HKSAR v. Lau Chun Yau

DCCC123/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.123 OF 2011

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Reasons for Sentence

1.The defendant was convicted after trial of one charge of Dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to s.25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455.

Facts

2.The defendant is 80 years old at the time of trial. She was one of the 2 joint account holders of 3 joint accounts, the other joint account holder being Li Xiaoyan. About HK$11.8 million of cash was withdrawn from the 3 joint accounts between 15^th July and 3^rd September 2002.

3.That HK$11.8 million odd came from $12 million that was deposited into the said 3 joint accounts on 12^th July 2002 from another joint account held by the defendant with the same Li Xiaoyan in the Bank of Communications.

4.That $12 million deposit came from the defendant’s Savings Account with the same Bank, which was opened by the defendant on 24^th May 2002 with an initial deposit of $200, and which at the time of the transfer had $12,593,429.25.

5.This $12,593,429.25 in turn came from a joint fixed deposit account held by the defendant and one Lau Yuen Ching.

6.This $12,593,429.25 in the joint account came from the company accounts of Lin Fat Tong Company Limited with HSBC. The bank mandates of the company accounts was changed so that the company accounts could be operated on the joint signature of PW1 and the defendant or the defendant and the said Lau Yuen Ching.

7.In February 2000, most of the money in the company accounts was transferred into the personal accounts held by the defendant and the said Lau Yuen Ching.

8.The defendant left Hong Kong in 2007. She was arrested on 13^th December 2010 when she came back to Hong Kong from the Mainland.

9.Lin Fat Tong is a charitable religious institution that was established in the 1930s. The defendant was sold to the then Keeper of the institution (住持), a Madam Lau Hing Lin,  when she was 7 years old to become Madam Lau’s daughter.

10.PW1 was sent to the institution when she was 3 years old. She and the defendant would later become the Keeper of the institution upon Madam Lau’s passing away in 1999.

11.By way of compensation from the government, Lin Fat Tong received a substantial amount of money in 1982. It is not disputed during the trial that the $12 million odd dollars alleged to have been laundered belonged to Lin Fat Tong.

12.Save for perhaps the defendant, who did not give evidence at trial, as is her right, no one knows where all the money had gone subsequent to the last 4 cash withdrawals between 15^th July and 3^rd September 2002 from the defendant and Li Xiaoyan’s joint accounts.

13.It was found after trial that the money, as early as when they were transferred from the company accounts into the personal accounts of the defendant and Lau Yuen Ching, or the latest when the $12,593,429.25 was transferred into the defendant’s personal Savings Account with the Bank of Communications that the defendant had dealt with the money. It was also found after trial that the money had been stolen from Lin Fat Tong, with theft being the underlying offence.

14.The defendant therefore had dealt with the money when she made the various transfers, and at the time of her dealing with the money she had reasonable grounds to believe that the money represented the proceeds of an indictable offence.

Previous Conviction

15.The defendant was of previously clear record.

Mitigation

16.Given the age of the defendant and the likely prospect that she will be receiving an immediate custodial sentence, I ordered a background report to be prepared on the defendant prior to sentencing.

17.Nothing much came out from the report as the defendant claimed that she is too old to remember much. She said that it was Lau Yuen Ching who had taken the money of Madam Lau and that she has no idea where the money had gone.

Sentencing Authorities

18.I was helpfully provided with the cases of HKSAR v Lung Yun Ngan & Another, CACC 482/2010 and HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 by the prosecution.

19.In Hsu, the Court of Appeal confirmed that there are no sentencing guidelines for the present offence, but certain factors should be taken into account when sentencing. The most important factor being the amount of money involved, not the amount of benefit received by a defendant in the transaction.

20.The culpability of the offence lay in the assistance, support and encouragement offered to the commission of an indictable offence, to a defendant’s level of participation and number of occasions on which he was involved in the money laundering activities are all relevant factors.

21.The court can also take into account the sentence likely to be imposed on the perpetrator of the underlying offence.

22.If the case had an international element involving activities carried out across different regions, the court might impose a more severe sentence. This is not applicable in our present case.

23.Lastly, the length of the time the offence is also relevant.

24.In the case of Lung, a married couple were convicted after trial for a similar offence. The amount being laundered was $3,074,931. A sentence of 12 months’ imprisonment was imposed on each of the applicants. In that case, the laundering lasted over a period of 2 years. As to the level of the applicants’ participation, they kept custody of the chop and check book of the company used to help launder funds and signed 6 blank checks when called upon to do so.

25.The Court of Appeal was of the view that, based on the fact of their participation in the scheme extended over a period of two years and involving a sum in excess of $3 million, the imposition of a sentence of 12 months’ imprisonment cannot be said to be manifestly excessive. The Court of Appeal is in fact of the view that the sentence contained an element of mercy.

26.I was also referred to 2 cases by Ms. Tai, they confirm the principle that old age can sometimes be taken into consideration as a mitigating factor, as is ill health.

Sentence

27.In our present case, it is a finding in the verdict that “the evidence of PW1 suggests that the defendant was able to follow the instructions of Madam Lau and rendered assistance to her in dealing with the financial matters of the Tong. It was not the case that the defendant was totally useless and had no clue what was going on in the financial world. This would negate the suggestion by counsel for the defendant that the defendant was just a puppet being controlled by Lau Yuen Ching.”

28.This is supported by the fact that the bank mandate in relation to the company accounts was changed on 31^st January 2000 so that the accounts could be operated on the joint signatures of PW1 and the defendant or the joint signatures of the defendant and Lau Yuen Ching. The defendant must have known about this since the change of the mandate would have required her signature.

29.Later on, while the $12 million was still in the joint fixed deposit account of the defendant and Lau Yuen Ching, the defendant went to open a personal savings account in her own name on 24^th May 2002. 17 days later, the full sum of the fixed deposit was transferred into this the defendant’s savings account. Given the fact that the defendant opened the account just 17 days prior to the transfer, I found that it was an inference that the defendant knew about the pending transfer when she opened the account.

30.The defendant then made further transfers of the money in the account. I find the defendant being fully aware of what was then going on and gave full assistance in the dealings with the stolen money.

31.I find that the dealings lasted about 2 years. That was the time in 2000 when the company’s money was transferred into the personal accounts of Lau Yuen Ching and the defendant and the time when the money was withdrawn from the defendant’s joint account with Li Xiaoyan in 2002.

32.The defendant is aged 80, this is one factor that I will take into consideration, but as the Court of Appeal in the above mentioned case of Lung mentioned, “even taking into account the ages of the applicants, the fact that they had no previous convictions…the limited level of their participation – we are of the view that an immediate custodial sentence was inevitable.”

33.Lastly, the amount of money being laundered is some $12.59 million which is 4 times the amount involved in Lung. This, as the Court of Appeal in the case of Hsu Yau Yi pointed out, is the most significant factor to be considered.

34.Therefore, bearing in mind the level of participation of the defendant in the laundering, the large amount involved and the length of time it had taken place over, I find that a proper starting point is that of 36 months’ imprisonment.

35.As the 2 cases referred to by Ms. Tai for the defendant suggest, advanced age and ill health can be a mitigating factor. Given the situation of the defendant, I am prepared to give her a slight discount as an act of mercy and reduce her sentence by 9 months on the ground of her age and ill health (6 months for age and 3 months for ill health) and sentence her to 27 months’ imprisonment.