HKSAR v. Wan Minqiang

DCCC 994/2024

[2025] HKDC 919

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 994 OF 2024

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REASONS FOR SENTENCE

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1.Mr Wan pleaded guilty before me to one charge of Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.

2.Particulars are that he, between 30 November 2020 and 17 December 2020, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of $4,546,163.66 Hong Kong currency in an account numbered 405-8-778155-1 held in the name of Mr Wan with Standard Chartered Bank (Hong Kong)  Limited, in whole or in part directly or indirectly, represented any person’s proceeds of an indictable offence, dealt with the said property.

Facts admitted by Mr Wan

3.A male victim (aged 82)  was defrauded a total sum of about $7.5 million.  His monies were deposited into 9 bank accounts between 28 October 2020 and 15 December 2020.

4.In particular, on 8 December 2020, a sum of $400,000 was deposited by bank transfer into a bank account numbered 405-8-778155-1 held in the name of Mr Wan with Standard Chartered Bank (Hong Kong)  Limited (“the Account”).

5.The Account was opened by Mr Wan on 23 November 2020.  He was the sole signatory of the Account.  He reported to be an engineer, earning $18,000 a month.

6.Between 30 November 2020 and 17 December 2020, a total sum of $4,546,163.66 was deposited into the Account; a corresponding total sum of $4,546,111 was withdrawn from the Account, leaving a low balance of $52.66 as at 17 December 2020.

7.During the above period, there were observable patterns of money laundering in the Account, namely mirror pattern (same or aggregate amount being deposited and withdrawn), quick speed of dissipation of funds and low remaining balance.  The Account was being used as a temporary fund depository.

8.The Account was closed on 16 March 2021.

9.On 30 December 2021, Mr Wan was arrested.

10.Inland Revenue Department records show that Mr Wan’s reported income was incommensurate with the amounts transacted in the Account.

11.Mr Wan now admits the particulars of the charged offence.

Criminal record

12.Mr Wan has three previous dissimilar convictions, the last two of which relate to offences committed after the present offence.

Antecedents

13.Mr Wan is aged 46 (41 at the time of the offence), educated to F3 level in the Mainland.  He was unemployed at the time of arrest.  Mr Wan is divorced.

Mitigation

14.Mr Dickson Li of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Wan.  The following is a summary of the mitigation submissions.

15.Mr Wan was born in the Mainland and came to settle in Hong Kong in 2018.  He is a divorcee.  His son is studying for secondary education in the Mainland (with subsidies from his mother’s Mainland neighbours).  Mr Wan’s mother (in her 60s)  is living in Hong Kong.

16.Mr Wan lent his subject bank account to other people for their use in order to set off a gambling debt in the sum of about $3,200.

17.Before arrest, Mr Wan had been working as an odd job man in construction industry.

18.This is the first time Mr Wan got into trouble with money laundering offences.

19.In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the Court of Appeal in para 15 said that the Court (differently constituted)  has earlier summed up in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 that the sentence for money laundering charges would be like (as starting point):

(a)  3 years or so between $1m and $2m;

(b)  4 years or so between $3m and $6m; and

(c)  Over 5 years where it is above $10m.

20.In HKSAR v Yam Kong Lai, CACC 458/2006, where the amount of money involved was USD500,000, the Court of Appeal allowed the appeal against sentence on an offence of money laundering by reducing sentence (after trial)  of 5 years to one of 4 years (see paras 1 and 31).

21.The amount in the present case is about $4.5m which is similar.

22.Mr Li will not dispute the OSCO Notice nor argue against the prevalence of the crime in issue.

23.In HKSAR v Fong Chi Yam, CACC 411/2017, the applicant was charged with 2 offences of money laundering originated from a background of fraud (see paras 1 & 5).  The present case is similar in that $400,000 of the $7.5m fraud proceeds was deposited into Mr Wan’s bank account.

24.There is no evidence to show Mr Wan has taken part in or has knowledge of the predicate offence.

25.In paras 105-106 of Fong Chi Yam, the Court of Appeal held that people should not be penalized further in respect of crimes that they did not take part in nor had knowledge of.

26.The Court of Appeal went on to dismiss the enhancement of sentence made by the sentencing judge (see para 106).

27.In appropriate circumstances, the court could reduce sentence where there has been delay in prosecution: DCCC 996/2022; DCCC 314 & 363/2021 (Consolidated).

28.Mr Wan was arrested in December 2021.  After about 6 months, he was released with return of bail money.  Mr Wan returned to his normal life and resumed work in construction industry.  On 5 July 2024, when Mr Wan tried to visit the Mainland, he was stopped at the border.

29.The present case is about one bank account for a period of less than one month.  It was therefore submitted there might have been some delay.

30.It was submitted that Mr Wan should be sentenced in the most lenient way.

31.Mr Li submitted on behalf of Mr Wan a mitigation letter written in Chinese by Mr Wan himself.  The contents are generally that Mr Wan is regretful and apologizes to the Hong Kong Government and the victim.  Mr Wan asks for lenient sentence so that he may return home early to attend to her mother and to see his son.

Sentence

32.There is one aggravating feature in relation to Mr Wan: he committed the present offence whilst on court bail for WKCC 684/2020.

33.I have seen the Prosecution Timeline produced by the prosecution.  There was a time lapse of about 14 months (from January 2022 to March 2023)  from initial arrest to the seeking of legal advice. There followed another time lapse of about 10 months (from March 2023 to January 2024)  when legal advice was pending.  Although this case involved only one defendant and one bank account, it is linked to at least one fraud case in which $7.5 million was lost.  There is also no evidence that Mr Wan made any admissions on arrest.

34.Bearing in mind that even normal investigation and normal rendering of legal advice would take some time, and that both the police and the Department of Justice are busy departments, I am not satisfied that there was unreasonable delay, which was a prerequisite for relying on it as a mitigating factor. Another essential condition before this mitigation can be made out is there must be either additional stress or rehabilitation attempt by the defendant in the interim period.  There is no evidence of either in the present case.

35.In the premises, I am not prepared to grant Mr Wan any further reduction in sentence.

36.The case of Fong Chi Yam does not assist Mr Wan.  In Fong, although the applicant was charged with and convicted of two charges of money laundering, the basis upon which the enhancement of sentence was made was prevalence of “telephone deception” (see para 93 of the Chinese Reasons for Judgment).  Here, in Mr Wan’s case, the basis is completely different: the enhancement is sought on the basis of prevalence of money laundering offence, and the harm caused to the community by recent occurrences of this offence.

37.The maximum penalty for the offence of money laundering is 14 years’ imprisonment.  There are no sentencing guidelines but a deterrent sentence is called for.

38.The amount of money involved is a major consideration: HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, 551 at para 9(a).

39.In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal said a sentencing court should take into account the following non-exhaustive list of features when dealing with offences of money laundering:-

(a)  the nature of the predicate offence;

(b)  the state of the offender’s knowledge;

(c)  where the operation involved an international dimension, this would be a significant aggravating feature;

(d)  the sophistication of the offence, including the degree of planning;

(e)  where the offence was committed by or on behalf of an organized criminal syndicate would be an aggravating feature;

(f)  whether there was one transaction or many and the length of time over which the offence was committed;

(g)  whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved;

(h)  the role of the offender and the acts performed by him.

40.In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, Yeung JA, in giving the judgment of the Court of Appeal, said at para 15:

“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 sentencing starting point is 3 years or so where the “black money” involved is between $1 million and $2 million; 4 years or so where it is between $3 million and $6 million; and could be over 5 years where it is above $10 million.”

41.In the present case, the amount laundered was about $4.5 million.  The predicate offence appears to be “Fraud”; however, there is little evidence that Mr Wan knew about this.  The duration of the offence was less than one month. Mr Wan’s role was simply to allow others to use his account.  According to mitigation, Mr Wan committed the offence in order to set off a gambling debt of $3,200 so that was his remuneration.  There is a lack of other aggravating features peculiar to the offence.

42.With all those factors in mind especially the short duration of the offence, I adopt a low starting point of 3 years and 3 months’ imprisonment.

43.Because of the aggravating factor of commission of the offence whilst on bail, I increase the starting point by 3 months to reach the final starting point of 3½ years’ imprisonment.

44.Mr Wan pleaded guilty in good time, earning for himself the customary 1/3 sentencing discount.  Other than that, I cannot discern any other mitigating factors of weight to justify another sentence reduction.

45.According to the witness statement of CIP Li Yiu Nam dated 21 March 2025, although the overall number of money laundering cases (detected with arrest)  and the amount of losses or proceeds laundered went down from 776 and HK$10,262.7M[1] in year 2023, to 549 and HK$3,971.8M[2] in year 2024, the figures in year 2024 are still substantial.  This shows the money laundering offence is still prevalent.

46.CIP has also elaborated in his statement how the anti-money laundering regime in Hong Kong is hampered by the increasing use of stooges for money laundering activities, as follows:

(a)  The increasing number of stooge accounts interferes with the normal operation of the banking system, having a negative effect on the reputation of Hong Kong as a well-known international financial hub;

(b)  The increasing number of stooge accounts form multiple layers of “shields” concealing the identity of the masterminds behind, making it difficult, if not impossible, for police to identify the masterminds behind;

(c)  The increasing number of stooge accounts substantially facilitates the commission of crimes and in turn leads to more crimes being committed, as the mastermind could easily get away from their criminal liability;

(d)  The increasing number of stooge accounts makes money laundering easier, which allows culprits to make use of their ill-gotten gains to extend their sphere to engage in a wider range of illegal activities;

(e)  The increasing number of stooge accounts means that law enforcement agencies have to put in more investigation efforts and resources; and

(f)  People with low income or less awareness of the consequences of selling their bank accounts are more likely to be lured by the culprits to take the risks of commission of crimes to surrender their accounts for monetary reward.

47.As could be seen from the figures provided by CIP, the use of stooge is increasing in both figures and proportion: there is a rising trend in the use of stooge in deception and money laundering cases combined, from 31.38% recorded in the year 2020 to 75.10% in the year 2024.  In the year 2024 alone, there were 3,675 cases involving the use of stooge accounts and they accounted for reported monetary losses or proceeds laundered to the total amount of HK$4,466.4M[3].

48.I am therefore satisfied that the money laundering offence is prevalent; and that the nature and extent of harm, whether direct or indirect, caused to the community by recent occurrences of the money laundering offence is substantial.

49.I will therefore exercise the power under section 27(11)  of the Organized and Serious Crimes Ordinance, Cap 455, to enhance the sentence of Mr Wan.  The extent of the enhancement will be 25%.

50.I am satisfied that the final sentence thus arrived at is not excessive in the circumstances of the offence and the offender.

(Mr Wan, please stand)

51.The sentence is 35 months’ imprisonment.