HKSAR v. Yeung Ka Sing, Carson

DCCC 860/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO.860 OF 2011

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Reasons for Sentence

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1.The defendant was convicted after trial of 5 charges of ‘dealing with property believed to represent proceeds of an indictable offence’, contrary to s.25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap.455, more commonly known as offences of money laundering.

Background

2.Each of the 5 charges concerns one bank account and covers slightly different periods from 2001 to 2007. The bank accounts in charges 1, 2 and 3 (hereinafter as account A, B and C) were opened and held in the name of the defendant. The bank accounts in charges 4 and 5 (hereinafter as account D and E) were opened and held in the name of the defendant’s now deceased father, Yeung Chung, with the defendant as the only other signatory. It was my finding that the defendant also dealt with the money in his father’s bank accounts.

3.The forensic accountant, Mr. Sutton, for the prosecution reviewed the movement of funds in the 5 accounts over the years and identified various hallmarks of money laundering.

4.I found that the prosecution had proven beyond reasonable doubt that the circumstances concerning the movement of funds into and out of the bank accounts were all known to the defendant and that a right thinking member of the community knowing those circumstances had reasonable grounds to believe that the money being dealt with represented wholly or in part directly or indirectly proceeds of an indictable offence, hence the defendant himself was held as having reasonable grounds to so believe and was convicted of all 5 charges.

5.The total amount of money being subject of the 5 charges is $721,287,606.

Previous convictions

6.Although the defendant is not of clear record, his only conviction was in relation to summonses issued by the Securities and Futures Commission for non-disclosure of his interest in some shares. This was disclosed voluntarily by the defendant during his examination-in-chief, and I do not take this as an aggravating factor when sentencing.

Mitigation

7.The defendant is 54. His background was fully canvassed when he gave evidence in his own defence and I do not propose to repeat it here. In any event, given the nature of the charges and the manner of the commission of the offences over the years by the defendant as a successful businessman, I find that his personal background is not of much significance when determining the sentence.

8.Letters from Dr. Cheng Wan Qi, Chairman of the Asian Basketball Association; Mr. Zhang Cheng, Chairman of Birmingham International Holdings Limited and Mr. Wei Yue Tong, Chairman of Liang Tan Yi Xing International Foundation were handed up in mitigation. They in turn described the defendant as righteous, reliable, responsible, ‘grateful’ and as someone of outstanding commercial ability.

9.All 3 letters refer to a Birmingham Charity Fund established through the defendant’s RMB50 million donations, which was later incorporated into the China Foundation for Disabled Persons to promote charity work in China.

10.The defendant’s eldest son wrote to seek leniency from the court, describing how the defendant has always been a responsible and loving father. The Prison Chaplain wrote to tell the court that he commiserates with the defendant’s family situation.

Sentencing authorities

11.The defence referred to the case of HKSAR v Boma Amaso [2012] 2 HKLRD 33 where the Court of Appeal set out the factors to be considered when sentencing money laundering cases.

12.The defence also seek to rely on the cases of HKSAR v Kam Susanto, CACC 542/2003 and HKSAR v Tam Hung, CACC 127/2010 to suggest that dealing with proceeds in the region of $400 million odd would attract a sentence of 4 to 4 and a half years’ imprisonment. I however find that the cases are not helpful in our present case because their factual circumstances are so different and the sentence was never a subject of contention in the appeals.

Sentence

13.The maximum sentence under s.25(3)(a) is a fine of $5,000,000 and imprisonment for 14 years. I find that although there are 5 charges, the defendant’s sentence should be dealt with by way of a combined approach given the manner that the accounts were used by the defendant in his money laundering activities.

14.The defendant utilized 5 different bank accounts in his money laundering over a long period of time involving vast sums of money. But for the defendant’s own evidence shedding some light on some of the deposits and transactions, despite my finding that he was still lying about their true nature we would have known very little about the extent of his money laundering activities. Even now, I find that the defendant is the only person who truly knows.

15.The defendant used his and his father’s bank accounts to engage in money laundering activities. In relation to the deposits that the defendant said were repayment of capital and returns from his and his father’s investment in either Neptune Club or Massive Resources (070), there were multiple deposits by numerous individuals and companies who on the face of it would look innocent but as evidence disclosed, were all somehow connected to Lin Cheuk Fung and Cheung Chi Tai, the 2 bosses of the Macau casino VIP room. There was some sophistication in the defendant’s operation of his money laundering activities.

16.Although it would appear that the defendant was not the director of a laundering scheme, I find that without his considerable skills in share dealings and connections to the Macau casinos, the laundering could not have gone on for such a long time and on such a large scale.

17.The defendant’s commission of the offences involved individuals and entities of the Macau SAR jurisdiction, adding a cross-border dimension to the case.

18.The defendant deliberately tried to mislead the court about the true nature of various deposits by lying in the witness box.

19.On the other hand, there is no evidence as to what the predicate offence or offences were, nor is there evidence to suggest that the defendant knew the nature of the predicate offence. Furthermore, given that the prosecution case rested on the ‘having reasonable grounds to believe’ limb of s.25(1), I find that the defendant must be sentenced on the basis that he did not have knowledge of the fact that the funds were the proceeds of an indictable offence.

20.Although Cheung Chi Tai, one of the depositors, was referred to in a news article linked by Mr. Robinson in his report as someone connected with Hong Kong triad societies, I found in my verdict that there was no evidence to suggest the defendant knew this fact and so I will not hold this against the defendant when sentencing him.

21.As to what amount of money should the sentence be based upon, I find that, even if the defendant is sentenced on the basis of the reduced figure of $449,012,331, as suggested by the defence, given the fact that $449 million odd is still a staggering figure, and given that the amount of money is just one of the factors affecting the sentence, I find that there should not be much difference in the ultimate sentence.

22.As Mr. Reading pointed out, the defendant was arrested in June 2011 and the defendant’s trial was supposed to have commenced in November 2012. I find that there had been no delay in the defendant’s prosecution and will not reduce the sentence on that basis.

23.Maintaining the integrity of the banking system is of paramount importance if Hong Kong is to remain an international finance centre. I find that the sentence must include an element of deterrence to discourage those who are in a position to exploit the system for their own gains through money laundering, and to send the message that should they choose to do so, the law will come down on them with full force.

24.Bearing in mind all the circumstances of the case and the factors referred to above, I find that an overall combined starting point of 6 years’ imprisonment is appropriate. I have already taken into consideration the defendant’s charitable donations to various organizations in Hong Kong when arriving at this starting point.

25.Based on the amount of money involved in the charges, the defendant is sentenced to concurrent sentences of 6 years’ imprisonment on charges 1 and 2, 5 years’ imprisonment on charge 3, 2 years’ imprisonment on charge 4 and 5 years’ imprisonment on charge 5. The defendant is therefore sentenced to a total of 6 years’ imprisonment.