The defendant, Tsoi For, was on trial for one count of trafficking in dangerous drugs (the 1st count) and one of dealing with property known or reasonably believed to represent proceeds of an indictable offence (the 2nd count).
The jury acquitted the defendant of the 1st count by a majority verdict of six to one but found him guilty of the 2nd count by a unanimous verdict.
The Factual Basis of the Conviction
The 2nd count concerned a joint account held by Diao Jun-hua and the defendant with HSBC. The joint account was opened by them on 1 December 2016, approximately two months they had lived together. The 2nd count concerned cash deposits in the total sum of $4,252,188 made between 12 December 2016 and 10 May 2018.
The jury, by their verdict, must have rejected the evidence of the defendant and Diao that the account was only opened because the defendant wanted to immigrate to Australia in the future and the joint account was intended to serve as proof of their financial commitment in their relationship. The jury, in their verdict, must have rejected the evidence of the defendant and Diao as to the purpose and intended use of the joint account.
It is possible that the jury did not reject the defendant’s evidence that the deposits he made were from his own savings from his income as a model, sale of his mainland property and moneys given to him by his family. According to the treasury accountant’s report, there were seven deposits in total of $446,000 in that regard.
The jury, by their verdict, must have accepted the evidence of Diao that he had on the few occasions given some cash to the defendant to deposit into the joint account when he was busy and the defendant had reasonable grounds to believe that on those occasions the cash sums were proceeds of drug trafficking. The jury in their verdict must have accepted the evidence of Diao that for the cash deposits he put into the joint account, the money mostly came from his trafficking in dangerous drugs, mostly ‘Ice’.
In convicting the defendant of the 2nd count, the jury must have found that the incidents of dealing by the defendant and Diao were done pursuant to their plan or agreement during the period in question to use the joint account to hide the proceeds of Diao’s trafficking in dangerous drugs. Hence, for the deposits made by Diao, the defendant must be aware that Diao had been putting money into the joint account during the relevant period. Diao would only ask the defendant to make cash deposits for him when Diao was unable to do so.
Given the WhatsApp messages and the evidence of Diao, it is clear from the jury’s verdict they found the defendant have reasonable grounds to believe the property that Diao put into the joint account was proceeds from dangerous drugs trafficking.
Now, Diao’s sentence for the money laundering charge in relation to the joint account. For the money laundering charge identical to the 2nd count that Diao pleaded guilty to, DHCJ Bruce, SC, considered that the money laundering by Diao did not involve any attempt to disguise the proceeds of the crime and was relatively unsophisticated and there was no international element. The learned deputy judge considered the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma [2012] 2 HKLRD 43.
Mr Ma draws my attention to the following passages in the learned Deputy Judge’s reasons for sentence:
“In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal held that the principle considerations are as follows:
(a) The amount of the money involved was the major consideration, not the amount of benefit received by a defendant in the transaction;
(b) The culpability of the offence lay in and the assistance, support and encouragement offered to the commission of an indictable offence so a defendant’s level of participation and number of occasions on which he was involved in the “money laundering” activities were relevant factors;
(c) The offence of dealing with the proceeds from an indictment offence did not necessarily have any direct correlation with the indictable offence in question, but if the latter offence could be identified, the court could take into account the sentence imposed on it per se when determining the sentence for the former offence;
(d) If the case had an international element involving activities carried out across different regions, the court might impose a more severe sentence so as to protect Hong Kong’s reputation as an international finance centre and banking hub from being tarnished; and
(e) The length of the time the offence lasted.”
“The topic of the appropriate approach to sentence in money laundering cases was also considered in HKSAR v Boma [2012] 2 HKLRD 33. In this case, Stock VP, recognised the multiplicity of circumstances in which the offence could be committed. Taking account of the factors discussed by Stock VP, which compliment those in Hsu Yu Yi (above), to which a reference has been made, the predicate offence is drug trafficking and as I have already noted, the proceeds were simply banked into a joint account. There is a substantial amount of cash in the refrigerator in the premises which was plainly used for drug trafficking, and that cannot be ignored. However, in my view, the conduct of the money-laundering in this case is relatively unsophisticated.”
The learned Deputy High Court Judge adopted a starting point of 3 years’ imprisonment for the money laundering charge. He sentenced it down to 2 years’ imprisonment after the one-third discount for plea.
It was ordered that the sentence for the money laundering charge should run concurrently with the sentence in respect of the drug trafficking charges.
Mitigation
I take into account all the matters urged on the defendant’s behalf by Mr Ma and the mitigation placed before me today. For the reasons given, I sentence the defendant on the basis of the aforementioned factual basis.
I accept the role of the defendant was a passive one. The defendant and Diao were living together as a couple. His role was passive in that he acted upon Diao’s instructions, his partner.
The 2nd count concerned a period of around 18 months. There was no international element for the money laundering part though the predicate offence of trafficking in dangerous drugs involved importing into Hong Kong Gamma Butyrolactone, GBL, a dangerous drug from Lithuania.
Mr Ma draws my attention to the facts and the sentences imposed in HKSAR v Chan Wai Yan [2012] 4 HKLRD 195 and HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 165. Mr Arthur also places before me for my consideration the following cases: one, HKSAR v Xu Xia Li and Another [2004] 4 HKC 16; two, HKSAR v Shing Siu Ming [1999] 2 HKC 818; three, HKSAR v Javid Kamran, CACC 400/2004; and four, HKSAR v Leong Wai Keong, CACC 476/2007.
Mr Ma asked me to take into consideration the facts of this case and the facts of Chan and Lai and the sentences imposed in the two cases. He submits that the defendant only acted upon Diao’s instructions and given the relationship of the defendant with Diao, i.e. is the perpetrator of the predicate offence, that warrants a discount on the sentence.
Mr Ma submits the seriousness of the present case is comparable to Lai Kam Yee Teresa in terms of the amount of the money laundered, the predicate offence and the relationship of the defendant with the perpetrator of the predicate offence.
Consideration
In sentencing the defendant, I take into account the facts of this case, the amount of the money laundered, the laundering act was relatively unsophisticated, the period covered, the nature of the predicate offence. I am aware that the jury convicted the defendant on the basis he had reasonable grounds to believe the property that he and Diao dealt with represented proceeds of dangerous drugs trafficking, not that he knew.
There is evidence that both the defendant and Diao had access to the money in the joint account. The evidence shows that there was no clear division of ownership for the monies put into the account by either the defendant or Diao.
I accept that the defendant acted upon Diao’s instructions and they were living as a couple at the time. The defendant has a clear record.
In my judgment, I’d adopt a starting point of 3 years. I allow the defendant a reduction of 2 months for his clear record. I allow a further 6 months reduction for the combined factor that the defendant committed the offence largely because of his relationship with Diao. He was acting passively under Diao’s instructions and he had reasonable grounds to believe, not knowledge, that the property represented proceeds of dangerous drug trafficking.
There is no further mitigating factor that can further reduce the sentence. For the reasons given, on the 2nd count, I sentence the defendant to 2 years and 4 months’ imprisonment.