HKSAR v. Chuensri Pattanodom also known as Pemathanapas Chittapon

DCCC 382/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 382 OF 2013

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Reasons for Verdict

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1.The defendant pleaded not guilty to the offence of money laundering. After trial, I now give the reasons for verdict.

2.Admitted facts under section 65C:

1. The defendant is known as Chuensri Pattanodom and also Pemathanapas Chittapon, bearing a Thai national identity card numbered 3100 1008 16880. The identity of the defendant is admitted.

2. Goldstein International Limited (GIL) was incorporated in Hong Kong on 25 May 2011 by the defendant in the name of Pemathanapas. The defendant was the sole director and shareholder of GIL. The company documents, Exhibit P-14 to P-17, are tendered.

3. The travel record of Pemathanapas for the period from 29 May 2011 to 23 April 2012 is exhibited as P-20.

4. The travel record of Chuensri Pattanodom for 24 January 2013 is exhibited as P-21.

5. The defendant was arrested by SPC23612 at about 9 pm on 24 January 2013 at the Hong Kong International Airport.

6. PC3359 seized a passport and a Thai national identity card from the defendant and copies thereof were made as Exhibit P-23.

7. A video-recorded interview was taken from the defendant on 25 January 2013 with the assistance of a Thai interpreter: Exhibit P-3 with the transcript as P3A and the certified translation as P3B.

8. The second video-recorded interview was taken on the evening of the same day with the assistance of the said Thai interpreter, exhibited as P-4 with the transcript as P4A and the certified translation as P4B.

9. The third video-recorded interview was taken from the defendant on 26 January with the assistance of another Thai interpreter, exhibited as P-6 with the translation as P6A and the certified translation as P6B.

10. These recorded interviews were given by the defendant voluntarily and the certified translations are true and accurate translations of the words uttered by the parties concerned.

11. The Hang Seng Bank business integrated account 288‑247216-833 in the name of GIL and its annexure are exhibited as P-13.

12. Neither the defendant nor GIL filed any tax returns for the period from August 2006 to August 2012.  The Inland Revenue Department only received Exhibits P-18 and P-19 which are certified simultaneous business registration application form by GIL and the certified method of payment concerning GIL.

13. The defendant has no criminal record in Hong Kong.

PW1 Tsang Ho-lun PC3359

3.His statement dated 30 May 2013 was admitted under section 65B and exhibited as P-24. Based on the banker’s affirmation of the Hang Seng Bank (HSB) relating to the bank account of GIL, PW1 prepared his statement and the analysis. He said account 1 was an HSB business integrated account in the name of GIL with the defendant as the sole signatory. Account 1 has four sub-accounts in four different currencies, namely, Hong Kong dollar (account 1-A), Swiss franc (CHF) (account 1-B), US dollar (account 1-C) and Euro (EUR) (account 1-D).

4.The defendant used his previous name Pemathanapas Chittapon in the application form. The Hong Kong dollar savings account recorded 16 transactions totalled HK$8,710-odd. The IP addresses of the e-banking transactions were made in Thailand. The CHF savings account registered five transactions with the total amount of CHF$16,440-odd. Again the IP addresses were in Thailand. The US dollar savings account showed 17 transactions totalled US$32,316-odd. The IP addresses of the e-banking transactions were in Thailand. The Euro savings account showed 71 transactions totalling EUR$472,231-odd. The IP addresses of the e-banking were in Thailand.

5.PW1 joined the police in 2001. In his statement, PW1 did not specify the date on which he calculated the exchange rate, but he recalled that the rate should be in mid-2012.

6.PW1 was referred to the deposits made by a company called High Rich which should be a Hong Kong company. He did not know whether there was any beneficiary relationship between High Rich and GIL. Based on the payment details, the transactions were done by e-banking. He did not know the company called High Profit.

PW2 Tso Hoi-yan, Anita

7.She was the senior executive manager of Asia Business Service Limited (ABSL) since 2008. The company address was Unit 1010, Miramar Tower, Tsim Sha Tsui. Cherry Lam and Jenny Cheung were her company colleagues. As a result of some emails communications between GIL and her company, PW2 met a person on 30 May and that man produced his passport in the name of Pemathanapas Chittapon to her for inspection. A copy of that passport was made (page 41 and 42 of bundle 3, part of Exhibit P-9). She compared the photo of the passport with the man who produced that passport in her office and was satisfied that the same person was depicted. She then returned the passport to the man. PW2 also made a copy of the man’s Thai ID card which is in Thai characters without any English translation. PW2 wrote down the address of the man on the copy (page 43 of bundle 3). PW2 also made a copy of the House Registration Copy in the name of the said Pemathanapas issued by Provincial Administration Department of the Ministry of Interior of Thailand (page 44 and 45 of bundle 3). The man also produced a bank document issued by the Bangkok Bank which was to certify that Pemathanapas had a credit balance of about Thai baht $12,086 (about US$404-odd) in the savings deposit account (page 46 of bundle 3). The man also produced a business plan (Exhibit P-10) stating that the business nature was trading of furniture. PW2 was told the company was in the business for 20 years with a turnover of over $1 million. PW2 asked the man in English and she felt that it was sufficient for her to jot down the information. The details were written by the man in PW2’s presence, and he signed in her presence. PW2 said the man was asked to append his signature on copy of the business plan in order to confirm that the written content of the plan was correct.

8.A material handover list (Exhibit P-11) was prepared and the man signed the document in PW2’s presence. PW2 believed that the company documents were returned to the client on 30 May 2011 by hand and that is why she wrote “by hand” at the bottom right corner of the document. The certificate of incorporation of GIL (Exhibit P-8) was issued on 25 May 2011. It was one of the services provided to GIL that GIL can use the address of PW2’s company as GIL’s registered address. The company document shows that Pemathanapas was the sole shareholder (Exhibit P-7 or page 22 of bundle 3) and director (Exhibit P-7, page 28 of bundle 3). The name of Pemathanapas also appears in Form NC1 (Exhibit P-7 at page 29 of bundle 3) and the resolution of GIL (Exhibit P-7, page 35) which were signed by Pemathanapas on 19 May 2011 and 25 May 2011 respectively. Pemathanapas also signed a director declaration on 25 May 2011 (at Exhibit P-7 at page 37 of the bundle). PW2 recalled that the man appended his signature on the form NC1 in her presence, but the signature on item 9 of the form (at page 34 of the bundle) was faxed back to PW2’s company.

9.Based on the account statement of ABSL (Exhibit P-12), PW2 recalled that it was the same person who paid the sum of $600 for certification by CPA. ABSL also charged the client for the service of opening a bank account.

10.PW2 recalled that she handled this client for about one hour. That client brought along the company documents and the chop. PW2 identified the defendant in court.

11.Under cross-examination, PW2 said it was her colleague who liaised with one Toni Zimmerman for GIL and on behalf of Pemathanapas (Exhibit P-7). PW2 explained that it was due to the police investigation that the account statement at Exhibit P-12 which was dated 18 February 2013 was printed out. If the client paid the fee, the account statement would be given to the client immediately. PW2 met the man on 30 May because her colleague Jenny was not free. PW2 agreed that the man she met on the day could speak Cantonese with Thai accent plus some basic English. PW2 had the impression that it was the man who gave the address that she wrote on the copy of the man’s Thai ID card which can be seen at page 43 of Exhibit P-9. PW2 then asked the man to sign on this copy of Thai ID card. The man signed in her presence. The purpose of the signature was to confirm the address so recorded was the client’s address. PW2 was adamant that she definitely asked the client to sign after she wrote the address on the copy of the Thai ID card as the particulars there are all in Thai. By contrast, there is English translation in the man’s Thai passport. The House Registration copy (page 44 to 45, Exhibit P-9) was to provide a kind of certification to show the client’s address. She did not notice the address in the registration copy is different from that in the company document. PW2 said eventually ABSL did not open a bank account for GIL because the client failed to provide all the information that was required, for example, business proof concerning the furniture sale and the relevant invoices or contracts.

12.PW2’s company received $6,650 on 4 May by way of payment transfer by High Profit (page 52 of Exhibit P-12). She has no knowledge of High Profit. GIL also paid the outstanding fee of $1,885 on 24 May 2012. PW2 explained that every year her staff would liaise with clients to renew the company. With the payment, it showed that GIL continued to renew the registration with the filing of the requisite documents. It was PW2’s impression that the man Pemathanapas stayed for about one to two hours in her company.

PW3 Ho Yuk-ling Esther

13.She was the Assistant Vice President of the Hang Seng Bank since 2011. She stationed in the business centre in Wanchai and was the one who handled the opening of the account by GIL. The account-opening form of GIL is in the banker’s affirmation, Exhibit P-13. She met the client on 30 May 2011. It was she who applied an “urgent” chop on the application form. She wrote the particulars in the form and the information was from the client as they have the “KYC” - know‑your-client procedure. The client provided the necessary documents. For a non-Hong Kong resident to apply for opening an account, the bank needed valid ID document and a chop from the Immigration to show that the client enters into Hong Kong properly.

14.It is a must for her to inspect the original copy of the documents.  She inspected the original copy of the passport and applied a chop reading “ID seen by Esther Ho Yuk-ling” on the copy of the passport and signed there (page 294 of the affirmation, Exhibit P-13).  She compared the photo in the passport with the face of the client and was satisfied that the same person was depicted in the passport.  She asked the client to sign on the copy of the passport in her presence (same passport as P-8 when the company was opened).  The client also wrote the telephone number “6681-440-1761.”  PW3 also stamped the “ID seen” chop on one of the pages of the passport (page 295 of Exhibit P-13) to prove that the client had a valid chop dated 29 May 2011 to enter into Hong Kong, just one day before the meeting.  PW3 also filled in the application form, that is, page 272 of Exhibit P-13.  It stated that there were about 30 staff in Thailand with the anticipated transactional activity of about $1 million per month.  The registered address was that of the secretarial company. Chequebook, phone-banking, ATM and e-banking facility were applied for.  PW3 passed all the documents to the client to activate e-banking.  The primary user of the account was Pemathanapas.  If the primary user divulged the PIN to other users, the other person could use the account.  The client was the only signatory and he appended his signature (page 289 of Exhibit P-13) in the name of Pemathanapas Chittapon.  PW3 recalled that the client asked the account be opened urgently but she forgot the reasons given.  The whole procedure took about 30 minutes but PW3 could not identify the client by now.  The acknowledgement of PIN for the Hang Seng business e-banking service (at page 296 of Exhibit P-13) was signed by the one named Pemathanapas Chittapon in PW3’s presence on 30 May 2011.  PW3 said numerical password would be mailed to client’s registered address in Hong Kong.

15.Under cross-examination, PW3 confirmed that the application of GIL was labelled as special customer category and could be regarded as a high-risk client.  GIL was referred to the bank by the secretarial company, ABSL.  On 30 May, the client took the documents directly to the bank.  The telephone number of ABSL, that is 81022592, was inserted in the form.  That is at page 273 of Exhibit P-13.  The client acted as a director of GIL, not as a representative, to open the bank account.  She recalled that there was proof of business provided and she made copies thereof.  Based on the business record so provided, PW3 was satisfied that GIL was in the furniture business and it was recorded that the transactional activity was $1 million per month.  PW3 added that the business proof provided by the client related to another company, not this newly incorporated GIL.  There was a limit of fund transfer at $5 million to registered beneficiary designated account, and that of $500,000 for non-designated ones.  Normally, the password of the account would be sent to the client within two weeks.

16.When re-examined, PW3, based on the historical account information report at page 297 of Exhibit P-13, said that GIL’s account was approved on 3 June 2011.  That was four days after the account was applied for.  Normally, it would take at least one week.

PW4 Lam Kai-wing

17.His two statements were admitted under section 65B and exhibited as P-25 with English translation as P-25A and P-26 with English translation as P-26A.  The inward remittance advices annexed to the statements are exhibited as P-22.

18.PW4 worked as the manager and was a director of Thye Hong Commercial and Finance Company (Thye Hong) since 2003.  PW4 mentioned about the transactions between August and November 2011 made by GIL to Thye Hong through telegraphic transfers by the Hang Seng Bank and also the transfer of 20 sums of money to Wo Shing Company. PW4 said his company received the inward remittance advice from the bank for making transfer to the account of Wo Shing Co in PW4’s company. Staff of PW4’s company would inform Wo Shing Co that GIL had money transferred to Thye Hong. Thye Hong would then transfer the money to Wo Shing Co.  The amount of money would be stated clearly on the fax.  The person in charge of Wo Shing Co was a Thai called Somkhid.  Thye Hong used its bank account number 0714-154687-401 with the Public Bank.  The bank account that GIL used was that of the Hang Seng Bank numbered 288-247216-883.  PW4 further provided the details of the 20 transactions in the currencies of Euro, USD and Swiss franc.  PW4 further identified the inward remittance advice.  In his second statement, PW4 provided further documents relating to Wo Shing Co and GIL.

19.PW4 said he did not know why the monies in these transactions were given to Wo Shing Co.  PW4 acted in accordance with the instructions of the Public Bank.  When the monies were received by Thye Hong, they would inform Wo Shing Co and then transferred the same to the account of Wo Shing Co.  They would send vouchers to Wo Shing Co with whom they had business for many years. Wo Shing Co maintained an account with Thye Hong.  PW4 had no idea of what “FFC” in the payment details stands for.  Basically, PW4 did not know anyone in GIL which was not the client of his company.  PW4 said he has no idea why GIL did not remit the money to Wo Shing Co direct.

20.Under cross-examination, PW4 said depending on the needs and the sufficiency of funds, there would be swap of funds between the accounts in Hong Kong dollars and USD.  PW4 said Wo Shing Co was a trading company in Thailand but PW4 did not know the nature of its trading business.  As PW4’s company was familiar with Wo Shing Co, they asked Wo Shing Co about the information relating to GIL.  GIL was the client of Wo Shing Co, not the client of Thye Hong.

First Video-recorded Interview dated 25 January 2013 (Exhibit P‑3 and P-3B)

21.Entry 40, 42 - Defendant stated his name as Pattanodom Chuensri with the date of birth, 25 March 1944.

254 - Defendant’s former name was Chittapon Pemathanapas

271 - After defendant altered his name, he went to apply for a passport immediately.

351, 355, 359 - The defendant can understand Chinese but doesn’t fully understand. He could write some Chinese. He does not know English.

367, 375, 381, 403 - The defendant was unemployed for the past two years. In previous years, he rented Buddhist statues to others in Bangkok.

415, 433, 437 - The defendant got HK$10,000 this month. When someone wanted the statue, they could call him and arrangement can be made. That happened on many occasions.

465, 487 - he separated from his wife and remarried in November last year.

506, 510, 516 - Defendant lived in village number 3 in Thailand, a place called Nonthaburi.

562, 578, 581, 591 - The defendant has two phones for use in Thailand. The numbers are 081‑9882826 and 081-4401761. The defendant used these phones for four to five years.

595 - Defendant has a SIM card for the phone in Hong Kong.

625 - The defendant has no bank account in Hong Kong.

635, 639 - Defendant opened a company in Hong Kong for a friend about two years ago.

643, 651, 663 - About two years ago, defendant made acquaintance with a friend in a banquet which was held in a hotel called Ratchada. He wanted to open a company in Hong Kong.

680, 684, 711 - That friend is called Tony, a foreigner from Soviet Union.

715 - Defendant knew this man Tony not very long, just talked for a while.

721, 727 - Defendant’s friend told Tony that the defendant went to Hong Kong often. Tony said he wanted to open an account, open a company specialising in furniture, and asked the defendant for help.

731 - Defendant said he wanted to open a company in Hong Kong and asked if the defendant could help.

755, 759, 769, 773 - We were unable to communicate. Defendant went to his friend’s home with his wife. It was said on that occasion Tony was there too. Defendant met Tony there incidentally.

775, 786 - Tony mentioned that and the defendant said okay and asked him to contact the defendant when to go. But they did not have any means of contact.

793, 805 - Tony asked his friend to call the defendant. But the defendant did not see Tony.

809 - Defendant did not know the full name of Tony.

827, 831, 843 - Defendant was given a Hong Kong name card by a friend of Tony. The card was for the defendant to find that person in Hong Kong. That person would prepare the documents and ask the defendant to sign.

849, 855, 883, 888 - At his friend’s home, the defendant was given an air ticket and HK$1,000. Tony was also present.

892, 894 - Tony could not speak much Thai, and his friend became the bridge of communication.

898 - This was the third time the defendant met Tony.

906 - After the account was opened, the company was opened. All the documents were given to him.

910(912?) - Defendant stayed in Hong Kong for three days.

920 - Defendant handed over all the documents to Tony when he returned to Bangkok.

932, 933 - Defendant went to the 10th floor, and a woman told the defendant that she would go to get some documents for the defendant to sign. Defendant went to the address stated in the name card.

969, 985 - Probably, the defendant gave a copy of the passport to that woman. Defendant was told that the documents were about furniture for import and export.

989 - The documents were for opening a company.

1037 - After signing the documents, the defendant eventually was given a set of company documents which was contained in a bag.

1049 - Defendant did not know the name of the company he opened.

1054, 1058 - The documents are in English. The defendant had no idea about the documents.

1074 - Defendant did not ask and just took away the company documents.

1078 - Defendant knew the documents were for opening a company. He thought it was okay and therefore he signed.

1082, 1086 - After signing the documents, the defendant returned to the hotel to sleep. Defendant stayed in Hong Kong for three days and just sauntered around on streets and had meals.

1100, 1104, 1108 - After returning to Bangkok, the defendant took the documents to a friend the next day. He took the documents to Tony’s secretary in Ratchada.

1122, 1128, 1130 - The secretary said they would buy furniture from Hong Kong in Thailand. The furniture would be sent to Hong Kong from Thailand, in or out. The furniture would be delivered to some other places from Hong Kong.

1134, 1136 - Defendant met Tony in Bangkok again, but nothing special was said because the company had been opened already.

1148 - Defendant thought it was his honour to open a company for a friend.

1152 - Defendant did not know the preparation for opening a company. He said the defendant just needed to come over to sign.

1158 - Defendant had nothing to do with the company.

1166, 1170 - The defendant did not know the background of Tony. He just knew that Tony was running the business of buying and selling furniture, that is, importing and exporting of furniture.

1188, 1192 - Defendant did not visit Tony’s company nor did defendant know the name of Tony’s company.

1196, 1200 - To the defendant’s knowledge, Tony is a middle class. Defendant did not know what Tony did in Thailand for a living.

1208 - Defendant gave assistance because Tony was well acquainted with that friend. Besides, Tony is a foreigner and defendant would give a helping hand if possible.

1212 - Tony said he would make arrangements but did not have time to go (to Hong Kong).

1230 - Because the defendant could speak Cantonese and is trusted and reliable, therefore let defendant do that.

1236 - Defendant had opened a company for Tony. Defendant had finished his duty.

1250, 1254 - Defendant did not know his liability after opening a company, and he did not know the company he opened had an address in Hong Kong.

1258 - (When asked why did defendant sign and open a company), there probably nothing to worry about opening a company to do business. They arranged the documents themselves and defendant had nothing to do with that.

1388 - Defendant had the impression that he signed and wrote his phone number.

1501 - When asked if the defendant signed the set of bank papers, the defendant believed so and recalled that the defendant only signed at the place down below.

1548 - Defendant had no idea of the content (of the bank account statement).

1556 - Defendant had no idea of the source of the money deposited into the bank account.

1564 - Defendant did not use this bank account.

1648, 1672 - The defendant did not know the remittance company Thye Hong nor Wo Shing Co in Thailand.

1694 - Defendant has no knowledge of the computer and the Internet.

1705, 1715, 1719 - Defendant said he has three names. Pattanodom Chuensri is the defendant’s original name. This is the name used in the passport now.

1839, 1856 - then changed to Pemathanapas Chittapon when defendant was about 60 years old.

2113, 2121 - Tony is a Russian of about 40 years old.

2150, 2155, 2167, 2178 - Defendant could not communicate with Tony, so he asked somebody to come to communicate with defendant. Tony introduced him as an interpreter. Later, the defendant knew that one, who is a Thai, was Tony’s secretary.

2195 - That friend of Tony was Tony’s secretary, and he requested the defendant to arrange for the registration of a company in Hong Kong for him.

2207, 2209, 2213 - Defendant did not furnish that man with any of his personal information. Defendant said to him that going to Hong Kong to open an account was difficult because of a lot of papers.

2243 - Defendant was told that the lawyer had arranged all the things and the defendant could simply return after signing.

2308 - Defendant threw away the name card in Thailand.

2327, 2329, 2333 - Defendant had no idea if the money of HK$1,000 can be regarded as his remuneration. $1,000 for spending in Hong Kong is indeed not enough. Defendant spent the money on meals and buying trousers.

2348 - The money is equivalent to tips.

2424 - When asked if he knew the company called Goldstein International Limited, defendant said, “Don’t know.”

2581 - Defendant had no idea that he was the sole signatory to the account.

2593, 2611 - (When asked about the bank transactions), the defendant replied that she had said all in and out required defendant’s signatures, but defendant had not made any signatures at all. The said lady was the one who met defendant on the 10th floor.

2628, 2633 - Defendant had taken out to have a look. They were just the papers of an ordinary company. It was because she told the defendant that those were the papers of a company.

2717, 2721 - Defendant had come to Hong Kong for two to four times between June 2011 and January 2012. Defendant came with his friends.

2815 - After giving the papers to Tony, defendant met him two more times in his secretary’s office.

Second Video-recorded Interview on 25 January 2013 with Thai interpreter (P-4, P-4A and P-4B)

22.Entry in 99, 103 - Defendant never saw the bank withdrawal card and had no idea of any phone or email-banking services in the account.

136 - After the defendant took the documents and came back, defendant gave them all to him. Defendant did not read.

193, 199 - Upon arrival in Hong Kong, defendant went to a hotel in Mongkok.

207, 213 - Defendant went to the place for opening the company on the following day. Defendant held the business card and travelled by MTR.

244, 309 - The defendant was given a bag containing the company stamp and a wad of documents. They were in the form of books.

363 - When asked if the defendant could read Chinese, defendant replied, “Of course I know, so I can tell you.”

371 - Tony did say that it was a law firm.

400 - Helping his friend to open a company in Hong Kong would help the defendant gain some face.

443, 447 - When asked if Tony gave the defendant any other advantages, defendant replied, “Not even a cup of coffee.” Tony just gave defendant the air ticket and $1,000.

501, 505, 508 - Defendant went to the office of Tony’s secretary very frequently. Defendant went there to look for his friend, not particularly for Tony.

566, 568 - When asked why Tony asked the defendant for help, the defendant replied he said the defendant was honest and knew Cantonese.

622 - The defendant was told that this account could only be operated with the defendant’s signature.

735 - Defendant agreed that the woman (staff on the 10th floor) mentioned that it was Tony who told her to help him.

Third Video-recorded Interview on 26 January 2013 with a Thai interpreter (P-6, P-6A and P-6B)

23.Entry 30 - Defendant called himself Pattanodom Chuensri.

191 - Defendant came to Hong Kong many times in 2001 (five times - on 29 May, 6 October, 25 October, 22 November, 19 December 2011).

285, 289, 295 - The defendant was using the passport numbered X608572 in the name of Pemathanapas Chittapon.

309 - After that, the defendant changed his Thai passport in the same name but with a different number, 960000.

340, 344 - Defendant switched to a Thai passport in the name of Pattanodom Chuensri, and he was currently using his passport.

485 - Defendant had no idea of the name of the company he set up.

727, 731 - The defendant was asked to come (to the secretarial company) so defendant came. He came to sign to set up the company. The defendant was given the documents of incorporation.

741 - He gave the defendant the air ticket for the defendant to come, so the defendant came.

833, 837 - The person (in the secretarial company) asked if the defendant was Tony, and then the defendant was given some documents to sign.

873, 879 - That company (secretarial company) was quite big, and there were many foreigners making investment. Defendant agreed that he felt the company was an investment company.

883, 890 - It was a solicitor as she registered limited companies for others. The defendant agreed that he felt that it was a solicitors’ firm and made investments for others.

892 - Just the case for anywhere, one got a solicitor if one wants to make investment.

1049 - (When asked if defendant signed the bank application form), the defendant was not sure.

1336, 1352 - She (staff of the secretarial company) asked the defendant for the passport and took it for photocopying. She said it was required when she went to make company registration.

1398, 1045 - Defendant signed the documents and also on the copy of the passport. The defendant signed and wrote down the phone number.

1451, 1455 - The defendant did not lose his passport, nor did he lend his passport to others.

1474 - Defendant did not know why the bank has a copy of his passport.

1489, 1491 - Defendant tried many times to open an account, but that could not be done.

1505, 1513, 1521, 1523 - Defendant went to open a personal account but failed. The defendant had tried many times. Defendant had tried Hang Seng Bank, HSBC, East Asia. The bank accounts could not be opened even the passport was available.

1526, 1536 - Many documents were required (regarding the opening of the bank account). Maybe it is because it can only be done in a law firm.

1564 - It was suspicious because defendant went there personally but still could not open an account.

1568, 1572, 1582 - If one wants to open an account, one needs to deposit a sum of money; and, secondly, it requires ‘payment of telephone’ bill paid by the party in Thailand. Thirdly, the bank in Thailand is required to issue a letter to prove that one has an account in Thailand.

1603 - For a corporation (bank account), it is definitely more difficult.

1609 - Defendant does not understand why this corporation account could be opened.

1734 - (Concerning replacement of the old passport), because many chops were stamped on the old passport and all pages were used up.

1753, 1767 - (When being informed that his old passport was to expire on 29 October 2011) the defendant remembered that the passport would expire in less than six months. Many places require that one’s passport must be valid for more than six months. Hence, it came the new passport number P960000.

1791, 1795, 1807 - The defendant was asked to act as the contact person. (When asked why the address of the defendant’s friend not being stated in the company document), the defendant said because the defendant did not know his address and only know his own address. It was simple just to use the defendant’s own address.

1818, 1822, 1824, 1828, 1834 - His documents (or letters) were still in the defendant’s home in Thailand. Defendant did not open the documents as the things had nothing to do with the defendant. Those were sent from Hong Kong. That included bank letters.

2088 - He (Tony) told me to set up a company, and then the letters were sent to the defendant’s place so the defendant would bring them to him.

2473, 2475, 2483, 2485, 2552, 2561 - Previously, the defendant intended to open a personal account in Hong Kong because the defendant worked as an agent, making contacts for selling oil, USSR selling oil. It should be in 2008 or 2009. The defendant was a broker. The oil was petrol for vehicles.

2627 - The defendant did not go to the bank. He only went to the office.

24.There was no halftime submission.  The defendant elected not to give evidence.

Analysis

25.All along, it is the duty of the prosecution to prove the elements of offence.  The burden is on the prosecution.  The defendant does not have any duty to prove anything.  The defendant has no criminal record in Hong Kong, and the court is obliged to consider any evidence disclosed so far and also the content of the video-recorded interviews in the defendant’s favour in light of the defendant’s credibility and propensity to commit any crime.  The fact that the defendant elected not to give evidence in court is his right, and this court would not draw any adverse inference against the defendant.  On the other hand, it is well-established that what was said by the defendant in his three video-recorded interviews, if accepted, could not be attached with the same weight as if the defendant was giving evidence in court.

26.It is of assistance to list out some of the background information about the defendant, based on what he told the police in the abovesaid three video-recorded interviews.  The defendant did not have employment for about two years before his arrest.  Occasionally, he rented out Buddhist statues and claimed that, at times, could earn about HK$10,000 in one month. He has no criminal record in Hong Kong.  He travelled to Hong Kong frequently and could understand some Cantonese.  He is not proficient in English.  This time the defendant came to Hong Kong with the Thai passport numbered Z594609 in the name of Chuensri Pattanodom (Exhibit P-23).  He also possessed his Thai National ID card numbered 3100100816880 and the name so recorded is Chuensri Pattanodom with the date of issue 30 April 2012.

27.The defendant came to Hong Kong in 2011 with another passport numbered X608572 in the name of Pemathanapas Chittapon. At that time, the defendant presented his Thai ID card which is in Thai (Exhibit P-9) but has the same ID number 3100100816880.  The defendant admitted he had these two names.  The defendant also admitted that he went to the secretarial company to open a company for Tony, a Russian.  The defendant claimed that he frequented the office of Tony’s secretary who acted as a bridge of communication between Tony and the defendant.  Based on the exchange of emails (Exhibit P-7), there was a person called Toni Zimmerman of Goldstein International Limited who liaised with staff of Asia Business Service Limited (ABSL) from 3 May 2011.  In the email dated 3 May 2011, Toni made it clear that he was acting on behalf of Mr Pemathanapas Chittapon and chose the package valued at HK$6,650.

28.It is noted that the company documents dated 19 May and 25 May 2011 were signed by Pemathanapas, prior to his arrival in Hong Kong on 29 May 2011.  The defendant was given the actual business card of the secretarial company in Thailand.  Upon arrival in Hong Kong on 29 May 2011, the defendant went to the secretarial company the next day.  He followed the address shown on the business card that Tony’s secretary gave him when the defendant was in Thailand.  The defendant claimed that Tony gave him HK$1,000 and a return air ticket.  The defendant made acquaintance with Toni in a banquet and the defendant said it was an honour for him to give a helping hand to a friend who is a foreigner. It is noted that the certificate of incorporation and business registration certificate Form 2 (Exhibit P-8) was issued on 25 May 2011, four days before the arrival of the defendant.  Payment for the Form 2 was made on 19 May 2011. From the emails in Exhibit P-7, preparation work has already started in early May 2011.  The defendant said Toni found the defendant trustworthy and reliable, hence asked the defendant, who travelled to Hong Kong frequently, for a helping hand in opening a company.  The defendant did not claim that he has any special skill or expertise in running a company and/or running a business relating to furniture.  The defendant claimed that he acted as a broker for oil trade back in 2008 or 2009.  He, however, was not successful in opening a personal bank account in Hong Kong, even though he attempted to do so at the Hang Seng Bank, HSBC and East Asia.

29.The defendant claimed that he only went to the secretarial company to open a company.  He denied he had ever gone to the Hang Seng Bank to open a company account for GIL.  He did not know why the application form of the Hang Seng Bank had his personal particulars.  He did not know why the bank staff has copy of his passport and Thai ID card.  The defendant denied he has anything to do with the opening of the bank account, let alone the activity of the bank account.  The defendant has little or no knowledge of the computer and Internet which meant that he would not be able to execute e-banking.  The defendant had two phone numbers in Thailand and used one SIM card in Hong Kong.

30.I have considered the content of the three video-recorded interviews and am of the view that the version put forward by the defendant was evasive and not trustworthy at all.  Why a social acquaintance who is a Russian took the trouble to arrange the preparation work for the defendant well before the defendant arrived in Hong Kong on 29 May 2011?  The defendant has no skill or expertise and could hardly speak English. The defendant claimed he relied on Tony’s secretary as a bridge of communication.  The defendant, who was unemployed, then took the trouble to fly to Hong Kong and spent three days in Hong Kong.  He might well take this trip as a free ride.  The defendant said Tony gave him the return ticket plus HK$1,000.  That is all without any daily expenses, without any allowance or reimbursement.  The defendant did not mention about the hotel expense and the travelling expenses in Hong Kong.  I am sure that the defendant was not doing any voluntary or charitable work for Tony.  The defendant did not ask why Tony required him to go to Hong Kong to open a company.  Why Tony or his secretary or his staff could not go to Hong Kong themselves?  Why some of the documents had to be signed in advance when the defendant was still in Thailand?  All along it was intended that the company GIL would be registered under the defendant’s previous name, Pemathanapas.  In the later days, the defendant travelled to Hong Kong at the strength of another passport in the name of Chuensri Pattanodom.  In my view, the defendant had the intention to conceal his identity or to make his entry into Hong Kong less easy to be detected by using another passport in a different name when he entered into Hong Kong.

31.The company documents contained no information about Tony.  The defendant did not know the full name of Tony nor Tony’s business.  The defendant did not pay the expenses of HK$6,600-odd for setting up the company.  The defendant provided his own residential address in Thailand to the secretarial company and even claimed that he received correspondence of GIL or Tony that were sent to the defendant’s address in Thailand.  On the other hand, the defendant repeatedly said once he signed the documents in Hong Kong, he had nothing to do with GIL.

32.While I found the version of the defendant not creditworthy, I have to consider the evidence tendered by the prosecution as a whole to see if the charge is proved.  I found all the prosecution witnesses are credible witnesses and their evidence could be relied upon.

33.PW2, Anita Tso, staff of the secretarial company, was able to identify the defendant in court.  She was the one who checked the passport and the Thai ID card of the defendant and made copy thereof.  On the other hand, although PW3, Esther Ho, the bank staff, could not identify the defendant in court, she was adamant that she did check and compare the person with the photo of the passport that was provided to her.  She was satisfied that it was the same person and she even applied the chop “ID seen.”  She met the client on 30 May 2011.  I am satisfied and have no doubt that it was the defendant who went to the Hang Seng Bank to open the bank account in question.  The defendant being the sole shareholder and director of GIL provided the information of GIL to the bank staff.  PW3 maintained that Pemathanapas acted as the director of GIL to open the bank account, not as the representative of GIL.  The defendant was the sole signatory to the account.  Password and security device was given to the defendant.  The process of the application was expedited because the client wanted to open the account urgently.  The defendant used his previous passport in the name of Pemathanapas to enter Hong Kong on 29 May, and used the same passport and identity when he signed the company documents at ABSL and when he opened the bank account at the Hang Seng Bank.  All the company documents are in that name and the passport in that name, that is Pemathanapas, has to be used.

34.The business integrated account of the Hang Seng Bank under GIL had four sub-accounts in four currencies. Frequent transactions totalled about HK$5.3 million were recorded between 21 June 2011 and 30 December 2011.  As the defendant was the primary user of the bank account and he was given the password and the security device by the bank, it can be inferred that the bank account was operated either by the defendant or with the authority or knowledge of the defendant.  The defendant might not know the details of this activity.  Nevertheless, it can be inferred that the defendant knew that the bank account of GIL would be operated.  Opening a bank account of GIL in Hong Kong was one of the main purposes for the defendant to come to Hong Kong in person.

35.The mens rea of section 25(1) has two parts.  The prosecution is relying on the second limb of “having reasonable grounds to believe.”  A person cannot turn a blind eye to the obvious.  When the knowledge on the part of a defendant is required to be proved, it is always open to the tribunal of fact to base a finding of knowledge on evidence that the defendant had deliberately shut his eyes to the obvious or refrained from inquiry because he suspected the truth and did not want to have his suspicions confirmed: see paragraph 41-73 of Archbold Hong Kong 2013.  Reasonable grounds to believe contains objective and subjective elements.  The necessary mental element of the offence can exist even if a defendant does not himself believe that the property in question constitutes the proceeds of an indictable offence provided he knows of the grounds upon which objectively such a belief is reasonably based. 

36.The defendant, acting in the instructions of a foreigner, Tony, came all the way from Bangkok to Hong Kong just to sign documents at the secretarial company to open a company in Hong Kong.  The preparation work of the company registration and meeting of staff of ABSL was made or arranged well in advance.  It was the defendant who signed the company documents and the defendant obtained a bag of company documents from the secretarial company. That facilitated the defendant to go to the Hang Seng Bank right away to open a business integrated bank account on 30 May.  He was given the password and security device to operate the e-banking service.  The defendant claimed that he gave all the company documents to Tony or Tony’s secretary shortly after his return to Bangkok on 31 May 2011.  The defendant claimed that he had no knowledge of the nature of business that Tony was doing, and yet it was the defendant who provided the information, for example, the business plan, the estimated transactional activity, to the secretarial company and to the bank when documents were prepared.  GIL did not pay any tax in Hong Kong.

37.A common-sense, right-thinking member of the community would certainly find it suspicious for an inexperienced and unemployed Thai national who flied to Hong Kong from Bangkok to open a company and the company bank account in Hong Kong.  That would lead that member of the community to believe that the property in whole or in part as recorded in that company bank account represented proceeds of indictable offence.  And, subjectively, the defendant must be aware of those grounds.  The defendant claimed that he did make many attempts to open a personal bank account in Hong Kong.  He travelled to Hong Kong frequently and even knows Chinese.  He is able to speak Cantonese.  He knows company documents were required when a corporate bank account is to be opened.  The e-banking service was provided and the transactions recorded in the bank account was done by e-banking with the IP addresses in Thailand.  Counsel for the defendant submitted that the defendant did not open the bank account, and further submitted that even if the bank account was opened by the defendant for GIL, the defendant had no reasonable grounds to believe that the account would be used for money laundering.  In my view, there is a kind of inherent contradiction in this line of submission.

38.I rejected the defendant’s version totally in that he denied that he was the one to open the bank account.  In the present case, it would defy common sense for the defendant to say he has a true and reasonable lack of suspicion.  On the other hand, as the defendant was named as the primary user of the account and possessed the security device and password for e‑banking, I find that the only reasonable and irresistible inference is that the defendant was the one, or the one who authorised another person or acted in concert with other persons, to operate the bank account.  There is no other credible explanation that this court can derive from the evidence in hand.  The bank staff maintained that the past business records that was provided by the defendant related to another company, not GIL.  That is in contrary to what was submitted by counsel for the defendant (re paragraph 58(5) of the submission).

39.I have also considered the detailed analysis of the law as expounded by the Court of Appeal in a recent case, HKSAR v Pang Hung Fai CACC 34 of 2012.  Taking all factors into account, I find that the defendant has the requisite belief in that he has reasonable grounds to believe that the company bank account that he opened in Hong Kong would be used for the purpose of money laundering and that the property as represented in the various entries in the bank statement was the proceeds of an indictable offence.  To conclude, I find the prosecution has proved the charge against the defendant, and I convict the defendant of one count of money laundering.

Please refer to CACC294/2013 for the relevant appeal(s) to the Court of Appeal.