HKSAR v. Wong Tak Wai
Read the full judgment text of CACC 67/2012 on BabelCite. This Court of Appeal judgment was delivered on 2 May 2014 before Yuen JA and Chu JA.
Criminal law – sentencing – money laundering – fraud – dealing with property representing proceeds of indictable offence – organized crime – shell companies – leave to appeal out of time – whether aggregate sentence of 4 years manifestly excessive for mastermind of scheme using 15 shell companies to defraud financial institutions and launder HK$7,828,974.50 with HK$1,545,564 in fraud losses over one year – Court of Appeal considered sentencing factors for money laundering under HKSAR v Hsu Yu Yi and HKSAR v Boma – starting point, discount for guilty plea (one-third), discount for prosecution delay (3 months) – whether consecutive sentencing appropriate where applicant already serving 30-year sentence for drug conspiracy (HCCC 302/2010) – application for adjournment of hearing refused – four-factor test in HKSAR v CHOW Sui-ngan for out-of-time applications – application for leave to appeal out of time refused due to serious 11-month delay, absence of good reason, and lack of merit in intended appeal.
Legal issues: Whether leave to appeal against sentence should be granted out of time
Outcome: Application for leave to appeal against sentence out of time refused.
Cited by 11 cases · Cites 12 cases
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[English Translation – 英譯本] CACC 67/2012 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CRIMINAL APPEAL NO 67 OF 2012 (ON APPEAL FROM DCCC NO 121 OF 2011) _______________________
_______________________ Before: Hon Yuen JA and Hon Chu JA in Court Date of Hearing and Delivery of Judgment: 24 April 2014 Date of Reasons for Judgment: 2 May 2014 REASONS FOR JUDGMENT Hon Chu JA (giving the reasons for judgment of the Court): 1.The applicant pleaded guilty before Deputy District Judge Sham (as he then was) to 8 charges of ‘dealing with property known or believed to represent the proceeds of an indictable offence’, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 Laws of Hong Kong (Charges 1 to 8), and 12 charges of ‘fraud’, contrary to section 16A of the Theft Ordinance, Cap 210 Laws of Hong Kong (Charges 9 to 20). 2.On 13 February 2012, the applicant was sentenced to a total of 4 years’ imprisonment. The details are as follows:
3.In addition, 12 months of the sentence imposed on the applicant in this case were to run concurrently and the remaining 36 months were to run consecutively with the sentence he is currently serving. 4.On 8 February 2013, the applicant applied for leave to appeal against sentence out of time. On 30 October 2013, Madam Justice Maria Yuen, Justice of Appeal, refused the application after hearing it. 5.On 13 November 2013, the applicant re-applied for leave to appeal against sentence out of time. The application was made beyond the statutory time period but, having considered the explanation given by the applicant in his affirmation dated 19 December 2013, Madam Justice Yuen allowed him to reapply out of time for leave to appeal against sentence out of time on 23 December 2013. The Facts 6.The facts admitted by the applicant reveal that this was a case of planned criminal activities which involved defrauding financial institutions and what is commonly referred to as ‘money laundering’. The applicant was the mastermind in the case. Besides him, there were 11 other defendants in the case. 7.The facts related to Charges 1 to 8 reveal that from April to December of 2001, the applicant, together with the third to fifth and the seventh to ninth defendants of the case and others, set up 15 shell companies in the capacity of sole proprietors. They applied for business registrations, and opened accounts for these companies with banks. Actually, these shell companies did not operate any genuine business, and the applicant’s purpose of setting them up was to facilitate the defrauding of financial institutions and to launder proceeds of crimes through the companies’ accounts. The ‘black money’ laundered through the bank accounts of these companies amounted to HK$7,828,974.50 in total. 8.The facts of Charges 9 to 20 reveal that the applicant arranged for the tenth to twelfth defendants and others to obtain, by deceit, personal or tax loans from different financial institutions. First of all, the applicant arranged for funds to be transferred from the bank accounts of the above-mentioned shell companies to the personal bank accounts of the above-mentioned people who were fraudulently represented as employees, and such funds would serve as false proof of their monthly salaries. Then, the applicant arranged for the shell companies and the fraudulent employees to respectively complete the ‘Employer’s Return of Remuneration and Pensions’ and the financial statements, and the ‘Tax Return - Individuals’, and submit them to the Inland Revenue Department. Based on these false information, the Inland Revenue Department issued Demands for Tax to the fraudulent employees. 9.After creating the above salary transfer records and obtaining the Demands for Tax, the fraudulent employees then applied for loans from one or more than one financial institutions with these false or illegally obtained documents as supporting materials. Induced by these false materials, the financial institutions approved the loan applications of the fraudulent employees and released loan funds to them. 10.After obtaining the loans successfully, the applicant arranged for the funds to be withdrawn or transferred to other accounts, and some of them eventually flowed back to the bank accounts of the applicant, the other defendants or the above-mentioned shell companies. Apart from a few initial repayments by instalments, the vast majority of the loans was not paid back. The financial institutions involved in the case suffered a loss of $1,545,564 in total. Sentence passed bythe Trial Judge 11.The applicant was 37 years old at the time of sentence. He had 12 previous criminal convictions, but they were not similar in nature to the charges in this case. 12.The applicant was sentenced to 16 years’ and 30 years’ imprisonment in 2002 and 2011 respectively for involving in drug-related offences. The applicant was serving the 30 years’ sentence at the time of sentence. 13.The trial judge noticed that some of the defendants of the same case pleaded guilty in a magistrates’ court and were dealt with by way of community service order or sentenced to 4 to 10 months’ imprisonment. However, he pointed out that when the court passed such sentences, it had not referred to the judgment from the Court of Appeal in HKSAR v CHAN Chi-hoi, CACC 218/2009, and that the sentences could be different as the case was handled by different judges. 14.The trial judge found that the case was serious, involving planned and syndicated fraudulent conduct which was carried out after careful deliberation and thorough preparation. Moreover, the money laundered amounted to a total sum of over $7.82 million, the duration of the offence was over a year, and a sum of over $1.54 million was defrauded of. 15.The trial judge also found the applicant most culpable as he was the mastermind in the case. He formed the syndicate for the purpose of conducting criminal activities. Through making false instruments, these people deceived government departments, and then they defrauded financial institutions of the loan funds. 16.On the other hand, the trial judge accepted that there was undue delay in that in 2001 the police had already obtained evidence to conduct investigation, but it was not until 2007 that arrests were made and prosecution was instituted only 3 years after that. Such delay increased the anxiety and stress suffered by the applicant and the other defendants. He therefore gave the applicant a three months’ discount on the sentences. 17.At the same time, the trial judge awarded him a one-third discount on the sentences for his guilty plea. 18.After considering all the mitigating factors and all discounts available to the applicant on account of the delay in prosecution and the guilty plea mentioned above, the trial judge passed the following sentences:
19.Furthermore, in the light of the totality principle, the trial judge ordered that the 22 months’ sentence on Charge 1 was to run consecutively with 2 months of each of the sentences of Charges 2 to 8 and 1 month of each of the sentences of Charges 9 to 20. The aggregate sentence was therefore 48 months. 20.Since the applicant, at the time of sentence, was serving a sentence of 30 years in respect of a case of conspiracy to traffic in a dangerous drug (HCCC 302/2010), the trial judge ordered that 12 months of the aggregate sentence of 48 months were to run concurrently with the sentence in that case. Applicant’s Application for Adjournment of Hearing 21.At the start of the hearing in this court, the applicant asked for adjournment of this application until the appeal of the other case involoving him (HCCC 302/2010) to the Court of Final Appeal was disposed of. His reason was that part of the sentence of this case was to run consecutively with the sentence of that case, and that he was not prepared to proceed with this application if the appeal in that case was successful. 22.We refused to grant the application. Although the trial judge ordered that part of the sentences of the two cases was to run concurrently, the success or otherwise of the applicant’s appeal in that case has no bearing on the question of whether the sentence in this case was proper or not. Regarding the possibility that the applicant might not proceed with this application depending on the outcome of the appeal in that case, that is neither here nor there. It is out of the question that this court would postpone the legal proceedings to accommodate the litigation strategy of the applicant. Ground of Application for Leave to Appeal out of Time 23.The applicant explained during the hearing that he knew the time limit for making an application for leave to appeal was 28 days, but he needed time to prepare for the grounds of appeal which included seeking assistance from lawyers. The applicant submitted that he had already sent a letter to the court as early as 9 March 2012 to make it clear that he intended to appeal, and that he had also informed the social welfare officer of the Correctional Services Department immediately after receiving the reply letter of the registrar dated 14 March 2012. However, he had not yet resolved the problems concerning his grounds of appeal at that time, so he was not definitely sure that he would proceed with the appeal. Later, when he was ready, he informed the social welfare officer about it, prepared affirmation and made the application. Applicant’s Grounds of Appeal 24.The thrust of the applicant’s grounds of appeal is that the trial judge placed too much emphasis and weight on making the sentences run consecutively, resulting in an aggregate sentence that was too long. The applicant pointed out that the aggregate sentence of 4 years was equivalent to adopting a starting point of 6 years, and it was manifestly excessive. He also submitted that it was not proper to have 36 months of the sentence in this case to run consecutively with the sentence of 30 years he is currently serving. Reasons for Our Decision 25.The applicant’s application for leave to appeal against sentence exceeded the time limit for as long as 11 months. In HKSAR v CHOW Sui-ngan [transliteration of 鄒瑞顏] CACC 61/2012, the Court of Appeal pointed out that when deciding whether or not to grant an out-of-time application, the court had to consider:
26.As mentioned before, the delay of the applicant is very serious. The explanation of the delay given by him does not constitute a good reason. If the applicant intended to lodge an appeal, he should act according to the statutory time frame. The grounds of appeal now raised by the applicant are not complicated. The applicant gives no explanation as to why the grounds of appeal required 11 months to prepare. 27.As far as the grounds of appeal are concerned, there are no sentencing guidelines for the offences commonly referred to as ‘money laundering’ and the offences of fraud for which the applicant was prosecuted. In HKSAR v Hsu Yu Yi [2010] 5 HKLRD 536, the Court of Appeal set out the factors relevant to sentencing in a ‘money laundering’ case:
28.In HKSAR v Boma [2012] 2 HKLRD 33, the Court of Appeal further explained that the amount of money laundered was no doubt important, but it was not the be-all and end-all of a case, and that the court at the same time had to consider the following significant features:
29.This court agrees with the views of the trial judge, namely there are many aggravating factors in this case. Firstly, it was a case involving organized illegal activities with elaborate planning. Secondly, the applicant was the mastermind. He recruited the other defendants in the case and some others and formed a crime syndicate. They deceived government departments by setting up shell companies and using false information and transfer transactions. By so doing they achieved the objective of defrauding the banks and obtained loans and financial gains. Furthermore, the crime lasted for as long as one year, and the money laundered and the funds obtained from the frauds were substantial, amounting to over $7.82 million and over $1.54 million respectively. In addition, the ‘black money’ dealt with by the applicant was largely obtained from the fraud cases in which he played a leading role. 30.The respondent cited the following authorities to illustrate the approaches taken by the court in sentencing in respect of these charges:
31.Indeed, there can be a myriad of variations in the circumstances surrounding and the modus operandi employed in ‘money laundering’ and fraud cases, so it is not suitable to formulate any sentencing guidelines. The above cases can only serve as references for the purpose of understanding the range within which the court passed sentences in respect of these charges. 32.Having considered the factual background of this case, the aggravating features mentioned above (paragraph 28) and the authorities cited by the respondent, this court finds that the starting point adopted by the trial judge for each charge was not excessively high. He already reduced the sentences by one-third to reflect the guilty plea of the applicant. The 3 months’ discount given for the delay in prosecution was also appropriate. 33.Regarding consecutive sentences, the applicant did not dispute that the sentences of the charges in this case should run consecutively. Taking into account the totality principle, the trial judge only ordered that part of the sentences was to run consecutively, and this approach was also correct. Indeed, an aggregate sentence of 4 years was equivalent to adopting a starting point of 6 years. However, having regard to all the circumstances of this case, particularly the fact that it was an organized crime perpetrated jointly by a number of people, and that a total of 20 charges were preferred in connection with this case, adopting 6 years’ imprisonment as the starting point of the total sentence was by no means manifestly excessive. 34.Furthermore, in view of the fact that the applicant was sentenced to a rather lengthy term of imprisonment (30 years) in HCCC 302/2010, the trial judge ordered that 12 months of the sentence in this case be served concurrently with the sentence of that case. This decision was appropriate and was in line with the sentencing principles. 35.All in all, the intended appeal of the applicant is devoid of any reasonably arguable ground. Conclusion 36.By reason of the serious delay of the applicant’s application, the absence of a good reason for the delay, and the lack of merit of his intended appeal, we refuse the application for leave to appeal out of time which the applicant made afresh.
Mr David Chan, ADPP, of the Department of Justice, for the Respondent The Applicant, acting in person, present. Translated by the Judgment Translation Unit of the Judiciary and vetted by Mr Patrick W.S. Cheung, Barrister-at-law |
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