HKSAR v. Chan Hon Keung, Jacob

DCCC 409/2023

[2024] HKDC 311

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 409 OF 2023

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REASONS FOR SENTENCE

The defendant pleaded guilty to a charge of "Dealing with property known or believed to represent proceeds of an indictable offence". In short, he lent his bank account to someone and helped withdrawing funds.

Summary of Facts

2.The defendant was the sole director and shareholder of Jacob Holiday (Int'l)  Limited ("JHL").  JHL held a business account No.012-917-111XXXX-0 ("the Account")  with the Bank of China (Hong Kong)  Limited ("BoC"), which was opened in September 2008.  The Account consisted of a savings account and a current account.  The defendant became the sole signatory of the Account since November 2017.

3.On 20 June and 9 July 2018, Goldpang Co. Ltd. ("Goldpang"), a South Korean company, remitted US$298,848 and US$320,528 respectively to the Account. Goldpang made these 2 remittances because it was deceived by an email scam.

4.In relation to the 1^st remittance by Goldpang, police investigation revealed the following :-

(a)  On 20 June 2018, Goldpang remitted US$298,828 (after deduction of US$20 as bank charges)  to the Account's savings account, which was then exchanged into HK$2,340,316.08. The entire sum in HKD was transferred to the Account's current account on the same day.

(b)  On 21 June 2018, HK$2,059,680 was transferred from the Account's current account to a bank account held by Hui's Brothers Currency Exchange Group Holdings Limited ("Hui's Brothers"). At 15:29 hours on the same day, the defendant exchanged HK$2,059,500 into RMB1,709,385 at Hui's Brothers and remitted the entire sum in RMB to a mainland bank account No.6228-4800-8861-XXXX-073 held by Chen Meiyang at Agriculture Bank ("Chen's Account").

(c)  On 22 June 2018, the defendant withdrew HK$280,816 from the Account's current account by cheque at a BoC counter.

5.In relation to the 2^nd remittance by Goldpang, police investigation revealed the following :-

(a)  On 9 July 2018, Goldpang remitted US$320,508 (after deduction of US$20 as bank charges)  to the Account's savings account, which was then exchanged into HK$2,510,879.79. The entire sum in HKD was transferred to the Account's current account on 10 July 2018.

(b)  On 11 July 2018, HK$2,209,680 was transferred from the Account's current account to a bank account held by Hui's Brothers. On the same day, the defendant exchanged HK$2,209,500 into RMB1,880,285 at Hui's Brothers and remitted the entire sum in RMB to Chen's Account.

(c)  Also on 11 July 2018, the defendant withdrew HK$301,380 from the Account's current account by cheque at a BoC counter.

6.The Police arrested the defendant on 26 July 2018.  Under caution, he said he lent his account to a friend named "Ah Tai", who had asked the defendant to assist in withdrawing the 2 sums of money from the Account and remitting the same to the mainland.

7.In his video recorded interviews, the defendant admitted, inter alia, that he had assisted male Law Fuk Shan (alias "Ah Tai")  in remitting the 2 sums of money to the mainland.  The defendant stated that he was the owner of JHL, a travel agency established in February 2009.  The Account was used for business purpose and receiving tour fees from clients.  Law is a former partner of JHL and the defendant had known him for 10 years.  The defendant followed Law's instructions by remitting a portion of the money to the mainland.  He handed the remaining amount to Law in cash.

8.WeChat messages between the defendant and "Leo" (i.e. Law as alleged by the defendant)  contained in the defendant's mobile phone showed that by remitting the 2 sums of money, the defendant could receive HK$75,330 as his reward; whereas Leo, HK$50,200.  Also, the defendant was to give HK$175,849 to an unknown person.

9.The defendant now admits that during the offence period, he knew or had reasonable grounds to believe that the total sum of HK$4,851,195.87 in the Account represented the proceeds of an indictable offence and had dealt with the said sum of money.

Mitigation & Sentence

10.The defendant is 51 and has a clear record. Defence counsel Mr. Chan informed me that the defendant is single and resides with his mother (aged 73). He has been the owner of JHL since 2009. He also acted as a tour guide for tours organized by JHL. In mitigation, Mr. Chan submitted that the defendant committed the present offence in order to earn some quick money. He wanted to alleviate the financial problems of his business, which was in a slump. Mr. Chan also mentioned the defendant's health problems and raised "undue delay" as a mitigating factor.

11.I will deal with the issue of "delay" first. Ms. Fok, SPP has helpfully prepared a Chronology of Events for my reference. The defendant was arrested and interviewed under caution on 26 July 2018. It took the Police 2 years to investigate this case and to submit the case file to the Department of Justice for legal advice in August 2020. Between August 2020 and October 2022 (i.e. 26 months), there were preliminary legal advice, further investigation, 1^st legal advice, follow-up actions and final legal advice to charge the defendant. Yet, the Police did not contact the defendant until February 2023. He attended the police station on 15 March 2023 as scheduled and was charged. This case reached the magistracy on 29 March 2023 and then the District Court on 23 May 2023. After one adjournment, on 25 July 2023, a plea & sentence date was fixed for 8 February 2024.

12.In my view, 4 years and 8 months from the cautioned interview to charging the defendant were excessive. Based on the Summary of Facts, only 2 overseas remittances were involved. The subsequent fund flow was simple and straightforward. I am aware of the sudden influx of caseload in 2019 and the pandemic from 2020 to 2022. Nevertheless, there is, in my view, undue delay in bringing criminal prosecution against the defendant.

13.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]

14.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.

15.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]

16.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 email fraud deceiving a company in Korea). I also accept that the defendant did no more than "lending" his bank account to an alleged former business partner and helping him remitting the money to the mainland. On the other hand, I cannot overlook the fact that a total of HK$4.85 million went through the Account in less than a month.

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 4 years' imprisonment[3]. With the timely guilty plea, the sentence is reduced to 32 months. I would grant an additional discount of 4 months to reflect the undue delay, reducing the sentence to 28 months. I sentence the defendant to 28 months' imprisonment.