HKSAR v. Cheung Wing Chiu

DCCC168/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.168 OF 2011

--------------------------

--------------------------

Reasons for Sentence

1.The defendant pleaded guilty to one charge of dealing with property known or believed to represent proceeds of indictable offence.

Facts

2.The defendant opened an account with the Bank of China (“the BOC account”) in December 2005 primarily for receiving his salary. There had been no overseas transactions in the BOC account up to 6^th January 2010.

3.PW1, a Chinese New Zealander received a phone call on 16^th March 2010 from some unknown person who falsely told her she had won a lottery prize. PW1 opted for a remittance of HK$800,000 cash into her bank account.

4.A few days later, another unknown male “Chen” called and told PW1 that she had to pay a handling fee of NZD$6,000 to a person named Wong Chi Man in Hong Kong via Western Union. PW1 did so accordingly.

5.On 23^rd March, the same unknown male “Chen” called PW1 and told her she had to remit a further NZD$18,000 as administration fee for handling the taxation aspect. PW1 borrowed money to make this remittance. Later on the same day, the same “Chen” called PW1 and told her to contact the director, “Mr. Law” of the company which sponsored the lottery. PW1 called and was told to use her HK$800,000 winnings to take part in the annual grand lottery draw in Macau. PW1 agreed.

6.On 24^th March, “Mr. Law” called PW1 and told her she had won a cash prize of NZD$5,232,600 and then told her to remit NZD$87,900 to “Chen” as administration fee before she could receive the prize. “Chen” later told PW1 later that there would be no further administration fees after this NZD$87,900.

7.PW1 was reluctant to pay the money but “Chen” and “Law” managed to persuade her. PW1 then asked for another way to remit the money to avoid incurring more administration fees over the money transfer. “Chen” then told PW1 to remit the money to the BOC account of the defendant.

8.On 25^th March, PW1 borrowed money from her friends and remitted a total of NZD$87,900 on 3 occasions to the BOC account of the defendant.

9.On 29^th March 2010, “Chen” falsely told PW1 that she had to pay NZD$80,000 as tax. PW1 told him that she had no more money to pay him. After that, PW1 realized that she had been deceived and made a report to the Hong Kong Police.

10.PW1 paid a total of NZD$112,975 out, which was about HK$615,488. Of that amount, approximately HK$478,094.20 was remitted into the BOC account of the defendant.

11.Upon receipt of the funds from PW1, the defendant on the same day of each deposit made withdrawals in more or less the same amount of the deposits into the BOC account. The total amount withdrawn was HK$768,300, the amount particularized in the charge.

12.The defendant was arrested on 14^th September 2010 at his home. The ATM card and passbook of the BOC account of the defendant was found in his home.

13.In his cautioned video recorded interview, the defendant claimed that he did not know about PW1 and the persons related to the lottery fraud. He knew a friend nicknamed “Ah Long” in mainland China. Ah Long asked to use the defendant’s bank account to receive some money and asked the defendant withdrew money for him. Ah Long said the money was for buying things. The defendant agreed and gave Ah Long the details of his BOC account.

14.Before each of the defendant’s withdrawals, the defendant had received a phone call from Ah Long’s friend “Fei Keung” telling him to make the withdrawal. Either Fei Keung together with another unknown male or the unknown male alone would accompany the defendant to the bank to make the withdrawals over the counter. The defendant handed over the money to them after the withdrawals. Sometimes the defendant would use his ATM card to check the bank balance beforehand to make sure that the funds were in his account.

15.The ATM card and the passbook of the BOC account seized from the defendant’s home had all along been kept by the defendant and had never been lost or missing.

Previous

16.The defendant has 2 previous convictions in 2008 and 2010, both relating to violence and he received a small fine on both occasions.

Mitigation

17.The defendant is 21 years old. The defendant started living alone 4-5 years ago because of bad relationship with his parents. The defendant’s father is over 70 and his mother over 60. The defendant has an elder sister of 26 years old.

18.The defendant worked as a delivery worker for a few years and then became a waiter. 2 letters from the defendant’s former and present employer submitted.

19.The defendant is remorseful. Because of this offence, he has been having difficulty in sleeping, thinking about the old lady being swindled a large amount of money. He is very sorry for that.

20.The defendant was only 20 when the offence was committed. He owed around $80,000 to $90,000 to financial institutions and therefore thought to assist his friend and to make some quick money. The defendant however underestimated the seriousness of the offence. He did not know what went on behind the deposits and the withdrawals. The defendant did however receive HK$1,000 for his assistance rendered.

21.Counsel Mr. Siu referred to the case of HKSAR v Wang Yu Hsin and Others, CACC 173/2009. This is a case concerning lottery fraud with an international element. D9’s appeal is relevant to our case, he was the Hong Kong resident who allowed his bank account to be used by the crime syndicate. The amount involved in his case was over HK$900,000.

22.Mr. Siu pointed out that the defendant was only 20 at the time when the offence was committed. There was only one bank account that was made use of. The period of the offence was between 25^th March to 27^th May which was just shy of 2 months. The amount involved was $768,300 odd dollars only, which is less than the amount involved in the case referred to above. Mr. Siu submitted that a starting point below 3 years’ imprisonment would appropriately reflect the circumstances of this case.

23.Lastly, the defendant had informed the prosecution and the registrar on 29^th April 2011 that he was going to plead guilty to the charge, saving the court considerable time and money and avoiding the need to require the overseas witness to fly to Hong Kong.

Sentence

24.s.25(1) of Cap.455 is not an excepted offence. The maximum sentence is a fine of $5M and 14 years’ imprisonment.

25.I have the benefit of reading the cases of HKSAR v Hsu Yu Yi (許有益), CACC 159/2009 which was decided after the case submitted and relied on by Mr. Siu mentioned above. In fact, that case was  one of the many cases considered in the Hsu Yu Yi case. I was also referred to the case of Secretary for Justice v Wan Kwok Keung, CAAR 13/2010 by the prosecution.

26.In the Wan Kwok Keung case, the Court of Appeal after considering the case of Hsu Yu Yi summarized the various sentences considered in that case and came up with the general observation that for money laundering cases involving between $1-2M the starting point had been around 3 years’ imprisonment, for $3-6M the starting point had been around 4 years’ imprisonment, whereas for offences involving over $10M the starting point can be above 5 years. This is not a tariff sentence.

27.In our present case the amount involved is $768,000 odd. I find that the fact that the defendant had kept the ATM card and the passbook and the fact that he had actively helped Ah Long, Fei Keung and the unknown male to make the withdrawals show that his role in the money laundering was not entirely passive.

28.I also find it strange that for the small sum of $1,000 the defendant would be willing to risk getting into trouble by going to the bank with the unknown male on different occasions making the various withdrawals. I am not sure the defendant is being entirely frank about his gains from this criminal venture. Nevertheless, the court cannot speculate.

29.Age was also mentioned as a mitigating factor by counsel. I find first of all that the defendant was not so young as to be regarded as in the extreme youth category. Furthermore, the defendant had been working for some years prior to this offence. As a delivery worker and a waiter, the defendant would have been exposed to all elements of society and it is not likely that he would be as innocent or naïve as, say, a student who had never worked.

30.I find that the court must also make sure that the correct message is sent out to those who are in a similar situation as the defendant, that is to say, people who are relatively young, financially insecure and who want to make some quick money. The message is that, if they choose to take the easy way out by allowing their bank accounts to be used for money laundering, expect the full force of the law bearing on them afterwards.

31.Based on the amount of money being laundered, the seriousness of the underlying offence, the defendant’s role and the need for deterrence, I find that an appropriate starting point under all the circumstances is that of 3 years’ imprisonment.

32.I do not think the defendant should receive any extra credit for his indication of an early plea of guilty other than the usual one third discount.  The defendant is therefore sentenced to 2 years’ imprisonment.