HKSAR v. Leung Wai Wah

CACC 201/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 201 OF 2011

(ON APPEAL FROM DCCC 1319 OF 2010)

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BETWEEN

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Before: Hon Cheung CJHC and Yeung VP

Date of Hearing: 9 November 2011

Date of Judgment: 9 November 2011

Date of Handing Down Reasons for Judgement: 16 November 2011

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REASONS FOR JUDGMENT

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Hon Yeung VP (giving the reasons for judgment of the Court):

Introduction

1.The applicant (Leung Wai-wah alias Liang Wei-hua) held, at the material times, a Hang Seng Bank Account (“the account”). Between November 1997 and June 1999, total deposits into and withdrawals from the account were HK$38,157,601.89 and $38,157,191.38 respectively.  69.97% of the deposits (HK$26,699,429.90) and 24.49% of the withdrawals (HK$9,344,806.58) were made in cash.

2.Between 1 December 1997 and 6 May 1999, there were transfers of a total sum of HK$12,661,090 from the account into another account in the name of Li Kam-ming (“Li”).

3.The applicant had not filed any tax return between 1994 and 2000.

4.The applicant was arrested on 4 November 2010 when he returned to Hong Kong from Canada to attend a funeral.  Under caution, the applicant admitted that he had engaged in bookmaking of horse racing and football games with Li, his brother-in-law. 

5.The applicant claimed that the account was operated by Li in connection with the bookmaking activities and that he had signed some deposit slips for Li to process bank transactions.

6.The applicant was charged with conspiracy to deal with property known or believed to represent the proceeds of an indictable offence (“money laundering”).

7.On the 4 May 2011, the applicant pleaded guilty to the charge before Judge Browne in the District Court and was sentenced to 4 years’ imprisonment.

8.Represented by Mr Andy Hung, the applicant sought leave to appeal against sentence.  At the end of the hearing, we granted the application.  Treating the application as the appeal proper, we allowed the appeal and reduced the applicant’s sentence from 4 years to 3 years and 6 months.  We indicated that we would hand down our reasons in due course and this we now do.

The applicant’s background and mitigation

9.The applicant, aged 48, is married with a clear record.  He normally lives in Canada with his wife and three children.  The applicant suffers from diabetes and severe neck and back pain.

10.It was suggested that the applicant was not the mastermind and was given a job by Li in a clubhouse for members to gamble.  In 1998 when the economic climate was bad, Li persuaded the applicant to open the account for the purpose of “money laundering” and the applicant was given a monthly salary of only HK$25,000 to HK$30,000.

The Judge’s approach

11.The judge accepted that the applicant was not the mastermind and his rewards for the “crime” were modest when comparing with that of the mastermind.  The judge further pointed out that the applicant was co-operative with the police when he was arrested.

12.However, the judge emphasized that the applicant committed the offence over a period of two years and that the sums he had handled, mostly in cash, were very large.  The judge considered a 6-year starting point appropriate and reduced it to 4 years on account of the guilty plea.

Grounds of Appeal

13.Mr Hung suggested that the starting point adopted by the judge was too high and that the judge had not given sufficient weight to the fact that the applicant had co-operated fully with the police. He emphasized that the applicant had confessed to almost the entire case of the prosecution.  Relying on HKSAR v Chiu Kit and Another (CACC 210/2009) and HKSAR v Lai Kam Yee Teresa [2010] 4 HKLRD 165, Mr Hung suggested that the applicant should be given a greater discount than what he was given.

14.Mr Hung argued that the applicant’s sentence was manifestly excessive and he referred to a number of cases to support his contentions.

15.Mr Hung further suggested that as the underlying offence, namely bookmaking, was not considered to be very serious, the sentence imposed on the applicant should be more lenient. 

Discussion

16.We wish to emphasize firstly the sentiment expressed in HKSAR v Javid Kamran (unreported CACC 400/2004) that:

“Money laundering is a very serious offence as it is an attempt to legitimize proceeds from criminal activities.

Serious criminal offences are very often motivated by financial gains and those who assist criminals in laundering money, indirectly encourage them in their criminal activities…

Successful deterrents against money laundering could be effective measures against crime.”

17.Similar sentiment was expressed in HKSAR v Xu Xia Li & Anor[2004] 4 HKC 16 when Woo VP said at p. 23 E-G:

“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.”

18.We did not agree with Mr Hung’s submission that when the underlying offence was bookmaking, the applicant should be given a more lenient sentence.  A “money laundering” offence is committed when the defendant had reasonable grounds to believe that the “money” he had handled was “dirty”. The offence does not require the establishment by the prosecution that the “money” is actually “dirty”.  The offence would have been proved even if the “money” is in fact not “dirty” as long as the defendant had reasonable grounds to believe that it was.

19.That being the case, it is not logical to suggest that the sentence for “money laundering” should be more lenient when the underlying offence is not serious.

20.The Court of Appeal took the view that the nature of the indictable offence from which the “laundered money” derived was a factor which a sentencing court was entitled to take into account although it was not a significant one unless it could be shown that the defendant knew the nature of the crime and that the crime was of a serious nature.  (See the judgment of Woo VP in Xu Xia Li (supra) at p. 22B-C) The approach is already a favourable one to a defendant.

21.Mr Hung suggested that the applicant’s only benefit from assisting Li by allowing him to use the account was a monthly remuneration of $25,000 to $30,000.  We were slightly skeptical about this suggestion.

22.The facts admitted by the applicant indicated that over $12 million was remitted into Li’s account over the two-year period. In the light of the close relationship between the applicant and Li, it was not difficult to infer that the applicant and/or his family would have been more substantially benefited from the “profits”.

23.In any event, as this court had observed in HKSAR v Chen Zhen Chu [2007] 5 HKC 505 at p. 513 D-E:

“…the gravamen of a money laundering offence is the amount of money handled, not the amount of profit to the defendants or the loss to the victims. In most money laundering cases, it is simply not possible to determine the question of profit to the defendants or the loss to the victims even if those victims could be identified.”

24.From various cases cited to this court [HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, Secretary for Justice v Herzberg [2010] 1 HKLRD 502, HKSAR v Javid Kamran (supra)], it appears that the following factors are relevant to sentence in “money laundering” cases:

1.   The amount of money laundered, which was described as the major consideration.

2.   The nature of the offence that generated the “laundered money”.

3.   The extent to which the offence assisted the underlying crime or hindered its detection.

4.   The degree of sophistication of the offence.

5.   The defendant’s participation, both in the underlying offence and in the “money laundering” activities.

6.   The length of time that the offence lasted.

7.   The benefit that the defendant had derived from the offence.

8.   Whether there was an international element in the commission of the offence.

25.The amount involved in this case of almost $40 million represented proceeds from illegal bookmaking of horse racing and football games, which was not a trivial offence.  The applicant took an active part, both in the actual bookmaking activities as well as the “money laundering” activities.  The offence lasted over 18 months, involving multiple deposits and withdrawals.  The applicant derived substantial financial benefits from the offence.  These factors were very much against the applicant.

26.Mr Hung suggested that Li was the mastermind and that the applicant only assisted him.  However, it must be remembered that the account, in the applicant’s name, was central to the funding of the bookmaking activities.  Without the applicant performing his role as the holder of the account, it would not be possible for the bookmaking business to take place in the manner as it did.  We do not accept the suggestion that the applicant only played a minor role in the bookmaking business.

27.Mr Hung relied on a number of previous cases to demonstrate his point that the 6-year starting point adopted by the judge is too high.  We wish to repeat what this court said in Chen Zhen Chu (supra) at p. 514I – 515A:

“…that the seriousness and prevalence of money laundering offences are such that it may be necessary for the courts to take a more robust view about them. In appropriate cases where the aggravating factors are such as those identified above and sums involved are large, more robust sentences may well be called for than in some the cases cited to us where relatively modest terms of imprisonment appear to have been imposed.”

28.On the other hand, we could not ignore the fact that the applicant had a clear record.  We had also examined a large number of cases on sentence in “money laundering” offences involving bookmaking.

29.HKSAR v Oei Hengky Wiryo (CACC 109/2005) involved a total turn-over of $247 million in a bookmaking business operated over a period of 4 years, and a starting point of 5½ years was adopted.  HKSAR v Kwok Chau-wah (CACC 210/2008) concerned a suspected bookmaking business with a turn-over of $18 million over a period of 15 months and a starting point of 3 years was considered appropriate.  HKSAR v Lee Ka-ki (CACC 148/2007) also related to “money laundering” in a bookmaking business involving $16.7 million over a period of 30 months, and a modest sentence of 3 years was imposed after trial.  In HKSAR v Wan Kwok-keung (CAAR 13/2010), the applicant pleaded guilty to a charge of “money laundering” in a bookmaking case.  The offence lasted about 7 years and involved $14 million. The Court of Appeal, on a review application, increased the sentence from 14 months to 2 years and 6 months. 

30.Whilst the court should adopt a more robust attitude towards “money laundering” offences in view of its prevalence, the 6-year starting point adopted by the judge was, in our view, manifestly excessive.

31.We were persuaded that a more appropriate starting point would be 5 years and 3 months.

32.The applicant, as emphasized by Mr Hung, did confess and accept full responsibility for what he had done.  He also co-operated fully with the police.  However, the applicant had been given a full one-third discount for his guilty plea and such a discount would have taken into consideration other mitigating factors, including full co-operation with the police and a good record.

33.In S for J v Lee Chun Ho, Jeef [2009] 6 HKC 471 at p 477 A-C, it is stated:

“The Court of Appeal have repeatedly emphasized that the one-third discount ‘is usually to be regarded as the high watermark of the discount given to a defendant pleading guilty in good time.’ The respondent’s co-operation with the police referred to by the judge was his admission of the offence to the police, both at the scene of the crime and at the police station. Such a ‘co-operation’ is just part and parcel of the respondent’s admission of his guilt, albeit at the first available opportunity. This mitigating factor should be subsumed within the one-third discount.”

34.One of the defendants in Chiu Kit (supra) and the defendant in Lai Kam Yee Teresa (supra) were given more lenient sentences because of their relationship with the main culprits, namely father and daughter in Chiu Kit (supra) and husband and wife in Lai Kam Yee Teresa(supra).

35.In Chiu Kit (supra), the Court of Appeal said at p. 19 of the judgment:

“Despite the clear records of the applicants and the other mitigating factors put forward by them, we cannot say that the starting point of 5 years adopted by the judge is manifestly excessive. Indeed such a starting point, when compared with other cases involving a similar amount, is a low one, justified perhaps because of the absence of evidence linking the money to a particular offence.

On the other hand, it appeared that Zhao got himself involved because of his blind faith in his daughter. The judge gave Zhao a discount of sentence of 6 months to reflect his advanced age. The judge had not taken into consideration the fact that Zhao was acting under the influence of Chiu and that his role was passive.

We are persuaded that a more significant reduction should be made…”

36.Similarly, the court in Lai Kam Yee Teresa (supra) observed at p. 175:

“…The difference between the present case and an ordinary case of dealing with property that represents the proceeds of an indictable offence is that, as Deputy Judge Wong agreed, there is no evidence in the present case to suggest that the applicant made a profit by dealing with the monies in question. Deputy Judge Wong thought that the applicant agreed to deal with the monies mainly because of her relationship with Fok. She did so to protect the interests of their 12-year-old son. Deputy Judge Wong also accepted that although the applicant used a small portion of the money deposited into her account for her own purpose and towards the purchase of a residential property, she did not do so with the intention to make a profit. The emphasis was on Fok’s responsibility to provide for the applicant and their son, he being her ex-husband and the father of the son. The applicant did not go through complicated procedures to deal with the remittances on her own accord. She merely acted upon Fok’s instructions…”

37.Mr Hung emphasized that in Lai Kam Yee Teresa (supra), the defendant was given a further discount because she had co-operated fully with the police by providing all the information in nine interviews and that the prosecution evidence against her came mostly from the information she provided.

38.As we had pointed out to Mr Hung, the defendant in Lai Kam Yee Teresa (supra) did not plead guilty and the court simply considered it appropriate to lower the starting point because of the special mitigating factors identified by the court.  Quite rightly, in our view, Mr Hung did not then pursue the suggestion that the applicant should be given a greater discount than the one-third that he was given.

39.We were persuaded that the 4-year sentence imposed on the applicant, in all the circumstances of the case, was manifestly excessive and that a more appropriate starting point was 5 years and 3 months. The applicant pleaded guilty to the charge and should be entitled to the customary discount of one-third.

40.We therefore allowed the applicant’s appeal against sentence and reduced his sentence from 4 years to 3 years and 6 months.

Ms Samantha Chiu, SPP (Ag.) of the Department of Justice for the Respondent.

Mr Andy Hung, instructed by Messrs. Au & Associates assigned by the Director of Legal Aid for the Applicant.