HKSAR v. Hen Yoav and Another

DCCC 1033 & 1036/2012 (A)
(Consolidated)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1033 & 1036 OF 2012 (A) (Consolidated)

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REASONS FOR SENTENCE

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Introduction

1.The first defendant, Mr Hen Yoav (D1) and the third defendant, Mr Fadlon Daniel, are the two of the three Israelis appeared before me in this trial.  They both have a clear record and each pleaded guilty at the outset of the trial to a single charge of dealing with property known or reasonably believed to represent the proceeds of an indictable offence, contrary to sections 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”) (Charge 1 -2).  The charge is more commonly known as “money laundering”.

2.D1 is jointly charged with D2 in Charge1 of laundering 342 1-kg gold bars.  The particulars of offence alleges that D1 and D2, between 1 May and 7 May 2012, both dates inclusive, in Hong Kong, together with D3, knowing or having reasonable grounds to believe that property, namely, 342 pieces of 1-kg gold bars, in whole or in part directly or indirectly represented proceeds of an indictable offence, dealt with the said property.

3.D3 faces Charge 2 alone.  He is accused of laundering the same amount of gold bars in Charge 1 plus another four 5 carat diamonds together with D1 and D2.  The particulars of offence alleges that D3, between 3 May 2012 and 7 May 2012, both dates inclusive, in Hong Kong, together with D1 and D2, knowing or having reasonable grounds to believe that property, namely, 342 pieces of 1-kg gold bars and 4 diamonds, in whole or in part directly or indirectly represented the proceeds of an indictable offence, dealt with the said property.

The facts

4.According to the summary of facts which were admitted by both defendants, the 342 pieces of 1-kg gold bars were purchased from one Metalor Technologies Hong Kong Ltd (“Metalor”), a precious metal processing company in Kwai Chung, during the period between November 2008 and June 2011 by companies including Southern Ace Ltd, GX Port Ltd and Cycom Tech Ltd (“Cycom”).  Each of the gold bars sold by Metalor to these companies had a serial number and was duly recorded.

5.The gold bars and diamonds were only discovered by the police during an operation in which D2 and D3 were arrested on 7 May 2012 inside a hostel at Chung King Mansions, Tsim Sha Tsui, Kowloon for the offence of “possession of explosive substance”.  Amongst the items seized by the police inside the room where D2 and D3 were found were five bags containing a total of 161 1-kg gold bars with a value of approximately HK$66 million, four 5 carat diamonds valued at HK$11.58 million and three receipts (inside one of the bags) issued by Metalor relating to its recent purchase of a total of 181 1-kg gold bars from Cycom just a few days ago on 2-3 and 4 of May 2012.

6.On 2-3 May 2012, D1 first accompanied an unidentified male (by the name Gordo using a Philippine passport) and sold a total of 85 and 32 1-kg gold bars respectively to Metalor and on 4 May, 2012, D3 also went with Gordo and sold to Metalor another 64 1-kg gold bars.  The gold bars were sold to Metalor in the name of Cycom.  The total amount of the sale of the gold bars to Metalor during these three days is HKD73 million.  Together with the value of the gold bars (HKD66 million) which was later seized by the police on 7 May 2012 at Chung King Mansions, the total value of the 342 pieces of gold bars is therefore approximately HKD139 million.  The proceeds of the sale of the gold bars, namely HKD73 million were received into Cycom’s bank account at HSBC.  Between 4 and 8 May 2012, HKD5.4 million was transferred to the bank account of East Asia Escrow Ltd and HKD16.7 million was transferred to Cycom’s another security bank account.

7.The three companies which bought the gold bars from Metalor between 2009 and 2011 were in fact all controlled by one Shulman Doron Zvi (“Shulman”), a holder of Israeli and Australian passports.  Shulman was already arrested by the police back on 30 April 2012. 

8.Between January 2010 and April 2012, Shulman had visited Hong Kong on twenty-one occasions.  On each occasion, he entered as a visitor.  Apart from the three companies mentioned, Shulman in fact controlled seven other companies in Hong Kong.  Nine out of these ten companies had opened bank accounts in Hong Kong.  Funds were regularly transferred between the bank accounts of these companies in significant amounts.  In the period from 2 January 2010 to the arrest of Shulman on 30 April 2012, the nine companies’ bank accounts received a total of HKD1.7 billion approximately.  During the same period, approximately HKD2.7 million was received in Shulman’s six personal accounts with HSBC and Citibank and the amount remaining in his personal bank accounts at the time of his arrest was approximately HKD170,000.  Shulman was however described as a student in his personal account documentation.

9.In August and September 2010, Shulman also purchased two village houses situated in Nga Yiu Tau, Yuen Long (“House A”) and Tsiu Keng Road, Sheung Shui (“House B”) in the names of Century Holdings Ltd and Everplus Ltd respectively for the total sum of HKD7.7 million approximately.  These two companies were also among the ten companies which were under his control at all material times.  The title deeds and keys of the both houses were later found by police at Shulman’s office and his residence at Laguna City, Kwun Tong following his arrest.  The bank cards and e-banking tokens relating to the bank accounts of the companies under his control were also found by the police in his apartment. It is the prosecution case that the two village houses were bought with the purpose of storing and concealing the gold bars or even diamonds.

10.Between 7 and 15 June 2011, on three occasions, Shulman collected on behalf of his another company, Ajax Technology Ltd, a total of three 5 carat diamonds valued at USD1.069 million (HKD8.5 million approximately) from a company called Tache Asia Ltd (Hong Kong).  Three of the diamonds purchased had engraved on them serial numbers.  The serial numbers of two of the four 5 carat diamonds later seized by the police on 7 May 2012 matched those on two of the diamonds Shulman had purchased in 2011.

11.D1 came to Hong Kong for the first time on 18 October 2011 as a visitor. Thereafter, he had travelled to Hong Kong 5 times in two months before he arrived on 27 April 2012. D3 was on his twelve visits to Hong Kong when he arrived on 3 May 2012, having first come to Hong Kong as a visitor on 3 September 2009.

12.It is the prosecution case that after Shulman was arrested on 30 April 2010 and in the immediate few days that followed, D1, D2, D3 and together with some other persons at large, were acting together in an endeavour to remove the 342 pieces of gold bars and 4 diamonds from the safes of two village houses to Chung King Mansions temporarily for storage and concealment and also launder 181 of the 342 pieces of gold bars by selling the same back to Metalor.

13.According to the summary of facts, the following events were unfolded in the following chronological order:-

1/5/2012

· D1 went to Shulman’s flat at Laguna City, Kwun Tong but was unable to gain entry;

2/5/2012

· D1 first went with D2 to a metal company in Yuen Long to purchase steel cutting equipments;

· D1 then returned to House A and D2 also returned at a few minutes later. D2 left the house about an hour later;

· Later, D1 removed a number of heavy bags from House A and the bags were loaded into a taxi;

· D1 together with an unidentified foreign male (Gordo) then attended the office of Metalor to sell 85 gold bars;

· A locksmith Wong was asked by a foreign male to “undo a lock” at House B where he previously had installed a lock;

· Wong prized opened an iron door in House B and he could see cutters and suitcases on the floor and observed “a strong smell of iron” coming from the house;

· Three suitcases had been removed from the House B into a taxi;

· D1 was seen by CCTV images together with two unidentified foreign males pulling bags in Tsim Sha Tsui towards the direction of Chung King Mansions and also later in the lobby thereof;

3/5/2012

· D1 was again captured by CCTV cameras inside the lift of Chung King Mansions in possession of baggage in the company of two unidentified males;

· D1 later went to Metalor again with the same unidentified male (Gordo) and sold to Metalor 32 gold bars;

· The police gained entry to House A using a key found in Shulman’s flat and saw therein a safe had been broken open. Tools which could be used to break open the safe including electric saw was found;

· The police also went to House B and gained entry by using the key found in Shulman’s flat. They found an empty safe which had been broken open and a number of safe breaking tools including electric saw;

4/5/2012

· D3 was seen in CCTV images at Chung King Mansions leaving the building in possession of bags;

· D3 then went with the same unidentified male (Gordo) to Metalor’s premises and sold to Metalor 64 gold bars;

· An unidentified foreign male claiming to be one ‘John Miller” went to the secretarial company of Cycom and collected the company chop;

6/5/2012

· D1 went to May Sum Villa (“the villa”) in Portland Street, Yau Ma Tei and rented a room there;

· D1 went with a South African Male to the villa;

7/5/2012

· At 0235 hours, D1 was arrested by the police when he left the Villa;

· At 0245 hours, D2 and D3 were arrested inside a room of a hostel at Chung King Mansions. The police conducted a search on both defendants and the premises and eventually found the gold bars, the diamonds and the receipts issued by Metalor in relation to the gold bars.

14.A search with the Inland Revenue Department revealed that only seven out of the ten companies controlled by Shulman had submitted profit tax returns for the past years.  For those companies which had filed the tax returns, each stated that no gross profit was received.  Cycom even stated in its 2010/2011 tax return that it had not yet commenced business.

15.On 10 May 2012, the police arrested one Cheung Yuen Pui, Lilian, the holder of a Netherlands passport, when she arrived at Hong Kong.  A search of her person revealed she was in possession of one remittance slip which was for the transfer on 23 March 2012 for USD300,000 to Cycom.

16.Santos Jason Perez, a Philippine passport holder, and a director of East Asia Escrow Ltd (one of the ten companies controlled by Shulman) was also intercepted by police at the airport on 11 May 2012 as he was attempting to leave Hong Kong.  A search of his person revealed him to be in possession of 10 telegraphic transfers forms which were for the remittance of a total of USD7.8 million from Cycom’s bank account to a number of other bank accounts.  He was arrested but he jumped police bail afterwards.

>The background of the defendants

17.D1 is 27 years old and is still single.  He was born in Israel and there he lives together with his parents and his twin brothers.  He finished High School and he was exempted from compulsory military service in Israel due to medical conditions.  He worked as a customer service manager at a cell phone company for ten months before he came to Hong Kong on 18 October, 2011.  His monthly salary was about USD1,300.  He intended to change his career path to become a land surveyor and he had enrolled himself into a degree and qualification course for that purpose.  According to his counsel, Mr Adams, D1 accepted the job to come to work in Hong Kong to watch over a house as he had quitted his job to study and there  was a time gap before he was due to start his degree course.  He also wanted to earn some money to subsidize his tuition fees.

18.D2 is 28 years old and he was born in Israel.  He is also single.  He graduated from high school in 2003 with flying colours but he did not continue with his study in the university.  Instead, after working briefly in the food industry, he joined the army in 2004 and received training to later become a member of an elite anti-terrorist unit in the Israeli Army called Duvdevan in 2005.  He finished three years compulsory military service in 2007 and stayed on to serve as a non-commissioned officer.  During his service in the army, he received numerous awards and commendations.  Mr Cohen, the solicitor for D2, told the court that after leaving the army in 2009, like many ex-army officers in Israel, D2 travelled extensively to countries in Far East like Thailand, Philippines and even to Mexico.  In the Philippines, through the contact of his friend, he managed to secure a job, albeit working illegally, of security service and worked there for two years.  During the time, he also visited Hong Kong many times but usually for very short duration of one or two days and mostly for transit purposes.  In the beginning of May 2012, he had actually returned to Israel but he received a call from a friend he knew in the Philippines who asked him to take up a security job in Hong Kong.  He was promised to be paid USD3,000 for seven day’s work plus expenses and reimbursement of airfares so he decided to accept the offer and arrived on 3 May 2012.

>Mitigations

19.In mitigation, there were lots of common grounds relied upon by both defendants: that each defendant has a hitherto good character; that they both produced large numbers of letters of mitigations from their Rabbis of the Jewish communities, friends, teachers, superiors, siblings, parents, and close relatives urging the court to be as lenient as possible; that they both had pleaded guilty and save the court’s time; that they were all extremely remorseful and they all did not know about the source of the monies that were used to purchase the gold bars and diamonds let alone the nature of any underlying offence when they came to work in Hong Kong.

20.Mr Adams told me that D1 only met Shulman for three times and the last time was already when they both appeared in court.  After D1 had lived in House A for 2½ months, he left for the Philippines to extend his visa.  There he met a fellow Israeli called Din who was his contact person.  He later decided to stay behind in the Philippines and worked for Din for a few months as his assistant before he finally came back to Hong Kong on 27 April 2012 and returned to work in House A again.  On 30 April 2012 he said he was given keys by Shulman and in House A, for the first time, he opened a locked room and found a safe was there.  He was also present when an iron gate was installed in the house later and by then he could still call Shulman by phone to settle the installation charges.  At the early hours of 1 May 2012, he met D2 for the first time in House A.  Since then they both started to lose contact with Shulman and D1 was later called by Din in the Philippines to enquire about what happened to Shulman.  Din told D1 to stand by the phone and said his boss called John would call him direct.  D1 later received the calls from John who told him about the address of House B and to go there to have a look and John also asked him to go to Shulman’s apartment to see if he was there but D1 was unable to gain entry.  On 2 May 2012, John later gave him instructions to remove the safe with D2 in House A from the wall and to go to a hardware store to buy tools to cut open the safe.  D1 later managed to cut open a square at back of the safe and for the first time, he found gold bars inside the safe.  He took out the gold bars and found a total of 181 pieces there.  He was then told to put the gold bars into the bags and loaded into a taxi and went to Chung King Mansions in Tsim Sha Tsui.  Mr Adams emphasised that it was Din who cut open the safe in House B and whilst D1 took the gold bars and attended the Metalor’s premises on both 2 and 3 of May 2012, he was merely there to accompany the Filippino male Gordo.

21.Mr Admas nevertheless accepted that by being asked to deal with the gold bars in such unusual circumstances, D1 should still have reasonable grounds to suspect the provenance of the gold bars and the acts that he were asked to perform and that was the basis of his plea.  Mr Adams however urged the court to still take into account the background of D1 and to treat this as an isolated incident which was committed out of his character.  Mr Adams even boldly suggested that there was no international dimension involved in this case and that a deterrent sentence is perhaps not called for in D1’s case as he would certainly not repeat the offence in the future.

22.Mr Cohen submitted that D3 was fully remorseful and regretted very much for he had done in this case.  He also submitted that the period of the charge he faced was short (only four days) and that D3’s role was rather limited.  He only flew to Hong Kong on 3 May 2012 to take up the job as something akin to a security guard or officer.  The next day, he took the gold bars and travelled with Gordo to Metalor for sale.  When he was later arrested on 7 May 2012, he was found in the room in a hostel at Chung King Mansions with D2 together with 161 1-kg gold bars and the four diamonds were found in his wallet.  Mr Cohen accepted that D3 should have asked questions when he was asked to deal with the gold bars and diamonds in this way and failing which, he was effectively turning a blind eye to the most suspicious circumstances especially given his background as a professional soldier and a security personnel.  Mr Cohen however still urged me to take into account his guilty plea, the unusual facts of this case and his unique background to take a more realistic view and a lenient approach when I come to sentence D3.

>Sentencing considerations

23.In sentencing the two defendants, I have borne in mind the facts as admitted by them, the nature of the offence and all the matters urged on their behalf by Mr Adams and Mr Cohen. I am aware that there is no sentencing tariff for the offence of money laundering because of the infinite variety of circumstances that may exist which lead to offences of this kind.

24.In HKSAR v Xu Xia Li and Another, CACC 395/2003, the Court of Appeal said in paragraph 18 of that case:-

“18.The prohibition of the offence is in order to strike at those who give assistance to criminals to dispose of or retain their ill-gotten gains as if they were derived from legitimate activities. Without the assistance of money launderers, it would be more difficult for criminals to clothe their illegal proceeds with the same respect as lawful gains and the chances of law enforcement detection of illegal activities that produce monetary benefits would be enhanced. Money laundering is therefore treated as a serious offence. If money laundering activities were allowed to be carried out in Hong Kong with impunity or treated lightly with minor penalties it would mar Hong Kong's reputation as a world-class financial and banking centre.”

25.On the other hand, I have much sympathy for the family members for both D1 and D3.  No doubt, especially in the eyes of their parents, the offences which were committed by their sons must be a shock to them and totally out of their previous good characters.  There is really no need for me to refer to the content of those letters.  Suffice it to say that they all spoke highly of both defendants.  I can see from their letters that they have a close family relationship and being a foreigner, the fact that they have to be incarcerated here in Hong Kong must means an additional hardship for them.  However, the Court of Appeal in Hong Kong has in many occasions said that for cases involving serious crimes, family circumstances virtually play no part in mitigation and the sentence of a defendant would also not be reduced solely because he is a foreigner.  As said by the Court of Appeal in HKSAR v Hong Chang Chi [2002] 1 HKC 295at p 302:-

“It should be made clear to non-residents of Hong Kong, whether from the mainland (or Taiwan) or from far-flung jurisdictions, that if they come here in order to break the law, they will be treated no differently, and certainly no more leniently, than criminals who are normally resident here.”

26.Both defendants are mature and in their late 20’s.  They both have life experiences and travelled extensively and they are by no means extremely young and immature.  They should think about the consequences before they act. Obviously, even according to their mitigations that they did not know exactly the nature of the origin of the gold bars and the diamonds as they have both claimed, they could not just turned the blind eyes and took the risks and chose to deal with them as they did in this case.  Now that they were caught and they just have to face the consequences of their own choices.

27.In the past few years, the Court of Appeal has stated the relevant factors for sentencing money-laundering cases.  In Secretary for Justice v Wan Kwok Keung [2012]1 HKLRD 201, it was held that:-

“12. ‘Money laundering’ is a serious offence for not only does it encourage criminal activities indirectly, but also attempt to legitimise the process of the crime. In order to crack down on serious crimes and to prevent offenders from getting financial gains, it is necessary to deter and prevent the offenders from getting financial gains. It is necessary to deter the commission of the ‘money laundering’ offence.

13. Generally, the sentence for a ‘money laundering’ offence should mainly reflect the amount of the ‘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’ is in fact derived. Of course if there is information to prove that the ‘black money’ originated from a serious crime, including drug trafficking, kidnap and blackmail, illegal human trafficking and other organised crimes, etc. or the defendant’s benefit is huge, then the sentence should be adjusted upward.

14. This court has, in a number of other similar cases, also listed other factors relevant to the sentence to be imposed including the number of offence, the length of the time the offence lasted, the degree to which the defendant participated in the offence involving the ‘black money’ and whether or not it was an organised and sophisticated crime.

15. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, Cheung JA set out the amounts of money involved and the sentences passed in a number of “money-laundering” cases. The sentencing starting point is 3 years or so where the ‘black money’ involved is between $1 million and $2 million, 4 years or so where it is between $3 million and $6 million, and could be over 5 years where it is above $10 million.”

28.In HKSAR v Boma, [2012] 2 HKLRD 33, a more recent case, Stock VP says in that case that the first three factors to which any sentencing court should have regarded are the maximum penalty available, the need for deterrence and the question of the amount of the money laundered (see paragraphs 35 to 38 of the judgment).

29.In paragraph 40 of the judgment, Stock VP points out that the court should take into account some of the other significant features. inter alia:-

(a) the nature of the predicate offence;

(b) the state of the offender’s knowledge;

(c) where the operation involved an international dimension, this would be a significant aggravating feature;

(d) the sophistication of the offence, including the degree of planning;

(e) where the offence was committed by or on behalf of an organised criminal syndicate would be an aggravating feature;

(f) whether there was one transaction or many and the length of time over which the offence was committed;

(g) whether the offender continued to launder funds after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and

(h) the role of the offender and the acts performed by him.”

The list was said to be non-exhaustive.

30.As said, the maximum penalty for money laundering is one of 14 years’ imprisonment subject to the jurisdiction limit of 7 years’ imprisonment here in the District Court.

31.It is important that Hong Kong’s reputation as an international financial centre must be closely guarded and it is necessary to deter money laundering activities in Hong Kong.

32.In this case, the nature of the predicate offence is not known and I accept what Mr Adams and Mr Cohen had submitted on behalf of the defendants that they only had reasonable grounds to believe that the property they dealt with represented the proceeds of an indictable offence and not that they knew they were proceeds.

33.The whole money laundering exercise in this case is very sophisticated in its nature, apparently due to the huge amount of monies laundered and the acts involved by both defendants were only part of a continuing process.  It also involved a high degree of planning.  The setting-up by Shulman of a total of at least ten Hong Kong companies, for example, and the opening of nine company bank accounts to facilitate the withdrawal and transfer of the black money.  In order to clothe the black money to give it a legitimate appearance, the monies were withdrawn from the accounts and converted into gold bars and diamonds.  Two village houses in Yuen Long and Sheung Shui in New Territories were also purchased with the black money to store and conceal the property.  After the ring-leader or the “key-holder” Shulman was arrested by the police, the gold bars and the diamonds were hastily removed from the safes of the two houses and with the efforts and assistances of both defendants and also some other foreign nationals, more than half of the gold bars were successfully sold back to Metalor and converted to credit balance in the Cycom’s bank account. The company chop of Cycom was also collected by an unidentified male using the name of ‘John Miller’ from the secretarial company that kept it.  In the few days following the sale, I can inferred beyond any reasonable doubt that it was exactly by using the company chop that monies were successfully transferred from the Cycom’s account into other bank accounts and obviously there were even evidence of attempts by a Filipino male to also transfer HKD7.6 million out of the jurisdiction from the Cycom’s account by telegraphic transfers as mentioned in paragraph 16.

34.Based on the above, there is no doubt in my mind that the whole operation was obviously manned by an overseas organised syndicate behind and the offence involved a high degree of international dimension as both defendants as well as D2 are Israeli nationals and they were recruited in Israel to come all the way to Hong Kong to assist in the guarding, removing and converting of the property laundered.  Apart from these defendants, there were also peoples brought in by this syndicate from other countries such as the Philippines, and even the Netherlands and South Africa.  

35.That said, I of course take into account that it was a common ground between both the prosecution and the defence that there was no evidence that the defendants clearly knew the nature of the underlying offence.  However, that does not mean that the culpability can be thereby significantly reduced although I bear in mind that each of the defendant is to be sentenced on the facts of the money-laundering charge only and not the facts of the underlying offence.

36.As Stock VP in Boma (supra) at para 40(2)(a) had pointed out:-

“In such a case it must be recognised that he is nevertheless ‘assisting in the original crime, whether with knowledge or blind‑eye knowledge of it.’: R v Barsa at p 472. The scheme and the purpose of the legislation is to ensure care and honesty in the handling of other people’s money and those who are prepared to handle money on other people’s behalf and turn a blind eye to the source of that money do so at their own risk: see R v Farrow [2007] 1 Cr App R (S) 558, para 24. So the person who is aware of the fact that he is dealing with proceeds of an indictable offence but deliberately chooses not to ask questions is barely less culpable than the person who asks or who is told.”

37.I cannot bring myself to agree with Mr Adams’s submission that there is no need to impose a deterrent sentence in this case.  Even if I were to accept that the chance of re-offending the present offence by each defendant may be slim in the future, a clear message has still to be sent out by this court to all other people, especially to their fellow Israelis and people from other jurisdictions who may be lured by monetary rewards and are contemplating whether to turn a blind eye and choose not to ask questions whenever they are called upon to come to Hong Kong to deal with property which are proceeds of indictable offence. 

38.The property laundered in Charge 1 is said to be approximately HKD139 million and in Charge 2 approximately HKD150 million.  These sums can only be properly described as ‘huge’ or ‘enormous’.  While I also accept that there is no evidence that D1 or D3 has any share of profit other than the remuneration they were promised, one has to bear in mind that the gravamen of a money-laundering offence is still the amount of money laundered, not the amount of profit to the defendants or loss to the victims (see HKSAR v Chen Zhen Chiu [2007] 5 HKC 505 at p513 D-E para48).

39.In HKSAR v Chen Zhen Chiu (supra), the sum involved HKD73 million remitted in a 13-month period by over 1,500 remittances from Australia tom banks in Hong Kong.  The Court of Appeal identified 7½ years’ imprisonment as the appropriate starting point and imposed that sentence.

40.In Secretary for Justice v Herzberg [2010] HKLRD 502, there are five charges of money laundering and the sum involved over HKD683 million remitted through four BVI accounts over 21 months.  The Court of Appeal replaced the original global starting point of 5½ years’ imprisonment by a global starting point of 9 years’ imprisonment.

41.Taking into account of the huge amount of money involved and the need for imposing a deterrent sentence, I am satisfied that for a defendant who also assumed a major role in the laundering process, the starting point in this case for these two offences could well be as high as 8 years’ imprisonment.

42.However, it is true and I accept that D1 and D3 in this case each assumed a lesser role which was “a cog in the machinery” and clearly there was another mastermind or even masterminds behind the whole scheme.  The actual duration of their dealings of the property is short (4-7 days) and the benefits they received were also small as compared to the money laundered.

43.That said, the roles played by D1 and D3 and the acts performed by them in this case were still very important.  Without the assistance and participations of people like them, it is difficult for the director of a laundering operation or scheme to execute its plans and to launder the money.  As Stock VP said in Boma (supra) at paragraph 40 (8) p 44:-

“...the director of a laundering operation or scheme should attract a greater sentence than a person engaged by him although sentences should be sufficient to deter those who might be prevailed upon by directing minds...”

44.Having considered the above authorities and after applying the relevant factors into consideration, I come to the conclusion that the proper starting point on Charge 1 and Charge 2 should be 6½ years’ imprisonment.  Although the amount of money involved in Charge 2 is more by approximately HK$11 million, the level of participation by D3 was much lesser than D1 and the duration of his engagement is also shorter in terms of days.  As these factors cancelled out each other, in the end, I am satisfied that D1 and D3 were equally culpable in this matter and therefore they should receive the same sentence for each charge.

45.The only effective mitigation therefore is their guilty plea and for which they would be given a full one-third discount.

Conclusion

46.Based on the above reasons, the sentence of D1 on Charge 1 and the sentence of D3 on Charge 2 is each therefore reduced to 52 months’ imprisonment.