COURT: In the present case, there are two defendants appearing for sentence before this court. The 1st defendant, whom I shall refer to as D1, is Man Kam-fai, and the 2nd defendant, whom I shall refer to as D2, is Ng Lai-yin. Each defendant pleaded guilty before a magistrate sitting at the Eastern Magistracy to three charges on 29 June 2023.
For D1, he pleaded guilty to the 1st charge on the indictment of trafficking in dangerous drugs, the 2nd charge on the indictment also to a charge of trafficking in dangerous drugs, and the 3rd charge of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance. This offence is commonly known as “money laundering”.
As for the 2nd defendant, D2, he pleaded guilty to the 4th charge on the indictment, the offence being one of a tenant permitting premises to be used for the unlawful trafficking of dangerous drugs, contrary to section 37(1)(a) and (2) of the Dangerous Drugs Ordinance, Chapter 134. He also pleaded guilty to two charges of money laundering, that is, Charge 5 and Charge 6 on the indictment.
As a result of their pleas of guilty, the two defendants were committed to the Court of First Instance for sentence.
For the 1st defendant, Charges 1 and 2 relate to 26 June 2020 at Manhattan Mid Town, Lai Chi Kok, Kowloon. In Charge 1, he admitted he unlawfully trafficked in 249 grammes of a solid containing 214 grammes of ketamine. In Charge 2, D1 admitted to trafficking this time at Manhattan Hill, but at Flat C, 33rd Floor, Tower 6, of Lai Chi Kok, dangerous drugs, namely, 998.9 grammes of a solid containing 866.1 grammes of ketamine, 35.44 grammes of a solid containing 21.72 grammes of ketamine and 8.74 grammes of fluorodeschloroketamine and 302.41 grammes of a solid containing 254.15 grammes of cocaine.
In respect of Charge 3, D1 admitted that on or about 26 June 2020, he knowingly believed that the property, namely, a sum of $105,500 Hong Kong currency, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and dealt with that property.
In respect of Charge 4 against D2, tenant permitting premises to be used for unlawful trafficking of dangerous drugs, D2 admitted that on or about 26 June 2020, being the tenant of the premises at Flat C, 33rd Floor, Tower 6, Manhattan Hill, Lai Chi Kok, he permitted the premises to be used by Man Kam-fai, that is D1, for the unlawful trafficking of dangerous drugs, namely, ketamine, fluorodeschloroketamine, and cocaine.
In respect of Charge 5, D1 admitted that on or about 26 June 2020, in Hong Kong, he knowingly believed that the property, namely, HK$6,398,620, US$13,700 and 24,145 RMB and a cashier’s order issued by the Hang Seng Bank Limited in the sum of US$142,615.02 payable to D2 himself, Ng Lai-yin, in whole or in part, directly or indirectly, represented the proceeds of an indicatable offence and dealt with the property.
In respect of Charge 6, also a money laundering charge, D2 admitted that between 30 June 2014 and the 23 June 2020, both dates inclusive, knowingly believed that a total sum of HK$5,012,558 in the bank account with Hang Seng Bank in the name of himself, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence and dealt with the property.
As for the facts in support of these charges, both defendants admitted the Amended Summary of Facts and also additionally before me today admitted two further paragraphs of facts.
As regards the 1st count, that is, the trafficking in dangerous drugs against the 1st defendant, on 26 June 2020, Customs officers conducted an anti-narcotics operation at the vicinity of Mei Foo. At around 2050 hours on the same day, D1 was spotted to be acting furtively at Manhattan Mid Town shopping mall while carrying a nylon bag. D1 was thus intercepted. Upon search of the nylon bag, the drugs as quantified in Charge 1 were found.
After his arrest, upon enquiry, D1 revealed that he resided at Flat C, 33rd Floor, Tower 6, Manhattan Hill. A key and a Manhattan Hill residence card was also found in D1’s possession upon search. D1 was later escorted to Manhattan Hill and Customs officers gained access to Manhattan Hill using the card and opened the door of the premises using the key found on D1. A search of the premises was conducted.
Upon search, the drugs, as quantified in Charge 2, were found. Amongst those drugs were also three electronic scales and numerous empty Ziploc bags and an impulse sealer. On both occasions when D1 was arrested at Manhattan Mid Town shopping mall, when he was arrested and cautioned, and in the premises, he denied knowledge of the drugs.
At about 2140 hours on the same day, D2 exited from the lift and walked towards the premises. When D2 saw the Customs officer who was standing guard at the door of the premises, he immediately turned around and ran back towards the lift. D2 was, however, intercepted immediately. A Customs officer conducted an enquiry with D2, who replied that he was living in the premises and took out a bunch of keys from his shorts. One of those keys opened the door of the premises.
When D2 was arrested and cautioned, and being asked what the suspected dangerous drugs and drug paraphernalia were in the premises, under caution, D2 stated they were “K Chai”, which was a kind of dangerous drug, and they belonged to his friend called “Man Kam-fai,” that is D1. When being asked what those dangerous drugs were for, D2 stated he knew the dangerous drugs would be sold at several hundred thousand dollars. At about 2142 hours on the same day, D2 confirmed that D1 is Man Kam-fai.
As regards the tenancy of the premises, D2 was the tenant of the premises, and the rental period was between 15 August 2019 and 14 August 2021, with a monthly rental of $25,000. He was also the registered account owner of Town Gas, China Light Power and Water Supplies in relation to the premises. The residence records on Manhattan Hill showed that D1, D2 and another person, “X”, were the registered residents of the premises.
The estimated street value of the ketamine seized in relation to Count 1 was about $115,536.
For the ketamine and the cocaine seized in relation to Count 2, the estimated street value was about $916,431.07 in total.
No estimate could be given on the fluorodeschloroketamine as there was insufficient statistics to calculate its value.
In respect of the money laundering counts, inside a black bag on the floor of D1’s bedroom, cash of $105,000 was found together with passport photos, Exit and Entry Permit of the People’s Republic China of D1. Those are facts supporting Count 3.
In relation to Count 5, that is, the money laundering count against D2 only, in the wardrobe inside D2’s bedroom, cash of $198,050 and 2,900 RMB was found. Also, in a backpack, a cashier order issued by Hang Seng Bank Limited payable to D2 in the sum of US$142,615.02 was found. A further amount of cash of 21,245 RMB was found there.
Underneath the bed in the bedroom, there were found, although in the facts it says four similar suitcases, they look like four similar briefcases in the photographs. Upon search of those briefcases, there was a total of HK$6,200,570 and US$13,700 cash were found. In the Re-Amended Summary of Facts, the property seized in D2’s bedroom when converted to Hong Kong dollars was approximately $7,636,379.
In relation to Count 6, the money laundering offence against D2 only, Customs conducted financial investigations on D2’s personal savings account at Hang Seng Bank Limited. This account was opened on 21 October 2008. D2 was the sole account holder and authorised signatory. According to the application form for the account, D2 claimed to be a sales person at McDonald’s restaurant.
Between 30 June 2014 and 23 June 2020, the total amount of all deposits made to the account was $5,522,949.35 and the total withdrawals from the account was $5,507,106.68.
The account evidenced a money laundering pattern whereby there was a temporary repository for funds. The funds deposited in the account were withdrawn in a short period of time. In addition, there were multiple deposits of small amounts into this account via cash deposit or transfer.
During the period from 30 June 2014 and 23 June 2020, there was a total of $4,359,800 of cash deposits on 360 times which constituted 78.094% of the total sum.
As regards these offences as stated in the Summary of Facts, D1 admits and accepts that he was knowingly in possession of the dangerous drugs seized in Count 1 and Count 2 for the purpose of trafficking. D1 admits that he knew the property particularised in the 3rd count of money laundering, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, namely, trafficking in dangerous drugs.
As regards D2, he admits that he knew the property particularised in the 5th and 6th count, that is, the money laundering charge, was in whole or in part, directly or indirectly, representing the proceeds of an indictable offence, namely, trafficking in dangerous drugs. D2 further admits that he knew and permitted the premises particularised in Count 4 to be used by D1 for the unlawful trafficking of dangerous drugs, namely, ketamine, fluorodeschloroketamine and cocaine.
I have received written mitigation by Mr Danny Chan and his junior, Mr Benjamin Chong, to which he relied upon in mitigation before this court. As regards the antecedents of D1, he is aged 31 and single. He was born in mainland China and migrated to Hong Kong when he was a few years old. Before his arrest, he lived with his parents and his sister in a public housing unit.
He has received education up to Form 3 level and was unemployed at the time that he was arrested. He had been working part-time in the logistics industry with monthly earnings of $12,000 per month. Before his arrest, he gave $5,000 to his parents every month as living expenses. D1 has two previous convictions of possession of dangerous drugs.
I turn to D2. He is aged 30, single and born in Hong Kong. His parents are in their senior years and he also has a younger sister. He received education up to Form 2 at secondary school. He worked in the food and beverages and logistics industry in the past and earned $19,000 a month. Before his arrest, he gave $5,000 to his mother every month as living expenses. He has one previous conviction, also related to possession of dangerous drugs.
In respect to the mitigation, Mr Chan has brought forth to the court that the strongest plea of mitigation is their plea of guilty at the earliest opportunity. In this period of time in custody, which they have been remanded since their arrest, that is, 3 years and 3 months, they have reflected upon themselves and are remorseful for their misdeeds and feel sorry for letting their families down by committing such serious offences.
The defendants themselves have written letters to this court as well as their family members. Those letters clearly state from the defendants that they are very remorseful for the commission of this offence. As for the families of the defendants, both families say they are shocked and surprised to learn of the sons’ involvement, or brother, in the commission of this crime and otherwise they had thought they were hardworking young men and filial. They have asked for leniency from the court so that they can return to their families.
I turn first to deal with sentence in respect of D1 and the trafficking charges. D1 has pleaded guilty to two charges of trafficking in dangerous drugs. I will sentence the defendant on each charge separately, look at the principle of totality and sentence him in accordance with that in respect of both charges.
For Charge 1, the defendant was trafficking in 214 grammes of ketamine. The guideline case for trafficking in ketamine is the case of Secretary for Justice v Hii Siew Cheng [2009] 1 HKLRD 1. For that amount of ketamine, it falls within the band between 40 to 300 grammes which after trial would attract a sentence of between 6 to 9 years’ imprisonment. Accordingly, I adopt a starting point of 7 years and 9 months for Charge 1. As the defendant has pleaded guilty at the earliest opportunity, he will be awarded a one-third discount and that term shall be reduced to 5 years and 2 months’ imprisonment.
I turn to Charge 2. In Charge 2, there was a total of 896.56 grammes of ketamine plus 254.19 grammes of cocaine. As there are two kinds of drugs in this charge, I shall adopt the combined approach and convert the cocaine to ketamine. As stated long ago in HKSAR v Ko Ka Hing [2009] 4 HKLRD at page 856, the Court of Appeal, Cheung JA giving judgment for the court, said in respect of the sentencing approach at paragraph 3C, at page 859:
“Where the combined approach is taken, the court will rely on common sense in determining which type of the dangerous drug is to be regarded as the more serious, hence forming the basis of the starting point. For example, a certain type of drug, although less potent, may be present in much large quantity than another, in which case its quantity will form the basis for the starting point.”
The adoption of this principle was made by the Court of Appeal more recently in HKSAR v Islam S M Majharul [2020] 3 HKLRD 146, where the court held that at paragraph 24:
“The combined approach involves a calculation of the applicable sentence for the more or most serious drug (in terms of potency), and then adjusting the sentence upwards to take into account significant quantities of other (less serious) drugs. In carrying out this task, the sentencing court should take a common sense approach in determining which drug is to be the base drug in order to calculate a starting point.”
And the court there referred to Ko Ka Hing.
“There may be cases where the more or most serious drug is of such a small quantity that it would be unrealistic to use it as a base drug. As stated, it will be a matter of common sense.”
In this case before me, the more serious drug is, of course, that of cocaine, but it is of much smaller quantity than that of ketamine. And therefore, I will use the more significant quantity of ketamine as the base drug.
The guideline case for sentencing in cocaine is that of Lau Tak Ming [1990] 2 HKLR 370, and the amount of cocaine trafficked in Charge 2 was 254.15 grammes of cocaine. That falls between the bracket of 200 and 400 grammes, which would attract a term of imprisonment of between 12 to 15 years after trial. In sentencing the defendant for this amount of cocaine, I would have taken a starting point of 12 years and 9 months’ imprisonment.
In converting that amount to ketamine, that equates to approximately 770 grammes of ketamine. I therefore add the 770 grammes of ketamine to the other total ketamine in that charge. This is 896.56 grammes, which totals 1,666.56 grammes of ketamine. The case of Hii Siew Cheng states that over 1,000 grammes, a sentence of 14 years and upwards is appropriate. This total is 1,666 grammes. In those circumstances, I take a starting point of 17 years and 6 months’ imprisonment.
The defendant has pleaded guilty. He deserves the one-third discount. In those circumstances, he shall be sentenced on Charge 2 to 11 years and 8 months’ imprisonment.
In respect of Charge 1 and 2, I shall add up the two amounts of ketamine, so it is 214 grammes of ketamine in Charge 1 plus the 1,666.56 grammes of ketamine in Charge 2, which makes a total of 1,880.56 grammes of ketamine for both Charge 1 and Charge 2. If he were to be sentenced for that total amount of ketamine, I would still take a term of 17 years and 6 months’ imprisonment. And giving him the one-third discount, that would mean that he is sentenced to 11 years and 8 months’ imprisonment. In the circumstances, that would be the totality of the sentence, and for Charge 1 and 2, those charges will run concurrent to each other.
Before I deal with Charge 3 for D1, I will just turn and leave that to when I deal with money laundering respective of D2. So let me now just turn to the 4th count of tenant permitting the use of premises for unlawful drug trafficking in relation to D2.
For that charge, the guideline cases or principles are laid down in the case of Li Kwok Keung at CACC 595/1996, and HKSAR v Siu Kwok Chun [2017] 4 HKLRD 109(102?), where the court there, the Court of Appeal referred to the seminal case of Li Kwok Keung. The maximum sentence for this charge is one of 15 years’ imprisonment. It is therefore, as I said then, it is not as serious an offence as trafficking in dangerous drugs which carries a sentence of life imprisonment. The Court of Appeal has, however, not considered it appropriate to lay down any guidelines for sentencing.
In Ho Wing To [2011] 4 HKLRD 465, the court held when assessing the culpability of the defendant, the court will take into account the following factors: the background to the offending, the extent of the relationship between the offender and the person for whom he or she stored the drugs in question, the extent of their knowledge as to the quantity in existence of the drugs, the period over which they sold the drugs, the extent to which they are involved in the drugs in question or they seek to distance themselves from it or avoid further offending, and the nature and reward of or benefit that they received for acting as they did.
In this case, Mr Chan submits that it was unknown as to the roles of the respective defendants in the premises. Also, in the present case, there is no indication of the duration in which the premises had been used for trafficking in dangerous drugs. I accept on the facts of this case there is no clear duration, but it is clear that D2 had rented these premises since 2019.
And since 2014, he has admitted to money laundering. That is in his account for Count 6, money laundering knowingly. The offence was that of trafficking in dangerous drugs, so I am going to take the only reasonable inference that these premises had been used for trafficking in dangerous drugs at least since the beginning of the lease that commenced in August 2019.
In respect of D2’s role as the tenant, it is beyond doubt that D2 was aware that D1 was trafficking in dangerous drugs, is they were stored in the premises. As stated, shortly after his arrest, under caution, he said he knew of the “K Chai” which belonged to his friend, D1, and when being asked what those drugs were for, D2 stated that he knew the dangerous drugs would be sold at several hundred thousand dollars. It is clear to me that he knew that these premises was used to store dangerous drugs for a significant sum of money, and in my view, his role was very significant in their knowledge of these premises being used for drug trafficking.
At the time of the day of the arrest, there were, found inside the flat, 1,110.56 grammes of ketamine plus 254.19 grammes of cocaine. D2 knowingly assisted a drug trafficker, D1, to engage in trafficking. He received a huge financial benefit. He allowed D1 to store drugs in the flat for a reward for a substantial period of time. His involvement was that he received a large and huge financial benefit. He had knowledge that by allowing D1 to use the premises, it was a service provided to D1 to enable D1 to carry out his trafficking activities. In the circumstances, D2’s culpability in this offence is very high.
I take the baseline for the offence of the original trafficking to which I have sentenced D1. That means I use it as a comparator or reference point to ensure that the starting point adopted for this offence is a fair one. I took a starting point of 17 years, 6 months for D1, and reduced that term to 11 years, 8 months for his plea of guilty. For D2’s offence for tenant permitting, I take a starting point of 11 years, 6 months. As he pleaded guilty at the first opportunity, I give him the one-third discount and his sentence for Charge 2 shall be reduced to one of 7 years and 8 months’ imprisonment.
I now turn to the money laundering charges, which is Charge 3 for D1 and Charge 5 and 6 for D2. The maximum sentence of money laundering is 14 years’ imprisonment. There is no tariff for this type of offence. The court, in HKSAR v Boma Amaso [2012] 1 HKC 380, identified a list of factors the court should take into account in sentencing for money laundering. This included:
(a) the nature of the predicate offence, if known, and the penalty available for the predicate offence;
(b) knowledge of the nature of the predicate offence, whether the predicate offence is known to the court, and knowledge of the fact that funds are the proceeds of an indictable offence;
(c) an international dimension;
(d) the sophistication of the offence, including the degree of planning, whether there is one transaction or many, and the length of time over which the offence was committed;
(e) whether the offence is committed by or on behalf by an organised criminal syndicate being an aggravating factor;
(f) whether there is one transaction or many and the length of time over which the offence was committed;
(g) whether the defendant continues to launder funds after he has discovered the fact the funds are the proceeds of an offence or after he has discovered the nature of an offence which was serious; and
(h) the role of the defendant and whether the defendant had received and if so the nature and size of the benefit.
It is not disputed, as stated by Mr Chan in paragraph 39 of his written mitigation, that the defendants knew the properties particularised in the respective money laundering charges represented the proceeds of trafficking in dangerous drugs. As to the amounts of money laundered, Charge 3 against D1 involved $105,000. Charge 5 against D2, as mentioned earlier, involves an amount of $7,636,279, and in Charge 6, the amount involves $5,012,558 over a period of six years.
There is no evidence in this case that the proceeds came from an international source or account, so I accept Mr Chan’s submission there is no international element in this case. What can be seen is there is no sophistication as such because this case is simple case of drug trafficking. I accept also Mr Chan’s submission that there is no evidence that this account of D2’s was opened for the purpose of money laundering. However, I accept there is no evidence that he received any remuneration, but this account was used for money laundering drug proceeds.
Going back to those factors, then, clearly, deterrence is paramount in money laundering. The nature of this predicate offence is known. It is a very, very serious offence of drug trafficking. Both defendants knew that the proceeds were from drug trafficking. They deliberately dealt with proceeds of drug-trafficking crime. As to D2’s account in his bank account in Count 6, there were many transactions over that period of time. As stated, almost 79 per cent were cash deposits, amounting to over $4 million. I accept in this case there is no criminal syndicate as such, but clearly D1 and D2 were working together. Perhaps there was another person involved who was a resident of these premises.
In this case, on the face of it, prima facie D1 has benefitted in the sum of $105,000-odd. As regards D2, his benefit is huge, almost more than $7.5 million-odd. In the premises alone that day, cash of at least approximately $7 million was found underneath his bed. So I am of the view that the role of D2 was large and he received an extremely high benefit.
In taking those factors into account, for D1, on Count 3, for the money laundering of $105,000, had he been sentenced after trial, I would have taken 2 years as a starting point. Given his plea of guilty, I reduce that term by one-third to 1 year and 4 months. Taking into account the principle of totality, I order that term to run concurrent to Charges 1 and 2. Therefore, his sentence remains at 11 years, 8 months’ imprisonment.
So D1 you are sentenced to 11 years and 8 months’ imprisonment.
Turning to D2, I have already sentenced you to 7 years, 8 months on Charge 4. I turn to Charge 5. This was the property found in your bedroom, which, as I mentioned, was approximately $7.6 million-odd. For that charge, had you been convicted after trial, I would have taken a starting point of 9 years’ imprisonment, and reduce that term by, given your plea of guilty, by one-third to one of 6 years’ imprisonment.
For Charge 6, you had laundered $5,012,558 over a period of six years and I take a starting point of 4 years’ imprisonment and reduce that term to 2 years and 8 months’ imprisonment, giving you the full one-third discount.
I now look at the principle of totality for D2 and Charges 3, 4 and 5. You knew and you did play an important role in assisting D1 in the trafficking of dangerous drugs. Your benefit was huge. Taking these factors into account, I consider a total term of 10 years’ imprisonment to be appropriate for you to be sentenced.
You were sentenced to 7 years, 8 months in Charge 4. I order 2 years and 4 months’ imprisonment of Charge 5 to run consecutive to Charge 4, and Charge 6 to run concurrent.
So that would make a period of 10 years’ imprisonment.