HKSAR v. Cheung Kam Lun

CACC000015/2003

CACC 15/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 15 OF 2003

(ON APPEAL FROM DCCC NO. 224 OF 2002)

--------------------

--------------------

Coram: Hon Woo JA in Court

Date of Hearing: 17 April 2003

Date of Judgment: 17 April 2003

-----------------------

J U D G M E N T

-----------------------

Hon Woo JA:

1.This is an application for leave to appeal against conviction and sentence.

Background

2.On 23 December 2002, the applicant was convicted after trial before Deputy Judge Tong in the District Court of a single charge of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to section 159A(1) of the Crimes Ordinance, Cap 200 and section 25(1) of the Organized and Serious Crimes Ordinance, Cap 455. He was sentenced by the judge to a term of imprisonment of two years and nine months.

3.The applicant did not face the charge alone. He was the 2nd defendant before the judge. The 1st defendant was jointly charged with the offence of which the applicant was convicted, but the 1st defendant had pleaded guilty to an alternative charge and other charges with which the applicant was unconnected.

4.The offence on which the applicant was found guilty was commonly known as money laundering. The prosecution's evidence mainly consisted of taped conversations between the 1st defendant and ICAC undercover officers and later on taped conversations amongst these officers, the 1st defendant and the applicant. These conversations showed that ICAC undercover officers first met with the 1st defendant, who indicated that he would help to launder money. After meetings and discussions for several months, the 1st defendant brought in the applicant for that purpose. Finally, on 31 May 20001, both the 1st defendant and the applicant were arrested when two such officers went to the bank with the applicant to make a deposit or to use US$15,000 to buy a cashier order.

5.The applicant gave evidence before the judge, to claim that he did not know that the US$15,000 or the HK$5 million mentioned in the conversations represented proceeds from illegal immigrant smuggling. He told the court that his role was a middleman in the sale of "Lai Ma", or clay chips, for gambling in Macau. He also explained that the reference to illegal immigrant smuggling in the conversations in which he took part was believed by him to be only jokes mentioned by the officer.

6.The judge identified the issue in the case before him as whether the applicant knew that he was helping the officers, who represented themselves to be illegal immigrant smugglers or persons related to the same, to launder money, or what he had done were just innocent acts, helping the officers whom he thought were punters to take money to Macau for the purpose of gambling.

The grounds of appeal

7.In his Form XI, the defendant stated his grounds of appeal to be that since there was an entrapment of him by agent provocateur, the verdict should not have been guilty. He also stated that the sentence was too heavy.

8.However, before me today, after he withdrew his application for an adjournment, he has raised four grounds of appeal against conviction. They are as follows:

(1) There was no evidence of any agreement between the first defendant and the applicant to launder money.

(2) While the judge accepted DW2 Lau's evidence that clay chips could not be changed into cash, he came to the wrong conclusion that the applicant could change the chips into cash with STDM, the Macau casino organisation.

(3) The evidence of the ICAC officer who testified in court is different from what he stated in his statement, but the judge still wrongly accepted his evidence.

(4) The ICAC undercover officers enticed the 1st defendant to launder money, and the 1st defendant mentioned many ways to do that. What the applicant did was only acting as an intermediary to introduce the others to buy chips and the cashier order was only payable to STDM directly.

Conviction

9.As to ground (1), which is that there was no evidence of an agreement between the 1st defendant and the applicant, the judge was fully aware that there was no direct evidence of such an agreement. He pointed out that

"It is of course trite law that acts and declarations made in furtherance of a conspiracy is admissible against all in that conspiracy to show the extent and design of the same." (Transcript p 20J)

10.The existence of a conspiracy, which is an agreement, can be proved by inference from circumstantial evidence that is accepted by the fact-finding court or jury, as normally there is no direct evidence as to the agreement.

11.I have read the Reasons for Verdict given by the judge very carefully. He said he had read all the tape transcripts in detail. He first referred to the conversations between the 1st defendant and the ICAC officers. It clearly showed that the 1st defendant was trying to help the officers to launder several millions of illegal proceeds by designing various ways. Eventually the 1st defendant proposed to launder money by using STDM. On 23 May 2001, the applicant was brought into the picture by his attending a meeting with the 1st defendant and an ICAC officer. There were subsequent meetings between the 1st defendant, the applicant and ICAC officers. The judge gave a description of what took place in the conversations. He said:

"The overall effect of the evidence on the tape transcripts recorded in the subsequent days was that the defendant [applicant] was brought in by D1 to launder money representing illegal proceeds. From the overall tenor of the conversations that the agent had with the defendant [applicant], I am sure that the defendant [applicant] was part and parcel of the money laundering scheme which he had sought to explain to the agents on 24 May 2001. The scheme was about using illegal proceeds to buy cashier order from a bank of Hong Kong. Then someone could take the cashier order to a gambling hall in Macau to have the same exchanged with a cheque at the same amount. In the meantime, the agent would have to pay separately an amount equivalent to 13 per cent of the money so laundered. Ten per cent would go to the entertainment company or its agent, 2 per cent would be shared by the defendant [applicant], while 1 per cent would go to D1. The share of the entertainment company and that of the defendant [applicant], i.e., the 12 per cent of the overall 13 per cent would have to be put into a designated account." (Transcript p 21E-P)

12.The judge also commented that there was no ring of truth in the applicant's evidence. The judge gave no less than six reasons for reaching his conclusion. Two reasons are of particular importance, in my view. The first was that in the conversation on 24 May 2001, reference was made in sending someone with an identity card to bring a cashier order to Macau to collect a cheque from the entertainment company. The judge's view was, and I think correctly, that this was hardly consistent with a punter making winnings but was highly indicative of money laundering. Secondly, while the applicant said that the 10 per cent payable to the entertainment company referred to in the conversation related to winning tips to be awarded by the punters, the judge discerned that if one looks at the relevant conversation in its context, it was apparent that such an amount was part of the 13 per cent processing fee or service charge that the officer would have to pay into a separate account in Hong Kong. This again, in my view, is clearly demonstrative of the involvement of the applicant in the proposed laundering of illegal money and inconsistent with a gambling escapade. Ground (1) has no merit.

13.On ground (2), while it is true that the judge accepted the evidence of DW2 that clay chips could not be changed into cash without going through the gambling process, yet he also accepted DW2's evidence that the purpose of a punter buying clay chips was to obtain some benefits such as free ferry passage, free meals, free hotel lodging and free entertainment, but buying $50,000 worth of clay chips would be no different from buying $2 million worth of such chips in obtaining such benefits. This was one of the reasons why the judge did not believe the applicant's story. The judge said:

"No one would change several million dollars into 'Lai Ma' which could not be changed back to cash again. It is because according to the evidence of DW2, if a person purchases HK$50,000 worth of 'Lai Ma', he would already get the full package of free gifts. It makes no difference so far as the free gifts are concerned even if he buys more." (Transcript p 22F-I)

14.Ground (2) is without substance.

15.Regarding ground (3), the discrepancy between the evidence of the ICAC undercover officer who gave evidence in rebuttal, Tom, was noted by the judge. The judge said:

"Under cross-examination, this witness first disagreed with the suggestion that the defendant [applicant] had explained to him the procedure of buying a cashier order and to bring the same to Macau. However, when he was shown his own prior statement, he admitted that had been discussed. Yet, the witness still insisted that he had never told the defendant [applicant] that the money came from illegal immigrants nor had the defendant [applicant] stood up and tried to leave." (Transcript p 19N-R)

16.The judge further dealt with Tom's evidence and said:

"On 23 May 2001, the defendant [applicant] was brought into the picture by his attending a meeting with D1 and Tom. Tom gave rebuttal evidence on the fact that on that occasion he never mentioned to the defendant [applicant] that the money came from illegal immigrant nor had the defendant [applicant] walked away on hearing that. Although Tom had wrongly remembered that there was no discussion on how money should be sent to Macau to buy chips, I accept that was only a lapse of memory on his part." (Transcript p 21A-E)

17.It is obvious that the judge relied heavily on the evidence borne out by the transcripts of the taped conversations (see para 11 above). I do not see how the discrepancy now relied on by the applicant can affect the conviction so as to make it unsafe or unsatisfactory. Ground (3) is again unhelpful.

18.Ground (4) raises the point that the applicant was entrapped by an agent provocateur and therefore he should not be found guilty.

19.In fact, the judge had dealt with this when the applicant applied before the judge to have the proceedings against him stayed permanently. The judge had ruled that what the ICAC officers had done in the case was no more than presenting the defendants with an "unexceptional opportunity to commit a crime". The application was refused.

20.In Attorney General's Reference No. 3 of 2000, The Times, June 27, 2001, the English Court of Appeal held that it was wrong for the court to apply in this sort of case the only test "whether the officer was acting as an agent provocateur in the sense that he was enticing the accused to commit that particular offence which he did". It stated the proper rule as follows:

"In most cases the principal question to be considered by the court would be whether the officers did no more, whether by active or passive means, than to afford the accused the opportunity to offend of which he freely took advantage in circumstances where it appeared that he would have behaved in a similar way if offered the opportunity by someone else; or whether, on the other hand, by means of unworthy or shameful conduct, they had persuaded him to commit an offence of a kind which otherwise he would not have committed."

21.I do not see any merit in this ground of appeal.

Sentence

22.The judge mentioned "entrapment" when he was passing sentence on the applicant. He referred to HKSAR v Kai Chi-chung and Anr, Cr App No. 259 of 1997, where the Court of Appeal clearly distinguished entrapment by an agent who lured the defendant into committing a crime from a case where the agent was only posing as an ordinary customer patronizing the illegal trade held out by the defendant.

23.In HKSAR v Cheung Yun-kei [2001] 4 HKC 52, the Court of Appeal also held that a reduction of sentence should be made where the defendant committed the offences as a result of the encouragement by an agent which the accused would not otherwise have committed. The judge stated that he was satisfied that the applicant was not encouraged to commit an offence and sentenced the applicant on that basis.

24.Now the applicant relies on two grounds of appeal against sentence, namely, his illness and clear record.

25.The judge adopted a starting point of three years, having taken into account that the scheme advanced by the 1st defendant and the applicant was sophisticated, hard to detect, and possessed an inter-jurisdictional element involving Macau, and opined that a deterrent sentence must be considered. Out of the three-year starting point, the judge took into account that the applicant was suffering from diabetes and hypertension and gave him a discount of three months. Regarding the clear record, the judge said:

"His clear previous record could help him little in this sort of non-violent white collar crime." (Transcript p 28J)

I agree. I do not consider the sentence of two years and nine months passed by the judge is in any way manifestly excessive or wrong in principle.

Conclusion

26.For the above reasons, I dismiss the application for leave to appeal against conviction and sentence.

27.I have already told the applicant that he is entitled to make a new application to the Court of Appeal for leave within 14 days, but I will warn him that if that court takes the view that his application is unmeritorious, he risks an order for loss of time, which would lengthen the period of his custody in jail. I also warn him that the Court of Appeal may increase his sentence on his application for leave to appeal against sentence.

Representation:

Mr Marco Li, Government Counsel, of the Department of Justice, for the HKSAR.

The applicant, in person.