HKSAR v. Pun Fung

DCCC 212/2023

[2023] HKDC 1631

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 212 OF 2023

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REASONS FOR SENTENCE

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1.The defendant has entered pleas of guilty to four counts of dealing with property known or believed to represent the proceeds of an indictable offence, contrary to Sections 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455. The facts have been admitted and convictions have been entered.

2.The facts show that on 21 August 2018, AXIS Global Holding, known as “the company”, was incorporated.  The defendant was its director and a company called Stepcon its company secretary.  The company maintained an account at Citibank, which is known as “the Citibank account”, that was opened with a US dollar current account, a call deposit account and what was also known as a consolidated account.  Accounts were opened for the purpose of intercompany business settlement and time deposits.  The source of funds was said to be business owner and sales proceeds.  The authorised signatories on the account were Lam Shu Fan, “Mr Lam”, and the defendant.  Instructions on the account could only be given by Lam and the defendant jointly.  Both Lam and the defendant’s residential address and email addresses were given and e-statements were sent to the email addresses.

3.The company held an account also with the Dah Sing Bank Limited opened on 14 January 2019, again opened for trading purposes.  Authorised signatories on the account were Lam and the defendant.  Mobile phone numbers were provided as was the email address of the company.

4.The facts also show that the funds that entered and left these accounts, they showed transactions in the Citibank accounts between 1 October 2018 and 30 June 2019 and the Dah Sing account between 14 January 2019 to 31 May 2019. Multiple deposits and withdrawals can be seen from these accounts and the charges themselves relate to each account in Citibank and Dah Sing were representing those transactions.  We can see the total amounts showed in the charges, the 1^st Charge, HK$9,885,564.38; the 2^nd Charge, again HK$279,801.78; the 3^rd Charge HK$123,711.03; the 4^th Charge representing HK$877,248.53.  The total period for all the charges is between 2 November 2018 and 31 June 2019.  The total sum of money involved in the accounts and the charges is $30 million-around.

5.The defendant admits dealing in this property and at the time of such dealings she had reasonable grounds to believe that the property represents the proceeds of an indictable offence.  From the facts we can also see that the Inland Revenue Department shared the company did not submit any tax returns, audited report or financial statements and that Stepcon were sent the defendant’s identity and address proof via WhatsApp.  Similarly, Citibank verified the identities of Lam and the defendant by checking their identity cards against their facial appearances.  The facts also show Lam’s withdrawal of certain moneys from the Dah Sing Bank account.  It is pointed out that there is no evidence of showing the defendant indulging in the same activity.

6.The defendant is now I believe 42 years of age.  She has a number of convictions for gambling.  I consider them not relevant to her sentencing today.  The defendant is single.  In 2018/19 at the time of these offences she was around 38 years old, educated to a Secondary 3 level.  She came to Hong Kong in 2009.  Her mitigation says that she has worked as a cleaner at the time of her arrest.  The defendant indicates she was invited to become a director and shareholder of the company.  She maintains she was not involved in the actual operation of the company bank accounts, that the majority of outward payments of the company went to Lam, Lam also made cash withdrawals as can be seen from the Admitted Facts.  It was common ground that she participated in the offences by allowing her identity to be used to set up the company.  There is no evidence to show money paid directly by the company to the defendant or to her account.

7.As far as the approach to sentencing that is to be observed, there is no sentencing guideline or tariff for the offence of which the defendant has pleaded guilty.  Clearly the circumstances in which such an offence may be committed will vary widely.  A range of the factors to be considered and also some analysis of previous cases can be found in the case of HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545.  This sets out the appropriate factors consideration is the seriousness of the, what I believe is called the predicative offence, the original offence; secondly, the amount of property or money involved; thirdly, planning or organisation of the money laundering operation; fourthly, the period of time over which the money laundering occurred; fifthly the defendant’s conduct; sixthly, to what extent the defendant benefitted from the operation and lastly the existence of any international dimension.

8.The nature of the original offence which the criminal offence which the money originated cannot be defined from the facts that have been presented to the court.  The amount of money involved is of course large here.  The setting up of this conspiracy involved a degree of organisation of planning, the creation of a company and its operation.  The period of time over which the offence occurred was some 7 or 8 months.  The defendant’s conduct as can be found from the facts appear to be limited to her involvement in the setting up of the company.  The extent of her benefit is not known.  There is no evidence of any international dimension at this stage.  As I said already, the operation involves a degree of sophistication with the establishment of a company.  The defendant’s involvement of course involving the providing of her identity to establish the company’s accounts, the provision of an identity nevertheless with the knowledge of the establishment of the company is the essential feature of this crime.  It is sine qua non for the existence of the money laundering operation.  As such, it involves the defendant’s involvement in serious criminal behaviour.

9.The defendant has, as far as I am aware, indicated a plea of guilty from an early stage of these proceedings.  She is entitled to a deduction of one-third from any starting point for sentence.  Taking all these factors into consideration, I will pass the following sentences:

- On Charge 1, I will take a starting point of 45 months’ imprisonment, reduce that to 30 months’ imprisonment for plea of guilty.

- On Charge 2, a starting point of 36 months’ imprisonment reduced to 24 months’ imprisonment for plea of guilty.

- On Charge 3, a starting point of 24 months reduced to 16 months’ imprisonment for plea of guilty.

- On Charge 4, a starting point of 30 months’ imprisonment reduced to 20 months’ imprisonment for plea of guilty.

10.Having regard to the nature of this operation, I consider that by way of totality that all of these sentences should be served concurrently to a total of 30 months’ imprisonment.