HKSAR v. Yeung Chun-to

DCCC 677/2021

[2022] HKDC 232

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 677 OF 2021

____________

____________

REASONS FOR SENTENCE

The defendant pleaded guilty to a charge of "Conspiracy to deal with property known or reasonably believed to represent proceeds of an indictable offence". In short, he lent his bank account to someone.

Summary of Facts

2.The defendant opened a bank account (No.052-821212-833) with HSBC ("the Account") on 2 July 2015.

3.Between 18 September and 9 October 2015, a number of people were deceived on the internet. They intended to purchase concert tickets of a K-pop group named "BIGBANG".  Those people deposited money into various bank accounts as payments for their tickets.  Unfortunately, they did not receive their tickets.  The Police was alerted.  Investigation revealed that the Account was one of the bank accounts which received money from the concert ticket fraud victims.

4.Between July and December 2015, the Account received a total of 976 deposits (50% by cash; 34% by bank transfers; and 15% by ATM transfers) which aggregated to an approximate sum of $1.9 million.  Withdrawals which aggregated to about $1.9 million were made within the same period.  Over 97% of the withdrawals were made by way of transfers to the defendant's current account, and then by cheques payable to 2 individuals and 3 entities.

5.In his cautioned interview conducted on 8 March 2016, the defendant admitted that he was a student.  He opened the Account for receiving his work pay in the future.  Shortly after the Account was opened, he met someone named "Ah Lung" in a bar.  Ah Lung asked the defendant to lend him the Account since Ah Lung did not have any account with HSBC.  The defendant then gave the ATM card to Ah Lung and told him the password as well.  The defendant claimed that he knew nothing about the transactions of the Account.  He thought he was just helping a friend and no reward was involved.  The defendant closed the Account a few months later when Ah Lung was nowhere to be found.

6.The defendant now admits that during the offence period, he had conspired with Ah Lung, knowing or having reasonable grounds to believe that the total sum of $1,926,300.28 held in the Account, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, to deal with the said sum of money.

Mitigation & Sentence

7.The defendant is now 25 and has a clear record. Defence counsel Mr. Tsui informed me that the defendant is single and resides with his father and grandmother. He is a renovation worker earning $18,000 per month. Prior to that, he was a waiter and a transportation worker.

8.In mitigation, Mr. Tsui submitted that the defendant was only 18 when he opened the Account. He later lent the ATM card of the Account to Ah Lung. He was also asked to sign a number of blank cheques. Mr. Tsui stressed that the defendant had no knowledge of and did not take part in the "concert ticket fraud".

9.Finally, Mr. Tsui submitted that there is undue delay in charging the defendant. His cautioned interview took place in March 2016 but he was not charged until June 2021, some 5 years later. Mr. Tsui explained that the defendant was perhaps naive when he committed the present offence, but he has reformed and rehabilitated himself in the past 5 odd years. He has a stable job and is willing to help others. His renovation skills and generosity are recognized by his clients and members in his community.

10.I will deal with the issue of "delay" first. Prosecuting counsel Ms. Chan has helpfully prepared a Chronology of Events for my reference. I need not go into the details, suffice it to say that it took the Police 17 months to investigate this case and to submit the case file to the Department of Justice for legal advice; then 10 months to issue the initial legal advice. The Police took another 26 months to conduct further investigation. The Department of Justice took 6 months to finalize its legal advice. The Police then took 7 months to locate 5 suspects and the defendant was arrested and charged in June 2021. Ms. Chan informed me that a total of 70 bank accounts and 6 suspects were involved in this investigation.

11.In my view, 5 years from the cautioned interview to charging the defendant were excessive. I appreciate the complexity of this case as described by Ms. Chan, but flexibility is often necessary. Of course it is easier said than done with the benefit of hindsight, a major investigation could perhaps be truncated into a number of sub-investigations, so that some arrested persons could be triaged and dealt with first as and when the sub-investigations were completed. As far as the defendant is concerned, there is undue delay in bringing criminal prosecution against him. I should, for the sake of completeness, mention that this case reached the District Court on 17 August 2021. The defendant indicated his intention to plead guilty on 12 October 2021.

12.The Court of Appeal in SJ v Wan Kwok Keung [2012] 1 HKLRD 201 held :-

"Money laundering" is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the "money laundering" offences.

Generally, the sentence for "money laundering" offences should mainly reflect the amount of "black money" laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most "money laundering" cases, there may not be evidence to show from what indictable offence the "black money" are in fact derived. Of course, if there is information to prove that the "black money" is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant's benefit is huge, then the sentence should be adjusted upward.[1]

13.In determining the proper starting point, I have reminded myself of the sentencing principles laid down in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33. I have also borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

14.In SJ v Ngai Fung Sin Apple [2013] 5 HKLRD 104, Yeung V-P held :-

Generally speaking, the sentence passed in a "money laundering" case is primarily to reflect the amount of the "illicit/black money" involved. Neither the fact that the "illicit/black money"was actually not derived from an indictable offence nor the defendant's ignorance of the actual source of the "illicit/black money" is necessarily a valid mitigating factor…[2]

15.I accept there is no evidence in the present case showing that the defendant was involved in or had any knowledge of any predicate offence (i.e. the concert ticket fraud). I also accept that the defendant did no more than "lending" his bank account to someone and that he did not deal with the funds which went through the Account. Furthermore, all banking transactions seem to have taken place locally in Hong Kong.

16.On the other hand, I cannot overlook the fact that $1.9 million went through the Account within a period of 6 months. Ms. Chan has informed me that only $2,000 deposited into the Account were related to the concert ticket fraud. The source of other deposits is unknown. I was also told that of the 976 deposits made to the Account, the sums ranged from $200 to $26,000.

17.By "lending" his bank account to someone, the defendant played a pivotal role in allowing the mastermind(s) of criminal activities to access the illegal funds without revealing their identities. The court must send a clear message to the general public that people who play any role in "money laundering" will receive severe punishment, so that there is a deterrent effect.

18.In the circumstances, I adopt a starting point of 3 years' imprisonment[3]. With the timely guilty plea, the sentence is reduced to 2 years. I will further reduce the sentence to 22 months since only $2,000 were related to the concert ticket fraud.

19.Had the defendant been brought to court in a timely fashion, it is almost certain that he would have been under 21 at the time of sentencing. Hence, section 109A of the Criminal Procedure Ordinance (Cap.221) would apply, and imprisonment would have been the last resort, unless the court is of the opinion that no other method of dealing with him is appropriate.

20.At present, my hands are tied. Sentencing options which are created for the benefit of young offenders such as Rehabilitation Centre, Detention Centre and Training Centre are no longer available for my consideration because the defendant is now over 21.

21.Since his involvement in this case came to light in March 2016, the defendant did not give up himself. He has behaved well and worked hard. He performed well on his job and tried to help others in his community. Information from all angles shows that he has rehabilitated himself and transformed to become a law-abiding citizen.

22.As the Court of Appeal put it in Secretary for Justice v Chan Chi Tao[4] [2020] HKCA 296 (CAAR 6/2018; Chinese judgment), by sending the defendant to prison now, it would not only declare his effort in reforming himself futile, but would also be devastating to him and his family. The undue delay and the defendant's background justify a suspended sentence. I order his sentence be suspended for 18 months.