HKSAR v. Chan Wing Lan

DCCC 1159/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO 1159 OF 2013

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Reasons for Verdict

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1.The defendant faces one charge of dealing with property known or believed to be the proceeds of an indictable offence, contrary to section 25(1) and 25(3) of the Organized and Serious Crimes Ordinance, Cap 455. The offence is commonly known as money laundering.

2.The charge alleges that between the 19th day of April 2011 and the 11th day of May 2011, the defendant laundered a total sum of HK$2,027,540 in a bank account.

The Prosecution Case

3.The prosecution case is not challenged.  Most of the prosecution case is agreed by way of admitted evidence.

4.Mr Thorsten Henkel, PW1, is a businessman in Germany with GSE Europe GmbH (“GSE”).  In April 2011, he was deceived in an email scam and tricked to pay a sum equivalent to HK$345,219.74 into a bank account numbered 809‑831225‑001 of the Hongkong and Shanghai Banking Corporation Limited (“HSBC”) held in the name of GOLD RICH (“the GOLD RICH account”).  The case was subsequently reported to the police. 

5.It is not the prosecution case that the defendant was a party to the scam.  There is no dispute that PW1 was deceived of the money. 

6.PW2 and 3 are police officers who gave evidence of the background to the arrest, subsequent search and seizure and investigation.  Their evidence was not challenged.

7.The defendant registered GOLD RICH as a business on 20 May 2010.  She is the sole proprietor.  The business address of GOLD RICH was the same as her residential address which was a flat in a public housing estate.  The defendant opened the GOLD RICH account on 23 March 2011.  The account has Internet banking and chequebook facility.  The defendant is the sole signatory.

8.Between 19 April 2011 and 11 May 2011, the charge period, nine suspicious deposits (“the charge moneys”) were made into the GOLD RICH account from various overseas payers totalling HK$2,027,540.  One of the deposits was from PW1.  The defendant had two other HSBC bank accounts in her own name, namely, 499-671634-292 (“DPA1”) and 015-810906-833 (“DPA2”). 

9.The charge moneys were transferred between the three accounts.  Money was withdrawn from the GOLD RICH account shortly after each charge credit was deposited.  There were a total of 15 withdrawals from the GOLD RICH account during the said period, amounting to HK$2,317,722.  Excluding three of the withdrawals representing bank charges, the remaining 12 withdrawals totalling 2,317,452 included one cash withdrawal of $208,000, eight transfer withdrawals amounting to $1,679,452, and three cheque withdrawals amounting to $430,000.  Among those eight transfer withdrawals, five of them amounting to $1,417,381 were transferred from the GOLD RICH account to DPA1.  

10.Annex A shows the nine deposits, subject matter of the charge.  Annex B shows the details of withdrawals from GOLD RICH account.  Annex C shows the activities of the defendant’s personal account, DPA1.  Annex D shows the transactions in the GOLD RICH account within the charge period.  These annexes are adopted from the admitted facts.

11.DPA1 had been opened on 25 September 2009.  As said before, GOLD RICH account was opened on 23 March 2011.  DPA2 was only opened by the defendant on 11 May 2011.  When this account was opened, the defendant transferred two sums, namely, $33,569 and $200,000.  The moneys were transferred from DPA1 to DPA2.  They originated from the charge moneys received in the GOLD RICH account from overseas.  

12.No tax return has been filed by GOLD RICH or the defendant between 1 January 2010 and 22 June 2012.  The defendant was arrested on 4 November 2011.

13.The prosecution case is in essence that the defendant opened the GOLD RICH account so that she could access and use this account as a conduit for moneys which were the proceeds of an indictable offence.  Most of the money representing the nine credits was ultimately withdrawn from the GOLD RICH account.  She knew or had reasonable grounds to believe that the money passing through her account was the proceeds of such offences.

The Defence Case

14.The defendant elected to give evidence but called no witnesses.  She testified as to her background, the establishment of GOLD RICH and reasons for opening of the GOLD RICH account.  She gave full accounts how and why she dealt with the funds in her three accounts. 

15.She is aged 28, single with a 9-year-old daughter.  She has a clear record in Hong Kong.  She previously worked in sales for UA Finance, a finance company, and then at Sure On Investment Company Limited where she worked with a male, Ng Kwok-leung (“Ng”).  Then she established GOLD RICH for a business in association with Ng.  She worked as a part-time in a construction company starting from April 2011 for around a year.

16.The defendant established GOLD RICH in May 2010 to run a partnership with Ng.  Their business was to find customers for loans for a finance company known as Winton Finance.  Ng had a company also known as GOLD RICH.  The defendant also invested in a call centre in Dongguan, China to cold‑call potential clients for loans.  At that time, GOLD RICH did not have a bank account. 

17.The defendant had known one Edward Law Wai-hung (“Edward”) for about eight years.  They were common friends.  In September 2010, one of her clients wanted to buy some property in China.  Edward introduced to her a person called Tsang Wai‑kit (“Tsang”) who dealt in property in the mainland.  They met once in September or October 2010 when the defendant and her client went to China to meet Tsang.  In the end, no property was purchased. 

18.Later, Edward told the defendant that Tsang wanted to find someone trustworthy as a middleman to get back some loans for him.  Tsang would like the defendant to help.  The defendant could receive a 1 per cent commission on the funds received.   

19.A meeting was later arranged for them to meet in Tsim Sha Tsui.  Present at that meeting were Edward, Tsang, the defendant and an accountant who was there to give opinion about the legitimacy and feasibility of the scheme.  The accountant advised that some people would engage in this kind of business.  However, after the defendant collected the money and before she passed it to Tsang, she must get invoices from Tsang.  The defendant believed in what the accountant said and that the scheme was lawful. She also relied on Edward’s words that Tsang was a trustworthy person.  She later agreed to the scheme.  Subsequently, Edward took the defendant to HSBC to open a bank account for GOLD RICH.  Edward passed the bank details to Tsang.

20.The defendant gave an account of how she dealt with the funds she received which is not fully repeated here.  I will highlight some relevant parts for discussion.   

21.From 19 April 2011, the GOLD RICH account started to receive moneys for Tsang.  The first payment was from Maria De Jesus (“Maria”).  On receipt, the defendant called Tsang who told her to keep the funds received in her personal account pending his instructions.  She was also instructed to do the same in the future.

22.There was an occasion on 26 April 2011 that Tsang called the defendant and asked her to transfer the sums of 167,725 and 87,345 to Odeyemi Kolawole (“Odeyemi”).  Tsang explained that Odeyemi had sold Tsang some recyclable products.  The defendant agreed but asked Tsang to provide her with the invoices.  Tsang agreed to supply the invoices later.  

23.On the same day, Tsang asked the defendant to withdraw $208,000 and deliver it to him in Shenzhen.  Later, she went to Shenzhen with Edward to meet Tsang and handed over the money to him.  On this occasion, Tsang showed her invoices relating to the recycling material and Maria and gave her an authorisation letter (Exhibit D1) which authorised the defendant to receive money from Maria.  It was the first time she had seen any documentation.  She kept the letter of authorisation.  However, she was not given copies of the invoices for retention.

24.On 29 and 30 April, Tsang was in Hong Kong and he asked the defendant to withdraw $20,000 and $100,000 cash respectively.  The defendant did as requested.

25.In cross-examination, the defendant, having seen her immigration record, clarified that it was on 30 April 2011 that the defendant went to Shenzhen with Edward to meet Tsang and hand over the $208,000 which had been withdrawn on 26 April.  She confirmed it was at this meeting Tsang showed her the invoices relating to Odeyemi and gave her the letter of authorisation.  The defendant further confirmed that the first time she had seen any documentation was on this day.

26.On 3 May 2011, Tsang called the defendant and asked her to withdraw $254,000 and hand it to Edward.  The defendant did as instructed.

27.On 6 May 2011, sometime after 4 pm, the defendant received Tsang’s call when she was in a restaurant, waiting for a client.  Tsang asked her to withdraw $290,000 urgently to pay for some goods and pass the money to Edward.  The defendant refused, saying she was busy.  The defendant also asked again about being provided with invoices.  The defendant challenged Tsang that in their agreement, she was not required to buy goods for him.  She insisted to see the invoices.  The two quarrelled, and the defendant told Tsang she no longer wished to continue and would only help him for the last time.  In order to get the money before the bank closed at 5 pm, the defendant arranged a friend, Fan Lok-ming (“Fan”), to come to the restaurant and get a cheque from her.  Fan got money from the bank and passed it to Edward.

28.On 7 May, two deposits were deposited into the GOLD RICH account.  The defendant called Edward to tell him that she was upset because Tsang had not informed her about these sums.  She told Edward that she did not want to continue with the partnership with Tsang.  Edward said Tsang happened to call him and asked him to get $40,000 for him.  The defendant wrote a cheque for 40,000 to Edward. 

29.On 11 May, two deposits were received in the GOLD RICH account.  The defendant asked Edward to inform Tsang because at this time she and Tsang were not on good terms.  The same day, the defendant transferred $100,000 from her personal account to the GOLD RICH account. She also wrote a cheque to Edward for the same amount.  Edward gave the money to Tsang. 

30.In addition, the defendant withdrew $100,000 cash from her personal account to give to Tsang. 

31.Also on 11 May, the defendant transferred $250,000 to a third-party account.  She is unable to recall the reason for this but says it was according to Tsang’s instructions. 

32.Again on the same day, the defendant opened an Advance account, DPA2, at HSBC so that in future she would not have to queue up in the bank to make withdrawals.  She phoned Tsang in the bank and told him about that.  Tsang had no objection to this. 

33.On 12 May, she transferred 2 sums of $33,569 and $200,000 to DPA2. 

34.Either on the same day or the next day, the defendant received a call from the security section of HSBC, informing her that many overseas remittances were being made to the GOLD RICH account which the bank thought were suspicious.  The defendant gave her consent to freeze all her accounts and return all the remittances.

35.The defence case is that, in a nutshell, the defendant opened the GOLD RICH account to receive moneys for a mainlander, Tsang, for a remuneration of 1 per cent of the amount of moneys received. She believed Edward and Tsang and the advice of the accountant.  She dealt with the moneys according to the instructions of Tsang.  She believed that her business with Tsang was lawful.  She did not know or suspect that the moneys were proceeds of an indictable offence.

The Law

36.The prosecution has the burden of proof to prove all elements of this offence.  The mens rea of the offence has two limbs: knowing or having reasonable grounds to believe.  The actus reus in this case is not disputed.  In the prosecution written closing submission, the prosecution concedes that there is no direct evidence of the defendant’s actual knowledge nor any evidence from which actual knowledge of the provenance of the funds could be safely inferred.

37.Reasonable grounds to believe contains objective and subjective elements.  It was considered in HKSAR v Shing Siu Ming & Others [1999] 2 HKC 818.  There, the court said:

“This phrase, we are satisfied, contains subjective and objective elements. In our view it requires proof that there were grounds that a common-sense, right-thinking member of the community would consider were sufficient to lead a person to believe that the person being assisted was a drug trafficker or had benefited therefrom. This is the objective element. It must be proved that those grounds were known to the defendant. That is the subjective element.”

38.That was a case under former Drug Trafficking (Recovery of Proceeds) Ordinance, Cap 405, but this approach has been consistently applied by trial courts and upheld by the Court of Appeal in money laundering offence.

39.The elements were last considered in the case of HKSAR v Pang Hung Fai, CACC 34/2012 in the Court of Appeal.  After reconsidering the mens rea element of the offence, the Court of Appeal decided to revise the current approach and that the order of the questions proposed in the Shing Siu Ming test be reversed. The more logical approach, in the judgment delivered by McWalters J, should be as follows: 

(1) Firstly, what were the facts known to the defendant and the objective factual circumstances in which he found himself and of which he was aware at the time at which he dealt with the property which is the subject of the charge?

(2) Secondly, do those facts and circumstances provide reasonable grounds to believe that that property in whole or in part represented the proceeds of an indictable offence? (See paragraphs 107 and 108 of the judgment.)

40.The Court of Appeal further elaborated.  I quote paragraph 110:

“The first step in determining whether a defendant had reasonable grounds to believe is to identify all the facts known to the defendant that relate to the dealing with property that is the subject of the charge. These facts may, depending on the circumstances of each case, extend beyond those relating to just the dealing with the property and include facts known to the defendant about other persons or circumstances linked in some way to the dealing.”

41.Paragraph 112:

“The second step is to process these facts through the mind of the common-sense, right-thinking member of the community and determine whether this person, possessed of these facts, objectively would consider them sufficient to lead a person to believe that the property in question constitutes the proceeds of an indictable offence. When this reasonable person considers these facts objectively it means he does so uninfluenced by the personal beliefs, perceptions or prejudices of the defendant.”

42.Paragraph 113:

“The question that would be posed to a jury would run as follows: “On those facts and in those circumstances, did the defendant have reasonable grounds to believe that the property was the proceeds of an indictable offence? The question is not whether the defendant believed the property to be the proceeds of an indictable offence, still less whether the property was in fact the proceeds of an indictable offence. The question is whether he had on all those facts and circumstances known to him reasonable grounds so to believe.”

The Issues

43.The prosecution’s evidence is not challenged. There is no dispute that the defendant dealt with the moneys in the GOLD RICH account.  Part of that funds, namely, $345,219, was proceeds of an email deception.  It is not the prosecution case that the defendant played a part in the email deception or any underlying offences other than allowing her bank account to deal with the proceeds of an indictable offence.  The issue in this case is whether the defendant had reasonable grounds to believe that the moneys she dealt with represented proceeds of an indictable offence.   

Analysis of the Defendant’s Evidence

44.The burden is on the prosecution to prove their case beyond reasonable doubt.  I have to be sure that the defendant is guilty before I can convict her.  The defendant has no burden of proof.  I bear in mind that she has a clear criminal record.  I give myself the character direction in respect of propensity and credibility.

45.The first peculiarity to be noted in this case is the circumstances when GOLD RICH was established.  If, as the defendant said, GOLD RICH was established in May 2010 for partnership with Ng and to receive cheques issued to Ng’s GOLD RICH, it would be improbable that the defendant did not open a bank account for GOLD RICH until March 2011.  One would wonder without a bank account, how could the defendant’s GOLD RICH operate its business with Ng’s GOLD RICH and the defendant’s call centre in the mainland?  GOLD RICH was in the business of looking for potential borrowers for a finance company.  Why was its nature of business stated as “trading” in the application for business registration?  Moreover, after GOLD RICH account was opened, why was there not even one single transaction in the GOLD RICH account related to Ng’s GOLD RICH, Winton or the defendant’s mainland call centre?  

46.The next point to be noted is the information on the GOLD RICH account-opening mandate dated 23 March 2011.  There, the defendant reported to HSBC that GOLD RICH was a trading company in the field of electronics, having a turnover of $5 million with sales from China to Dubai and America.  When DPA2 was opened, again she reported GOLD RICH business was import, export, wholesale.  The defendant explained she was just putting down the information Tsang told her about his business because the matter was related to him.  I find the explanation incredible and ridiculous indeed.  

47.Throughout her evidence, the defendant emphasised her concern about the legitimacy of the business with Tsang.  She was, however, satisfied that upon advice of the accountant, the business was legitimate so long as Tsang could give her invoices before the money was passed back to him, and Tsang promised to give her invoices. 

48.However, if the defendant attached so much importance to the legitimacy of the transactions and the invoices, why did she give her bank account information to Tsang and started to receive deposits before she could see any documentation and invoices in Shenzhen on 30 April 2011?

49.Apart from this occasion, the defendant was not shown any further invoices.  Indeed, even in the meeting in Shenzhen when she was shown invoices relating to Maria and Odeyemi, no copies were given to her for retention.  Although Tsang promised to give her such copies, he never kept his promise.  Why did the defendant continue to deal with the moneys? 

50.During further cross-examination, the defendant changed to give a different version about the significance of the invoices. She said she needed the invoices to safeguard herself in case Tsang later on alleged that he never received any money from her.   

51.I fail to understand how the invoices could prove the payment.  This explanation is not only inconsistent with her previous explanation but also implausible.

52.Tsang was introduced to the defendant by Edward only a few months ago.  They met only once when she went with her client to the mainland to buy property.  When the defendant was requested to collect funds for Tsang, the defendant barely knew Tsang.  The very least questions one would immediately think of are: why did Tsang not simply open an account himself in Hong Kong?  Why did he need to pay 1 per cent of the funds as remuneration? 

53.During cross-examination, the defendant admitted she did find it suspicious at the beginning.  Hence, she did ask these questions on the day they met.  When challenged why she did not say this in examination-in-chief, she explained that she was not asked about this in examination-in-chief.  Later, when she was questioned what did she ask, she diverted the question by saying that she knew there was underground bank to deal with these matters, but Tsang said he would like to collect these moneys in a legitimate manner.  However, when this issue was followed up again on the next day, she changed to say that she did not actually ask Tsang why he did not open an account himself because she believed that Tsang must have given a thought on this issue before he approached her.

54.The defendant admitted that she had the idea of illegitimacy in her mind.  It is inconceivable that she would refrain from asking questions to safeguard herself simply because she believed the defendant must have given thought about it.  I find the defendant’s answers evasive, inconsistent and unconvincing. 

55.Looking at the three accounts of the defendant, one would readily notice that soon after the moneys were deposited into GOLD RICH account, the moneys were withdrawn from the account by cash withdrawal or otherwise.  Large sums of money were even transferred from GOLD RICH account to the defendant’s personal account, DPA1.  (See the transfer withdrawals from 28 April to 11 May for $345,000, 196,200, 371,800, $290,000, $500,000.)

56.Two sums of money for $33,569 and $200,000 were also transferred on 12 May from DPA1 to DPA2.  Funds were interwoven between the three accounts.  The defendant explained it was the instruction of Tsang that when moneys were received in GOLD RICH account, she should transfer the moneys in round figures to her personal account for convenience and a clearer record. 

57.Yet, the defendant could not offer any reasonable explanations to justify how convenience and clarity could be achieved. I cannot see any legitimate benefit in such convoluted arrangements for the interwoven movement of funds between the three accounts.  Let alone inconvenience, it defies common sense and business sense.  The use of three accounts would mix up Tsang’s money and the defendant’s own money.  It could only bring confusion rather than clarity.

58.The defendant had a quarrel with Tsang on 6 May.  On 7 May, she received deposits without prior notice.  She was upset and discontented.  She told Edward to pass the message to Tsang that she would stop the business with Tsang.  If she had that in mind, she would be prepared to return all the money to Tsang.  It would be improbable that she should on the same day take all the troubles to issue a cheque for $40,000 to Edward and transfer $500,000 from GOLD RICH account to DPA1.  It is inconceivable that she should continue to deal with the funds on 11 May by drawing a cheque for $100,000 to Edward and transferring $250,000 to a third-party account.  The defendant attempted to explain it away by saying for the first time after two days’ evidence that Tsang asked her not to return all the money to him on that day because he could not take so much cash with him.

59.I find the defendant changed her evidence to suit her case as she went along.  Her explanation is yet unconvincing as it makes no sense for her to transfer the funds between the three accounts.  She could simply let Edward keep the money who had been entrusted by Tsang to keep large sums of money before.

60.In my judgment, if the defendant indicated her unwillingness to continue with the business, it would be against any business sense that Tsang should continue to put money into the account of an unwilling partner in the absence of evidence that he had control over the account or financial security from the defendant.

61.The defendant’s evidence in respect of the event on 6 May 2011 is also contradicted by documentary evidence.  The defendant gave a vivid and detailed description of this event in examination-in-chief: On that day, sometime after 4 pm, she said, Tsang called her when she was waiting for a client in a restaurant.  Tsang asked her to remit funds to another overseas company at once.  She had a quarrel with Tsang but eventually she agreed to remit the money for the last time.  As she was waiting for her client, she could not leave the restaurant.  She called her friend, Fan, for assistance so that he could come in time to get cash from bank before 5 pm.  As she did not have a cheque account for her personal account, she transferred $290,000 from her personal account to GOLD RICH account so that she could issue a cash cheque of GOLD RICH for Fan.  She did the transfer in the restaurant.  Fan turned up and was given a cash cheque payable to him.  He took cash from the bank and passed it to Edward.

62.Bank records, however, show that Fan cashed the cheque at 1545 hours.  Moreover, the transfer of $290,000 was made by the defendant in person at 1405 hours in the bank.  The defendant’s explanation for the discrepancy was that she remembered wrongly.  In my judgment, the defendant’s evidence-in-chief was quite detailed and unequivocal in describing the time and sequence of events.  She confirmed again in cross-examination of the sequence.  She also emphasised that she was in a rush to make the arrangements in the restaurant and, hence, she needed to ask for assistance from Fan.

63.There was only one occasion that Fan was brought into the picture of this case.  Fan was a stranger to Edward and Tsang and unrelated to the defendant’s business with Tsang.  The reason for bringing Fan into the picture, as the defendant said, was the rush in time so that someone could rush to the bank to get money in time before 5 pm.  Lapse of memory, therefore, cannot reconcile this contradiction of evidence.  In my judgment, she was only tailoring her evidence to justify why Fan, ostensibly a stranger in the scheme, should assist her in dealing with Tsang’s money.

64.One thing should be mentioned in passing.  The defendant withdrew $208,000 cash from GOLD RICH account on 26 April. There was initially some confusion in her evidence as to when she passed the money to Tsang in Shenzhen.  Eventually, having been shown her immigration record, she corrected herself and confirmed that she and Edward travelled together to Shenzhen to give the money to Tsang on 30 April.

65.Mr Davies, counsel for the defendant, submits that it is unfair for the prosecution to criticise on this inconsistency when the prosecution failed to disclose until cross-examination of the defendant that they were in possession of the immigration record.  He says no weight should be attached to the discrepancy in the dates as it might be genuine memory lapse.

66.Mr Parry, counsel for the prosecution, agrees that the records were only given to the defence after examination-in-chief and before cross-examination of the defendant.  He fairly concedes that the records, which were only brought to his notice by those instructing him after examination-in-chief of the defendant, should have been served on the defence before trial.  It is noted that when Mr Parry cross-examined the defendant on this issue, Mr Davies made his observation that the immigration records should be placed in front of the defendant for examination.  No objection was taken to the cross-examination.

67.In my judgment, I agree that the defendant should not be criticised for the confusion which might be the result of memory lapse.  No adverse inference should be drawn against the defendant.

68.It is, however, noted that the defendant, so she said, withdrew $100,000 cash in the bank on 30 April and gave it to Tsang who was in Hong Kong.  It would then be highly improbable that if the defendant and Edward gave Tsang $208,000 in Shenzhen, she would also give another $100,000 to Tsang in Hong Kong on the same day.

69.Mr Davies says in his written submission that apart from the money deposited by PW1, there is no evidence to suggest that the remaining sums are not legitimate.  It is incumbent on the police to make inquiries with those who have transferred the funds to GOLD RICH account to ascertain whether the payments are legitimate.

70.With respect to Mr Davies, there is no requirement for the prosecution to prove the underlying offences or that the property is in fact the proceeds of an indictable offence.

71.Mr Davies also submits that the payment from Maria was supported by an authorisation letter, D1, which is not being suggested to be a forgery. 

72.D1 is a letter of authorisation ostensibly authorising the defendant to collect payment from Maria De Jesus.  This document is not in the form of a contractual document of Tsang and the defendant setting out each party’s rights and obligations.  It does not speak of the remuneration of the defendant. 

73.On a cursory reading of it, one will readily notice that clause 1 of this document does not make sense.  At the date of the document, ie 16 March 2011, GOLD RICH had not yet received any funds from Maria.  It also makes no sense to state that up to 1 November 2011, which was a future date, Tsang had fully received the fund from GOLD RICH.  There is no evidence to explain about it.  

74.The parties, if seriously relying on this document, would have discovered and rectified this error.  The authenticity of this document is doubtful. 

75.In any case, in my judgment, the document is neither here nor there as I find that the defendant did not rely on it at all. As admitted, she only saw and received this document on 30 April.  By then, she had already received four sums of money totalling more than $1 million.

76.There is a dispute as to whether HSBC staff called the defendant by phone on or about 12 May to ask the defendant about the suspicious remittances received on that day.  The prosecution suggested to the defendant in cross-examination that the bank did not call, but the defendant disagreed.  Mr Davies submits that the prosecution could forward no evidence in this regard. 

77.I agree with Mr Davies.  It is probable that the bank staff on or about 12 May called, indicating their suspicion.  The defendant then agreed to freeze her account.  But this cannot assist the defendant’s case.  Accepting what she said, she was not reporting her suspicion to the bank on her own motion.  It was the bank, having the suspicion, called her and she gave her consent to freeze the account.

78.I have carefully considered all the evidence and submissions made by both parties.  In my view, the defendant’s evidence is full of inherent improbabilities and inconsistencies.  She changed her evidence as she went along. 

79.Despite that she has a clear record, I find that she is not a credible witness.  It might be that the defendant agreed to open the GOLD RICH account to receive and deal with moneys for a financial reward for another.  However, I am sure that she has not told the court the truth as to the true nature and extent of her dealings with Tsang and Edward. I do not believe that she had no suspicions of the illegitimacy of the scheme and the funds.  It is indeed difficult to envisage any reasons why a person honestly engaged in legitimate business would give false information to a bank when an account is opened. 

80.The fact that I disbelieve the evidence of the defendant does not mean that she is guilty.  Mere suspicion is not enough.  I have to decide whether on the evidence I accepted, the defendant is proved to be guilty to the required standard. 

Whether the defendant had reasonable grounds to believe?

81.I will adopt the two-steps approach as set out in Pang Hung Fai.  In this case, the facts and circumstances which would objectively be examined are these:

(1) The defendant came to know a mainlander, Tsang, through a friend. She barely knew Tsang.

(2) The defendant established GOLD RICH but never opened a bank account for it until she required it to deal with funds for Tsang.

(3) She was sceptical of the scheme at the beginning. An accountant at the meeting in Tsim Sha Tsui advised that she must receive invoices to legitimise the transactions if she were to proceed.

(4) Despite her suspicion, she did not ask Tsang why he did not open an account and deal with the money himself.

(5) The defendant did not keep any invoices and is unable to produce any in court.

(6) Tsang continually promised to give the copies of invoices but he never did. In spite of it, the defendant continued to deal with the moneys.

(7) The defendant is a person of modest means. Although a sole proprietor of GOLD RICH, she received no income from GOLD RICH. She had to work as a part-time in a construction company. Before she transferred any charge moneys into DPA1, the defendant had only five cents in the account.

(8) GOLD RICH account, once opened, had a series of large amount received from various overseas payers which did not relate to the business of GOLD RICH. Money was withdrawn from GOLD RICH account shortly after each deposit. Some were transferred to the defendant’s personal account.

(9) The letter of authorisation authorised the defendant to receive payment from Maria De Jesus, but the defendant received payments from names other than this name.

(10) The defendant had full knowledge of the nine credit deposits. GOLD RICH account and the other two personal accounts were all under the control of the defendant. She personally handled the transactions.

(11) She was to received 1 per cent of the moneys she handled as her remuneration.

(12) She gave false information to HSBC when the GOLD RICH account and DPA2 were opened.

82.On these facts and circumstances known to the defendant, I am sure that a common-sense, right-thinking member of the community will consider them sufficient to lead a person to believe that the moneys in question were the proceeds of an indictable offence.  I am satisfied beyond reasonable doubt that the defendant had reasonable grounds to believe that the moneys she dealt with for Tsang were proceeds of an indictable offence. 

83.I would finally add one remark for what it is worth.  In Pang Hung Fai case, Stock JA raised the issue of reading into section 25 offence a halfway-house defence.  This defence could not assist the defendant as I found her an incredible witness and rejected her evidence as to the true nature and extent of her dealing with Tsang.  Applying common sense to the unusual circumstances in this case, I am sure that the defendant must have at the least suspicion about the legitimacy of the scheme and source of the funds.  If she did not, she was turning a blind eye to the obvious.

84.I am satisfied beyond reasonable doubt that the prosecution has proved all the elements of the charge.  Accordingly, the defendant is convicted as charged.

Annex A

Credit Transactions to account of Gold Rich – The “Account” (subject of Charge):

Annex B

Withdrawals from account of Gold Rich over charge period:19/04/2011 – 11/05/2011
(excluding 3 Bank charges transactions)

Annex C

Defendant’s Personal HSBC Saving Account Number 499-671634-292 (2011-04-21 to 2011-10-28)
“DPA1”

Annex D

Gold Rich HSBC Account Number 809-831225-838 (2011-04-19 to 2011-05-11)