HKSAR v. Lee Kwok Wai

DCCC 946/2010

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 946 OF 2010

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REASONS FOR SENTENCE

1.The defendant pleads guilty to one charge that he between the 18th July 2007 and the 5th December 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 on the 18th July 2007 the defendant opened a bank account in his own name with the Standard Chartered Bank.  From that date until the 5th December 2009 a total of 1915 cash deposits amounting to HK$2,283,440 were made into the account with the money on many occasions being withdrawn by ATM shortly afterwards.

3.The police arrested the defendant on the 5th December 2009 for the offence of lending money at an excessive interest rate.  Under caution the defendant said he opened the bank account for “Bun Jai” to use.  In a subsequent video interview the defendant said, inter alia, that he gave the passbook, ATM card together with the password to “Bun Jai” and further that he had assisted “Bun Jai” to withdraw money on two or three occasions and on one occasion had transferred $50,000 to his girlfriend’s account.

4.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. 

5.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.

6.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.

7.The defendant’s role is not limited to just allowing his account to be used.  The defendant also admitted he assisted in withdrawing the monies.  The defendant by allowing “Bun Jai” to use the account knowing monies were being deposited and soon after withdrawn has, over a period of nearly two and a half years, dealt with substantial sums of money in excess of $2.2 million.  The lending of bank accounts facilitates money laundering by disguising the true owner of the money and thus making difficult the detection of crime, whilst at the same time undermining the integrity of the banking system by allowing someone other than the true holder of the account to use the account.

8.Mr Kwong submits the defendant did not benefit from allowing his account to be used.  I do not accept that the defendant received nothing in return for opening a bank account and allowing another to use that account.  Whether or not the defendant received a reward is however insignificant as a sentencing factor for the reality is the offence of money laundering is very serious (see HKSAR v CHEN Szu-ming  CACC 270/2005 at paragraph 23).  As seen in the recent cases of  HSU Yu-yiand HKSAR v HOU Shun-hsiungCACC 472/2009 the amount of money involved is a major consideration and not the amount of benefit received by a defendant.

9.In passing sentence I take into account everything said on behalf of the defendant by Mr Kwong together with the letters submitted by the defendant and his family.  I take into account the defendant has no previous convictions.

10.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.  Taking into account the amount involved was HK$2,283,440; the role of the defendant; the time over which the offence was committed; and the clear record of the defendant, I am satisfied a starting point of 3 years imprisonment is appropriate.  Giving the defendant full credit for his guilty plea he is convicted and sentenced to 2 years imprisonment.