HKSAR v. Sze Tung Lam and Another

DCCC 132/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.132 OF 2011

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Reasons for Verdict

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1.D1 and D2 face 3 and 2 charges of dealing with proceeds of an indictable offence under s.25(1) of the Organized and Serious Crimes Ordinance, Cap.455 respectively. They both pleaded not guilty to their respective charges.

Background

2.D1 and D2 are husband and wife. They each held bank accounts with large sums of money being deposited and withdrawn over a period of time, during which neither of them had any seemingly legitimate source of income to generate that sort of financial activities.

3.Upon investigation and under caution, D1 allegedly confessed to operating illegal gambling establishments and the moneys were winnings and losses of the gamblers there. D1 is therefore charged with dealing with property which he knew represented proceeds of an indictable offence.

4.Since D2 is the wife of D1 and she appeared to also have had dealt with the money connected to the illegal gambling, D2 is also charged.

The Prosecution’s case

5.In relation to D1, the prosecution relies on the confession of D1 in his 1^st and 2^nd video recorded interview to prove he knew that the money deposited into his 3 bank accounts over the charge periods represented at least partly and indirectly proceeds of those who operated various gambling establishments.

6.In relation to D2, the prosecution relies on the fact that she is D1’s wife, that they operated in similar social circles, that the amount of money being deposited into D2’s 2 bank accounts did not come from any job that D2 held, that D2 knew about D1’s gambling and D1’s assisting in the settling of gambling debts for those who gambled in gambling establishments, and that despite this D2 helped D1 to transfer moneys to various different accounts out of her own accounts to prove that any “common sense, right-thinking member of the community” would have reasonable grounds based on those facts that the money that D2 was dealing on behalf of D1 must at least in part and indirectly represented proceeds of an indictable offence.

Issues

7.In relation to D1, the real issue is the weight to be given to the confession of D1 in his 1^st and 2^nd video recorded interview, as well as his explanation given first time in court of why he had made those confessions at those 2 interviews. If full weight can be given to D1’s confession, then the prosecution would have proved that when D1 dealt with the money deposited into his 3 bank accounts, he must have known that those money represented at least in part and indirectly proceeds of the indictable offence of operating a gambling establishment or assisting someone in doing so.

8.In relation to D2, the issue is whether a “common sense, right-thinking member of the community”, knowing the facts that were known to D2, would have concluded that the money deposited into her 2 bank accounts over the charged period represented at least in part and indirectly proceeds of an indictable offence.

Admitted Facts

9.There are 2 sets of facts admitted pursuant to s.65C of the Criminal Procedure Ordinance, Cap.221, marked as exhibits P-22 and P-23. The P-23 facts relate to company registrations, business registrations, the tax return status of both the defendants, as well as the documents shown to D1 in his 2^nd video recorded interview.

10.The prosecution called 2 witnesses.

PW1 DPC53457 Officer Law

11.PW1 DPC53457 was the Police officer who brought D2 to Unit B, 2/F, Block 1, Wo Fu Centre on 27^th August 2009 for investigation. The prosecution rely on Officer Law’s evidence to prove the layout of the unit, and ultimately that the unit was likely to be a place used as a gambling establishment.

12.According to PW1, the unit had an open kitchen and 3 big rooms. Inside each room was a mahjong table with 4 chairs and a box of mahjong set on the floor next to the table. On top of some of the mahjong tables were chips. Inside cupboards in one of the room were lots of decks of cards and cigarettes of various brands. Each room also had at least 2 exhaust fans. Nothing was however seized as exhibits from the unit and Officer Law considered that nothing suspicious was found.

PW2 PC7767 Officer Chan

13.PW2 PC7767 Officer Chan is a retired Police officer. He was the arresting officer of D2 on 27^th August 2009 and was tendered for cross-examination. The defence wished to establish that after D2’s arrest but before she was brought along to the Wo Fu Centre unit to investigate, she made a phone call to someone who was allegedly the tenant of the unit.

14.Officer Chan’s impression was that D2 did make a phone call to her lawyer but he did not know what the conversation was about. It is officer Chan’s evidence that D2 did not say to him that the unit was rented out to someone for $35,000 odd.

D1’s video recorded interviews

15.The defendant took part in a total of 6 video recorded interviews. The voluntariness of the interviews were not challenged and I find that the defendant did make them voluntarily. The contents of the interviews show that they are mixed statements and as such I will deal with what weight to give to which parts of the contents where relevant later on. It is the prosecution’s case that they are relying on the confession of D1 made in the 1^st and 2^nd video recorded interviews to prove that D1 knew that the property D1 had dealt with represented proceeds of the indictable offence of operating or assisting in the operation of a gambling establishment.

D1’s 1^st video recorded interview

16.The defendant came to Hong Kong in 1981. He started working in 1984 at a garment factory, earning about $5,000 odd. He worked there for around 3 years and then in 1987 became a spray paint worker earning about 7,000 to 8,000 per month. He worked there for about 2 to 3 years and then since the paint jobs were all moving into mainland China, the defendant started to play mahjong with his friends in 1990. He would still do some casual work when there was work, if none, he would go to play mahjong. Because he was basically gambling, sometimes he would lose sometimes he would win and so did not have a fixed income.

17.The defendant also started to go to Macau to stack chips (疊碼) for some friends in 1999. He said he did not go all the time, just from time to time. When there was client, he would go to Macau to stack chips for others. The defendant explained that he would bring clients to the gambling casino (賭廳), and then he would sign some ‘mud chips’ (泥碼) for his friend to gamble, the mud chips were from another of the defendant’s friend.

18.The defendant said he is actually living on the earnings from chip stacking. For each $10 million of mud chip, he would receive about $80,000 profits.

19.The defendant had on and off worked in this job for about 3-4 years. If there was client he would go over if not then will not go. The clients were mostly his friends from the same clan.

20.Because of travelling difficulties, the big clients would deposit money into the defendant’s account and then bring to Macau.  The clients would put money into the defendant’s account, then the defendant would issue cashier orders and bring to Macau for the clients to buy chips.

21.Over the 3 to 4 years, the defendant had made over $3 to $4 million profits. After the 3 to 4 years, D1 would still go to Macau although less frequently. The defendant said he was still working as chip stacker.

22.D1 said he ‘opened stall’ (開檔) for Pai Gou (牌九) and mahjong (麻將) at Room B, 23/F, Block 4 of City Garden, renting the place for $26,000. This place was run for about 2 years. The defendant said he would take commission from other people’s winnings. Over the 2 year period, the defendant made gross profits of over $5 million [Item 486 of transcripts].

23.After 2 years, that place was reported to the Police and closed down. Another place was then rented for playing of mahjong and Dou Di Zhu (“鬥地主”, a card game). This was Room A, 18/F, Block 10 of City Garden and was rented at $30,000 per month for about 2-3 months. The defendant said he was partnering with someone on this premises and the defendant made about $2 to $3 million profits [Item 530].

24.In around April 2008 the defendant moved to Unit 2B, Block 1 of Wo Fu Centre. This place was bought on mortgage with D1’s wife as the registered owner. The property was bought for about $7 million odd. The defendant paid about $2 to $3 million down payment and monthly mortgage payment was $35,000. The down payment was mostly paid by D1 [Item 598].

25.According to D1, this Wo Fu Centre unit was mostly for friends to go up to play mahjong from time to time [Item 703]. D1 denied any taking of commission when friends were playing there.

26.D1 was asked about his bank accounts.

Bank of China 064-777-106-74419

27.D1 said the purpose of this account was to let his mainland friends transfer money into in order for D1 to prepare the cashier order to bring to Macau for the friends then to gamble there [Item 675].

D1’s 2^nd video recorded interview

28.D1 was taken through the statement of account of the Bank of China account in this interview, covering the period 2005 to 2007.

29.D1 explained the various transactions, which can be categorized into payment of utility bills, money for own use, money given to wife, money won or lost through D1’s own gambling (mahjong or Dou Di Zhu), money that his friends lost gambling in Macau, money friends won or lost playing mahjong in Hong Kong and which D1 helped them to settle by transferring the money.

30.According to D1 in the interview, on average, one night of playing Dou Di Zhu would involve about $80,000 to $100,000 of winnings and losses. The stakes would go up to $3 to $5 million per night occasionally. As for mahjong, they would play for $100,000 per round.

D1’s 3^rd video recorded interview

31.D1 was asked about the transactions in the account statements in relation to the Bank of China account for the period between 16^th April 2007 and 23^rd March 2009.

32.D1 said that all the money going in and out in this account during this period were mahjong and Macau chip stacking (疊碼) money since he was still helping out at his friend’s mahjong stall as well as working as chip stacker in Macau.

33.D1 was shown copies of checks that were deposited into or issued out of D1’s Bank of China account. D1 explained that they were either money that was deposited into his account by someone who lost money gambling in Macau for D1 to transfer to the winner, or money that D1 had won or lost in gambling in mahjong.

34.D1 explained that because he played mahjong and Dou Di Zhu, a lot of the money that went in and out of the account were his winnings and losses. Also, he had friends who gambled in Macau and since they were his friends, D1 would pay out money for them through his own account, that was why there had been so many transactions in relation to this account [218].

Unit B, 23/F, Block 4, City Garden

35.D1 was then asked about this unit 23B at transcripts item 303. D1 agreed that in 2006 he himself operated an illegal pai gou (牌九) and mahjong stall at this unit [Item 304]. D1 explained at item 306 that it was D1’s friend who operated the unit and D1 just helped out by bringing friends from mainland China to go up there to play mahjong. D1 also said that he himself is very fond of gambling and so the person who operated unit 23B would call D1 up to play mahjong when there were clients up there.

36.D1 said he did not need to put up any money for Unit 23B, D1 just needed to bring any friends who want to play mahjong up to the unit. Some of the clients would tip D1 if they won.

37.D1 was reminded that in his 1^st video recorded interview he said it was he himself who operated the pai gou (牌九) and mahjong stall. D1 explained that it was his friend who rented the place and asked D1 to help out. The friend just told D1 to bring clients up to the unit if D1 had any so that they could gamble together, since D1 liked to gamble so much. D1 agreed and he would from time to time bring people who came from Macau up to the unit to play mahjong and Dou Di Zhu.

38.Between items 311 and 314, D1 specifically agreed that he had made a profit of over $5 million in the 2 years that Unit B, 23/F of City Garden was in operation.

39.D1 then explained that he had lost all the money in gambling in mainland China and Macau [Items 315-318].

40.At item 322, D1 confirmed what he had said in his 1^st video recorded interview, that in 2008, Flat A, 18/F, Block 1 of City Garden was rented at $30,000 per month for illegal gambling establishment for mahjong and Dou Di Zhu. D1 elaborated by saying that it was his friend Mr. Hung who rented the unit and asked D1 to go up to the unit to play Dou Di Zhu since D1 was so good at it. Whatever D1 won he could keep and if D1 lost he did not have to pay immediately. D1 therefore would frequently bring friends up to the unit to play Dou Di Zhu.

41.At item 323, D1 insisted that it was Mr. Hung who rented the unit and that D1 only from time to time assisted him because D1 had relatively more friends and so Hung would ask D1 to go up to gamble in Dou Di Zhu together all the time.

42.When asked about what D1 said earlier about this unit being run for 3 months, that in those 3 months he had made a profit of $2 to $3 million and where the money had gone, D1 said that this $2 to $3 million was given to his wife to purchase the unit in Wo Fu Centre [Item 326].

43.When asked to confirm whether D1 meant that the money D1’s wife used to buy the Wo Fu Centre premises at Unit B, 2/F, Block 1 was bought with the profits that D1 obtained from operating the illegal mahjong gambling establishment, D1 refused to do so. D1 said it was $3 million that D1 had won playing Dou Di Zhu which was given to his wife to buy the Wo Fu Centre unit. D1 denied that he had operated the gambling establishment, repeated that it was money he had won by gambling in Dou Di Zhu that was used to buy the Wo Fu Centre unit [328-330].

44.D1 further overturned what he had said in his 1^st video recorded interview about himself renting Flat B, 23/F, Block 4 of City Garden for $26,000 to operate a pai gou 牌九and mahjong gambling stall (賭檔). D1 said it was his friend who had rented the premises, and because D1 had more mainlander clients, his friend told him to bring the clients up whenever he can. If they won, a bit of money will be given to D1 as tips. All that D1 did was to bring friends up to play [Items 351-358].

45.D1 also overturned what he said in his 1^st video recorded interview about renting Flat A, 18/F, Block 10 of City Garden in his own name for $30,000 per month to use as mahjong and Dou Di Zhu gambling place. D1 said it was his friend who rented the place. At that time D1 had relatively more mainlander clients and Macau was not that convenient to go to, and since D1’s friend knew D1 had lots of clients, so the friend said to D1 that since D1 liked to Dou Di Zhu so much, D1 should go up to the unit to play, and that if there were mainlander clients, D1 should go up together to play Dou Di Zhu.

46.D1 then explained that because the sums involved in the Dou Di Zhu was rather large and since it was D1 who brought the mainlander clients up to play, and since those clients did not have Hong Kong bank accounts, D1 would take deposits into his own account and then either take out cash to give to the clients to gamble in Hong Kong or if the clients had to settle gambling debts with other clients, D1 would do the transfers for them.

D1’s 4^th video recorded interview

47.D1 explained that Flat A, 18/F, Block 10, City Garden operated between around May to August 2008 and stopped when Police went up and raided the place and his friend Hung Gar Cheung was arrested and charged and eventually fined for operating a gambling establishment.

48.D1 elaborated that his friend would call him up to play mahjong or Dou Di Zhu if they did not have enough players.

49.D1 was then asked about the Wo Fu Centre unit that he said was bought with money he won in gambling. D1 explained that he bought the premises because his kids were growing up and since they frequently had mainlander friends visiting, they decided to buy the unit. They however lived there for just 1 month and the place was then rented out to a friend Mr. Choi.

HSB account 292-1-95526-888 and 001 (charge 2 and 5)

50.D1 agreed that the account was opened in April 1998. D1 declined to view the individual account statements for the period January 2005 to April 2009. D1 said that this account was for his mortgage payment, credit card payments, utility bills, and perhaps once or twice used for winnings and losses for his mahjong gambling.

D1’s 5^th video recorded interview

51.D1 was asked about his chip stacking (疊碼) activities in Macau as well as documents relating to D1’s wife’s 2 Bank of China accounts in this interview. D1 explained how he would stack chips. He was not able to recall which particular deposits he had made into his wife’s account over the years. His deposits to his wife were not fixed and were in irregular sums. It depended on his gambling. If he won, he would give more, if not then less.

D1’s 6^th video recorded interview

52.D1 was further interviewed about his chip stacking activities and persons involved in his work in Macau. D1 exercised his right to silence and declined to answer most questions.

53.D1 was then asked about his wife’s job but D1 was not clear about any details.

54.D1 denied that he had between 1999 and 2006 operated illegal gambling establishments, or assisted anyone to do so [102-104].

55.D1 was then interview about how the clients he brought to gamble would tip him. D1 said they would tip him only if they won. D1 did not need to compensate them if they lost.

56.In relation to Flat 2B of Wo Fu Centre, D1 said that there was no requirement to pay any commission for gamblers playing there. According to D1, between 1999 and 2009, he had not brought any friends or other people to play mahjong or Dou Di Zhu there.

57.D1 also stated that even when he gambled in mahjong or Dou Di Zhu with his friends, there was no need to take any commission.

58.In relation to Flat 2B of Wo Fu Centre, D1 said that he would only very rarely had friends up there to play mahjong or Dou Di Zhu, perhaps once a month. Those would be very familiar friends. Some were from mainland China and they would go up to the place before going to Macau and if they had nothing to do then they may play some Dou Di Zhu [Item 210].

59.When D1 was asked what he did with the money that he had won and the money that clients had tipped him between 1993 and 2009, D1 said that he would sometimes deposit the money into his Bank of China account after winning. He did not use the HSB account to do so [Item 220].

60.It was then pointed out to D1 that he had in his earlier video recorded interview said that the HSB account also took in money from his winnings. D1 explained that it was very few times that the HSB account was used and so he could not recall clearly [Item 226].

D1’s case

61.D1 fully understood his rights and elected to give evidence.

62.It is D1’s evidence that he is a person who loves gambling. He would gamble 3-4 times or more per week at his friend’s home as well as clubs where people from his same clan would gather. D1 would usually start gambling from 4-5pm until the next morning when he would go home to sleep. D1 frankly disclosed in examination-in-chief that he had been convicted of illegal gambling 3 times before in 1992, 1996 and 2008 when he was fined up to $750.

63.In relation to City Garden 23B, D1 said it was his friend Sze Wing Kei’s home and he gambled there frequently. Sze would call D1 from time to time and ask D1 if he was free to play, usually when they are short of a player to start a proper game of mahjong or Dou Di Zhu. Sometimes D1 would bring his own friends there to gamble, friends who are from D1’s own clan of Fujianese.

64.The gambling started in around mid-2006 and went on until March or April 2008 when Police raided the premises. Sze Wing Kei was one of the 10 odd people arrested on that day and Sze was charged for managing an illegal gambling establishment. According to D1, Sze pleaded guilty and was fined. D1 himself was also arrested for gambling and this was his 2008 conviction mentioned earlier.

65.According to D1, when he gambled with his friends, the loser would usually write down the account number of the winner and then deposit money into the winner’s account within a few days. If the sum involved was small, they would be settled in cash.

66.In relation to gambling in Dou Di Zhu, if they were playing small, the gambling would be around $80,000 to $100,000. If they were playing big, the stakes would be over $1 million. In relation to mahjong, the turnover would usually be between $100,000 and $300,000 and would not go as high as $1 million like for Dou Di Zhu.

67.It is D1’s evidence that his friends who gambled were in business and had lots of money. There was a Lin Tsz Fung (林子峰) who owns a shoe factory and have lots of shops selling shoes in Hong Kong. There were no bad gambling debts between the gamblers.

68.There were occasions when friends of D1 would come to Hong Kong from mainland China to gamble. Their winnings and losses will be sent through remittance agents (匯款代理) to D1’s bank account in Hong Kong. The money could either be for D1 if he himself had won, or the money could be for D1 to forward to other friends of his who had gambled with the losing party but not familiar with them, in which case, D1 would hand over the money to the winning party on behalf of the losing party. In fact, if D1 could manage, he would pay out from his account to the winning party in Hong Kong first and then wait for the mainland China friend to remit the money into his account.

69.Since D1 gambled at night and slept in the day time and by the time he woke up the banks would be closed, D1 would sometimes ask his wife to conduct transfers for him. D1 would tell him wife how much to transfer to whom. The money could sometimes be transferred out from his wife’s account because D1 would from time to time give checks to his wife to deposit into her account. Therefore, D1 would sometimes ask his wife to settle his gambling debts using her account.

City Garden Block 10

70.D1 admitted that he also went to gamble at another unit, 17D in Block 10 of City Garden, which was the home of his friend 洪家祥, Ah Bee. There the mode of gambling was basically the same as with City Garden unit 23B mentioned earlier. D1 would bring along friends and Ah Bee would call D1 if they are short of players. Later on in his evidence, D1 corrected his evidence and said that it was in fact unit 18A that he had gambled at.

71.Just as before, D1 would be responsible for the settling of the gambling sums for his friends by way of money being deposited into D1’s account first and then for D1 to hand over to the winners.

72.The gambling at Flat D, 17/F (or 18A) lasted about 2 to 3 months and stopped when Police raided the premises. Although D1 was present on that day, he was not one of the persons being arrested. Ah Bee on the other hand was arrested for operating a gambling establishment.

73.Whether the gambling was in Flat D, 17/F, or 18A Block 10 or 23B Block 4, when D1 went to gamble, if the stakes were too high, because D1’s friends were rich and could afford it, D1 would partner with a friend to play. D1 said he is very good at Dou Di Zhu.

74.Certain transfers were shown to D1 and he explained how they were money deposited by his mainland China friend who had lost money gambling in Hong Kong and how he had transferred the money over to the winning person or someone designated by the winning person. D1 also explained how some sums were money he had won while partnering with his friend in the gambling.

75.D1 explained that the money he used to make the down payment for the Wo Fu Centre unit was from his gambling and that which can be seen in the bank transfers dated 26^th May 2008. D1 also explained how money were sent via remittance agents in mainland China to his Hong Kong bank account for the settling of gambling debts.

76.D1 explained in details why he and his family chose not to live in the newly bought flat at Flat 2B, Block 1, Wo Fu Centre which was bought with money from his winnings. D1 did however go up to the unit after it had been rented out to an Ah Ching and he did play Dou Di Zhu there.

77.In fact, on the night just before D1’s arrest, D1 had been gambling there with Ah Ching and 3 of his friends from mainland China. 3 of them played while the rest watched. D1 gambled up to around 08:30am and then left and was arrested when he got home at around 09:05am.

Wife borrowing money for D1

78.D1 also told us in his evidence how his wife had borrowed money for him when he had lost money at gambling and was not able to settle the debt. D1 referred to one specific occasion when he lost $1 million when his family went back to their place of origin (鄉下) to visit. D1 had to ask his wife to seek the assistance of her elder sister to borrow RMB$1 million from one Chan Mian Mian (陳綿綿) to settle the debt. D1’s wife and the elder sister would later give evidence on this and other incidents of borrowing.

79.During cross-examination, D1 further explained about his gambling habit. It is his evidence that he gambled basically everyday starting from 4 to 5 pm until 8 to 9am the following day, day after day, year after year.

80.When D1 gambled in Hong Kong, it is not fixed whether he would go alone or would bring friends along. On average, he would bring friends to gamble about 2 to 3 times per week.

81.When he did bring friends to gamble, they would sometimes pay their winnings or losses through D1’s bank account. Say, if his friend lost money, the friend would deposit money into D1’s account and then for D1 to hand over that money to the person who had won that money.

82.D1 also confirmed that sometimes his friends from mainland China would deposit money into D1’s account before coming to Hong Kong so that they would have money to gamble when they are in Hong Kong, or for when they want to go to Macau to gamble.

83.D1 confirmed that sometimes if his friends from China had lost money gambling in Hong Kong, they would go back to China first and then pay the money they lost to the winner through D1’s bank account in Hong Kong. It is as D1 had said in his video recorded interview, that kind of money would mostly go through D1’s Bank of China savings account.

84.It is D1’s evidence that he cannot totally remove the possibility of some of that kind of money going through his other bank accounts other than the Bank of China account.

85.D1 confirmed that when he gambled there was no system of commission taking (抽水). It is his evidence that he did not stand to gain any benefits at all by bringing his friends to gamble at the different gambling places at his friends’ home. D1 would bring his friends to his other friends’ place to gamble if they need people and they called him and if it so happened that D1 had some friends with him, then they would go up to gamble together.

86.The friends that D1 brought to gamble would tip D1 if they won, which for D1’s clansman would be referred to as ‘Lai See’. D1 would himself give out such tips if he won. Tipping is however not compulsory. In answer to the court’s question, D1 explained that the tips would be about $3,000 to $5,000, which would usually be given in cash and not deposited into D1’s bank account.

87.According to D1, his friends would usually bring around a few $10,000 cash to gamble and only if the winnings or losses go up to a few hundred thousand would they need to use D1’s bank account to settle. Those who lost will deposit money into D1’s account and then D1 will either take out in cash or make transfers to the winning party. D1 did not ask for, nor was he given, any rewards or reimbursement for helping his friends out like that.

88.As mentioned in his evidence before, D1 repeated that he would from time to time ask his wife to help him transfer the moneys. It is not fixed how often his wife would help him out like that. On average, it would be one to two days per week. D1 did not instruct her as to which of her accounts to use and D1’s wife would use her own Bank of China savings account to do the transfer.

89.It is D1’s evidence that he met his wife when playing mahjong at a friend’s place. His wife is a frequent gambler and always plays mahjong. D1 said his wife was not too clear about D1’s gambling activities, but she knew that D1 worked as a chip stacker in Macau. She knew D1 was gambling but would not necessarily know where D1 was gambling. She also knew that D1 would bring friends to gamble at other friends’ places, and that D1’s gambling friends had transferred money through D1’s bank account.

90.D1 agreed that his wife knew clearly about D1’s gambling activities and she had helped him to borrow money to cover his gambling debts. In addition to the one time mentioned earlier, D1 had also through his wife borrowed money from Chan Mian Mian, also at the interest rate of 1 cent per $1 million, on other occasions. The borrowing however was not often since D1 would win in his gambling most of the time, because he was very good at Dou Di Zhu and would win most of the time when he played.

91.D1 was then asked about his chip stacking situation in Macau. It is his evidence that although he was paid a wage for this job, there was no fixed time or method of payment into D1’s account. The amount of his wage was also not fixed and no formal wage slips were issued to D1, nor did D1 sign any receipts in acknowledgement.

92.D1 would nonetheless be aware of his share of income by keeping track of the amount of chips he had converted for his gambling clients in Macau. D1 would also be tipped by his Macau clients for his chip stacking work but they were usually in cash and D1 did not keep track of the tips amount.

93.D1 was then asked about how Jimei Vessel Co Ltd had made deposits into D1’s HSB account as his chip stacking income. D1 relied on this evidence to correct what he had said in his video recorded interview about how this HSB account was mainly for payment of various bills and would at most have once or twice been used for gambling related money. D1 claimed that the correct version was that this HSB account was also used in relation to 疊碼money as well as money going in and out relating to D1’s gambling.

94.D1 then went on to explain that when he admitted in his first video recorded interview that he himself rented City Garden Block 4 Unit 23B to open pai gou ( 牌九) and mahjong gambling stall (賭檔) he actually made a mistake. D1 said that when he attended the 1^st video recorded interview, he had not slept the previous night and was tired and confused and so had made the mistakes. All D1 wanted to do was to explain to the Police officer that he did not launder money and that he had won the money through gambling. D1 just wanted to leave quickly.

95.D1 was then asked about what he meant in his 3^rd video recorded interview in relation to City Garden Block 4, 23B, when D1 said it was opened by his friend and that he was just ‘helping out’. D1 explained in court that by ‘helping out’ he meant that he brought friends up there to play. D1 also said in court that when he said in his video recorded interview that a Mr. Hung rented the place, he had made a mistake. He made the same mistake in his 6^th video recorded interview as well.

96.In relation to what D1 said in his 1^st video recorded interview about how he had partnered with a friend to run the gambling place at 18A of Block 10 of City Garden, D1 explained in court that by partnering he meant he partnered the friend in gambling, not in operating the gambling place.

97.As to the $2 to $3 million profits, D1 explained that he meant he had won the $2 to $3 million in gambling, and that he had misunderstood the Police officer at that time, thinking the officer was asking him about the winnings and the losses.

98.D1 also explained that in the Fujian dialect, ‘賺’ actually meant ‘贏’, so in saying that he had made profits of $2 to $3 million, D1 actually meant to say he had won the money through gambling.

99.In relation to what D1 said in his 3^rd video recorded interview about how he would from time to time assist a Mr. Hung, the person who D1 said rented the place, because he had more friends and Hung would ask D1 to go up there to Dou Di Zhu, D1 explained in court that by ‘assist’ he meant Hung would call D1 to ask if D1 had clients and if D1 did have clients he would then bring them up there to gamble.

100.D1 was then asked to explain why in his 1^st video recorded interview D1 had said that 2B, block 1, Wo Fu Centre was also used as a gambling stall (賭檔). D1 denied he said that and disagreed when it was pointed out to him that what he meant was that after the 18A, Block 10 City Garden premises had been closed, they moved on to Unit 2B, Wo Fu Centre to continue operating an illegal gambling establishment. D1 in cross-examination explained that his friends would go up there to play only very rarely and only for entertainment purpose.

D2’s evidence

101.D2 fully understood her rights and elected to give evidence.

102.According to D2, she is an avid player of mahjong and would play it 3 to 4 days per week. She would play with her Fujian friends at various places including restaurants, private clubs (聯誼會) and friends’ home. Just as D1, D2 also named a number of names who were her playing partners. Some of those names were later called as defence witnesses.

103.When D2 first started to play and the stakes were not high, the players would settle the gambling debts in cash. Later on when the stakes were higher, they began to write down account numbers for each other and would make deposits and withdrawals according to who won and who lost. The stakes ranged from a few $10,000 to $100,000.

104.D2 explained that, say, if she lost, she would deposit money into winner’s account and then make a phone call to notify the winner for him/her to check. If D2 herself won, it would be the other way round.

105.When D2 played mahjong at the various places, there might be situations when she would be playing against people whom she was not familiar with, perhaps friends of friends. Should that be the case, the settling of debts between her and the unfamiliar player would be through the mutual friend.

106.D2 usually gambled from 4 to 5pm until 3am the next day. If she had won, she would deposit the cash at cash depositing machines into her account, right after finished playing.

107.According to D2, she knew that D1 worked as a chip stacker in Macau. She also knew that D1 would gamble in Hong Kong and that he likes playing mahjong and Dou Di Zhu. D2 knew that D1 would play at City Garden in North Point, sometimes in hotels, sometimes at private clubs (聯誼會) and sometimes at other people’s home. D1 would gamble from 4 to 5 pm until the following day.

108.D2 knew that her husband gambled with high stakes, and heard from him that they would go up to over $1 million.

109.It is D2’s evidence that over the years, she had been to visit her husband to see him gamble although she could no longer remember how times. When she did visit him, she had seen him gambling with other people, people whom D2 herself knew, as well as with people whom she did not know.

110.In addition to mahjong and Dou Di Zhu, D2 also knew that her husband gambled in pai gou (牌九) and soccer. As far as she knew, her husband had lost $1 to $2 million in soccer gambling in one particular year. D2 remembered specifically that after her husband had lost, he told her to deposit money into the bank account of one Huang Li Hua (黃麗華). The reason why the money was deposited to Huang was because D1 was actually gambling through the online account of Huang’s husband and it was Huang’s husband who told D1 and then for D1 to tell D2 that the money should be deposited into Huang’s account.

23B, Block 4, City Garden

111.It is D2’s evidence that she had been to this unit 23B, but not very often. She knew that her husband would go there to play mahjong and Dou Di Zhu. She did not know whose place it was. She visited D1 there for only a few times. According to D2, when she was there she saw her husband gambling but he never mentioned that he was operating an illegal gambling establishment. D2 also heard somewhere that the place was run by a friend of his husband by the nickname of ‘Ah Kei’.

18A, Block 10, City Garden

112.D2 said she had been there just 2 times and both times were to look for her husband, whom she found gambling there. Again, her husband never told her that he was operating this place as a gambling establishment. As far as D2 was aware, it was a friend ‘Ah Bee’’s place.

2B, Block 1, Wo Fu Centre

113.D2 confirmed that this unit was bought in her name in 2008. According to D2, it was bought with money that her husband had won in gambling. The reason for buying this flat was because their children were growing up and they needed a bigger place, and also because she wanted to send her daughter to a school in the North Point area and so they needed a Hong Kong address.

114.D2 said they had changed the wall paper, the air-conditioners and then they moved to live there. The whole family moved to live there for about 1 odd month until September when school started. Since they did not have enough time to apply for the school they had wanted to, they moved back to where they were staying in Tseung Kwan O.

115.The unit was then left vacant until about 1 year later when it was rented out to her husband’s friend Choi Chuk Ching in July 2009 for $35,000 per month.

116.In relation to the 2 bank accounts in the 2 charges that D2 faces, the ChiYu Bank account was opened a long time ago while the Bank of China account was opened in July 2008 when the 2B Wo Fu Centre property was purchased. This Bank of China account was used for mortgage payments.

117.Both accounts were used by D2 for settling gambling winnings and losses, as well as when D2 borrowed money from her elder sister’s relative, Chan Mian Mian. Also, money was transferred out from either of the 2 accounts to other people when D1 lost money in soccer gambling.

118.According to D2, sometimes when D1 won money at gambling he would also ask his friends to deposit money into either of D2’s bank accounts.

119.D2 then proceeded to explain how she would give the account numbers to her elder sister for her to arrange for remittance agents in mainland China to remit money into D2’s accounts. D2 referred to the time when her husband gambled and lost about $1 million odd when they were in mainland China. D2 had to borrow money to cover D1’s loss.

120.D2 asked her elder sister to help and together they went to meet with this Chan Mian Mian and borrowed RMB$1 million from her in the name of her elder sister. The repayment would be made through either of D2’s bank accounts by D2 remitting money to Chan Mian Mian via remittance agents.

121.D2 was then referred to a few deposits and transfers and explained how they were settling of gambling debts with other people, as well as helping her husband to take deposits and make withdrawals in relation to D1’s gambling, and money that was remitted from mainland China that was borrowed from Chan Mian Mian.

The day of D2’s arrest

122.It is D2’s evidence that on the day of her arrest, after she was arrested and the Police wanted to search the 2B Wo Fu Centre unit, D2 said she had told the Police that the place was rented out to a Mr. Choi and so she had to call Mr. Choi. D2 was allowed to make the call and Choi told her that he was not home and told D2 just to bring the Police up to the unit herself.

123.It is D2’s evidence that when D1 lost in gambling and was unable to repay the gambling debts, D2 would very often ask her elder sister to borrow money from Chan Mian Mian. D2 would call her sister and the sister would then go to look for Chan and then will have the money transferred to her the following day.

Home expenses

124.According to D2, her husband did not give her fixed home expenses, and did not have a fixed date to pay her, although D1 had always paid her every month. The amount could range from a few thousand to a few hundred thousand dollars, if he had won in gambling.

125.In cross-examination, D2 confirmed that since 2004, she had not held a proper job, did not go to work to earn a living and did not do any businesses with an income. Her husband was the same, apart from chip stacking, he had no job and he gambled even more frequently than D2 did.

126.It is D2’s evidence that their living is supported by D1’s chip stacking income which was enough to maintain their 3 children and 1 helper. D2 said that she knew that the clients of D1 gambled at very high stakes and volume and so even though D1 did not go to Macau very often, the income was still considerable.

127.It was then pointed out to D2 that she had said that she had for many times borrowed money on behalf of D1 through D2’s elder sister from Chan Mian Mian, and that from D2’s own documents, she had borrowed over $5 million from Chan. It is D2’s evidence that as soon as they won back some money they would repay Chan. When pressed, D2 agreed that they would rely on gambling winnings and D1’s wages from chip stacking to repay Chan Mian Mian.

128.D2 said it would usually take about 1 to 2 months to repay Chan Mian Mian for money borrowed.

129.It is D2’s evidence that she did not know the places that D1 went to gamble were gambling establishments, nor did she know who was running those gambling establishments. The money given to her by D1 were either gambling debts between third parties or home expenses from D1 to her, which would fluctuate depending on D1’s luck in gambling. D2 and her husband did not purchase unit 2B Wo Fu Centre to be used as a gambling establishment.

DW3Lin Tsz Fung

130.Mr. Lin is the boss of a shoe manufacturing and retail business. He had known D1 since early 1990s and had always known D2 as D1’s wife.

131.Mr. Lin had been gambling with D1 since he knew D1. They played mahjong and Dou Di Zhu. In relation to the gambling debts, if the amount was small they would be done in cash, if the amount was large, then he will transfer the money through bank accounts.

132.When Mr. Lin went gambling, he would usually have about $100,000 to $200,000 cash on him. Anything above that were settled via bank accounts.

133.Evidence was then led to show that Mr. Lin’s various personal and company accounts had had dealings with both D1 and D2’s bank accounts. It is Mr. Lin’s evidence that all those dealings were in relation to his gambling with D1. Mr. Lin did not gamble with D2.

134.Mr. Lin would sometimes gamble with D1 at a residential flat in City Garden, sometimes in City Garden Hotel, sometimes in restaurants. Mr. Lin then mentioned the nicknames of a few gambling partners with whom he had often gambled.

135.Each night’s gambling stakes would be around a few hundred thousand dollars. If Mr. Lin had enough cash on him then he will just settle in cash. If the amount was too large, he would sometimes ask D1 to collect for him.

136.The reason why Mr. Lin would ask D1 to do that was because Mr. Lin was also a client of D1’s chip stacking job in Macau. He was therefore familiar with D1 and trusted him. When Mr. Lin gambled in Hong Kong, if he was gambling with people whom he was familiar with then he will do the settling himself, but if he gambled with people not so familiar with, he would ask D1 to collect or pay first on his behalf, and then he would pay D1 back.

137.It is Mr. Lin’s evidence that wherever he had gambled, there was no system of commission taking.

138.Mr. Lin recalled he had been to 23B, Block 4, City Garden for about 10 odd times. He had seen D1 up there and he also had went up there together with D1 before. When they were up there, Mr. Lin had never seen D1 greet customers and it is his evidence that D1 did not operate the place. Mr. Lin however confirmed later on that it was just his personal feeling.

139.As for Block 10, City Garden, Mr. Lin recalled that he had been there but could no longer remember which unit. He had been there 2 to 3 times. In those 2 to 3 times, he had seen D1 there just once when D1 was playing Dou Di Zhu.

140.Apart from gambling with D1, Mr. Lin also partnered with D1 to gamble in Dou Di Zhu, because D1 was really good at it. Mr. Lin was then referred to a bank transfer dated 26^th May 2008 and he explained how $1 million was his share of one third in partnering with D1 to Dou Di Zhu.

141.In cross-examination, Mr. Lin gave evidence as to how he had brought a friend nicknamed Lin Jiu (林九) to the unit in City Garden to meet up with friends. According to Mr. Lin, he and his friend had tea and then he left after about 1 hour.

142.Mr. Lin said that after gambling, the one who won most would take out some money to have tea, a few hundred dollars, sometimes $1,000 to $2,000. Mr. Lin said this was a custom of Fujianese people, it was an act so that the luck (彩氣) would continue the next time. The money would just be thrown down on the table without giving to anyone specifically. Mr. Lin however pointed out that not all people would pay after they won.

143.Mr. Lin further explained how the gambling at those places worked. If the gamblers were not familiar with each other, they would have to tell who is their guarantor (擔保人), who will be someone familiar to either the other gamblers or the guarantor of those other gamblers. The guarantor would not need to be present as long as he confirmed that he will be responsible for the losses of the person citing him as guarantor.

144.In Mr. Lin’s case, if D1 was not present when he went up to gamble and there was someone unfamiliar there, Mr. Lin would call D1 and tell him that he was going to gamble with so and so and ask D1 who the guarantor of that person was. Sometimes, Mr. Lin himself would be the guarantor of someone.

145.It is Mr. Lin’s evidence that D1 himself was not one of the guarantors, he would just ask the person who was gambling against Mr. Lin who his guarantor was.

146.After a game, if Mr. Lin won, he would ask D1 to collect money on his behalf, if he lost, Mr. Lin will ask D1 to pay on his behalf first and then reimburse D1 later. It is Mr. Lin’s evidence that wherever he went to gamble in Hong Kong, he would ask D1 to help him to do this.

147.Lastly, it is Mr. Lin’s evidence that he had been to Unit 2B, Block 1, Wo Fu Centre a few times. He however did not play mahjong there. The last time he went there was when he went up to meet up with D1 so they could go to Macau to gamble together.

DW4 Hung Ting Chiu

148.Mr. Hung is friend of D1 and D2 and had known them for many years. Mr. Hung resided mainly in Xiamen. When Mr. Hung came to Hong Kong, he would play mahjong with D1 and occasionally played Dou Di Zhu. The stakes were usually around a few hundred thousand dollars, which would be settled by cash that Mr. Hung would carry on his person when gambling.

149.On the occasions when Mr. Hung lost more than that and did not have enough cash, he would return to Xiamen first and then use remittance agents to remit the money to D1’s account. When Mr. Hung was the winning party instead, he would ask either D1 or one Wong Tin Chuk to collect for him and then to pay on to him on another day, or when Mr. Hung returned to Hong Kong.

150.Mr. Hung recalled that he usually gambled at the home of the said Wong Tin Chuk in Wo Fu Centre, as well as a residential home in City Garden and hotels.

151.Mr. Hung also talked about how he had once brought someone along to gamble and that person had lost $1.9 million. Since no one knew that person when he gambled Mr. Hung had to pay on his behalf to the others. Mr. Hung used the term ‘認頭’ (being responsible), saying that because it was he who brought his friend to gamble, so he had to be responsible for his losses. This corroborated with the evidence of defence witness Mr. Lin, except he would refer to the ‘認頭’ person as the guarantor. In fact, later on in cross-examination, Mr. Hung adopted the term guarantor as well.

152.Mr. Hung recalled that the money was paid into D1’s account. He was however not sure to whom his friend had lost, just that the total amount lost was $1.98 million. Mr. Hung deposited the money into D1’s account because D1 was the only person he knew, and so he gave the total sum for D1 to distribute. According to Mr. Hung, this method of paying money for D1 to distribute happened frequently. He had chosen D1 because in their gang of brothers, everyone said D1 had good credibility, that if he owed money to other people he will always repay every single cent.

153.In cross-examination, Mr. Hung confirmed that he would make phone call to either Ah Chuk or D1 if he had nothing to do and wanted to gamble. Then Ah Chuk or D1 would respond and tell Mr. Hung if there were enough ‘legs’ (players) to start a game. They would also tell Mr. Hung where to go to gamble, either Ah Chuk or D1 would tell Mr. Hung that information.

154.In relation to his friend who had lost the $1.98 million and Mr. Hung had remitted the money to D1 for him to distribute, Mr. Hung confirmed that D1 did not ask him for any reward or remuneration.

155.Mr. Hung said that if when he gambled and D1 was not present, then he would ask the said Ah Chuk to do the settling for him.

156.Unlike Mr. Lin, Mr. Hung would not leave any money behind even if he had won at gambling. He had not seen others do that either.

DW5 Hung Kim Er (洪金娥)

157.Ms. Hung resided at a flat in Wo Fu Centre. She did not know D1 or D2 nor did she gamble with them.

158.The defendants called Ms. Hung to explain why there were transfers between her account and D1’s bank account. Ms. Hung explained that it was in fact her husband and younger brother who had gambled and lost money in Hong Kong and had borrowed money from her. She allowed her account to be used to receive money from remittance agents and then transferred to D1 to settle the gambling debts they had incurred.

159.Ms. Hung was not cross-examined.

DW6 Or Mei Hong 柯美紅

160.Ms. Or is the elder sister of D2. She recalled the summer vacation of 2006 when D2 went back to mainland China with her family for the holidays. D1 went gambling and lost $1 million odd. D2 asked Ms. Or to help borrow money to repay. It so happened that Ms. Or knew a Chan Mian Mian who had money to lend out and so Ms. Or borrowed the money for her sister as the guarantor. Interest was at the rate of 1 cent per $1 million, which was $10,000 per month. That money was repaid within half a month.

161.Ms. Or also lent her own money to D2 on other occasions in the sum of a few tens of thousand of dollars, without charging interest. Ms. Or transferred the money via remittance agents to D2’s account in Hong Kong.

162.After that first time that D2 had asked Ms. Or to borrow from Chan Mian Mian, there were over 10 odd occasions that D1 and D2 had asked Ms. Or to further borrow from Chan. The amount they asked for was not fixed, but always at the interest rate of 1 cent per million. There was no time limit to repay, they just had to pay interest when the time came.

163.Ms. Or said that D2 had repaid after each borrowing and then would borrow again. In relation to the money that D2 repaid Chan Mian Mian, D2 would remit the money to Ms. Or for her to repay Chan.

DW7 Maria Marcelo

164.Ms. Marcelo was the secretary of a Lam Ying Tat and dealt with Mr. Lam’s personal sundry expenses, private expenses, family expenses and credit card accounts. According to documents, Ms. Marcelo’s account had had transactions with D1’s account. Ms. Marcelo explained that the money were either transferred to D1’s account under Mr. Lam’s instructions or she was told by Mr. Lam that money was deposited into her account by D1. Ms. Marcelo herself did not have any dealings at all with D1, nor did she ask her boss why her account was being used for those transactions.

DW8 Wong Tin Chuk

165.Mr. Wong is a friend of D1 and had known him for 20 years. They gambled together in mahjong and Dou Di Zhu, with stakes of around a few hundred thousand per night.

166.Mr. Wong would usually bring about $100,000 to $200,000 cash to gamble. If enough, then will settle in cash, if not, will settle after a few days, sometimes by way of bank transfers.

167.Mr. Wong however did not use his own accounts to do any of the settling. He used either his wife’s account or his wife’s elder sister account to do so.

168.Mr. Wong would sometimes gamble in hotel, or friend’s home or even his own home.

169.Mr. Wong confirmed that he was arrested in 2008 for illegal gambling which took place at 17D, Block 10, City Garden. Another person named Hung Gar Cheung was arrested for being keeper of the gambling place. Mr. Wong pleaded guilty to illegal gambling and was fined. As far as he knew, Hung also pleaded guilty and was also fined.

170.It is Mr. Wong’s evidence that on the day of the arrest, D1 was also present but was not arrested because he did not gamble. The defence would rely on this evidence to show that D1 was not operating or assisting in the operation of the unit as a gambling establishment.

171.Mr. Wong explained in cross-examination that he used his wife’s and his wife’s sister’s account to settle the gambling debts because he did not like to go to the bank to do the transfers. That was why he told his wife to do it for him instead. It is Mr. Wong’s evidence that he did not need to repay his wife’s sister after the transfers because he had money deposited with her. He would sometimes deposit money into her account by way of cash, sometimes by way of checks.

172.It is Mr. Wong’s evidence that if D1’s friends lost in gambling, D1 will ask his friend for the money and then transfer the money to Mr. Wong, either into Mr. Wong’s wife’s account or her sister’s account, or the sister’s husband’s account.

173.Mr. Wong agreed that there might be situations when he felt like gambling and would call to see if there was enough ‘legs’ to gamble. He would call his clansman, which included D1.

174.Mr. Wong did not have the habit of leaving behind money on the table after gambling, he did not know if it was a custom of Fujianese people to do so or not. He had not seen other people doing that after gambling. Mr. Wong however had heard of people tipping someone after they won.

175.In relation to the place that Mr. Wong went gambling and where Hung Gar Cheung was arrested as the keeper, Mr. Wong said he did not have to pay anything to Hung to gamble there, that there was no system of commission taking and he had no idea why Hung was charged for being the keeper of a gambling establishment.

DW9 Chong Ching Ham

176.Mr. Chong is a friend of D1 and had known him for 10 years. They have gambling as their shared hobby.

177.Mr. Chong would gamble frequently at this private club (同鄉會) where his clansman would gather. They would all be Fujianese. Mr. Chong would sometimes gamble in hotels, restaurants or other people’s home. He would usually gamble in mahjong although he also knew how to  play Dou Di Zhu.

178.Mr. Chong was in fact the person who was in charge of the private club and for that he was charged with money laundering in the District Court Case of DCCC 1125 of 2011. Mr. Chong was acquitted after trial.

179.Mr. Chong remembered D1 gave evidence as a defence witness in that case and both his and D1’s evidence was accepted as true by the learned Judge. More specifically, it was accepted that the gambling was social gambling and that there was no taking of commission, and that Mr. Chong and D1 had used their respective bank accounts to settle various gambling debts incurred between the gambling parties.

180.Mr. Chong explained that when people who were not familiar with each other gambled against each other, they will use D1 and Mr. Chong’s account to settle their gambling debts. Say if D1’s friend won, Mr. Chong will pay the winning sum into D1’s account, and if Mr. Chong’s friend won, D1 will pay the winning sum into Mr. Chong’s account.

181.As for D2, it is Mr. Chong’s evidence that he had gambled directly with D2 and so there were dealings between their accounts.

DW10 Choi Chuk Ching

182.Mr. Choi came to settle in Hong Kong in 2002. He is friends with D1 and D2. Mr. Choi also gave evidence for Mr. Chong in his trial mentioned above.

183.Mr. Choi likes to gamble. Apart from gambling he did not have other dealings with D1.

184.In relation to unit 2B, Block 1, Wo Fu Centre, Mr. Choi said that when he saw that the unit was left vacant he suggested to rent it from D1. He entered into a verbal agreement with D2 and started renting the flat at $35,000 per month on 15^th July 2009. Mr. Choi would call up D2 each month on the 15^th and pay her the rental in cash.

185.After he started to rent the unit, Mr. Choi brought some Fujianese tea tables and mahjong tables and placed them inside the rooms. It is Mr. Choi’s evidence that each room had just one exhaust fan. He put the fans in because all his friends smoked.

186.Mr. Choi explained that he rented the unit because his friends from his clan all liked to gamble and the unit would allow them to have a place to stay and rest when they are in Hong Kong shopping. They would not have to pay Mr. Choi anything. Mr. Choi was able to support the place from his earnings as chips stacker in Macau.

187.Mr. Choi then recalled that one day in August 2009 D2 called him and said that she wanted to bring Police up to the flat. Mr. Choi remembered that he was outside at that time and since he did not have anything valuable in the flat, he just told D2 to go up to the flat herself with her own set of key.

188.It is Mr. Choi’s evidence that D1 had been to the flat once after he had rented the unit when Mr. Choi’s friend came to Hong Kong and they were missing one leg for playing Dou Di Zhu. Mr. Choi called D1 to join them and he did. They played from 5pm until 8am the next day and D1 was the winner, taking in about $90,000.

DW11 Sze Tak Tok

189.Mr. Sze is 65 and came to Hong Kong in 1957. He had known D2 for 10 odd years and been playing mahjong with her for as long. They would play 3 to 4 times a week. The stakes were around a few $10,000, sometimes more, sometimes less.

190.They would usually settle the gambling debts by way of cash, or if the figures were bigger, by way of check. It was pointed out that documents showed only 3 checks and Mr. Sze confirmed that they had dealt mostly in cash.

191.Mr. Sze was not cross-examined.

DW12 Hui Cheung Tai

192.Mr. Hui was another mahjong playing partner of D2. He confirmed that they would play at restaurants, private clubs, together with DW11 Mr. Sze. Again, they would play in cash and if not enough cash will settle by way of bank transfers. Bank records between 2005 and 2008 were shown and Mr. Hui confirmed there was twice he transferred to D2 and twice he received transfers from her. Mr. Hui confirmed that they were all mahjong money.

193.Mr. Hui was not cross-examined.

DW13 Chen Rong Chun

194.This was the defendants’ last witness.

195.Mr. Chen worked as a chip stacker in Jun Hao Hui (君豪會), Waldo Hotel (華都酒店) in Macau. D1 seeks to rely on his evidence to show that D1 really did work as chips stacker in Macau, and Mr. Chen was helping D1 by allowing him to use Mr. Chen’s brother-in-law’s  chips stacking account with Jun Hao Hui.

196.It is Mr. Chen’s evidence that D1 stacked chips for him as well as for D1 himself. D1 however did not have his own account with Jun Hao Hui. When D1 had clients, he would call up Mr. Chen and will use his brother-in-law’s account. Mr. Chen would eventually pay D1 what was due to him afterwards.

197.According to Mr. Chen, D1 would call him up for help on average 2 to 3 times per month. D1 would at least sign for $3 million worth of chips, which was the maximum amount. Mr. Chen estimated that on average D1 was making about $200,000 to $300,000 in chip stacking wages.

198.The chip stacking wages would be paid to D1 month by month. Sometimes D1 would go to Macau and Mr. Chen would pay him in cash. If it so happened that D1 owed him money, then will set off with D1.

199.Apart from cash, Mr. Chen would sometimes deposit the money into D1’s account.

200.Mr. Chen was not cross-examined.

Findings

201.It is for the prosecution to prove beyond reasonable doubt that D1 and D2 had dealt with the money in question in relation to each of the charges they face. In relation to D1, the prosecution has to prove that D1 knew the money that was deposited into his 3 bank accounts in each of the 3 charges represented, wholly or in part, directly or indirectly, proceeds of the indictable offence of operating or assisting in the operation of a gambling establishment.

202.In relation to D2, the prosecution has to prove what the facts were that were known to D2, and that those facts would cause a “common sense, right-thinking member of the community” to believe that the money that D2 had dealt with through her bank accounts represented, wholly or in part, directly or indirectly proceeds of the indictable offence of operating or assisting in the operation of a gambling establishment.

203.It was not disputed at trial that D1 and D2 had dealt with the moneys in the respective accounts and I do so find.

PW1

204.I find PW1 honest and reliable. I find that the settings in the Wo Fu Centre 2B unit was as he had described. I find that there were 3 different areas each with its own mahjong table with 4 chairs around each of the 4 tables. I find that next to each table on the floor was one set of mahjong. I find that in the hanging cabinet in one of the partition were over 10 decks of new playing cards as well as multiple packs of cigarettes of various brands.

205.I find that there were multiple exhaust fans inside the unit and at least 2 fans in each of the 3 areas.

206.I find that the evidence of PW1 corroborated the confession that D1 had made in his 1^st video recorded interview about how this unit 2B had also been used as a gambling establishment.

PW2

207.I find PW2 an honest witness. I find however that his evidence in relation to the settings of the Wo Fu Centre 2B unit unreliable. It is his own evidence that he no longer remembered with any certainty the settings in the flat. I find that PW1’s recollection of the flat is the correct version since PW1 was the person specifically tasked with searching the premises while PW2 was only the arresting and guarding officer of D2.

208.I find however that PW2 is telling the truth when he said that he had never heard D2 telling him that the premises in Wo Fu Centre was rented out to someone for $35,000. D2 was allowed to talk to her lawyer on the phone as far as PW2 was aware but he did not know the contents of their conversation.

D1

The video recorded interviews

209.I find that D1 had taken part in all the video recorded interviews voluntarily and he had given the answers that he gave voluntarily.

210.I find that D1 was telling the truth in his video recorded interview when he confessed that he had made gross profits of around $5 million when Unit 23B, Block 4 of City Garden was being run as an illegal gambling establishment for about 2 years, and profits of around $2 to $3 million dollars when Unit 18A, Block 10 of City Garden was being run as an illegal gambling establishment for about 2 to 3 months.

211.I find D1 telling the truth when he confessed that he made those profits by ‘taking commissions from other people’s winnings’.

212.D1 is, according to his and his witnesses’ evidence, an avid gambler and was more or less an expert in Dou Di Zhu. D1 is therefore definitely someone who is of considerable mental ability.

213.I reject D1’s attempted explanation as to why he confessed to the Police officer about his operation of the gambling establishments. D1 did not appear to be the least bit confused or tired in the video recorded interviews.

214.Furthermore, this was not the first time that D1 had crossed path with the law. It is his own evidence that he was arrested and had been convicted on 3 previous occasions for gambling. He would no doubt be aware of the possible consequences of whatever confessions he chooses to make in a cautioned interview. In fact, later on in the 5^th and 6^th video recorded interviews, D1 was fully aware of his right to silence and had exercised his right on a few occasions.

215.D1 had had ample opportunity to explain in his later video recorded interviews about his fatigue and his giving the wrong answer in the 1^st and 2^nd interview but he never did so. It was not until his examination-in-chief that we first heard about this purported explanation.

216.I find that I can place full weight on D1’s confession about how he had obtained profits of $5 million and $2 to $3 million from the operation of the 2 gambling establishments.

217.Although it was someone else and not D1 who had been charged with and convicted of operating the gambling establishments, it does not preclude D1 from having actually assisted in their operation. There could have been multiple reasons why D1 was not charged and there is no need to speculate.

218.The fact remains that D1, even knowing that he had never been so charged and that someone else had been convicted for managing the gambling establishment, had chosen to admit that he himself had assisted in the operation of the establishments and that he had made millions in profits from such assisting.

219.I agree with Mr. Wong, S.C.’s submission that illegal gambling itself is not an indictable offence in law and if the money dealt with by D1 were only winnings and losses between the gambling parties and nothing else, then it would not be possible for D1 to know that the money represented proceeds of an indictable offence because they would not be of an indictable offence. Only proceeds of the operation or assisting in the operation of a gambling establishment can be proceeds of an indictable offence.

220.Without D1’s confession there would not have been enough material to find that D1 knew the money represented proceeds from the operation of the gambling establishment.

221.It must be pointed out that the charges do not require the proceeds to be of D1’s, but can be of any person’s. The confession of D1 goes to prove that when D1 dealt with the money that was deposited into his various bank accounts, he knew that at least part of the money, and at least indirectly, were proceeds from the operation of the gambling establishments.

222.It is trite law that the prosecution does not need to prove the underlying indictable offence in a charge under s.25(1). The status of the property is only an element of the mens rea of the offence[1].

223.It is admitted facts and not disputed that in relation to 2 of the City Garden units, someone had been operating them as an illegal gambling establishment. If that is the case, then what D1 did as described by himself and defence witnesses which included him introducing people to gamble there must have amounted to assisting in the operation of the establishment, in that what he did have a direct bearing on the operation or management of the establishment. D1 was instrumental in encouraging the gamblers to gamble in the establishment because they trusted D1 and would only deal with the gambling money through D1, or they would rather not gamble.

224.Based on the defence witnesses’ evidence, it is clear that D1’s credibility was essential in the smooth operation of the gambling establishment. D1’s role was akin to a clearing house so that those who took part in the gambling will be able to minimize the risk of not being able to collect their winnings.

225.Based on the defendant’s confession as corroborated by the evidence of the defence witnesses who gave evidence of D1’s role when they gambled at the establishments, I find that the prosecution had proved that D1 did in fact assist in the operation of the gambling establishments.

226.I have noted that there is no corroborating evidence that there was a system of commission taking (抽水) in any of the establishments except for D1’s confession. This lack of evidence is expected since the establishments were catering for a very specific clientele, that is to say, those of Fujianese origin and who came from the same area of Fujian in mainland China.

227.There is however some evidence to suggest that there was payment by the gamblers to those operating the establishment, and in particular, D1.

228.This evidence is in the form of D1’s confession when he said that the gamblers would tip (醒) him money after they won, as well as in the form of the evidence of  the defence witness Mr. Lin who said that it was customary to leave some money on the table after winning. There may not have been an explicit commission set down by D1 or those operating the establishment of a certain percentage, as Mr. Wong sought to educate this court what the gambling halls in Macau would do, but I find that there is an implicit understanding that for the service given to the gamblers, those who won will leave some money there.

229.Nevertheless, I find that it must be an irresistible inference that D1 would not be acting as he did for those who gambled at the establishments for free. Perhaps he took a commission, perhaps he was paid wages, perhaps because of his role at the gambling establishments that he was able to play with the gamblers and win some money, there is not enough evidence to make a specific finding on that, but it is clear that the end result of D1’s assisting in the operation of the gambling establishment was that he had made profits of $5 million and $2 to $3 million dollars over the years, as admitted by D1 in his 1^st and 2^nd video recorded interview.

230.While I accept as true that a lot of the transactions, the deposits, the withdrawals shown in D1’s accounts were settling of gambling moneys between the gambling parties, the fact that D1 had made millions of dollars of profits in the process must mean that some of the money that was being moved or distributed or dealt with by D1 were his income and therefore proceeds from an indictable offence.

231.I find that the defence witnesses were not telling the truth when they said D1 had taken nothing from his assisting in the operation of the establishments. The profits that D1 had confessed to making must come from somewhere and the only place that they could have come from would be the winnings and losses of the gambling parties.

232.I have considered whether it was the truth as D1 had explained in that he actually meant ‘won’ (贏) when he said he had made profits (賺) from the gambling operations. I find that such is not the case. It is clear from the context of the 1^st and 2^nd video recorded interviews that D1 clearly meant profits and not winnings.

233.Furthermore, if D2 is telling the truth, then D1 had been losing a lot of money and had to keep borrowing money from Chan Mian Mian to settle his gambling debts. It could not have been the case that D1 was winning a lot of money, so much so that he was able to pay for the down payment of the Wo Fu Centre 2B unit.

234.Also, after D1 had made the confession in his 1^st and 2^nd video recorded interview, he had had plenty of opportunity to explain about the

235.difference between the usage of the words ‘賺’and ‘贏’in his later video recorded interviews. Yet, all D1 did in those interviews was to deny that he had operated the gambling establishments. It was only in D1’s evidence in court that we first heard about D1’s explanation of difference between the words.

236.I find D1’s assertion that chip stacking was his main source of income not true. During trial, in D1’s own exhibits D1-1 and D1-3, only 5 items were being pointed out as chip stacking wages. They are nowhere near the frequency and amount that D1 was trying to have this court believe.

237.Based on the evidence referred to above, I find that when D1 dealt with the money deposited into his 3 bank accounts, he knew that those property at least partly and indirectly represented proceeds from the indictable offence of assisting in the operation of a gambling establishment as well as operation of a gambling establishment. I convict D1 of charges 1, 2 and 5 accordingly.

D2

Charges 3 and 4

238.The prosecution case against D2 is slightly different. It is the prosecution’s case that D2 had reasonable grounds to believe that the money that she had dealt with in her 2 accounts represented proceeds of an indictable offence. Again, the indictable offence the prosecution is complaining about is that of the operation or assisting in the operation of gambling establishments.

239.I find first of all that D2 did deal with the money stated in charges 3 and 4.

240.In dealing with the ‘having reasonable grounds to believe’ limb of s.25(1), it is not necessary for the prosecution to prove that D2 knew about a specific offence, all that they have to do is to prove that there were reasonable grounds for D2 to believe that the money was from an indictable offence. See HKSAR v. Wong Ping Shui and Another (2001) 4 HKCFAR 29 and Oei Hengky Wiryo v HKSAR [2007] 10 HKCFAR 98.

241.The mens rea for this limb of the offence has two elements, objective and subjective. The test is the two stage test^[2] as set out in HKSAR v Shing Siu Ming, CACC 415/1997:

“35. …..“having reasonable grounds to believe” contains subjective and objective elements. In our view it requires proof that there were grounds that a common sense, right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom. That is the objective element. It must also be proved that those grounds were known to the defendant. That is the subjective element.”

242.There is no need for the prosecution to prove that the indictable offence actually did take place, all that they are required to prove is that there are grounds which were known to D2 when she dealt with the money that would lead a “common sense, right-thinking member of the community” to believe that the money represented wholly or partly, directly or indirectly proceeds of an indictable offence.

243.The facts known to D2 are these.

244.D1 and D2 did not hold a job. They have no formal source of income. D1 would gamble almost daily in Hong Kong. D1 would from time to time pay money to D2, yet without fail would be able to pay her something every month for the upkeep of the family.

245.In addition to those money paid to D2, D1 also would arrange for money to be deposited into D2’s 2 bank accounts and then D2 would make arrangements for those money to be transferred out to different people. D2 therefore knew that her husband was doing far more than a normal gambler was doing.

246.D2 knew that D1 would gamble at various places, including homes of their friends. D2 had been up to the gambling places to visit D1 multiple times. D2 knew D1 was good in Dou Di Zhu. Yet D2 also knew that D1 would frequently lose money, to the extent that D2 had to ask her own elder sister to borrow money from someone in mainland China in order for D1 to settle D1’s gambling debts. D2 therefore knew that her husband did not always win in his gambling and the money that was given to her monthly could not have just been from her husband’s gambling winnings.

247.It may also be the case that D2 had over the years ‘turned a blind eye’ towards the question of where all the money that was being deposited into her account was coming from but it would still not absolve D2 from possible liability under s.25(1).

248.In the case of HKSAR v Wan Yet Kwai, CACC 372/2008, in relation to the accused who turned a blind eye to the existing reasonable grounds to believe, the Court of Appeal said this,

“32. In summary…..if a person, although he cannot know for certain, nevertheless has reasonable grounds to believe that, having regard to all the circumstances, he may well be dealing in the proceeds of an indictable offence, and if that person goes ahead and deals then he commits an offence under s.25(1). This is so even if there also exist reasonable grounds for believing in some alternative scenario.

33. What cannot be ignored is that the money laundering is invariably a devious activity, its purpose being to appear what it is not. In our view, it would therefore undermine the purpose of the legislation if a person was able to ‘turn a blind eye’ to a reasonably held belief that certain property represents the proceeds of an indictable offence by being able to focus instead on some alternative reasonably held belief as to its provenance.”

249.The question is still whether a common sense, right-thinking member of the community with the facts available would have reasonable grounds to believe that the money represented proceeds of an indictable offence.

250.I find that it is an irresistible inference that a “common sense, right-thinking member of the community” knowing what was known to D2 would have reasonable grounds to believe that the large amount of money that was deposited into her account and which D2 had later dealt with by transferring them out to different people under the instructions of D1 must have represented at least in part and indirectly the proceeds of an indictable offence.

251.D1 had been running an illegal gambling establishment over a long period of time. It was not the case that D2 had her own job and had no idea what D1 was doing. She was a gambler herself and she knew some of D1’s gambling friends. She had been to visit D1 at the gambling places and it could not have escaped her that her husband was acting in his role he did in relation to the other gamblers. She must have had reasonable grounds to believe that all the money she had been dealing with for D1 had something to do with the illegal gambling establishments.

252.I therefore convict D2 of charge 3 and 4 accordingly.

[1] Oei Hengky Wiryo v HKSAR [2007] HKCFA 8; [2007] 1 HKLRD 568; (2007) 10 HKCFAR 98; FACC4/2006 (9 February 2007)

[2] Confirmed in HKSAR v Ma Zhujiang and another, CACC 491/2005 to be applicable in considering a charge under s.25(1) of the Organized and Serious Crimes Ordinance