HKSAR V .Jariabka Juraj

DCCC 54/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 54 OF 2014

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REASONS FOR SENTENCE

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1.The defendant is convicted after trial of one charge of incitement to deal with property knowing or believing the property represented the proceeds of an indictable offence, contrary to Common Law and section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Chapter 455.

2.Full details of the offence are set out in my verdict delivered earlier today.  In summary Mr Antonio Aldo Papaleo, an Italian living in Slovakia and working as a freelance journalist, was interested in investigating financial crime. Frustrated by the difficulties in getting real information on the outside Mr Papaleo posed as a corrupt journalist who had serious drug and alcohol problems. 

3.Posing in this way Mr Papaleo, through the introduction of Jozef Drlicka, met the defendant on the 10 May 2013.  Two or three days prior to the meeting Jozef Drlicka told Mr Papaleo that he had a Slovakian friend working in Hong Kong who needed urgent help in order to do his business in Hong Kong.  Jozef Drlicka told Mr Papaleo the business was illegal but not criminal meaning not involving guns or drugs, which meant that there was no physical risk to Mr Papaleo’s safety.

4.The defendant asked Mr Papaleo to go to Hong Kong to incorporate a company and related bank account.  All expenses were to be paid by the defendant with Mr Papaleo being promised a €5,000 reward.  Mr Papaleo agreed to go.

5.On the 14 May 2013 both Mr Papaleo and the defendant arrived in Hong Kong.  Whilst in Hong Kong at the direction of the defendant Mr Papaleo went to Acorn Business Services and Consultancy Limited to incorporate two companies Vindex (HK) Limited and East Ray (HK) Limited, which names had been given to Mr Papaleo by the defendant. 

6.After incorporating the companies and opening the bank accounts for the two companies Mr Papaleo was to hand over control of the companies and the bank accounts to the defendant.  Mr Papaleo would then be paid the €5,000.

7.Mr Papaleo did not however open any bank accounts and gave various excuses to the defendant as to why the bank accounts could not be opened, including that the banks required proof of business.  

8.Mr Papaleo and the defendant therefore returned to Bratislava for Mr Papaleo to prepare the documentation supposedly required by the banks for opening the accounts. 

9.On return to Bratislava Mr Papaleo reported the matter to the Slovakian police however the Slovakian police declined to investigate the matter.  Mr Papaleo therefore agreed to return to Hong Kong ostensibly to complete the opening of the bank accounts. 

10.Mr Papaleo arrived in Hong Kong on the 11 June 2013 and the defendant arrived on the 14 June 2013.  In the meantime Mr Papaleo had reported the matter to the Hong Kong police.  At a pre-arranged meeting with the defendant Mr Papaleo pointed out the defendant who was then arrested by the police. 

11.In passing sentence I take into account everything said on your behalf by Mr Ross, including the ill health of your mother.  I take into account you have no convictions in Hong Kong.  This however carries little weight where you are a visitor to Hong Kong who commits serious crime.    

12.Money laundering is a serious offence for which deterrent sentences are required.  A number of significant factors have been identified as relevant in determining the culpability of a defendant, including the nature of the offence that generated the laundered money and the extent to which the offence assisted the crime or hindered its detection; whether the defendant had knowledge of that underlying offence or has turned a blind eye to the source of the money; whether there was an international element to the commission of the offence; the degree of sophistication of the offence and the level of the defendant's participation, including the length of time the offence lasted and the benefit he derived from the offence; and the amount of money involved (see for example Secretary for Justice v Jerome Yuval Arnold Herzberg [2010] 1 HKLRD 502; HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545; and HKSAR v Boma [2012] 2 HKLRD 33).  Mr Ross has specifically referred me to eight factors set out in paragraph 40(2) of the judgment in Boma. 

13.The opening of bank accounts for someone else facilitates the laundering of money by disguising the true owner of the money passing through the bank accounts.  This makes difficult the detection of crime and at the same time undermines the integrity of the banking system.  This is even more so in a case where both the person who opens the account and the true holder of the account are not Hong Kong residents. 

14.Taking into account the international dimension and your role in inciting Mr Papaleo I am satisfied the proper sentence after trial is one of 4 years imprisonment.  There are no grounds to reduce the sentence.  You are convicted and sentenced to 4 years imprisonment.