HKSAR v. Wong Chok Kwan and Another

DCCC 179/2017

[2018] HKDC 327

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 179 OF 2017

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REASONS FOR SENTENCE

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1.These proceedings involved an indictment consisting of 12 offences, all of which under section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455, Laws of Hong Kong. After trial Mr Wong Chok Kwan (D1) had been convicted of three counts of “Dealing with property known or believed to represent proceeds of an indictable offence” (namely, Charges 1-3 of the indictment). His wife, Ms Wong Chan Shuk Kwan (D2) had been convicted of 8 counts of the same offence (namely Charges 4-10 and Charge 12).

2.In addition, D1 and D2 had been jointly charged with and, both convicted of one further count of the same offence (Charge 11).

3.The offences took place over a span of 7 years.  Except in the case of Charge 11, each of the charges was tied to a specific account either under the defendant’s name or, in the case of Charge 12, to which D2 had access and control.  As for Charge 11 in which the defendants were jointly charged, it was tied to an account under their joint names.

4.The subject of each charge was the deposits paid into a specific account during the period, less all inter-account transactions, interests and all other payments that could have an innocent explanation.

5.The sums involved are as follow:-

6.Since Charge 11 is a joint charge, each defendant is responsible for the amount laundered.  Therefore, over a period of 7 years, D1 had laundered a total of HK$148,213,048.42 and D2 had laundered a total sum of HK$632,855,485.86.

7.Their convictions after trial were in relation to their course of conduct over the 7 years in question.  That there were separate charges were obviously for technical reasons.  It would be superficial to deal with each count separately.  Accordingly, I would adopt a global approach in sentencing.

Principle for sentencing

8.Money laundering is a very serious and damaging offence: a fact reflected by the maximum penalties of a HK$5 million fine and 14 years’ imprisonment. 

9.It is clear that the sentencing principle for such offences is one of general deterrence in order to:-

“strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities …… If money laundering offences were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong’s reputation as a world class financial and banking centre”[1].

10.It is also accepted that all sentence orders in relation to similar offences are fact sensitive and it is not feasible to attempt to lay down sentencing guidelines for this type of offence[2]. To assess the severity of the crimes at hand the relevant considerations include the following factors:-

•  The nature of the offence that generated the laundered money;

•  The extent to which the offence assisted the crime or hindered its detection;

•  The degree of sophistication of the offence and/or the offender’s participation;

•  The length of time the offence lasted;

•  The benefit the offender derived from the offence;

•  The amount of the money involved;

•  The defendant’s knowledge of the nature of the underlying offence;

· The presence or otherwise of an international element in the commission of the offence[3].

11.For the present cases, I note the following factors, largely for want of evidence, which either derogate from the overall severity of the crime or at least indicate the absence of aggravating factor:-

(1) There is no evidence upon which this court could make a finding on what the predicate offence was.

(2) The absence of positive evidence of international elements: although the identity of the funds’ recipients did suggest that they were possibly not based in Hong Kong and that there were also suggestions the movements of funds were somehow related to gambling activities in Macau, in the absence of more solid evidence I find myself unable to make such inference or make such factual findings.

(3) The operation involved the use of bank accounts for the transfer of funds, the defendants’ roles are instrumental in effecting such transfers. The scheme, based on the available evidence, was not particularly sophisticated as far as the defendants were concerned.

(4) There is no direct evidence on the defendants’ knowledge of the predicate offence: although from the pattern, the frequency and the amount of the funds movement one can infer that they must have been aware that the purpose of the exercise was to conceal the source and the destination of the funds. This only goes to show the absence of aggravating factor[4].

(5) Although there were documentary evidence showing part of the funds deposited into the defendants’ accounts had been used for personal expenses such as mortgage payments and credit card bills, there is no evidence upon which this court could quantify the benefit the defendants received from the scheme with some degree of precision. In any event, even if the accused had not derived any financial benefit, this fact is not to be treated as a mitigating factor[5], as the sentence order should reflect the amount of money laundered rather the benefit accrued to the accused[6].

12.Therefore, the only solid evidence one can gauge the culpabilities of the both defendants are factors such as the degree their participation, the duration of the scheme and the amounts involved.  The bare fact is both defendants had been instrumental to the laundering of very substantial sums over a period of 7 years.  Whatever the predicate offence was, both defendants played an important part to render the proceeds generated from the same untraceable. 

13.Although there is no tariff for the offence, there is no lacking similar sentencing decisions by the Court of Appeal.  I found these decisions useful and relevant, not so much as a precedent or tariff, but as a gauge and reference for arriving at a sentence order consistent with previous decisions:-

14.In the case of Secretary of Justice v Wan Kwok Keung[7], the accused was found guilty on his own plea for laundering HK$14 million over a period of 7 years.  The predicate offence was illegal gambling committed through the accused’s account in a gambling web site.  The Secretary of Justice’s sought to review the original sentence order of 14 months.  The Court of Appeal accepted that both the money laundering and the predicate offences were not particularly serious but considered that the proper starting point should not be less than 4 years in view of the following factors, namely:-

(i) The offence took place within a span of 7 years,

(ii) The amount involved was HKD 14 million, and

(iii) The defendant was directly involved in the money laundering activities.

15.The case of HKSAR v Yeung Kin Chai (supra) involved one single transaction of simple transfer in the sum of HK$500,000 in 1996.  The Court of Appeal took the view that compared to other offences which involved larger sums of money, committed with more sophistication and over a longer period of time, the case at hand was less serious than most.  After taking into account of the inflation factor (as the sums would have been more substantial at the time of the commission as compared to the time of conviction), the Court of Appeal considered 30 months’ imprisonment an appropriate starting point. 

16.Similarly, the case of HKSAR v Javid Kamran[8] the court adopted 3 years’ imprisonment as starting point for one offence of laundering $1,190,264.

17.The accused in the case HKSAR v Ng Man Yee [9] was sentenced to 5 years 6 months’ imprisonment for laundering HK$77  million.

18.For the case of the Secretary for Justice v Herzberg case (supra), a total of HK$683 million had been deposited into the 5 accounts operated by the respondent over the period of 21 months, the Court of Appeal took the view that  the respondent’s culpability was enhanced by the presence of an international element, the duration over which the offences were committed, the fact that he continued with the scheme after realizing the moneys were proceeds of crime and he was the beneficiary to the scheme in the sum of HK$24.9 million.  It allowed the application of review of sentence and decided the appropriate global starting point was 9 years’ imprisonment.

19.The case of Shing Siu Ming[10] involved considerable assistance to retain the benefit of drug trafficking.  The scale was substantial and over a lengthy period.  After trial, the accused was sentenced to 7 years’ imprisonment. 

20.The cases referred to above were not, and were not meant to be sentencing tariffs. They were nonetheless noteworthy for deciding on a proper sentencing order which is consistent with the view of the higher court.

Decision

21.Both defendants were involved in similar offences in similar manners. The main difference is the amount involved.  The followings are what I found to be valid considerations in the cases at hand.

22.The total amount laundered is very substantial.  In the case of D1, the total sum of HK$148.2 million.  In the case of D2, HK$632.8 million.

23.The course of conduct was over a period of 7 years, involving 3 accounts under the name of D1, 8 accounts either under the name of D2 or, in the case of charge 11, an account to which D2 had access and control and the joint account to which both defendants had access and control.

24.D1 and D2 were actively involved in the money laundering activities by moving various funds in and out of the accounts in question.  All over-the-counter transactions had been done personally by the defendants.

25.Having considered the above and the previous decisions mentioned above, I consider that in the case of D1, a global overall sentence order should be 4 years.

26.In the case of D2, in view of the much more substantial total amount involved, I consider 6 years’ imprisonment appropriate global sentence.

Mitigation

27.Both defendants had previous convictions, although none of them had the nature and magnitude of the offences I have to deal with.  Nonetheless, the fact that both were adults and had previous convictions in the past, they could not expect any leniency for their age or previous good character.

28.D1 had been tried in absentia. I could not find anything in the evidence adduced by the prosecution capable of constituting mitigating factors.  He is therefore sentenced to 4 years’ imprisonment for each of the charges he is convicted, all to run concurrently.

29.Under the eyes of a very sympathetic Probation Officer, D2, living on the handsome maintenance provided by her husband, was an “illiterate rich lay back house wife” who had been “coerced” and ‘misled” into collusion in the crime she now was convicted of [11]. I also have been given to understand that apart from devoting to the caring of her children and family, D2 was also a pious, philanthropic person who gave her time and money generously to charitable causes.

30.Yet her role in the money laundering scheme was undeniable and crucial.  She had also obviously benefited from her participation and had been, for a long time, living beyond the dream and means of an ordinary, illiterate housewife. While I am sure she was as good a person as described by the Probation Officer: the personal circumstances of the accused, the drastic consequences of the convictions to her personally and her family would pale into insignificance when the sentencing principle for this kind of offence of one of deterrence.  On the most charitable assumption that she had not the full knowledge of the extent of the predicate offence, the purpose and reason of the exercise, it is undeniable for a long span of 7 years, she had knowingly participated in and perpetuated a crime which eroded the very fabric of the society.  It is the court’s policy that anyone who knowingly allows oneself to be involved in similar activities could not expect clemency by pleading ignorance.  For the reasons stated above, I consider a total sentence of 6 years is appropriate for crimes of such scale and for the degree of her participation.

31.However, there is evidence that she also positive contribution to the society.  As an act of compassion and in recognition of her contribution, I would exercise my residual discretion to reduce 6 months from the total term of imprisonment.  Therefore, D2 is sentenced to 66 months’ imprisonment for each charge she is convicted of, all to run concurrently.