HKSAR v. Cheung Kwing Hei

DCCC343/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 343 OF 2010

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Reasons for Sentence

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1.Cheung Kwing-hei, you have been convicted on your own pleas of one charge of bookmaking and three charges of dealing with property known or reasonably believed to represent the proceeds of an indictable offence.

2.The charge of bookmaking is the result of a police operation on 18 May 2006 at the flat in which you were living in Tokwawan.  In the early hours of the morning the police could hear the sound of a broadcast of a football match from inside your flat.  They heard a person, who must have been you, answering the telephone and talk about a football match to a caller.

3.In the early evening you came out of your flat. Amongst the items found on you were 5 suspected bookmaking slips.  Inside the flat were 148 suspected bookmaking slips.  You claimed to the police that you were only betting on your own account.  However, when an expert examined the betting slips, he took the view that 74 of the slips were records of bets on football matches received by a bookmaker and an agent for a bookmaker between 7 March 2006 and 15 May 2006, the dates referred to in the charge.  The offence therefore took place over a period of just over 2 months.  The value of the bets received was $1,414,900. 

4.The charges of dealing with the proceeds of an indictable offence relate to money deposited into three bank accounts in your own name.  Charge 2 relates to 48 deposits totalling $1,308,768.90 deposited into your account with the Bank of China over a period of 17 months between 1 January 2005, shortly after you opened the account, and 1 June 2006.  The average monthly deposits were almost $77,000. 

5.Charge 3 relates to your account with the Hang Seng Bank.  Between 1 January 2005 and 13 June 2006, a period of 17½ months, 282 deposits totalling $3,300,897.75 were made into that account.  The average monthly deposits were almost $190,000. 

6.Charge 4 relates to your account with the Hong Kong Bank.  You opened that account on 4 August 2005.  Between that date and 19 April 2006, a period of 8½ months, 77 deposits totalling $1,747,148.47 were made into that account.   The average monthly deposits were almost $190,000. 

7.You submitted no tax returns to the Inland Revenue Department during the relevant tax years.  There were no salary deposits into your accounts during that period.  There is nothing to suggest that you had any legitimate income during the period of a year and a half when these deposits were being made into your bank accounts.  

8.Mr Ma has conceded that for the period of approximately 1½ years covered by the charges the deposits into these three accounts were the proceeds of your acceptance of bets on the results of European football matches.  The total turnover on all three accounts during this period of 1½ years was therefore just over $6.3 million.

9.The prosecution had been unable to provide any estimate of what your profit would have been from engaging in these activities.   Insofar as the bets of $1,414,900 which form the subject matter of the bookmaking charge, Mr Ma has pointed out that the treasury accountant took the view that you had passed on the risk of bets worth $1.08 million to another bookmaker or other bookmakers.  He commented that his understanding was that a bookmaker who passed on bets in this way would normally receive a 0.5 per cent commission.  However, there is no hard evidence as to what your profits were during this period.

10.I have been told by Mr Ma that you have been working as a chauffeur since 2006 and are now earning $12,000 a month, and that you are legally aided and now have no significant savings or other assets, and so any financial penalty would have to be paid by borrowing money from friends. 

11.You were arrested for these offences over 4 years ago on 18 May 2006.  You were on police bail until 7 January 2008 when the police released you from bail but told you that you would face re-arrest if the police had sufficient evidence to do so. 

12.For reasons that the prosecution had been unable to explain, the treasury accountant’s report was not received until 31 March 2008, almost 2 years after your arrest.  Even then it was not until a year later in April 2009 that legal advice was given to re-arrest and charge you.  By then you had moved flat. 

13.Despite the fact that I am informed that you regularly cross the border, you were not re-arrested until January 2010 when you were doing so.  The fact that this matter has been hanging over your head for so long is a matter that I take into account in deciding the appropriate sentence. 

14.I bear in mind that there is no suggestion that any of the bets received by you emanated from overseas or that there was any other international element in these offences.  I am prepared to treat you as a man of previous good character despite your conviction for what must have been a minor unrelated matter when you were 17 years of age. 

15.As far as the charge of bookmaking, Charge 1, is concerned, the Court of Appeal said in R v Yip Kam Fai CACC108/1993 that the operator of a substantial bookmaking operation can expect to receive a sentence of between 2 to 3 years’ imprisonment.  I am satisfied that your operation fell within that category but at the bottom end.  I adopt a starting point of 2 years’ imprisonment which I discount by one-third to reflect your plea of guilty.  I give a further discount of 2 months to reflect the length of time that this matter has been hanging over your head. 

16.On Charge 1, therefore, the sentence is one of 14 months’ imprisonment.

17.Charges 2, 3 and 4 are of dealing with the proceeds of an indictable offence.  They cover 1½ years, a considerable longer period than the period covered by the bookmaking charge,  and involve considerably greater sums than that to which the bookmaking charge relates, $6.3 million.  The three offences broadly overlap in time and are only the subject of different charges because they involve different bank accounts.  For the purpose of sentence, they should be looked at together.

18.I bear in mind that unlike with some money laundering offences, your dealing with this money was not designed to conceal the source of the money or to prevent it from recovery, but was simply the result of your bookmaking activities.  I also bear in mind the observation of Wright J in HKSAR v Au Hau Ching CACC146/2008 that in charges of money laundering where the  predicate offence is established as being illegal bookmaking sentences regularly fall at the lower end of the spectrum.

19.In my view, the appropriate overall starting point for all three of the money laundering charges is 27 months’ imprisonment which should be discounted by one-third to reflect your pleas of guilty.  I give a further discount of 2 months for each of these offences resulting in a sentence of 16 months’ imprisonment on each charge. 

20.In considering the totality of sentence, I am satisfied that the sentences on Charges 2, 3 and 4 should run concurrently.  I appreciate that there is an overlap between those charges and that in Charge 1.  However, Charge 1 does involve the additional significant element that it was you yourself who engaged in bookmaking.  And, therefore, the sentences on Charges 2, 3 and 4 run concurrently with each other and that 3 months of the sentence on Charge 1 run consecutively to the sentences on Charges 2, 3 and 4. The resulting overall sentence is one of 19 months’ imprisonment. 

21.I am not satisfied that you have the means to meet any additional financial penalty and so I do not impose one.