HKSAR v. Huang Zhenhua

DCCC 1418/2024

[2025] HKDC 2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1418 OF 2024

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REASONS FOR SENTENCE

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1.Mr Huang pleaded guilty before me to 3 charges 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 of the charges are that he, A, in Hong Kong, together with a person unknown, knowing or having reasonable grounds to believe that property namely a total sum of B in the bank account with C, account number D, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.

3.For Charge 1, A is on or about 3 June 2023; B is $950,799 Hong Kong currency; C is China CITIC Bank International Limited; D is 018772111479900.

4.For Charge 2, A is between 9 and 12 June 2023, both dates inclusive; B is $332,680 United States currency; C is Standard Chartered Bank (Hong Kong) Limited; D is 320-8-905376-1.

5.For Charge 3, A is between 4 and 7 March 2024, both dates inclusive; B is $2,134,317.15 Hong Kong currency; C is Industrial and Commercial Bank of China (Asia) Limited; D is 866-823-39731-0.

Facts admitted by Mr Huang

Charge 1

6.In May 2023, PW1 (aged 20) received phone call(s) from unknown persons posing as PRC PSB officers.  PW1 was alleged to have committed crime in PRC and was instructed to deposit HK$319,999 into various bank accounts in Hong Kong, including the bank account specified under Charge 1 in the name of Mr Huang (“Charge 1 Account”) in order to prove her innocence.  After PW1 realized it was a scam, she made a police report.

7.The Charge 1 Account was opened by Mr Huang at a Hong Kong branch office on 1 June 2023, with his PRC ID Card.  Mr Huang was the sole signatory with on-line banking activated.  On the opening mandate, it was stated that Mr Huang was a technician earning about HK$30,000 monthly with a reported address in Gaozhou City, Guangdong Province.

8.Fund flow analysis of the Charge 1 Account showed repository pattern on 3 June 2023 as follows:

(a) 4 deposits totaling HK$950,799 from 2 persons including PW1;

(b) 4 withdrawals totaling HK$949,301.81 to 4 different persons; and

(c) The account became inactive afterwards leaving a balance of HK$1,498.14.

Charge 2

9.In May 2023, a male informant residing in the United States fell prey to email scam and was instructed to deposit money into various bank accounts in Hong Kong including the bank account specified under Charge 2 in the name of Mr Huang (“Charge 2 Account”) for the purpose of fixing PayPal issues.  After he realized it was a scam, a report was made to the Hong Kong Police.

10.The Charge 2 Account was opened by Mr Huang at a Hong Kong branch office on 30 May 2023, with a copy of his Exit-Entry Permit for Travelling to and from Hong Kong and Macao.  Mr Huang was the sole signatory.  He opted for e-statement.  On the opening mandate, it was stated that Mr Huang was earning about HK$28,000 monthly with a reported residential address in Gaozhou City, Guangdong Province.

11.The Charge 2 Account was a USD & HKD dual currency account.  The informant deposited USD119,900 to the USD sub-account on 9 June 2023.  The same was transferred to the HKD sub-account (being HK$936,047.31).  The fund in the HKD sub-account was then transferred out.  The monies in the HKD sub-account originated from the USD sub-account.

12.Fund flow analysis of the Charge 2 Account (USD sub-account) showed repository pattern from 9 to 12 June 2023 as follows:

(a) 3 deposits totaling USD332,680 (around HK$2.59 million) from 2 entities including the informant;

(b) One withdrawal totaling USD119,900 to the HKD sub-account; and

(c) The USD sub-account became inactive afterwards leaving a balance of USD212,864.22 (Letter of no consent was issued).

Arrest and caution (Charges 1 & 2)

13.Mr Huang was and is a two-way permit holder.  He was arrested when he arrived in Hong Kong via Lok Ma Chau on 2 May 2024.  He stated in two cautioned VRIs on 3 May 2024 that:-

(a) He was educated up to secondary level and he co-owned a restaurant in Mainland;

(b) He lived alone in a rented unit with rental payment of a few hundred dollars;

(c) He had no assets in Hong Kong or Mainland;

(d) He was declared bankrupt in around 2021 and was still owing debts of around a few hundred thousand dollars;

(e) He repaid the debts monthly; and

(f) He denied knowledge of transactions in the Charge 1 Account and the Charge 2 Account.

14.Mr Huang now admits that, together with a person unknown, he committed the offences subject of Charges 1 and 2.

Charge 3

15.In March 2024, a Singaporean woman fell prey to online scam.  She followed instructions to deposit money into various bank accounts in Hong Kong, including the bank account specified under Charge 3 in the name of Mr Huang (“Charge 3 Account”).  After the scam was recognized, a report was made to the Hong Kong Police.

16.The Charge 3 Account was an integrated multi-currency account opened by Mr Huang at a Hong Kong branch office on 3 March 2024 with his PRC ID Card and his two-way permit.  Mr Huang was the sole signatory.

17.Fund flow analysis of the Charge 3 Account showed repository pattern between 4 and 7 March 2024:-

(a) 5 deposits totaling HK$2,134,317.15 via FPS transfer deposit (including a HK$10,000 cash deposit into the HKD savings sub-account on 4 March 2024; and the deposit of SGD192,556 (around HK$1,124,317.15) from the informant on 7 March 2024, which was transferred to the HKD current sub-account on the same day);

(b) 4 withdrawals totaling HK$1,210,000 via FPS transfer withdrawal; and

(c) The account became inactive afterwards leaving a balance of HK$924,367.15 (Letter of no consent was issued).

18.Mr Huang was arrested on 28 August 2024 for Charge 3.  Under caution, he admitted he had no reported income or landed property in Hong Kong.

19.Mr Huang now admits that, together with a person unknown, he committed the offence subject of Charge 3.

Criminal record

20.Mr Huang has a clear record in Hong Kong.

Antecedents

21.Mr Huang is aged 33 (30-31 at the time of the offences), educated to intermediate school in Mainland, unemployed in Hong Kong.  Mr Huang was living with his parents, his children and his girlfriend, and his own younger brother in Guangdong.

Mitigation

22.Mr Lam Shun Chiu of counsel assigned by the Director of Legal Aid mitigated on behalf of Mr Huang.  The following is a summary of the mitigation submissions.

23.Mr Huang is a Mainland resident.  He was living with his family in a village in Gaozhou Shi (City) of Guangdong Province.

24.Mr Huang was educated to F3 level.  He is divorced with two children.

25.Mr Huang was living with his girlfriend who is working at a nursery.  Mr Huang’s grandmother (80+) and his parents (60+) all depend on Mr Huang and his girlfriend.

26.Mr Huang used to be a peasant but in early 2023, he became the owner of a barbecue shop in the local town.

27.In early 2023, a friend suggested to him that he could go to Hong Kong and open bank accounts so that he might borrow money from the banks in Hong Kong for his business in future.

28.He therefore followed his friend to Hong Kong where he opened two bank accounts with the assistance of his friend.  Reposing misguided trust in his friend, Mr Huang allowed him to use and operate these accounts at the same time failing to appreciate the risks and problematic nature of these transactions. Due to his ignorance and simplemindedness, Mr Huang came to Hong Kong in March 2024 and opened another bank account.  Similarly, he lent this account to his friend for use.

29.There is no sentencing tariff for this type of case: HKSAR v Boma [2012] 2 HKLRD 33 at paras 24-27.  The amount of money laundered is just one of the factors for consideration, not the sole factor nor the most important one.  The factors for consideration are:

(a) The amount of money laundered;

(b) The seriousness of the predicate offence which generated the crime proceeds;

(c) Whether the offender participated in the predicate offence;

(d) Whether the offender actually knew about that the proceeds were from the predicate offence or he just had reasonable grounds to believe that the properties were crime proceeds;

(e) Whether the offender was a beneficiary of the laundering process or he was just a conduit;

(f) Whether the case involved an organized and sophisticated scheme where the offender was the director of the laundering exercise; or he may be a lowly employee in the exercise;

(g) Whether the offence involved a single transaction or, on the other hand, many transactions over an extended period;

(h) Whether deceit to achieve the objective had been employed;

(i) Whether the case had an international element; and

(j) The list is not exhaustive; the sentencing judge has to engage his ‘feel’ for the case bringing to bear his sentencing experience bearing in mind at all times the mischief at which the legislation is directed.

30.It was also pointed out in Boma that “persons down the chain there will be gradations of culpability” and persons with no more participation and no more knowledge than that it^[1] is going to be used for some sort of crime is much less culpable than an offender of a different sort not “used” in this way (para 40(8)).

31.It was submitted that Mr Huang was in fact at the lowest end of the gradations of culpability.

32.The amount of money dealt with no doubt has to be considered.  In Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, the Court considered the knowledge of the nature of the predicate offence, the benefit to the respondent, the length of the period of the offence, the amount of money involved, and held that a starting point not lower than 4 years should be adopted.

33.In the present case, it was submitted that the amount and the culpability is substantially lower than Wan Kwok Keung and therefore a starting point substantially lower than 4 years should be adopted.

34.Regarding request for enhancement of sentence, it was submitted that the policy objective is to enable the courts to mete out additional punishment to offenders in view of prevalence or/and grave harm occasioned so that^[2] greater deterrence to the potential future offenders.  However, it is sad to note that from time to time, the message from the courts may not reach those potential offenders timely for various reasons.

35.Mr Lam referred to para 19 of CIP Li’s statement.  Mr Lam accepted that the Hong Kong Police have done much publicity work and the courts have dealt with similar cases sternly and enhanced the sentences from time to time.

36.Nowadays, dissemination of information is fast and convenient but usually hand in hand with misinformation.  Mr Huang and quite a number of those “used” as stooges in similar situations were, to a certain extent, victims of misinformation from those who were much more culpable but beyond the reach of the police.

37.If the court were minded to enhance the sentence, Mr Lam submitted that the court has to balance with the consideration that Mr Huang or those alike can only bring home the court’s message to others when they return after doing their time.  It would, according to the submission, be counter-productive if these offenders are detained in Hong Kong longer than is necessary.

38.The key mitigation is the timely guilty plea.  The court is urged to allow Mr Huang to return home as soon as possible.

39.Mr Lam submitted on behalf of Mr Huang one mitigation letter in Chinese written by Mr Huang himself.  The contents generally are that Mr Huang is shameful for the consequences his crime has caused to his family.  Mr Huang asked the court for an early return home.

40.Upon enquiry by the court, Mr Lam submitted that the purpose of opening the 3^rd account was also to borrow a loan from that bank.  However, it was submitted, no loan was ever taken out from any of the three banks.  It was also submitted that Mr Huang received no rewards for all his labour under the offences.

Sentence

41.Money laundering is a serious offence.  A deterrent sentence is always called for.

42.This case has the following features.  Offences subject of Charges 1 and 2 spanned less than 2 weeks.  The Charge 3 offence spanned less than one week. Charge 1 relates to just less than HK$1 million laundered; Charge 2 relates to about HK$2.6 million (original in USD) laundered; Charge 3 relates to about HK$2.1 million laundered.  The number of transactions is not large.  Offences subject of Charges 2 and 3 have international dimension.

43.An aggravating feature of the offences is, according to what the prosecution told me about the TIC, Mr Huang must have come to Hong Kong specifically for the purpose of opening the three bank accounts.

44.Although Mr Huang claimed to have received no reward for his labour, it is inconceivable that he would have allowed others to use his bank accounts without remuneration.

45.There is no evidence that Mr Huang knew of the predicate offences of deception.

46.Bearing all these matters in mind, and noting Wan Kwok Keung para 15, I am minded to adopt a global starting point of 4 years’ imprisonment.

47.Mr Huang pleaded guilty in good time, earning for himself the customary 1/3 sentencing discount.  There are no other mitigating factors of weight to justify another sentence reduction.

48.Prosecution sought to furnish a witness statement of CIP Li Yiu Nam dated 11 November 2025 under section 27(2) of OSCO, Cap 455, with a view to requesting enhancement of sentence.  Prosecution sought to show (a) the prevalence of money laundering offences; and (b) the nature and extent of any harm, whether direct or indirect, caused to the community by recent occurrences of money laundering offences.

49.There being no objection to the reception of this statement, I duly received it for consideration.

50.According to Table A on page 5 of the statement, the total number of local Deception cases (involving subsequent laundering of crime proceeds) and pure Money laundering cases has been on the rise since 2020 and the projected figure for the whole of 2025 would be 47,241 which is still huge in numbers.

51.I am satisfied prevalence of money laundering offences is made out.

52.According to Table B on pages 6 and 7 of the statement, the amount of reported losses in local Deception cases (involving subsequent laundering of crime proceeds) has been on a rising trend since 2022 and the projected amount for the whole of 2025 would be HK$2,176.76M which is a huge number.

53.But amount lost is not the only harm to the community.  In para 18 of the statement, CIP laid out how the prevalence of using stooge accounts in money laundering activities could harm the community in various ways:-

(a) It 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) It forms multiple layers of “shield” concealing the identity of the masterminds behind, making it difficult, if not impossible, for police to identify the masterminds behind;

(c) It 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) It 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) It 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.

54.Also according to Table A, the total projected number for the whole of 2025 of stooges arrested in detected cases would still stand at 5,538 despite a drop from 7,883 for the year 2024.

55.Bringing all these considerations together, I am satisfied that the harm caused to the community by recent occurrences of money laundering offences is still substantial.

56.I am therefore satisfied that I am empowered by section 27(11) of OSCO, Cap 455, to enhance the sentence of Mr Huang.

57.As regards the extent of enhancement, I have borne in mind what was submitted on behalf of Mr Huang.  In the circumstances, I deem a 20% enhancement appropriate.  I will round down to the nearest month where there are decimal places after calculation.

58.I will impose individual sentences after enhancement for the three charges and will apply the totality principle before arriving at the final enhanced sentence for Mr Huang.

(Mr Huang, please stand)

59.For Charge 1, the sentence is 19 months’ imprisonment.

60.For Charge 2, the sentence is 33 months’ imprisonment.

61.For Charge 3, the sentence is 28 months’ imprisonment.

62.I order that 2 months of the sentence on Charge 1, and 3 months of the sentence on Charge 3, are each to run consecutively to the sentence on Charge 2, making an aggregate sentence for Mr Huang of 38 months’ imprisonment.