HKSAR v. Zheng Zhi Long

DCCC 971/2017

[2018] HKDC 646

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 971 OF 2017

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REASONS FOR SENTENCE

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CHARGES

1.The defendant was charged with one count of dealing with property involving an amount of US$5 million, 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.

PLEA

2.Defendant pleaded not guilty to the charge and was convicted after trial

SUMMARY OF FACTS

3.An American male William De Jacma Frederick (PW1) was the director of two Hong Kong companies specializing in matching overseas investors to invest in Mainland business opportunities.

4.The defendant was the only director and sole shareholder of the Excellent Century Holdings Limited which held a multicurrency account 048-866834-838 (the Account).

5.At the material time, PW1 received an email from a Peterjohn Boshoff concerning an investment opportunity offered by a Met Bawi.  Such investment proposal involved an investment of US$5 million with a return of US$40 million in 45 days.  John Nock agreed with PW1 to make the investment by providing the funds of US$5 million.  Under their agreement, PW1 would receive 1% of the US$ 40 million as commission.  PW1 then accepted the investment proposal offered by Met Bawi who instructed the US$5 million was to be deposited into a designated account of a bank in Hong Kong (the Account held by defendant’s company).  Met Bawi provided an insurance policy for loss of trade for US$5 million.

6.On 2 February 2016, the amount of US$5 million was transferred into the Account.  After the transfer, between 2 February 2016 and 9 March 2016, the defendant made several withdrawals and a number of transfers to other accounts with the total amount of US$ 4,397,378.87.

7.At the expiry of the contracting period, PW1 had not received any money from Met Bawi and lost contact with Met Bawi.  PW1 could not get any compensation from the insurance company as the policy was not a genuine document.  PW1 made a report to the police.

Arrest of Defendant

8.On 5 July 2017, defendant was arrested at the Lo Wu Report Centre of the Lo Wu Control Point.  Two ATM cards bearing defendant’s name with account No 048-866834-838 and 609-868708-888 were seized from him.

Defendant’s record of interview

9.In the record of interview, defendant said the followings:-

(a) He was born in Mainland China. He emigrated to Australia in 1990. He worked as a middleman dealing with import and export of commodities, such as sugar. He made profit from the price difference.

(b) He was the sole owner and manager of Excellent Century Holdings Ltd. He opened the company Account in Hong Kong. He was the only one to manage the Account. He had never borrowed the Account to the other. He also had a personal bank account.

(c) He did not know who made the deposit of US$5 million into the Account on 2 February 2016. A Met Bawi sent him a receipt for the transfer (P30).

(d) He used to contact Met Bawi by using Skype, telephone and email. He had some contact with Met Bawi but could no longer contact him.

(e) He did not know PW1, PW2, Peterjohn Boshoff, Ian Cumming and Met Bawi.

(f) As shown on the receipt (P30), he had checked the company and found that Nip Joe (PW2) was the director of the company.

(g) The transfer from company Account to his personal bank account in February and March 2016 were made by him and he had spent some of the money.

(h) The transfer of US$ 5,000 to female Salikhova Elena was made by him as reward for providing Russian translation and consultancy services.

(i) The transfer of total US$ 430,000 to HUANG Guoshen was made by him for repayment of debt.

(j) The transfer of US$ 3.2 million to the Account of “Abbott and Abbott” was made by him. He knew it was a lawyer account of United States. He did not tell why he made the transfer.

BACKGROUND OF THE DEFENDANT

10.Defendant, aged 47 was born in Fujian China.  He emigrated to Australia in 1990 and was now an Australian passport holder.  He was married with three young children with all living in Australia.  He was a businessman of trading.  He had a clear record.

CONSIDERATION OF SENTENCE

11.In sentencing him, I have considered the followings:-

(1) the facts of the case involving the amount of US$5 million;

(2) mitigation put forward on his behalf;

(3) defendant has a clear record.

12.I have further considered the following authorities:-

(1) HKSAR v Hsu Yu Yi [2010]5 HKLRD 5345;

(2) HKSAR v Poon Lok Man CACC 171/2002;

(3) S for J v Wan Kwok Keung CACC 13/2010;

(4) HKSAR v Boma Amaso CACC 335/2010;

(5) HKSAR v Fan Shek Hung [2008] 1 HKCLRT 428;

(6) HKSAR v Chen Szu Ming CACC 270/2005.

13.In the case of Hsu, the starting point adopted was 3 years’ imprisonment for the amount of around one to two million Hong Kong dollars. 

14.In the case of Wan, the amount involved was about $14 million.  The starting point adopted after review was one of 45 months. 

15.In Boma, it involved $10 million with the international dimension.  The overall starting point was 42 months’ imprisonment. 

16.In the case of Fan, it involved $15 million, the starting point adopted was 5 years and 8 months. 

17.In the case of Chen, it involved $17 million.  The starting point adopted was one of 5 years.

FACTS OF THE PRESENT CASE

18.I have considered the following points:-

(a) The amounted involved was very substantial, namely about HK$39 million.

(b) Defendant received a receipt from Met Bawi. That was the bank record (P30) dated 30 January 2016 showing US$ 5 million was transferred from Wealth Mark to Excellent Century but this transaction was unsuccessful. As such, defendant was aware of this transfer before he dealt with the money from his company’s account on and after 2 February 2016.

(c) Obviously defendant had gained a great profit in dealing with the money in the company account.

(d) The money involved arouse from an offence of fraud.

(e) It involved an international dimension.

SENTENCE

19.I have considered the facts of the case, the mitigation put forward, the authorities as cited and all the circumstances of the case.  I adopted a starting points of 5 years and 6 months’ imprisonment.  As defendant was convicted after trial, there was no discount for a plea of not guilty.  However, in view of his clear record, I made a reduction of 3 months for the sentence.

20.I accordingly sentenced him to a term of 5 years and 3 months’ imprisonment.