HKSAR v. Wong Chok Kwan and Another
Read the full judgment text of DCCC 179/2017 on BabelCite. This District Court judgment was delivered on 2 March 2018.
1. Middle classed and middle-aged, Mr Wong Chok Kwan (“D1”) and Ms Wong Chan Shuk Kwan (“D2”) seemed a normal, well-off couple. They were married on 24 April 1980 and have raised three children, one son and two daughters, all of them well in their adulthood by 2011. In the course of the years they held a number of properties in succession. Yet as in the case of some normal couples, fissures began to appear in their union. On 13 May 2011, D1 filed for divorce in the Hong Kong Family Court. C
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DCCC 179/2017 [2018] HKDC 310 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 179 OF 2017 -------------------------------
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--------------------------------------- REASONS FOR VERDICT --------------------------------------- Introduction 1.Middle classed and middle-aged, Mr Wong Chok Kwan (“D1”) and Ms Wong Chan Shuk Kwan (“D2”) seemed a normal, well-off couple. They were married on 24 April 1980 and have raised three children, one son and two daughters, all of them well in their adulthood by 2011. In the course of the years they held a number of properties in succession. Yet as in the case of some normal couples, fissures began to appear in their union. On 13 May 2011, D1 filed for divorce in the Hong Kong Family Court. Consequently each defendants filed a financial statement ‘Form E’ as part of the matrimonial proceedings to disclose on affirmation their financial status. 2.D1 declared that he was a ‘businessman’ and the nature of his business was ‘gambling’. That he had been convicted of ‘operating a gambling establishment’ by a Mainland Court and was sentenced to 3 years’ imprisonment suspended for 3 years and fined RMB80 million on 15 October 2009, and that he owed a friend in the Mainland a debt of RMB25 million. 3.D2 declared that she was a housewife and had under her name 2 properties. 4.The police started to investigate into their financial conditions. It was revealed that D1 and D2 each had control of a number of bank accounts and at least one joint account not previously disclosed in the respective Form Es. During the 7 years between 2004 and 2011 (‘the Period Under Review’), a total sum of HKD206 million had been deposited into D1’s five bank accounts and a total of HKD488 million into the 10 bank accounts under D2’s name[1]. In addition, the total sum of HKD21 million had been deposited into an account under their joint names. D2 was also a signatory to an account under the name of her elder sister, a Macanese citizen who seemed otherwise had little connection to Hong Kong, into which a total of HKD296 million had been deposited. Almost all of the moneys paid into the abovementioned accounts had been withdrawn by November 2011. 5.A study of those accounts showed that there were unusual funds movements in the 12 accounts under the defendants’ names. The prosecution contended that the defendants were involved in money laundering in respect of the moneys deposited into those 12 accounts. The indictment 6.The present proceedings involved an indictment consisting of 12 counts of “Dealing 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; covering the period between October 2004 and December 2011. 7.Each of the 12 charges is tied to the deposits paid into one specific account. 8.The particulars of the offences for each charge are practically identical except for the names of the party, bank accounts in question, the total amounts involved and the exact period covered. 9.As a sample, the particulars of offence for Charge 1 are as follows:-
The charges against D1 10.D1 alone faced the following three charges involving a total deposit of HKD134,487,716.66.
The charges against D2 11.D2 alone faced 8 charges, involving a total deposit of HKD619,130,154.10.
12.In addition, the defendants are jointly charged in one count:-
13.The prosecution contended that the defendants had dealt with the deposits (minus interbank transfers and other payments that could be accounted for) made towards a specific account during the Period Under Review.[2] Pleas 14.D1 indicated that he would plead not guilty to the charges during the appearances before the commencement of the trial. D2 pleaded not guilty to all the charges. D1’s Trial in Absentia 15.D1 was absent on the first day of the trial on 20 November 2017. The court adjourned the hearing twice in an attempt to secure his attendance and to identify the reason of his absence. 16.Repeated attempts from both the police and his own defence team to locate D1 proved futile. On 22 November 2017, the prosecution applied for the trial to proceed in D1’s absence on the basis that D1 had waived his right to be present. The undersigned ruled in favour of the prosecution after giving simple reason in open court. The followings are the full reasons. The law on Trial in absentia 17.The law is well settled. The principles have been spelt out in the judgment of R v Usman Ahmed [3] and distilled by the editors of Archbold Hong Kong 2018 at paras 3-108 and 3-310. I would not repeat them. In granting the application, the followings had been what I bore in mind:-
18.I am satisfied beyond all reasonable doubt that D1 deliberately chose to be absent from the trial. I am also satisfied that justice requires the trial to proceed in his absence. His lawyers were released after I granted their application for discharge. 19.However, I am vigilant of the fact that D1’s absence should not be taken as any indication of guilt. Nor is it a factor from which I could draw adverse inference against him. 20.D1 is disadvantaged as he would not have the benefit of a lawyer to scrutinize the evidence of the witnesses by way of cross-examination and to make submissions on law and fact on his behalf. It also means that any proposed admitted facts tendered on his behalf would have no effect. 21.Nonetheless the presumption of his innocence is still intact. The prosecution still bears the burden of proving the facts and the law of each of the charges beyond all reasonable doubt before I can make any finding against him. 22.Since D1 is neither present nor represented, the prosecution will have to prove every relevant fact, however undisputable it otherwise might be, in accordance with the rules of evidence. Nonetheless despite his absence, this Court has the duty to scrutiny the evidence carefully and interpret the facts to the best of his advantage. The Law of Money Laundering 23.The law relating to the offence under section 25 (1) of the Organized and Serious Crimes Ordinance has been clearly expounded by the Court of Final Appeal[4]. 24.The prosecution does not have to prove that the property was in fact proceeds of an indictable offence or what indictable offence it was. The actus rea is the act of “dealing with the property”. The status of the property was an element of the mens reas and not of the actus reas. The prosecution must prove that defendant knew or whether she/he had the “reasonable grounds to believe” that the property she/he dealt with were proceeds of an indictable offence[5]. ‘Dealing with’ 25.The term is given a very wide interpretation in section 2 of The Organized and Serious Crimes Ordinance, including receiving or acquiring the property, concealing or disguising the property (whether by concealing or disguising its nature, source, location, disposition, movement, ownership or any rights with respect to it or otherwise) and bringing the property into or removing it from Hong Kong. 26.Lending a bank account or facilitating a bank account for the money laundering falls within the ambit of ‘dealing’[6]. In the present hearing although each of the charge dealt with only the funds deposited into an account owned or controlled by one of the defendants. There is also evidence to show that the defendant had personally dealt with the funds deposited by giving instructions for their disposal. It follows that the account holder must have been aware of the existence of the money and would not have been able to content that he or she was not aware of the activities in the accounts. Such conduct clearly constituted dealing with the property. Reasonable grounds for believing 27.There is no direct evidence on the defendants’ knowledge on the nature of the property (ie the money paid in the account in each of the charges) when they dealt with them. The issue for me to decide is whether she/he had reasonable grounds to believe they were proceeds of an indictable offence.
28.In assessing whether such ‘reasonable grounds’ existed, the court as a tribunal of fact could take into account of the personal beliefs, perceptions and prejudices of the accused and give weight to the same to assist its assessment as it deemed fit[8]. The trial 29.These proceedings are in substance about the interpretation of documentary evidence. The Period Under Review is a span of 7 years from 2004 to 2011. All of the 12 charges had taken place within this period. The documentary evidence consisted of 35 bundles and more than 15,131 numbered pages[9]. 30.The principal witness Ms Chan Chiu Ling was called to assist the court with her expertise in forensic accounting to analyze the sources and applications of funds in all the 18 accounts under the respective names of D1, D2 and D2’s sister, one Madam Chan Shuk Keng during the Period Under Review. In addition to the bank statements and vouchers, she had also examined Tax returns, Land Registration Record and Company Record to assist her assessment and analysis. She produced a report dated 31 December 2015 setting out all her findings. She gave evidence to assist the parties and the undersigned to understand how she collected the data from the documentary evidence and how she carried out analysis of the same. 31.For the ease of reference, in this Statement of Findings witnesses called would be identified in the same way they appeared in the Witness List irrespective of the real order of their appearance in the hearing. Likewise I would adopt the Prosecution’s system of enumerating exhibits; namely, the exhibit numbers, the number of the Bundle and of the pages they appeared in[10]. 32.The absence of D1 and his representatives in this hearing means that the Prosecution has to prove every element of the charges. Every mundane and indisputable detail which a legal representative would have agreed on had been proved and produced by the book. That in part explains why a total of 13 witnesses had been called. I am satisfied that all the witness had been truthful. The documents they produced were secured through proper channels in accordance with the law. They were identical documents shown to Ms Chan Chui Ling for her perusal and analysis. 33.D2 admitted to part of the facts pursuant to section 65C of the Criminal Procedure Ordinance[11]. I would consider them proven facts only in relation to the part of the proceedings against D2. 34.While I have considered all the documents and witness testimonies as much as humanly possible, to enlist everything I have considered would unduly render this Statement of Findings unnecessarily cumbersome. I would refer only to the matters that are crucial for understanding the substance of the allegations and the reasons of my findings. What I have omitted here is an editorial choice dictated by necessity and should not be taken to be failure on my part to consider the same. On the expertise issue 35.Ms Chan Chui ling (PW 90) has been a Certified Public Accountant of the Hong Kong Institute of Certified Accountants since 2005. She joined the Financial Division of the Hong Kong Police Force since 2015 and had undergone training by the Academy of Experts[12]. This was the first time she gave evidence in Court. I am satisfied that she is qualified as an expert in assisting this court to analyze the data collected from the business records and public documents and in giving her opinions on how to interpret the same. 36.PW9 reviewed the records from the Inland Revenue Department, the Company Registry and the business records secured by the Production Orders granted by a High Court Judge. They were in turn physically obtained by the police officers and handed to her. She then extracted information from the primary documents, prepared charts, analyzed them and set out her findings systematically in an Accountant Report: P76 [13]. Her evidence in court is basically highlights of what she set out in full in P76. 37.The report covers the financial activities of 18 bank accounts (referred to collectively as the “Subject Bank Accounts”) from 2004 to 2011(“Period Under Review”) under the respective names of D1, D2 and D2’s elder sister, Madam Chan Shuk Keng. Twelve of the accounts formed the respective subject matters of the charges. The sum referred to is the amount of the deposits paid into the respective accounts minus funds transferred from the other accounts under review, bank charges and sums that could be accounted for. 38.PW9 explained how she acquired the data (from the bank vouchers) and took this court to view samples of the documents from which the information was extracted. I am satisfied the data she acquired had been correctly extracted from the relevant documents. 39.PW9 carried out a clinical, methodical and detailed analysis of the transactions that took place including the fund flow patterns, the speed of the flows, the time lines of deposits and withdrawals, types and the identities of the counter parties in the accounts in question. She set out her findings and the basis for the same in her report[14]. Her evidence in court is mainly to help me to navigate through the paper records and her report, during the process highlighting some of the findings in respect of the significant features and patterns in the movement of funds. As illustrations she would also draw my attention to some of the original vouchers and documents from which she extracted the relevant information upon which she based her findings. I am satisfied the documents from which she extracted the information and upon which she made the analysis were genuine and untampered. I defer to her expertise in these matters and accept her evidence. 40.I should also mention that on the rare instances in which she gave opinion on matters I do not consider to be within her expertise[15], I would disregard them. However, I do not consider them to affect the overall validity of her assessment and opinion. 41.To have the full advantage of her expertise one could do no better than reading the report itself. I would however only enumerate matters essential for the understanding of my findings. Other accounts 42.In addition to the twelve accounts named in the charges, PW9 also reviewed the following accounts which are not tied to any particular charge in these hearings:-
43.As would be apparent later, the accounts were somehow connected in the sense that funds had been sloshed in and out of the Subject Bank Accounts during the Period Under Review. To scrutinize individual accounts in isolation would be missing the big picture. Therefore I would first deal with each charge and the related bank account separately, and would, in due course step back and review the whole picture in order to discern patterns in the movements of the accounts. The defendants’ financial status 44.There is no evidence on the defendants’ wealth prior to 2004. However, during the Period Under Review, neither had any visible resource and legitimate source of income or profit to commensurate the size and frequency of funds that went through the accounts. D1’s financial status 45.D1’s tax returns reported no income from employment or profits from business. 46.D1 had no regular income on 1 September 2011. According to the Financial Statement (Form E) affirmed and filed for the divorce proceedings[16], he was a self-employed businessman and his business was ‘gambling’. He was living with a friend in Shenzhen. Their matrimonial property in Hong Kong, estimated to value at HKD25.7 million, was occupied by D2. The equity value of his other flat in Shatin was HKD4.4 million. He had about HKD170,000 cash in the bank. 47.D1 was detained in China since 28 October 2008 for his involvement in a criminal matter. On 13 November 2009, D1 was convicted by a Hubei Court of ‘Operating a Gambling Establishment’ for which he was sentenced to 3 years imprisonment suspended for 3 years and fined RMB80 million[17]. For the payment of the fine, he claimed that he was indebted to a friend in the sum of RMB 25 million. He declared his monthly expenses in September 2011 was HKD19,500. 48.He stated that he was a ‘Manager’ with a monthly salary of HKD200,000 in two Bank Account Opening Statements[18], but his Tax Returns did not reflect such income. 49.According to the IRD and CR records, D1 had the control and shareholdings in 3 registered companies, none of them was in business during the Period Under Review nor did it generate any income[19]. None of the above companies declared any profit during the Period Under Review[20]. D1’s properties 50.D1 had been the registered owner of 5 properties (2 of which jointly owned with D2) during the Period Under Review. There was no evidence of their equity values. Except for the Beverly Villas property (jointly owned by both defendants) which were sold on 31 August 2004 at a profit of HKD2,665,000.00, all others were sold at a loss[21]. 51.During Period under Review, D1’s only reported income was from rent of his properties in the total sum of HKD1,463,600.00, on average about HKD0.21 million a year[22]. 52.His Telebet Account with the Hong Kong Jockey Club showed that except for the year 2006 when his Dividends/Rebate exceeded bets by about HKD2 million, he had been losing money every year from 2007 to 2010[23]. D2’s financial status[24] 53.In the Form E D2 declared she was a housewife since 1986. She had 2 properties in Hong Kong. That her net asset, including her properties, stock and cash at hand added up to HKD27.1 million. Her total monthly expenses, including mortgage payments, children’s school fees and personal expenses, added up to HKD251,475.00[25]. 54.Likewise, she was stated to be a housewife in Account Opening documents for the accounts CHAN-AC07, CHAN-AC08, CHAN-AC11 and KENG-AC01. 55.She was one of the two shareholders of Cosmos Men Limited. The company had never been in business and never generated any profit (see above). 56.She had no taxable income between 2004-2006. Between 2007 and 2011, her only reported income was from letting of her two properties in the total sum of HKD1,335,000.00. Her average yearly income during the 7 years under review was less than HKD0.2 million[26]. 57.Of the other properties either in her own name or sold during the Period under Review, except for the Beverly Villas property (which she jointly owned with D1), none of the sales had returned any profit. 58.Her betting record during the Period Under Review had recorded every year loss for the whole period between 2006 and 2012[27]. D1’s arrest and response to the charges 59.D1 sought to account for the source of the funds deposited into his account when he was interviewed under caution. I would deal with this issue later. D2’s arrest and response to the charges 60.D2 was arrested on 5 May 2013 upon her return to Hong Kong from Macau. Under caution, D2 said “I don’t know anything”. She maintained her right to silence in the subsequent interviews. 61.After her arrest, police found personal belongings valued at about HKD72,000 in her residence, cash of HKD605,580, Japanese Yen 932,000, small quantities of other currencies, some watches and jewelry in her 2 safe deposit boxes. The Charges 62.I will deal with the each of the accounts reviewed by PW9. I have accepted her analysis and the accuracy of the data upon which it was based. I would only highlight the parts that are relevant to my findings. The charges against Wong Chok Kwan, D1 Charge 1: D1’s Bank of China Savings Account 030-561-1-032064-9 (“WONG AC-01”) from 2004-10-28 to 2011-12-31, for the sum of HKD64,151,378.84. 63.This sum represents the total amount paid into this account less interests, one returned cheque and bank transfers from the other accounts of D2 and KENG-AC01)[28]. 64.WONG AC-1 was opened on 5 August 1998 by D1. He was the sole signatory. As on 29 October 2004, its account balance was HKD2,693,201.47. Since then a total of HKD107,688,329.88 had been deposited and HKD110,381,531.35 withdrawn. By 31 December 2011, its account balance was reduced to zero. 65.17.5 % of the total deposits (HKD18.9 million) and 13.2% of the total withdrawals (HKD14.6 million) were by way of cash or cashier order. All cash transactions were by way of counter service. 66.On average, the deposits stayed in WONG AC-1 for 189.5 days before their withdrawal. 67.The most active years of deposits and withdrawals are 2005-2008, accounting for 87.5 % of the total deposits and 81.6% of the total withdrawal. The year 2009 saw a sharp decline in banking activities. 68.Deposits on Mondays and Thursdays account for 77% (HKD82.9 million) of the total deposit, whereas withdrawals on Mondays and Tuesdays account for 70.4% (HKD77.7 million) of the total deposits received. 69.Of the 508 days[29] in which there banking activities, there were 30 days in which there were both deposits and withdrawals at the respective total sums of HKD36,556,612.27 and HKD32,446,343.52. There were 31 days in which the daily deposit amount equal to or more than HKD1 million. There were 26 days in which the daily withdrawal amount equal to or more than HKD1 million. 70.The highest daily total deposit was on 13 March 2008 at HKD16 million from KENG AC-1. The record high total daily withdrawal was on 2 April 2007 at HKD10.05 million, mainly consisting of a bank transfer of HKD10 million to Jimei Vessel Co Ltd. 71.80.3% of the total deposits (HKD86.5 millions) was made in 32 transactions with each exceeding or equal to HKD1 million. Deposits 72.39% of the funds (HKD42 million) consisted of transfers from the six Subject Bank Accounts: namely WONG-AC02, WONG-AC04, CHAN-AC01, CHAN-AC06, CHAN-AC07, and KENG-AC01, of which HKD16 million came from KENG-AC01 in one single transaction on 13 March 2009. 73.10 Counterparties had been identified to have contributed to 31% of the deposits. Of which Fine China Trading Ltd had deposited HKD6 million in 2 transactions. Some of the contributors’ names would reappear in the other counters under review such as Lam Ching Tak, Kwok Po Shun, Ng Yuk Ching Alva. Withdrawals 74.4.5% of the funds (HKD5 million) went to CHAN-AC1. 75.Other top recipients include Jimei Vessel Co Ltd and Guai Lian Phuay (each receiving HKD10 million), the Jockey Club and Choi So Ching (each receiving HKD7 million) and Ma Kee Ching (HKD5.69 million). D1’s HSBC Integrated Accounts 411-028848-888 (WONG-AC02 and WONG-AC03) 76.These were sub accounts of the integrated account 411-028848-888. They are not tied specifically to any of the charges. The period under review was from 13 September 2004 until their closure on 28 February 2013. WONG–AC02 77.As on 13 September 2004, the account balance of WONG AC02 was HKD48,067.32. Since then a total of HKD15,646,522.62 had been deposited, of which HKD15,681,160.00 had been withdrawn. On 13 October 2011, the balance was HKD13,459.94. 78.All the money deposited in 2008 (HKD5.6 million) had been withdrawn in the same year, leaving a balance of HKD3,420.00. Again, the year 2009 saw a sharp decline of banking activities. 79.There were significant banking activities for WONG–AC02 in 2 days, both happened to be Mondays. 80.On 13 March 2006, there were 2 deposits by way of transfer respectively from WONG-AC04 and WONG-AC05 in the total sum of HKD 10 million. Within the same day the amount was withdrawn by way of 2 cashier order respectively to WONG-AC01 and one Sat Ieng Company. 81.On 31 March 2008, a deposit of HKD5,643,900.00 was transferred from WONG-AC04. On the same day, the same amount was withdrawn by way of two cashier orders and paid respectively to Ye Xiaoquan and 叶德海(Yip Tak Hoi). WONG–AC03 82.There was only one day with significant activities: on Thursday 13 September 2004, a sum of AUD500,000.00 was transferred from WONG-AC04 and was subsequently withdrawn by transfer to the company by the name of Crown Australia on the same day. Charge 2: D1’s HSBC Savings Account 078-3-026784 (“WONG AC-04”) from 2004-10-01 to 2011-10-15. The amount involved is HKD60,935,819.39. 83.This sum represents the total sum paid into the account minus interests accrued to the deposits. 84.As on 1 October 2004 its account balance was HKD55,581.42. Since then a total of HKD61,167,021.90 had been deposited and HKD61,170, 444.76 withdrawn. By 15 October 2011, all the remaining HKD52,158.56 had been withdrawn. 85.3% (HKD1.8 million) of the deposits in amounts ranging from HKD5 million to HKD0.8 million were in cash. 59.7% (HKD36.6 million) of the withdrawals were in cash or by way of cashier’s orders in amounts ranging from HKD0.2 million to 7 million. 86.On average the funds stayed in the account for 204.2 days before they were withdrawn. 87.The most active years of deposits are 2004-2006, 2008 and 2010, accounting for 92.3% of the total deposit. The years 2006 and 2008 had the highest yearly deposit at over HKD16 million. The most active years for withdrawals are the years 2005-2008 and 2010, accounting for 99.6% of the total withdrawal. The years 2005, 2006 and 2010 saw total annual withdrawal exceed HKD13 million. There is a perceptible decrease in both deposits and withdrawal in the year 2009. 88.70.3 % of the deposits were made on Monday and Tuesdays. 61.6 % of the withdrawals were made on Mondays and Fridays. 89.86.8% of the deposits were made in amounts of or exceeding HKD1 million. 90.96.7% of the total withdrawals (HKD59.1 million) was made in amounts equal to or exceeding HKD1 million. 91.Of the transfers the amount of which equal or exceeding HKD 1 million, a total of HKD37.8 million had been transferred to the 5 Subject Bank Accounts: namely WONG-AC01, WONG-AC02, WONG AC-03, WONG-ACO5, CHAN-AC01 and KENG-AC01, and two transactions totaling HKD5 million transferred to the Hong Kong Jockey Club by way of Cashier Orders on 19 May 2007. 92.The largest single deposit by way of transfer was HKD8 million on 5 February 2008, the remark on the voucher suggested that it was a transfer from the Jockey Club. The largest single withdrawal was a transfer of HKD9.2 million to WONG-AC02 on 13 March 2006. 93.Except for 3 instances of cash deposit via ATM at the total sum HKD60,000, all other cash deposits and withdrawals were conducted through counter service. Deposits 94.58.2% of the total deposits came from The Hong Kong Jockey Club at HKD35.6 million, and the nature of the deposits were unknown for want of documentary evidence. Two accounts, namely 613-070333-888 and 067-526236-888 contributed the total sum of HKD10.2 million to the deposits. Withdrawals 95.A total of HKD38.3 million (62.6% of the total withdrawals) was made to the other 6 Accounts under Review (WONG-AC01, AC02, AC03 and AC05, CHAN-AC01 and KENG-AC01). 96.Other recipients include one Yang Li (HKD6 million in one transaction) and The Hong Kong Jockey Club (HKD5 million in two transactions). Charge 3: D1’s HSBC Savings Account 030-1-286019 (“WONG AC-05”) from 2004-10-01 to 2011-10-15. The amount involved is HKD9,400,518.43. 97.This charge is against D1 in respect of the total sum of HKD9,400,518.43 being deposits paid into WONG-AC05 during the period between 1 October 2004 and 15 October 2011. The said sum represents the total sum paid into the account less bank interests, one returned cheque and bank transfer from WONG-AC04. 98.On 1 October 2004, the opening balance of WONG-AC05 was HKD98,674. Since then total of HKD18,295,401.00 had been deposited and HKD18,342,934.45 withdrawn from the account. On 15 October 2011 its final balance was down to HKD51,141.41. WONG AC-05 was closed on 26 February 2013. 99.On average, the deposits stayed in the account for 185.6 days before their withdrawal. 100.5% (HKD0.9 million) of the total deposits were by way of cash or Cashier’s Orders. 52.4% (HKD9.6 million) were withdrawn in the same manners in amounts ranging from HKD0.5 million to 5 million. 101.The most active years for deposit and withdrawal were 2009 and 2010, accounting for 86.5% (HKD13,999,774.28) of the total deposit and 78.8% (HKD14,465,603.25) of the total withdrawal. 102.The monthly deposits ranged from nil in most of the months to HKD9.9 million in December 2009. The monthly withdrawal ranged from nil in some of the months to HKD7.1 million in July 2010. 103.There were 6 days with total deposit amount equal to or more than HKD1 million. There were 3 days with total withdrawal to the like amount. 104.Deposits made on Wednesdays and Thursdays account for 67.3% (HKD12.3 million) of the total deposit. Withdrawal made on Thursdays and Wednesdays account for 79% (HKD14.5 million) of the total withdrawal. 105.66.1% of the deposits were made in sums of over or equal to HKD1 million. 70.9% of the withdrawals were made in similar sums. 106.4 deposits respectively from Hung Kam See Stephen, Lam Ching Tak, King Tak Enerprises Ltd account for 49.6% (HKD6.1 million) of the total deposit. 2 withdrawals by way of cashier order payable to Xiao Yuxin and Chan Wai Fong contributed to 56.7% (HKD7 million) of the total withdrawal. Deposits 107.13.7% (HKD2.5 million) of the deposits came from WONG AC04. The other major contributors include one deposit of 1.86 million from Lam Ching Tak, HKD1.24 million from King Tak Enterprises Group Ltd and HKD1 million each from Hung Kam See Stephen and Star Cruise Service Limited. 108.There was no tax record for the said Lam Ching Tak during this period. Withdrawals 109.Some of the withdrawals were obviously for personal purpose, for example, payments for credit card Auto toll and insurance, but they were of relatively insignificant amounts. 110.The followings are the major recipients of the withdrawals, accounting for 63.6 % of the total:-
The overall analysis of D1’s five accounts General 111.The total sum of HKD205.8 million had been paid into D1’s accounts. All the money deposited had been withdrawn within the Period Under Review. 112.10.5% (HKD21.6 million) of total deposits were by cash or cashier order in amount ranging from HKD1980 to HKD6 million. 113.The most active years were 2005 to 2009 during which the total annual deposits and withdrawals exceeded HKD20 million. The year 2006 had the highest total annual deposit of HKD55.5 million. 114.Monthly deposits ranged from nil to HKD27.2 million in March 2006. The monthly total withdrawals ranged from nil to HKD27.4 million in March 2006. 115.63% of the deposits and 64% of the withdrawals were made on Thursdays and Mondays. 116.80.9% (HKD166.6 million) of the total deposit amount and 86.1% (HKD179.6 million) of the total deposit was made to the amount equal to or more than HKD1 million. 117.A total of 15 cheques paid into D1’s account, with amounts ranging from HKD17,700 to HKD1 million, had the names of the payee left blank. 118.30.7% (HKD63.3 million) of the total deposits were funds which had been moved around the Bank Accounts Under Review. In some cases, an exact amount had been deposited and withdrawn on the same day[30]. Deposits 119.The main sources of the funds are:-
120.It is noted that Fine China Trading Ltd had also made deposits in the total sum of HKD3 million to CHAN-AC01 (ie subject of Charge 1). 121.This company had no declared income with IRD. 122.Likewise, Lam Ching Tak had also made deposits to CHAN-AC06 (Charge 6), and KENG-AC01 (Charge 12) at the total sum of HKD17,926,000. There was no record of any tax return filed under that name. Withdrawals 123.WONG-AC1, AC2, AC3 and AC5, CHAN-AC01 and KENG-AC01: 24% (HKD50.1 million). 124.Hong Kong Jockey Club: 5.8% (HKD12 million). 125.Guai Lian Phuay: 4.8% (HKD10 million). 126.Jimei Vessel Co Ltd: 4.8% (HKD10 million). Summary of D1’s inter-account transfer activities 127.Although each of the charges dealt with specifically with the amount of deposits made into a particular account less the inter account transfers, banking charges and other payments accounted for, an overview of the inter account transfers would illustrate how the accounts were interrelated. 128.In this case the accounts are inextricably intertwined; to view each account on its own would be missing the Nazca Lines-like big picture. The followings are the summary of the inter-account activities. Inter-account transfers amongst D1’s Own Accounts Deposits 129.WONG-AC01 received a total deposit of HKD11 million from WONG-AC02 (HKD6 million) and WONG-AC04 (HKD5 million). 130.WONG-AC02 received a total deposit of HKD15.6 million from WONG-AC04 (HKD14.8 million) and WONG-AC05 (HKD0.8 million). 131.WONG-AC03 received in one transaction received from WONG-AC04 a sum of HKD3 million (ie AUD500,000). 132.WONG-AC05 received deposit of HKD2.5 million from WONG-AC04. Withdrawals 133.HKD6 million was withdrawn from WONG-AC02 and paid into WONG-AC01. 134.The total sum of HKD20.8 million was withdrawn from WONG-AC04 to pay into the accounts of WONG-AC01 (5 million), WONG-AC02 (HKD14.8 million), WONG-AC03 (3 million/ AUD 500,000) and WONG-AC05 (2.5 million). Transfers to D2’s accounts/KENG-AC01 135.WONG-AC01 received a total deposit of HKD31.14 million from CHAN-AC01 (HKD6 million), CHAN-AC06 (HKD5 million), CHAN-AC07(HKD4.14 million) and KENG-AC01(HKD16 million). 136.The total sum of 1 million had been withdrawn from WONG-AC01 and paid into CHAN-AC01. The charges against Chan Wong Shuk Kwan, D2 Charge 4: D2’s Hang Seng Bank Savings Account 357-3-005554 (CHAN AC-01) from 2004-10-26 to 2011-10-27. The amount involved was HKD157,363,966.42. 137.This amount represents the total amount paid into the account less interests, a returned cheque and bank transfers from the other Accounts of Under Review[31]. 138.CHAN-AC01 was opened on 8 October 1990. As on 26 October 2004, its account balance was HKD4,268,539.19. Since then a total of HKD182,141,067.72 had been deposited into and HKD186,237,358.38 withdrawn from CHAN-AC01. 139.By October 2011, the last of the funds (HKD172,248.53) had been withdrawn. 140.On average, the funds were withdrawn 36 days after they were deposited. 141.20.2% (HKD36.9 million) of the total deposits with amount ranging from HKD5000 to HKD7 million. 19.2 % (HKD35.7 million) of the total withdrawals were by way of cash or Cashier’s Orders. 142.The most active years of deposits and withdrawals were 2005-2007, taking up 78% (HKD143,274,273.11) of the total deposit and 78.1% (HKD145,366,799.96) of the total withdrawal. 69.5 % (HKD126.5 million) of the deposit took place on Thursdays and Mondays. 82% (HKD152.7 million) of the withdrawal took place on Thursday and Monday. 143.The highest daily deposits were on 15 January 2005 and 16 November 2006, when deposits were received from WONG AC-04 by way of cashier order and a cash cheque from Low Thiam Herr both in the sum of HKD7 million. 144.There were 59 days in which the daily deposit amount equal to or more than HKD1 million. There were 61 days in which the daily withdrawal amount equal to or more than HKD1 million. 145.There were 63 withdrawals (HKD135.7 million) each of which amount equal to or more than HKD1 million. HKD18.5 million was paid to Hong Kong Jockey Club and HKD14.5 million was paid to Low Thiam Herr. Deposits 146.12.6% (HKD22.9 million) of the total deposits came from six Subject Bank Accounts (namely, WONG-AC01, AC04, CHAN-AC02, AC10, W&C-AC01 and KENG-AC01). 147.Other major contributors include:-
Withdrawals 148.5.5% (HKD10,219,000.00) of the deposits were withdrawn by 4 Subject Bank Accounts (WONG-AC01, CHAN-AC07, AC02 and W&C-AC01). 149.Other major recipients include:-
Charge 5: D2’s Hang Seng Bank Savings Account 265-230987-888 (CHAN AC-02) from 2004-10-02 to 2011-11-03, the amount involved is HKD11,228,238.75. 150.This sum represents total deposits less interests, dividends, time deposits and bank transfers from the other subject accounts under review[32]. 151.CHAN-AC02 was opened on 3 December 2001 as a sub-account of the integrated account 265-230987-888[33]. As on 2 October 2004, its account balance was HKD151,860.23. Since then a total of HKD15,076,321.82 had been deposited and HKD15,151,795.30 withdrawn. By November 2011, the last of the funds (HKD76,386.75) had been withdrawn. 152.On average, 30.5% (HKD4.6 million) of the deposits and 8.6% (HKD1.3 million) of the deposits were by way of cash or Cashier’s Orders. 153.On average, deposits stayed in CHAN-AC02 for 72.9 days before they were withdrawn. 154.The most active years were 2005-8, accounting for 84.1% (HKD12.7 million) of the total deposit and 82.7% (HKD12.5 million) of the total withdrawal. 155.62% (HKD5.4 million) and 26.9% (HKD4.1 million) of the total deposits were made on Monday and Tuesday. 156.A total of HKD8.9 million (58.5% of the total withdrawals) were paid towards 2 credit card expenses, out of which HKD1.96 million was paid to one Star Cruise Service Ltd; usually in more than one payment on the same day. Deposits 157.22% (HKD3.4 million) of the deposits came from D2’s other accounts under review, namely CHAN-AC01, AC03, AC04, AC05 and AC06. 158.40.1% (HKD6.048 million) came from Star Cruise Services Limited. 159.17.9 % (HKD2.7 million) was paid in cash. 160.5.3 % (HKD0.8 million) came from Central Harbour Ltd. Withdrawals 161.58.5% (HKD8.9 million) were credit card payments, of which HKD1.96 million were paid to Star Cruise Service Ltd, usually in more than 1 payment one the same day. 162.4% (HKD0.6 million) were paid out in cash. 163.3.3 % (HKD0.5 million) was paid to Central Harbour Limited. CHAN-AC03 Hang Seng HKD Current Account 164.This account is not tied specifically to any of the charges. 165.There were only two deposits as Bank Rates to this account in 2006 and 2009 respectively and in the total sum of HKD10,303.92. On 30 March 2011, the whole sum was transferred to CHAN-AC02 and its balance reduced to zero. CHAN-AC04 Hang Seng AUD Savings Account 166.This account is not tied specifically to any of the charges. 167.In all a total of AUD336,152.71 had been paid into CHAN-AC03 between 2004 and 2011. All but AUD1.72 had been withdrawn by 3 November 2011. The most active years are 2005-2008, taking up 91% (AUD306, 465.70) of the total deposit and the same percentage in withdrawal. There was a notable drop in both deposit and withdrawal in 2009. 168.The largest single withdrawal was on 14 May 2005, in the sum of AUD55,000 to Wong Chan Shuk Kwan (ie D2) to a bank account not under review. The last withdrawal was on 17 September 2010 by way of transfer to CHAN-AC02 in the sum of AUD29,029.34. 169.On average, the funds stayed in the account in about 45.8 days before their withdrawal. CHAN-AC05 Hang Seng USD Savings Account 170.This account is not tied specifically to any of the charges. 171.Between 2 October 2004 and 3 November 2011, a total sum of USD1,907,760.84 had been deposited into CHAN-A05 and nearly all money deposited had been withdrawn by November 2011. 172.2% (USD50,400) of the deposits and 5% of the withdrawals had been made by Cashier’s Orders. 173.52.9% (USD1 million) of total deposits had been received from Unknown Counterparties. 174.2.6% (USD50,000) had been paid to CHAN-AC02 in one transaction. Charge 6: D2’s Bank of China Savings Account 012-885-1-035974-5(CHAN AC-06) from 2004-11-08 to 2011-12-31. The amount involved is HKD81,197,061.46. 175.The above sum represents the total deposit minus the bank interests and interbank transfers from CHAN-AC07, AC09, AC10 and KENG-AC01. 176.D2 and her daughter Wong Pui Yee were the authorized signatories of CHAN-AC06. However, all the over-the-counter transactions had been signed by D2. 177.As on 8 November 2004, its account balance was HKD590,898.44. Since then a total of HKD107,683,517.33 had been paid into the account and HKD108,239,527.92 withdrawn. The account balance on 31 December 2011 was HKD34,887.85. 178.The average number of days the funds stayed in the account was 41.7 days. 179.2.4% (HKD2.5 million) of the deposits was received by cash or Cashier’s Orders in amounts ranging from HKD2,400 to HKD0.8 million. 51.5% (HKD55.7 million) was paid by cash or cashier order in amounts ranging from HKD1,000 to HKD8 million. 180.5.2% (HKD5.6 million) of the total withdrawals was for credit card settlement. 181.The years 2006-2008 saw the most action in terms of deposits and withdrawals, accounting for 85.5% (HKD92.1 million) and 85.4% (HK$92.4 million) respectively. Contributors 182.The Hong Kong Jockey Club: HKD48.2 million. 183.KENG-AC01 and CHAN-AC07, AC09 & AC10: HKD26.3 million. Recipients 184.The Hong Kong Jockey Club: HKD36 million. 185.Guai Lian Phuay: HKD11 million. 186.6 other Bank Accounts Under Review[34]: HKD9.4 million. 187.There were 5 bank transfers from one Leong Io Man totalling HKD910,000. The signatory on the bank vouchers appeared to be that of D2. Charge 7: D2’s Bank of China Savings Account 012-561-1-001281-8 (CHAN AC-07) from 2004-11-22 to 2011-12-31. The amount involved was HKD66,312,963.99. 188.The above sum represents the total deposits minus funds from premium deposits, securities transactions, time deposit, interests/dividend, equity linked deposit, loan repayment, returned remittance withdrawal and transfers from other Subject Accounts[35]. 189.CHAN-ACO7 was opened on 18 April 2002. On 8 November 2004, its account balance was HKD2,663,600.15. D2’s daughter Wong Pui Yee was also an authorized signatory. All but one withdrawal voucher for over-the-counter transactions had been signed by D2[36]. 190.Into this account a total of HKD150,749,716.83 had been deposited and HKD153,308,566. 23 withdrawn during the 7 years in question. The last of the balance of HKD104,760.75 had been withdrawn by December 2011. 191.16.3 % (HKD14.5 million) of the deposits was made in cash or Cashier’s Order ranging from HKD28,000 to HKD4 million). 10.8% (HKD16.6 million) of the withdrawal had been in the form of cash or Cashier’s Orders with amounts ranging from HKD1,000 to HKD5 million. 192.On average, the funds stayed in the account for 57.1 days before their withdrawal. 193.The active years for both deposit and withdrawal are 2006-2010, accounting for 92.5% (HKD139.4 million) of the total deposit and 90.9% (HKD108.4 million) of the total withdrawal. 194.The monthly deposits ranged from nil to HKD18 million in December 2008. Likewise the monthly withdrawals ranged from nil to HKD13.2 million in December 2008. 195.The highest deposit was from KENG-AC01 on 6 June 2008 by bank transfer in the sum of HKD5 million with D2 signing the bank voucher. The same sum was withdrawn on the same day by Cashier Order to The Hong Kong Jockey Club. 196.The highest daily withdrawal was on 20 August 2010 at a total of HKD6.5 million to the following parties: WONG-AC01 (HKD3 million), Securities Transaction (HKD1 million), D2 and her sister Chan Sok Keng (HKD0.5 million). 197.There were 59 days with total daily deposit of amount equal to or more than HKD1 million. There were 57 days with total daily withdrawal amount equal to or more than HKD1 million. 198.56.6 % (HKD85.3 million) of the deposits were made on Thursdays and Mondays. 54% (HKD78.2 million) of the withdrawal were made on Thursdays and Mondays. Deposits 199.Lamtex Securities Ltd: HKD32.3 million (21.5%). 200.Chao Weng: HKD3 million (2 %). 201.Zhou Zhihe: HKD2 million (1.3 %). 202.Leung Io Man: HKD1.8 million (1.2 %). 203.Star Cruise Services Limited: HKD1.3 million (0.8 %). Withdrawals 204.Lamtex Securities: HKD25.8 million (16.8%). 205.Hong Kong Jockey Club: HKD6.8 million (4.4%). 206.Lam Kam Tong: HKD4.7 million (3.1%). 207.Credit Card Payment: HKD3 million (2%). D2’s Bank of China Current Account 012-874-0-016600-4(CHAN-AC08) 208.The captioned account is not tied specifically to any of the charges. It was opened under D2’s name on 17 January 2011. The Account was closed on 31 December 2011. 209.A total of HKD496,320.76 had been deposited and withdrawn from this account within the period. The funds stayed in the account for an average of 6.2 days before withdrawal. 210.Although D2’s daughter was named as an additional signatory, all withdrawals had been done by D2. 211.60% (HKD0.3 million) of the deposits had been made in cash. 212.13.8 % of the total deposits were transfers from the Subject Bank Accounts of CHAN-AC06, AC07 and AC09. 213.19.9% of the deposits were transferred from the account under the joint name of D2 and Chan Sok Keng, an account not under review. Charge 8: D2’s Bank of China Savings Account 026-710-1-031675-8 (CHAN-AC09) from 2004-11-02 to 2011-12-31. The amount involved was HKD3,114,948.56. 214.The sum in the charge represents total deposits less transfer from KENG-A C01, interests, returned deposits and rent payment of HKD1,256,343.50. 215.CHAN-AC09 was opened on 19 June 1998 with the China and South Sea Bank before it amalgamated with Bank of China. D2 was the sole signatory but her daughter Wong Pui Yee was added as a signatory on 24 March 2009. None of the available bank vouchers for the over-the-counter transactions was signed by Wong Pui Yee. 216.As on 2 November 2004 its balance was HKD225,030.87. Since then a total of HKD6,367,200.37 had been paid into CHAN-AC09 and HKD6,577,432 withdrawn. By December 2011, the last of the HKD14,799.24 had been withdrawn. 217.About 7.3% (HKD0.46 million) of the deposits was in cash, as was 38.2% (HKD2.5 million) of the withdrawal. On 29 January 2009, there was one single transaction of withdrawal of 1 million in cash. 29% (HKD1.9 million) of the total withdrawal was for credit card payment. 218.On average, the deposits stayed in the account for about 256.4 days before they were withdrawn. 219.The most active years for deposit were 2006-2009, accounting for 83.5% (HKD5.3 million) of the total deposit. 66.7% (HKD4.4 million) of the total withdrawals took place in the years 2007-2009. 220.51% (HKD3.2 million) of the deposits took place on Thursday and Monday. Withdrawals took place mainly on Mondays (HKD1.5 million), Wednesdays (HKD1.5 million) and Thursdays (HKD2.8 million), taking up 86.6% of the total withdrawal. There was no withdrawal on Tuesdays. Deposits 221.KENG-AC01 transferred 30.6% (HKD1.9 million)of the total deposit. 222.Star Cruise Service Ltd: HKD1.9 million (30%). 223.Central Harbour Ltd: HKD0.22million (3.5%). 224.Ng Wai Chi: HKD0.13 million (2%). Withdrawals 225.CHAN-AC06, AC07 and AC08: HKD0.68 million (10.3%). 226.Xin Jia Trading Company: HKD 0.9 million (29%). 227.Massmutual Asia Limited: HKD0.45 million (6.8%). Charge 9: D2’s HSBC Savings Account 080-0-065575 (“CHAN AC-10”) from 2004-10-01 to 2005-07-18. The amount involved is HKD12,302,500.00 228.The sum represents the total deposits into CHAN-AC10 during the period in question minus bank interests. 229.CHAN-AC10 was opened by D2 on 12th June 1998. She was the sole signatory. On 1 October 2004, the account balance was HKD362,190.89. Since then a total of HKD12,313,623.16 had been deposited into the account and HKD12,675,814.05 had been withdrawn. By the time the account was closed on 18th July 2005, the last of the deposits (ie HKD175,699.05) was withdrawn in cash. 230.A total of HKD12.3 million had been transferred from CHAN-AC01. 76.3% (HKD9.7 million) of the withdrawals had been conducted by cash or cashier order. 23.7 % (HKD3 million) had been by way of bank transfer. 231.On average, the funds stayed in the account for 63.5 days before their withdrawal. 232.The monthly total deposits ranged from HKD20,250 to 6.3 million in February 2005. 233.The monthly total withdrawals ranged from nil to HKD7 million in July 2005. 234.There were 3 deposits by HK Jockey Club that were withdrawn by other counterparties within a short time:-
235.82.4 % (HKD10.1 million) of the deposits had been made in Tuesdays and Fridays. All withdrawals were conducted on Monday or Thursdays. Deposits 236.93% (HKD12.3 million) of the deposits was transferred from The Hong Kong Jockey Club in 5 transactions. Withdrawals 237.The followings are the major recipients to the funds:-
Charge 10: D2’s Public Bank Savings Account 0725-162988-400 (“CHAN AC-11”) from 2005-10-07 to 2011-10-31. The amount involved is HKD4,832,259.79 238.The sum represents the total deposits paid into this account during the period in question less interests and fixed deposit. 239.The account was opened by D2 on 7 October 2005. She was the sole signatory. Since then a total of HKD11,597,958.06 had been deposited into the account, out of which HKD11,553,170.80 had been withdrawn. Nearly all of the remainder of HKD44,797.26 had been withdrawn by October 2011. 240.61.2% (HKD7.1 million) of the total deposit had been conducted by cash or cashier order. 19.5% (HKD2.2 million) of the total withdrawal was carried out in the same manner. 241.On average, the funds stayed in the account for 208.8 days before their withdrawal. 242.The most active years for deposits were 2005-2009, accounting for 94.6% (HKD11 million) of the total. The years 2007-2009 account for 86.3% (HKD10 million) of the total withdrawal. 243.Of the 125 days in which there were banking activities, there were 7 days in which there were deposits (HKD4.9 million) and withdrawals (HKD3.5 million). There were 5 days in which the daily deposit amount equal to or more than HKD1 million. There were 4 days in which the daily withdrawals to the like amount. 244.70.8% (HKD8.2 million) of the deposits were made on Monday and Wednesday combined. 65.3% of the withdrawals were conducted on Tuesday and Thursday. Deposits 245.21.7% (HKD2.5 million) of the funds came from CHAN-AC06, AC07 and W&C-A01. 246.13.8% (HKD1.6 million) was deposited in cash. 247.25.9% (HKD3 million) was from 2 unknown counterparties. Withdrawals 248.48% (HKD5.6 million) were transferred to W&C-AC01 and CHAN-AC07. 249.10.8% (HKD1.6 million) were withdrawn in cash. Charge 12: Wong Shuk Keng’s Bank of China Savings Account 012-922-1-004902-0 (“KENG-AC01”) from 2006-06-20 to 2009-01-29. The amount involved is HKD282,778,215.13. 250.The account was opened on 20 June 2006 under the name of Chan Shuk Keng, the elder sister to D2. The prosecution contended that D2 had control of the account and was instrumental in dealing with the funds therein during the Period Under Review. 251.In Account Opening Form Chan Shuk Keng was stated to be a permanent resident of Macau. Her business was stated to be ‘cake shop’. Her telephone number had a prefix of Macanese regional code. There was no record of her address. Apart from the fact that the account was under her name, there was no evidence that she had paid any part in the management of the account. 252.D2 was the authorized signatory to the account. She did provide her address[37]. She was the only Hong Kong contact in the bank documents. D2 had also signed on all bank vouchers of the over-the-counter transactions. 253.I have no doubt that D2 had control of the account and had been instrumental for the movements of the funds therein. 254.This sum represents the total amount of deposits made during the period in question less interbank transfers from the Account Under Review (CHAN-AC07 and WONG-AC04), interests and error correction. 255.During the period in question, a total of HKD296,502,475.43 had passed through KENG-AC01. It balance was reduced to zero when the account was closed on 29 January 2009. 256.On average, the funds stayed in the account for 25.6 days before they were withdrawn. 95% of the total annual deposits were withdrawn in the same year. 257.6.5% (HKD139.5 million) of the total deposits were conducted in cash or cashier order which methods also account for 17.9% (HKD53.1 million) of the total withdrawal 258.The most active years for both deposit and withdrawals had been 2006-02-08, accounting for 99.9% (HKD296.4 million) of the deposit and 99.9% (HKD295.8 million) of the withdrawals. 259.Of the 293 days in which there were banking activities, there were 72 days in which both deposits (HKD122.5 million) and withdrawals (HKD191.4 million) took place. 260.Mondays and Thursdays combined account for 61.3% (HKD181.8 million) of the total deposits and 80.2% of the withdrawals (HKD237.8 million). 261.68.1 % (HKD202 million) of total deposits was made in 89 transactions, with each transaction equal or more than 1 million. Deposits 262.2 of the Subject Bank Accounts (CHAN-AC01, WONG-AC04) each made one deposit adding up to a total of HKD7.9 million (2.7%). 263.Xin Jia Trading Company: HKD16.4 million (4.4%). 264.Zhou Zhihe: HKD12.5 million (4.2 %). 265.Choi So Ching: HKD12.3 million (4.1%). 266.Lam Ching Tak: HKD12 million (4.1 %). Withdrawals 267.Accounts Under Review (CHAN-AC01,AC06, AC07, AC09 and WONG-AC01): 50.7 million (17.1 %). 268.Hong Kong Jockey Club: HKD44 million (14.8%). 269.Guai Lian Phuay: HKD27.3 million (9.2%). 270.Xin Jia Trading Company: HKD15.5 million (5.2%). 271.Zhou Zhihe: HKD9.2 million (3.1 %). 272.Choi So Ching: HKD6 million (2 %). Charge against D1 and D2 Charge 11: Current Account in the joint name of D1 and D2 with the Public Bank 0725-158395-001 (“W&C AC-01”) between 2004-05-08 to 2011-10-31. The amount involved is HKD13,725,331.76. 273.The sum represents the total deposits paid into the W&C-AC01 less fixed deposit, rebate and interbank transfers (HKD4.5 million) from CHAN-AC01, AC06, AC07 and WONG-AC01. 274.The account was opened on 8 May 2004 and. Since then a total of HKD21,311,403.69 had been deposited into the account and nearly the same amount had been withdrawn. The closing balance on 31 October 2011 was HKD0.33. 275.Both defendants were signatories to the account. Either one would suffice. On the withdrawal documents, both had on different occasions, signed to authorize withdrawal of funds from the account, although the majority was signed by D2. 276.46.1% (HKD9.8 million) of the deposits had been made by cash or cashier order in the amount ranging from HKD0.3 million to HKD2.3 million. 277.On average, the funds stayed in the account for 15.6 days before they were withdrawn. 278.The most active years for both deposits and withdrawals were 2004-2006, the former accounting for 67.2% (HKD14.3 million) of the deposits and the latter 65.5% (HKD13.9 million) of the total withdrawal. 279.Of the 376 days with banking activities, there were 22 days in which there were both deposits (HKD6.1 million) and withdrawals (HKD2.8 million). 280.60.4% (HKD12.9 million) of the total deposits were made on Tuesdays and Thursdays combined. The combined withdrawals for Mondays and Wednesdays were 64.3% (HKD13.7 million). 281.There were 23 withdrawals by cheques (0.9 million) with the cheque payee left blank. Deposits 282.The percentages calculated below include all deposits otherwise excluded from the sum stated in the charge. 283.From CHAN-AC01, AC06, AC07 and AC11: 21.1% (HKD4.5 million). 284.Cash Deposits: 25.2 % (HKD5.4 million). 285.From D1, D2[38] and the joint account[39]: 3.3% (HKD2.3 million). Recipients 286.23.6 % (HKD5 million) of the withdrawals were made to CHAN-AC01 and AC11. 287.14.1 % (HKD3 million) in one cheque withdrawal to a person surnamed Leung. 288.There were also payments of a regular and personal nature such as credit card payment, loan repayment, management fees to various management companies, insurance and interior design company. D2’s inter account activities 289.For reasons already stated above, to look at each account for the particular charge in isolation would be missing the patterns that appear in the general picture. Although the moneys paid into the D2’s accounts via inter account transfer from the other Accounts Under Review do not form part of the charges, the activities are relevant as part of the circumstances which I have to consider in order to determine if D2 had reasonable grounds to believe they were proceeds of indictable offence. CHAN-AC01 290.A total of HKD3.92 million had been transferred out of CHAN-01 to deposit into CHAN-02 (HKD0.92 million) and CHAN-07 (HKD3 million). 291.A total of HKD2.8 million had been deposited into CHAN-01 from CHAN-AC02 (HKD0.5 million) and CHAN-AC10 (HKD2 million). CHAN-AC02 292.A total of HKD1.5 million had been transferred out of CHAN-02 to deposit into CHAN-AC-01 (HKD0.5 million) and CHAN-AC05 (HKD1 million/UDS 129,612). 293.The total sum of HKD3.4 million had been paid into CHAN-AC02 from the following accounts:-
CHAN-AC03 294.A sum of HKD0.01 million had been transferred from CHAN-AC03 and paid into CHAN-AC02. CHAN-AC04 295.The sum of AUD20,029 (HKD0.21 million) had been withdrawn from CHAN-AC04 and deposited into CHAN-AC02. CHAN-AC05 296.The sum of USD50,000 (HKD0.39 million) had been withdrawn from CHAN-AC05 and deposited to CHAN-AC02. 297.The sum of USD129,612.49 (HKD 1 million) had been paid into CHAN-AC05 from CHAN-AC02. CHAN-AC06 298.The total sum of HKD4.24 million had been withdrawn from CHAN-AC06 and paid into the following accounts:-
299.The total sum of HKD26.38 million had been deposited into CHAN-AC06 from the following accounts:-
CHAN-AC07 300.The total sum of HKD6.73 million had been withdrawn from CHAN-AC07 and paid into the following accounts:-
301.A total sum of HKD12.8 million had been deposited into CHAN-AC07 from the following accounts:-
CHAN-AC08 302.The total sum of HKD68,703 had been deposited into CHAN-AC08 from the following accounts:-
CHAN-AC09 303.The total sum of HKD680,700 had been withdrawn from CHAN-AC09 and paid into the following accounts:-
304.The sum of HKD1.95 million had been deposited into CHAN-AC09 from KENG-AC01. CHAN-AC10 305.The total sum of HKD2.7 million had been withdrawn from CHAN-AC10 and paid into CHAN-AC01 (HKD2.3 million) and CHAN-AC6 (HKD0.4 million) respectively. CHAN-AC11 306.A total sum of HKD2.95 million had been withdrawn from CHAN-AC11 and paid into the W&C AC-01. 307.The total sum of HKD2.52 million had been paid into CHAN-AC11 from the following accounts:-
Discussions 308.Being wealthy is not a crime. There is no general duty on the part of a Hong Kong citizen to account for his or her wealth. The mere fact that large sums of money had been deposited in one’s account can be open to innocent explanations. Therefore, the fact that large sums of money appeared in one’s account per se is insufficient to prove that they were from a dubious source. 309.It is beyond all reasonable doubt that the defendants had the control of the accounts named in the charges. Nor is there any doubt that they had dealt with the funds paid into the same. 310.In the present case the issue is whether the defendants had reasonable grounds to believe that they were proceeds of an indictable offence when they dealt with them. The standard is objective, but this court could also take into account of the personal beliefs, perceptions and prejudices of the individual in question. Although there is no direct evidence relating to state of knowledge, belief, perception and prejudices of either defendant, the court will interpret the facts and make inferences to their best advantage. 311.In the absence of direct evidence from the horse’s mouth, this court would have to make findings from studying the size, the frequency, the pattern and the duration of the funds movements in the respective accounts under the defendants’ names. 312.Both the undersigned and the learned prosecuting counsel are conscious of the position that where the defence called no evidence, rarely would the prosecution be called upon to make closing submissions. In the present case although both defendants did not give evidence nor call any other evidence, I felt it necessary to invite the prosecution to adopt the unusual course of rendering assistance by making written submissions. This he did in his usual thorough manner. I note they were in substance summaries and highlights of the evidence adduced during the trial and were an extension of his written opening and are tremendously helpful. 313.Although each charge must be considered separately, yet not unlike appreciating the patterns formed by the Nazca Lines, one must take a step back to view the overall picture in order to make sense of the whole matrix of facts. The Subject Bank Accounts all share common traits in the size of the funds, the speed and frequency of their movements. The summary of the account activities above speaks for itself: large, astronomical sums disproportionate to the visual means of the defendants moved in and out of the accounts within the Period Under Review. The sources of the moneys were either unknown (in the form of cash or cashier’s orders) or from divers parties which seemed to have no relationship with the defendants. In some instances, for funds of these sizes, they were handled in a manner that seemed suspiciously cavalier in that large sums were deposited in cash and withdrawn by cheques without the name of the payee penned in. 314.In my view the fact that D1 had been arrested, detained and convicted of a criminal offence in the Mainland is only part of the background to be considered. I do not find this fact particularly pertinent for assessing the issue to be determined: it only explained why at some point the activities in the accounts ceased but is not indicative the funds he had dealt with that he knew the funds he dealt with had been proceeds of an indicatable offence. 315.There also appeared to be days of the weeks in which the movement of funds was particularly frequent. That fact alone is neither here nor there, in the absence of other evidence to prove or for this court to infer that the nature of the funds or the defendants’ knowledge to the same. The charges against D1 (Charges 1-3) 316.D1 was not present in his trial. Obviously he could not give evidence or call evidence on his knowledge or belief when he dealt with the deposits in question. Yet the presumption of innocence is intact and the prosecution’s burden to prove the case is in no way diminished by the defendant’s absence. 317.D1 was definitely not a businessman in the conventional sense of the word. Nor was he a paid employee. None of his declared properties could yield the kind of funds that appeared in his accounts, nor could his gambling activitiesyield the size of funds that appeared and withdrawn in his account with such frequency and regularity. 318.Even if D1 was a professional gambler (as he claimed he was) with the widest lucky streak, it was inconsistent with the fact that various entities (either individuals or companies) had paid large sums of money into his account. His rather lack luster betting record with the Hong Kong Jockey Club seemed also to be inconsistent with such contention. He explanations during the interview was a long and contradicting narrative lacking in essential details. Having viewed the interviews (held in the same night in two sessions), I am convinced beyond any doubt that D1 was making things up in a failed attempt to explain the source of the funds in his accounts. I am unable to find from anything he told the police to suggest or infer that he had reason to believe that he was dealing in proceeds from a legitimate source. I disregard what he said during the interview. 319.There is no evidence on how the contributors and beneficiaries were related to D1. Some of the beneficiaries had no tax records in Hong Kong (see above). 320.It is undisputable that D1’s financial conditions could not have possibly covered the size of the funds that moved in and out of his accounts: the total amounts involved in the 3 charges were in the respective sums of HKD64 million, HKD61 million and HKD9 million.
321.Looking at the whole of the evidence objectively, any reasonable person in D1’s position would inevitably wonder who these individuals might be and why they would pay such large sums into his accounts. This coupled with the fact that the substantial parts of funds were taken out and paid to various individuals bearing seemingly no relationship to D1, the only logical and inevitable conclusion would be that these were but means to hide the source and/or destination of the funds, and it was necessary because they were funds of dubious origin, paid in and taken out the account for the purpose of hiding the origins of the funds. 322.In my view, anyone in D1’s position would have, if not an inkling that he was instrumental in a money laundering exercise, at least reasonable grounds to believe that the manner of dealing with the funds were but ways to hide or obscure their provenance; and the only logical reason for such elaborate exercise could only be the funds were proceeds of indictable offence. 323.For reasons stated above, I found D1 guilty of Charges 1, 2 and 3. Assessment of D2’s case 324.Although the defendants’ daughter, Wong Pui Yee was also named an authorized signatory in CHAN-AC06, AC07 and AC09 (to which Charges 6, 7 and 8 were respectively tied), there was but one instance that her signature appeared on the withdrawal vouchers and only to effect a withdrawal to an account under D2’s name. All other vouchers were under D2’s signatures. I am satisfied that D2 had the sole control of these accounts. 325.Likewise, for the reasons already stated above, I found that D2 had access and control to the KENG-AC01 (ie Charge 12) and she did deal with the funds deposited therein. 326.It is an undisputed fact that D2 dealt with the funds. The question is whether she had reasonable grounds to believe if the funds were proceeds of an indictable offence. 327.Under caution D2 pleaded ignorance. She chose to maintain her right to silence when the police attempted to interview her. She elected not to give evidence nor to adduce any evidence in her defence. No adverse inference can be drawn against her for her choice. It does not affect the burden of the prosecution to prove the case. It only means I do not have any direct evidence as to her mens rea, ie her state of mind, personal beliefs and prejudices when assessing that whether at the time she dealt with the property, she had reasonable grounds to believe that they were proceeds of an indictable offence. 328.Counsel for the defence submitted that the prosecution failed to prove mens rea for the offences and put forward a number of possible scenarios in which D2 could believe that the funds she dealt with were funds of legitimate sources, namely,
329.Although the husband and wife relationship is an intimate one, the court would never assume that a wife knew everything about her husband. She could be blissfully unaware of what her husband was up to and simply accept what her husband told her about the source of the funds. Such knowledge and believe could be relevant in assessing whether she had the reasonable grounds to believe that the property was proceeds of indictable offence. Evidence relating to her state of knowledge, evaluation and belief could be relevant to assess if such reasonable grounds existed. There had been no evidence from which this court could use to make findings in this direction. 330.What D1 said under caution could only be admissible if it contained admissions against self-interest and only against D1 himself. As has been pointed out earlier, I found his explanations vague and self-contradictory and I have rejected the same. So D1’s explanations, such as they were, could not lend any assistance to my findings in the charges against D2. 331.The undisputed background (under according to D2’s own admission and other evidence) that D2 was a housewife since 1986. There is no evidence on the state of her finance prior to 2004. She reported no income to the Inland Revenue Department. She had a number of properties under her name, none of them could come up with the kind of profits or revenue that commensurate with the funds that flowed in and out of the accounts under her control: from the Land Registry Record, since 1994 she had started investing in property, yet except for the Beverly Villa property jointly owned by both defendants, all other properties sold during the Period Under Review failed to yield any profit[40]. Her betting record with the Hong Kong Jockey Club for the years 2006 to 2011 had been constantly on the red[41]. Her only visible source of income was from letting of her properties from 2008-2011, cumulating in the total rental income of HKD1.3 million. 332.There was also documentary evidence that she went to Macau on a regular basis and she had an account with the Hong Kong Jockey Club in which large amounts of money passed through. There was no evidence relating to her activities in Macau or her other gambling activities (if any) and how they were related to the deposits that appeared in her accounts. 333.Yet a total of HKD619 million passed through her 7 accounts within the Period Under Review. Such sums, disproportionate to her visible means and wealth had passed through those accounts during the Period Under Review. They were all withdrawn at the end of the Period Under Review. My assessments and comments in relation to D1’s accounts and financial status are equally valid in D2’s case. 334.It had also been suggested that D2, like her husband, D1 was a gambler. That funds had been moved in and out of the Hong Kong Jockey Club and other gambling related companies were used to support such suggestions. Yet there is no evidence to substantiate such suggestion. The only thing however I could take judicial notice of is the fact that the Hong Kong Jockey Club does offer opportunity to bet on horse races. It is a fact that large sums had been moved in and out of D2’s account with the Hong Kong Jockey Club as the counter party. I found this could not be indication that the funds paid into D2’s account were her winnings. In fact her track record with the Hong Kong Jockey Club rendered such suggestion untenable. 335.There are features common to all the accounts in question:-
336.There is no evidence to suggest the purpose of the inter account transfers amongst the Bank Accounts Under Review, however, such transfers made no commercial sense. The only conclusion one could make of the same is that they were deliberate for purpose this court is unable to guess. It does show, however, that the holder of the account had been aware of the funds in her bank accounts. She could not plead ignorance to such transfers. 337.In particular, the followings are but some of the features in her accounts which would lend support to my conclusion that she had reasons to suspect that the funds movements were but ways to cover their tracks and she had reason to suspect that they were proceeds of indictable offence. I. CHAN-AC01 (Charge 4) 338.There were 59 days in which the daily deposit amount equal to or more than 1 million and 61 days in which the daily withdrawal equal to or more than 1 million. 339.The same individual Low Thiam Herr deposited HKD20 million into and withdrew HKD18.5 million from the account. II. CHAN-AC02 (Charge 5) 340.30.5 % of the deposit (HKD4.6 million) was by way of cash or cashier’s order. 341.The same company Star Cruise Services Limited were both the source and recipient of the funds in the respective sums of HKD6 million and HKD8.9 million. III. CHAN-AC06 (Charge 6) 342.The Hong Kong Jockey Club deposited HKD48.2 million into and withdrew HKD36 million from this account. 343.HKD26.3 million came from KENG-AC01, CHAN-AC07, CHAN-09 and CHAN-AC10.HKD9.4 million was withdrawn by WONG-AC01, CHAN-AC02, CHAN-AC07, CHAN-AC08, CHAN-AC11, W&C-AC01. 344.An individual GUAI LIAN PHUAY alone withdrew HKD11 million. 345.5 bank transfers from LEONG IO MAN at 0.9 million with D2’s signatures on the bank vouchers. IV. CHAN-AC07 (Charge 7) 346.On 6 June 2009, the sum of HKD5 million was transferred from KENG-AC01 with the voucher signed by D2. The same sum was withdrawn on the same day by cashier order to The Hong Kong Jockey Club. 347.One Lamtex Securities Ltd deposited HKD32.3 million to and withdrew HKD25.8 million from the account. 348.There were 59 days with total daily deposit of amount equal to or more than 1 million. 57 days with total daily withdrawal of amount equal to or more than 1 minion. V. CHAN-AC09 (Charge 8) 349.30.6 % of the funds were transferred from KENG-AC01. VI. CHAN-AC10 (Charge 9) 350.3 deposits by Hong Kong Jockey Club in the total sum of 12.1 million were withdrawn within a short time (see above). VII. CHAN-AC11 (Charge 10) 351.61.2% (HKD7.1 million) of the deposits were in cash or cashier’s order. 352.HKD2.5 million of the funds came from CHAN-AC06, AC07 and W&C-AC01. HKD5.6 million had been transferred to W&C-A01 and CHAN-AC07 VIII. KENG-AC01 (Charge 12) 353.95% of the total annual deposits were withdrawn within the same year. 354.Xin Jia Trading Company deposited HKD16.4 million into and withdrew HKD15.5 million from the account. 355.Zhou Zhihe deposited HKD12.5 million into and withdrew 9.2 million from the account. 356.The above were such samples of usual features of the accounts linked to the charges against D2. For a housewife whose only visible source of income was from letting her properties and perhaps household expenses from her husband, any reasonable person in her position would harbor suspicious over the source of the funds. I found therefore she had reasonable grounds to believe that the proceeds she dealt with were from indictable offences. From the way the funds were being moved, the large number of cash involved, and the speed in which funds were withdrawn after their deposit, I have no doubt at all that she was aware that they were means to hide the source of the funds. 357.I found her guilty as charged. 11th Charge (W&C-AC01) 358.Both defendants had the control of this current account and both did control the movements of the funds by signing to withdraw funds therefrom. 359.During the Period Under Review, about HKD21 million had passed this account. The same pattern can be deciphered in the movement of funds: on average the deposits stayed in the account for 15.6 days. HKD4.5 million of the deposit came from CHAN-AC01, AC06, AC07 and AC11. HKD5.4 million was in the form of cash. Whereas HKD5 million of the withdrawals were made to CHAN-AC01 and C11. There was one cheque of HKD3 million to a person surnamed Leung. There were 23 withdrawals (at a total of HKD0.9 million) by cheques with no payee’s name written on. 360.As in the other cases, this movement of funds made no commercial sense. I found that anyone in the position of the defendant would have reasonable grounds to believe that the maneuver was an attempt to cover the tracks of the funds and both would have reasonable ground to believe that the funds were proceeds of indictable offence. 361.I found both defendants guilty of the charge.
[1] These are rough figures arrived at by adding all deposits to the respective accounts under the names of the defendants for years between 2004 and 2007. They include all bank interests, interbank transfers from the Bank Accounts Under Review, in one case, rent payments and deposits which had been reversed. Only 12 of these bank accounts (including the joint account and KENG-AC1) form the subject matter of charges in these proceedings. [2] For example, the deposit of HKD1,256,343.50 into CHAN-AC09 is identified as rental income and deducted from the total deposit which formed the subject of Charge 9. [3] [2015] EWCA 2238 [4] See HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778 and HKSAR and Yeung Ka Sing, Carson FACC No 5 & 6 of 2015 and HKSAR v Salim, Majed FACC No 1 of 2015 (Heard Together), (2016) 19 HKCFAR 279. [5] HKSAR v Wong Ping Shui & Anor (2001) 4 HKCFAR 29. [6] HKSAR v Lau Sui Hing, unreported, CACC 111/2008. [7] The test was formulated by Litton PJ in Seng Yuet Fong v HKSAR [1999] 2HKC 833 and adopted by CFA in HKSAR v Pang Hung Fai, supra, at paras 52-70 of the judgment by Spigelman NPJ. [8] See Pang Hung Fai, supra, at para 85. [9] Some were in duplications and the prosecution also decided not to produce some of the documents during the trial. They were not taken out of the trial bundle in order not to create confusion. [10] For example, P76, Bundle 17 @ 6683 refers to Exhibit 76, appearing in Bundle No 17 at page 6683. [11] See P94. [12] The full particulars of her qualification and training is set out in P76, Bundle 17 @ 6657. [13] Bundles 17-18. [14] PW9 set out her Methodology at P3 of her report, see P76, Bundle 17 @ 6659. [15] For example, at P76, para 86.4, Bundle 17 @6708, she stated that some of the counterparties’ names did not seem to be retail shops for household purchases’, I had immediately indicated in open court that the statement was not within her expertise and I would disregard them. [16] P79 [17] P79, Bundle 20 @7342 & 7401 [18] HSBC Accounts 411-028838-888 (WONG-AC02, WONG-AC03) and 030-1-286019 (WONG-AC05). [19] Namely, 香港達興錶殼廠, Gold Standard (HK) Ltd and Cosmos Men Limited. See P76, Bundle 17 @ 6661 [20] P76, Bundle 17 @ 6712, Para. 89 [21] See Appendix 3 of P76, Bundle 17 @ 6877. [22] P76, Bundle 17 @ 6711, 6715. [23] See P108, Bundle 31 @ 13018. [24] See Admitted Facts P94. [25] P79, Bundle 20 @ 7404 [26] P76, Bundle 17 @ 6818 [27] See P78, Bundle 32. [28] See P76, Bundle 17 @ 6669. [29] The Period Under Review encompasses 2,621 days, see P76 Bundle 17 @ 6665. [30] See para. 94, P76, Bundle 17 @ 6713 [31] See P76, Bundle 17 @ 6669. [32] Namely, CHAN-AC01, CHAN-AC03-6; see P76, Bundle 17 @ 6733. [33] The others being CHAN-AC04 and CHAN-AC04 and CHAN-AC05, they are not linked specifically with any of the charges in the indictment. [34] Total Deposits from CHAN-AC01, AC06, AC09, AC11 and KENG-AC01 was 12.8 million. Total withdrawal to KENG-AC01, WONG-AC01, CHAN-AC06, AC08, AC11, W&C-AC01 and KENG-AC01 was 12 million. [35] Total Deposits from CHAN-AC01, AC06, AC09, AC11 and KENG-AC01 was 12.8 million. Total withdrawal to KENG-AC01, WONG-AC01, CHAN-AC06, AC08, AC11, W&C-AC01 and KENG-AC01 was 12 million. [36] On 2009-10-09, Wong Pui Yee signed on a withdrawal voucher for the sum HKD701,243.65 paid into an account (not a Bank Account Under Review) under the name of the D2, see P16, Bundle 18 @ 7136, TRN 3995. [37] See Banker’s Affirmation, P92, Bundle 28 @ 12070. [38] As explained by Ms Chan, there were instances when information on the counterparties could be missing from bank documents supplied to her. By cross-referencing the bank transactions, she confirmed that some of the transfers could be traced back to one of the Accounts Under Review. [39] Joint Account No 0725-158395-446 under the names of D1 and D2, not an Account Under Review. [40] See Appendix 3 of P76, Bundle 17 @ 6877. [41] See P78, Bundle 32 @ 13842. |
Cases cited in this judgment
Further hearings and rulings under DCCC 179/2017