HKSAR v. Ye Ming

DCCC 1141/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.1141 OF 2009

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Reasons for Sentence

1.The defendant faces 8 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. He pleaded not guilty to charges 1 to 3, but guilty to charges 4 to 8. The defendant admitted to the summary of facts and was duly convicted on charges 4 to 8. Upon the application of the prosecution, charges 1 to 3 are to be left in court file, not to be proceeded with without the leave of the court.

Summary of facts

2.The defendant is a mainlander. He came to Hong Kong on 2 occasions in June and February 2009 to open 2 bank accounts, one at the Bank of China (“the BOC account”) and the other at the Citibank (“the Citibank account”) respectively.

3.In relation to charge 4, on 17^th June 2009, the victim’s lawyer in the USA received a false cashier cheque which was supposed to have been payment of a debt owed to the said victim. Upon receiving the false cheque, the victim instructed his lawyer to deposit US$395,617 into the defendant’s BOC account. On 23^rd June, the falsity of the cheque was exposed. The sum as particularized in the 4^th charge, that is US$395,605.54 was the actual amount received into the BOC account after bank charges were deducted.

4.Charges 5 to 8 arose out of a collection of estate scam. The victim PW2 was asked by a “Gloria” to assist in the collection of an estate that she had become entitled to. Gloria claimed that due to her age, she needed PW2’s help in the collection of the money. PW2 was asked to approach a solicitor Gomogo. Gomogo, in carrying out the scam, asked PW2 to make various payments. When PW2 was asked to make a further payment of US$120,000, he refused.

5.On or before 23^rd June 2009, Gomogo told PW2 that a sum of US$98,500 had been remitted into his account, which seemingly had been confirmed by a corresponding credit entry in PW2’s bank account. On that basis, PW2 agreed to, and did, remit various sums to different recipients, among them being a sum of US$90,000 remitted into the defendant’s Citibank account, on 26^th June 2009. Unfortunately, on the very next day after that, PW2 was told by his bank that the remittance into his account was cancelled because the cheque deposited could not be honoured.

6.Bank records showed that the defendant’s Citibank account received an inward remittance of US$89,990 on 29^th June 2009, originating from PW2’s said US$90,000 remittance. The defendant dealt with the remittance as follows. He withdrew US$5,000 in cash, made an outward remittance of US$5,400 to a bank account in mainland China and another outward remittance of US$79,112 to a bank account in Canada, all done on 2^nd July 2009.

7.The defendant came to Hong Kong from mainland China on 1^st July. He went to BOC on 2^nd July to seek to deal with the balance in his BOC account by remitting US$30,000 to his Shanghai BOC account and US$33,575 to a Hang Seng Bank account.

8.Since BOC was alerted of the possible fraud, the bank did not process the outward remittances requested by the defendant but informed the police instead. The defendant was arrested and under caution he said that his old friend had asked him to receive the sum for and on his behalf since the old friend did not have a company in Hong Kong. The defendant said that the money was from a supplier.

Previous convictions

9.The defendant is of clear record.

Mitigation

10.The defendant is 40 years old. He had been working as a merchant after graduation and was earning about RMB4000 a month. A letter from his employer was submitted. It discloses that the defendant joined the company in May 2006, that he was responsible for purchasing and work site coordination, that the defendant is a diligent employee, always willing to assist his colleagues.

11.A letter from a psychiatric centre in Shanghai was also submitted. It states that the defendant’s father, who’s 78, suffers from Alzheimer’s disease, while the defendant’s mother suffers from blindness. The defendant is the only person taking care of his parents.

12.Counsel for the defendant pointed out that the trial of this case was originally set down for 5 days, now that the defendant had pleaded guilty, much time and resources had been saved.

13.It is pointed out by counsel that this case involved just 2 transactions, one being the remittance to the defendant’s BOC account on 19^th June 2009 in the amount of about US$395,605. I am told that amount is still in the account and there is no loss to the victim.

14.The other transaction being the remittance of US$89,900 into the defendant’s Citibank account on 29^th June 2009. According to Mr. Lee, if all the amount was added together and converted, the total would be about HK$4.5 million.

15.Counsel for the defendant then referred to various cases.

16.In the case of HKSAR v Cheung Kam Lun, CACC 15/2003, the sum laundered was about HK$5 million. In that case, the Court of Appeal at paragraph 32 stated that there are no guidelines for offences of this nature…because the circumstances of each case may vary almost infinitely. In that case, the Court found that a starting point of 3 years’ imprisonment, with a slight reduction of 3 months in recognition of the applicant’s ill health and clear record was appropriate.

17.I would also like to quote at paragraph 35 of the judgment: “While the value of the money which was the subject of the conspiracy may not have been as great as in other cases, value is not the sole yardstick by which sentence is to be assessed in cases of this kind. It must be remembered that in the present case the applicant was to play a pivotal role in the execution of the scheme, one which was sophisticated in its nature, difficult to detect and inter-jurisdictional.”

18.Mr. Lee also seeks to rely on the case of HKSAR v Xu Xia Li [2004] 4 HKC 16, where the Court of Appeal confirmed that a sentencing discount should be given to recognise the saving of court time and the applicant’s clear record. A discount of 3 months was ordered.

19.In the case of HKSAR v Mak Shing, CACC 322/2001, the defendant was convicted after trial for 3 counts of money laundering. The amount involved was 14.56 million RMB (paragraph 6), being proceeds of a theft case which occurred in China. The Court of Appeal considered a starting point of 4 years would have been sufficient to reflect the seriousness of the offences. A 1 year discount was given on the basis that the defence was confined to legal arguments only. I would just like to also quote from paragraph 27 of the judgment: “It also has to be borne in mind that there was an international element to the offences and that Hong Kong has to take a very serious view of such matters if its international reputation is not to be sullied.”

20.In the Magistracy Appeal case of HKSAR v Hui Kam, [2000] 3 HKC 211, the defendant, a 45 years old housewife, was charged with a similar offence which took place over a period of 17 months involving a total of $6.5 million that was deposited into her account. The funds came from the defendant’s brother and the defendant knew they were proceeds from illegal activities carried out in the mainland. The defendant was originally sentenced to 18 months’ imprisonment. On appeal, the Court took into account the background of the defendant and the fact that the defendant is a first offender and reduced the sentence to just 6 months’ imprisonment.

21.Finally, Mr. Lee seeks to rely on the case of HKSAR v Lai Kam Yee Teresa, CACC 120/2009 to point out that the fact that the applicant did not have any financial gain from the money laundering is a mitigating factor to be considered.

22.In that case, the defendant between of 1^st January 2005 to 19^th April 2007, laundered money to an amount of about 4.205M HKD. The trial judge adopted a starting point of 3 years’ imprisonment, granting her a discount of 9 months and sentenced her to 2 years and 3 months’ imprisonment. On appeal, the Court of Appeal found special reasons and ordered a sentence with the effect of an immediate release of the applicant. The Court took into consideration the fact that the defendant was the wife of the person who provided the criminal proceeds, and she did that for the reason that she wanted to protect hersons, and that the defendant did not have any financial gain in the activities.

23.It was pointed out by counsel for the defendant that the defendant is willing to give the US$5,000 that was found on him at the time of arrest as restitution to the victim. Since the defendant is willing to compensate the victim, so in effect he had no financial gain. That’s the submission of Mr. Lee.

24.In relation to this US$5000 found on the defendant, the prosecution confirmed that there is no evidence that the money was withdrawn from the Citibank account and the money was just seized and kept by the police. Whether it could be construed as the defendant having no financial gain from the money laundering activities is a matter for the court to decide.

Sentence

25.First, I find that the cases of Hui Kam and Lai Kam Yee Teresa must be distinguished from our case. Both cases involved the defendant helping out a family member under difficult circumstances. No such situation exists in our present case.

26.I find that there is an international as well as inter-jurisdictional element in the present case, as evidenced from the transfer being made from the USA to Hong Kong in charge 4 and the remittance out to China and Canada in charges 7 and 8.

27.I find that there is an irresistible inference that the defendant committed the present offences for personal gain. It is not the case that the defendant was doing some legitimate business and was incidentally helping out a friend as he allegedly told the police. The company Loyal Champ was incorporated in 2007 in Hong Kong and shortly afterwards acquired by the defendant. The BOC account in the name of the company was opened in June 2008, but the account had remained dormant until 9^th June 2009. Somehow, just 10 days after the account became active, the offence in charge 4 was committed. The facts show clear planning and organisation, not some nice gesture to help out a friend in need. Furthermore, whether the defendant had made some financial gain or not is not entirely relevant, the more important point is that the situation anticipated in Hui Kam or Lai Kam Yee Teresa do not exist.

28.Having regard to all the circumstances of the case and the cited authorities, I will adopt a starting point of 3 years’ imprisonment on all 5 charges. I will reduce this starting point by 3 months in recognition of the defendant’s clear record in Hong Kong, reducing the starting point to that of 33 months. I will grant the defendant the full one third discount for his guilty plea, reducing the sentence to 22 months’ imprisonment on each charge.

29.Having considered the principle of totality, I will order that the sentences in relation to charge 5 to 8 to be served wholly concurrently, whereas 6 months of that sentence to be served consecutively to the sentence of charge 4, making the total sentence one of 28 months’ imprisonment in relation to all 5 charges.