HKSAR v. Wu Honghui
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DCCC 1474/2025 [2026] HKDC 1679 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 1474 OF 2025 ________________________
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________________________ REASONS FOR SENTENCE ________________________ 1.D pleaded guilty to six counts 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 (“OSCO”). Facts 2.A victim of an online scam was lured by fraudsters into depositing $439,000 into various accounts, including a Bank of East Asia account held by one Xiao Jindun (“the first layer recipient account”). Charge 1 Account (“D’s Livi Account”) 3.On 21 August 2024, D opened this account with the Livi Bank with, inter alia, his PRC identity card, claiming to be an employer in the construction industry earning $25,001 to $50,000 a month. 4.Fund flow analysis showed that between 22 August and 12 September 2024, this account received 52 deposits totalling $1,288,873.01 (including 8 deposits totalling $249,386 from the first layer recipient account on 8 September 2024), and 18 outward transfers totalling $1,288,869.03. The deposits were followed by quick dissipations, including 15 transfers totalling $1,256,100.03 to D’s account particularised in Charge 5 (“D’s BOC Account”), and a transfer of $2,259 to D’s account particularised in Charge 6 (“D’s HSBC Account”). Charge 2 Account (“D’s Fusion Account”) 5.On 22 August 2024, D opened this account with Fusion Bank with, inter alia, his PRC identity card, claiming to be self-employed without providing his income. 6.Fund flow analysis showed that between 22 August and 6 September 2024, this account received 80 deposits totalling $2,127,559.02. The deposits were followed by quick dissipations which took the form of 75 outward transfers, including 50 transfers totalling $1,446,958 to D’s BOC Account. Charge 3 Account (“D’s ZA Account”) 7.On 22 August 2024, D opened this account with ZA Bank with, inter alia, his PRC identity card, claiming to be a partner/owner in the construction industry without providing his income. 8.Fund flow analysis showed that between 22 August and 5 September 2024, this account received 34 deposits totalling $1,652,356.40. The deposits were followed by quick dissipations which took the form of 31 outward transfers totalling $1,652,256, including 20 transfers totalling $1,036,156 to D’s BOC Account. Charge 4 Account (“D’s Airstar Account”) 9.On 21 August 2024, D opened this account with Airstar Bank with, inter alia, his PRC identity card, claiming to be a general clerical staff earning $80,001 to $100,000 a month. 10.Fund flow analysis showed that between 22 August and 12 September 2024, this account received 22 deposits totalling $1,069,397.41 (including $110 from D’s HSBC Account). The deposits were followed by quick dissipations which took the form of 18 outward transfers totalling $1,069,401, all to D’s HSBC Account. Charge 5 Account (“D’s BOC Account”) 11.On 26 August 2024, D opened this account with Bank of China (Hong Kong) with, inter alia, his PRC identity card, claiming to be a technical consultant of Far East Cable Limited Company earning RMB10,001 to RMB25,000 a month. He was the sole authorised signatory of this account. 12.Fund flow analysis showed that between 26 August and 12 September 2024, this account received 96 deposits totalling $4,208,490.12 (including transfers from: i) D’s Livi Account totalling $1,256,100.03; ii) D’s Fusion Account totalling $1,446,958; and iii) D’s ZA Account totalling $1,036,156), and 56 withdrawals dissipating a total of $4,208,242, which included 42 ATM withdrawals totalling $634,200 and 10 over-the-counter (“OTC”) cash withdrawals totalling $3,400,000. The combined ATM and OTC withdrawals accounted for 95.9% of the dissipations. Charge 6 Account (“D’s HSBC Account”) 13.On 21 August 2024, D opened this account with the Hong Kong and Shanghai Bank with his two-way permit, claiming to be a clerical employee of “yuandongdianma” earning $240,000 a year. He was the sole authorised signatory of this account. 14.Fund flow analysis showed that between 26 August and 12 September 2024, this account received 30 deposits totalling $1,758,969.93 (including transfers from: i) D’s Livi Account of $2,259; and ii) D’s Airstar Account totalling $1,069,401). The deposits were followed by quick dissipations, which took the form of 19 withdrawals totalling 1,750,810, which included 9 ATM withdrawals totalling $160,000, 3 OTC cash withdrawals totalling $1,590,000, and deposits of $110 to D’s Airstar Account. The combined ATM and OTC withdrawals and deposits to D’s Airstar Account amounted to 99.9% of the dissipations. 15.On 12 September 2024 alone, cash of $500,000 was withdrawn from this account. Arrest and Police Investigation 16.Around 10:40 am on 12 September 2024, outside the Central Branch of HSBC, D was arrested for “money laundering” in connection with the transactions in his Livi Account, Fusion Account, ZA Account and BOC Account. Under caution, D claimed that he had gone to the bank to withdraw money to purchase cryptocurrency, and that the money in the bank had been transferred to him by his cousin. 17.From D’s sling bag, the police seized: i) an iQOO phone and an iPhone; ii) cash of $500,000; iii) 2 “U Coin” receipts, both dated 11 September 2024, showing respective purchases of $580,000 and $510,000 worth of USDT in D’s name; and iv) a wallet containing cash of $1,151.70 and RMB¥112. 18.In two subsequent video-recorded interviews, D claimed that he worked in the mainland as a takeaway courier earning a few thousand RMB a month. He came to Hong Kong in August 2024 for the purpose of doing cryptocurrency trading with his cousin Wu Liuzhen (伍柳貞) and his compatriot WU Ming (伍明). These two Wus, who stayed with him in a flat in Hung Hom during their stay in Hong Kong, sold cryptocurrency and instructed their buyers to make payment directly to D’s virtual bank accounts. D admitted that all the accounts particularised in the Charges were opened by him. After receiving the payments, D would transfer them to his BOC Account and HSBC Account from which he would withdraw cash to buy cryptocurrency for them at “U Coin” in Admiralty. Wu Liuzhen would give him a reward of $300 to $600 every day. So far, he had received $1,000 from him. WU Ming had promised him reward, but had not paid him any so far. He had withdrawn $500,000 cash from HSBC in the morning that he was arrested and was going to use the money to buy cryptocurrency for Wu Liuzhen. The two receipts found on him documented his purchases of USDT for Wu Liuzhen. He kept his HSBC Account’s ATM card to withdraw cash from this account. 19.Inspection of D’s iPhone revealed that it had been installed with mobile banking apps of certain banks including Livi Bank, Fusion Bank, ZA Bank, Airstar Bank and HSBC. It also contained photos of 18 “U Coin” receipts, 6 of which were for purchases totalling $2,410,000 worth of USDT for WU Liuzhen between 8 and 11 September 2024, 12 of which were for purchases totalling $2,195,800 worth of USDT for WU Ming between 2 and 7 September 2024. 20.D admits the allegation in the Summary of Facts that he, together with WU Liuzhen and WU Ming, dealt with the properties particularised in the charges, knowing or having reasonable grounds to believe that those properties represented proceeds of an indictable offence. Defendant’s Background 21.D is 45 years old. He was born in the mainland and resides there. He is divorced. His two children are living with their paternal grandparents. He worked as a delivery worker on a casual basis, earning about RMB5,000 a month. 22.He has a clear record. Mitigation 23.Defence counsel Mr Chan Chung referred to HKSAR v Boma [2012] 2 HKLRD 33 for some of the significant considerations in sentencing for this type of offence. He pointed out that there are no sentencing guidelines for money laundering cases, and referred to the observation that the sentencing starting point is 3 years or so where the proceeds involved is between HK$1 million and HK$2 million, 4 years or so where it is between HK$3 million and HK$6 million, and could be over 5 years where it is above HK$10 million. However, Mr Chan also referred to the 4 cases mentioned in paragraph 49 of the judgment of Secretary for Justice v Xie Zhijian [2025] HKCA 911 where the Court of Appeal pointed out that in Xu Xia Li CACC 395/2003 and Lee Ka Ki CACC 148/2007, the amounts involved in both cases were over $11,000,000 but the starting points were 2 years 9 months and 3 years respectively, and in Mak Shing CACC 322/2001 and Abayomi Bamidele Fayomi CACC 197/2005, the amounts involved were $15,000,000 and $12,000,000 respectively and the starting points were 4 years and 3 years 6 months respectively. 24.Mr Chan admitted that each case depends on its own facts and comparison may not be very useful. These authorities were cited for reference only. 25.On D’s culpability, Mr Chan admitted that D opened the 6 accounts and handled withdrawals of money from the accounts personally acting on the instructions of the two Wus for an insignificant reward. He submitted that D was a person down the chain. There is no information suggesting that D knew anything about the predicate offence of online scam. Although there is nothing to show that D knew that the funds represented proceeds of an indictable offence, it is admitted that D had reasonable grounds to believe the funds represented such proceeds. 26.Mr Chan pointed out that the offences involved 6 bank accounts, a total of $12,105,645.89 and were committed over a period of about 23 days. He asked the Court to be as lenient as possible with D, given his timely guilty pleas. He admitted in his oral submissions that there were considerable cross-account transfers between the D’s various accounts, and that this created layering which would increase D’s culpability. Mr Chan agreed that the court should adopt the sentencing approach set out in the case of HKSAR v Tsang Yiu Kong (曾耀光) [2026] 1 HKLRD 503. 27.Defence has no objection to the application for sentence enhancement under OSCO. Mr Chan urged the court to adopt an enhancement of 20-25%. 28.D expressed his remorse in his mitigation letter to the court, pointed out that he had been made use of his cousin to commit the offences for a small reward, and that he had never committed any crimes in Hong Kong before. Sentencing considerations 29.Money laundering is a serious offence which attracts a maximum sentence of 14 years’ imprisonment. 30.It is a serious offence as it is an attempt to legitimise proceeds from criminal activities. Successful deterrents against money laundering could be effective measures against crime. No guidelines for sentence of such an offence have been laid down as the crime can be committed in a variety of ways and there is a wide range of culpability. 31.According to HKSAR v Hsu Yu Yi (許有益) [2010] 5 HKLRD 545, the sentencing considerations for this offence are: i) the amount of money involved is a major consideration; ii) the offender’s level of participation; iii) the sentence imposed on the predicate offence if it can be known; iv) if the case has an international element; and v) the length of time the offence lasted. 32.The Court of Appeal in Boma emphasized the importance of deterrence for this kind of offence, pointed out that the amount of money laundered was an important consideration but not the only one, and set out a non-exhaustive list of other significant considerations, which includes: i) the nature of the predicate offence; ii) the state of the offender’s knowledge; iii) whether an international element was involved; iv) the sophistication of the offence; v) whether organised criminal syndicate was involved; vi) the number of transactions and length of the offence; vii) whether the offender continued to launder funds after knowing that they were proceeds of a serious crime; and viii) the offender’s role and the acts performed by him. 33.With regard to the cases set out by Cheung JA in Hsu Yu Yi showing the starting points for different amounts of money laundered, the Court of Appeal in Wan Kwok Keung observed that the sentencing starting point is 3 years or so where the proceeds involved is between HK$1 million and HK$2 million, 4 years or so where it is between HK$3 million and HK$6 million, and could be over 5 years where it is above HK$10 million. The Court of Appeal in HKSAR v Liao Liting (廖麗婷) CACC 334/2015 remarked that while these starting points are not sentencing guidelines, they provide valuable reference[1]. 34.In Xie Zhijian, the Court of Appeal pointed out that in dealing with money laundering sentencing, the judge should consider on the one hand the maximum sentence for this type of offence and the need for deterrent sentence, and on the other hand the facts of the case and his overall impression of the case; the judge should not merely rely on the approximate sentencing ranges for the amounts of money laundered as summarised in the case of Wan Kwok Keung.[2] 35.Mr Chan was certainly correct in saying that comparison with the cases cited by him namely, Xu Xia Li, Lee Ka Ki, Mak Shing and Abayomi may not be very helpful as each case depends on its own facts. The same observation was made by Macrae VP in HKSAR v Lam Man Yin CACC 306/2025 where the learned judge said:
36.D, a man of clear record, came to Hong Kong to commit the offences to which he pleaded guilty at the earliest opportunity. 37.Charge 1 involves laundering $1,288,873.01 in 23 days. Charge 2 involves laundering $2,127,559.02 in 22 days. Charge 3 involves laundering $1,652,356.40 in 23 days. Charge 4 involves laundering $1,069,397.41 in 23 days. Charge 5 involves laundering $4,208,490.12 in 18 days. Charge 6 involves laundering $1,758,969.93 in 23 days. The amounts particularised in the 6 charges add up to $12,105,645.89. 38.D not only provided his own accounts for the deposit and withdrawal of “black money” and the transfer of such money to other accounts under his own name, he also personally withdrew cash from his accounts by OTC and ATM transactions and used the withdrawn funds to purchase cryptocurrency for other people, thereby further distancing the crime proceeds from their sources, making investigation into those crimes and the recovery of those proceeds even more difficult. 39.According to the Summary of Facts, such cash withdrawals amounted to $4,034,000 from his BOC Account and $1,750,000 from his HSBC Account. The records on his iPhone show that he had purchased no less than $4,605,800 worth of cryptocurrency, and was about to purchase another $500,000 worth of such currency had he not been arrested by the police. 40.Although the amounts particularised in the six charges add up to $12,105,645.89, there were considerable cross deposits-and-withdrawals and layering occurring between the accounts, so that the actual amount of “black money” involved would be a lesser amount. 41.In the face of such a situation, the Court of Appeal in the case of Tsang Yiu Kong devised a sentencing approach which is “on the one hand the most well-ordered with the most predictable result while, on the other hand, the fairest without rendering the sentence disproportionate”. The approach involves: i) ticking the cross deposit-and-withdrawal amounts off; ii) determining the starting point according to the actual amount of the “black money”; iii) increasing the term with regard to the seriousness of layering in an individual case to reflect the defendant’s true culpability. 42.In our case, after deducting the cross deposit-and-withdrawal amounts, the actual amount of “black money” was $7,294,661.86. This amount will be used as a basis for the starting point adopted in provisionally assessing D’s overall culpability. The starting point so adopted will be increased in accordance with the severity of the layering. 43.This case involves substantial amounts of transfers within D’s own accounts and serious layering: i) $1,256,100.03 from Livi Account to BOC Account by 15 transfers; ii) $2,259 from Livi Account to HSBC Account by a single transfer; iii) $1,446,958 from Fusion Account to BOC Account by 50 transfers; iv) $1,036,156 from ZA Account to BOC Account by 20 transfers; v) $1,069,401 from Airstar Account to HSBC Account by 18 transfers; and vi) a transfer of $110 from HSBC Account to Airstar Account. 44.Such cross-account transfers between the accounts belonging to the same person can lower the vigilance of the bank staff, making it difficult for them to detect suspicious activities so as to fulfil their reporting obligations as required by the law. This in turn would render it difficult for law enforcement agents to track and stop the crime in time, and to recover the victims’ losses. 45.The following starting points will be adopted: i) Charge 1: 27 months; ii) Charge 2: 36 months; iii) Charge 3: 30 months; iv) Charge 4: 24 months; v) Charge 5: 45 months; vi) Charge 6: 30 months. 46.I would adopt 48 months to reflect D’s culpability in laundering $7,294,661. Given the severity of layering in this case, I would increase this starting point to 54 months to reflect D’s true overall culpability in this case. 47.After giving a one-third discount for D’s guilty plea, the sentences become: i) Charge 1: 18 months; ii) Charge 2: 24 months; iii) Charge 3: 20 months; iv) Charge 4: 16 months; iv) Charge 5: 30 months; vi) Charge 6: 20months. The sentence for his overall culpability would be 36 months. Sentence Enhancement under OSCO 48.A statement dated 25 August 2026 made by Chief Inspector LI Yiu-nam (“the statement”) of the Money Laundering and Terrorist Financing Risk Assessment of the Financial and Intelligence Bureau was tendered by the prosecution in support of its application under section 27(2) of OSCO to enhance the sentence on the grounds of prevalence and the nature and extent of harm caused to the community. 49.The statement describes someone as a “money laundering stooge” when that person has assisted in the money laundering activities but has minimal or no involvement in the predicate offence or has little or no knowledge about the predicate offence. In the majority of cases, money laundering stooges were recruited to open new accounts at financial institutions and allow the criminals to use their accounts for money laundering purpose. Some stooges would sell or lend their existing accounts to criminals for the same purpose. 50.The statement shows that the number of money laundering stooges arrested in 2024 was 7,883 (the highest number of stooges arrested since 2020), accounting for 75.1 % of all the persons arrested in fraud and money laundering cases. For the year 2025, the corresponding figures were 5,355 arrests and 71% respectively. From January to July 2026, the number of stooges arrested was 3,696, accounting for 72.34% of all the persons arrested in fraud and money laundering cases. 51.The amount of total loss and/or proceeds laundered reached its peak in 2022, with a figure of $35,549.21 million. The total amount of loss in 2025 was $4,577.64 million, and the total loss in January to July 2026 was $1,563.79 million. 52.Although the statistics show that the number of stooges arrested and the total amount of loss have both declined from their respective peaks, these offences are still prevalent and causing tremendous harm to the community. 53.D fits the description of a money laundering stooge. I consider that this case calls for sentence enhancement. A 25% enhancement in sentence is appropriate. 54.Thus enhanced, the sentences become: i) Charge 1: 22 months’ imprisonment (decimal points omitted); ii) Charge 2: 30 months’ imprisonment; iii) Charge 3: 25 months’ imprisonment; iv) Charge 4: 20 months’ imprisonment; v) Charge 5: 37 months’ imprisonment (decimal points omitted); vi) Charge 6: 25 months’ imprisonment. 55.The sentence that reflects D’s overall culpability is enhanced to 45 months’ imprisonment. Totality 56.Sentences in respect of Charges 1 to 5 are to be served concurrently. 8 months of the sentence in respect of Charge 6 are to be served consecutively with the sentence in respect of Charge 5, resulting in a total sentence of 45 months’ imprisonment in respect of all the charges.
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Cases cited in this judgment