HKSAR v. Pak Yim

DCCC 499/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 499 OF 2010

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REASONS FOR SENTENCE

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1.The defendant pleads guilty to one charge that she between the 13th October 2006 and the 15th September 2009 dealt with property knowing or believing the property represented the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Chapter 455.

2.Full particulars of the offence are set out in the facts admitted by the defendant. Briefly in the evening of the 16th September last year the police executed a Gambling Authorization at the home of the defendant in Tuen Mun.  The police seized two passbooks of savings account number 821-1-001543 held with the HSBC in the name of the defendant.

3.Examination of the passbooks and the account revealed that between the 13th October 2006 and the 15th September 2009 a total of HK$5,674,234.78 was deposited into the account and HK$5,679,154.11 withdrawn.   Enquiries with the Inland Revenue revealed throughout this period the defendant had only received income in the sums of HK$90,000, $28,952 and $24,000 in the years ending March 2004, 2005 and 2008.

4.Under video interview the defendant admitted that after opening the bank account she handed the bankcard together with the password to her ex boyfriend and had no knowledge how the bank account was utilized.  This clearly was not correct for the defendant also admitted she kept the passbook, which her boyfriend did not need.  As can be seen from looking at the passbooks they were regularly updated and of the 975 transactions I am told 580 are recorded in the two passbooks. 

5.Mr Tam submits the defendant’s role is limited to allowing the bank account to be used by her ex boyfriend.  Mr Tam explains that the withdrawals made by the defendant set out in paragraph 5 of the admitted facts were made as a result of the boyfriend repaying $200,000 the defendant had loaned him.

6.I reject that the defendant’s role was limited to simply allowing the bank account to be used.  If this was the case there would be no need to be regularly updating the passbooks, the boyfriend having no need for the passbook.  I note the passbooks are not only updated when the defendant made withdrawals but on other occasions as well and of the withdrawals none are in the period covered by the first passbook.

7.The defendant by allowing her ex boyfriend to use the account knowing monies were being deposited and soon after withdrawn has, over a period in excess of three years, dealt with substantial sums of money in excess of $5 million.

8.Money laundering is a serious offence for which deterrent sentences are required (see HKSAR v XU Xia-li & another [2004] 4 HKC 16 at paragraph 18).  In HKSAR v Javid Kamran CACC 400/2004 the court, stressing the need for deterrent sentences, said that it was not possible to lay down guidelines, as there is a very wide range of culpability.  The court identified a number of factors relevant in determining the culpability of a defendant, including the nature of the offence that generated the laundered money, the extent to which the offence assisted the crime or hindered its detection, the degree of sophistication of the offence and perhaps the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence. 

9.In Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502 the Court of Appeal said that other relevant factors are the amount of money involved; the degree of sophistication of the operation; the defendant’s knowledge of the underlying offence and whether there was an international element to the commission of the offence.

10.In HKSAR v HSU Yu-yi CACC 159/2009 the Court of Appeal reviewed a number of cases, includingXU Xia-li and Javid Kamran. The court at paragraph 13 highlighted five factors to be considered in determining sentence:

(1) It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

(2) The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant's level of participation and the number of occasions on which he is involved in the ‘money laundering' activities are relevant factors to be considered.

(3) The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence pre se when determining the sentence of the dealing offence.

(4) If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong's reputation as an international finance and banking hub from being tarnished.

(5) The length of time the offence lasted.

11.Mr Tam submits the defendant did not know the source of the money and did not benefit from allowing her account to be used.  Whilst some of the money may have been the proceeds of bookmaking,the nature of the indictable offence from which the money was derived should be of no particular significance in sentencing, save that if the defendant knew the money was derived from very serious crimes, it would be an aggravating feature (see XU Xia-li at paragraph 11).  This approach has been followed, for example, in HKSAR v CHEN Szu-ming CACC 270/2005 and HKSAR v YAM Kong-lai [2008] 5 HKLRD 384, the courts emphasising that the defendant is to be sentenced on the facts of the money laundering charge only and not on the facts of the underlying offence. 

12.Whether or not the defendant received a reward is insignificant as a sentencing factor for the reality is the offence of money laundering is very serious (see CHEN Szu-ming at paragraph 23).  As seen in the recent cases of HSU Yu-yiand HOU Shun-hsiungCACC 472/2009 the amount of money involved is a major consideration and not the amount of benefit received by a defendant.

13.In passing sentence I take into account everything said on behalf of the defendant by Mr Tam.  I note the defendant has no similar convictions.

14.In his written submission Mr Tam says the boyfriend, Poon Tat-chiu, pleaded guilty to the same charge and was sentenced by Deputy Judge Chan in DCCC 458/2010 to 2 years and 4 months imprisonment.  Mr Tam submitted the defendant, whose role and culpability was minimal when compared to Poon, should receive a more lenient sentence.  I have had the opportunity of reading the reasons for sentence of Deputy Judge Chan.  Poon did not face the same charge, his charge related to a different bank account in his name.  Further there is no mention at all to the defendant in the reasons for sentence. 

15.Mr Tam therefore accepts that the sentence of Poon has no relevance to the sentence to be imposed on the defendant.  I do however note that Poon laundered between $7.3 and $8.1 million and his role was in fact similar to that of the defendant in allowing his bank account to be used.  Deputy Judge Chan said a starting point of at least 4 years imprisonment was appropriate, however, for reasons which are not specifically stated Deputy Judge Chan took a starting point of 3 years and 6 months imprisonment. 

16.The cases reviewed in HSU Yu-yi show that a starting point of between 3 and 5 years imprisonment has been applied to amounts ranging between $1 and $15 million.  In my view the starting point taken by Deputy Judge Chan could be said to be a little on the generous side.

17.Taking into account the amount involved was HK$5,679,154.11; the role of the defendant; the time over which the offence was committed; and so that the defendant does not have a sense of grievance she is treated differently to her ex-boyfriend for similar offending, I also take a starting point of 3 years and 6 months imprisonment. 

18.Giving the defendant full credit for her guilty plea she is convicted and sentenced to 2 years and 4 months imprisonment. 

19.The defendant is in breach of a 1 month suspended sentence imposed on the 7th August 2008 by the Kowloon City Magistracy in KCCC 4767/08 for an offence of possession of dangerous drugs.  I am satisfied it would not be unjust to activate the sentence.  The sentence is activated and ordered to be served consecutively to the sentence imposed today.