HKSAR v. Ng Chun Yin

DCCC 462/2022

[2023] HKDC 1188

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 462 OF 2022

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REASONS FOR SENTENCE

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1.The D pleaded guilty to one charge of dealing with property known or believed to represent proceeds of an indicatable offence, contrary to S 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.

Summary of facts

2.At all material times, PW1, a staff of NFK in Japan, was responsible for settling the invoices by remitting the amounts to its supplier FD’s bank account.  This mode of operation has been in place for more than 20 years.

3.On 24 October 2018, not knowing that PW2’s email account has been hacked, PW1 received an email from PW2, a staff in Hong Kong office, informing PW1 that:-

a. FD’s bank account had been changed from Barclays Bank London to Bank of China Hong Kong (“BOC”)  held by Innovation Area Engineering (“IAE”)  and

b. requested PW1 to pay US$113,124 into BOC for the purchase order dated 20 July 2018.

4.On 30 October 2018, PW1 remitted US$113,124 to BOC as payment to FD.  

5.After remittance, PW1 was repeatedly informed by FD that they have not received the payment.

6.On 6 November 2018, PW1 called Hong Kong office and found out that was a fraud email.

7.On 18 June 2019, D was arrested by PW3 for “Money Laundering”.

BOC

8.On 28 June 2016, D trading as IAE opened BOC account.  D was the sole signatory.

9.According to the bank records:-

(i)  The remittance into BOC by PW1 resulted in deposit of HK$885,667.45 into BOC on 30th October 2018, HK$865,000 of which was withdrawn by D at the bank counter in cash on the same day of receipt.

(ii)  Most other transactions were conducted by ATM.

(iii)  BOC conducted no e-banking transaction at all material times.

(iv)  The bank records of BOC also reveal suspicious money laundering transactions patterns: -

(a)  There were very strong mirroring transaction patterns where all the deposits were withdrawn in a few days, leaving a very small amount in the account.

(b)  BOC ’s transaction patterns indicated a temporary funds depository; and

(c)  HK$3,217,942 were deposited into BOC and HK$ 3,187,673 were withdrawn in the period from 11 July 2016 and 5 November 2018.

(v)  D has no reported income with IRD at all material times.

(vi)  D admits and accepts that between 11 July 2016 and 5 November 2018, in Hong Kong, he had dealt with total sum of HK$3,217,942 in BOC, knowing or having reasonable grounds to believe the said sum in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence.

Criminal Record

10.The D has 22 court appearances with 30 previous convictions. Since 1995 to 2017, majority of the convictions were drugs related offences.

Mitigation

11.The D is now 60 years old, he was divorced in 2016 without any children. Since his released from prison in October 2017, he managed to stay away from crime.  He worked for a renovation company since late 2019, earning a monthly salary of $12,800.

12.In mitigating, I am told that this matter has been hanging over his head for some 4 years.

13.The BOC account was opened in June 2016 and he lent the ATM card to a Mr. Yeung of whom he met in prison in 1999.

14.The defence said that the D was imprisonment from March to Oct, 2017 (  for a period of 7 months )  for a sentence imposed by the TM Court.  The D was not involved in any illegal transaction during this period of time.

15.However, the Defence properly accepted that it involved an international element as the victim company was registered in Japan with a subsidiary in Hong Kong.

Sentence

16.The maximum sentence for a charge of money laundering upon indictment is a fine of $5 million and imprisonment for 14 years. 

17.The Court of Appeal in HKSAR v Boma  [2012] 2 HKLRD 33 laid down various factors to be taken into account when sentencing money laundering cases.

18.In the present case:-

(a)  The amount was about $3.2 million over a period of 2 years 4 months.

(b)  Today, the Prosecution told me that there were 129 times of deposits and 304 times of withdrawals, which means this account have been actively used.

(c)  The D has been a drug addict in his life time, he has been sentence to prison on many occasions prior his arrest for the present offence. Clearly, he could not hold on to any steady job, not to mention that he could run a company while he was in prison. He also admitted that he never filed any tax return to the Inland Revenue.

(d)  After the opening of the business bank account, the D passed on the ATM card to a Mr. Yeung whom he met in prison.

(e)  The account was opened on 28 June 2016. The offence period was from 11 July 2016 to November 2018. That means the opening of the account was for the sole purpose for Mr. Yeung to use as the D was not managing a business.

(f)  In mitigation, he knew what Mr. Yeung was up to, he had reasonable grounds to believe that any money deposited into the account would, in whole or in part, directly or indirectly, represented proceeds of an indictable offence.

(g)  However, there is no evidence to suggest that the D knew the nature of the predicate offence.

(h)  But, there is an international element as properly admitted by the Defence.

(i)  The defence said that there was no evidence to suggest that the D had received any benefit from it.

(j)  The deposit was HK$885,667.45 while the D went to the Bank personally to withdraw only HK$865,000. There was a balance of $20, 667.45 left in his account.

(k)  Today, I am told that this amount of $20,667.45 was for his emergency use. However, he returned this money to Mr. Yeung subsequently.

(l)  The D clearly remained in control of the Bank account although he passed his ATM cards to a Mr. Yeung

19.As said in many cases, the amount of money laundered is a significant factor in determining the sentence.

20.In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases.  The starting point is 3 years or so where the “black money” involved is between $1M and $2M.  4years or so when it is between $3M and $6M .

21.In the judgement of the Boma case at paragraph 36, the court also stated: -

“the sentencing court must have regard is the fact that in this category of offence, deterrence is paramount. It is to be remembered that “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.”

22.When passing sentence on the Defendant, I bear in mind of all the mitigating and sentencing factors as discussed above.

23.Against this background, I adopt a starting point of 3 years 9 months to reflect the gravity of the offence, the sentence is reduced to 2 years 6 months after 1/3 discount.

24.I further reduce 2 months’ imprisonment as this matter has been hanging over his head for some 4 years.

25.The defendant is order to serve a sentence of 2 years 4 months’ imprisonment.