HKSAR v. Li Shunying

DCCC 798/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CRIMINAL CASE NO. 798 OF 2014

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Reasons for Sentence
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1.The defendant pleaded guilty to one charge of Conspiracy to deal with property known or believed to represent proceeds of an indictable offence, namely HKD $60,000, 3 rings and 4 necklaces.

Summary of facts

2.At around 1pm on 1^st July 2014, 46 year old madam Wong received a phone call from someone pretending to be her son, claiming he had borrowed money from someone and needed her help. Another voice then took over and told Ms. Wong to repay $230,000 for her son. A third voice took over and Ms. Wong told him that she only had $50,000. The man told her to surrender her jewellery as well. Ms. Wong then described herself to the man over the phone and gave the man her mobile phone number. Ms. Wong eventually agreed to pay the man $60,000 as well as hand over 3 rings and 4 necklaces.

3.Ms. Wong’s husband reported the matter to the Police. As instructed, Ms. Wong arrived in Aberdeen later the same day. At the designated meeting point, the defendant approached Ms. Wong and asked her what had she got. Ms. Wong told the defendant that she had the said items in the bag that she had with her. The defendant took away the bag, which in fact only contained newspapers, and was promptly intercepted and arrested by Police officers.

4.The defendant claimed in his cautioned video recorded interviews that he entered Hong Kong on 30^th June 2014 and took over the bag from Ms. Wong. Call records of the 2 mobile phones found on the defendant showed the defendant receiving 4 calls that originated from mainland China between 12am and 2:53pm on the day of the offence. Movement records show the defendant entering Hong Kong at around 11:01am on 30^th June 2014.

Previous convictions

5.The defendant is of previously clear record.

Mitigation

6.The defendant is 18 years old and a mainland Chinese citizen. Since conspiracy to commit a s.25(1) offence is not an excepted offence under schedule 3 of the Criminal Procedure Ordinance, reports were ordered to be prepared on the defendant as to the suitability of his detention in either the Rehabilitation Centre, the Detention Centre or the Training Centre. In short, the defendant is considered unsuitable for any of those centres.

7.The defendant was born in Taishan, Guangdong Province and brought up in a broken family. He is the only child of his natural parents. His father passed away shortly after the defendant’s birth in 1996. The defendant’s mother worked as a factory worker. The defendant was arranged to reside with his maternal grandparents when he was small and his mother would visit him regularly. The defendant’s mother re-married in 2007 and gave birth to a daughter.

8.The defendant received education up to secondary 3 level in mainland China. After leaving school in 2011 he worked as a kitchen assistant earning RMB1,200 per month. He was employed as a salon apprentice in early 2012 when he left his hometown, and had since worked at different salons earning between RMB1,200 and 1,700 per month.

9.The defendant borrowed RMB10,000 from his friends in late 2013. In order to repay his debt, the defendant agreed to come to Hong Kong to collect debts for his friends. He was instructed to come to Hong Kong and stay in a motel in Sham Shui Po and then to take a taxi to Aberdeen to collect some money and jewellery from a woman there.

10.The defendant realized that it was greediness and ignorance that caused him to commit the present offence.

11.In his skeleton submissions in mitigation, Mr. Lau for the defendant pointed out that this is a typical case of ‘drop-off’ mode telephone deception case, although there is no evidence to suggest that the defendant was party to the deception or that the defendant had knowledge of the deception.

12.The defendant was recruited by one ‘black boy’ to come to Hong Kong to earn some easy money. The defendant was promised 10% of the money he was to collect. The defendant was in financial difficulty and was not someone with much life experience and so he foolishly agreed to the arrangement. He is now remorseful.

13.The defendant merely acted as a collector. Mr. Lau submits that the defendant’s role is similar to the person who sells the ATM card or lend his bank account to others, citing the District Court case of HKSAR v Xie Jianwen, DCCC 105/2014.

14.Ms. Wong did not suffer actual financial loss.

15.The case involved $60,000, 3 rings and 4 necklaces, and there is no evidence to suggest that the total value was significantly more than around $60,000. There was just one single transaction.

16.Mr. Lau referred to the case of HKSAR v Xie Jianwen (supra) where the learned judge adopted a starting point of 15 months’ imprisonment and a sum of $150,000 was involved. Mr. Lau also referred to another District Court case of HKSAR v Mo Liuchun, DCCC 770/2011 where the learned judge adopted a starting point of 2 years for a similar offence in which $30,000 was involved.

Enhancement of sentence[1]

17.The prosecution applied to enhance the defendant’s sentence pursuant to s.27, in particular s.27(2)(c) and (d) of the Organized and Serious Crimes Ordinance, Cap.455 (“OSCO”).

18.Their application is based on the information as set out in the statement of Detective Chief Inspector Lam Cheuk Ho (exhibit P-1) dated 7^th October 2014. It is their case that the offences of Dealing with property known or believed to represent proceeds of an indictable offence and the offence of conspiring to commit the same offence is prevalent in Hong Kong, and the nature and extent of the harm caused to the community by recent occurrences of the offences warrant an enhancement of the sentence.

19.The enhancement application is opposed by the defendant.

20.It is not disputed that conspiring to deal with proceeds of an indictable offence is a specified offence within the meaning of s.27 of OSCO.

21.The defendant does not object to the use of DCIP Lam’s statement as evidence. Mr. Lau however pointed out that according to DCIP Lam’s statement, in particular in Annex A, the number of detected cases which resulted in convictions for money laundering are just 15 cases in 2011, 24 cases in 2012, 25 cases in 2013 and 9 cases in 2014 (up to and including September), and there is therefore ‘no conclusive cogent evidence’ to show that the ‘money laundering’ offence is prevalent and that there is an increasing tendency.

22.If the court is not with the defendant on this point, Mr. Lau suggests that the enhancement should be in line with the above mentioned case of Xie Jianwen, where the learned judge applied a 20% enhancement.

23.I would like to deal with the case of HKSAR v Mo Liuchun in the context of how the evidence in DCIP Lam’s witness statement should be applied since this case is referred to in Mr. Lau’s skeleton submissions.

24.In Mo Liuchun, the defendant pleaded guilty to one charge of conspiracy to launder money. There, as in our present case, the defendant went to collect money from the victim after the victim had been led to believe that her son was kidnapped by way of a telephone deception and had agreed to pay a ransom of $30,000. Also similar to our present case, the collector came to Hong Kong for the specific purpose of collecting the money after someone had promised her RMB$8,000. There was no evidence to suggest she knew the nature of the predicate offence.

25.The prosecution sought an enhancement of sentence on the basis of prevalence and harm to society under s.27(2)(c) and (d) of OSCO.

26.In sentencing, the learned District Judge Pang (as she then was) first of all finds that the guideline sentence of 4 years’ imprisonment for telephone deception cases did not apply since the accused was not charged with any deception or fraud offences, and there was no evidence to prove that the accused was a party to the telephone deception. I agree with the learned judge’s finding on this point.

27.The learned judge that referred to the case of HKSAR v Hou Shun Hsiung, CACC 472/2009 where the Court of Appeal set out some relevant factors to be considered when sentencing in money laundering cases. Having taken into consideration those relevant factors, including the $30,000 involved, the fact that the accused did not actually receive the promised reward, the fact that the accused was recruited in mainland China to come to Hong Kong to commit the offence and the fact that the accused was aware that she was acting with others when committing the offence, the learned judge adopted a starting point of 2 years’ imprisonment.

28.In relation to the prosecution’s application for enhancement of sentence, the learned judge found that the statistics produced by the prosecution did not deal with the prevalence of the specified offence of money laundering, nor did they include the percentage of telephone deception cases being prosecuted by way of money laundering offences and whether the accused in those cases were aware of or party to the deception.

29.The learned judge then proceeded to find that since the specified offence was conspiracy to launder money, the prevalence that the prosecution had to prove was the prevalence of that particular offence and not that of telephone deception. The learned judge refused the prosecution’s application to enhance as a result.

30.Mr. Lau also referred to the case of HKSAR v Wu Jianbing CACC 32/2011. There the applicant came to Hong Kong from mainland China to collect money on four occasions over four days, with the money collected ranging between $20,000 to $200,000. The applicant pleaded guilty at trial to 2 charges of money laundering and 2 charges of conspiring to launder money. The Court of Appeal, having taken into account that there was no evidence to show that the applicant participated directly in the telephone deceptions found that the proper starting point after trial was that of 3 years’ imprisonment on each charge.

31.The prosecution’s application to enhance the sentence was not opposed in the District Court. The Court of Appeal allowed the appeal on sentence but confirmed the enhancement.

32.While it is true that there was no detailed argument on the enhancement, given that the appeal was against sentence, and an enhancement under OSCO can only proceed upon the prosecution proving its case, the fact that the Court of Appeal considered an enhancement necessary in a case with facts so similar to ours must not be disregarded lightly.

What information to consider when deciding on prevalence

33.Unlike the statement relied upon by the prosecution in the case of Mo Liuchan, DCIP Lam’s statement in our present case does contain information specifically on the percentage of telephone deception cases being prosecuted by way of money laundering offences.

34.Looking at the statistics, it is unmistakable that there is an upward trend of telephone deception cases. The question that needs to be answered is whether those statistics can be taken into account when deciding on the prevalence of the ‘specified offence’.

35.For the following reasons, it is my finding that statistics for all the reported ‘Drop-off’ cases and not just the prosecuted ones should be taken into consideration.

36.Theoretically speaking, there is nothing to prevent the prosecution from including a charge of money laundering against the money collecting person in all telephone deception cases. It is only the offence of deception or fraud that would require the prosecution to prove knowledge of the deception on the defendant’s part. If the evidence supports a prima facie case of fraud or deception against the money collecting person, the same evidence would inevitably also support a prima facie case of money laundering or conspiracy to launder money against that same person.

37.In any event, since 2011, where arrests in relation to ‘Drop-off’ cases were made, the majority of the prosecutions was by way of money laundering (see paragraph 22 of DSIP Lam’s statement) and only a handful of arrested persons were charged with either conspiracy to defraud or attempted fraud. This is no doubt due to the difficulties that the prosecution would always face in trying to prove knowledge of the telephone deception against the money collector, and the relatively easier task of proving the money collector had reasonable grounds to believe the money they were collecting represented proceeds of an indictable offence.

38.I find that I am entitled to look at the trend of the increase in reported telephone deception cases with a ‘drop-off’ modus operandi over the years and not be restricted to the amount of cases where there had been prosecution and conviction.

39.I find that when considering the prevalence of a specified offence, the court must look into the facts behind the offence. An example in support of this proposition is where sentence was enhanced for theft of Buddhist pines and ‘incense trees’. The defendants would be charged with either theft or handling stolen goods for their theft of the protected species. If only money laundering statistics can be considered, then instead of producing statistics for theft of the specific kind of trees, the prosecution would be referring the court to the trend of all theft or handling cases in Hong Kong. This cannot be the right approach. As suggested by the various cases of theft of Buddhist pines and ‘incense trees’, the court required specificity when considering prevalence.

40.In the case of HKSAR v Xie Jinbin, CACC 195 of 2010 where ‘incense trees’ were stolen and the prosecution applied to enhance the sentence, the Court of Appeal found that there were no prosecution statistics to support the suggestion that the offence of theft of ‘incense tree’ was prevalent. Yet the Court did refer to the existence of numerous reports of illegal exploitation of the species, and deduced that the exploitation was difficult to police. Furthermore, the Court then referred to cases where there is evidence to prove that theft of Buddhist pines is prevalent and pointed out the similarities in the nature of the offences, that is to say, mainlanders coming illegally or on two way permits to exploit Hong Kong’s local flora as well as the relative ease that the offence could be committed and found that all these considerations apply equally to illegal exploitation of ‘incense trees’.

41.I find that in the interest of justice, the court should adopt an expansive approach when dealing with the statistics in support of an enhancement application, rather than a restrictive and narrow one.

Ruling on prosecution’s enhancement application

42.Applying this approach to the information as produced by the prosecution through DCIP Lam’s statement, I find that the prosecution has proved beyond reasonable doubt that the offence of money laundering committed by someone collecting money which represented proceeds from a telephone deception is prevalent and that the nature and extent of the harm done to the society warrant an enhancement of the sentence.

Sentence

43.The maximum sentence for money laundering is that of a fine of $5 million and imprisonment for 14 years.

44.The defendant is of previously clear record. There is no evidence to suggest he knew about or took part in the underlying telephone deception. The conspiracy to launder money was just for that particular occasion. The money conspired to be laundered was $60,000 plus the value of the 3 rings and 4 necklaces, a relatively small amount in money laundering cases.

45.The defendant however committed the offence for a monetary reward. He came to Hong Kong as a Chinese citizen from mainland China just the day before he committed the offence, and for the specific purpose of committing the offence.

46.I have specifically considered whether a small discount should be applied based on the defendant’s relatively young age but had decided against it. To do so might encourage the culprits to recruit young people to do their dirty foot soldier work. A message must be sent to try to deter those who might be their targets.

47.I find that a proper starting point is that of 2 years’ imprisonment under the circumstances, discounted by one-third to 16 months’ imprisonment in recognition of the defendant’s guilty plea. I will enhance the sentence by slightly less than one-third, resulting in the sentence of 21 months’ imprisonment after the enhancement.