HKSAR v. Paul James Grant and Others

DCCC 1170/2007 & 770/2008
(Consolidated)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NOS. 1170 OF 2007 & 770 OF 2008

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Before:    Deputy District Judge J. Lam

Date:   23^rd February 2009 at 4.27 p.m.

Offence:  Conspiracy to deal with property known or believed to represent proceeds of an indictable offence, etc (串謀處理已知道或相信為代表從可公訴罪行的得益的財產等罪項)

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Reasons for Sentence

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1.There are 2 charges and 3 defendants (D1-D3).

2.Charge 1 alleges D1 and D2 conspired together and with CHAN Wai-yin, Anna Abelia Samson LOCSIN and other unknown persons between 31 May 2007 and 18 June 2007 in Hong Kong to deal with Euros 1,716,688, knowing or having reasonable grounds to believe the money in whole or in part directly or indirectly represented proceeds of an indictable offence.

3.Charge 2 alleges D1 and D3 conspired together and with others unknown on or about 11 September 2007 in Hong Kong to deal with Euros 923,406, knowing or having reasonable grounds to believe the money in whole or in part directly or indirectly represented proceeds of an indictable offence.

4.D1 pleads guilty to both charges. D2 pleads not guilty to Charge 1 while D3 pleads not guilty to Charge 2. After trial, D2 is convicted of Charge 1 and D3 is convicted of Charge 2.

5.All 3 defendants have a clear record. I call for a background report in each defendant’s case. Those reports are now available. They disclose detailed information of the three defendants. Counsel make further submission on their behalf in court today.

6.There are similar characteristics of the three defendants. They all had a clear record before the present case. All three are educated and sophisticated men, having worked for years. They had had their own business and seen ups and downs. They are described to be loving fathers and caring husbands rendering responsibility towards their family. Because of their current predicament, they and their family have all suffered.

7.D1 pleads guilty. He expresses remorse. He has been in custody in HK since September 2007, away from his home in Australia.

8.Counsel says D1 was recently divorced by his wife because of the pressure that had been built up as a result of the proceedings and D1’s incarceration for definitely some more time. The wife has written a letter to mitigate for D1. She points out the difficulty faced by their 11-year-old daughter. The girl has been suffering from ‘audio processing disorder’. D1’s incarceration, particularly in a foreign land, exacerbates the kid’s anxiety because she cannot go to her father for assistance or communication. Due to financial reasons, the wife cannot afford bringing the kid to Hong Kong to visit D1. They last saw D1 at the Hong Kong prison. That was already 18 months ago.

9.D1 has also got a number of friends in Australia and the priest of Lai Chi Kok Reception Centre writing in to speak good of him.

10.Counsel says D1 had been conducting legitimate financial business. He saw opportunity in that Egyptian (mentioned as Sammi Hawsa in the background report).  D1 mistrusted him and acted naively as a courier on the Egyptian’s instruction. D1 was open with his deeds. He had not used any false identity or papers for cover-up. Counsel says D1 was not a mastermind in the perpetration. He deeply regrets for what he had done. He is unlikely to re-offend after learning this harsh lesson. Counsel says D1 has lost almost everything now.

11.The victim bank in Charge 2 (Banca Popolare) has filed lawsuits here through a local solicitors’ firm Clyde & Co. against some parties including D1 and D3 for the loss of the money involved in Charge 2. (The victim in Charge 1 has not made similar claims.) According to Clyde & Co’s letter dated 17 Feb 2009, D1 and LOCSIN had jointly paid back HK$1.068M, which money is now kept by the High Court. D1 agrees to this court ordering his bail money of HK$350,000 to go to Banca Popolare too as partial compensation. He also has no objection for the HK$280,000 seized from him in September 2007 to be given back to the rightful owner, although police cannot decide now how that sum is to be apportioned between the two charges.

12.Counsel asks me to be lenient towards D1. Agreeing that there are no sentencing guidelines or tariffs, he refers me to a number of cases to establish the point that lengthy imprisonment is usually imposed due to aggravating factors but there are none here. Counsel says for example in CACC 29/2007, D2 there only got 6 ½ years after trial even when the money laundered was up to HK$6.4 billion over a protracted period of 74 months. He says sentences do vary and D1’s case should be considered as at the lower end of the scale.

13.Finally, Counsel tells me D1 has some health problems, though not serious. His condition is stated in Dr. Kwong’s medical report dated 13 Jan 2009.

14.D2 pleads not guilty. He maintains his version of innocence to the Probation Officer, who make enquires of him for the preparation of  a background report.

15.Counsel emphasizes that D2 had been a responsible man in his work and towards his family. He had contributed to the development of China and is still determined to do so.

16.Counsel repeats that in committing Charge 1, D2 was only “on someone else’s enterprise”. He was not the mastermind. He did not cover up. D2 would not offend again. He actually wants to repay the money he had obtained but at the moment he does not have the ability to do so. The background report reveals D2’s family is really suffering financial hardship now.

17.D2’s family and friends have written letters to speak good of him. They highlight D2’s honesty, kindness and generosity.

18.D3 pleads not guilty. He also maintains his version of innocence to the Probation Officer.

19.D3 is a devout Christian. A few pastors write to say about his good character.

20.Counsel points out D3’s wife is rendering full support to her husband. She will give the HK$300,000 bail she has put up for D3 as compensation to Banca Popolare. Because the bank has also obtained a garnishee order against D3 and Alutech in the sum of HK$568,773.08, there was a shortfall of only HK$130,356.27 from the HK$999,129.35 retained by D3 from the remitted amount. The wife has made out a cashier’s order payable to Banca Popolare in that amount to show D3 would surrender all he has got in this case.

21.Counsel refers to the various factors mentioned in Para. 41-75 of Archbold 2009. He says while the offence generating the proceeds in Charge 2 was a serious fraud in Italy and Euros 923,406 were involved, there is no evidence to show D3 knew of that offence or he was party to it. He just dealt with the money according to D1 and LOCSIN’s instruction. His benefit was minimal. Actually D3 had no personal gain; he just retained what D1 owed him in the sum of about HK$1M. Counsel says Charge 2 was an isolated incident, lasting for a very short time. D3 was only a ‘cog of the laundering machinery’. He was made use of by others. The predicament had tortured him for a long time since September 2007.

22.Counsel says there are no useful authorities to guide this court on quantum. He says 2 years might be right.

23.D1 pleads guilty to both charges. D2 and D3 are convicted of Charge 1 and Charge 2 respectively after trial.

24.By his pleas, D1 expresses remorse. D2 and D3 still insist on their innocence. They still do not think what they have done are breaches of laundering money.

25.All three defendants are convicted of dealing with the moneys not because they knew they were proceeds but that they dealt with them when they were aware of such existing grounds, which a reasonable right-minded person would believe the moneys in whole or in part directly or indirectly represented proceeds of an indictable crime. I shall sentence them on that basis.

26.In my judgment, I find D2 had actually retained Euros 4,200 and HK$ 231,943.30 plus HK$22,198 (total worth of around HK$300,000) from the money remitted to his account. I find that was his gain for doing a simple but illegal job of dealing with the remitted money. I do not accept his explanation that the money was just left-over for the purpose of paying tax or charges, or as D2 now claims surplus due to more favourable exchange rates.

27.In D3’s case, I find the benefit he derived was simply D1’s repaying him most of the money Northron had owed Alutech. Northron was D1’s company while Alutech was D3’s. The money D3 received as such was HK$999,129.35. That was not an extra gain for D3 but it was still a benefit to him.

28.Motive is not an important factor in money laundering sentencing. It is not an ingredient of the offence. The offence is committed when a person deals with a property when he is aware of some grounds, which are sufficient for a reasonable right-thinking person to believe the property in whole or in part directly or indirectly represented proceeds of an indictable offence. The law is to refrain people from participating at any stage and in any role in any laundering money process.

29.That a defendant is not involving in the crime that generates the proceeds himself or being ignorant of its occurrence or the law is no defence. These are not mitigation factors. On the contrary, participation or knowledge of the crime can be aggravating factors.

30.Nowadays, courts normally adopt a tough stance towards money laundering. A substantial term of imprisonment is inevitable even for a first offender if the sums involved are not small.

31.Charge 1 involves Euros 1,716,688. Charge 2 involves Euros 923,406. These were not small sums. There is no information that the victim bank in Charge 1 has recovered anything from anyone. Banca Popolare, however, in respect of Charge 2, has recovered part of the money as follows: HK$1.068M from D1 and LOCSIN, HK$568,773.08 from D3 and Alutech according to D3’s solicitor. D3 would now surrender his bail of HK$300,000 and a further HK$130,000 odd to Banca Popolare. D1 also agrees to have his bail of HK$350,000 be surrendered to Banca Popolare. A further HK$280,000 is available to be apportioned to the two victim banks subject to further court orders.

32.I take all these into consideration and what counsel have said on behalf of the respective defendants. I agree with all counsel that D1-D3 are not likely to re-offend. The three, apart from the present case, have been enjoying a clear record. They have been acting as caring and responsible men. On Charge 1, I shall lower the original starting point of 4 years to 3 years and 9 months’ imprisonment in each of D1 and D2’s case.  On Charge 2, I shall lower the original starting point of 3 years to 2 years and 9 months’ imprisonment in each of D1 and D3’s case.

33.After 1/3 discount for his pleas of guilty to both charges: D1 is sentenced to 30 months on Charge 1 and 22 months on Charge 2. The two charges were separate and distinct offences. However, they were close in time and similar in nature. I would order 10 months of the term for Charge 2 to run concurrently with that of Charge 1. That would result in a total term of 42 months in D1’s case.

34.D2 pleads not guilty to Charge 1. He is sentenced to 45 months’ imprisonment on that charge.

35.D3 pleads not guilty to Charge 2. He is sentenced to 33 months’ imprisonment on that charge.