HKSAR v. Chan Wai Sing

DCCC 1026/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 1026 OF 2012

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REASONS FOR SENTENCE

The defendant pleaded guilty to a "Money laundering" offence. The total sum involved is roughly HK$4.2 million.

Summary of Facts

2.On 30 March 2007, the defendant opened an account (No.052-5-096749) with The Hongkong and Shanghai Banking Corporation Limited (HSBC).  He is the sole signatory of that account.

3.From 30 March 2007 to 26 May 2009, a total sum of $4,227,909.06 was deposited into the defendant's HSBC account on 595 occasions, mostly made by phone or ATM.  The same total sum was taken out of the account, mostly by phone or ATM, by 313 withdrawals.

4.The defendant reported his occupation as a cook.  Between 2004 and 2010, he filed his tax return in 2006 only.  His reported income for 2006 was $144,000.

5.The defendant was arrested by the Police on 6 July 2010 for the present offence.  Under caution, he admitted that he sold his HSBC account to an unknown male in 2007 for $1,500 and that he had no knowledge of the transactions in that bank account.  In his video recorded interview, the defendant admitted that he had financial difficulties in 2007.  He saw a newspaper advertisement for "Quick Cash" and called the number stated thereon.  An unknown male told him to open a bank account, and he would receive $1,500 as a reward.  The defendant thus opened the HSBC account on 30 March 2007 and gave the ATM card and password slip to an unknown male.  In 2009, he received a phone call from HSBC asking him questions about some large amount transactions.  He felt suspicious about the transactions of that account and closed the account in May 2009.

Mitigation & Sentence

6.The defendant is 35, married and has a clear record.  He resides with his wife in Shenzhen.  The defendant is educated up to F.3 level and has been working as a cook since he left school. Prior to his arrest, he was earning $13,000 per month.

7.Defence lawyer Mr. SHIN submitted that out of kindness, the defendant acted as a guarantor for a friend in relation to a loan.  Unfortunately, his friend defaulted on the repayments. Debt collectors then came to trouble the defendant.  The defendant and his mother ended up paying $600,000 out of their own pockets to settle the loan. The defendant saw the newspaper advertisement and wanted to earn some quick money.  Mr. SHIN submitted that the defendant had no control of the HSBC account. He only realized the trouble when the bank suddenly called him in 2009.

8.Time after time, the court has expressed in very clear terms that being in financial difficulty (however serious) is no mitigating factor for committing a crime.

9.The Court of Appeal in SJ v WAN Kwok Keung [2012] 1 HKLRD 201 held:

"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" offences.

Generally, the sentence for "money laundering" offences 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.[1]

10.I have reminded myself of the sentencing principles laid down in HKSAR v HSU Yu Yi [2010] 5 HKLRD 545 and HKSAR v Boma Amaso [2012] 2 HKLRD 33.

11.As held by the Court of Appeal in both HSU Yu Yi and WAN Kwok Keung, when the "black money" involved is between $3 million and $6 million, the starting point is 4 years' imprisonment or so.

12.For the purpose of sentencing, I accept that this case is distinguishable from most typical cases of "money laundering" since there is no evidence of any underlying criminal activities from which the money "laundered" in the defendant's bank account was originated.  I agree with Mr. SHIN that the evidence seems to suggest that the defendant was only involved in the opening of the HSBC account and handing over of the ATM card and password slip.  There is no evidence of any international element either.  I also note that the defendant's reward appears to be $1,500 only.

13.In determining the proper starting point, I have borne in mind the amount of money involved, the duration of the offence, the defendant's role in relation to the movements of funds as well as his personal circumstances.

14.Based on the low level of his participation, lack of international element and evidence of any underlying criminal activities as well as the defendant's clear record, I am prepared to adopt a slightly lower starting point.  I will adopt a starting point of 3.5 years' imprisonment.  The usual one-third discount is given for his guilty plea, reducing the sentence to 28 months.

15.Mr. SHIN has also raised the issue of delay.  The defendant was arrested in July 2010, yet he was not charged until October 2012.  Cases of this type often require lengthy investigation which involves obtaining of voluminous bank records as well as complex and tedious fund flow analysis.  All these steps take time.  The ultimate conclusion of this case may be that the defendant had simply "sold" his bank account to someone for the purpose of "money laundering", but in order to reach that conclusion, much investigative work had to be carried out.

16.In my view, there might have been a slight delay in charging the defendant, but it certainly was not any undue delay which warrants a substantial discount in sentence.  In this connection, I am prepared to grant a nominal discount of 1 month, reducing the sentence to 27 months.  I therefore sentence the defendant to 27 months' imprisonment.