HKSAR v. Fong Chi Yam
Read the full judgment text of CACC 411/2017 on BabelCite. This Court of Appeal judgment was delivered on 22 January 2019 before Yeung Acting CJHC, Cheung JA, Pang JA.
Criminal law – money laundering – dealing with property known or believed to represent proceeds of an indictable offence – two charges involving HK$409,000 and HK$37,100 – applicant sole proprietor of money exchange shop – victims of telephone deception ring handed cash to applicant on instructions of unknown principal 'Maa' – applicant used banknote serial number as identification mark and handed cash to unknown 'fatty' without receipts or records – mens rea of 'reasonable grounds to believe' property was proceeds of crime – whether trial judge erred in admitting and relying on police video interviews – whether convictions were safe – whether trial judge erred in adopting starting points of 3 years and 2 years and in imposing one-third sentence enhancement under Organized and Serious Crimes Ordinance (Cap.455) for prevalence of telephone deception – appeal against conviction dismissed as trial judge's analysis of objective and direct evidence including applicant's admission of suspicion was sufficient – appeal against sentence allowed as starting points manifestly excessive and one-third enhancement erroneously imposed where applicant had no knowledge of or participation in the underlying telephone deception – sentences reduced to 2½ years and 1 year with 6 months consecutive, total 36 months instead of 54 months.
Legal issues: Admissibility and voluntariness of admissions in police video interviews · Mens rea for money laundering: reasonable grounds to believe property represented proceeds of an indictable offence · Whether HKSAR v Yan Sui Ling (2012) 15 HKCFAR 146 supports the applicant · Sentencing starting points for money laundering · Application of one-third sentence enhancement under the Organized and Serious Crimes Ordinance for prevalence of telephone deception
Outcome: Application for leave to appeal against conviction refused. Application for leave to appeal against sentence granted. Appeal against sentence allowed. Total sentence reduced from 54 months to 36 months.
Cited by 14 cases · Cites 6 cases
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[English Translation – 英譯本] CACC 411/2017 [2019] HKCA 121 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO 411 OF 2017 (ON APPEAL FROM DCCC NO 306 OF 2017) ___________________
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REASONS FOR JUDGMENT Hon Yeung Acting CJHC (giving the Reasons for Judgment of the Court): Introduction 1.The applicant (Fong Chi Yam) faced two charges of dealing with property known or believed to represent proceeds of an indictable offence (commonly known as money laundering). The applicant pleaded not guilty and stood trial before Deputy District Judge Chan Wai-mun (the trial judge) in the District Court. 2.The trial judge found the applicant guilty of both charges on 14 November 2017 and sentenced him to 48 months and 32 months’ imprisonment respectively for the two charges on 1 December 2017. The trial judge ordered 6 months of the sentence on Charge 2 to run consecutively to the 48 months on Charge 1. The applicant was to serve a total term of 54 months. 3.Mr James Cheng and Ms Arlina Mak, counsel representing the applicant, applied for leave to appeal against conviction and/or sentence on his behalf. After the hearing, we dismissed the applicant’s appeal against conviction but granted him leave to appeal against sentence. We allowed his appeal against sentence and reduced the total term from one of 54 months to 36 months. The reasons for judgment are as follows. Prosecution case and evidence 4.At the time of the offence, the applicant was the sole proprietor of Kong Lung (Hong Kong) International Limited (“Kong Lung”). Kong Lung operated a “Kong Lung RMB/Foreign Exchange” (“Kong Lung Money Exchange”) at Shop G, G/F, Pearl Oriental Tower, No. 225 Nathan Road, Kowloon (Shop G). 5.Both victims, Mr Tse and Mr Pang, were tricked into handing over cash in the sum of HK$409,000 and HK$37,100 to the applicant at Kong Lung Money Exchange on 28 July 2015 and 29 July 2015 respectively. These incidents led to the arrest of the applicant for the offence of “deception” by the police on 30 July 2015. 6.With the applicant’s consent, the police seized a CCTV system storage device (P3). P3 showed the relevant course of events recorded on 28 and 29 July 2015, from which a total of 32 photos were retrieved. At the same time, the police seized three account books (P4(1) - (3)), a business registration form 2 of Kong Lung Money Exchange (Form 2) (P2) and a banknote in the denomination of HK$20 of Hong Kong and Shanghai Banking Corporation (P5) as exhibits. 7.On 30 July 2015 at Kowloon City Police Station, a police officer also found two mobile phones on the applicant upon search; one of them was a Samsung (P6) with a battery, two SIM cards and one memory card, while the other one was a Coolpad (P11) with a battery, two SIM cards and one memory card. 8.On 31 July 2015, DPC34357 found upon search HK$37,100 (P15) inside a safe of Kong Lung Money Exchange. 9.Police officer(s) also obtained from the applicant’s two mobile phones some WeChat communication records of the applicant and another person called Maa (P22 and P23) as exhibits. 10.The evidence admitted by the prosecution and the defence showed that on 30 July 2015, Mr Pang made a report to the police complaining that he was defrauded of HK$37,100, while on 29 July 2015, someone handed over HK$37,100 to the applicant at Kong Lung Money Exchange. 11.Mr Tse was also a victim of a crime of deception. The undisputed evidence showed that on 27 July 2015 he received a phone call from a Putonghua speaking man who alleged that he had outstanding credit card debts in Mainland China. On the instructions of the man, Mr Tse telephoned the alleged Beijing Public Security Bureau, and someone who claimed to be a police officer demanded Mr Tse provide his banking and financial information to prove his innocence. On 28 July 2015, someone who claimed to be a prosecutor instructed Mr Tse to deposit all his cash into the China Monetary Supervision Authority (literal translation) for investigation, and stated at the same time that the sum would be returned to Mr Tse in 7 days if nothing suspicious was found. 12.In the end, Mr Tse withdrew $409,000 from the bank and then went to Kong Lung Money Exchange. As instructed, Mr Tse said the password “I am Siu Mei, I come to give four pieces.” After the applicant had confirmed the password, he opened the iron gate and let Mr Tse into the money exchange shop, and then Mr Tse immediately handed over $409,000 to the applicant. After the applicant had counted the money, he told Mr Tse to leave. According to Mr Tse, the person who claimed to be a prosecutor told him not to ask for a receipt from staff, and the applicant had neither issued any receipt to him nor made any record. 13.Later, Mr Tse realized that he had been deceived, therefore he made a report to the police to seek assistance on 29 July 2015. 14.On 30 July 2015, after Mr Tse had identified the applicant at Kong Lung Money Exchange, PC15186 and the applicant had the following conversation:
15.PC15186 immediately arrested the applicant. Under caution, the applicant said, “I received $409,000 on that day but (I) gave it to the fatty yesterday.” 16.PC15186 made a post-record on his notebook (P28) of what the applicant had said in the presence of his counsel. The applicant confirmed the same by signing the notebook. 17.On 30 and 31 July 2015, two detective police officers conducted three video interviews with the applicant (1st to 3rd). The applicant was asked many questions but he indicated that he was unwilling to answer. 18.From 31 July 2015 to 12 August 2015, police detectives conducted 7 further video interviews with the applicant (4th to 10th). During the interviews, the detectives mentioned the record of WeChat communications between the applicant and Maa, and questioned the applicant about the record. 19.In the above video interviews, the applicant admitted that upon the requests and instructions of a regular customer, Maa, he received some money in the sum of HK$409,000 and HK$37,100 from Mr Tse and Mr Pang respectively. The applicant said he only received the two sums of money temporarily on behalf of Maa, he did not get any reward in return and it had nothing to do with the business of the money exchange. 20.The applicant said Maa was his regular customer but at the time of the offence he only had known her for about 7 months through Ah Kin (transliteration), a shareholder in Guangzhou. 21.The applicant admitted that he neither knew the full name of Maa nor the nature of the business she owned. He only knew that she was a native of Chaozhou and she resided in Shenzhen. The applicant said that apart from WeChat, he had no other means to contact Maa. 22.The applicant said that Maa often had to make payments in Hong Kong dollars to her customers in Taiwan and Malaysia. At the beginning, Maa, through Ah Kin, asked the applicant to buy Hong Kong dollars. Later, she dealt with the applicant directly once or twice a month. The applicant would give the Guangzhou bank account number of his fellow trader, Ma Man Kwan (transliteration) to Maa. After Maa had deposited the same amount in RMB into the account, the applicant would go to collect the amount in cash in Hong Kong dollars from a fellow trader and then notify Maa. Maa’s customer would use a banknote serial number as a mark for identification and go to Kong Lung Money Exchange to collect the Hong Kong dollars. The applicant said apart from Ma Man Kwan, he would also go to other fellow traders to get the Hong Kong dollars and further sell it to Maa in order to make a profit from the difference in exchange rates. 23.The applicant admitted that he had received $409,000 and $37,100 from Mr Tse and another man on 28 and 29 July 2015 respectively. 24.The applicant said Maa messaged him on WeChat on 28 July 2015, saying her customer would take $400,000 to Kong Lung Money Exchange. On the same day, an old man brought along $409,000, saying that it was “Siu Mei” who told him to hand it to the applicant. The applicant enquired with Maa by messaging her on WeChat. Upon Maa’s confirmation, the applicant received the said sum of $409,000. The applicant admitted that he had neither enquired about the source of $409,000 from Maa nor issued a receipt to Mr Tse or made any record. 25.The applicant also admitted that he did not ask Mr Tse about the source of the money because he believed that Mr Tse was a Malaysian customer of “Siu Mei”. 26.The applicant further said Maa messaged him on WeChat on 29 July 2015, asking to exchange over two million Hong Kong dollars. In the end, the applicant exchanged HK$1,837,400 for Maa and handed over the same and the above $409,000, i.e. HK$2,246,400 in total to Maa. 27.Later, Maa sent her customer’s telephone number and a banknote serial number via WeChat to the applicant and asked him to contact the person at that telephone number. In the end, after the applicant had telephoned that person, a “fatty” came along with a $20 banknote with the same serial number. After the applicant had sent the picture of the banknote to Maa, he handed over cash in the sum of HK$2,246,400 to the “fatty”. 28.The applicant said he had worked together with Maa for a long time, and they had developed mutual trust; therefore, he did not have any suspicion in respect of the amount of $409,000 brought along by Mr Tse. But the applicant admitted that Maa was his only customer who would use a banknote as a mark for identification in a transaction; the reason was that many of her customers from Malaysia had difficulty communicating due to the language barrier. 29.The applicant also said that it was only when Mr Tse mentioned “Siu Mei” that he then realized that Maa was also known as Siu Mei. The applicant said the fact that he received $409,000 on behalf of Siu Mei was a normal practice between the fellow traders, and he did not record the transaction in the accounts book of the money exchange shop because that sum did not belong to him. 30.The applicant even said, “In fact, I felt a little suspicious about the money, but in order to have some revenue for the shop and to make a living, I did not make any registration. I did not want to offend the customer. I did not want to ask too much. If I asked too much, I feared that I would lose the customer and there would be less revenue for the shop.” 31.As to the second sum of $37,100, the applicant said on 29 July 2015, a man came to the money exchange shop and said that Siu Mei told him to hand over the money to the applicant. Upon Maa’s confirmation, it represented a sum she paid in excess to a customer earlier and the customer returned the amount of $37,100 paid in excess. Then the applicant put the said $37,100 in the safe of the money exchange shop. 32.The applicant maintained that he did not know the money was related to any deception case and he had never suspected Siu Mei. 33.The applicant admitted that he would record general transactions in the accounts book. However he did not record the sums involved in this case, namely $409,000 and $37,100, because he did not make any profit from these transactions. 34.The prosecution witnesses stressed that at 4:10 pm on 31 July 2015, police officers took the applicant to his residence in Kwai Chung for a house search. At that time, the applicant’s mother, his pregnant wife and three children were present. They all became emotional when they saw the applicant, and the applicant’s pregnant wife was on the verge of tears when she saw the applicant. Then, after the applicant had conversed with his wife, he left his residence. When he was in the corridor leading to the lift lobby, the applicant whispered to PC58970, “Sir, I have something to say”. PC58970 asked the applicant what he wanted to say, and the applicant said, “I want to tell the truth.” PC58970 cautioned the applicant at once and said he would take him back to the police station for a video interview. 35.At 6:07 pm on 31 July 2015, PC58970 and PC10802 conducted a video interview with the applicant in a video interview room at Tsz Wan Shan Police Station. At that time, the applicant said he did not require a lawyer to accompany him. At 7:02 pm the same day, there was a telephone call to the video room telling PC58970 that the wife of the applicant’s elder brother had engaged a lawyer on his behalf. As a result, the applicant and the lawyer surnamed Yam had a meeting for about 15 minutes. Then, the lawyer surnamed Yam said he would not accompany the applicant. The applicant had a meeting with his elder brother’s wife too and it was at 8:12 pm that the video interview resumed. 36.The applicant stated clearly to the police officers that he did not require any lawyer present during the video interview. On 12 August 2015, when the police officers took the 8th to 10th video interviews with the applicant, the applicant also indicated that he did not require the presence of a lawyer. The police officers who participated in the 4th to 10th video interviews also said that they did not use any threat, force, inducement or other improper means against the applicant or his family. 37.On 2 September 2015, PC11297 interviewed the applicant again in the presence of his counsel and a legal clerk, but the applicant did not respond to the questions of the police officer. 38.Apart from the above evidence, the prosecution had also called an expert witness, Mr Tse Tin Nang (transliteration) to give evidence. The defence did not dispute the evidence of Mr Tse Tin Nang. In fact, his witness statement was admitted and produced in court by consent. 39.Mr Tse Tin Nang pointed out that according to the records of the money exchange shop, Maa gave instructions a total of 17 times for someone to use a banknote with a certain serial number and a business card of the money exchange shop as identification in order to withdraw cash. He considered the practice unusual because it was more appropriate to use a real name and to produce a valid identification document for verification. 40.Mr Tse Tin Nang also pointed out that the practice of keeping cash for someone and then handing over the same to another person later was neither a usual trade practice nor a normal service of a money exchange, but he did not rule out that someone would do so. 41.Mr Tse Tin Nang did analyze the transactions shown in the records of the two mobile phones of the applicant. From one of the mobile phones, there was a record of 29 transactions, among which there were 8 transactions which involved a total sum of more than RMB4,277,277, while the other 21 transactions involved more than HK$15,000,000. From the other mobile phone, there was a record of 7 transactions, and 2 transactions of them involved more than RMB2.2 million, while 4 other transactions involved more than HK$3,670,500. The applicant’s stance and evidence 42.The applicant denied committing the offence of money laundering and he said the admissions he made were involuntary. But the applicant agreed that Mr Tse was a victim of the offence of deception who, according to the instruction of a swindler, took the sum of $409,000 to Kong Lung Money Exchange and gave it to the applicant on 28 July 2015. The applicant also admitted that a man went to Kong Lung Money Exchange on 29 July 2015 to give him $37,100, and on the following day, Mr Pang made a report to the Police claiming that he had been defrauded and he lost $37,100. 43.The applicant agreed that after he had been arrested and taken back to the police station, he was once allowed to make a telephone call to his family for engaging counsel, Mr Yeung Shak Nung, to assist him. After he had received legal advice, he agreed to sign the post-recorded caution statement to confirm that he did say he once received $409,000 from an old man. 44.The applicant pointed out that during the 1st video interview, in the company of Mr Yeung, he remained silent. The applicant said although before the 2nd and the 3rd video interviews, Mr Yeung had already made it clear that the applicant’s family had ceased to engage him to assist the applicant, and the police officer(s) did use force against him, the applicant remained silent and did not respond to the questions of the police officers. 45.However, the applicant pointed out that during the house search, the police officer(s) said repeatedly that he was required to respond, and the applicant’s mother and wife were asked to persuade the applicant to cooperate with the police. 46.The applicant also said that when he was in a police vehicle, a police officer knew that his wife was going to give birth, he said to the applicant, “Ah Yam, this is your last chance, we are now going back to the police station, then we will make an application to the court to bring a prosecution against you. If you refuse to say anything now, we cannot help you, and you will be locked up until the time you appear in court. As to when it will be, we have no idea”. The applicant said it was under the above circumstances that he told the police officer he was willing to speak as he wanted to be released on bail so that he could accompany his wife during labour. As his wife did not have a Hong Kong ID card yet, he needed to sign the papers at the hospital, and he did not want his mother to worry. 47.The applicant said that an hour into the 4th video interview, the lawyer engaged by his elder brother’s wife, Mr Yam Kee Cheong, arrived at the police station. Police officers did make arrangement for him to meet his lawyer. Mr Yam also told the applicant that if there were other video interviews, he could telephone him. 48.When the police were conducting the 5th interview, the applicant did indicate that he needed Mr Yam to accompany him, but the police officer(s) objected and said a lawyer would tell him not to answer any questions and it would be pointless to conduct any video interview. The applicant even said the police officer(s) threatened him and said “Given the statements and information we have in hand, we can charge you and refuse to give you bail.” However, if the applicant was cooperative, the police would allow him bail. As a result, the applicant agreed to continue with the video interview. 49.The applicant also stated that before the 6th video interview commenced, the police officer(s) asked him to be cooperative and said the applicant could leave the police station after the video interview. 50.The applicant even said before the 7th video interview commenced, the police officer(s) said that the response he made was beside the point and he was asked to respond according to the instructions of the police officer(s). The applicant stressed that the police officer(s) wanted him to say, “The transactions with Maa were really suspicious, but for the sake of making a living and the business of the shop, and being fearful of offending the customer, [he) did not ask much.” And it was said that if the applicant was cooperative, he would be assisted in his mitigation. The applicant stressed that it was under the above circumstances that he made the admissions according to the instructions during the interview. He was only allowed to eat and given bail after the interview. 51.In respect of the 8th to the 10th video interviews, the police officer(s) told him that he would be asked to identify some exhibits only, and he had to do so whether he had a lawyer or not, so it would only be a waste of money to get a lawyer. In the end, the applicant agreed not to get a lawyer. The applicant also said the police officer(s) did at one point take away his cross-body bag which contained his mobile phone(s). After the 8th and the 9th video interviews, police officer(s) told the applicant that a second charge would be laid against him. Then the police officer(s) continued with the 10th video interview and the cross-body bag was only returned to him after the interview. 52.Although the applicant did not give evidence on the general issue, he called two character witnesses, namely his two ex-employers to testify in order to prove that he was a conscientious, hardworking, friendly, and decent man. The findings of the trial judge 53.The trial judge analyzed in great detail the evidence from both the prosecution and the defence, including what the defence alleged was unreasonable evidence of the police officers, namely why the police conducted two house searches, and after the second house search, the applicant allegedly told PC58970 that he had something to say, how come the other officers were unaware that PC58970 cautioned him. During the 4th interview, PC10802 told the applicant: “… got something to tell me”, but the applicant did not correct him. It was because he wanted to tell PC58970 only, but not a group of officers. The defence considered all the above evidence from the police officers was not credible. 54.The trial judge pointed out that not only did PC58970 put down in his notebook in great detail what the applicant had said that he would tell him everything, he also reported the matter to Station Sergeant 50477. The trial judge accepted the evidence of the police officers concerned and rejected the allegation that PC15186 had violated the relevant rules of “Rules and directions for the questioning of suspects and taking of statements” when he questioned the applicant. 55.The trial judge rejected entirely the applicant’s allegations against the police. The trial judge held that the statements made by the applicant during the interviews concerned were voluntary, and therefore they could be produced as evidence. 56.Although the applicant did not give evidence on the general issue, he called two character witnesses to testify on his behalf. 57.The trial judge had considered the two charges against the applicant one by one, and she also carefully analyzed the relevant evidence as well as the legal principles relating to the offence of “money laundering”. 58.The trial judge pointed out that it was extremely unusual for the applicant to use a banknote serial number as a mark for identification, and according to the expert evidence, the applicant’s receipt of the sums of $409,000 and $37,100 in those two transactions were suspicious transactions, they did not belong to the normal business of a money exchange. 59.The trial judge stressed that according to what the applicant had said, the two sums of money concerned were deposited in the applicant’s money exchange shop by Maa, who would arrange to withdraw the same later. However, the applicant had limited knowledge about Maa’s background. He neither knew her full name, nor did he have other means to contact her apart from WeChat, and he was unaware of the nature of her work except that he had known her for 7 months. 60.The trial judge pointed out that the applicant had 17 transactions with Maa, involving a total amount exceeding 15 million dollars, but she did not open a bank account in Hong Kong, and she had to get someone to go to the money exchange shop personally to withdraw the cash on each occasion. The trial judge was of the view that the two transactions concerned were extremely unusual, in particular the applicant adopted an indifferent attitude to the depositors, and he even did not enquire about the identities and backgrounds of Mr Tse and Mr Pang and their reasons for making the deposits. 61.The trial judge stressed that the applicant admitted that he felt a little suspicious about the money concerned, but in order to make a living, he decided not to ask too much and received the two sums of money without making any records. 62.The trial judge found that the applicant adopted an indifferent attitude which showed that he had reasonable grounds to believe the two sums of money he dealt with were “black money”. Therefore, the trial judge found the applicant guilty of both charges. Grounds of appeal 63.Mr James Cheng of counsel put forward a number of grounds in support of the applicant’s application for leave to appeal against conviction. 64.Mr Cheng contended that the trial judge should not have admitted the applicant’s video interviews taken by the police officers into evidence. Mr Cheng pointed out the inconsistencies in the evidence of different police officers, and PC10802 and Station Sergeant 50477 should not, as the trial judge said, be unable to hear the conversation between the applicant and PC58970. 65.Mr Cheng stressed that the contradictory evidence of the police officers affected the reliability and credibility of their overall evidence. He pointed out that PC15186 did not caution the applicant timely, which was a violation of the rules concerned, and that the trial judge should not have found the applicant’s evidence untrue. 66.Mr Cheng stressed that as the police officers spoke neither Putonghua nor the Chaozhou dialect, thus the trial judge should not have found the applicant’s evidence regarding his conversation with his wife in Putonghua a recent fabrication to discredit the Police. He also contended that the trial judge should not have rejected the evidence of the lawyer, Mr Yam Kee Cheong, but should have accepted the different evidence of Station Sergeant 50477 instead. 67.Mr Cheng pointed out that the trial judge misunderstood the evidence of the expert witness and applied the legal principles erroneously, and she had failed to properly analyze the applicant’s beliefs, feelings, likes or dislikes before deciding whether he had reasonable grounds to believe the two sums of money involved in the case were “black money”. 68.Mr Cheng stressed that the applicant did take a photo of the banknote which the customer brought along as a mark for identification to collect the cash, and then he further sent it to Maa in order to show that the money had been given to the customer. Hence, the trial judge should not criticize the applicant for not issuing a receipt. 69.In respect of the 2nd charge, Mr Cheng pointed out that the trial judge did not deal with this charge separately from the 1st charge, and the two complainants were mistakenly identified by her as the victims of deception. He considered that since Maa was a mainlander, her customers would have different reasons not to hand the money to her directly. Discussion 70.It is not disputed that Mr Tse was a victim of a deception offence. The defence also admitted that Mr Pang did make a report to the police on 30 July 2015 alleging that he was defrauded of $37,100, and one day earlier, namely on 29 July 2015, someone handed over $37,100 to the applicant at Kong Lung Money Exchange. According to what the applicant confessed in the video interview, a man aged about forty came to his money exchange shop on 29 July 2015, saying that it was “Siu Mei” who told him to hand over $37,100 to the applicant. 71.In our view, the above evidence was sufficient to lead to the conclusion made by the trial judge, namely that the one who handed over $37,100 was Mr Pang who had allegedly been swindled. If the defence disputed that the one who handed over $37,100 to the applicant was Mr Pang who had allegedly been swindled and lost $37,100, they should not have submitted the two points by way of admitted facts to the trial judge. 72.Plainly, whether the money involved came from a deception offence has no direct or necessary relation to the incident. In “money laundering” offences, the prosecution is not required to prove that the “black money” comes from some indictable offence. The prosecution alleged in the two charges that when the applicant received and later dealt with the sums of $409,000 and $37,100 on 28th and 29th July 2015 respectively, he had reasonable grounds to believe that the said two sums of money were “black money”. 73.The applicant admitted that he did receive and deal with the two sums of money. Therefore, it was not disputed that he did deal with the two sums of money. The only issue to be resolved in this case would be the applicant’s mens rea, namely when he dealt with the money, including receiving/keeping/paying the two sums of money, whether he had reasonable grounds to believe the two sums of money were “black money”. 74.There was undisputed objective and/or indirect evidence which showed that when the applicant dealt with the two sums of money, he had reasonable grounds to believe the two sums of money were “black money”. The evidence included:
75.Having considered the state of mind of the applicant when he dealt with the two sums of money involved in the case in accordance with the legal principles laid down in money laundering cases, including HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778 and HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279, the trial judge found that the applicant had reasonable grounds to believe the two sums of money were “black money”. In our view, the trial judge’s way of dealing with the matter was correct. The above objective or indirect evidence supported the trial judge’s decision. 76.The applicant’s admissions showed directly that he had reasonable grounds to believe the two sums of money he dealt with were “black money”. In reply to the question of Station Sergeant 50477 as to whether the applicant felt the transactions concerned suspicious, he admitted directly, “Yes, yes, I myself felt suspicious too, but in order to make a living and for the sake of the business of the shop, and fearful of offending the customer, (I) did not ask much.” 77.The applicant’s admission showed that he believed the source of the two sums of money was questionable, but for the sake of the business he adopted an indifferent attitude. 78.The above indirect and/or direct evidence could prove that when the applicant dealt with the two sums of money concerned in the case, he had reasonable grounds to believe the two sums of money were “black money”. 79.Mr Cheng argued that the trial judge should not have accepted the evidence of the police officers and found the applicant’s admission voluntary. Mr Cheng pointed out that there were inconsistencies in the evidence of some individual police officers, and he stressed at one point of time the applicant remained silent but he later changed his stance which was a sign that he was once under duress. 80.In our view, Mr Cheng’s approach was fault-finding. PC10802 and Station Sergeant 50477 were together with PC58970 and the applicant, but whether they were able to hear the conversation between PC58970 and the applicant would be subject to various factors, including their relative positions, whether they focused their attention on PC58970 and the applicant, and whether they had to deal with other matters and therefore focused on other matters. 81.PC10802 and Station Sergeant 50477 testified that they could not hear the conversation between PC58970 and the applicant, so that Mr Cheng argued that the witnesses are neither credible nor reliable. This argument was impractical and we disagreed with it. A person under police investigation changing his mind and answering questions asked by the police does happen from time to time. The defence cannot argue unreasonably that since there was a change of stance, there were doubts and the admission concerned was involuntary (see HKSAR v Chan Yu Sing and Another CACC13/2008). 82.The fact that the police officers speak neither Putonghua nor the Chaozhou dialect does not mean they could not tell the difference between the two. When the police officers gave evidence, they said the applicant conversed with his wife in a dialect similar to Chaozhou dialect, which the defence did not deny during cross examination. However, when the applicant gave evidence, he said he conversed with his wife in Putonghua. The trial judge had a basis to make adverse comments against the applicant, but this point can be regarded as insignificant in the entire incident. 83.In fact, the trial judge had analyzed the evidence from both the prosecution and the defence with extreme care and in great detail. The trial judge had also set out completely her process of reasoning. In our view, the trial judge had not misunderstood the expert evidence. In fact, what the expert witness said is just common sense, and the conduct of the transactions involved in the case is obviously suspicious and improper. With regard to the overall evidence, we are of the view that the trial judge had sufficient grounds to reject the evidence of the applicant on the special issue and accept the evidence of the police officers. The trial judge also had basis to find that the contents of the video interviews concerned were made by the applicant voluntarily, and therefore they were admissible. We agree with the trial judge in her ways of handling the matter and her findings. 84.When the trial judge criticized the applicant for issuing no receipts, she meant that he did not issue any receipts to the payers when he received the two sums of money involved in the case. The fact that the applicant did take photos of the banknotes for identification and send them to Maa as records does not affect the comments of the trial judge on this issue. 85.We are of the view that the judgment of HKSAR v Yan Sui Ling (2012) 15 HKCFAR 146, which Mr Cheng relied on heavily, does not support his position. 86.In respect of the facts and the background of the present case, the trial judge had sufficient grounds to find that when the applicant dealt with the sums of $409,000 and $37,100 involved in both charges, he had reasonable grounds to believe the two sums of money were “black money”. 87.In our view, the trial judge’s verdicts that the applicant was guilty of both charges were justified and safe. The grounds of appeal put forward by Mr Cheng fail and they do not constitute any grounds for overturning the convictions. 88.Accordingly, we refuse the applicant’s application for leave to appeal against conviction. Sentence 89.When passing sentence, the trial judge pointed out that there was no evidence to show the applicant knew about the predicate offence. The applicant’s modus operandi was unsophisticated and he did not participate in any telephone deception. The trial judge further pointed out that the applicant only dealt with two sums of “black money” over two days, but he did not continue to “launder the black money” after he became aware of the nature of the predicate offence. 90.The trial judge was of the view that there was an international element as the swindlers had telephoned the victims from the mainland, and a criminal syndicate was behind the offences. 91.The trial judge also pointed out that since the applicant was the person in charge of the money exchange, he should have a better knowledge of the anti-money laundering ordinance and a relatively better sense of prevention than other people in general. He certainly would have known of the risks involved, but he did not enquire about the sources of the funds, and he only believed without any basis that the two sums of money were legal and accepted them. 92.In respect of the two charges, the trial judge considered the appropriate starting points should be 3 years and 2 years respectively. 93.In view of the prevalence of “telephone deception” offences, the trial judge granted the application by the prosecution to enhance the sentences by one third to 48 months and 32 months pursuant to the Organized and Serious Crimes Ordinance (Cap.455). The trial judge ordered that 6 months of the sentence for Charge 2 should run consecutively to the 48 months’ imprisonment for Charge 1, making a total term of imprisonment of 54 months. 94.Mr Cheng contended that since the amounts involved in the two charges were only $409,000 and $37,100 respectively, the starting points of 3 years and 2 years adopted by the trial judge were excessive. Mr Cheng cited a number of cases in support of his position. 95.Mr Cheng also contended that since there was no evidence to support the point that the sum of $37,100 involved in Charge 2 came from a telephone deception offence, the trial judge should not have sentenced on the basis that the sum of $37,100 was generated by a telephone deception offence. Mr Cheng at first agreed that for Charge 1, the trial judge was entitled to enhance the sentence pursuant to the Organized and Serious Crimes Ordinance, but, following our analysis of the matter, he changes his position. Discussion 96.The Court of Appeal has stressed time and again that “money laundering” is a serious crime as the “money laundering” offence indirectly encourages criminals in their illegal activities, and it legalizes the proceeds of crime. The Court of Appeal has stressed that combating money laundering effectively could be one of the effective measures against crimes as in modern society, criminals often commit serious crimes for financial gain (see para 31 of HKSAR v Javid Kamran,unreported, CACC 400/2004). 97.The Court of Appeal made it clear in Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 197:
98.Although in the present case, there is evidence to show the two sums of money originated from some telephone deception offences, there is no information to prove the applicant did participate in or know about the telephone deception cases. 99.Regarding the two sums of $409,000 and $37,100 involved in the two charges in the present case, the amount is less than those involved in similar cases in general. 100.No serious aggravating factors are found in the present case, and the applicant only received two sums of money of unknown sources over two days. A swindler from a similar case would usually hide his criminal acts in different ways, and definite answers to the questions such as from where they telephoned the victims, and whether there was a criminal syndicate involved and its scale, would not be easily obtained. 101.The trial judge was extremely harsh when she said the case involved an international element and the applicant’s criminal acts involved a criminal syndicate, and treated them as aggravating factors. 102.However, we agree that as the applicant was the person in charge of the money exchange, he should pay more attention to “money laundering” offences. Furthermore, we also cannot overlook that a “money exchange shop” can easily be used by others to accept “black money”. Hence, using a “money exchange shop” to deal with “black money” was indeed an aggravating factor. 103.The amounts involved in the two charges were only $409,000 and $37,100 respectively. The amount involved in the present case was relatively smaller than that in similar cases. We are of the view that the starting points of 3 years and 2 years adopted by the trial judge were manifestly excessive. 104.In our view, the more appropriate starting points should be 2½ years and 1 year. 105.Although “telephone deception” cases are extremely prevalent, there is no evidence to show the applicant knew that the amount involved in the two charges originated from the telephone deception cases. There is no direct relation between the culpability of the applicant and the telephone deception offences. Telephone deception offences are serious as well as prevalent. The court has a duty to deter them. However, the court should not impose additional punishment on an applicant for offences which he neither had knowledge of nor had taken part in. 106.Under the above circumstances, the enhancement of the sentence for the two charges by one third pursuant to the Organized and Serious Crimes Ordinance due to the prevalence of telephone deception cases was erroneous in the present case and should be set aside. 107.We grant the application for leave to appeal against sentence. We allow the appeal and reduce the sentence for Charges 1 and 2 to 2½ years and 1 year respectively. We order that 6 months of the sentence for Charge 2 run consecutively with the sentence of 2½ years for Charge 1, making a total prison term of 3 years. The total term of imprisonment for the applicant is reduced from 54 months to 36 months.
Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr. P. Y. Lo, Barrister-at-law. |
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