HKSAR v. Cocheteux Ludovic Charles Bernard

DCCC 451/2020

[2020] HKDC 1018

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 451 OF 2020

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REASONS FOR SENTENCE

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1.The Defendant, a French National, pleads guilty to the charge that he deals with the property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance (also known as the “money laundering charge”).

2.He admits that the content of the amended Summary of Facts to be true and correct.  In a gist, he admits that at the material time, he set up a company in Hong Kong, then he used this company to open a bank account in Hong Kong (the “Bank Account”).  Eventually a total sum of EUR 280,000, being part of the proceeds of the fraud that he committed in France, was transferred to the Bank Account on two occasions in April and June 2009, and he spent all the money for himself. The Defendant has been convicted and sentenced for 5 years’ imprisonment by the First Instance Court of Paris for the fraud he committed, which involved a total sum of EUR 1.29 million.

3.Prosecution admits that that EUR 280,000 equals to around HK$3 million based on the prevailing exchange rate at that time. 

The legal issues

4.Before the court decides a proper sentence, two legal issues have to be considered:-

(a)  Whether any discount (and if so, how much) ought to be given to the Defendant for the fact that he had previously been convicted of and sentenced for the predicate crime (i.e. the fraud he committed in France) from which the proceeds in question were divided (the “Double Punishment Issue”); and

(b)  Whether any discount (and if so, how much) ought to be given to the Defendant for the possible difficulties or hardship that he may suffer in prison on account for his foreignness (the “Foreignness Issue”).

The Double Punishment Issue

5.In HKSAR v Chan Kim Chung, Nelson [2012] 2 HKLRD 263, the appellant pleaded guilty to blackmail and money laundering.  He applied for leave to appeal against sentence on the ground that the sentence for the money laundering offence ought not to run consecutively to the sentence for blackmail, as he had merely dealt with the fruits of the blackmail.  The Court of Appeal explained (at paragraph 13) what amounted to “dealing with the proceeds for a money laundering purpose”. It meant where the crime proceeds were dealt with for the specific purpose of creating distance between the crime and the profits it generated by, for instance, transferring the money between accounts, both domestic and international, a series of layers were created rendering the detection of the crime and the recovery of its proceeds more difficult. The Court held (at paragraph 14) that when money laundering in this sense took place then it should be separately charged because it represented a course of criminal activities that was clearly additional to the criminal acts that made up the predicate offence. Insofar as sentencing is concerned, the Court (at paragraph 17) stated that the question for the purpose of sentence of the money laundering offence had to be whether its commission added anything to the culpability disclosed by the commission of the predicate offence.  If it did, then that extra culpability had to be reflected in the overall sentence imposed.  If, however, the money laundering offence added nothing, then an effective additional sentence for the money laundering offence should not be imposed, for doing so would in effect be to punish the offender twice for the same conduct. The Court went on to elaborate (at paragraph 19) that in the normal course of events the use of an account “to conceal the proceeds of a crime, to disguise them, or to transfer them or remove them” so as to facilitate the crime’s commission or render its detection more difficult would constitute material additional culpability. 

6.Accordingly, where there is additional criminality or culpability on the money laundering offence than the predicate offence, an additional sentence is warranted.

The Foreignness Issue

7.In Secretary for Justice v Tse Ki Wu and Ors [2002] 1 HKC 160, Judge Leong said the following after reviewing a series of case authorities (at 165D-E):-

“The position is therefore quite clear and that is, the ‘foreignness’ of a defendant in the sense that he being foreign to the environments in a Hong Kong prison and likely to experience cultural and social difference and difficulty in communication, is only an aspect for the overall circumstances to be considered when a court determines the appropriate sentence to be imposed on him and it is a factor for which, depending on the circumstances of the case, little or no weight at all should be given”.

8.The decision in Tse Ki Wu was cited with approval by the Court of Appeal in HKSAR v Hong Chang Chi [2002] 1 HKLRD 486 and Stuart-Moore VP says as follows (at 49(A)):-

“While the overseas status of a defendant was a circumstance to be taken into consideration, it could not amount to mitigation to any substantial degree and should not, on that account, be given a specific discount”.

9.Accordingly, no special discount should be given on the foreignness of a Defendant.

Personal background

10.According to the letters the Defendant wrote to the court, he pleaded guilty in the very first opportunity, feels remorseful, he is willing to face the legal consequence and is a changed man. He also admitted that he had been convicted and sentenced for 5 years’ imprisonment by the First Instance Court of Paris and mentioned that he should not be punished again.

The starting point

11.In this case, I am satisfied that the Defendant carried out additional acts to conceal his proceeds of crime, to disguise them, to transfer them or to remove them, hence material additional culpability was involved. 

12.In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal emphasised that deterrence sentence is paramount in this kind of offence, for the criminality in laundering arises from the encouragement and nourishment it gives to crime in general.  Without it, many crimes would be rendered much less fruitful and perhaps more difficult to perpetrate. A list of factors should be considered by the sentencing court.  However, given the highly variable circumstances in which the offence might be committed, it was difficult and undesirable to set up any guidelines.

13.In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal set out the amounts of money involved and the sentence passed in a number of money laundering cases.  The starting point was 3 years or so where the amount of money laundered was between $1 million and $2 million, and 4 years or so where it was between $3 million and $6 million.  It was endorsed subsequently in Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201. 

14.In our case, the Defendant on two occasions transferred a total sum of EUR 280,000, which equals to around HK$3 million, being part of the proceeds of fraud happened in France, to the account in HSBC in Hong Kong, then spent all of the money.  He was fully responsible for the transfers by utilising the Chelsea Corporation Limited, a local company, and the Weston Global Group Limited, a BVI company.  The predicate crime is a fraud that he committed in France.  Further, he had been sentenced in France for the fraud for 5 years. The total money involved in the fraud is around EUR 1.29 million.  Accordingly, the money he laundered in Hong Kong amounted to 21.7 per cent of the money he frauded.

15.In the Defendant’s letter dated 12 October 2020, he submits that according to the Judgment of the French court, it had already considered the fraud involved the Chelsea Corporation Limited, the HSBC and Hong Kong. 

16.After considering all the factors, I decided a term of 42 months as a starting point is appropriate in this case. 

Aggregation or mitigation

17.As I mentioned before, little or no weight at all should be attached to the Defendant’s foreignness status.  The Defendant’s only mitigating factor is he pleaded guilty at the very first opportunity.  He will have full one-third discount; see HKSAR v Ngo Van Nam (CACC327/2015 and CACC418/2014).  His sentence after discount is 28 months of imprisonment.

Conclusion

18.After considering all the factors, I confirm a term of 28 months’ imprisonment is a proper sentence. 

19.And I also thank for the assistance from Ms Chan.