HKSAR v. Lo Wai To

DCCC 391/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.391 OF 2011

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Reasons for Sentence

1.There are 8 defendants in this case. This Reasons for Sentence is in relation to D7 only.

2.D7 pleaded guilty to charge 7, 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. Particulars of the charge allege that the defendant laundered a total sum of $898,121.

Facts

3.Between March and September 2009, Hong Kong Police were alerted by the HSBC Bank about suspicious remittances of over $15 million from Taiwan into bank accounts maintained by local residents in Hong Kong.

4.Investigation revealed that large amount of money had been remitted from Taiwan into the bank accounts of D1 to D8. The money were quickly dealt with by way of over the counter cash withdrawals and transfers into other bank accounts.

5.D7 opened an account with the Bank of China on 11^th June 2007 as the sole signatory. 2 remittances from mainland China in the total amount of HK$898,121 were made to this account on 9^th March 2009. The deposits in RMB were made via remittance agents in China and their Hong Kong partner agents.

6.On the same day, D7 made 2 cash withdrawals in the amount of HK$320,000 and HK$500,000 over the counter at the Bank of China.

7.Prior to the 9^th March deposits, D7’s account only had small deposits of between a few to about 11,000 dollars. Tax records of D7 suggest nothing to support the 2 deposits and the subsequent withdrawals.

8.On 2^nd September 2009, D3, D6 and D7 were found by the Police in Room 1942 of Panda Hotel in Tsuen Wan. D7 remained silent under caution.

9.During a house search conducted after D7’s arrest, the bank account number and name of D4 were found written on an envelope inside D7’s residence. Immigration records revealed that D1 to D7 had been traveling together in various combinations from mainland China between 1^st January 2008 and 12^th August 2009.

10.D7 departed from Hong Kong to mainland China on 3^rd May 2011. D7 was re-arrested on 5^th March 2012 when he returned to Hong Kong.

Previous Convictions

11.The defendant has a clear record.

Mitigation

12.The defendant is 26. At the time of arrest, the defendant had been working as an air-conditioning technician for 6-7 years on contract basis, but he was out of contract for about 1.5 month. When he was working, he earned about $12,000 per month. The defendant was living with his parents. His mother is over 60 years old, retired while his father is over 80 years old, also retired. The defendant is a quiet person, he used to contribute about $6,000 per month to the family for expenses. The defendant has no vice habits like gambling or taking drugs.

13.Although with a modest salary, he managed to make ends meet and did not have financial problems as the time of the offence.

14.The defendant was born in Hakka, Guangdong. He befriended the other defendants there. the defendant came to Hong Kong at a young age.

15.Before the commission of the offence, the defendant and the others were offered by a man, who was also from the same place in China as they were, financial reward if they would allow him to use their bank accounts to receive some money remitted from China. As the other defendants agreed to do so, and not realizing it could be a serious offence, out of greed, the defendant also agreed to the arrangement.

16.The defendant did not open a new bank account specifically for the offence, he just gave the account number of his existing account, which was opened in 2007. The defendant on 9^th March 2009 received a total of $898,121 and then withdrew money and handed over the money to the same man who asked to use his bank account. The defendant kept the balance of around $60,000 as reward.

17.Before the trial last year, the defendant was scared to go to jail and absconded to China. After almost one year, he had decided to come back to Hong Kong to face the consequences because he wanted to see his elderly parents. He is remorseful and realized it was very foolish of him to have committed the offence.

18.The court should take into account that he is 26 and has a clear record. He pleaded guilty, showing remorse. He was just a foot soldier. The money involved was below the $1M category at $898,121. The money was received by 2 remittances only and committed in a single day. The defendant had no knowledge of the underlying crime nor participated therein.

Sentence

19.In the case of HKSAR v Hsu Yu Yi, CACC 159/2009, the Court of Appeal stated the following sentencing principles:

“Sentencing principles

9. There are no sentencing guidelines for the offence of dealing with the proceeds from an indictable offence because the facts vary from case to case. However the following factors are to be taken into account when determining sentence:

It is the amount of money involved that is a major consideration and not the amount of benefit received by a defendant in the transaction.

The culpability of the offence lies in the assistance, support and encouragement offered to the commission of an indictable offence. So a defendant's level of participation and the number of occasions on which he is involved in the ‘money laundering' activities are relevant factors to be considered.

The offence of dealing with the proceeds from an indictable offence does not necessarily have any direct correlation with the indictable offence in question. However if the relevant indictable offence can be identified, the court may take into account the sentence imposed on the indictable offence pre se when determining the sentence of the dealing offence.

If the case has an international element involving activities carried out across different regions, the court may impose a more severe sentence. This is to protect Hong Kong's reputation as an international finance and banking hub from being tarnished.

The length of time the offence lasted.”

20.In Hsu Yu Yi, the applicant had personally dealt with around $2,500,000. The Court of Appeal considered that an appropriate starting point was 3 years and 6 months’ imprisonment.

21.In the recent case of HKSAR v Boma Amaso, CACC 335/2010, the Court described the ‘petty crook who is paid a small sum to open an account and hand over its operation to another with no more participation and no more knowledge than that it is going to be used for some sort of crime as ‘much less culpable than an offender of a different sort not “used” in that way’.

22.In our present case, there is no evidence that the defendant had any knowledge of the crime behind the proceeds. All that the defendant did was to allow his bank account to be used for 2 remittances and subsequent withdrawals on the same day. The reward was not huge, but is not small either at $60,000. Nevertheless, I find that the defendant was at the bottom of the chain of culpability and a “petty crook”.

23.Given the relatively small amount of money involved in the laundering, but recognizing that there is a cross border element in the commission of the offence, yet not forgetting the relatively low level of culpability of the defendant as a petty crook, I find that an appropriate starting point is that of 2 years and 6 months’ imprisonment. I will grant the defendant the full one third discount in recognition of his guilty plea and sentence him to 20 months’ imprisonment.