HKSAR v. Fan Wai Ping
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DCCC 315/2011 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO. 315 OF 2011 ____________
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REASONS FOR SENTENCE 1.D1 pleaded guilty to charges of money-laundering, bookmaking and illegal betting. 2.The charge of money laundering related to sums of just over HKD27.1 million money passing through his personal bank account between January 2006 and June 2010. It was admitted that the monies related to an illegal book- making business operated by the defendant. 3.The second charge of illegal bookmaking covered the period from 17 may 2010 and 12 June 2010 involving about HKD8 million. 4.The third charge was a charge of illegal betting. This related to bets placed by the defendant with illegal bookmakers. 5.D2, D1’s wife, was jointly charged with D1 with illegal bookmaking ( Charge 2). She entered a not guilty plea to this charge. The court acceded to a prosecution application that the charge remain on the court file, not to be proceeded with without the consent of the court. D2 pleaded guilty to a charge of betting with illegal bookmakers ( Charge 4) and was fined HKD2000. Background 6.On 12 June 2010 a police team, C1-2 of the Organised and Serious Crimes and Triad Bureau (OCTB) conducted a raid on Room B, 3rd Floor, Cheong Sing Building, Wang Fat Path, Yuen Long (the gambling establishment) under a Gambling Authorization S/N 216132, prosecution exhibit P1. 7.At about 2:25 pm on 12 June 2010, the police team declared their identity and demanded entry under the said Gambling Authorization. Voices and noises were heard coming from inside. Entry into the gambling establishment was not forthcoming. Police observers indicated that persons were attempting to leave the premises by the rear door leading to a roof top and then by climbing a metal fence. 8.The outer wooden door of the gambling establishment was forced open and this led to a further metal door preventing access. The metal door was forced open and entry gained to the gambling establishment. On entering, one female and three males were discovered. There were three other males, including D1, found outside on the roof top who had attempted to evade arrest by climbing unsuccessfully the metal fence. D1’s head was bleeding as he had hurt himself on the metal fence. 9.Inside the gambling establishment there were four computers all of which were logged into some illegal gambling websites with multiple windows opened. In addition there were a number of newspapers showing racing commentary and racing odds sheets. A television was on and connected to a domestic live racing broadcast. Another television shown was connected to a CCTV camera between the wooden door and the metal door positioned to observe persons entering the premises. The landlady of the gambling establishment property has confirmed that both the 2nd metal door and the CCTV camera were not installed by her. She was unaware of their installation. She rented the property in March 2008 to WAN Ka-ping, one of the persons detained at the scene, but, at Wan’s request, the name of a CHOY Po-kong’s name was used as tenant. 10.D1 admitted to using a computer. In addition betting records were found on a table. All of the computers seized in the gambling establishment had internet access. 11.Later that same day D1 & D2’s home, Room 815 Yue Wah House, Tin Yiu Estate, Tin Shui Wai, Yuen Long was searched in their respective presence and a number of other illegal bookmaking related documents were seized. 12.A mobile phone used by D1 to solicit, receive and negotiate bets by way of a trade or business was seized. Audio records of conversations of the users of the mobile phone were made by a technical services division officer. In the opinion of the gambling expert these records show the user accepting bets totalling $813,500 between 23 May 2010 to 12 June 2010. Five other mobile phones used by others in the room were seized. In addition, other gambling paraphernalia seized were four calculators, six multi-coloured pens and multi-coloured pen refills. 13.Cash was seized from the possession of D1 as follows: (i) HKD 50,000; and (ii) RMB 1,000 Cash was seized from the possession of D2 as follows: (i) HKD57,490 13.In addition, a bundle of records were seized from the table near D1’s computer and these show variously telephone numbers and notes relating to website accounts. They are telephone numbers of customers, agents and bookmakers related to the illegal bookmaking. 14.D1 admitted gambling with bankers on the Mainland through the internet and using one of the computers. He admitted accepting bets but only, he claimed of one individual. 15.D1 further admitted making bets but equivocated about receiving bets and sought to say bets were only placed for others. Admitted using more than one illegal gambling website. 16.D1 could not provide any explanation for the volume of transactions or the fund flow in respect of his Bank of China account numbered 031-368-1-030011-4. He made no admissions concerning any significant commercial activity that could explain the activity reflected by the transactions on the account. 17.A Gambling Expert attended at the gambling establishment after police entry on 12 June 2010. In his opinion the gambling establishment was a bookmaking centre. It was being used by D1 and the other persons present so that they could conveniently co-operate in bookmaking activity to their own respective advantage. 18.In the following ways they could co-operate with persons located in the room:
19.Furthermore, bookmakers used illegal websites to set up sub-accounts of the bookmaker’s master account to supply to their customers and thus afford a certain credit limit to that customer. The customer may then login with the membership number and password supplied and commence illegal gambling on credit. The bookmaker will earn commission from the website for the value of bets placed. In addition the website will offer a discount on bets to bookmakers who hold the master account and the bookmaker may choose not to pass this on to his customers holding sub-accounts thus gaining in effect a further commission. 20.The gambling expert examined the betting records found in one of the computers including an examination and analysis of the screen shots of the computer windows opened at the time of police entry. His conclusion is that the bets placed by the user were in total value HK$1,022,528, during the period of 17 May 2010 and 12 June 2010. The same records revealed in his opinion that bets valued in total of HK$6,079,546 were accepted by the user of the computer between 17 May 2010 and 12 June 2010. This is in addition to the bets placed with the user of P27 the mobile phone of HK$813,000. Bank of China account numbered 031-368-1-030011-4 21.This bank account was used between the 3 January 2006 to 12 June 2010 to deal with property that represented the proceeds of crime. An analysis has been done of the 31/2 year period of 3 January 2006 to 1 June 2009. By inference much of the property so dealt with was related to D1’s illegal bookmaking activity. Although the analysis was not continued for the year 1 June 2009 – 12 June 2010, the balances on the account, the volume of deposits and withdrawals were commensurate with similar activity on the account as noted in the analysis for the 31/2 year period. 22.As per the amended 1st charge, the total amount of deposits between 3 January 2006 and 12 June 2010 was HK$27,124,656.50. 23.The evidence of the first of two banker’s affirmations of staff of the Bank of China indicated that between 3January 2006 and 1 June 2009 there was a total sum of HK$19,137,001.80 deposited into the account. The total amount of cash deposits was HK$8,478,300. It consisted of 340 transactions ranging from HK$100 to HK$191,000. There were 398 deposits by bank transfers, in the total sum of HK$8,377,246, ranging from HK$250 to HK$148,150. There were 25 deposits by cheques in the total amount of HK$2,266,428. 24.After filtering away cheque deposits, it was found that the number of deposits by cash and bank transfers on Monday and Thursday amounted to 64.64% of the total number of deposits by cash and bank transfers. 25.During the period, a total of HK$19,144,368.60 was withdrawn from the account. The total amount of cash withdrawals was in the amount of HK$10,486,300. It consisted of 53 transactions ranging from HK$300 to HK$600,000. There were 360 withdrawals by bank transfers, ranging from HK$800 to HK$282,000, in the total sum of HK$8,572,860.60. 26.The number of withdrawals on Monday and Thursday amount to 71.18% of the total number of withdrawals. 27.The second banker’s affirmation of the Bank of China indicates that the total deposits in the period 2 June 2009 and 12 June 2010 was HK$7,997,655. The balance of the account on 12 June 2010 was HK$322,487.08. 28.D1 filed no income tax returns relevant to the period of his charges. Settlement of bets 29.It is the practice and method of operation of illegal bookmakers to generally settle the bets of horse-racing bookmaking on Monday and Thursday, since Hong Kong Jockey Club horseracing takes place on Wednesday evenings or Saturday or Sunday afternoons. Therefore, the settlement of bets would generally be the next banking day, i.e. Monday and Thursday. 30.In relation to soccer bookmaking, the settlement of bets could take place most days while the number of transactions on Monday would be higher than the rest of the week because most soccer matches take place during weekends and the settlement day would generally be the next banking day (i.e. Monday). 31.The banking evidence is supportive of the bookmaking evidence as part of the conduct of bookmaking is the settling of bets. The easiest method to settle bets of any size and frequency is through a bank account. Furthermore the volume of the fund flow indicates the conduct of bookmaking was done as part of a trade or business. Record 32.D1 had appeared before courts on 5 previous occasions between 1981 and 1986. In 1986 he was imprisoned for 4 years for trafficking in dangerous drugs. Given the time that has elapsed since the commission of those offences, I treated the defendant as having a clear record for the purposes of sentencing him on the current charges. Mitigation 33.D1 is 49 years of age. He is married to his second wife who was D2 in these proceedings. D2 pleaded guilty to a charge of unlawful betting and was fined HKD2,000. D2 has a 21 year old son from a former marriage but he is treated as a son by D1 and they also have a 13 year-old daughter. 34.D1 looked after his aged parents. His father died earlier this year and D1 feels that his father’s anxiety about these proceedings contributed to the deterioration in his father’s health and for this D1 feels extremely guilty. 35.Following his arrest on these charges his relationship with his wife deteriorated and he had suicidal thoughts. He has now had counseling and the situation has improved. 36.The defendant was educated to Form 3 standard. He worked as a waiter and a fruit hawker. Currently he is running a property management business for a Housing Estate in Yuen Long earning HKD40,000 per month. 37.I was told by his counsel that D1’s involvement in gambling can be traced back to 2005 when he invested in a restaurant in Shenzhen. He started visiting the restaurant and drinking and gambling with friends and customers. He soon became a gambling expert and became addicted. He started to spend a lot of money on gambling on soccer, horse-racing and mahjong. He gambled through websites with bookmakers. 38.He later started to put on bets for friends and his gambling business developed in that way. I am told he once tried to get away from gambling but would feel restless and irritable. 39.Counsel pointed out that all the money laundered in this case came from soccer gambling and horse-racing, not more serious crimes such as fraud and drug trafficking. It was also urged upon the court that the way in which the money was laundered in this case was not sophisticated, there was no elaborate web of corporate bank accounts or accounts in the names of others, all the money went through the defendant’s personal bank account. 40.It was also urged upon the court that although the defendant did attempt to escape from the gambling establishment, there was no attempt to destroy any incriminating materials before the police entered the premises. Authorities 41.I have been referred to a number of authorities. Obviously there is not tariff for offences of this kind and the sentence in each case will depend on its own peculiar facts. 42.In Secretary for Justice v.Wan Kwok Keung CAAR 13/2010 the court was called upon to review a sentence passed on the respondent who had been charged with offences of money laundering and bookmaking. The court made the following observations:
Discussion 12. “Money laundering” is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimize the proceeds of crime. In order to crack down on serious crimes, to prevent offenders from getting financial gains, it is necessary to deter the commission of the “money laundering” offence (See Court of Appeal cases HKSAR v Javid Kamran (CACC 400/2004), HKSAR v Xu Xia Li and another [2004] 4 HKC 16, etc.). 13. Generally, the sentence for “money laundering” offence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others. The reason being that it is very difficult to prove the benefit concerned, and in most “money laundering” cases, there may not be evidence to show from what indictable offence the “black money” are in fact derived. Of course if there is information to prove that the “black money” is originated from serious crimes, including drug trafficking, kidnap and blackmail, illegal human trafficking, other organized crimes, etc. or the defendant’s benefit is huge, then the sentence should be adjusted upward. 14. This Court has, in a number of other similar cases, also listed others factors relevant to the sentence to be imposed including the number of offences, the length of time the offence lasted, the degree to which the defendant participated in the offence involving “black money” and whether or not it was an organised and sophisticated crime, etc. 15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money laundering” cases. The sentencing starting point is 3 years or so where the “black money” involved is between 1 million and 2 million dollars, 4 years or so where it is between 3 million and 6 million dollars, and could be over 5 years where it is above 10 million dollars. 16. The “black money” in this case was from illegal bookmaking on soccer gambling and not from a particularly serious crime, and the Respondent’s offences, including his bookmaking offence, were not well-organised either. According to the Respondent’s confession, the amount of money that he had received from the offence was not huge, it was not over $150,000. This Court agrees that where the offence of “money laundering” is concerned, this case is not a very serious one. 17. However, this Court cannot ignore the fact that the Respondent had “laundered money” on thousands of occasions for as long as 7 years and the total amount involved was as high as 14 million dollars. And neither can this Court ignore the fact that the “black money” laundered by the Respondent was from the bookmaking offence in which he had participated. 18. This Court agrees with the Secretary that the starting point of 21 months’ imprisonment for the “money laundering” offence adopted by Judge Yip is manifestly inadequate in that it “falls outside [the range of sentences] which the judge, applying his mind to all the relevant factors, could reasonably consider appropriate” (See Lord Lane CJ in AG’s Reference No.4 of 1989 [1990] 1 WLR 41, the test expressed in line A on page 46 of the Judgment). 19. This Court is of the view that the appropriate starting point should not be lower than 4 years’ imprisonment even if the Respondent is to be dealt with in a way most favourable to him. “ 43.Many of the aggravating ingredients present in the cited case are present in this case. The period of time was substantial, four and a half years, the amount involved was huge, HKD27.1 million and the defendant was directly participated in the offence involving the black money. 44.It was noted by the court in Wan Kwok Keung that the bookmaking offence was not well organized. In this case however, when the police raided the premises, the wooden door at the entrance to the premises had to be forced open. Inside the entrance to the premises a metal door and metal wall had been constructed to prevent further access and a CCTV camera had been installed to allow persons within to view persons entering the premises. When the officers manage to force open the metal gate there were four persons inside and a further three men, including the defendant, were found outside on the rooftop attempting to evade arrest by trying to climb over a metal fence. 45.Inside the establishment there were four computers all of which were logged into some illegal gambling websites with multiple windows opened. There were a number of newspapers showing racing commentary and racing odd sheets. Six mobile phones were recovered, four calculators, six multi- coloured pens and multi- coloured refills. D1 was in possession of HKD50,000 and D2 had HKD57,490 in her possession. 46.The main mitigation in this case is that the defendant has entered guilty pleas to all charges. I accept that the defendant and his family have been put under enormous emotional strain as a result of the defendant’s arrest and that the defendant has had to receive psychiatric counseling. I note that notwithstanding his addiction problems the defendant did not seek counseling until some considerable time after his arrest. I have taken into account the psychiatric report submitted and the report from Caritas Family Service. I have also considered a number of letters of support from the defendant’s children and prominent members of the community. 47.Having considered all the circumstances, I take the view that the appropriate starting point for the first charge is one of 4 years imprisonment which I reduce by one third to reflect his guilty plea. The sentence therefore will be two years and 8 months. For the second charge I take a starting point of 18 months imprisonment, reduce that by one third and order that the sentence of 12 months should run concurrently with the sentence on the first charge. 48.With regards to charge 3 I impose a sentence of 7 days imprisonment and order that it shall run concurrently with the other two sentences. 49.D1 will therefore go to prison for 2 years and 8 months. 50.I order the forfeiture of the money found on D1 and D2 under the provisions of s.26 of the Gambling Ordinance and that the application for confiscation of the funds in D1’s bank account under s.8 of the Organised and Serious Crimes Ordinance be adjourned until 16 September 2011. 51.Finally, the members of the OCTB team involved in this case are to be commended for the professional manner in which they prepared for and executed this operation. It is also apparent to the court that the prosecution file was prepared in such a way that D1 was left with little alternative other than to enter guilty pleas to the charges he faced.
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