HKSAR v. Hounsa Paul
Read the full judgment text of DCCC 939/2013 on BabelCite. This District Court judgment was delivered on 23 April 2014.
1. The defendant pleaded not guilty to three charges of fraud and three charges of money laundering. The prosecution alleged that the defendant fraudulently opened accounts at three different banks in Hong Kong ( Charges 1,2 and 5) and laundered a total of HKD18,928,127.10 through the accounts ( Charges 3,4 and 6).
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DCCC 939, 1066/2013 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CRIMINAL CASE NO 939, 1066 OF 2013(consolidated) ____________ BETWEEN
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_______________ REASONS FOR VERDICT _______________ 1.The defendant pleaded not guilty to three charges of fraud and three charges of money laundering. The prosecution alleged that the defendant fraudulently opened accounts at three different banks in Hong Kong ( Charges 1,2 and 5) and laundered a total of HKD18,928,127.10 through the accounts ( Charges 3,4 and 6). Background 2.The defendant is a visitor from Benin. He arrived in Hong Kong on 9 January 2012 and was permitted to stay for 14 days until 23 January 2012. 3.On 14 February 2012 the defendant opened accounts at the Bank of Communications Company Limited (BOCC) and the Hang Seng Bank (HSB). On 27 February 2012 he opened an account with the Industrial and Commercial Bank of China (Asia) Limited (ICBC). 4.In early 2013 the police started an investigation into the ICBC account following an alleged email fraud resulting in a payment into that account in October 2012. The defendant was interviewed about the ICBC account in April 2013. During that interview he revealed he had opened the two other bank accounts. 5.The prosecution alleged that when the defendant opened the bank accounts he produced his passport which contained a false immigration stamp. The stamp purported to show that he had arrived in Hong Kong on 1 February 2012 and was allowed to stay for 90 days thereby concealing that he was an overstayer – Charges 1, 2 and 5. 6.The defence case was that the defendant came to Hong Kong for business purposes. He denied practising any deception on the banks and asserted that all the monies going through the three accounts were for legitimate business or other purposes. 7.With regard to the monies passing through his ICBC bank account when interviewed the defendant said that they related to genuine transactions and that he kept the relevant records and receipts at the residence of a female friend who lived at 5/F, No. 183 Temple Street, Hong Kong. Police enquiries revealed that a female tenant at these premises was not seen after 22 March 2013. 8.The defendant claimed he knew nothing about any e-mail fraud and that he never used e-mail to communicate with customers. Prosecution Case 9.Much of the prosecution case was not in dispute Admitted Facts – Exhibit 11 10.The facts stated inter alia :
11.The Defendant opened a personal savings bank account at the Industrial and Commercial Bank of China “ICBC” on 27th February, 2012 (account number 861- 520058- 690.) The affirmation was exhibited as P1. 12.The Defendant was the sole signatory of the said account. The Defendant was provided with an ATM card and a personal password to access the account. 13.The account was closed by the Defendant on 12th October, 2012. 14.Between 27th February, 2012 and 12th October, 2012 there were a total of 20 deposits (17 inward remittances and 3 cash deposits) into the account amounting to HK$13,720,912.53 15.During the same period there were 54 withdrawals (23 cash withdrawals and 31 withdrawals via ATM) totaling HK$13,720,599.40 16.The Defendant opened a savings account at the Bank of Communications (“BOCC.”) on 14th February, 2012. The account comprised a USD and a HKD account (02753393133496.) The relevant banker’s affirmation was exhibited as P2 17.The Defendant was the sole signatory of the said account. The Defendant was issued an ATM card and accompanying password to access the said account. 18.In the USD account, between 12th April, 2012 and 9th August, 2012, there were 3 deposits into the account totaling US$341,004.84 (HK$2,660,000) and during the same timeframe there were 3 withdrawals amounting to US$341,004.95. These three withdrawals were transferred to the HKD account. This left the account at a zero balance. 19.There were a total of 9 deposits amounting to 2,763,959.78 into the HKD account and 18 withdrawals amounting to HK$2,758,500 between 14th April, 2012 and 2nd September, 2012. The account balance as of 2nd November, 2012 was HK$4,589.78 20.The Defendant opened a personal account at the Hang Seng Bank (HSB) on 14th February, 2012 (264- 541707- 668.) The account was closed by the Defendant on 30th August, 2012. The relevant banker’s affirmation was exhibited as P3. 21.The Defendant was the sole signatory of the said account and the Bank provided to the Defendant an ATM card accompanied with its respective password. 22.Between 14th February, 2012 and 30 August 2012 there were 10 deposits (5 remittances and 5 cash deposits) totaling HK$2,456,777.76 into the account. During the same period 19 withdrawals (5 cash and 14 via ATM) totaled HK$2,451,277.76. The account had a zero balance as of 30 August 2012. 23.Summaries of the deposits and withdrawals of the above- mentioned accounts prepared by DPC 8315 were produced as:
PW4 Mr Yang Qiming – Sales Manager of Shandong Bayi Tyre Manufacture Company Limited 24.He said that his company dealt with the export of tyres for trucks. The company dealt with companies in many different countries and conducted some business by email. He said the company had dealings a customer by the name of Ndusayezu Therence (Therence) from Burundi. 25.PW4 said that on 12 July 2012 his company sold tyres to Therence and received payment. 26.PW4 said that they then had discussions for a second contract. He was shown P13A, a sales contract dated 21 September 2012 relating to the sale of 110 tyres for USD25,040 by his company to Therence. PW4 said that by October 2012 they had expected to receive a deposit of USD7,500. PW4 said that they contacted Therence about the deposit and Therence told him it was already paid. 27.PW4 produced P13 B, an importer’s declaration dated 2 September 2013 relating to this transaction. 28.PW4 produced email correspondence relating to this transaction, Exhibit 13 C. He said that in this correspondence the email addresses [email protected] and [email protected] appear at various places. PW4 said his company did not use either of these addresses address when corresponding with Therence. He said the correct email addresses were [email protected] and [email protected] respectively. 29.PW4 was shown P1, page ICBC 58 which shows a remittance dated 13 October 2012 in the sum of USD7,500 from Therence to the defendant which purports to be an advance payment for 110 truck tyres. The remarks column at the bottom of the remittance makes reference to BRDT-20120921/314-1 which is the contract number shown on exhibit P13A. 30.PW4 said that he had never heard of the defendant and he had no knowledge about this remittance. PW1 DPC 8315 Tsan Hong Yin – Arresting officer 31.PW1 produced fund flow statements, Exhibits P4 to P6, which he had prepared from the bankers’ affirmations Exhibits P1 to P3. 32.PW1 obtained a control sample immigration chop, Exhibit 17B, from the Immigration Department and later handed it to the Government Chemist for comparison purposes. PW1 later retrieved the control sample and retained it in police custody. 33.PW1 agreed that the defendant’s Acer laptop was seized by the police. PW1 said he did not access the computer. PW1 agreed the defendant told him that he had lots of information about his business on this laptop. PW1 disagreed that the defendant said when interviewed that he wished to access this computer. 34.PW1 agreed that documents produced as Exhibit D1 (1-26) were in the possession of the defendant when he was arrested. 35.PW1 said that when arrested the defendant said he lived at Woosung Street. He said that a female friend lived at Room 4, 4/F, 183, Temple Street. PW1 said he never searched these premises as the landlord told him they had been vacated months previously. PW1 said the defendant did not mention that he lived at Temple Street for a while. 36.PW1 interviewed the defendant on 29 April 2013. The admissibility of the records of interview was not challenged and they were produced as Exhibits P7 and P8 and the transcriptions as P7A and P8A. PW6 Fong Yuek Ho – Landlord of Room 4, 4/F, 181-3, Temple Street 37.PW6 said he rented out a number of premises on Temple Street including Room 4, 4/F, 181-3 Temple Street. PW6 said the arrangements for letting out the premises and collecting the rent were handled by an agency. He produced a rental agreement, P14, which showed that Room 4 was let from 2 July 2013 to a person called WAQI TIYNGSIH (WAQI). PW6 said he never met this person. PW6 said that the last rent was paid on 2 March 2013. 38.PW6 did not know why the signature of P. Hounsa appeared on the agreement indicating that he paid the key deposit. PW6 agreed that receipts shown to him as exhibits D1 pages 8,10 and 12 related to monthly rental payments in respect of these premises. 39.PW6 said he had never seen the defendant. Bank Staff - PW’s 12,13 and 5 PW12 – Man Wai Sim – Finance Service Manager of BOCC – Exhibit P2 40.PW12 confirmed that the defendant opened a savings account on 14 February 2012 and produced his passport, Exhibit P16. PW12 said she copied page 8 of the passport which contained the most recent chops. She said that without a valid chop in the passport she would not have allowed the defendant to open an account and that had she suspected that the chops were not genuine she would not have allowed the defendant to open an account. 41.PW12 said that she assisted him to complete the bank opening documents. PW12 said all the details came from him. 42.PW12 said that the defendant was provided with a passbook and ATM card. 43.PW12 said that only the defendant was allowed to use the account. PW13 Lai Yin Ling – Executive of HSB – Exhibit P3 44.PW13 said that she countersigned the documents relating to the opening of the defendant’s savings account with her bank on 14 February 2012. PW13 said that the bank staff handling the account opening would have photocopied the relevant pages of the defendant’s passport. 45.PW13 said that a person illegally in Hong Kong is not allowed to open a bank account. PW13 said that a valid immigration record is a prerequisite to opening an account. PW13 said that records show the account holder was supplied with an ATM card. PW5 Fong Po Kuen, Vanessa, Senior Personal Account Manager ICBC – Exhibit P1 46.PW5 said that she dealt with the defendant when he opened the savings account with her bank to which exhibit P1 relates. She said the defendant was supplied with an ATM card. 47.PW5 said that the purpose given for opening the account was for savings and no other reason was given. She said that had been told the account was to be used for remittances she would have ticked the relevant box. PW5 said that, had she been told the account was for use by a company, she would have enquired as to why a company account was not being opened. 48.PW5 said that she copied the relevant pages of the defendant’s passport. She said that she would not have allowed the defendant to open an account had she known that the chops in the defendant’s passport were not genuine. PW5 said that only the defendant was allowed to access the account. PW 15 Hung Pui Shing – Government Chemist - Document Examiner – P17 and P18 49.The expertise of PW15 as a document examiner was not challenged and I accepted him as an expert witness. 50.PW15 was supplied with the copies of the three bank photocopies of page 8 of the defendant’s passport, P16. He examined the chops thereon which purported to be a visa issued by the Hong Kong Immigration Department number 3608 indicating the defendant entered Hong Kong on 1 February 2012. PW1 had delivered to the Government Chemist a control sample of the chop, Exhibit 17B, which he had obtained from the Immigration Department. 51.PW15 said that he prepared enlargements of equal sizes of P17B and the bank photocopies showing the arrival stamp chop in question and prepared a template of P17 B for comparison purposes. 52.PW15 said that the questioned stamp impression on each of the bank photocopies showed discrepancies in terms of design details ( e.g. relative position / alignment , stokes length and size) of the characters, letters and numerals. He pointed out these discrepancies to the court. They included, inter alia, the shape of the various letter “G”, the Chinese character for “Hong” in Hong Kong, the size of the word “Kong” and the relative position of the Bauhinia, the letter “O” in the word Kong. 53.He opined that the each of the questioned chop on each of the three bank photocopies was a forgery. 54.PW15 agreed that the photocopies supplied were somewhat smudged but he said that this did not affect his observations and conclusions. 55.I noted that, as mentioned in the Admitted Facts, the records of the Immigration Department recorded that the defendant entered Hong Kong on 9 January 2012 and was allowed to remain for 14 days. I noted also that on page 8 of the defendant’s passport, in addition to the chop purporting to show he entered Hong Kong on 1 February 2012 there were chops indicating that he was a visitor permitted to stay for 90 days and that the departed Hong Kong on 30 April 2012. There were chops on page 12 purporting to show that the defendant entered Hong Kong on 10 May 2012, was permitted to stay for 90 days and departed on 30 July 2012. On page 14 of his passport there were chops purporting to show that he entered Hong Kong on 5 August 2012 and was permitted to stay for 90 days. Defence Case 56.The defendant elected to give evidence. In his evidence he said that the 26 remittances into his three accounts were all for legitimate business or other legitimate reasons. 57.The defendant is aged 35 and was born in Benin. He was educated in English to diploma level in information technology and completed his education when aged 26. He said he then worked as a supervisor in a rubber plant for 6 months and later as an inventory clerk in the merchant navy. 58.He started getting interested in mobile phones from around 2009/2010. He said he had a small shop which dealt wholesale in mobile phones and accessories and he earned about USD5-600 per month. The defendant purchased goods on the international market from Nigeria. Nearly all the goods were made in China. 59.The defendant intended to travel to China to do business but stopped off in Hong Kong en route. He had obtained a China Visa which is on page 4 of his passport. He intended to source goods in China to take back to Benin to sell at a profit. He brought with him from Benin USD8,500. 60.The defendant said he transited in Dubai for 3-4 hours on the way to Hong Kong and it had been arranged for him to meet businessmen there by persons with whom he did business. He said he met a man called Saleem who owns a shop in the transit lounge at Dubai Airport through this introduction. He said that no business was arranged at that stage but he later did business with him when he came to Hong Kong as evidenced by Exhibit P1 ICBC 32 , a remittance advice dated 14 August 2012 in the sum of USD68,480 which purports to be by order of Raheel Saleem of Dubai. I will refer to this matter later. 61.The defendant said he had no laptop or Ipad with him when he came to Hong Kong on 9 January 2012. He said that he had been given a business contact in Hong Kong called Mohamed who has a business called Lexon International which deals in electronics. The defendant said a man called Charles N with whom he did business in Benin mentioned the name of Mohamed to him. The defendant said that he was also given the name of a contact called Mr Baxil from Nigeria. 62.The day he arrived in Hong Kong he met Baxil who had lived in Hong Kong for 5 years and ran a scrap yard in Kam Tin from which he sold motor cars to Africa. He discussed trading in goods from China with Baxil after he moved to Chung King Mansions. The defendant said he did business with Baxil. He supplied to Baxil the names of companies from all over the world who would do business with Baxil using the defendant as a middleman. The defendant said that he had lots of documents which he kept in a box file at Temple Street but after those premises were vacated he could not locate the file. The defendant said that he could not now recall the names of the companies whose details he supplied to Baxil. 63.The defendant said that soon after arriving in Hong Kong he telephoned Mohamad of Lexon and arranged to meet him at his office at 212 Kowloon Centre, 39 Ashley Road, TST. 64.The defendant said that the major suppliers he dealt with in Hong Kong were Lexon and Oraimo. The defendant said that Oraimo was run by a person also called Mohamed. Both Lexon and Oraimo dealt in wholesale electronic goods such as mobile phones, laptops and cameras. Oraimo had premises on the first floor of Chungking Mansions. 65.The defendant was taken through the 33 various remittance advices transferring monies to his three Hong Kong bank accounts. In respect of those remittances that were made for goods supplied he said that most of these purchasers were introduced to him by either the Mohamed from Lexon or the Mohamed from Oraimo. He said that he had supplied them with details of his bank accounts and he would also contact the buyers. The defendant said that coincidentally he knew most of the buyers through various contacts round the world. The defendant said that when a remittance was made to one of his accounts he would withdraw the money in cash. In the case of Oraimo he would pay the cash into the Oraimo account at the adjacent Western Union Money Exchange and produce the invoice to Oraimo staff. He said that he would then arrange for the goods to be packaged and transported. The defendant said there was a similar arrangement with Lexon except that he paid the cash direct to them. The defendant said that the purchasers preferred to pay the money to him as he was trustworthy and would make sure the order was dealt with expeditiously. 66.The defendant was referred to two remittances, P1, ICBC 55 and 61, dated 27 September 2012 and 8 October 2012 in the sums of USD157,985 and USD179,085. The remittances stated the payments were made by order of Riquiah Binti Mohamed Ali. According to the remittance advices the amounts related to property purchases. The defendant said that Ali was a relative of Mohamed of Oraimo and he had met her at the Oraimo company. The defendant said that he withdrew the money in cash from the account and took it to Oraimo to give to Ali. The defendant said that he did not think Oraimo had an account. He said he made no profit from this transaction but Mohamed gave him business. Visa Extension 67.The defendant said that he arrived in Hong Kong on 9 January for 14 days. He said that he went to a travel agency in Chungking Mansions to arrange an extension of his stay in Hong Kong and paid them a total of HKD6,500 for the two extensions of stay shown on pages 12 and 14 of his passport and a ticket to Thailand. He said he could not recall the name of the agency. 68.The defendant said that he went to a second agency to get his visa to visit Thailand and they confirmed that the extension recorded on page 12 of his passport was in order. 69.He said that he did not think that the extensions were fakes. Bank Accounts 70.The defendant said that on the 14 February 2012 he opened the accounts at the BOCC and HSB to facilitate fund transfers. He said that this was to receive payments in relation to goods such as mobile phones and laptops. 71.The defendant said that he asked Mohamed of Lexon about the arrangements for opening an account and Mohamed told him he would need to take his passport and proof of address. The defendant said that at the banks he handed his passport to the bank staff but he did not know what they would do with it. He said that he told the bank staff at each of the banks the purpose for his opening the accounts was fund transfers. He said that he was asked why he did not open a business account and he told the staff that he did not have the facilities to do so. 72.The defendant said that the reason for opening three bank accounts was because he was involved in multiple transactions and having three bank accounts would speed up the process. The defendant said that most of the buyers were put in touch with him by Oraimo or Lexon and he would make arrangements over the telephone. He said that they wanted to deal with him rather that Oraimo or Lexon as he was on the spot and would speed up the process. He said he would guarantee delivery. 73.The defendant said that he had no reason to suspect the money transferred into his accounts came from an illegal source because the funds were sent to his banks so the procedures must have been followed and they must be clean. Defence Exhibits Exhibit D1- Miscellaneous documents found in Defendant’s Computer Laptop Bag 74.Exhibit D1 consisted of 26 documents which were in the computer laptop bag of the defendant at the time of his arrest. The police did not retain them. They handed them over to the Correctional Sevices Department together with other property belonging to the defendant. 75.They consisted of some documentation relating to his rental of Temple Steet, documents relating to the bank documents produced by the prosecution, various invoices for small purchases of electronic goods and some receipts purportedly issued by Oraimo or Lexon. \ 76.The defendant said that he had retained many documents relating to the bank transactions in the file he kept at Temple Street. He said that after the landlord retook possession of the property he could not find the file. Exhibit D2 – 9 Photographs recovered from the hard drive of his laptop computer 77.During the course of the trial, the defendant was allowed access to the Acer laptop computer which was in his possession at the time of his arrest. The computer was in his property retained by the CSD. They consisted of photographs taken inside an electrical retail store and some were of persons packaging what appeared to be electrical goods. 78.Exhibit D4 is a picture of the front of an electrical retail store called High 5 International Limited. Residences 79.In cross-examination the defendant said that when he arrived in Hong Kong he stayed in North Point for 3-4 days. He said that when he arrived he asked advice about where to stay from the taxi driver who picked him up at the airport and the driver recommended a guest house in North Point. 80.The defendant then moved to a guest house in Chungking Mansions where he stayed for one week. The defendant said that he then rented a property at Flat B/E in Woosung House, 123-9, Woosung Street, Yau Ma Tei, Kowloon which is where he was staying when he opened the three bank accounts. 81.In July 2012 the defendant moved to Flat 4, 4/F, 183, Temple Street. He said that he paid the rent but had the agreement put in the name of a lady friend called Waqi whom he had met in a nightclub on the 3/F of Mirador Mansions. He said that she was Indonesian Chinese and had a Hong Kong identity card. The defendant said that he did not think he would be allowed to take out another tenancy after Woosung Street and he also said he did not want to use his passport as his visa had expired. The defendant said that Waqi had a boyfriend but used to stay at the Temple Street property at weekends using a spare key to gain access. Oraimo and Lexon 82.The defendant said that he had never travelled outside Africa before coming to Hong Kong. He had not met the two Mohameds who ran Oraimo and Lexon before coming to Hong Kong. He said he did more business with Lexon. He said that in respect of the remittances going through his account two thirds of that business was done with Lexon. He said he did not know whether Mohamed was Indian or Pakistani. He said Mohamed’ held a Hong Kong ID card, had lived in Hong Kong for 5years and his English was not good. 83.The defendant said that Mohamed from Oraimo appeared to be the same nationality as the Mohamed from Lexon and that he also held a Hong Kong ID card. He said that he did not know if either of them had a bank account. He said that someone told him that persons like the two Mohameds would have difficulty opening bank accounts but he did not ask any questions about that. 84.The defendant said that he was encouraged to open a bank account by his foreign customers so as to make transactions easier. He said that the two Mohameds did not encourage him to do so. 85.The defendant agreed that he was aware he would need proof of address and identification to open a bank account. He agreed the banks would look at his status in Hong Kong. 86.The defendant agreed that all the withdrawals from the three accounts were made by him in cash. He said that he made small withdrawals using ATM machines so he could ascertain if the transfer had been made to the account. He disagreed he did this so as to make sure the accounts had not been frozen. The defendant said that he withdrew cash because Oraimo and Lexon wanted cash. 87.The defendant never filed any tax returns. Exhibit P1 ICBC 58 Remittance by Nduwayezu Therence- Advance Payment of USD7,500 for 110 tyres – Exhibits 13A - C 88.The defendant said that he never met or spoke to Therence. He said his friend Baxil represented him because Baxil and Therence were from the same tribe. The defendant said he had not seen the documentation, Exhibit 13 A – C, produced by PW4 in relation to this transaction. The defendant said he could not explain why his name appeared on the documentation. He said that perhaps somebody used his name. He said that Lexon looked after this transaction. He said that he let them use his account. 89.The defendant said that this was the only transaction in which he played no role. 90.In relation to ICBC 49, a remittance of USD99,975 by Venus Investments Development, the defendant said he met a “white guy from this company” but there was no discussion as the goods were already in transit. He said he could not recall the names of any persons involved. The defendant said that Mohamed from Lexon gave him the details of the company. The defendant said that he had heard about the name of the person from Venus from his relatives in Canada who had told him about the defendant being in Hong Kong. 91.He agreed that in his record of interview he told the police that he could not recall what this transaction was about. The defendant said that his state of mind was not good at the time of the interview. 92.The defendant said that Venus would not deal with Lexon directly. They would deal with him because he is reliable and honest . The defendant said that Mohamed was not reliable , he is not trusted , but they trusted the defendant 100%. The defendant said that his profit on this deal was about USD800-1000. 93.The defendant said he kept no records on his computer. 94.The defendant said that his total commission charge in respect of all the remittances he handled, about HKD18.9 million , was about USD5-7,000. 95.The defendant agreed that he intended to go to China but never went there. He agreed he does not speak any Chinese. 96.The defendant said that when he came to Hong Kong in January 2012 he set up an email address but he never used it. 97.The defendant said that he gave both Mohameds the details of all three bank accounts he opened. Exhibit P16 – The defendant’s passport 98.The defendant said that he did not pay attention to the part of the chop which said he was in Hong Kong as a visitor. He said he only looked at the number of days he was allowed to stay. 99.He said that he did not go to the Immigration Department to extend his stay as he had encountered difficulties with their staff when he entered Hong Kong. 100.The defendant said that after having arranged for a travel agency to deal with his extension of stay in Hong Kong he knew that the chop endorsed on page 8 of his passport indicating that he arrived in Hong Kong on 1 February 2012 was not correct. He said that he was told that someone had taken the passport to Macau to get this stamp attached on re-entry. Directions 101.I reminded myself that the prosecution are required to prove the guilt of the defendant beyond reasonable doubt. The defendant has nothing to prove. If I were to disbelieve what he told the police when interviewed or his evidence in court that does not mean he is guilty of the offence. Were I to disbelieve what he said when interviewed or his evidence in court I am required to consider the evidence I do accept and decide if that satisfies me of the guilt of the defendant to the required standard. 102.The defendant has a clear record which is relevant to the issues of propensity and credibility. 103.I also reminded myself that where the prosecution rely on circumstantial evidence, the court can only draw an inference from facts proved beyond reasonable doubt and such an inference must be the only reasonable inference that can be drawn from such facts, it must be an irresistible inference. The Law relating to Fraud: s16A of the Theft Ordinance Cap 210- Charges 1,2 and 5 Archbold Hong Kong 2014 – paragraph 22-124
The Law relating to money laundering: s 25 (1) of the Organised and Serious Crimes Ordinance Cap 455 – Charges3,4 and 6 104.The prosecution is required to prove beyond reasonable doubt that the defendant dealt with property, knowing, or having reasonable grounds to believe, that such property, in whole or in part, directly or indirectly, represented the proceeds of an indictable offence. 105.The actus reus of the offence is the dealing. It is not an aspect of the actus reus that the property is in fact the proceeds of an indictable offence. 106.The Court of Appeal in HKSAR v. Pang Hung Fai CACC 34/2012 held that, in order to ascertain whether the “ having reasonable grounds to believe” limb of the offence has been established to the required standard, the court should ask itself two questions. The first question is: 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 he dealt with the property which is the subject of the charge? The Court stated that it is for the prosecution to establish the facts and circumstances relied upon. 107.The second question is: do those facts and circumstances provide reasonable grounds to believe that the property in whole or in part represented the proceeds of an indictable offence? 108.The Court of Appeal went on to state in Pang that the first step in determining whether a defendant had reasonable grounds to believe is to identify:
Evaluation of the evidence Fraud Charges – Charges 1,2 and 5 109.These charges alleged that the defendant deceived staff at each of three banks by falsely representing that at the time of opening the bank accounts he was lawfully allowed to remain in Hong Kong and , with intent to defraud, he induced the staff of the banks to approve his application to open a bank account. It was averred that this resulted in benefit to himself , or in prejudice, or a substantial risk of prejudice, to the banks concerned. The Bank Accounts 110.On 14 February 2012 the defendant opened an account at BOCC. It comprised both a USD and HKD account (Charge 1). The account balance as at 2 November 2012 was HK$4,589.78. 111.On the same day the defendant opened an account with HSB which was closed by the bank on 30 August 2012 (Charge 2). 112.On 27 February the defendant opened an account with ICBC which he closed on 12 October 2012 (Charge5). Defendant’s Passport – Exhibit P16 113.It was not disputed that the defendant arrived in Hong Kong on 9 January 2012. He was permitted to remain in Hong Kong for a period of 14 days. The defendant confirmed this in evidence. This evidence is in accordance with two of the Immigration Department Chops on page 7 of P16 and immigration records produced as Exhibit P9. The immigration records show that between his arrival on 9 January 2012 and his arrest the defendant never left Hong Kong. The defendant confirmed this in evidence. From 23 January onwards the defendant was in Hong Kong illegally. 114.The defendant opened two bank accounts on 14 February and one on the 27 February . His passport was produced by him to bank staff when he opened each of the accounts and bank staff took photocopies of, inter alia, page 8 of P16 which bore a chop which purported to show that the defendant entered Hong Kong on 1 February 2012. 115.The photocopies made by the staff of the three banks were sent to a Government Chemist , PW15, for forensic examination. He compared the photocopies of the entry chop with a control sample kept by the Immigration Department. He concluded that the 1st February chop photocopied by the banks was a forgery. He produced two statements, P17 and P18, which confirmed his findings. 116.I accepted the evidence of PW15. I was sure that the bank photocopies were copies of a forged entry chop. I was able to reach that conclusion without supporting evidence but had I needed any supporting evidence it was available in the form of the immigration records, P9, and the defendant’s admission that after he arrived in Hong Kong on 9 January 2012 he never left. 117.The defendant said that on two occasions he obtained extensions of stay using a travel agency at Chung King Mansions the name of which he could not recall. He said that he was told by the agency that the entry chops were obtained by sending someone to Macau with his passport to obtain the chop. The defendant claimed that he never looked at the various chops and did not realize he was in Hong Kong as a visitor. 118.I was sure that he was aware when he went to the banks that his passport contained false entries purporting to show that he left Hong Kong on 22 January 2012 returning on 1 February 2012 being allowed to stay for 90 days. Opening Bank Accounts Passport 119.All three banks requested sight of the defendant’s passport and took it away to photocopy during the account opening procedures. The responsible persons at the banks ( PW’s 5,12, and 13) relied on the false representation in the passport that the defendant had entered on 1 February 2012 and was allowed to remain as a visitor for 90 days. 120.When the defendant opened the three bank accounts he was in HK illegally. 121.I was sure the defendant knew the chop on page 8 of his passport saying he entered Hong Kong on 1 February was not genuine. 122.I was sure the defendant intended that the banks would accept the forged chop and allow him to open an account. 123.The defendant admitted that he was aware the bank would look at his status in Hong Kong before allowing him to open an account 124.I was sure he deliberately used his passport with the false chops to conceal his illegal status in Hong Kong Purpose of Opening Account 125.For each of the three banks the account opened was a savings account. 126.I was sure that is what the defendant requested. 127.I did not believe the evidence of the defendant that he told each of the banks the reason for his opening of the accounts was for fund transfers. 128.I was sure that the defendant did not tell any of the banks the true purpose for which the accounts were opened. 129.The defendant said he opened three bank accounts because he felt that one bank could not expeditiously deal with the volume of business he was anticipating. I did not believe this explanation. I was sure that the defendant was unable to give any honest reason for opening three accounts. 130.The address given to the bank was Flat B/E, Woosung House, 123-9, Woosung Street Yau Ma Tei. The defendant said that he moved out of the address in July 2012 when he moved to Flat 4, 4/F, 183 Temple Street. The defendant never gave the new address to any of the banks. It is noted that the majority of remittances were received after the move to Temple Street and that the remittance documents continued to use the Woosung House address. 131.I was sure that the accused acted dishonestly according to the criteria set out in the Ghosh test referred to above. I was sure that the defendant deliberately produced his passport with the false chop intending to deceive the bank staff as to his status in Hong Kong . I was sure he was aware that the bank would not have allowed the accounts to be opened had they known that the chop on page 8 of the passport was false and that the defendant was in Hong Kong illegally. I was sure that the relevant bank staff at each of the banks was deceived by this misrepresentation into opening the accounts and issuing the defendant with an ATM card. 132.I was sure that the defendant deliberately misled the banks as to the purpose for which the account was opened. I was sure the defendant deliberately misled the three banks as to his immigration status in Hong Kong. I was sure that this resulted in a benefit to himself and prejudice or a risk of prejudice to the banks concerned. I was satisfied that the prosecution had established each and every ingredient of offences 1,2 and 5 beyond reasonable doubt. Money Laundering charges - Charges 3,4 and 6 Remittances 133.There were a total of 26 remittances into the three bank accounts totaling the equivalent of HKD18,928,127.10. I set out below, in chronological order, a list of the remittances made into the defendant’s bank accounts:
Exhibit P1 ICBC 58- Remittance from Therence Nduwayezu 134.A report was made to the police in respect of this transaction alleging a possible e-mail fraud. It was this report, inter alia, that started the police investigation. 135.PW4, the sales manager for Shandong Bayi Tyre Manufacturing Company in China. conducted a successful transaction with a Therence Nduwayeze involving the sale of truck tyres. A contract had been negotiated for a second transaction for the sale of 110 truck tyres for USD25,040. Business was conducted by telephone and emails. The vendors were expecting a deposit of USD7,500 by October 2012 but none was received by them. 136.Company records showed that there was email correspondence and contracts relating to this transaction. 137.ICBC58 shows that in respect of this contract USD7,500 was remitted to the ICBC account of the defendant on 3 October 2012. The contractual references are set out in the Remarks column. 138.Company records, Exhibit 13A, show that this payment was made pursuant to an Interbank Order naming Paul Hounsa as the beneficiary with the address of PW4’s company listed underneath the defendant’s name. 139.PW4 did not know the defendant nor had his company ever had any dealings with him. 140.The defendant said that he did not know Therence although he knew through Baxil that Therence had sent money into the defendant’s account to buy tyres. In his evidence he said Baxil was a name given to him as a contact in Hong Kong and he also refers to him as his friend. There was no evidence as to what contribution the defendant made to effecting this delivery. 141.PW4 pointed out that some of the e-mail addresses shown to him in P13C were different from the ones he normally used to communicate with Therence. In my view this showed that there was an elaborate scheme to dishonestly divert monies due to be paid pursuant to a genuine contract into the account of the defendant. Records of Interview – Exhibits P7 and P8 142.The defendant was only interviewed about his ICBC account as the police were unaware of the two other bank accounts at that time. 143.When interviewed about the remittances going through that account the defendant’s answers were extremely vague. He said that he had kept documents relating to all the transactions in a box file at the Temple Street premises. When the police made enquiries about these premises it transpired they had been vacated. According to the landlord, PW6, the last rent payment was paid at the beginning of March 2013. In his interview the defendant said that Temple Street was occupied by his friend’s girlfriend. At counter 271 of P7 the defendant said that he just kept his bag there. At 293 he said he had had the spare key to the unit. When arrested the defendant told PW1 that he lived at Woosung House and that a female friend lived in Temple Street. This was very different to what he said in evidence. In his evidence he said that he occupied the flat and that his female friend had a spare key to use the flat at weekends. The defendant said he met her in a nightclub but also refers to her as his friend’s girlfriend. 144.In his interview the defendant said that he came to Hong Kong to trade in electronic and telcommunications devices as well as uniforms. He said that he allowed oversees buyers to use his ICBC account to remit monies to Hong Kong. 145.He said that they did not place any orders with him. He said he allowed the “buyers” to use his ICBC account as the “overseas buyers” had difficulty in applying for immigration visas, bringing monies into Hong Kong and opening bank accounts in Hong Kong. This explanation was not credible. 146.The defendant said that after the “overseas buyers” had transferred sums into his account the defendant would withdraw the sums and pay the suppliers. 147.He said that he conducted lots of business in Hong Kong (over HKD10 million) although during his stay he only earned about USD5000. When asked how his “overseas buyers” got his account details he said that “he wrote it down on a piece of paper and pass it”. There were huge sums of money going through the defendant’s account. He claimed that he had had no computer records of the transactions and there were no email exchanges with any of the remitters. 148.The defendant denied knowledge of any e-mail fraud. He said he never used e-mails to communicate with his clients. At counter 331 the defendant said that he is a pure businessman, he did not need emails. At 337 he said that he did business with overseas customers by phone. I found it incredible that any legitimate business would be conducted by telephone from Hong Kong with overseas companies in different parts of the world involving substantial sums of money. 149.In his second interview, P8, the defendant was shown a number of remittances and invited to comment. He was shown Exhibit P1 ICBC 30 ( Questions around counters 591 and 640), 34 ( Questions around counter 819), 36 (counter 851), 42 (counter 887), 32 (counter 978), 46 (counter 990), 47 (counter 999), 49 (counter 1002), 50 (counter1010), 53( counter 1010), 53 (counter 1045), 52 ( counter 1049), 58 (counter 1054), 60 ( counter 1133), 61 ( counter 1140). 150.The defendant’s recollection of these transactions and the remitters concerned was extremely vague. For instance when he was shown ICBC30 relating to a remittance on 9 July 2012 of USD13,671.00 from Al-Orobah in Palestine he said that he could not recall doing anything with them, maybe it was only one transaction ( counter 655). In respect of ICBC32 , a remittance of USD68,440 purporting to come from Raheel Saleem in Dubai he said he could not recall this transaction. He could not recall the name of Jiay Group Ltd in China in respect of ICBC 34. 151.In his evidence the defendant said that nearly all the remittances into his bank accounts came about because of his dealings with Mohamed of Lexon and Mohamed of Oraimo, usually the former. He said that they would alert him to a particular buyer and he would contact the buyer to make payment into his account. He withdrew the money in cash and took the money direct to Lexon or in the case of Oraimo, he would pay the money into a money exchange in the name of Oraimo and hand the staff of Oraimo the receipt. The defendant said that he would then arrange for the goods to be packaged and dispatched. 152.The defendant said that coincidentally he knew most of the customers through his international network of contacts. I found this to be yet another incredible assertion by the defendant. 153.I noted in his records of interview that he makes no reference to either of the Mohameds, Lexon or Oraimo. 154.When interviewed the defendant was asked about ICBC55 and 61, remittances by Ruqiah Binti Mhd Ali ( Ali) from Singapore in the sums of USD157,985 and USD179,987 on 27 September and 8 October respectively. The defendant said that these payments related to monies sent to his account for the purchase of property in Hong Kong. The remarks column on each remittance states “Purchase of Property”. 155.In his evidence the defendant said that Ali was a relative of Mohamed of Oraimo. The defendant said that he had met Ali a number of times at the Oraimo premises and it was suggested that for this property purchase money should be sent to Hong Kong via the defendant’s bank account. 156.The defendant said that the remitters dealt with him rather than Lexon or Oraimo because he was trustworthy. There was no explanation as to how these remitters would have come to trust the defendant or what they knew about him or what he was doing in Hong Kong. Fund Flow 157.Common to the three accounts was the fact that the Defendant was the sole signatory to the accounts. No cheques were issued from the accounts nor was there any activity by way of internet banking. The Defendant conceded that he, and he alone, operated the accounts. 158.The affirmations show that the Defendant withdrew nearly all the monies from the accounts by way of cash at ATMs or by way of cash withdrawal at the counters of the respective banks. 159.The ICBC account (subject matter of Charge 6) was opened 27th February, 2012 and closed 12th October, 2012. P4 shows that HK$13,720,913.20 was deposited and HK$13,720,599.40 was withdrawn. (The slight discrepancy in the two amounts is explained by the deduction of bank charges totaling HK$314.40) 160.The ATM withdrawals amounted to HK$86,000, or in percentage terms 0.01% of the actual withdrawal activity. Over the counter withdrawals (HK$13,634,599.40) amounted to 99.99%. 161.The BOOC account (charge 3) was opened 14th February, 2012 and remained in operation. The account had both a USD and an HKD account. The USD account saw 3 deposits of $341,004,84 and a transfer of the same three deposits to its HKD account (P5) 162.The activity in the HKD account saw deposits of HK $2,763,959.78 from the time the account was opened up to 2nd September, 2012. During the same time frame a total of HK $2,758,500 was withdrawn from the account. This comprised 5 cash withdrawals of HK$2,724,000 (98.75%) and 13 ATM withdrawals amounting to HK$34,500. As of 2 November 2012 the account balance stood at HK$4,589.78. 163.The HSB account (Charge 4) was also opened by the Defendant on 14th February, 2012 and closed 30th August, 2012. There were 10 deposits into the account totaling HK$2,456,777.76 and the whole sum, minus bank charges was withdrawn by the Defendant. There were 5 over the counter withdrawals of HK$2,411,103.32 (98.14%) and 14 ATM withdrawals of HK$45,595. 164.The Defendant was the person who withdrew the large amounts of cash at the banks. ICBC- 37 was an example of the Defendant signing to acknowledge he received the sums withdrawn from the bank. The Defendant was required to authenticate his identity by producing his passport. 165.Before the withdrawals were made the Defendant used his ATM card to withdraw very modest amounts of money from the respective accounts. Defence exhibits Exhibit D1 -Documents( pages 1-26) 166.These documents were recovered from the defendant’s laptop bag. After his arrest they were kept in his personal property. The documents were varied. There were various commercial receipts, bank documents and rental receipts. 167.D1-25 was a copy of a Maybank Telegraphic Transfer in respect of the remittance ICBC 61. I noted that although this remittance was made in October 2012 the address used was the defendant’s Woosung House address which he vacated in July 2012. 168.Bank documents at pages 14,15,18 and 19 relate to ICBC 61, BOCC23, BOCC 20 and BOCC 23 respectively. 169.Pages 1 -7 and 26 relate to modest purchases of electrical goods from Fortress. Page 24 is another modest purchase from High 5 International. 170.Pages 8 to 13 related to the property rented at Temple Street. 171.Page 16 purports to be “official receipts” on unheaded paper dated 17 April 2012 for USD282,000 from Zenco (Tecno). There is no indication on the document as to what it relates. The defendant said it was a receipt for mobile phones. There was nothing to connect this document to the defendant or to any of the remittances. 172.Page 17 is a similar document to page 16. It is dated the same day and the payer purports to be Zenco. The written amount and the figures do not tally. There is no indication on the document as to what it relates. The defendant said this was a receipt from Oraimo. Again there is nothing to connect this document with the defendant. 173.Page 20 is a Lexon International Limited Receipt dated 14 May 2012 for USD38,659 – HKD300,000 from Zenco. There is nothing on the receipt to indicate what it relates to or any connection with the defendant. The defendant said they related to the sale of Blackberry phones. Page 22 is a similar document. 174.Page 23 is a money receipt from Western Union for USD800. Exhibit D2 Photographs 175.The first shows the defendant standing in an electrical goods shop. The others show boxes of goods, some being packaged. There was nothing in the exhibits to link the photographs to any of the remittances. 176.No underlying commercial documents were produced to support any of the remittances which purportedly related to sales of goods. 177.The defendant claimed that they were arranged with the companies involved by telephone. At counter 438 of P7 when asked how his customers got his account number he said “I write it on a piece of paper and pass it”. In his evidence he said all the payments came from abroad. 178.In any event, no honest businessman would conduct business involving such huge sums of money in this manner. The defendant had no office. He had no access to any office facilities. None of the documents produced supported his evidence in relation to the remittances. 179.I found the evidence of the defendant very vague as to the details of the persons and companies remitting the funds. 180.I found the explanations given by the defendant in his records of interview confusing, inconsistent and illogical. The position became even more confusing when the defendant gave evidence. For the first time he introduced the two Mohameds who, according to the defendant were responsible for introducing most of the business to the defendant and to whom he paid most of the cash withdrawn 181.At one stage in his evidence he said that most of the remitters were persons introduced to him via one of the Mohameds and he did not know them. He later said he did know them. 182.The defendant’s claim that he had business contacts all over the world was not credible. 183.He had opened an email account when he arrived in Hong Kong but never used it. 184.He said he gave the two Mohameds details of all three of his bank accounts. 185.January 2012 was the first time he left Africa. He said when interviewed that he knew no one in Hong Kong and in evidence made claims of having very tenuous contacts with a few businessmen. 186.He claimed that he coincidentally knew the people or companies they referred to him .He said he knew them through his various contacts round the world. I did not believe this. 187.The defendant said that the monies sent to the banks could not be illegal as the banks would check. The only documentation that the bank received were the remittance forms which purported to show that the monies were related to commercial or property transactions. The banks would not know there was no underlying documentation to support these remittances or about the circumstances in which these payments were made into the defendant’s accounts. 188.The fact that I do not mention a particular piece of evidence or submission does not mean that I have not considered it or factored it in my decision making. 189.The totality of the evidence left me in no doubt that the defendant was lying about the circumstances in which the money was paid into and out of his three bank accounts. Charges 2,3 and 6 Facts and Circumstances known to the defendant 190.The defendant came to Hong Kong on 9 January 2012 with a right to stay 14 says. In Benin he had obtained a Chinese visa which was issued on 7 November 2011. The visa required that he enter China before 07 February 2014. This was the first time that the defendant had left the African continent. He stated that his purpose in coming to Hong Kong was to travel to China in search of business opportunities. I was sure he had no legitimate business contacts in Hong Kong. 191.The defendant did not open the bank accounts until some 5 weeks after his arrival here by which time he was in Hong Kong illegally and his passport contained false chops. I was sure that he was aware that the passport contained false chops and that the bank would rely on these false chops to allow him to open the bank accounts. 192.I was sure that the defendant lied to the bank as to the purpose of the bank accounts. 193.I was sure that he lied to the police and the court as to the circumstances in which the remittances were paid into his accounts. 194.Shortly after the deposits had been made into his accounts the defendant withdrew the money in cash leaving modest balances. Before each cash withdrawal there was a small withdrawal by way of ATM. No cheques were used and there was no internet banking. 195.A number of remittances came from countries such as Dubai, Palestine, Albania, Singapore, USA and Canada. The defendant had never met most of the remitters and said that that in addition to being introduced to the business by the Mohameds he had coincidentally had contact with them via his network of contacts round the world. The defendant said that all his dealings with them were conducted by telephone. I noted that the many of the remittances were for substantial sums of money, the amounts were irregular, few of them were in round figures. There were 22 different remitters and in respect of two remittances made on the 14 May2012 and 12 June 2012 in the respective sums of HKD659.544.50 and HKD732,897.56 the remitters were unknown. I found preposterous the defendant’s suggestion that these payments were for genuine business purposes conducted by telephone. 196.The defendant was very vague as to what he got out of these deals. 197.I found incredible the defendant’s assertion that customers remitted funds to his accounts in Hong Kong because they trusted him. He was a businessman from Benin of modest means and background with no genuine Hong Kong business connection. No credible explanation was offered as to why any of the remitters if they were engaged in genuine business transactions would trust the defendant and use the defendant’s accounts. 198.No underlying genuine documentation was produced to support any of the remittances. Do these facts and circumstances provide reasonable grounds to believe that the property represented the proceeds of an indictable offence I had no doubt that the circumstances set out above do provide reasonable grounds to believe that the property represented the proceeds of indictable offences. I was sure that the defendant either knew that the property going through his three accounts directly or indirectly represented the proceeds of indictable offences or deliberately turned a blind eye to the obvious.
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Cases cited in this judgment
Further hearings and rulings under DCCC 939/2013