HKSAR v. Cheung Chin Chiu

DCCC 1430/2024

[2026] HKDC 962

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1430 OF 2024

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REASONS FOR SENTENCE

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1.The Defendant pleaded guilty to one count of Dealing with property known or believed to represent proceeds of an indictable offence (money laundering), contrary to section 25(1)  and (3)  of the Organized and Serious Crimes Ordinance, Cap 455.

Summary of Facts

2.The Summary of Facts admitted by the Defendant are:

Predicate Offence

(1)  On 24 February 2022, Ms KWOK (PW1)  put up 2 Chanel handbags for sale on Carousell, an online trading platform. On 22 March 2022, a purported buyer contacted PW1 offering to purchase the 2 handbags from PW1 at a price of HK$20,000 (the $20,000 handbag)  and HK$10,000 (the $10,000 handbag)  respectively. PW1 accepted the offer. The parties agreed to complete the transaction on 23 March 2022.

(2)  On 23 March 2022 at around 1 pm, PW1 met up with a woman (the Woman)  who claimed to be the buyer outside Golden Plaza, Mongkok. The Woman falsely represented that HK$30,500 had been transferred to PW1’s bank account, HK$30,000 being the purchase price of the 2 handbags and HK$500 being PW1’s transportation reimbursement. PW1 believed the Woman that HK$30,500 had been deposited into her bank account. The Woman then claimed that she no longer wanted the $10,000 handbag. The Woman provided PW1 with a telephone number 5377 0131 and asked for a refund of HK$10,000 via Faster Payment System (FPS). PW1 complied with the request. The Woman then took the $20,000 handbag and left.

(3)  On the same day at about 3:15 pm, the Woman told PW1 that she had mistakenly transferred HK$28,000 into PW1’s bank account. The Woman provided the same telephone number 5377 0131 to PW1 and asked for a refund of HK$20,000, but keep the extra HK$8,000. Believing that HK$28,000 had really been deposited into her bank account, PW1 refunded the HK$20,000 via FPS pursuant to the Woman’s request.

(4)  Subsequently, PW1 was informed by the bank that the deposits of HK$30,500 and HK$28,000 were made by 2 cheques and that both cheques had been dishonored. The 2 cheques were drawn in a bank account that belonged to “Ho Wun Lick Company’. PW1 reported the matter to the police.

The Defendant’s Bank Account

(5)  Police investigations revealed that the MOX Bank Limited bank account, numbered 388-74954802026 held in the Defendant’s name (the Account)  had registered FPS with the telephone number 5377 0130. It was further confirmed that the HK$30,000 paid by PW1 to the Woman as refund were all directly deposited into the Account.

(6)  The Account was a personal account opened online on 9 March 2022. It was closed on 26 July 2022 by MOX Bank Limited. The Defendant was the sole account holder and authorized signatory of the Account. According to the opening mandate, the Defendant reported to be “self-employed / an executive” working in the “building services and construction” sector, earning a monthly income of HK$20,000; his telephone number was 5377 0130 and the purpose of opening the Account was for “savings / transactions instalments”.

(7)  Bank statements between 9 March 2022 and 26 July 2022 were obtained. During this period, a total of HK$3,167,798.56 was deposited into the Account by way of 9,122 deposits and a total of HK$3,167,798.56 was withdrawn from the Account by way of 1,876 withdrawals. In particular:

(i)  All the withdrawals were made online, involving a total of 350 recipients;

(ii)  As for the deposits, a total of HK$16.67 (involving 75 deposits)  were “interest”, whereas the remaining deposits were made online by a total of 461 individuals;

(iii)  All the transactions in the Account were made in Hong Kong dollars. The deposits ranged from HK$0.01 to HK$33,400 and the withdrawals ranged from HK$0.04 to HK$30,000; and

(iv)  On 23 March 2022, after PW1 transferred HK$10,000 into the Account at 1:39 pm, a total of HK$7,300 was quickly transferred out of the Account to 5 different individuals between 1:41 pm and 2:23 pm. Subsequently, after PW1 transferred HK$20,000 into the Account between 3:21 pm and 3:24 pm, HK$25,000 was quickly transferred out of the Account to one individual at 3:35 pm.

(8)  The transaction records showed a pattern of temporary repository of funds in the Account.

The Telephone Number 5377 0130

(9)  The telephone number 5377 0130 was from a pre-paid SIM card with no identifiable registered user.

Tax Records

(10)  According to the Inland Revenue Department, for the financial years 2021/2022 and 2022/2023 (up to 10 August 2023), there was no tax record of the Defendant at all.

Arrest

(11)  On 16 August 2022, the Defendant was arrested for the offence of “conspiracy to defraud”.

(12)  A written cautioned interview was conducted with the Defendant on 4 November 2022. Under caution for the offence of “money laundering”, the Defendant stated, inter alia, that:

(i)  He became unemployed since 2018. He relied on his savings and the financial support from his friends. Before his unemployment, he worked as a stage construction worker earning HK$20,000 to HK$30,000 each month;

(ii)  He lived with his father and his step-mother, but he seldom returned home in the past few years. Instead, he would stay in a guesthouse;

(iii)  He opened the Account using the mobile app of MOX Bank Limited to earn cash rebate of around HK$200. He did register FPS for the Account;

(iv)  He had one mobile telephone number 9769 9200 registered in his name. He also used pre-paid SIM card(s)  but he could not remember the telephone number(s)  of the pre-paid SIM card(s);

(v)  There was no bank card for the Account. He only needed a password to log into the Account in the mobile app of MOX Bank Limited;

(vi)  He only used the Account once. He once logged into the Account using his female friend SIN Wai Lan (SIN)’s mobile telephone to transfer HK$100 to SIN’s friend. He logged out after doing so. He had known SIN for around one year at that time, they became acquainted with each other at a gaming centre. He did not know SIN’s friend. He could not provide any contact information of SIN; and

(vii)  He had no knowledge of the transactions in the Account, the dishonored cheques or the scam perpetrated upon PW1.

Conclusion

(13)  The Defendant, between 9 March 2022 and 26 July 2022, both dates inclusive, in Hong Kong, together with other person(s)  unknown, knowing or having reasonable grounds to believe that property, namely a total sum of HK$3,167,798.56 in the Account (ie the total deposits in the Account during the above said period), in whole or in part, directly or indirectly represented any person’s proceeds of an indictable offence dealt with the said property.

3.Counsel stated that the Defendant opened the Account and handed over the login and password pursuant to someone’s instructions. He earned a reward of HK$2,000 for opening and handing over the Account. This was confirmed by the Defendant before his conviction.

The Defendant’s Background

4.The Defendant is 32 years old. He emigrated to Hong Kong in 2000. In his antecedent statement, the Defendant stated that he was educated up to primary 6 level in Hong Kong. However, counsel stated that the Defendant returned to the Mainland where he received education up to Form 2 level.

5.In his antecedent statement, the Defendant stated that he lived with his father and stepmother prior to his arrest. However, Counsel explained that the Defendant originally lived with his father and grandmother in a public housing unit. In 2007 (when the Defendant was 14 years old), the Defendant’s mother attempted suicide by burning coal. She survived but was in a coma for 4 years before she passed away. The Defendant’s father divorced his mother during this time and later remarried. The Defendant moved out of the family home as a result of arguments with his stepmother.

6.The Defendant worked in various jobs including a hair salon assistant and a warehouse worker. From the age of 21-29 (2019), he was a backstage worker for events. He became unemployed for several years as a result of the riots and the Pandemic. His last job was a cook for a fast food chain in 2024. This was contrary to his antecedent statement where the Defendant said he was unemployed since 2018. The Defendant was a manager of a gambling establishment.

7.Counsel stated that the Defendant got married in October 2023 and plans to start a family. His wife lives and works in Shenzhen. However, the Defendant stated that he was single in his antecedent statement. According to his criminal record, on 15 September 2022, the Defendant was sentenced to drug addiction treatment centre in KCCC 1080/2022. This was again contrary to his antecedent statement which stated that he was discharged from the drug addiction treatment centre on 17 January 2024. Counsel explained that the Defendant was released from the treatment centre in January 2023 but was recalled after he failed to attend urine tests after his marriage.

Principles

8.Money laundering is a serious offence. On indictment, the maximum sentence is a fine of $5,000,000 and imprisonment for 14 years. Not only does money laundering encourage criminal activities indirectly, it also attempts to legitimize the proceeds of crime. In order to crack down on serious crimes and to prevent offenders from obtaining financial gains, it is necessary to impose a deterrent sentence: HKSAR v Javid Kamran (CACC 400/2004); HKSAR v Xu Xia Li and another [2004] 4 HKC 16; Secretary for Justice v WAN Kwok Keung [2012] 1 HKLRD 201.

9.There are no sentencing guidelines. However, subject only to exceptional circumstances, an immediate custodial sentence is appropriate for deterrence, even for a first offender: Secretary for Justice v Siu Yun Yee [2017] 3 HKC 454.

10.Generally, the sentence should mainly reflect the amount of “black money” laundered. The benefit to the Defendant or the lack thereof is irrelevant. That is because it is very difficult to prove the benefit concerned, and in most cases, even the predicate offence is unknown. If there were information to prove that the “black money” originated from very serious crimes, such as drug trafficking, kidnap and blackmail, illegal human trafficking and other organized crimes or the Defendant’s benefit was huge, the sentence should be adjusted upward: Wan Kwok Keung (ibid).

11.The amount laundered is not the be-all and end-all of a case but is a significant feature: HKSAR v Boma [2012] 2 HKLRD 33. The Court of Appeal has, in a number of cases, listed other factors relevant to sentence. These include the nature of the predicate offence (if known); the Defendant’s knowledge of the nature of the predicate offence; whether there was an international dimension; whether the offence was committed on behalf of a criminal syndicate; the number of offences, the length of time the offence(s)  lasted, the number of transactions involved, the Defendant’s role, the degree of organization and sophistication of the offence and whether the Defendant continued to launder the money after he discovered the nature of the predicate offence. If the Defendant is a drug addict or petty crook who is paid a small sum to open an account and hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime, he is much less culpable than an offender of a different sort not used in that way: Boma (ibid).

12.In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, 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 for amounts between HK$1,000,000 and HK$2,000,000; 4 years or so where the amounts are between HK$3,000,000 and HK$6,000,000 and could be over 5 years where the amount is over HK$10,000,000 (See also Wan Kwok Keung (ibid).

Discussion

13.Counsel submitted that The Account was only in operation for about 3.5 months. The amount involved was just over HK$3 million. There was no evidence of any international element. The Defendant’s only involvement was opening an account to allow others to use it. There was no evidence that he was ever involved with any of the predicate offences.

14.I agree with some of those submissions. Although the offence only lasted for 3.5 months, there were thousands of transactions. The Defendant admitted that he himself registered the FPS for the Account. The registered telephone number is 5377 0130, the same telephone number that was used to perpetrate the fraud on PW1. In my judgment and in the light of the Defendant’s role, the appropriate starting point in the present case is 3 years and 9 months’ imprisonment.

Mitigation

15.Counsel submitted that the Defendant was fully co-operative and readily admitted his involvement in the offence, ie he was the owner of the Account.

16.I agree that the Defendant admitted that he was the owner of the Account when he was confronted by the police. However, he never admitted his involvement in the offence. To the contrary, he stated that he used the online services of the Account on his friend’s telephone, implying that his friend may be responsible for the offence.

17.However, the Defendant has pleaded guilty at the first opportunity and is entitled to a one-third discount. He is entitled to that discount whether he is genuinely remorseful or not.

18.Counsel submitted that the Defendant only committed the offence out of desperation for living expenses. Financial pressure is not an excuse for offending: R v Kwok Yau Fat (CACC 537/1996, 28 February 1997, unreported). It may help to explain why the crime occurred, but it cannot provide mitigation no matter how desperate or tragic the circumstances: Attorney General v Yan Chun Fong [1993] 1 HKCLR; R v Ying Lai Chau [1990] 1 HKC 218; Attorney General v Shek Sui Tai [1989] 1 HKLR 178, 179 and Secretary for Justice v Nones Carmelita Galay [2023] 1 HKC 139.

19.In HKSAR v Ngo Van Nam [2016] 5 HKC 231, the Court of Appeal made it clear that the discount for a guilty plea is the high watermark which already encompasses remorse, a clear record and all other mitigation. There will be no further discount unless there are exceptional mitigating factors.

20.In the circumstances, the sentence is reduced to 30 months’ imprisonment.

Enhancement

21.The Prosecution applies for an enhancement of sentence under section 27(2)  of the Organized and Serious Crimes Ordinance, Cap 455. The Defence does not challenge that application.

22.According to the witness statement of Chief Inspector Li in support of the application, money laundering cases where a person assisted in the money laundering activities but has minimal or no involvement in the predicate offence or has little or no knowledge of the predicate offence are called “ML Stooge” cases in Hong Kong. Such stooges open new accounts or allow criminals to use existing accounts for money laundering.

23.The number of such ML stooge cases showed an upward trend from 2020 to 2024. In 2024, there were 47,064 cases (ie an average of over 3,922 cases per month). Up to November 2025, there were 43,564 cases (ie an average of over 3,960 cases per month). The numbers are still rising.

24.According to Chief Inspector Li, the harm caused to the community is not restricted to losses suffered by victims. The anti-money laundering regime is also hampered by:

(1)  The prevalence 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;

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

(3)  The prevalence 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;

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

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

(6)  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.

25.Counsel cited HKSAR v Chiu Wai Chung [2025] HKDC 1606 and submitted that an enhancement of 20% would be sufficient.

26.Firstly, that case is a District Court case. In 律政司司長對唐健帮及另二人 [2023] HKCA 896, the Court of Appeal has already pointed out that such sentences have never been tested on appeal and do not involve laying down any legal principles. They are neither binding nor of any reference value and should not be referred to as authorities. The same sentiment was repeated in 香港特別行政區對劉晉旭及其他人 [2023] HKCA 1098.

27.In 律政司司長對谢志建 [2025] HKCA 911, the Defendant pleaded guilty to one count of money laundering. He opened a company bank account to launder funds. The Prosecution argued that the level of enhancement could be as high as one-third. The Court of Appeal made no comment about the Deputy District Court Judge’s enhancement by 20%.

28.In those circumstances, this court will also enhance the sentence by 20%. The sentence is therefore 36 months.