HKSAR v. Li Shuangkai and Others

DCCC 68/2022

[2022] HKDC 1116

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 68 OF 2022

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REASONS FOR SENTENCE

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1.The 1^st defendant pleaded guilty to one count of dealing with property known or believed to represent proceeds of an indictable offence, commonly known as “money laundering” offence (Charge 4).

2.The 2^nd defendant pleaded guilty to three counts of money laundering (Charges 1, 2 and 4).

3.The 3^rd defendant pleaded guilty to all four counts of money laundering (Charges 1, 2, 3 and 4).

The Facts

4.The underlying events leading up to the money laundering in the present case are a series of typical telephone deceptions.  Four senior citizens (Mr Leung (aged 83), Madam Tjiu (aged 79), Madam Tam (aged 72)  and Madam Fung (aged 77))  were victimized by unidentified scammer(s)  who falsely represented themselves to be their respective “son”.

5.Believing the false representations, the victims prepared cash to bail their “son” out of different dire circumstances presented by the scammer(s).  The defendants in the present case were persons who collected the cash from the victims.  The four incidents all took place within one month between 6 July 2021 and 2 August 2021.

6.For Charge 1, the 3^rd defendant collected HK$60,000 from Mr Leung on 6 July 2021 after confirming himself to be the person who came to collect the “bail money”.  Before the 3^rd defendant did so, CCTV evidence showed that the 2^nd defendant had kept him accompanied, and stayed around the scene to wait for the 3^rd defendant’s return.

7.For Charge 2, the 2^nd defendant alighted from a taxi with the 3^rd defendant to the vicinity of the scene and stayed around.  Then the 3^rd defendant similarly approached and presented himself to Madam Tjiu and collected HK$100,000 from her on 14 July 2021.  This time, he claimed himself to be the friend of the victim’s son.

8.For Charge 3, the 3^rd defendant collected HK$100,000 from Madam Tam on 23 July 2021, after she verified the identity of the 3^rd defendant (who claimed to be a friend of her son)  by calling the scammer (who pretended to be her son).  This time, the 3^rd defendant appeared alone at the scene.

9.For Charge 4, the 1^st defendant presented himself as the person directed by the “son” and successfully collected HK$80,000 from Madam Fung on 2 August 2021.  Prior to that, the 1^st defendant greeted the 2^nd defendant and the 3^rd defendant in a park where the collection is scheduled (“the Park”).  While the 1^st defendant headed to collect cash from the victim, the 2^nd defendant and the 3^rd defendant were waiting in different areas inside the Park. 

10.All parties in the case agreed before the court that for sentencing purposes, there is no evidence on whether any of the defendants had any direct knowledge or partaken in the telephone deceptions.  Therefore, it is clear that the defendants’ plea of guilty were entered on the basis of “having reasonable grounds to believe that property in whole or in part directly or indirectly represents any proceeds of an indictable offence” under s 25(1)  of Organized and Serious Crimes Ordinance (Cap 455).

11.Based on the above, I had indicated to the parties that these defendants are treated similarly as “foot soldiers/mere collectors” engaged by the underlying syndicate of unknown scale only.  The only distinguishing features amongst them are 1)  the degree of their knowledge and 2)  the number of individual charges they are now facing.

12.Besides, it is confirmed that there is no application under section 27 of the Organized and Serious Crimes Ordinance (Cap 455), and therefore no enhancement of sentence would require the court’s consideration in the present case.

Mitigation

13.I have carefully considered the detailed written submissions from counsel for the Defence and the relevant materials provided.  The gist is summarized as follows.

Mitigation for the 1^st defendant

14.The 1^st defendant is currently 26.  He was born in the Mainland China and came to Hong Kong in 2016 to reunite with his parents with a One-way permit.

15.The 1^st defendant has a clear record.

16.The 1^st defendant was first remanded in custody after the arrest.  After approximately a year, the 1^st defendant was granted bail by the High Court on 12 August 2022.

17.The 1^st defendant was unemployed two weeks prior to the offence.  After failed job-hunting attempts, the 1^st defendant contacted someone who offered an opportunity to make “quick money”, who then asked him to collect money for a reward.

18.Mr Chan of counsel stressed that the 1^st defendant felt very remorseful.  The Defence stated that the chance of reoffending is low and asked for a lenient sentence.

19.Mr Chan also emphasized that the 1^st defendant did not know anything about the predicate telephone deception.

Mitigation for the 2^nd defendant

20.The 2^nd defendant is currently 33 years old; he was born in the Mainland China and came to Hong Kong when he was 8 years old.  He lived in Sydney, Australia for 8 years on a student vocational visa studying economics and returned to Hong Kong 4 months prior to the commission of the offences.

21.The 2^nd defendant had some previous convictions which are not related to the present charges and the last one took place in 2007.

22.The 2^nd defendant was remanded in custody since the arrest.

23.Mr Boyton for the 2^nd defendant stated that the 2^nd defendant committed the offences because he was desperately in need of money and found it difficult to find a job after returning to Hong Kong.  He was naïve to think he could earn some “quick money” and did not question the nature of the “job” he was asked to do.  He was remorseful and pleaded guilty at the first opportunity.

24.Mr Boyton also stressed that the 2^nd defendant did not have any knowledge about the underlying predicate offence.

Mitigation for the 3^rd defendant

25.The 3^rd defendant is currently 31 years old and was educated to Form 3 level.  Prior to his arrest, he worked as a chef.

26.The 3^rd defendant had quite a number of previous convictions over the last 10 years (mainly dangerous drugs-related offences).

27.The 3^rd defendant was in remand since the arrest.

28.Mr Boyton also represented the 3^rd defendant and he stated that the 3^rd defendant committed the offences because of the urgent financial need stemming from the medical fees relating to his father’s brain cancer.  Unfortunately, the 3^rd defendant’s father passed away during his time in custody and he could not attend his father’s funeral.  Since then, he has been introduced to Buddhism and is in contact with an institute called the Buddhism Light International Association.

29.The Defence made no submission as to whether the 3^rd defendant had any knowledge on the predicate offence.  However, it was highlighted that the 3^rd defendant was not in the WhatsApp chat group named “Go”[1].

30.Last but not least, the Defence had presented a number of mitigation letters for the 1^st and 3^rd defendants, and I have carefully considered each of them.

Sentencing Principles

31.I have considered the authorities of HKSAR v Hsu Yu Yi [2010] HKC 486 and HKSAR v Boma [2012] HKCA 52 cited by the Defence, where the Court of Appeal set out a number of important features pertaining to the commission of the offences of money laundering that would affect the sentence.  Apart from the amount of money laundered, the Court of Appeal included the following factors in Boma:-

(1)  The nature and penalty of the predicate offence;

(2)  The nature of knowledge or belief of the predicate offence on the part of the money launderer;

(3)  The international element;

(4)  The sophistication of the money laundering offence, including the degree of planning or whether deceit is practiced to achieve the money laundering;

(5)  The instance of a criminal syndicate;

(6)  The number of transactions and the length of time in the money laundering process;

(7)  Subsequent knowledge of the predicate offence evolved from a case of reasonable belief; and

(8)  The role and acts of the money launderer, including his position and reward.

32.It is important to emphasize that the nature and penalty of telephone deception, the predicate offence of the present case, is well recognized as a more serious form of deception.  The Court of Appeal in HKSAR v Hung Yung Chun and Anor [2011] 2 HKLRD 174 commented that “if a comparison is to be made between telephone deception and street deception cases, the former is more serious than the latter”[2], and laid down the general starting point for telephone deception to be 4 years[3].

33.However, a clear distinction should be made between defendants participating in a telephone deception and those charged with money laundering while only having some “sketchy idea/understanding” about the predicate telephone deception.

34.Besides, in Secretary for Justice v Ngai Fung Sin, Apple [2013] 5 HKLRD 104, the Court of Appeal held that:-

“44. 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. On the other hand, if there is evidence which can prove from what serious crimes the “illicit/black money” was derived and if the defendant was aware of the origin of the “illicit/black money”, that would be an aggravating factor … ”

35.In HKSAR v Wu Jianbing [2012] 1 HKLRD 781, the applicant came to Hong Kong to collect monies under the telephone deception.  He faced 3 charges of money laundering and 1 charge of conspiracy to launder money.  There was no evidence that the applicant participated directly in the predicate offence and no evidence to prove the benefit he obtained.  The amounts involved were HK$200,000, HK$30,000, HK$20,000 and HK$60,000, respectively (HK$310,000 in total).  The Court of Appeal was of the view that the correct starting point for each charge should be 3 years’ imprisonment[4].

36.In HKSAR v Cen Huakuo CACC 21/2014, the applicant collected HK$50,000 from a telephone deception victim and was originally sentenced to 6 years’ imprisonment, with a starting point of 4 years and a 50% enhancement.  The Court of Appeal explained:-

“16. The sentences passed in Hung Yung Chun were based on the fact that the defendants knew the details of the deception offences including the fact that the victims were put into fear because someone told them that their family members were being detained or beaten up, and the victims gave the culprits several hundred thousand dollars out of that fear. Owing to the above factors, the Court of Appeal was of the view that the culpability of the defendant of a phone deception case was more serious than that of the defendant of a street deception and thus adopted the starting point of 4 years.

17. In ‘money laundering’ cases, some defendants have no knowledge or only have an incomplete or sketchy understanding about the indictable offence in connection with the ‘money laundering’ offence, but some defendants, even though they have not taken part in the relevant indictable offence, may have detailed knowledge and understanding of it and are also aware of the adverse impact arising out of their acts of ‘money laundering’. The Court has to take into account these factors when considering the sentence.

18. The applicant did not take part in the deception, he told Madam Chan that her son was being detained, but that only shows his sketchy understanding about the relevant indictable offence and does not mean that he knew the details. When considering the applicant’s knowledge about the relevant indictable offence, the trial judge should not have interpreted the facts in the most unfavorable way against the applicant.

19. The prosecution evidence was insufficient to show that the applicant knew the culprits did tell Madam Chan that harm would be done to her son as he had committed some offences of indecency. The trial judge considered that what happened was equivalent to kidnapping Madam Chan and that she was subjected to far greater fear and stress than those experienced by victims in street deception cases, and he blamed the applicant for that. In the circumstances of the present case, this approach was unfair to the applicant.

…

20. In any event, the criminal acts of the defendants in Hung Yung Chun were far more serious than that of the applicant. The applicant did not take part in the relevant deception offence, and it is very likely that he was just instructed to collect money from Madam Chan.

…

24. “Money laundering” is a serious offence, and worse still, the applicant came from the Mainland to commit crime here. Although the young applicant is only 18 years old and has no criminal record, he cannot expect leniency from the Court. The “black money” involved was derived from phone deception and the applicant knew the source of the “black money”. All these constitute aggravating factors (see Secretary for Justice v Lau Man Ying [2012] 4 HKLRD 429 and Xu Xia Li).

25. Taking into account all the circumstances of the case and the requirement that a sentence should have deterrent effect in order to prevent mainlanders from taking part in such an abhorrent and despicable offence like ‘phone deception’ in whatever manner, we are of the view that the appropriate starting point is 3 years’ imprisonment, and the sentence should be enhanced by one-third pursuant to the Organized and Serious Crimes Ordinance.” (emphasis added)

37.In HKSAR v Lin Zong Yue [2015] 3 HKLRD 196, the applicant was charged with three charges of money laundering. The amounts involved were HK$39,000 (1^st Charge), HK$30,000 (2^nd Charge)  and HK$75,000 (3^rd Charge).  The Court of Appeal found the applicant having “sketchy understanding” of the underlying telephone deception as he passed a telephone to the victim to verify that she was giving money to the persons captivating her son[5].  The Court of Appeal also noted that the applicant, a Mainland resident[6], came to Hong Kong to commit the crime.  After considering all relevant circumstances, the Court of Appeal determined that the starting point for the 1^st and 2^nd Charges were both 3 years, while the starting point of the 3^rd Charge being 3 years and 3 months because it showed the applicant “defied the law 53 days after the 2^nd Charge[7]”.

38.In HKSAR v Li Yonghong CACC 254/2015, the applicant was convicted of a charge of conspiracy to launder money resulting from telephone deception.  The sum of “black money” involved was HK$120,000.  The trial judge accepted that the applicant had no more than a “sketchy idea” of the predicate offence yet acknowledged that he came to Hong Kong to commit the offence[8]. As a result, the judge set the starting point at  3 years[9].  The Court of Appeal determined that the applicant knew about the predicate offence and upheld the trial judge’s decision[10].

39.These authorities of the Court of Appeal adopted a 3-year starting point for money laundering with the amount of “black money” for the individual charges ranging from HK$20,000 to HK$200,000, and these cases shared the following three common components:-

(1)  the predicate offence being telephone deception;

(2)  the defendant has a “sketchy idea/understanding” of the predicate offence; and

(3)  the defendant came to Hong Kong from the Mainland to commit the offence.

40.Mr Chan referred me to HKSAR v Fong Chi Yam [2020] 2 HKLRD 700 and remarked that if the component of “coming to Hong Kong from the Mainland to commit the offence” is absent, the starting point of 3 years’ imprisonment could be lowered.

41.In Fong Chi Yam, the applicant received two sums of money as the person in charge of money exchange from unknown sources over two days[11]. There was also no information showing that he knew about the telephone deception behind the two sums of money[12]. Taking these considerations into account, the Court of Appeal held that:-

“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.”

42.However, while the starting point in Fong Chi Yam is clearly lower than those adopted by the Court of Appeal in the aforementioned cases, it is important not to overlook that the applicant in Fong Chi Yam was in charge of a money exchange shop which is significantly different from the factual background of those authorities.  The Court of Appeal also remarked that using “money exchange shop” to launder money was in fact an aggravating factor[13].

43.In other words, if one is to remove this aggravating factor, and take Fong Chi Yam to mean that a starting point for laundering HK$409,000 should attract a starting point lower than 2½ years in the absence of that factor, in the present case (taking the highest amount being HK$100,000), a much lower starting point than 2½ years should be adopted.

44.In sentencing money laundering offences, it seems to me that there are no hard and fast rules and each case must depend on its own facts having due regards to the relevant sentencing principles, general and specific.  One has to pay attention to the fact that the sentences endorsed or replaced by the Court of Appeal must have taken into account the overall circumstances of the case and factored in all the mitigations specific to the individual accused. After all, the figure of “black money” is not the only factor to take into account.

45.According to Cen Huakuo, it seems that “no knowledge” and “sketchy understanding” were put in the same category. In the present case, I do not find sufficient basis to significantly distinguish the defendants and adopt a substantially different sentence albeit that as a matter of fact, I find that there is no evidence to show that the 1^st defendant and the 2^nd defendant had “knowledge” on the one hand, and on the other, the 3^rd defendant had a “sketchy understanding” because he mentioned to the victim in Charge 1 about the nature of the money (i.e. “bail money”)  and since then he should have more idea about what was going on behind.

Consideration of Sentence

46.All three defendants in the present case pleaded guilty to their charges.  The offences clearly stem from a typical case of telephone deception.  As I said, I accept that the defendants were not directly involved in the telephone deceptions which seemingly involved certain hierarchical criminal networks or organizations.  They had either no or merely a “sketchy understanding” of the matter.  I also accept that in the present case, none of the defendants falls within the notion of “coming to Hong Kong for the purpose of committing the offence”.

47.I have reminded myself to consider the charges separately and individually.  As the Court of Appeal explained in HKSAR v Chong Hung Shek [2019] 2 HKLRD 937,

“44. The superficial attractiveness of the global approach to sentencing is that it is perceived as allowing the sentencer to take an overall view of the whole of a defendant's culpability and, thereby, to arrive at an appropriate punishment. But it has been deprecated by the Court of Appeal as it results in an inappropriate sentence on each of the charges the defendant faces and this can cause difficulties at the appellate level. Furthermore, an overall view of a defendant's culpability can still be taken but after, and not before, the imposition of individualised sentences.”

48.With that in mind, I have also reminded myself to be careful in order not to introduce any disparity of sentence in light of that there are the common charges and that I should put the respective role of these defendants in the appropriate contexts.

49.In terms of sums being dealt with by the defendants individually, one would note that the liability of them shall differ, and separate starting points shall be given.  In summary: -

1st defendant	Charge 4 (HK$80,000)	Total: HK$ 80,000
2nd defendant	Charge 1 (HK$60,000) Charge 2 (HK$100,000) Charge 4 (HK$80,000)	Total: HK$ 240,000
3rd defendant	Charge 1 (HK$60,000) Charge 2 (HK$100,000) Charge 3 (HK$100,000) Charge 4 (HK$80,000)	Total: HK$ 340,000

50.Having carefully considered all the circumstances, the relevant starting points for each charge against each defendant are as follows:-

Charge 1: (HK$60,000)	the 2nd defendant - 30 months the 3rd defendant – 30 months
Charge 2: (HK$100,000)	the 2nd defendant - 33 months the 3rd defendant - 33 months
Charge 3: (HK$100,000)	the 3rd defendant - 33 months
Charge 4: (HK$80,000)	the 1st defendant - 30 months the 2nd defendant - 30 months the 3rd defendant - 30 months

51.These starting points are reduced by 1/3 discount to reflect the guilty plea and the sentences become:-

Charge 1:	the 2nd defendant - 20 months the 3rd defendant - 20 months
Charge 2:	the 2nd defendant - 22 months the 3rd defendant - 22 months
Charge 3:	the 3rd defendant - 22 months
Charge 4:	the 1st defendant - 20 months the 2nd defendant - 20 months the 3rd defendant - 20 months

52.Taking into account that the offences took place on different dates against different victims, I shall order that part of the sentences to be served on a partial consecutive manner for the 2^nd and 3^rd defendants.

53.Taking into account all the mitigations and submissions, in particular the totality principle, the sentences for these defendants are as follows.

54.For the 1^st defendant, I note that he had a clear criminal record.  I shall give a two-month further reduction for this and all mitigations. I find that no further reduction is justified.  Therefore, the overall sentence is 18 months’ imprisonment.

55.For the 2^nd defendant, I shall order 1 month in Charge 1 to be served consecutively to Charges 2 and 4; 1-month in Charge 4 to be served consecutively to Charges 1 and 2 (i.e. 1+22+1=24), making it a total of 24 months’ imprisonment.

56.For the 3^rd defendant, I shall order 1-month in each of Charges 1, 2 and 4 to run consecutively to the sentence in Charge 3 and each other (i.e. 1+1+22+1=25), making it a total of 25 months’ imprisonment.