomplice and no doubt was giving evidence to try secure a reduction in sentence.  Although D1 was not cross-examined on this aspect he did at the beginning of his evidence agree that the prosecution could not undertake that he would be given a reduction in sentence.  Nevertheless, D1 said he was still willing to give full and truthful evidence.   The fact D1 was an accomplice and no doubt giving evidence to try secure a reduction in sentence does not cause me to doubt his evidence.

72.I have no hesitation in rejecting D2’s evidence that he did not know that D1 was only a puppet/stooge and not the real owner of Nation Top; that Nation Top did not have any genuine business; and was not aware or had good reason to believe the $200,000 came from illegal sources.

73.I find inherently improbable that D1 would be accompanied to open the bank accounts by anyone who did not know that he was opening accounts for someone else to use. I am satisfied so I am sure by accompanying D1 the only inference to draw is that D2 was there to ensure everything went smoothly and that the banks did not realise that D1 was not the true holder of the accounts and therefore the one using the accounts. 

74.D2 did not simply accompany D1 to open the accounts.  I accept the evidence of D1 that apart from his identity card and proof of address D2 supplied all the documents necessary for opening the accounts; all the documents given by the bank were kept by D2; D2 did all the talking; and paid D1 a reward of $500 on each occasion. 

75.If D2 believed D1 was the real owner of Nation Top and the bank accounts were to be used in his business there would be no need for D2 to supply the documents; keep all the documents given by the bank and pay D1 a reward for opening the bank accounts.  All these actions are inconsistent with D1 being the real owner of Nation Top and the user of the bank accounts.

76.Further, in D2’s residence documents relating to Nation Top were found.  If D2 believed D1 was the real owner of Nation Top there was no reason for D2 to have these documents in his home, he could simply have given them to D1, in particular the name cards of D1. 

77.I do not find credible D2’s evidence about the name cards.  When D1 was cross-examined by Mr Wu he disagreed that D2 did not give him any name cards. In examination-in-chief D2 said he was aware there were name cards but took no notice of them.  Similarly, in cross-examination when asked why he did not give the name cards to D1 he replied that after he was given them he simply put them in a drawer and that Tony would collect them later. 

78.When asked by the court did he do anything with the name cards D2 said for the first time that he gave some to D1.  Asked why he did not give them all to D1, D2 replied because he only took a pile.  I accept D1’s evidence that D2 gave him some name cards telling D1 that he had them printed for him. 

79.I also accept D1’s evidence that before opening any bank account D2 gave him a piece of paper listing what accounts were to be opened [78].    In cross-examination D2 agreed this was written by him and that in the first video interview he told D1 that Ching Gor required these accounts to be opened[79].  If D2 believed D1 was the real owner of Nation Top and the bank accounts were to be used in his business there would be no need for D2 to write down and tell D1 what accounts were to be opened.

80.I do not find credible D2 was chosen to accompany D1 because he was working part-time in a registration company when he first met Ching Gor, delivering documents; going to the business registry and assisting people to open company accounts.  This evidence is different to what D2 told the police in the third video recorded interview that he did this work a long time ago, for several months, probably in the 90’s but could not stand the work because he did not have the knowledge[80]. Nor do I find credible D2’s answer, when the court drew this difference to his attention, that he forgot to tell the police he was doing this work when he knew Ching Gor.

81.I do not find credible D2’s evidence that at the time he received the cheque from Ching Gor in Shenzhen he was not aware the cheque was drawn on the account of Nation Top.  D2 said he only became aware later.  On clarification by the court D2 said he thinks he became aware when the cheque was shown to him by the police and at the time he was given the cheque he only realised it was a company cheque. 

82.I do not find this explanation credible.  D2 had accompanied D1 to open the bank account at the Kwun Tong branch of the Chong Hing Bank[81].  In answer to the court D2 said he withdrew the money in the Kwun Tong branch, the same branch where the account had been opened[82]. Further, in answer to the court D2 was unable to explain why he told the police, in the fifth video interview, that he was told by Ching Gor that as he had opened the account he may as well withdraw the money[83].

83.I also do not find credible D2’s evidence that Ching Gor told him he could deduct $2000, being the price difference Ching Gor owed him.  As pointed out in cross-examination this was something D2 did not tell the police in the fifth video interview[84]. D2 explained he did not tell the police this because the police mainly asked him if he received any reward for withdrawing the money. 

84.I do not find this explanation credible.  If D2 did deduct $2000 then he could simply have told this to the police, instead he told the police he handed all the money to Kwan Gor[85] and that he was not given a reward because an account had been opened with this bank[86]. 

85.I am satisfied no weight is to be attached to the statements made by D2 in the first video interview[87] that he was told by Ching Gor that D1 ran a company engaging in trading[88]; he had no idea how D1 set up Nation Top[89]; Ching Gor told D2 that D1 opened Nation Top for his own use[90]; Ching Gor did not say why D1 needed his assistance[91]; and he helped D1 because D1 was not good at speaking and did not know how to open an account[92]; in the second video interview[93]that he would have thrown away the documents kept in his home if he knew they concerned money laundering[94]; in the third interview[95] that Ching Gor said all the stuff is genuine business registration, just afraid he (D1) did not know how to talk well [96]; he would not have gone to the Nanyang Commercial Bank on 7 August (day of arrest) if he had known things about money laundering[97]; and he had no suspicion about being given blank cheques[98]; in the fourth video interview[99] that D1 told him the business of Nation Top was furniture, wood recycling and that D1 answered some of the questions asked by the bank[100]; and that Ching Gor trusted him with blank cheques because it was OK for cheques in the sum of several thousand dollars[101]; and in the fifth video interview[102] that he was told to withdraw the money for D1 to order goods[103]. 

86.I remind myself that the rejection of D2’s evidence that he did not know D1 was only a puppet/stooge and not the real owner of Nation Top; that Nation Top did not have any genuine business; and was not aware or had good reason to believe the $200,000 came from illegal sources, is not determinative of the issues in the case.  D2 has to prove nothing.  A case in which defence evidence is called and is not believed is no different from one in which no evidence is called. In either case the burden is on the prosecution to prove the defendant’s guilt beyond reasonable doubt.

Reasonable grounds to believe

87.Having regard to all the circumstances, including:

(a) for reward D1 agreed with Tony to allow his name and identity to be used to open bank accounts thereby concealing the true holder of the bank accounts;

(b) Tony assigned D2 to accompany D1 to open all the bank accounts;

(c) the inherent improbability that D1 would be accompanied to open the bank accounts by anyone who did not know that he was opening the bank accounts for someone else to use;

(d) before opening any bank account D2 gave D1 a piece of paper, written by D2,listing what accounts were to be opened [104]. Full weight is to be attached to D2’s admission in the first video interview he told D1 that Ching Gor required these accounts to be opened[105];

(e) apart from D1’s identity card and proof of address D2 supplied all the documents necessary for opening the accounts; kept all the documents given by the bank; did all the talking; and paid D1 a reward of $500 on each occasion;

(f) documents relating to Nation Top were found in D2’s residence, including transfer of shares and name cards of D1, some of which D2 gave to D1 telling him he had them printed for him;

(g) D2 at the request of Ching Gor and not D1 withdrew the $200,000 and handed all the money to Kwan Gor and not D1;

(h) the money was withdrawn from the Nation Top account with the Chong Hing Bank at the Kwun Tong branch, the same branch D2 had accompanied D1 to open the account;

(i) D2’s role was not limited to accompanying D1 to open the bank accounts and withdrawing $200,000. Three days after withdrawing the money D2 together with D1 went to the Nanyang Commercial Bank, where they were arrested. Prior to going to the bank D2 first met Tony in the Guangdong Roast Restaurant and were later joined by D1 during which time Tony and D2 discussed who should accompany D1 to the bank. This shows D2 was an integral part to the scheme to use D1’s name and identity and accompanied him to ensure the bank did not discover D1 was not the real holder of the account;

I am satisfied so I am sure the only inference to draw is that D2 together with D1, Tony and Kwan Gor had reasonable grounds to believe the $200,000 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.

88.I agree with the prosecution that Ching Gor must have known the $200,000 was the proceeds of crime.  As seen earlier the monies were remitted to the account on 2 August 2014.  On 4 August the monies were exchanged into Hong Kong dollars and transferred to the HK dollar current account.  After HK$246 was transferred from the savings account and the sum of $500 deposited in the current account, the cheque was presented for payment the same day at 09:43[106].  By providing the cheque Ching Gor must have known monies were in the account and had been remitted from overseas. 

89.Even if Ching Gor did not know, I am nevertheless satisfied on the admissions in the video interviews and D2’s own testimony that Ching Gor recruited D2 and instructed D2 throughout what to do, that Ching Gor had reasonable grounds to believe the $200,000 in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.

90.In reaching my verdict I have carefully considered everything said by Mr Wu, including that the evidence D2 had reasonable grounds to believe is speculation on the part of the prosecution.  Nothing said by Mr Wu causes me to doubt the findings I have made. 

91.I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution have proved all the elements of the charge beyond reasonable doubt.  D2 is convicted of charge 2.

D4 (charge 5)

92.The particulars of the charge read as follows: 

“Fung Tsz Him, between the 3^rd day of July and the 27^th day of October 2014, both dates inclusive, in Hong Kong, conspired together with a male called Tony, knowing or having reasonable grounds to believe that property, namely a total sum of about $5,511,178.52 Hong Kong currency, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, to deal with the said property.”

Background/Prosecution case

93.In March 2014 Good Plus Trading Limited was incorporated in Hong Kong.  On 18 June 2014 Fung Tze Him (D4) became the shareholder and sole director of Good Plus. 

94.Between 3 July and 31 July 2014 D4 opened a total of seven bank accounts on behalf of Good Plus with the Wing Lung Bank; the Wing Hang Bank; and the Bank of East Asia.  D4 was the sole signatory of all the bank accounts.

95.In July and August 2014, excluding interbank transfers and interest, a total sum of HK$5,511,178.52 (the amount particularised in the charge) was deposited in the bank accounts of Good Plus[107].

96.The prosecution case is that the bank accounts were used to receive monies from email fraud and that for reward D4 agreed with a person called Tony to become shareholder and director of Good Plus; to open the bank accounts on behalf of Good Plus; and to operate those accounts, having reasonable grounds to believe that the monies in the bank accounts were from illicit sources[108].  

Defence case

97.In summary the case of D4 is that he was asked by friends, who he trusted, to open the bank accounts, believing what he did was legal and did not suspect he was committing a crime or doing anything illegal.  

Prosecution evidence

Video Recorded Interview (exhibits P218 & P219)

98.The prosecution rely on admissions made by D4 in a video recorded interview (exhibits P218 & P219).  The defence objected to the admissibility of the interview. Guided by the decision in HKSAR v Okafor[109]as applied in HKSAR v Ip Chun Yin[110]these are my reasons for ruling the interview admissible in evidence.

99.The interview was conducted by PC 11899 and Sgt 58640.  The defence objected to the admissibility of the interview on the grounds of inducements made by Sgt 58640 at the residence of D4 and in the Wong Tai Sin Police Station prior to the interview, as particularised in the written objections submitted by Mr Davies (marked “A” for identification).

100.The prosecution called PC 11899 (PW20) and Sgt 58640 (PW33).  In summary in the morning of 15 June 2015 Sgt 58640 led PC 11899 and WDPC 9649 to the residence of D4.  The police officers arrived at 0642 hours and after initially refusing the police entry, the mother of D4 let the police in.  After confirming D4’s identity PC 11899 arrested and cautioned the defendant.  Admitted in evidence is that on 15 June 2015 at around 0647 D4 was arrested at his residence by PC 11899 and cautioned for the offence of money laundering[111].  PC 11899 then recorded the course of the arrest in his notebook[112].

101.At 0716 PC 11899 served on D4 a Notice to Persons in Custody[113].  PC 11899 explained to D4 the rights contained in the Notice.  After reading the Notice D4 signed the Notice at 0725.  D4 said he did not wish to exercise the rights listed in the Notice. 

102.PC 11899 then conducted a quick search of D4.  Two bank cards were seized from D4’s wallet. WDPC 9649 then produced the search warrant and explained the content to D4 and his mother.  In the presence of D4 and his mother the residence was searched.  Two bank cards; a passbook; mobile phone and iPad were seized from D4’s bedroom[114].

103.After the search D4 indicated he wanted to freshen up and go to the toilet.  D4 was allowed to go to the toilet where he washed his face and brushed his teeth.  In cross-examination PC 11899 said that to get to the bathroom D4 needed to pass the kitchen; that Sgt 58640 also went into the kitchen; and that there were periods of time when he did not see what Sgt 58640 and D4 were doing in the kitchen. 

104.In cross-examination Sgt 58640 disagreed that in the kitchen he asked D4 if he was willing to take part in an interview; that D4 asked what would happen if he did not; and that he replied D4 would be liable for all criminal charges but if he took part in the interview the liability would be reduced.

105.When the police were about to leave to take D4 to the police station, D4 requested his mother to contact his friend to find a lawyer for him.    

Wong Tai Sin Police Station

106.D4 was taken to the Wong Tai Sin Police Station arriving at 0808.  On arrival D4 was taken to see the Duty Officer, who instructed PC 11899 and Sgt 58640 to search D4.  D4 was taken to interview room 9 of the Report Room.  In cross-examination PC 11899 said D4 was taken to the interview room at 0810 where he was searched between 0821 and 0823. 

107.After the search Sgt 58640 telephoned D4’s mother to see if she had found a lawyer for D4.  Sgt 58640 was told by the mother she could not contact D4’s friend. Sgt 58640 asked D4’s mother to continue trying to contact the friend to find a lawyer.  In cross-examination PC 11899 said Sgt 58640 contacted D4’s mother at 0824. 

108.After calling the mother Sgt 58640 copied the Notice to Persons in Custody and the record of arrest made in PC 11899’s note book.  In cross-examination PC 11899 said Sgt 58640 copied the documents at 0830. 

109.D4 was also allowed to telephone his mother.  D4’s mother was however still unable to contact D4’s friend.  Sgt 58640 therefore told D4 he could provide him with a list of lawyers he could contact.  D4 said he did not want a lawyer from the list.

110.This was between 0834 and 0836.  In cross-examination Sgt 58640 agreed at this time he was alone with D4 but disagreed during this time he promised D4 if he gave an interview he would be allowed to go home.

111.At 0841 hours D4 was handed over to the custody of the Duty Officer.  At 1009 Sgt 58640 and WDPC 9649 took D4 from the custody of the Duty Officer to   the Low Block of the police station where he was interviewed in room 202.  The video interview commenced at 1019 and was completed at 1507, after which D4 was given copies of the discs recording the interview. 

112.PC 11899 testified that at no time did he make any promises to D4 or offer him any inducements or hear Sgt 58640 or any other police officer make any promises or offer any inducements to D4.  PC 11899 did not in any way act improperly towards D4.   Sgt 58640 testified he did not make any promises to D4 or offer him any inducements.  In cross-examination Sgt 58640 denied the allegations put to him by Mr Davies as particularised in the grounds of objection.    

Defence evidence

113.D4 elected to give evidence.  No witnesses were called on his behalf.  D4’s evidence was largely consistent with the grounds of objection save that at his residence the defendant said that he was also told if he gave a statement his sentence would be lighter and in cross-examination said he was refused permission to telephone his friend and therefore asked his mother to make the call. 

114.D4 said he believed what Sgt 58640 said to him because he did not know what to do.  D4 was very frightened both in his home and at the police station and therefore had no alternative but to be obedient and cooperate with the police.

115.In cross-examination when asked why he did not insist on getting a lawyer D4 replied he wanted to find out from his friend whether he needed a lawyer therefore he did not pick a lawyer from the list provided by Sgt 58640.

Ruling

116.I carefully considered all the evidence and submissions made.  The issue was one of credibility.  I was satisfied so I was sure that the police officers were witnesses of truth who gave credible and reliable evidence.  I had no hesitation in rejecting D4’s evidence.  I did not find his evidence credible. 

117.The unchallenged evidence was that just before leaving his home D4 asked his mother to find a lawyer for him.  At the police station Sgt 58640 followed this up by telephoning the mother to see if a lawyer had been found and allowing the defendant also to call his mother.  No lawyer having been found Sgt 58640 told D4 he could provide him with a list of lawyers he could contact.  In my view the steps taken by Sgt 58640 to try ensure D4 had a lawyer are inconsistent with Sgt 58640 having made promises or inducements to the defendant. 

118.I was satisfied beyond reasonable doubt that D4 gave the interview voluntarily.  D4 had been explained his rights at the time of his arrest, which rights D4 confirmed he understood at the beginning of the interview[115].  Further D4 was properly cautioned; consented to be interviewed and said he was fit to do the interview[116].

119.In reaching my decision I carefully considered everything said on behalf of D4 by Mr Davies, including that D4 had never been in trouble with the police before or been to a police station and therefore would not have known the procedure.

120.I also considered that in cross-examination Mr Davies questioned both police officers about what clothing D4 was wearing when they arrived at his residence.  Neither police officer could remember.  In my view it is not at all surprising almost two years later the police officers could not remember what D4 was wearing.  The failure to remember what clothing D4 was wearing did not cause me to doubt their evidence.  Nothing said by Mr Davies caused me to doubt that D4 gave the interview voluntarily. 

121.Applying the principles established in HKSAR v Lam Tat-ming[117]I found no grounds to exercise my discretion to exclude from evidence the video interview on the grounds of unfairness.  

Summary of the VRI[118]

122.In reaching my verdict I have considered both the inculpatory and exculpatory parts of the interview, in accordance with the principles in R v Sharp[119]. In summary D4, inter alia, said that Good Plus was not his company; he did not see the physical company and the business cards in his name were not printed by him[120]; he signed documents for Good Plus because he was jobless [121]; he asked his friend Yu Mo if there was any job for making quick money, which meant maybe some illegal jobs[122]; Yu Mo introduced him to Ah Yue who asked him to sign some documents and cheques[123]; Ah Yue introduced Tony who picked him up and took him to Jordan to sign the company documents[124]; Ah Yue and Tony said he would receive a reward, Ah Yue saying he could gain $100,000 for every $1 million deposited[125]; after signing the company documents he was accompanied, on at least five occasions, usually by Tony to open bank accounts, most documents being provided by Tony[126]; Tony gave him money to open the accounts[127]; Good Plus did not do the business of lighting and furniture[128];after opening the accounts he gave the documents to Tony, including e-banking log in and password[129]; Tony requested him to sign all the cheques blank[130]; Tony paid him a reward[131]; after conversion of Euro to Hong Kong dollars he signed a withdrawal slip and withdrew $309,795 from the Bank of East Asia and handed the money to Ah Man who gave him $1000 [132]; and that he did not have knowledge of various transactions, including online transactions[133].

Admitted evidence

123.All remaining evidence was either read or admitted pursuant to sections 65B and 65C of the Criminal Procedure Ordinance[134]. The admitted evidence[135] includes the company records of Good Plus Trading Limited[136]; bankers’ affirmations of the Wing Hang Bank; the Wing Lung Bank and the Bank of East Asia[137]; movement and immigration records of D4[138]; D4 and Good Plus did not file any tax returns; and the arrest of D4.  I will refer to the admitted facts as I review the evidence.  The evidence relating to the email fraud was read[139].  

Defence evidence

124.D4 elected to give evidence.  No witnesses were called on his behalf.  Admitted in evidence is that D4 has a clear record[140]. I direct myself as to good character in accordance with the decision in HKSAR v Tang Siu Man[141].

125.In reaching my verdict I remind myself of the burden and standard of proof and that the burden is on the prosecution throughout.  D4 has to prove nothing.  I direct myself that I must be sure of the guilt of the defendant before I can convict. On the other hand, if the court thinks that the defence evidence pointing to innocence is true or may be true, it would follow that the defence has raised sufficient doubt in the prosecution case and the defendant entitled to be acquitted.  

126.The main issue to determine is whether D4 agreed with Tony to deal with property by opening bank accounts, intending that the bank accounts would be used to receive and withdraw monies, and that at the time of making the agreement D4 and Tony knew or had reasonable grounds to believe that the bank accounts would be used to launder the proceeds of an indictable offence.   

127.I remind myself that when drawing inferences from the evidence the inference must be the only reasonable inference to draw from the proved facts.  If from the facts proved there is a reasonable inference to draw against a defendant as well as one in his favour, the adverse inference cannot be drawn.  

128.I have carefully considered all the evidence together with the submissions of Mr Ryan and Mr Davies. 

Agreement to deal with property

129.Admitted in evidence is that on 18 June 2014 D4 became the sole shareholder and sole director of Good Plus[142]; between 3 July and 31 July 2014 on behalf of Good Plus D4 opened the bank accounts with the Wing Lung Bank; the Wing Hang Bank and the Bank of East Asia[143]; D4 was the sole signatory of all the accounts[144]; and that the account holder (D4), withdrew the sum of $309,795 from the Bank of East Asia account on 12 August 2014[145].

130.I am satisfied full weight is to be attached to D4’s admissions that he was requested to sign company documents; Tony gave him the documents to sign; he opened bank accounts; Tony provided him with the documents to open the bank accounts; he received a reward from Tony for opening the accounts; at the request of Tony he signed all the cheques blank; he gave the documents, including e-banking log in and password to Tony; and that he signed the withdrawal slip and withdrew the sum of $309,795 from the Bank of East Asia account.   

131.I am satisfied so I am sure on this evidence the only inference to draw is that not only did D4 agree with Tony to deal with property by opening bank accounts intending that the bank accounts would be used to receive and withdraw monies but that D4 also carried out the agreement by signing blank cheques and withdrawing the sum of $309,795 from the Bank of East Asia[146].   

132.I also note D4 testified, inter alia, that he agreed to open a company bank account for which he would be given wages of $100,000 for every $1 million transaction; he went with Tony to various banks on different days to open bank accounts; he was given a reward for opening bank accounts; Tony requested him to sign all the cheques blank; and he withdraw the sum of $309,795 from the Bank of East Asia account[147].

Knowing or having reasonable grounds to believe the property represented the proceeds of an indictable offence

Proceeds of an indictable offence

133.The prosecution are able to prove that monies passing through the Wing Hang Bank; the Bank of East Asia; and the Wing Lung Bank accounts were the proceeds of email fraud.

134.Admitted in evidence is that between 17 and 24 July 2014 Antelope Oil Tool Canada Inc remitted a total sum of US$546,030.59 to the Wing Hang Bank account[148].  The witness statements of Ge Xiaowei detailing how Antelope Oil were deceived into remitting the money was read[149]. I accept this evidence. 

135.Admitted in evidence is that between 11 and 13 August 2014 Stephanie Fok Tsz Yan of VG Asia Ltd remitted a total sum of EUR€105,047.10 to the Bank of East Asia account[150]. The witness statements of Arthur De Villepin and Stephanie Fok Tsz Yan detailing how VG Asia Limited were deceived into remitting the money were read[151].   I accept this evidence. 

136.Admitted in evidence is that on 23 August 2014 Rajeev Bhargavan of Velca Racking Systems Private Ltd remitted the sum of US$23,026.83 to the Wing Lung Bank account[152].  The witness statements of Rajeev Bhargavan and Wang Xiaojun detailing how Velca Racking were deceived into remitting the money were read[153]. I accept this evidence.

137.The bankers’ affirmations of the Wing Hang Bank; the Bank of East Asia and the Wing Lung Bank show that these three remittances were the only substantial deposits made to the three bank accounts[154]. All the monies were withdrawn the same day or within 1-2 days of the remittances being made[155]. 

138.I am satisfied on this evidence the only inference to draw is that all three bank accounts were used to launder proceeds of crime[156].

Knowing or having reasonable grounds to believe

139.The prosecution submits that D4 had reasonable grounds to believe the monies in Good Plus’s bank accounts represented proceeds of an indictable offence and that Tony must have known that the bank accounts were intended for receiving crime proceeds[157]. 

Defence evidence

140.In summary[158] the defendant gave evidence that he first became involved with Good Plus through the introduction of his friend Ah Yiu, whose full name was Wong Yiu Lai.  D4 had known Ah Yiu for eight years, having first met him in an amusement game centre.  In 2013 while working in Monster Sushi D4 introduced a job to Ah Yiu.  In January 2014 after D4 had finished working at Monster Sushi he asked Ah Yiu if he could find him a job.

141.Ah Yiu said he could introduce someone to D4 who would be able to find a job for him.  In March 2014 arrangements were made to meet Ah Yiu’s friend in a bar. The friend, who was also called Ah Yue, asked D4 what work he wanted[159].  D4 said anything so long as the work was above board and not illegal.  One to two days later Ah Yue called D4 saying he had a job for D4 where D4’s name would be used to open a company bank account.   Ah Yue said for every $1 million transaction D4 would be given a wage of $100,000.  D4 agreed to do the work.

142.About three days later a person, who D4 did not know the name of, called saying that before opening the bank accounts he needed to copy D4’s identity card and ATM card.  During cross-examination and in answer to the court D4 said this was Ah Man, who he mentioned in the video recorded interview[160].  

143.About a week after Ah Man photocopied the documents D4 was contacted by Tony.  Tony asked D4 if he was doing the job of opening bank accounts.  D4 said yes.  Two days later Tony together with D3 picked up D4 and drove him to San Po Kong to open a bank account[161]. D3 carrying a green box containing the company documents accompanied D4 and went in the bank.  In cross-examination D4 agreed he never told the police D3 accompanied him to the bank.  D4 explained he did not recall D3 accompanied him until he saw D3 in Eastern Law Courts. 

144.The bank said the application needed to be examined and approved.  Tony supplied D4 with a phone, the number of which D4 gave to the bank as the contact number.  Tony next drove D3 and D4 to Jordan to open another bank account.  Again time was required for the bank to approve the application.  Afterwards D4 gave the phone back to Tony. 

145.Two days later Tony called to arrange to open another bank account.  The next day Tony picked D4 up and drove to a restaurant in San Po Kong.  Tony had to leave first saying that someone would come soon to take him to open bank accounts. Before leaving Tony gave D4 the green box and the phone.  A short while later D2 arrived and took D4 by bus to Kowloon City.  Attempts to open bank accounts were unsuccessful. 

146.D2 and D4 then took a bus to Hung Hom to open a bank account.  Again they were told to wait for approval.  D4 thought this was the Wing Lung Bank[162].  Afterwards D2 withdrew $1000 from an ATM and gave this to D4, which D4 described as tea money or wages.   

147.Within a week Tony rang to make arrangements to open another bank account.  The next day Tony picked up D4 and drove him to To Kwa Wan.  This time Tony went in the bank with D4 and taught D4 how to fill in all the forms.  D4 said this was probably Wing Hang Bank[163]. Again they were told to wait for approval. 

148.About one week later Tony rang saying that approval had been given and D4 needed to collect documents, including a cheque book.  The same day Tony drove D4 to the bank in To Kwa Wan where D4 collected the documents.  When driving D4 home Tony told D4 to sign all the cheques.   D4 gave all the documents to Tony. 

149.Two to three days later Tony rang saying another account had been approved.  Tony drove D4 to the bank in San Po Kong where D4 collected the documents, including the cheque book.  Tony told D4 to sign all the cheques, which D4 did in the bank.  D4 again handed all the documents over to Tony.  On this occasion Tony gave D4 $2000. 

150.Around mid-August Ah Man called D4 saying that $300,000 needed to be withdrawn from the Bank of East Asia.  After withdrawing the money D4 gave the money to Ah Man, who gave D4 $1000 as his reward.  In cross-examination D4 said he did not ask Ah Man or Tony why the money was to be withdrawn. 

151.Afterwards D4 had no more contact with Ah Yue, Ah Man or Tony because he had lost all their numbers. 

152.D4 did not suspect anything was illegal.  D4 trusted Ah Yiu (Wong Yiu Lai) who he regarded as a good friend, describing him as a brother.  D4 trusted Ah Yue because he had told Ah Yue as long as the job was above board and not illegal it was all right.  D4 trusted Tony because he felt Tony was the colleague or friend of Ah Yue.  D4 trusted Ah Man because he was introduced by Ah Yue and had the details of the company account and the company chop.  D4 believed what he did was legal because he did not feel he was committing a crime. 

Consideration of the evidence

153.I have no hesitation in rejecting D4’s evidence that he told Ah Yue he would do any work so long as the work was above board and not illegal and that he believed that what he did was legal because he did not feel he was committing a crime. 

154.In the video interview D4 told the police that he signed company documents for Good Plus because he was jobless and asked a friend if there was any job for making quick money.  When asked the meaning of making quick money D4 replied, “Maybe some illegal jobs”[164].

155.In evidence D4 explained that when he was arrested he was not clear what he had done to constitute a crime.  Only after thinking about the matter did D4 realise there was something wrong about opening the accounts which made him think he had committed a crime.  D4 therefore replied “Maybe some illegal jobs” when asked the meaning of making quick money. 

156.I have no hesitation in rejecting this explanation.  If D4 only thought this after his arrest he could easily have told the police he did not realise at the time what he had done was illegal.  Looking at the interview as a whole and considering that D4 signed documents purporting to be the sole director and shareholder of Good Plus and signed blank cheques, I am satisfied so I am sure that on being asked what was the meaning of making quick money D4 replied by saying what he meant at the time he asked his friend to find him a job and not what he thought after his arrest. 

157.I do not find credible D4’s evidence that he did not suspect anything was illegal because he trusted Ah Yiu (Wong Yiu Lai), Ah Yue, Tony and Ah Man. 

158.In the video interview D4 told the police the name of his friend, who he asked if there was any job for making quick money, was Yu Mo, and that he had known him for only two to three months[165]. This is different to D4’s evidence that he trusted Ah Yiu (Wong Yiu Lai) because he had known him for about eight years, regarding him as a good friend and brother.

159.In answer to the court D4 said that Yu Mo was not Ah Yiu (Wong Yiu Lai) and that when interviewed by the police he had wrongly remembered who he had asked to find him a job and therefore did not tell the police he had known his friend for eight years[166]. I do not find credible D4 wrongly remembered who he asked to find him a job for making quick money.  

160.I do not find credible D4’s evidence in cross-examination that he did not know Good Plus had no genuine business.  In the account opening application for the Bank of East Asia, signed by D4, it is stated that the business of Good Plus was trading lighting and furniture in Mainland China[167].  When D4 was asked about this by the police he said that Good Plus did not do this business and that he was told by Tony to write in this way[168]. 

161.In cross-examination D4 said he told the police Good Plus did not do this business because he was not clear what business Good Plus was engaged in.  I have no hesitation in rejecting this explanation.  If D4 was not clear about the business, he could have simply stated he was not clear instead of telling the police Good Plus did not do this business. 

162.I am satisfied no weight is to be attached to the statements made by D4 in the video interview that he was not aware of the transactions in the bank accounts. 

163.I remind myself that the rejection of D4’s evidence that he did not know or suspect what he was doing was illegal is not determinative of the issues in the case.   D4 has to prove nothing.  A case in which defence evidence is called and is not believed is no different from one in which no evidence is called. In either case the burden is on the prosecution to prove the defendant’s guilt beyond reasonable doubt.

Reasonable grounds to believe

164.I am satisfied full weight is to be attached to the admissions in the video recorded interview that D4 was jobless; asked a friend if there was any job for making quick money; making quick money meant maybe some illegal jobs; and was told he only needed to sign some documents and cheques[169]. For this work D4 told the police and testified in court that he was told he would be paid $100,000 for every $1 million transaction[170].  On this evidence alone I am satisfied so I am sure the only inference to draw is that D4 had reasonable grounds to believe the bank accounts were to be used to launder the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe (see HKSAR v Jariabka Juraj[171]).

165.In addition, I am satisfied full weight is to be attached to the admissions in the video recorded interview that D4 signed documents of Good Plus, a company which was not his; which he had not visited the office and did not print the business name cards[172]; said Gold Plus did not do the business of lighting and furniture[173]; he was supplied all necessary documentation for opening the bank accounts[174]; Tony gave him money to open the accounts[175]; after opening the bank accounts he handed over all the documents to Tony including e-banking log in and password[176]; signed all the cheques blank[177]; and was paid a reward by Tony for opening bank accounts[178].

166.By allowing his name and identity to be used the true holder of the bank accounts was concealed.  I am satisfied so I am sure the only inference to draw from the circumstances D4 came to open the bank accounts is that D4 had reasonable grounds to believe the bank accounts were to be used to launder the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.

167.Furthermore, when withdrawing the sum of $309,795 from the Bank of East Asia account D4 gave a false reason for withdrawing the money.  The withdrawal slip shows the Chinese characters for “purchase of a vehicle” followed by “inconvenient to reveal” which characters were crossed out with a horizontal line[179].

168.In the video interview D4 confirmed he signed the withdrawal slip but could not remember if he was taught by Ah Man to tell the bank the purpose of the withdrawal and said he did not know the purpose of the withdrawal[180].  In cross-examination D4 said that he told the bank it was inconvenient to reveal because he did not know what to say and because the bank wanted a reason he made up the reason for withdrawal of the money was for the purchase of a vehicle. 

169.On this evidence I am satisfied so I am sure that when D4, without asking why, withdrew the money and handed it over to Ah Man, the only inference to draw is that he had reasonable grounds to believe that the money was the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe. 

Tony

170.I agree with the prosecution that by giving instructions to D4 what to do, Tony must have known that the bank accounts were intended for receiving crime proceeds [181].  Even if Tony did not know I am nevertheless satisfied so I am sure on the evidence that Tony took D4 to sign the company documents; accompanied D4 to the banks; provided D4 with all necessary documentation and monies to open the accounts; instructed D4 what to do including signing all the cheques blank; received all the documentation after the accounts were opened; and paid D4 a reward for opening the accounts, that Tony had reasonable grounds to believe that the bank accounts were to be used to launder the proceeds of an indictable offence and that anyone looking at those grounds objectively would so believe.

171.In reaching my verdict I have carefully considered the submission of  Mr Davies[182] including the fact that Tony drove D4 to the banks and asked him to sign cheques may be suspicious but is not conclusive of guilt and that the possibility that Tony is an honest party cannot be ruled out[183].

172.I have no hesitation in rejecting this submission.  D4 signed the company documents, opened the bank accounts and signed the blank cheques to enable others to use the bank accounts.  I find inherently improbable that anyone accompanying D4 did not know D4 was signing documents and opening accounts for others to use. Tony clearly played an integral part in ensuring that D4 signed the company documents and opened the bank accounts.  Nothing said by Mr Davies causes me to doubt the findings I have made. 

173.I am satisfied so I am sure there are no material and significant discrepancies, improbabilities or omissions in the evidence, which cause me to doubt the findings I have made.  I am satisfied so I am sure the prosecution have proved all the elements of the charge beyond reasonable doubt.  D4 is convicted of charge 5.