HKSAR v. Chen Weiqiang

DCCC 470/2018

[2018] HKDC 1484

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 470 OF 2018

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REASONS FOR SENTENCE

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1.Defendant pleaded guilty before me this morning to two charges of conspiracy to deal with property known or believed to represent proceeds of an indictable offence.

The Facts

2.The facts he admitted reveal that two bank accounts opened by the defendant in the name of two different companies were involved.

3.For the first charge, a bank account was opened at the Bank of China on 10 March 2017 in the name of a company called “ENPU Limited”, of which the defendant and a man called “Yang”, were the shareholders and directors.  The defendant and Yang were the authorised signatories for this account.

4.Between 10 March 2017, which was the date the account was set up, and 23 June 2017, a total of US$973,453 (which is a little over HK$7.5 million) were deposited into this account on eight occasions.  These deposits were invariably followed by withdrawals of the monies paid in over the next few days, effected all by Internet bank transfers to various accounts in Hong Kong and mainland China.

5.Now, of the 973-odd thousand US dollars deposited into the ENPU account, $460,000 of which were in fact made by a UK company called the “AFZ Limited”.  AFZ Limited, as it turned out, was in fact the victim of what could be called an email fraud.  Thinking that the emails they received instructing them to wire money to Hong Kong for purchase of cocoas were given by their CEO, the company wired a total of almost US$3 million to six different companies in Hong Kong, ENPU being one of them.

6.The defendant was arrested by the police on 14 October 2017 when he was in the course of entering Hong Kong from Shenzhen. 

7.In the first video interview held with him, the defendant admitted that he bought the company ENPU from a man called “Lam”, whom he said was running a company providing company secretary service.

8.The defendant said that he intended at the time to start up a wine trading business, an idea which he had since abandoned.  He also told the police in the same interview that in June 2017, he had signed a form to resign his directorship.  However, he kept the ENPU bank account as he believed that it would be later transferred to a third party.  He denied knowledge of the deposits or withdrawals made with the bank account of ENPU.

9.According to the Company Registry’s records, the defendant and Yang had indeed resigned as directors of ENPU on 26 June 2017. But apparently they did it only to avoid getting into trouble with the law, for the police also found from the defendant’s mobile phone a number of WeChat conversations he had with the woman called “Mandy Deng”, which suggest that they were in the business of arranging people to come to Hong Kong to open bank accounts. 

10.According to the text dated 13 June 2017, the defendant was asking Mandy Deng whether his name under the company ENPU had been transferred and he also asked Mandy Deng whether he could go to Hong Kong.  To these questions, Mandy Deng’s replies were that the defendant could try; and more indicatively that, at most, the defendant would only be detained for 48 hours.  In addition, the defendant was told by this woman Mandy Deng to deny knowledge of what was going on should he be asked and to deny any involvement in the operation of the accounts.

11.In the second video interview the police had with him, the defendant told the police that Mandy Deng was in fact the wife of the man Lam mentioned earlier.  It was, he said, Lam who told him that he could sell the ENPU account out for monetary reward.  The defendant admitted that he knew ENPU’s account would be transferred to foreigners who had difficulties in opening bank accounts in Hong Kong and he said that, in return, he got a reward of RMB1,500.

12.What happened for the second charge is, in fact, very similar.  The defendant and the man Yang had been found by the police to be also directors of another company called the “Hongkong Coop Limited”.  Hongkong Coop has a bank account at the ICBC, which was opened by the defendant and Yang, and the two were the authorised signatories for this account.

13.Between 1 June 2017 and December 1 that year, a total of six deposits were made into the account held by Hongkong Coop with ICBC, making a total of US$297,719.78. 

14.One of these deposits was made by a company called the “Simplot (Hong Kong) Company Limited” on 19 September 2017.  It was in the sum of US$269,498.70, and, according to the company Simplot, the director of finance of the company had received on 19 September 2017 an email from an address which closely resembled that of a colleague of his from Australia, requesting payment of US$269,500 to the Hong Kong Coop account.  He did as told, only to realise subsequently that the email address was in fact a false one.

15.In entering a plea of guilty to the first two charges, it is admitted by the defendant that at the material time he conspired with the man Yang, Lam and the woman called “Mandy Deng” to deal with the properties set out in the two charges, knowing or having reasonable grounds to believe at the time that they represented proceeds of indictable offence.

Mitigations

16.The defendant is 32 years old.  He is married and has a daughter who is now 5 years old.  He has never been in trouble with the law in Hong Kong before.

17.At the time of the offence, I was told that he worked as a chauffeur, earning about RMB5,000 a month.  He was, however, running a transportation company up to about 2016 when the business was wound up.

18.This morning I was told by defendant’s counsel Mr Hui that the defendant’s wife has been suffering from a certain medical condition and has not been feeling well in general.  Mr Hui is however unable to be more specific with that and, although the court has been given a copy of an MRI test result carried out in Shenzhen, it is still not clear exactly what ailment was she suffering from.

Sentencing Consideration

19.I have been very helpfully referred by Mr Hui to a number of decisions made by my brethren at the District Court here.  In these cases, starting points in the range of 3 to 4 years have been adopted for money launderings of a roughly similar scale or nature.  Obviously some were for larger amounts and longer periods, some for smaller amounts and shorter periods.

20.I have at the same time reminded myself of the factors to be considered in sentencing, as set out in the case of HKSAR v Boma [2012] 2 HKLRD 33.  And I am mindful of the Court of Appeal’s observations in the case of HKSAR v Wan Kwok Keung [2012] 1 HKLRD 201.  In that case, it was noted by the Court of Appeal that the sentence for a money laundering case should mainly reflect the amount of money laundered and not the benefit obtained by the defendant. And in that case Yeung JA had suggested that a starting point of, and I quote, “3 years or so”, should be considered when the money involved was 2 to 3 million Hong Kong dollars.

21.In the present case, we are dealing with a total of almost HK$10 million: 7.5 for the first charge and a little over HK$2 million for the second charge.  The predicate offence was known and it is clear that the victims in both cases have suffered enormous loss and, as fairly accepted by Mr Hui, there is in this case also an international element which the court is entitled, if not obliged, to take into account.

22.Looking at the facts as a whole, it is clear to me that when the defendant opened the accounts in question and when he sold them, so to speak, to others, he had every reason to believe that the accounts could and would have been used by these other people for money laundering.

23.His claim to the police in his first video interview that he was at one stage planning to run a wine business by setting up the company ENPU and in opening the bank account at the Bank of China for the company is clearly a lie.

24.Now, taking a global view of the matter, I believe a global starting point of 45 months’ imprisonment is called for. 

25.For his timely plea, he will of course get the full one-third discount. This will take the global term down to 30 months.  That apart, I cannot see any other grounds of mitigation to warrant a further discount in sentence.

26.In the premises, I sentence the defendant to a term of 2½ years’ imprisonment for the first charge and a term of 2 years’ imprisonment for the second charge, and I shall order the two terms to be served concurrently, making a total term of 30 months, as mentioned earlier.