HKSAR v. Cen Qiusheng

DCCC 832/2017

[2018] HKDC 318

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 832 OF 2017

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REASONS FOR SENTENCE

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1.Defendant Cen Qiusheng pleaded guilty before me to one charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 and sections 159A and 159C of the Crimes Ordinance, Cap 200.

2.The particulars of offence are that Cen Qiusheng, between a day unknown in June, 2016, and 31 August, 2016, both dates inclusive, in Hong Kong or elsewhere, conspired with a person known as “Chen Mingyuan” to deal with property, namely money deposited in account numbered 124-466905-833 held in the name of the said Cen Qiusheng with The Hongkong and Shanghai Banking Corporation Limited, knowing or having reasonable grounds to believe that the said property, in whole or in part, directly or indirectly, represented the proceeds of an indicatable offence.

Admitted facts

3.The facts admitted by Mr Cen may be summarized as follows.

4.In June 2016, a Singaporean female in Singapore was deceived into transferring a sum of USD1,000 to the HSBC bank account opened by Mr Cen (particulars in the charge).  She later reported the matter to the Hong Kong Police.

5.Also in June 2016, a Malaysian female in Malaysia was deceived into remitting a sum of USD3,000 into the same HSBC account.  She later reported the matter to the Hong Kong Police.

6.It was on 15 June 2016 that Mr Cen opened the said bank account.  He was the only designated user.  In the opening mandate, Mr Cen held himself out to be the holder of a Chinese travel permit and the director of a Mainland company dealing in “business services” with a monthly salary of HK$20,000-29,999. According to the opening mandate, it was claimed that the purpose of the account was for Mr Cen’s frequent travel to Hong Kong and to have an account for expenses in Hong Kong.

7.Transaction records of the HSBC account show that during the period from the account opening date to 31 August 2016, the total amount of deposits in USD (98 transactions) was USD631,019.04 (approx HKD4,921,948.51) and the total amount of deposits in HKD (consisting of 5 transactions) was HKD217,036.89. The transfers in USD were mainly from accounts of companies and individuals in Singapore, Malaysia, and Taiwan, with one remittance from Hong Kong.

8.All or most of the USD received into the account was converted into HKD and transferred into the HKD sub-account within a short space of time.  All or a substantial amount of the money in the HKD sub-account was further transferred to the Hang Seng Bank accounts of two companies known as Kwok Wai and Long Sing.  In total, almost HKD4 million was remitted to Kwok Wai’s account during the first part of the offence period and just over HKD one million was remitted to Long Sing’s account during the second part of the offence period.

9.On 13 February 2017, Mr Cen was arrested at Lo Wu Control Point when he entered Hong Kong.

10.Under caution, he said:-

(a) He was born in the Mainland and worked as a salesman in construction field, making RMB7,000-8,000 a month;

(b) He came to know a male known as “Chen Mingyuan” in the Mainland;

(c) In June 2016, in Mainland, Chen told him that he (Chen) needed to save money but he owed Hang Seng Bank credit card debt so he could not open an account in Hong Kong; Chen asked him to open an account for Chen using Mr Cen’s own name;

(d) He agreed to the request to open an HSBC bank account in Hong Kong;

(e) In mid-June 2016, he came to Hong Kong and together with Chen went to HSBC to open an account; he only provided his travel permit and temporary stay permit to the bank staff; it was Chen who passed a piece of paper to the staff who then filled out all the information for him; and

(f) After signing the account opening form, he received the bank card, the PIN, and a cheque book from the staff all of which he handed over to Chen.

11.Mr Cen’s travel record shows that he entered Hong Kong at 1538 hours on 15 June 2016 and exited at 1917 hours the same day.  Since then he had no further movement record until 13 February 2017 when he was arrested in Hong Kong.

12.Hang Seng Bank records show that Kwok Wai had Mainland connections and that Long Sing shared the same registered address as Kwok Wai.

Criminal record

13.Mr Cen enjoys a clear criminal record in Hong Kong.

Antecedents

14.The antecedents statement  is agreed save one aspect which is that instead of being educated to F3, Mr Cen should have only been educated to F2. The rest of the statement shows that Mr Cen is 49 (48 at the time of the offence), born and lived alone in the Mainland; he had been a merchant; he is divorced.  He is a holder of an Exit-Entry Permit for Travelling to and from Hong Kong and Macau.

Mitigation

15.Ms Barbara Cheng of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Cen.

16.Ms Cheng mainly relied on a set of written submissions in mitigation which was supplemented by some oral remarks.

17.The following is a summary of the mitigation submissions.

18.Ms Cheng re-iterated that there is no tariff for “money laundering” offences.  She then referred to the 5 factors listed in para 9 of the case HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and, with respect, she is right to have submitted that activities between Mainland and Hong Kong count as activities with an international element.

19.Next, she referred to the case of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201 where Yeung JA (as he then was), in giving the judgment of the Court of Appeal, said at para 15,

“In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. The sentencing starting point is 3 years or so where the “black money” involved is between $1 million and $2 million; 4 years or so where it is between $3 million and $6 million; and could be over 5 years where it is above $10 million.”

20.The third and final case Ms Cheng cited was HKSAR v Boma [2010] 2 HKLRD 33 where at para 40(8), it was held that:-

“The sentencing court should have regard to the role of the offender and the acts performed by him. In this regard, the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds …… So for example the drug addict or petty crook who is paid a small sum to open an account and hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime is much less culpable than an offender of a different sort not “used” in that way.”

21.Ms Cheng submitted the following mitigating factors:-

(a) Mr Cen has pleaded guilty;

(b) He has a clear record;

(c) The period involved was only 2½ months and the amount was slightly more than $5 million;

(d) Mr Cen is remorseful and likelihood of re-offending is low;

(e) Mr Cen was not involved in the operation of the bank account: he handed over the documents and bank card to Chen Mingyuan on the date of opening the account; and

(f) Mr Cen has no knowledge of the predicate offence or the two companies namely Kwok Wai and Long Sing.

22.Lastly, Ms Cheng told me a bit more about Mr Cen’s personal backgrounds: he has a son (28) and a daughter (26); between 2007 and 2013, he had worked as a construction sales, earning around RMB7,000 to 8,000; that he had become unemployed since October 2016 and lived on savings and support from his girlfriend.

23.Upon enquiry from me, Ms Cheng said that at the time of opening the bank account, Mr Cen just signed his name on the forms provided; it was Chen Mingyuan who handed over the papers to the bank staff of which contents he had no knowledge; it was the bank staff who filled out the forms.

24.Also upon invitation from me, Ms Cheng suggested a starting point of slightly less than 4 years.

Sentence

25.I have considered the mitigation submissions made Ms Barbara Cheng.

26.Money laundering offence under section 25 of Cap 455 is a serious offence and a conspiracy to commit the same is no less so.

27.Both the substantive offence and the associated conspiracy offence carry a maximum penalty of a fine of $5M and 14 years’ imprisonment.

28.There are no sentencing guidelines for this type of offence simply because the facts vary so enormously that it is not feasible to set down tariffs.

29.However, the Court of Appeal has said on numerous occasions that a deterrent sentence is called for.

30.In HKSAR v Boma, supra, also reported in [2012] 1 HKC 504 by the name of HKSAR v A male known as Boma Amaso, the Court of Appeal has very helpfully summarized a number of factors that a sentencing court should look for apart from the obvious one which is the amount of money laundered.  These other factors which are non-exhaustive include:-

(a) The nature of the predicate offence;

(b) Knowledge of the offence as to the nature of the predicate offence;

(c) Whether the offender knew or believe on the one hand or merely had reasonable grounds to believe on the other that the money laundered represented proceeds of an indictable offence;

(d) Presence of international element;

(e) Degree of sophistication and/or planning;

(f) Whether the offence was committed by or on behalf of an organized crime syndicate;

(g) Length of time over which the offence(s) was/were committed;

(h) Offender continued to launder funds after he had gained further knowledge; and

(i) Role of, acts performed, and benefits received by the offender.

31.In the present case, the aggravating factor which stands out is the presence of the international element, involving funds moving in from overseas, which calls for a more severe sentence so as to protect Hong Kong’s reputation as an international financial centre and banking hub.

32.I also infer from Mr Cen’s travel record that he came to Hong Kong with no other purpose than to open the HSBC bank account, which is the activity he took part in in furthering the conspiracy.  I consider this an added aggravation.

33.I take into account the amount involved in the present case which is slightly over HK$5 million.

34.Taking into account the dicta of Yeung JA (as he then was) in Wan Kwok Keung, supra, above quoted, and bearing in mind the relatively minor yet crucial role that Mr Cen played in the conspiracy, I adopt an initial starting point of 4 years’ imprisonment.  Because of the presence of the two aggravating factors, I increase it by three months to arrive at the final starting point of 4 years 3 months’ imprisonment.

35.I give Mr Cen the full 1/3 discount for his early plea.

36.I do not find any other mitigating factors of sufficient weight to warrant a further discount.

37.Mr Cen, please stand.

38.Mr Cen will go to prison for 34 months.