HKSAR v. Yan Kin Chung

DCCC650/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 650 OF 2012

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Reasons for Sentence

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1.This defendant has pleaded guilty to one charge of dealing with property known or reasonably believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance, Cap. 455.

2.Particulars of the offence are that the defendant, between 27 January 2010 and 19 March 2010, both dates inclusive, together with other persons unknown, dealt with the property, namely monies in the sum of HK$3,650,000 in a Bank of China account held in the defendant’s name, and the defendant knowing, or having reasonable grounds to believe, that the said property in whole or in part, directly or indirectly, represented proceeds of an indictable offence.  This offence is colloquially referred to as a “money laundering offence”.

3.The facts of the case are that the defendant opened a personal bank account at the Bank of China in his own name on 18 December 2009.  He was a sole signatory to this account. 

4.This charge involves three transactions that are set out in paragraph 3 of the Amended Summary of Facts.  The total amount of the three transactions totalled 3.65 million.  The particulars of these three transactions are that, on 27 January 2010, the defendant withdrew HK$500,000 from his Bank of China account and deposited the whole amount into another Bank of China account in the name of Hong Kong Ho Shing Trading Company.  The second transaction took place on 24 February 2010 where the defendant withdrew $2.49 million from his account and deposited the total amount into the same Hong Kong Ho Shing Trading Company account.  The third transaction took place on 19 March 2010 where the defendant withdrew HK$660,000 from his account and deposited the whole amount into the Hong Kong Ho Shing Trading Company account. 

5.The account holder of the Hong Kong Ho Shing Trading Company was also arrested but jumped bail, and to date she is a wanted person.

6.There is no evidence how this amount of money got into the defendant’s account.  I have no explanation before me.  I have no evidence of the defendant’s role except he says an unknown person asked him to deposit money into a bank account of the Bank of China.  Under caution he did tell the police that he was helping others to remit illegal soccer gambling debts to the mainland and Macau.  I have no evidence of the defendant’s benefit, if any.  There has been no explanation offered.

7.The defendant has paid no income tax in the years leading up to 2010, including 2010.  On these facts admitted, defendant clearly had at least reasonable grounds to believe that the $3.65 million, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence, and he dealt with the monies.  And his best mitigation today is to plead to this offence.

8.The defendant is not a man of clear record.  He has four previous convictions but none of them similar to this.  Those four involve assault and gambling offences.  I have been informed the defendant is 35 years old and single, but engaged to be married.  The defendant has a fiancé who is now pregnant, apparently two months pregnant.  And I have seen a letter from her asking the court for leniency.  It has been stressed that since the defendant’s arrest in October 2010 he has turned over a new leaf and involved himself in three new business ventures: a bar in Hong Kong; a hotpot restaurant with a second branch to open soon; and, lastly, a snack retain business with two shops on the mainland.  I have seen letters from the defendant’s business partners asking for leniency on his behalf.  I have seen some receipts from the charities Oxfam and World Vision.  Although not in the defendant’s name, it has been explained that he and two friends donate monthly and in equal amounts.

9.Defence counsel has submitted that the court could consider his conduct since the offence as relevant to sentencing and find his conduct deserving of a further discount.  There has been two years since the defendant’s arrest to his plea today.  But this period of time is not a delay on the prosecution’s part because offences of this nature often entail lengthy investigation.  This is in the main because there are huge amounts of money involved, numerous bank accounts, as well as possible suspects.  Defence counsel, in fact, does not submit that the delay in coming to court is a relevant consideration here. 

10.Both prosecution and defence counsel have provided the court with relevant authorities.  And perhaps the most relevant is the most recent, HKSAR v Boma, CACC335/2010.  Prosecution has also referred me to HKSAR v Hsu Yu Yi, CACC159/2009, and Secretary for Justice v Wan Kwok Keung, CAAR13/2010.  Defence counsel has submitted the Magistracy Appeal 778/2000, HKSAR v Hui Kam.  The latter two authorities from the prosecution do try and consider sentencing guidelines based on previous money laundering cases.  However, the authority of Boma held this was a category of offence where it is difficult and undesirable to offer guidelines.  This is mainly because there are highly variable circumstances in which this offence might be committed.

11.Relevant sentencing considerations are highlighted by the Court of Appeal in this case.  I am mindful it is not an exhaustive list.  Considerations highlighted include bearing in mind that the maximum for this offence is 14 years' imprisonment, highlighting the seriousness of this offence.  When sentencing deterrents must be of paramount consideration.  Hong Kong’s reputation as an international financial centre, a transparent financial centre, is at stake.

12.What is also relevant is the nature of the predicate offence, if known.  It seems here that gambling is involved.  There is no evidence to suggest otherwise, and this information came from the defendant himself.

13.This leads on to the state of the knowledge of the defendant being relevant.  And here he admits that the money is from illegal soccer bets.  The court must look at whether there is any international element to the money laundering, and in this case the defendant’s admission shows a cross-border relationship.  From the facts, the sophistication level is not high.  Moreover, there is no evidence of a syndicate being involved. 

14.The defendant’s role is relevant.  But, as I have said, I am not clear of his role.  There is no explanation offered, except insofar as he says an unknown person asked him to make these transactions. 

15.Lastly the amount of money involved is highly relevant.  I will also take into account the number of transactions and the length of time over which this offence is committed.  These are the considerations highlighted by that Court of Appeal authority. 

16.In the facts of this case I find no significant aggravating factors that I will consider relevant.  Obviously the amount of money involved here is significant, HK$3.65 million, and the money does not seem to be confined to Hong Kong on the defendant’s own admission.  Although the amount of money is significant, there were only three transactions that took place over just short of a two month period, and the scheme of dealing with this money is not sophisticated.  For example, no false identities were used.

17.Defendant, please stand up.  I have considered mitigation put forward on your behalf, as well as mitigation letters from your business partners and your fiancé.  The facts of the offence and the considerations I have set out as relevant have also been referred to.  I would find initially a 3 year 6 month starting point appropriate.

18.Defence counsel has asked me to consider your conduct since the offence.  There is no further trouble with the law and have since then become a legitimate businessman and, as your fiancé said in her letter, you have stopped doing illegal things.  The authorities do say that if there is clear evidence of rehabilitation it may be of some relevance to sentencing.  Obviously it does depend on the seriousness of the offence committed.  If facing a very serious offence the relevance would not be high, nor would a degree of mercy be likely. 

19.Here I accept that the defendant has tried to engage in legitimate work and business.  He is about to become a father.  His partners and fiancé say that he is working long hours to try and make the business venture successful.  Despite this case hanging over him, he has not sat back and awaited his fate.  He has proactively tried to better himself.

20.So without losing sight of the seriousness of this offence I do find, in my view, his conduct since the offence does deserve some credit, and I do reduce the starting point by a further three months.  I ultimately take a 3 year and 3 months starting point, for which the defendant is entitled to a 13 month discount for his plea today.

21.The defendant is sentenced to this offence to 2 years and 2 months’ imprisonment.