HKSAR v. Xin Shihai
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DCCC 1691/2025 [2026] HKDC 1451 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 1691 OF 2025 ________________________
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________________________ REASONS FOR SENTENCE ________________________ 1.The defendant today has pleaded guilty to the 3 charges that he faces, those are charges of dealing with property known or believed to represent the proceeds of an indictable offence. The amount in respect of each of the 3 charges on charge 1 is $842,184.03; on charge 2, it is $2,501,405.94 and on charge 3, $747,516.68, a combined total on the 3 charges of some $4,091,106.65. 2.The amounts and the charges relate to 3 bank accounts held by the defendant as sole account holder and signatory of those bank accounts. Account 1, deals with the account at the Dah Sing Bank, Limited, Account 2, an account with the Bank of China (Hong Kong) Limited, Account 3, a bank account with the Standard Chartered Bank (Hong Kong) Limited. 3.The offences came to light as a result of the predicate offences involving PW1 to 4. They along with other members of the public were victims of Chinese Mainland Official scams. It said they were enticed by fraudsters to provide their bank account credentials and later unauthorised transfers were made from their accounts to various account, which included Accounts 1 to 3. Some details have been provided which show of the 4 prosecution witnesses particularised, there were total deposits of $1,658,000 into Account 2. 4.As far as the accounts are concerned, the accounts were all opened by the defendant personally in bank branches. Account 1, on 21 October 2024, it was operational until 16 November 2024 with total deposits of over $842,000 into the account as a result of 6 deposits and a total of 26 withdrawals. 5.Account 2 was opened on 18 October 2024 and was operational to 2 December 2024 with a total of 20 deposits totalling over $2.5 million deposited into that account with a total of 36 withdrawals totalling again over $2.5 million were made. 6.Account 3 was opened on 18 October 2024, was operational to 28 February 2025 and some total 14 deposits totalling over $747,516 were deposited into that account. Over $747,000 was withdrawn from the account as a result of 20 withdrawals. It could be seen that all 3 accounts were being used as temporary depositories of funds and had a number of suspicious transactions in that withdrawals were made promptly after moneys were deposited to the account and therein balances in the account were consistently low. 7.Defendant was arrested on 5 April 2025, made a video-recorded interview on 25 April 2025. He said he had given the accounts to a person named “Dai Minde” who would generate cashflow and the defendant intended to obtain loans with the bank accounts as the cashflow was generated. “Dai Minde” paid for the defendant’s expenses to come to Hong Kong but did not, he said, pay him renumeration. The defendant is in fact a resident in Mainland China and entered Hong Kong with a Hong Kong and Macao travel permit. 8.Defendant agrees with the conclusion of the facts and that he dealt with the property together with a person named “Dai Minde”. There is also in the prosecution’s case an application for enhancement of sentence which relies on the statement of the Chief Inspector Li Yiu Nam of the Hong Kong Police Force. I do note when particularising the role of the defendant in that statement and the defendants generally in these cases, the defendant is described as an “ML stooge” or “money mule” and the definition of that is a person who has assisted in money laundering activities but has minimum or no involvement in the predicate offence or has little or no knowledge on the predicate offence. They are people who sold or lent their accounts of financial institution to others. The evidence provided in the Summary of Facts supports that conclusion. 9.The defendant himself is now aged 47 years old. He has 2 children, a three-year-old son, a two-year-old daughter. He is a two-way permit holder with a clear record in Hong Kong. He has worked in the Mainland as a farmer alongside his parents and was the sole breadwinner for his family. He is now, however, divorced and his children are under the care of his elderly parents. 10.In mitigation, it is said the defendant was not a mastermind or involved in the underlying predicate offences. He opened bank accounts at the behest of the third party, “Dai Minde” and surrendered control under a mistaken belief that “Dai” would assist him in securing legitimate bank loans. It was said there is no evidence to suggest the defendant was aware how the accounts were subsequently operated, nor did he know what specific crimes were generated from the transactions. Therefore, it is said the defendant’s culpability is confined to the opening of the bank accounts, giving up control of the accounts to another person. There are no further aggravating features on the defendant’s part. 11.It is noted that the defendant is a Mainland citizen and travelled to Hong Kong in order to establish these accounts. However, that is the nature of a cross-border transaction rather than necessarily an international transaction. 12.The duration of the present offences is said to be relatively short, and that could be seen from the particulars in the charges. I am told that since his arrest in April 2025, the defendant has been remanded in custody. He is said to be remorseful and wishes to return home so that he can continue the care of his 2 young children. 13.Turning to the principles to be operated in cases of this kind, there is no sentencing guideline for money laundering cases of this nature. The maximum sentence is one of 14 years’ imprisonment and the courts have said that deterrent sentence was appropriate. The appellate courts have however set out a number of factors that are relevant to the calculation of any starting point for sentence and these can be seen in cases such as HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma [2012] 2 HKLRD 33. Those factors are the amount of money involved, not necessarily the amount of money received by the defendant; the defendant’s level of participation and the frequency of involvement; the sentences that would be imposed for the predicate offence if they are known; whether there is an international or cross-border element; the length of time the offence have taken place for. One must also look at the sophistication of the offence, whether a syndicate involved, the number of transactions and whether the defendant continued laundering the money after gaining actual knowledge of the fact the account was used for money laundering. 14.I have been referred to the case of Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201, which references certain sentences brackets in the case of Hsu Yu Yi and these are not guideline sentences but show the benchmark sentences for various ranges of proceeds of crime. It can be seen that between 1 to 2 million, a number of cases have shown a starting point of 3 years’ imprisonment or higher. Between 3 to 6 million, a starting point for sentence would range from 4 years’ imprisonment and higher and above 10 million, then sentences range over 5 years’ imprisonment and higher. 15.The defence asked me to take into account the factors that I have already set out in their mitigation. The prosecution, I note also has an application for enhancement of sentence as a result of Chief Inspector Li’s statement submitted to the court. It is clear from that statement, the facts of which are unopposed, that the use of stooge accounts in Hong Kong of this nature is prevalent and that harm is caused directly and indirectly to the community by the occurrences of these specified offences. This is a case in which it would be, in which it is appropriate for there to be an enhancement of sentence. I will deal with the extent of that enhancement when I set out the starting points for sentence on each of the charges. So those are the factors which I will take into account. 16.I will deal with the offences as follows:
17.Given that the overall amount involved in these charges is just over $4 million, I am going to take a starting point, an overall starting point for calculation of the overall sentence of 51 months’ imprisonment. That would reduce to 34 months’ imprisonment after a plea of guilty. Again, after an enhancement in the region of 20 per cent, that would lead to a final sentence of 40 months’ imprisonment. 18.I shall achieve that final sentence by ordering the charges to be served as follows: Charges 1 and 2 will be served concurrently to one another and 12 months of charge 3 will be served consecutively to charges 1 and 2, leading to a total final sentence of 40 months’ imprisonment for these 3 charges.
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Cases cited in this judgment