HKSAR v. Wang Qin-cai

DCCC 226/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 226 OF 2011

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REASONS FOR SENTENCE

1.The defendant has pleaded guilty to six charges of dealing with property known or believed to represent 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 offences are set out in the summary of facts admitted by the defendant.  Briefly, between the 27 August, 2010 and 3rd November 2010 a scam was operated where gullible persons were deceived into remitting a total of around HK$2.23 million to the defendant through remittance agents and into three bank accounts held in the name of the defendant for paying various alleged administrative costs, insurance and tax before they could claim their lottery prizes.

3.Three of the bank accounts in which the money was deposited and of which the defendant was the sole signatory were opened with the Hong  Kong & Shanghai Banking Corporation Ltd. (HSBC), the Standard Chartered Bank (Hong Kong) Ltd. (SCB) and the Bank of East Asia Ltd. (BEA).  Both the HSBC and the SCB bank accounts were opened on 16^th September, 2010 and the  BEA bank account was opened on 27 August, 2010.  All of the funds remitted into the said three bank accounts were withdrawn in cash either through bank teller or ATM within one or two days after the remittance. During this period a total of HK$2,188,780.76 was deposited into the three bank accounts.   In the same period of time the defendant was also the beneficiary of three overseas remittances equivalent to HK$47,195.47 remitted to him through MoneyGram and Western Union. 

4.The defendant was arrested on the 2nd November 2010.  Under caution the defendant said that he came to know a person named ‘Ah Pui’ through gambling.  He was asked by Ah Pui to open the three bank accounts. Ah Pui told him that he could not open the bank accounts himself because of his low credit worthiness. He was told to withdraw the monies deposited into the bank accounts and give the monies to Ah Pui. In return, he would be rewarded HK$200 for each withdrawal of HK$10,000. He did as instructed by Ah Pui. He knew nothing about the source of the funds remitted into the accounts. He was suspicious of the funds remitted into the accounts but he nonetheless followed Ah Pui’s instructions.  On a number of occasions he was asked by Ah Pui to wrap the monies with newspaper and hide them in a park for Ah Pui to collect.  He also helped Ah Pui to collect funds remitted to the remittance agents which he then handed over to Ah Pui.

5.After hearing Counsel in mitigation, I adjourned sentence until today, calling for a Background Report, which is now before me.  The defendant takes no issue with the contents of the report. I have before me also a letter in mitigation written by the defendant’s brother, who was in Court to show support for his brother. I have carefully considered all that has been urged upon me in mitigation by Counsel on behalf of the defendant, as well as the contents of the Background Report and the letter.

6.In mitigation I am told the defendant is now aged 37 years. He was born in China, and came to Hong Kong in 2005.  His wife and daughter live in Fujian in China, as do his parents. The defendant is the main breadwinner of the family.  The defendant has been in custody since his arrest in November, 2010. The defendant’s brother has informed Counsel for the defendant that the defendant’s wife has left the family, and the defendant’s 10 year old daughter is now cared for by the defendant’s parents. She has not been told that the defendant is in custody.  The defendant’s parents are aged and not in good health, and are unable to work.  The family was supported by the defendant and his brother. The family was poor. The defendant would often buy medicines for his parents when he was in Hong Kong. The defendant has pleaded guilty to all the charges, which reflects his genuine remorse.  He has a clear record and he had co-operated with the police.

7.Money laundering is a serious offence for which deterrent sentences are required not only to punish the defendants but also to deter others from behaving in this way.  It is not wrong in principle to impose an immediate custodial sentence on a first offender (see HKSAR v HUI Kam [2000] 3 HKLRD 211). There are no guidelines for offences of this nature, the reason for this being that the circumstances of each case may vary almost infinitely. There is a general recognition that sentences must be custodial and must be substantial to deter others. The sentences must also reflect public and commercial concerns about the use of bank accounts to launder funds derived from criminal enterprises. The fact that the victims were being asked to pay money into bank accounts adds a veneer of legitimacy to the underlying scam and serves to reassure the victims. Anybody who attaches himself to an international fraudulent scheme must expect to be dealt with severely if he is caught.

8.As to the seriousness of the offence and the need for deterrence the Court of Appeal in HKSAR v XU Xia-li & another, CACC 395/2003, said,

“The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities. Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced. Money laundering is therefore treated as a serious offence. If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong's reputation as a world-class financial and banking centre.”

9.The Court of Appeal reviewed a number of cases in XU Xia-li, HKSAR v Javid Kamran, CACC 400/2004, and in HKSAR v YEUNG Kin-chai, CACC 341/2008.  In Javid Kamran as applied in HKSAR v Jain Nikhil [2007] 2 HKLRD 640 and in HKSAR v LEONG Wai-keong, CACC 476/2007, the court said that it was not possible to lay down guidelines, as there is a very wide range of culpability.  The court went on to set out some of the 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.  Another factor to be added is the degree to which an offence had an international dimension.

10.In passing sentence I take into account everything said on behalf of the defendant by Counsel.  I accept the defendant was not part of the scams operated on the victims 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 HKSAR v CHEN Szu-ming, CACC 270/2005 at paragraph 23).  

11.In my view this was a carefully planned operation  with a very clear international dimension, all the remittances to the bank accounts and the remittance agents having come from overseas – Singapore, Japan, USA, Australia and New Zealand.  The opening up of different bank accounts to facilitate the moving of the funds make the detection of the crime all the more difficult.  In a short period of time, the defendant had dealt withover HK$2 million.  I am told that the balance in the SCB account was HK$420.70, that in the HSBC account was HK$7.04 and the balance in the BEA account was HK$71,122.19.  Ms. Yang informs me that the Prosecution is not seeking any orders for the disposal of these funds -  a confiscation order cannot be sought for sums of less than HK$150,000, nor can a compensation order be sought as it is difficult to identify the victims.  The defendant being in custody has also hindered the police in their handling of this as the defendant is not in the position to  give instructions to the banks involved for the disposal of the funds.  I am told by Ms. Yang that the police experience in the past has been that the banks will deal with the funds in their usual way and these funds will in all likelihood be returned to the defendant in due course. In sentencing the defendant today, I attach no weight to this.

12.I am asked to take into account the defendant’s clear record.  In my view he is not to be regarded as a true first offender.  The defendant is a multiple offender, having pleaded guilty to six offences (see Secretary for Justice v AU Man-kei, Alex CAAR 2/2000).  I am satisfied no further discount is to be given on account of clear record.  I fully accept that the defendant played no part in the fraudulent scheme which harvested the illicit funds but he was an essential cog in the processing of the money.  I do note that he has been co-operative with the police.  He has also assisted the court in his pleas of guilty by considerable saving of time. 

13.Taking into account the role played by the defendant and all the circumstances of the offences, I am satisfied the appropriate starting points after trial are 2 years and 6 months’ imprisonment on charge 1; 3 years’ imprisonment on charge 2; 2 years and 6 months’ imprisonment on charge 3 and 12 months imprisonment on each of charges 4 to 6.  I accept this was a course of conduct over a period of just over 8 weeks and that in considering totality of sentence I should look at the total amount of the proceeds the defendant dealt with. 

14.He is entitled to credit for his pleas. The defendant is sentenced as follows:

Charge 1 – 1 year and 8 months’ imprisonment;

Charge 2 – 2 years’ imprisonment;

Charge 3 – 1 year and 8 months’ imprisonment; and

Charges 4 - 6 – 8 months’ imprisonment on each charge.

I order all sentences to be served concurrently. The defendant serves a total sentence of 2 years’ imprisonment, which I am satisfied properly reflects his criminal culpability on the 6 charges.