HKSAR v. So Kim Chung

DCCC 222/2018

[2018] HKDC 1389

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 222 OF 2018

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REASONS FOR SENTENCE

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1.D1 pleaded guilty to two charges of trafficking in a dangerous drug (Charge 1 and Charge 2) and two charges commonly known as “money laundering” offence (Charge 3 and Charge 4).

2.The facts he admitted can be summarised as follows.

Charges 1 to 3

3.On 22 March 2017, Customs and Excise (C&E) officers intercepted D1 at a car park in Yuen Long, New Territories.  D1 was carrying a black plastic bag which contained three packets of cannabis in herbal form (E1), weighed 1.33 kilogrammes. 

4.Under arrest and caution, D1 admitted that E1 was cannabis buds belonging to him.  He was going to place the cannabis in his private car and he had also stored some cannabis at his home.

5.During house search, C&E officers found in the living room of D1’s home a total of 2,949.80 grammes of cannabis in herbal form.  One electronic scale and two bundles of empty resealable plastic bags in different sizes were also found in the living room. 

6.The total market value of all the seized cannabis is about HK$1.36 million. 

7.Next to the living room sofa there was a bag containing a total of HK$999,000 (exhibit E6).  The cash was all denominated in HK$500 banknotes.

8.Under further caution, D1 said that the cannabis buds were for delivery to someone else.  The cash in the living room was his savings and would be used for paying renovation work.

9.In his video recorded interview, D1 said under caution that he purchased the seized cannabis online for selling.  He also admitted E6 belonged to him.

Charge 4

10.During the period from 1 January 2011 to 22 March 2017, D1 had not filed any tax return with the Inland Revenue Department.  Records from the Land Registry show that a three-storey house in Fanling, New Territories, was purchased in D1’s sole name in September 2016 for HK$9 million.  An all-monies mortgage was taken out with Hang Seng Bank and payment was made from D1’s Hang Seng Bank current account 245089081001.

11.Records of D1’s Hang Seng Bank account show that D1 made two payments, being HK$1,132,800 on 9 September 2016 and HK$3,811,699.04 on 14 October 2016, to a law firm for the purchase of the Fanling house.  These funds came mainly from cash deposits. 

12.The record shows that a total of HK$4.4 million cash was deposited into D1’s Hang Seng Bank account between 30 August 2016 and 28 September 2016.  The deposits were done in 44 transactions, each transaction in the amount of HK$100,000. 

13.A balance of HK$206,066.61 remained in the bank account as at 14 October 2016 and this remained the same on the date of D1’s arrest.

14.The guilty plea was entered on the basis that D1 knew the cash found at his residence and the 44 deposits in his bank account represented proceeds of an indictable offence.

15.D1 is aged 49.  He has a criminal record for cultivation of cannabis in August 2011, for which he was sentenced to 2 years’ imprisonment.

MITIGATION

16.In mitigation, Mr Khosa, counsel for D1, tells the court that D1 is married.  His wife is a registered nurse.  They have no children.  The defendant received education up to Form 2.  He has all along been involved in decoration business as a subcontractor, earning about 40,000 to 50,000 dollars.

17.Apart from the decoration business, D1 was also on and off involved in selling cannabis to make extra money.  He himself also consumes cannabis for recreational purpose.  He would keep some cannabis for himself and the remainder would be sold.

18.For the drug trafficking charges, Mr Khosa draws my attention to the sentencing authority for unlawful trafficking of cannabis resin, R v Tuen Shui Ming, CAAR 12/1994.

19.As regards the money laundering offences, Mr Khosa submits that the “one-transaction rule” should apply in this case, because the “black money” involved was in fact proceeds of the crime committed by the defendant, namely, trafficking in dangerous drug.  The defendant was not laundering the money for others.  He was using the proceeds of the crime he committed. 

20.Counsel compares this case to a scenario where a robber brought home and kept the money he robbed.  The robber should not be additionally punished for the money laundering offence for the stolen money on top of the offence of robbery.  Otherwise, he would be punished twice.  Moreover, the prosecution has applied to confiscate the property of the defendant to a total of about $3.7 million, which the defendant will not oppose.

21.Mr Khosa clarifies that the monies dealt with by the defendant were not the net profit of the illicit trade.  The defendant could only earn a profit of about $10,000 for the sale of each kilogramme of cannabis.

22.It is submitted that there is a delay in prosecution, as the defendant was arrested in March 2017.  He indicated his intention to plead guilty to the trafficking charge at a very early stage. However, the charges of money laundering were later preferred against him.

23.It is further submitted that there is no sophistication or international element to aggravate the seriousness of the offences.  That I agree. 

THE COURT’S CONSIDERATION

Charges 1 and 2

24.Trafficking in dangerous drug in whatever form is a very serious offence.  I, however, would acknowledge that cannabis is less potent than other hard drugs and that herbal cannabis is weaker than cannabis resin.  Cannabis resin has an average concentration of THC about four times higher than the average found in herbal cannabis.

25.The Court of Appeal in Tuen Shui Ming said that the court should adjust the cannabis resin tariff when sentencing herbal cannabis.  The downward adjustment would be up to a year from the cannabis resin tariff, unless the quantity involved is very large.

26.The drugs in Charge 1 and Charge 2 were found in close proximity of time, on the same day.  I will sentence the defendant on the total quantity of the drugs.  The overall quantity is about 4.27 kilogrammes of cannabis in herbal form. 

27.Applying the tariff laid down in Tuen Shui Ming, the range of sentence for trafficking of the drug between 3 kilogrammes and 6 kilogrammes is in the region of 24 to 36 months’ imprisonment.  I would take 30 months as the initial starting point for the total quantity of the drugs, allowing a reduction of 9 months to reflect the weaker effect of herbal cannabis.

28.Despite his previous record for cultivation of cannabis, I am not going to enhance the sentence for his previous conviction.

29.The defendant is entitled to a one-third reduction of his sentence for his guilty plea.

30.Given that the money laundering offences would require the co-operation of the bank and time-consuming process of analysing the documentary evidence obtained, I am not persuaded that there was any unreasonable delay in prosecution, to the extent of justifying a further reduction of sentence.

31.While it is put forward that the defendant consumed cannabis himself for recreational purpose, it is not put forward, quite properly in my view, as a separate mitigating factor.  There is nothing to suggest that the quantity for his own consumption would in any way affect meaningfully the quantity of drugs in Charges 1 and 2, for the purpose of sentencing.  D1 would not be given any discount for the plea of own consumption.

32.Apart from his guilty plea, there is no other mitigating factor to reduce the sentence.  D1 is therefore sentenced to 14 months’ imprisonment on both Charges 1 and 2, to run concurrently.

Charges 3 and 4

33.There is no sentencing guideline for the money laundering offences.  In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal stated that, in considering the sentence, the amount of money laundered is a significant feature. 

34.The court should also take into account other significant features, including:-

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) whether the operation involved an international dimension;

(d) the sophistication of the offence;

(e) whether committed by or on behalf of an organised criminal syndicate;

(f) whether there was one transaction or many, and the length of the time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of the funds;

(h) the role of the offender and the acts performed by him.

The list is not exhaustive.

35.Charge 3 relates to $999,000 cash seized from the living room of D1’s residence.  It is admitted by the defence and put forward as mitigation that the money was proceeds of the crime of trafficking of cannabis.  Such concession provides the evidence for the nature of the predicate offence and D1’s actual knowledge of it.  These are aggravating features.

36.I will take 3 years’ imprisonment as the starting point for Charge 3.

37.When a person is charged with a drug-trafficking offence and a money laundering offence of proceeds from drug trafficking, the sentences can be made concurrently wholly or in part, depending on the circumstances.  That would depend on whether the funds in the money laundering charge(s) are referable and, if so, to what extent, to the actual drug trafficking charge(s). 

38.I cannot accept the argument that, as the defendant was not “cleaning black money” for others, then no additional punishment should be added to the sentences on Charge 1 and Charge 2.

39.While the cash was admitted to be proceeds of drug-trafficking activities, I fail to see how the money could become the proceeds of the specific quantity of drugs particularised in Charge 1 and Charge 2.  There is simply no such evidence in the case.

40.Under the admitted facts, D1 only told the police that the cash found in the living room was his own savings, which would be used to pay renovation work.  The total market value of all the seized cannabis is about $1.36 million.  Mr Khosa says the defendant could earn $10,000 for the sale of 1 kilogramme of cannabis.  $999,000 would represent the value of a very significant amount of cannabis.

41.When the particular drugs in the two charges were still in the possession of D1, it is difficult to imagine that D1 might have received advance payment for the sale of these drugs prior to its delivery.  Moreover, this is not the case pleaded in mitigation.

42.I find that the cash seized was separate and distinct from the trafficking of the drugs alleged in Charge 1 and Charge 2. When the “black money” in a money laundering charge are not referable to the specific drug-trafficking alleged in Charge 1 and Charge 2, a partly concurrent sentence can only be considered in the context of totality.

43.Charge 4 involves 44 bank deposits, each transaction in the amount of $100,000, between 30 August 2016 and 28 September 2016, ie a period of 30 days.  The deposits can hardly be or relate to the proceeds of the drug-trafficking alleged in Charges 1 and 2, which were committed on 22 March 2017.

44.The monies are admitted to be proceeds of the defendant’s drug-trafficking activities.  The total monies of the proceeds amount to a total of $4.4 million.  The deposits represented the defendant’s drug-trafficking activities over a period of about one month, presumably involving a very large amount of cannabis by reference to the admitted market value of the cannabis in Charges 1 and 2.

45.I adopt 4½ years’ imprisonment as a starting point for this charge.

46.The defendant is entitled to one-third reduction of sentence for his guilty plea.  As said, this is the only factor in this case which can reduce the individual sentence.

47.The defendant is therefore sentenced to 2 years’ imprisonment on Charge 3, and 3 years on Charge 4.

48.The last question is: what should be the proper overall sentence, taking into account the principle of totality?  I take into account the voluntary admission, through counsel, of the nature of the predicate offence in the money laundering charges.  I have also considered that trafficking of cannabis is usually regarded as less serious than the trafficking of other more potent drugs.

49.In my view, an overall sentence of 4 years and 2 months’ imprisonment can sufficiently reflect the overall gravity of the offences.

SENTENCE

50.D1 is sentenced as follows:-

(a) Charge 1: 14 months’ imprisonment;

(b) Charge 2: 14 months’ imprisonment, to run concurrently wholly with the sentence of Charge 1;

(c) Charge 3: 2 years’ imprisonment;

(d) Charge 4: 3 years’ imprisonment, of which 1 year is to run concurrently with and the remainder to run consecutively to the sentence in Charge 3.

51.Two months of the overall sentence of Charge 1 and Charge 2 shall run consecutively to the overall sentence of Charge 3 and Charge 4, the remainder to run concurrently.

52.The total term of imprisonment is 4 years 2 months.