HKSAR v. Lam Chi Yuen

DCCC 370/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 370 OF 2012

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Reasons for Sentence

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1.Defendant was convicted after trial for 7 charges of money laundering involving a total about 109 million.

2.The facts were that between October 2006 to February 2010, the defendant had dealt with the funds in 6 bank accounts and a Hong Kong Jockey Club account which were all in the sole name of the defendant except that 2 were held in the name of Chun Fat Finance Assurance Company (“Chun Fat”) where defendant was the sole proprietor.

3.From the tax return of the defendant and Chun Fat at the material times, there was simply no tax payable by the defendant and that Chun Fat at most only in a year having profit of about $55,000 whereas in other year even trading at a loss. Yet from all these accounts, there had been numerous transactions.  Say, for example, on Charge 4, there had been more than 500 deposits and withdrawals respectively involving a total sum of about 36 million.

4.There were also numerous transactions involving a total of substantial sum of amount of deposit and withdrawals in other charges where one may take reference to Annex I and II of the prosecution’s opening.  Defendant clearly had reasonable grounds to believe the funds involved represented the proceeds of indictable offence and yet he still dealt with them.

5.The defendant portrayed that he was the boss of 24 companies employing 80 staff at its peak, running business of the so-called guarantee and debt-collection business earning commission by introducing customer to licensed money-lenders.  Yet all these companies were not held in his name, and the respective tax return did not correspond with the allegation and eventually his story was not to be believed by this court. 

6.Defendant, aged 45, he had 4 previous criminal records involving gambling and assault all dated back to 1995 where fines were imposed.  Ms Gwilt submitted that the predicate offence was loan shark where the interest charged was not extortionate.  However, as I said in the verdict, defendant’s version was not to be believed and there must be more details behind for the source of all these funds. 

7.Money laundering is a serious offence carrying maximum sentence of 14 years’ imprisonment.  As stated in Secretary for Justice v Wan Kwok Keung [2012] 1 HKLRD 201,

“Money laundering is a serious offence for not only does it encourage criminal activities indirectly but also attempts to legitimise the proceeds of crime.In order to crack down on serious crime and to prevent offenders from getting financial gain, it is necessary to deter the commission of moneylaundering offence.Generally, the sentence for a moneylaundering offence should mainly reflect the amount of “black money” laundered and not the benefit obtained by the defendant or others, the reason being that it is very difficult to prove the benefit concerned, and in most moneylaundering cases, there may not be evidence to show from what indictable offence the “black money” is in fact derived.”

8.Also in HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545, the Court of Appeal set out the amounts of money involved and the sentence passed in a number of money laundering cases.  The starting point is 3 years or so where the sum involved is between 1 to 2 million, 4 years or so where it is between 3 to 6 million, and could be over 5 years where it is above 10 million.

9.The Court of Appeal in HKSAR v Boma [2012] 2 HKLRD 33 also set out some features for consideration on sentence.  Apart from the recognition of the maximum sentence and deterrent factor, the significant features would include the nature of the predicate offence; the state of offenders’ knowledge; where the operation involved an international dimension, this would be a significant aggravating feature; the sophistication of the offence, including the degree of planning; where the offence was committed by or on behalf of an organised criminal syndicate would be an aggravating feature; whether there was one transaction or many and the length of time over which the offence was committed; whether the offender continued to launder funds where after he had discovered the nature of the funds were proceeds of an offence or a serious offence was involved; and the role of the offender and the acts performed by him.  Of course, the list was non‑exhaustive.

10.Applying to the present case, the nature of the predicate offence is hard and difficult to recognise but the defendant must have full knowledge and control of all the funds involved so as to be able to divert and direct as he wished which necessarily included quite some degree of planning.  With the view that there were a substantial number of his and other bank accounts involved, one must not eliminate the existence of an organised syndicate.  One must also take note that the transactions had been taking over for about 3 to 4 years, and there were numerous transactions involved for all these charges.

11.Taking into account all these circumstances and all the matters submitted for consideration, I consider that for Charge 1, 5 and 6 involving about 8 million, 3½ years’ imprisonment for each charge is appropriate. For Charge 2, 3 and 4 involving about 20 to 36 million, 4½ years’ imprisonment for each is appropriate. And for Charge 7 involving about 4.4 million, 3 years’ imprisonment is appropriate.

12.For totality principles, one must also consider that although the total amount was more than 100 million but quite substantial sum for each charge was just interrelated and simply transferrals between each account, which means the total sum involved could be much less in the circumstances.  So, I consider it may be appropriate for all the sentences to be run concurrently and as follows,

Charge 1: 3½ years’ imprisonment;

Charge 2 - 4: 4½ years’ imprisonment for each charge;

Charge 5 & 6: 3½ years’ imprisonment for each charge;

Charge 7: 3 years’ imprisonment;

All the sentence to be run concurrently. So for all the charges involved, the total sentence is 4½ years’ imprisonment.