DCCC54/2014

DCCC54/2014

A A B B DCCC 54/2014 C IN THE DISTRICT COURT OF THE C HONG KONG SPECIAL ADMINISTRATIVE REGION D CRIMINAL CASE NO. 54 OF 2014 D ____________ E E HKSAR F F v G G JARIABKA JURAJ ____________ H H Before: HH Judge Dufton I I Date: 8 September 2014 Present: Mr Derek Wong, SPP, of the Department of Justice, J J for HKSAR Mr Phillip Ross instructed by Betty Chan & Co, K for the defendant K Offence: Incitement to deal with property known or believed to L represent proceeds of an indictable offence (煽惑處理已知道 L 或相信為代表從可公訴罪行的得益的財產) M M REASONS FOR VERDICT N N O 1. The defendant, a national of Slovakia, pleads not guilty to O one charge of incitement to deal with property known or believed to P P represent the proceeds of an indictable offence, contrary to Common Law Q and section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Q Chapter 455. R R S S T T U U V V  -2- A A B B The charge C C 2. The particulars of the charge read as follows: D D “Jariabka Juraj, between the 10th day of May, 2013 and the E E 14th day of June, 2013, both dates inclusive, in Hong Kong, unlawfully F incited Papaleo Antonio Aldo to deal with property, namely the chose in F action owed to Vindex (HK) Limited and/or East Ray (HK) Limited by G G Hong Kong bank, knowing or having reasonable grounds to believe that H the property, in whole or in part directly or indirectly represented the H proceeds of an indictable offence.” I I “Chose in action” J J K 3. When the Slovakian interpreter read the particulars of the K charge he asked for clarification of what a chose in action was. Mr Wong L L explained this was the deposits held by Hong Kong banks in the accounts M of Vindex (HK) Limited and East Ray (HK) Limited as particularised in M the charge. The Slovakian interpreter said he then understood the term N N chose in action and proceeded to read the particulars of the charge. The O defendant said he understood the charge and pleaded not guilty. O P P 4. After the charge was read Mr Ross asked for further Q particulars of the “chose in action” saying that no monies were ever Q deposited in any bank account and therefore the chose in action could not R R be the monies in the bank. Mr Wong explained that as the charge was S one of incitement the substantive offence need not be proved and that the S reference to chose in action was to the monies which would be deposited T T in those accounts. U U V V  -3- A A B B “Hong Kong bank” C C 5. On first reading the charge I read the reference to “Hong D Kong bank” as referring to HSBC. I clarified this with Mr Wong as there D was no mention in the opening that Mr Papaleo was to open a bank E E account with HSBC. Mr Wong explained that the reference to “Hong F Kong bank” in the charge was not a reference to HSBC but to Hong Kong F banks generally without specifying which bank. Although Mr Wong said G G that it would be better to amend the charge no amendment of the charge H has been sought by the prosecution. H I I Duplicity J J 6. The particulars of the charge alleging the date of the offence K K being between the 10 May and the 14 June 2013 Mr Ross submitted that L the charge was duplicitous and by virtue of section 4(4) of the Criminal L Jurisdiction Ordinance, Chapter 461 the first meeting on the 10 May M M which took place in Slovakia was not indictable in Hong Kong. N N 7. I was satisfied the charge was not duplicitous for the reasons O given in paragraphs 11 & 12 of my ruling delivered on the second day of O trial (14 May) (a copy of which is annexed to the verdict). P P Q 8. Further I was also of the view that the Common Law Q position that incitement outside the jurisdiction to do something within R R the jurisdiction is indictable in Hong Kong and not affected by the S Criminal Jurisdiction Ordinance (see paragraph 13 of my ruling). In S addition I would add that even if the meeting in Slovakia was not T T indictable in Hong Kong the evidence of that meeting would nevertheless U U V V  -4- A A B B still be admissible to explain the meetings and events which actually took C place in Hong Kong. C D Introduction D E E 9. Mr Antonio Aldo Papaleo, a national of Italy, was living in F Slovakia and working as a freelance journalist. On the 10 May 2013 Mr F Papaleo, through the introduction of Jozef Drlicka, met the defendant in G G the Goblin pub in Bratislava. Mr Papaleo was asked to go to Hong Kong H to incorporate a company and related bank account for which he would be H paid €5,000. Further meetings between Mr Papaleo and the defendant I I were held both in Bratislava and Hong Kong. Mr Papaleo secretly J recorded all meetings with the defendant with a pinhole camera. J K K 10. On the 14 May 2013 both Mr Papaleo and the defendant L arrived in Hong Kong. Whilst in Hong Kong Mr Papaleo went to Acorn L Business Services and Consultancy Limited who assisted in the M M incorporation of Vindex (HK) Limited and East Ray (HK) Limited. Mr N Papaleo did not however open any bank accounts and gave various N excuses to the defendant as to why the bank accounts could not be opened, O O including that the banks required proof of business. P P 11. Mr Papaleo and the defendant therefore returned to Q Bratislava for Mr Papaleo to prepare the documentation supposedly Q required by the banks for opening the accounts. On return to Bratislava R R Mr Papaleo reported the matter to the Slovakian police however the S police declined to investigate the matter. Mr Papaleo therefore agreed to S return to Hong Kong ostensibly to complete the opening of the bank T T accounts. Mr Papaleo arrived in Hong Kong on the 11 June 2013 and the U U V V  -5- A A B B defendant arrived on the 14 June 2013. In the meantime Mr Papaleo had C reported the matter to the Hong Kong police. At a pre-arranged meeting C with the defendant Mr Papaleo pointed out the defendant who was then D D arrested by the police. E E Prosecution case F F 12. In summary the prosecution case is that Mr Papaleo was told G G the business of the defendant was illegal. After incorporating the two H companies Vindex (HK) Limited and East Ray (HK) Limited and H opening the bank accounts for these two companies Mr Papaleo was to I I hand over control of the companies and the bank accounts to the J defendant. Mr Papaleo would then be paid the €5,000. J K 13. The paying of €5,000 and all expenses to Mr Papaleo to go K L to Hong Kong to incorporate companies and open related bank accounts, L the control of which were to be handed over to the defendant, the M M prosecution say that the defendant has incited Mr Papaleo to deal with N property by concealing the true identity of the person in control of the N bank accounts and thereby the true owner of the monies to be deposited O O in the bank accounts, knowing or having reasonable grounds to believe P that the monies passing through the accounts, in whole or in part directly P or indirectly represented the proceeds of an indictable offence. Q Q Defence case R R S 14. The defence case in summary is that in May 2013 the S defendant entered into an agreement with Jozef Drlicka to incorporate T T two companies in Hong Kong. One was to trade in LED lighting and the U U V V  -6- A A B B other in publishing. Jozef Drlicka would incorporate the companies and C manage the Hong Kong operation but as he did not have a passport Mr C Papaleo was asked to go to Hong Kong to incorporate the companies and D D open the bank accounts on his behalf. Once Jozef Drlicka was able to E travel to Hong Kong Mr Papaleo would then hand over control of the two E companies and the bank accounts to him. The business of the two F F companies was genuine and there was no intention of laundering money G through the bank accounts. G H Incitement H I I 15. A person is guilty of incitement to commit an offence if: J J (a) he incites another to do or cause to do an act or acts K K which, if done, will involve the commission of the offence L by the other; L M (b) he intends or believes that the other, if he acts as incited, M N N (c) shall, or will do so with the fault required for the offence O O (see Smith & Hogan, Criminal Law, (12th ed.), paragraph 13.4). P P 16. The unlawful act alleged is to deal with property, knowing or Q Q having reasonable grounds to believe that the property, in whole or in part, R directly or indirectly represented the proceeds of an indictable offence. R The prosecution must prove that the defendant incited Mr Papaleo to deal S S with property intending or believing that if Mr Papaleo so acted Mr T Papaleo shall or will do so knowing or having reasonable grounds to T U U V V  -7- A A B B believe that the property, in whole or in part, directly or indirectly C represented the proceeds of an indictable offence. C D Prosecution evidence D E E 17. The prosecution called only one witness, Mr Papaleo. F Evidence of four police officers was read pursuant to section 65B of the F Criminal Procedure Ordinance, Chapter 221 (exhibits P14-P17) relating G G to an enhanced version of the video recordings of the meetings. Facts H have also been admitted pursuant to section 65C of the Criminal H Procedure Ordinance, (exhibits P10, P10A & D9) including the I I movement records of Mr Papaleo and Jozef Drlicka. The movement J records of the defendant have been admitted pursuant to section 63B of J the Immigration Ordinance, Chapter 115 (exhibit P11). K K L 18. The bankers’ affirmation of Tang Wan Pong (exhibit P13) L relating to the bank account of Elitecon Inc Limited (“Elitecon”) of which M M the defendant is the sole signatory of the account was admitted pursuant N to section 20 of the Evidence Ordinance, Chapter 8. Mr Ross objected to N the admissibility of this affirmation on the grounds that it was not O O relevant there being no mention of Elitecon in the charge or the evidence P of Mr Papaleo. P Q 19. I overruled this objection. I was satisfied that the defendant Q having been shown to have opened a bank account in Hong Kong, which R R account was in operation at the time the defendant and Mr Papaleo came S to Hong Kong and was in respect of a company of which the defendant S was the sole director was relevant to the issues to be determined, in T T particular why Mr Papaleo was required to come to Hong Kong to U U V V  -8- A A B B incorporate companies and open bank accounts for these companies. I C did however later disallow the prosecution cross-examining the defendant C on the activities of Elitecon as shown in the bankers’ affirmation as these D D were not relevant to the charge or if they were relevant then the prejudice E outweighed the probative value of this evidence. E F Video recordings and transcripts F G G 20. Mr Papaleo secretly recorded the meetings with the H defendant with a pinhole camera. There were a total of 59 video files H recording meetings with the defendant of which the prosecution rely on I I five, including the first meeting in the Goblin pub in Bratislava and three J meetings in Hong Kong, two files relating to the same meeting. Mr J Wong informed the court that all video files had been served on the K K defence. L L 21. In the meeting in the Goblin pub Mr Papaleo and the M M defendant spoke in English whereas communication with Jozef Drlicka N was in Slovakian. There is also some Italian spoken by Mr Papaleo when N he answered a phone call. In the meetings in Hong Kong Mr Papaleo and O O the defendant again spoke in English. In two of those meetings Slovakian P is spoken by the defendant and Jakub Planka (who met Mr Papaleo at the P airport) and there is also some Chinese spoken by passers-by and taxi Q Q drivers. R R 22. The prosecution only transcribed the English conversation. S Various objections have been taken to the admissibility of both the video S files and the transcripts. I will address each of these objections in the T T order they were taken. U U V V  -9- A A B B 23. On the first day of trial Mr Ross objected to the admissibility C of three transcripts where only English had been transcribed on the basis C that without a full translation of everything said at these meetings the D D transcripts were inadmissible. Further Mr Ross submitted that the court E being deprived of knowing everything that was said at the meetings the E production of partial transcripts was unfair. F F 24. The use of a transcript being only an aid to the understanding G G of the recording and that the recording is the evidence and not the H transcript I overruled the objection of Mr Ross. I was satisfied that there H was no unfairness in only the English being transcribed as the majority of I I the conversations that were not translated and therefore transcribed were J J spoken by or to the defendant in Slovakian. The reasons for my ruling K are contained in paragraphs 1-10 of my ruling delivered on the second K day of trial. L L 25. As the majority of the conversations that were not translated M M were in Slovakian I said I would give the defence a reasonable time to N prepare such transcripts. Having taken instructions from the defendant N Mr Ross said the defence would like those passages in Slovakian O O translated and certified. Mr Ross therefore applied for an adjournment to P the following afternoon to seek the assistance of the Slovakian Embassy P in sending the tapes to Slovakia for translation and certification. Q Q R 26. I enquired of Mr Ross whether he was aware of what was R said in Slovakian. Mr Ross replied that he was aware in general terms of S S what was said. Anticipating that sending the tapes to Slovakia may T necessitate a long adjournment I suggested other alternatives for Mr Ross T U U V V  - 10 - A A B B to consider, including using the court interpreter to translate the C Slovakian passages in court. C D 27. The next day Mr Ross informed the court that the mother of D the defendant had located a translation company in Slovakia who were E E licensed by a Slovakian court to certify their own translations. The F company required at least 10 working days to prepare a transcript. Mr F Ross therefore applied for an adjournment of at least 10 working days G G asking that the case be listed for mention only so as to avoid Mr Papaleo H making another unnecessary trip to Hong Kong. H I I 28. Again anticipating a long adjournment I asked Mr Ross why J the services of the court interpreter could not be used. Mr Ross replied J that the defence preferred to obtain their own transcript. I was satisfied K K the trial should not be adjourned and that the services of the court L interpreter be used when necessary. I therefore refused the application L for adjournment and ordered the evidence to commence the following day. M M I was satisfied this caused no unfairness to the defendant. N N 29. During evidence-in-chief Mr Wong asked Mr Papaleo about O O certain passages in which Slovakian was spoken. These passages were P then interpreted in court by the Slovakian interpreter. Much of what was P interpreted was unrelated to the purpose of the meeting for example very Q Q rude words describing how tired Jozef Drlicka was after shopping. R R 30. During cross-examination Mr Ross also referred to certain S passages spoken in Slovakian. When this first occurred it was agreed that S the passage being nearly one minute long that the Slovakian interpreter T T would translate the passage before Mr Ross continued his questioning. U U V V  - 11 - A A B B The Slovakian interpreter then prepared a typed written translation of the C passage (marked exhibit P1F). C D 31. At my suggestion in order not to keep interrupting the cross- D examination Mr Ross agreed to tell the Slovakian interpreter which other E E passages he wished to question Mr Papaleo on. The Slovakian interpreter F then prepared a typed written translation of these passages (marked F exhibit P1G), which I note were conversations between Jozef Drlicka and G G Mr Papaleo after the defendant had left the Goblin pub. H H 32. In refusing the application I was mindful that although Mr I I Papaleo was to commence his evidence the next day, a Friday, due to the J unavailability of Mr Wong the evidence would not resume until the J following Wednesday (21 May). This I was satisfied would give the K K defence sufficient time to prepare a draft of the Slovakian passages for L use, as they thought fit, in cross-examination of Mr Papaleo and in the L conduct of the defence. Cross-examination only started on the 23 May. M M N 33. Also to be noted is that by virtue of sections 27 and 29A of N the Evidence Ordinance only documents certified by a person appointed O O by the Chief Justice may be admitted in evidence therefore any certified P transcript which was obtained by the defence from Slovakia could not be P produced in court unless the prosecution agreed. Q Q 34. I should also mention here that prior to Mr Papaleo giving R R evidence no application was made that the defence needed time to S prepare their own transcript of the English passages so as to verify the S accuracy of the transcripts. The only reference to the accuracy of the T T U U V V  - 12 - A A B B English transcripts was after an adjournment to obtain a certified C transcript of the Slovakian passages was refused. C D 35. In answer to the court whether the English transcripts were D agreed Mr Ross said that the defence wanted the Slovakian expert to E E confirm the accuracy of the English passages as well. I expressed the F view that the defence in deciding whether to accept the accuracy of the F transcripts ought already to have checked whether the transcripts were G G accurate and that if because of the sound quality they wished an expert to H verify the accuracy then an application should have been made on the H first day of trial. I I J 36. Mr Ross however was later to complain about the late J service on the defence of the transcripts. This occurred during an K K application made on the 10 June (day 14 of the trial) when renewing an L application for an adjournment to apply to the Court of First Instance for L an order that a letter of request be issued to assist in obtaining the M M evidence of Jozef Drlicka. N N 37. When the prosecution said any such application should have O O been made a long time before Mr Ross complained that the transcripts P were only served 2 weeks before trial at which time the defence knew the P prosecution were only relying on five of fifty nine video files. Not only Q Q was no application made by the defence that they needed time to verify R the accuracy of the five transcripts, no application was made that the R defence be given time to consider whether any of the other video files S S were required in the conduct of the defence. T T U U V V  - 13 - A A B B Enhancement C C 38. More than once I expressed my surprise that the prosecution D did not ensure as far as possible that when the video of the meeting in the D Goblin pub was played in court that everyone was able to hear as clear as E E possible what was said. Without doubt what was said is at times very F difficult if near impossible to hear. Mr Papaleo, the defendant and the F Slovakian interpreter have all used headphones in court to enable them to G G better hear what was said. Whilst considering my verdict I have also used H headphones to listen to the video. Many hours have been spent doing this. H I I 39. I said I was also surprised the police did not refer the matter J to their technology division for assistance whether by the provision of J better equipment or software to play the video so as to better hear what K K was said. In the afternoon of the 26 May (day 8 of the trial) during cross- L examination of Mr Papaleo the prosecution said they had an enhanced L version of the video of the meeting in the Goblin pub. At that time the M M enhanced version had not been served on the defence. The case was N stood down for Mr Ross to listen to the passage he wished to question N Mr Papaleo on to see if he had any objection to the enhanced version O O being played to Mr Papaleo. Mr Ross had no objection. P P 40. On the 30 May (day 10 of the trial) after Mr Papaleo had Q Q completed his evidence Mr Ross objected to the admissibility of the R enhanced version of the video. The basis of the objection was that the R defence had no time or resources or the ability to confirm the enhanced S S version was accurate and that the cross-examination of Mr Papaleo had T been based on the unenhanced version. Although the defence had not T listened to the enhanced version Mr Ross submitted that there may be U U V V  - 14 - A A B B material on the enhanced version which was useful or detrimental to the C defence and that if the defendant elected to give evidence he may be C cross-examined on those parts. D D 41. Mr Wong confirmed that the enhanced version was only E E produced in an attempt to make listening to the video a little clearer. The F prosecution did not seek to introduce a new transcript or rely on anything F which was not in the transcript of the unenhanced version. In these G G circumstances I overruled the objection of Mr Ross. In so doing I was H mindful that there would be three days holiday before resumption of the H case which therefore afforded the defence the opportunity to listen to the I I enhanced version and make any further submissions when the trial J J resumed. K K 42. As it happened due to other court commitments of Mr Ross L the trial did not resume until the 5 June some six days later. On the 5 L June Mr Ross informed the court that he did not maintain his objection as M M to the admissibility of the enhanced tape, which was marked exhibit N P17A. The remaining witness statements of the police officers relating to N the enhanced tape were read pursuant to section 65B of the Criminal O O Procedure Ordinance (exhibits P14-P17) after which the prosecution P closed their case. I would add that although at times the voices are P clearer on the enhanced audio for the parts where there is difficulty in Q Q hearing what was said I find no appreciable difference. R R Admissibility of P1 S S 43. The video files are all contained on an external hard drive T T (exhibit P1). After the close of the prosecution case Mr Ross submitted U U V V  - 15 - A A B B that the external hard drive being a copy of a copy was not admissible in C evidence. Mr Ross submitted there was no satisfactory explanation why C the original video files could not be produced. Mr Ross also submitted D D that the prosecution had failed to comply with the requirements of section E 22A(2) of the Evidence Ordinance. Mr Ross repeats this submission at E paragraph 11 of his written final submission. F F 44. Mr Papaleo testified that before he went to the Goblin pub he G G met with Evan Brada, a former colleague of his at the Slovak national H television. Evan Brada who was fully aware of what Mr Papaleo was H going to do, helped Mr Papaleo set up the pinhole camera, which I I belonged to the Slovak national television. J J 45. After the meeting with the defendant in the Goblin pub Mr K K Papaleo transferred the recording from the memory card of the pinhole L camera to the hard disk of his computer. Evan Brada also made a copy. L In cross-examination Mr Papaleo explained that it is normal practice to M M give a copy to who he called his “investigative twin” so that there was a N back-up. The camera and memory card were then returned to Evan Brada N for reuse by the Slovak national television which Mr Papaleo explained O O was normal procedure as the camera and memory card are used by the P television station every week. Mr Papaleo said he passed the hard disc to P the Hong Kong police, which he identified as the external hard disc Q Q (exhibit P1) shown to him by Mr Wong. R R 46. On arrival in Hong Kong Mr Papaleo bought a camera to S S secretly record the meetings with the defendant. Mr Papaleo later copied T all video recordings in Hong Kong onto the same external hard disc given T to the Hong Kong police. U U V V  - 16 - A A B B 47. In cross-examination Mr Papaleo said he borrowed the C external hard disc from a friend. This was when he realised there was not C enough memory on his computer to hold all the video files he had D D recorded. Mr Papaleo therefore borrowed the external hard disc and E transferred all the videos on to the external hard disc. However on arrival E in Hong Kong Mr Papaleo realised that the recordings of meetings after F F he returned to Bratislava had not been transferred to the external hard disc. G G 48. Mr Papaleo did not in any way manipulate, edit or cut the H video files. Mr Papaleo explained that when storing files it would be H usual to cut the non-important parts of the files such as test recordings. I I One example given by Mr Papaleo was that he did not cut the part at the J J beginning of the first video where he is preparing the camera with Evan K Brada prior to going to the Goblin Pub. K L 49. Another example that the video files have not been cut is that L before meeting the defendant in the Goblin pub Mr Papaleo went to the M M toilet. This is indicated in the transcript by “urinating sound” (see N transcript, P1A, counter 18) and was referred to in Mr Papaleo’s evidence N when the video was played in court. O O P 50. Mr Papaleo explained that due to technical problems with the P cameras used or the battery was exhausted he was not able to record the Q Q whole of every meeting or all of the meetings. Mr Papaleo estimated that R about 50-60% of the meetings or parts of meetings were captured on R video, all of which he handed over to the Hong Kong police. S S 51. Also to be noted is that the time and date are wrong for all T T the videos. Mr Papaleo explained he was never able to make the camera U U V V  - 17 - A A B B from the Slovak national television work with the correct time and date. C Mr Papaleo was unable to set the time and date before he used the camera C he bought in Hong Kong because he did not have a computer in Hong D D Kong. When Mr Papaleo realised all the dates and times were wrong he E renamed the directories the video files were kept in to give a logical E progression to the files and so that he could remember what was recorded. F F 52. In cross-examination Mr Papaleo explained that he was not G G preparing evidence to prove in a court and that for his undercover H investigation the facts were important and not the date or time. I also H note that there was no challenge to Mr Papaleo’s evidence that the I I meetings took place and the dates of those meetings. Further the J J defendant testified about these meetings. K K 53. Mr Papaleo regarded the video files on the external hard disc L (exhibit P1) as “original” files because they had not been modified, L altered or cut by him or anyone else. I accept the evidence of Mr Papaleo M M that neither he nor anyone else had modified, altered or cut the video files. N I was satisfied Mr Papaleo had accounted for the original video files and N ruled the external hard disc (exhibit P1) admissible in evidence. The fact O O the original was not produced goes only to the question of weight to be P attached to the evidence. I was also satisfied that Mr Papaleo being the P person who made the videos and the copies that the provisions of section Q Q 22A of the Evidence Ordinance did not apply. R R 54. In summarising the evidence and reaching my verdict I only S S refer to the video evidence where I have viewed and listened to those T parts and satisfied myself as to the accuracy of what was said as T transcribed in the five transcripts. I have not referred to any part of any U U V V  - 18 - A A B B video which has not been transcribed or translated by the Slovakian C interpreter in court. C D 55. The file name of each file is contained in paragraph 1 of the D admitted facts (exhibit P10) and the file path of each file is shown at the E E beginning of each transcript under the reference “File S/N”. The F transcripts of these five videos were marked for identification as exhibits F P1A-E. For ease of reference I will refer to the five videos as videos A, B, G G C, D & E. I refer to the counter numbers in the transcripts and on some H occasions also to the time elapsed on the video. H I I Defence evidence J J 56. Admitted in evidence is that the defendant does not have any K K previous convictions in Hong Kong (see paragraph 6 of the admitted facts, L exhibit P10). I direct myself in accordance with the decision in HKSAR v L Tang Siu Man [1997-98] 1 HKCFAR 107. M M 57. The defendant elected to give evidence. The defendant also N N wished to call Jozef Drlicka. The defence having been informed by the O prosecution on the first day of trial that Jozef Drlicka would be arrested if O he came to Hong Kong applied for an adjournment for the evidence of P P Jozef Drlicka to be taken overseas. These are my reasons for refusing Q that application. Q R R 58. On the first day of trial (13 May 2014) Mr Ross said the S defence were ready subject to the court ruling on the objection taken as to S the admissibility of the transcripts of the video recordings. No mention T T was made as to any difficulty in calling a witness. Mr Papaleo completed U U V V  - 19 - A A B B his evidence after 5 p.m. on the 28 May, which was day 9 of the trial. C The further conduct of the trial was then discussed with the parties during C which Mr Ross mentioned for the first time the difficulties in calling D D Jozef Drlicka. E E 59. Mr Ross said there were three ways in which the evidence of F Jozef Drlicka could be taken overseas: by live television link; applying F for letters of request or by seeking mutual legal assistance. G G H 60. Section 79B of the Criminal Procedure Ordinance provides H that a witness in fear may give evidence by live television link. Mr Ross I I accepted that Jozef Drlicka was not a witness in fear. Further as pointed J out at the time even if Jozef Drlicka could be said to be a witness in fear J the live television link is to another room located in the same premises as K K the courtroom and not overseas (see the definition of live television link L in section 79A of the Criminal Procedure Ordinance). L M M 61. Part VIIIA of the Evidence Ordinance provides for the N obtaining of evidence in other jurisdictions for use in criminal N proceedings in Hong Kong. Application is first made to the Court of First O O Instance for a letter of request to be issued to the court or tribunal P exercising jurisdiction in a place outside Hong Kong to assist in obtaining P evidence for the purpose of those criminal proceedings (see section 77E Q Q of the Evidence Ordinance). Application can be made by the Secretary R for Justice or any person charged with an offence. Mr Ross however R stated that the defence preferred not to go that route because of the time S S delay involved. T T U U V V  - 20 - A A B B 62. The third way, which Mr Ross said was a faster way, was by C way of mutual legal assistance pursuant to an application made under the C Mutual Legal Assistance in Criminal Matters Ordinance, Chapter 525. D D Unlike letters of request however a request for mutual legal assistance E can only be made by the Secretary of Justice. Mr Ross however E understood that ad hoc arrangements could be put in place within a matter F F of days whereby a request could be made by email from the Hong Kong G government to any government for assistance. Mr Ross therefore called G upon the prosecution to assist in making a request to the Slovakian H H government for assistance. I I 63. I expressed my surprise that no application had been made J J on the first day of trial with regards to the difficulty in calling Jozef K Drlicka. Mr Ross explained he had only been informed that Jozef Drlicka K would be arrested on the first day of trial and only become aware of this L L ad hoc arrangement a day or so before. Whilst I expressed my surprise M that the difficulty in calling Jozef Drlicka was only mentioned at the end M of the 9th day of trial I said I could not determine any application for N N adjournment until the application was made. No application for O adjournment was made at that time and the trial was adjourned to the 30 O May to accommodate the diary of Mr Ross. P P 64. On the 30 May the prosecution adduced all remaining Q Q evidence save for the production of the enhanced video. Just before R lunch on the 30 May during further discussions on the progress of the R trial Mr Ross again referred to the calling of Jozef Drlicka. Mr Ross S S informed the court the prosecution had declined to assist in making a T request to the Slovakian government for assistance and therefore this left T U U V V  - 21 - A A B B the defence to apply to the Court of First Instance for an order that a letter C of request be issued. I note subsequently on the 5 June when applying for C an adjournment Mr Ross told the court that he had been informed by the D D prosecution that a request for mutual legal assistance takes about the E same time as an application for letters of request and therefore there was E no advantage in seeking a request for mutual legal assistance. F F 65. The trial was adjourned to the afternoon when Mr Ross G G informed the court that having discussed the matter with the defendant H over the lunch adjournment the defence position was that they wished to H delay deciding whether or not to call Jozef Drlicka until after the I I defendant had elected whether or not to give evidence and if he did after J J his evidence was completed. I again made clear I could not determine K any application for adjournment until the application was made. K L 66. The defence requiring the calling of witnesses concerned L with the enhanced video necessitated the trial being further adjourned to M M the 5 June, again to accommodate the diary of Mr Ross. Anticipating the N prosecution would close their case on the 5 June before adjourning N further discussions took place with regard to the conduct of the defence O O case. P P 67. This partly arose due to the unavailability of the Slovakian Q Q interpreter there being only one Slovakian interpreter available in Hong R Kong for court interpretation. The interpreter was only available until the R 13 June after which he would be out of Hong Kong until the 16 July and S S again from the 23 July to the 8 August. As I was on leave between the 16 T and 23 July if the trial was not concluded by the 13 June then T adjournment to August was unavoidable. U U V V  - 22 - A A B B 68. The continuation of the trial was also affected by the fact Mr C Ross had a High Court trial starting on the 6 June. I therefore indicated C that if the defence case starts on the 5 June I will continue until the D D defence case finishes subject to any application made for an adjournment E to call Jozef Drlicka. The only other alternative was to adjourn the E defence case to August. The case was stood down for Mr Ross to take F F instructions whether the defence wished to start on the 5 June or adjourn G to August. Having taken instructions Mr Ross informed the court that the G defence wished to start on the 5 June and not adjourn to August. Mr Ross H H said he would return the High Court brief although I note he never did I which caused a delay in the commencement of the High Court trial and a I late start of this trial on the 6 June. J J K 69. On the 5 June the remaining prosecution evidence relating to K the enhanced video was read pursuant to section 65B of the Criminal L L Procedure Ordinance. The prosecution then closed their case. After I M overruled the objection made as to the admissibility of the external hard M disc (exhibit P1) I ruled the defendant had a case to answer. N N 70. The defendant elected to give evidence. Before the O O defendant began his evidence Mr Ross made his first application for an P adjournment. The grounds of the application were twofold. P Notwithstanding that on the 28 May Mr Ross had estimated that he would Q Q be half a day in his examination-in-chief the first ground for an R adjournment was that there was a danger the defendant would not finish R his evidence before the 13 June (the last day the Slovakian interpreter was S S available). T T U U V V  - 23 - A A B B 71. In the morning the parties had indicated that at the C conclusion of the defence case they would need time to prepare written C submissions which could not be completed before the 13 June which D D would necessitate the case being adjourned to August for submissions. E Mr Ross therefore applied for the defendant’s evidence to start in August. E F 72. The second ground was to enable an application to be made F to the Court of First Instance for an order that a letter of request be issued G G to assist in obtaining the evidence of Jozef Drlicka. Although letters of H request may take anything between 6-12 months from the date of H application to the preparation of the deposition of the evidence Mr Ross I I only applied for an adjournment to August to see what progress had been J J made by that time. K K 73. Notwithstanding the brief had not been returned for the High L Court trial starting the next day Mr Ross specifically stated he was not L applying for an adjournment so he could conduct the High Court trial. M M N 74. I rejected both grounds for an adjournment. There were still N six and half days available to hear the evidence of the defendant. Whilst O O accepting that it would be undesirable to have the defendant’s evidence P part-heard I was quite satisfied there was more than sufficient time (as P was shown to be right the defendant concluding his evidence on the Q Q morning of the fourth day of giving evidence) in which to conclude the R defendant’s evidence. Further as noted earlier on the 30 May the defence R requested that the case starts on the 5 June and not adjourn to August. S S 75. I also refused the application for adjournment for an T T application to be made to the Court of First Instance for an order that a U U V V  - 24 - A A B B letter of request be issued. I was satisfied the application was made too C late. At the commencement of the trial the defence stated that they were C ready to proceed without any mention of difficulties in calling witnesses. D D 76. Further in my view the prosecution case being that Jozef E E Drlicka arranged the meeting between Mr Papaleo and the defendant it F was obvious that if Jozef Drlicka was to come to Hong Kong he would be F arrested. This should have been anticipated by the defence and G G applications for letters of request made before the commencement of the H trial. H I I 77. Further in my view although the application for adjournment J was until August consideration of the application must take into account J that to obtain evidence pursuant to a letter of request may take anywhere K K up to 12 months, if not longer. I was satisfied that it would be L undesirable to adjourn for such a long period of time now that the trial L had started and with no certainty as to when the trial would continue. M M N 78. Notwithstanding the defence had been informed on the first N day of trial of the arrest of Jozef Drlicka not only was no application O O made at that time but also when applying for an adjournment (some 16 P working days later) no information was placed before me as to the P procedure involved where letters of request were issued to the courts of Q Q Slovakia and the likely time required to obtain the evidence. R R 79. I therefore relied on my experience, in particular a case S which was before me where letters of request were issued in December S 2013 for evidence to be obtained in Malaysia. By the 5 June a decision T T was still awaited from the High Court of Malaya. I communicated this U U V V  - 25 - A A B B information to the parties during the applications for adjournment to call C Jozef Drlicka. C D 80. On the 10 June (day 14 of the trial) after the defendant D completed his evidence Mr Ross renewed his application for an E E adjournment to apply for letters of request to obtain the evidence of Jozef F Drlicka. I again refused this application for the same reasons given F earlier namely that the application was too late and that an adjournment G G for a long period of time was undesirable now that the trial had started. H Having refused the defence application I direct myself as to the impact of H the absence of Jozef Drlicka on the conduct of the defence (see for I I example R v Holgate (No. 1) [1996] 3 HKC 315 as applied in HKSAR v J J Chan Kong On & others [2011] 2 HKLR 1085). K K 81. I now turn to consider the evidence of Mr Papaleo and the L defendant. I will first summarise the evidence of both Mr Papaleo and L the defendant. M M N Antonio Aldo Papaleo (PW1) N O 82. Mr Papaleo, an Italian national, testified that he was a O professional freelance journalist living in Slovakia. Mr Papaleo P P understood Slovakian however because he made many mistakes he did Q not like to speak Slovakian except with friends or when using some Q colloquial language. R R S 83. Mr Papaleo had previously worked for the Italian, Swiss and S Slovak national television corporations. Mr Papaleo was the Chairman of T T the Association of European Journalists in the Czech Republic (see U U V V  - 26 - A A B B exhibit P12B). Mr Papaleo was interested in news of a public interest C such as corruption, organised crime and trafficking in human parts. C D 84. One of Mr Papaleo’s interests was to investigate financial D crime. Frustrated by the difficulties in getting real information on the E E outside Mr Papaleo had for more than a couple of years posed as a F corrupt journalist who had serious drug and alcohol problems. Mr F Papaleo regarded this as the best way to make contact with the G G underworld in Bratislava and Prague so he could “fish” for a good story H to report. H I I Meeting in the Goblin Pub, Bratislava on the 10 May 2013 J J 85. Posing in this way Mr Papaleo met the defendant in May K K 2013. As noted earlier Mr Papaleo secretly recorded all the meetings L with the defendant, although only some of video files of these meetings L have been produced in evidence. The first meeting took place on the 10 M M May 2013 in the Goblin pub in Bratislava. The video of this meeting N (video A, transcript exhibit P1A), was played in court. N O 86. The meeting was arranged by Jozef Drlicka, who Mr Papaleo O described as his ‘informer’ and later as his “recruiter” having recruited P P him to go to Hong Kong. In answer to the court Mr Papaleo said he had Q never been to Hong Kong before. Q R R 87. Two or three days prior to the meeting Jozef Drlicka told S Mr Papaleo that he had a Slovakian friend working in Hong Kong who S needed urgent help in order to do his business in Hong Kong. Jozef T T Drlicka further said the business was illegal but not criminal meaning not U U V V  - 27 - A A B B involving guns or drugs. In answer to the court at the end of his evidence C Mr Papaleo explained that the use of “not criminal” meant that there was C no physical risk to his safety. D D 88. During the meeting in the Goblin pub Mr Papaleo was asked E E to go to Hong Kong to incorporate a company and open a related bank F account, the control of which he would give to the defendant including F the pin codes and everything necessary to operate the bank account. G G H 89. Mr Papaleo’s main interest was to understand what kind of H illegal activities lay behind this request. Mr Papaleo therefore asked I I about the nature of the business activities. However neither the defendant J nor Jozef Drlicka told Mr Papaleo the origin of the funds to be transacted. J K K 90. In video A Mr Papaleo can be heard at the end of counter 66 L to ask the defendant, “Can I know what’s the product?” There appears to L be a short reply from the defendant at counter 67 however apart from M M saying “Okay” the remainder of the reply is not audible. Mr Papaleo N explained that the defendant asked him if Jozef Drlicka had explained N everything to him. Mr Papaleo replied to the defendant that Jozef Drlicka O O had explained something very quickly. On the video Mr Papaleo can be P heard saying at counter 69 very quickly and that he does not know very P much. Q Q 91. Shortly after at counter 76 the defendant is heard saying to R R Mr Papaleo “…one company….and open bank account.” This is S followed by the defendant in the passage between counters 81-100 S mentioning 10% risk; no cash operation; transfer of money via the T T company and offshore company. U U V V  - 28 - A A B B 92. However this passage is very difficult to hear. Mr Papaleo C explained in court that the defendant was telling him like any business C there is a risk. When Mr Papaleo asked what risk the defendant said it D D was not a big risk because it was not a cash operation only money transfer E concerning an offshore company and that no tax was payable. E F 93. Mr Papaleo asked why Jozef Drlicka could not incorporate F the company and open the bank account. Mr Papaleo was told that Jozef G G Drlicka had a fresh passport which would not be useful or valid for such H operations and that someone who was not Slovakian or Czech was H needed. I I J 94. In video A at counters 135 and 139 Jozef Drlicka can be J heard to say he had a fresh passport however due to the music being K K played in the pub it is again very difficult to hear what else was said. In L cross-examination Mr Papaleo disagreed that once Jozef Drlicka had a L fresh passport and could therefore take over the control of the bank M M accounts he would take over the running of the two companies. N N 95. Mr Papaleo was promised a reward of €5000 once he O O returned to Bratislava. This can be heard in video A between counters P 102-105, the transcript accurately recording the conversation at that time. P Mr Papaleo testified that the money was to be paid after he handed over Q Q control of the company and the bank account to the defendant. The R defendant would also pay Mr Papaleo’s travel and living expenses in R Hong Kong and two nights’ accommodation in Bratislava. S S 96. The next day when the defendant bought the air tickets for T T Mr Papaleo they mostly discussed the logistics of the trip. The meeting U U V V  - 29 - A A B B was recorded by secret camera which recording has not been produced in C court. The defendant also told Mr Papaleo that if he was asked by C customs the purpose of his trip he was to say for tourism. D D Hong Kong E E F 97. Mr Papaleo arrived in Hong Kong on the 14 May when he F was met at the airport by Jakub Planka. The movement record shows Mr G G Papaleo arriving at the airport at 07:17:06 (see admitted facts, exhibit D9). H Jakub Planka took Mr Papaleo to the Island Pacific Hotel (see exhibit P3). H Jakub Planka gave Mr Papaleo a mobile phone on which was stored the I I defendant’s phone number and that of Jakub Planka. J J 98. The next day Mr Papaleo met the defendant at 9 a.m. at the K K IFC mall when the defendant instructed Mr Papaleo to go to what Mr L Papaleo called a “company house” to incorporate two companies Vindex L (HK) Limited and East Ray (HK) Limited. The company names were M M given to Mr Papaleo by the defendant and are the same names written on N a piece of paper found by the police inside luggage in the residence of the N defendant (see paragraph 4 of the admitted facts, exhibit P10). O O 99. The video recording of this meeting is contained in two files P P (video B, transcript exhibit P1B & video C, transcript exhibit P1C). In Q video B between counters 58-70 the defendant is seen giving Mr Papaleo Q the telephone number 25212515 to ring and make an appointment with R R “Offshore Incorporations”. Mr Papaleo is then heard at counter 71 S making the telephone call. S T T U U V V  - 30 - A A B B 100. Mr Papaleo explained that the meeting is on two files C because he was not sure how long the camera was charged therefore he C tried to economise on the battery and would stop the camera when he D D thought the meeting had ended. On hearing the defendant was going to E send a SMS with the exact names of the two companies Mr Papaleo E restarted the camera. F F 101. Video C was played in court and shows at the beginning the G G defendant using his telephone to send by SMS the names of the two H companies which are repeated by Mr Papaleo at counter 2. H Notwithstanding the agreement as to the accuracy of the transcript I am I I satisfied although mispronounced Mr Papaleo was saying East Ray and J not “X-S-Ray”. J K K 102. The defendant explained to Mr Papaleo that HK was to be L added to the names of the companies so as not to mix up with two L existing companies. The defendant did not however tell Mr Papaleo M M about the business of Vindex (HK) Limited and East Ray (HK) Limited. N N 103. In cross-examination Mr Ross put to Mr Papaleo that the day O O after the meeting in the Goblin pub he met the defendant at Jozef P Drlicka’s home when the defendant told him that the two companies to be P set up would be doing publishing and LED sales. Mr Papaleo replied that Q Q he did not go to Jozef Drlicka’s home on the 11 May and that he was only R told in Hong Kong how to justify the creation of the company by saying R that his business was publishing and lights. S S 104. In video B prior to giving Mr Papaleo the telephone number T T the defendant can be heard between counters 32-49 instructing Mr U U V V  - 31 - A A B B Papaleo what to say on the telephone including that he needs two C companies with bank accounts; and to use the Standard Chartered Bank C and not HSBC. This is followed by the defendant instructing Mr Papaleo D D what to say about the business of the two companies, namely say E something that you will be a publisher or something like that and that you E will be buying and selling products, LED lights (see counter 50). F F 105. When this part of video B was played in court Mr Papaleo G G was asked if there was any genuine business. After expressing his opinion H whether there was any genuine business Mr Papaleo went on to say that H when he was back in Slovakia the defendant instructed him how to I I prepare false reference to prove he had a business. J J 106. Mr Papaleo was also asked if he knew the reason why he K K was not to open a bank account with HSBC. Mr Papaleo explained that L the defendant told him not to use HSBC because of the anti-money L laundering views of the bank. Mr Papaleo however did not remember M M whether this was mentioned by the defendant on this or some other N occasion. N O O 107. Mr Papaleo then went to the first “company house” who said P they needed three or four days to incorporate the companies. Mr Papaleo P met up with the defendant again to inform him of this. The defendant Q Q then instructed Mr Papaleo to go to Acorn Business Services and R Consultancy Limited (“Acorn”). Acorn offered the service of changing R the name of two existing companies whereby the documents would be S S prepared that day and be ready for collection the next day. T T U U V V  - 32 - A A B B 108. The next day Mr Papaleo collected the company documents C (see exhibits P4-P7). The cost of $14,000 (exhibit P2) and $2,800 C (exhibit P8) for incorporating the two companies was paid by money D D given to Mr Papaleo by the defendant. After leaving Acorn Mr Papaleo E met the defendant who requested Mr Papaleo to start to open the bank E accounts. F F 109. At the request of the defendant Mr Papaleo also asked Acorn G G for banking introduction services. As noted earlier in video B the H defendant is heard instructing Mr Papaleo to ask for two companies with H bank accounts with the Standard Chartered Bank and not HSBC (see I I paragraph 104). Acorn arranged for Mr Papaleo to go to the Standard J J Chartered Bank. K K 110. The defendant and Jakub Planka escorted the defendant to L the bank but did not go in the bank with him. Mr Papaleo explained that L they did not go with him to any “company house” or bank because they M M said they were known to everybody and did not want to be seen with him. N On one occasion when meeting in Starbucks, which was situated in the N same building as Acorn, the defendant asked to go somewhere else O O because it was the end of the working day and he did not want Acorn P staff to see them together. In cross-examination Mr Papaleo said that the P defendant did not tell him why he did not want to be seen associating Q Q with him R R 111. Mr Papaleo was surprised that the bank staff would accept S S everything from him and open the account. Not wishing to violate Hong T Kong law Mr Papaleo therefore made an excuse to leave the bank saying T he would contact them later. Mr Papaleo then met the defendant and lied U U V V  - 33 - A A B B to him that he had big problems opening a bank account giving excuses C such as that the bank needed to do due diligence. Mr Papaleo made up C that the bank required proof of business and that it would take three to D D four weeks to approve the opening of the account. The defendant then E asked Mr Papaleo to visit more banks. E F 112. Part of the video recording of this meeting was played in F court (video D, transcript exhibit P1D). In the video Mr Papaleo can be G G heard telling the defendant the bank required proof of business and time H of approval will be three or four weeks followed by the defendant asking H Mr Papaleo to talk to the Bank of China (see counters 10-34). I I J 113. The following day being a public holiday this necessitated J Mr Papaleos’s flight being changed because the defendant did not want K K Mr Papaleo to fly back to Bratislava before starting some banking L procedure. The ticket was therefore changed that day, the cost of which L was paid by the defendant. M M N 114. Before leaving Hong Kong Mr Papaleo went to various N banks, including Citibank, Bank of China and Hang Seng Bank. In order O O to pretend he had been to meetings to open bank accounts Mr Papaleo P adopted the strategy of collecting visit cards to show the defendant and P again made up various excuses why the bank accounts could not be Q Q opened. R R 115. With regard to Citibank Mr Papaleo said initially the S defendant told him not to go to Citibank because this is where Vindex Ltd S and East Ray Ltd had their accounts. On hearing the supposed T T difficulties Mr Papaleo had in opening bank accounts the defendant told U U V V  - 34 - A A B B him to try Citibank and if he was asked about the names to say they were C different companies. C D 116. Part of another video file (video E, transcript P1E) was D played in court. Mr Papaleo identified this as being taken on Monday the E E 20 May in the IFC mall when the defendant complained Mr Papaleo was F not businesslike and was out of contact over the weekend due to drinking F alcohol. G G H 117. The defendant asked Mr Papaleo to return to Acorn to ask H for their help in clarifying exactly what proof of business the Standard I I Chartered Bank required in order for them to open the bank account. The J defendant is heard telling Mr Papaleo to ask Acorn to call Standard J Chartered Bank to ask them what they exactly need (see counters 56-64). K K L 118. Unsure whether he would be followed Mr Papaleo went to L Acorn however as the request for proof of business was an excuse made M M up by him Mr Papaleo did not ask Acorn to call Standard Chartered Bank. N Asked if any proof of business was prepared Mr Papaleo replied after N returning to Slovakia he prepared one or two at the request of the O O defendant and Jozef Drlicka which he said were totally invented. P P 119. Reference is also heard on the video to Mr Papaleo trying Q Citibank, Bank of China and BEA (see counters 47 & 74-93) followed by Q the defendant telephoning a bank. The defendant then gives Mr Papaleo R R a telephone number which Mr Papaleo calls to make an appointment to S open a bank account (see counters 93-100). S T T U U V V  - 35 - A A B B Bratislava C C 120. Mr Papaleo left Hong Kong on the 21 May without opening D any bank account. Before leaving Hong Kong Mr Papaleo met the D defendant at the in-town check-in when they discussed the situation E E relating to the banks. Mr Papaleo agreed he would return to Hong Kong F when the time was right to finalise the bank accounts. F G G 121. After returning to Bratislava Mr Papaleo, regarding his H journalistic mission completed, cut off contact with the defendant and H Jozef Drlicka. Mr Papaleo consulted with his colleagues who searched I I for legal advice to decide what to do. As a result Mr Papaleo produced a J complete record of everything that related to the story including all J documents and videos. K K L 122. After a few days, on or about the 26 May, Mr Papaleo L reported the matter to the Slovakian police. Mr Papaleo expected the M M police to act immediately by taking up the investigation or asking him to N open the bank account and continue the relationship with the defendant to N find out more. However the Slovakian police told Mr Papaleo to wait for O O their decision with no guarantee being given that they would do anything. P Pending the reply of the Slovakian police Mr Papaleo felt that he had, as P he put it, “to keep the game alive”. Q Q 123. Mr Papaleo therefore contacted Jozef Drlicka and explained R R his disappearance by saying his father had been very seriously ill S resulting in his own fictional drug and alcohol addiction becoming worse. S Jozef Drlicka said to Mr Papaleo that they were to follow up the T T procedure with the banks in order to produce as soon as possible the U U V V  - 36 - A A B B proof of business that Mr Papaleo said were requested by the banks so as C to ensure the next trip to Hong Kong was successful. C D 124. A meeting was arranged to see the defendant on the 3 June. D Mr Papaleo wanted to avoid the meeting because he did not want to go E E back to Hong Kong before receiving any news from the Slovakian police. F Mr Papaleo therefore tried to create an accident to justify a delay in his F return to Hong Kong. The night before he attended a party at the Italian G G Embassy in Bratislava inviting Jozef Drlicka to go with him. The H intention was to get very drunk and have a hangover the next day so he H could not attend the meeting with the defendant. I I J 125. Mr Papaleo did get very drunk and had an accident resulting J in him going to hospital. In cross-examination Mr Papaleo said he fell K K over the stairs of the entrance of the embassy. Mr Papaleo did however L keep the appointment with the defendant, who was disappointed with Mr L Papaleo’s appearance because his face was covered in scratches and M M therefore was not presentable to go to Hong Kong and deal with the bank. N Mr Papaleo was given a few days to recover before flying to Hong Kong. N O O 126. In these few days the Slovakian police replied that money P laundering was not a specific crime under Slovakian law and as there was P no evidence proving the illegal origin of the funds transferred there were Q Q no grounds for them to start the investigation. Disappointed with this R reply Mr Papaleo, intending to report the matter to the Hong Kong police, R agreed to return to Hong Kong to open the bank accounts. S S 127. Before leaving for Hong Kong Mr Papaleo met the defendant T T again for a minimum of two times to prepare the proof of business U U V V  - 37 - A A B B supposedly requested by the bank. Mr Papaleo said there were four or C five letters from companies who did not know of his existence saying C they had business or possible business with him. Mr Papaleo said he D D believed he gave these to the Hong Kong police. I note none have been E produced. E F 128. Mr Papaleo again recorded these meetings with the F defendant in Bratislava however as noted earlier only after Mr Papaleo G G arrived in Hong Kong did he realise that the recordings had not been H transferred to the external hard disc, exhibit P1 (see paragraph 47). H I I 129. Mr Papaleo arrived in Hong Kong on the 11 June. The J defendant arrived on the 14 June. In the meantime Mr Papaleo had J reported the matter to the Hong Kong police. At a pre-arranged meeting K K with the defendant at the IFC mall Mr Papaleo pointed out the defendant L who was then arrested by the police. L M M 130. At the end of examination-in-chief Mr Wong asked Mr N Papaleo whether the defendant had ever told him how to deal with the N police if he was investigated for setting up the companies and opening the O O bank accounts. Mr Papaleo referring to what had been seen on the video P of the meeting in the Goblin pub replied that the defendant told him that P if something happened he would tell Mr Papaleo what to do but in the Q Q case of investigation by the police Mr Papaleo could just show his R passport and say he had been to Hong Kong once only and did not know R anything about this story. S S 131. In video A just after 36:00 minutes the defendant can be T T heard to say “investigation” (see transcript, counter 237) however again it U U V V  - 38 - A A B B is very difficult to hear the full conversation at that time. When this part C was played in court Mr Papaleo said that the defendant was explaining C the impossibility of investigators finding out anything because one D D company was in the Czech Republic, one in Hong Kong and Mr Papaleo E was Italian and that if anything happened Mr Papaleo could just show his E passport and say whatever happened was not his responsibility. F F Jariabka Juraj (defendant) G G H 132. In his evidence the defendant agrees he first met Mr Papaleo H in the Goblin Pub in Bratislava; that Mr Papaleo was asked to go to Hong I I Kong to incorporate companies and open bank accounts; and that he J would give Mr Papaleo a reward of €5000 and pay all the expenses. J K K 133. The defendant however says that these arrangements were all L in pursuit of a legitimate business agreement he had with Jozef Drlicka. L In summary the defendant testified that after he finished university he M M worked as a journalist and was a member of the International Federation N of Journalists and a member of the Slovak Syndicate of Journalists N Association (see exhibits D2, D3 & D5). The defendant was also O O involved in running various different businesses. P P 134. The defendant said that he believes he understands English Q but was not able to express himself the same was as he would in his Q mother tongue. Sometimes the defendant would struggle with the context. R R Also the defendant did not know specific terminology and would S therefore use basic English. S T T U U V V  - 39 - A A B B 135. In 2013 the defendant had the idea of setting up business in C the fields of LED lighting and publishing with emphasis on electronic C books. Two companies were to be set up, one for each business. D D However the health of the defendant’s mother had rapidly deteriorated E and therefore the defendant wanted someone else to look after the E businesses so he could minimise his business activities. At the beginning F F of cross-examination the defendant said he first became interested in LED G business in 2012. G H 136. The defendant had known Jozef Drlicka for at least 15 years H and regarded him both as a friend and business partner. The defendant I I wanted Jozef Drlicka to set up the two companies. In cross-examination J J the defendant said that he decided to do business with Jozef Drlicka in K April 2013. K L 137. In May 2013 the business contacts of the defendant, who L also knew Jozef Drlicka, accepted the defendant’s proposal to do business M M with Jozef Drlicka. The two companies were to be established in Hong N Kong with each company focusing on one business only. Hong Kong N was chosen because due to costs reasons the goods and services such as O O lighting and book printing would originate from Hong Kong, China or P Taiwan and Hong Kong had no VAT. P Q Q 138. Jozef Drlicka was to be in charge of the start-up of the firms R including the incorporation of the two companies in Hong Kong and the R opening of the bank accounts. The defendant would introduce Jozef S S Drlicka to all the possible ways of doing business. In return Jozef Drlicka T would contribute and enhance the business with his own contacts. The T defendant would not be taking part in the business activities because of U U V V  - 40 - A A B B his mother’s health. The defendant produced a medical report dated 2 C May 2014 detailing his mother’s health (marked exhibit PD6 for C identification). D D 139. Initially Jozef Drlicka was to be based in Hong Kong. After E E finding suitable suppliers the area of operation would be Austria, F Slovakia and the Czech Republic. The decision whether anyone needed F to remain in Hong Kong was to be made by Jozef Drlicka. The defendant G G said he would not be intervening in this decision. H H 140. In cross-examination the defendant explained that the first I I intention was for Jozef Drlicka to go to Hong Kong to set up the J companies and open the bank accounts. This was confirmed by the J defendant at the end of his evidence when the court summarised the K K arrangement he had with Jozef Drlicka. L L 141. However when the first business trip was to take place Jozef M M Drlicka did not have a passport. Jozef Drlicka told the defendant he had N either lost his passport or his passport was not valid. This meant any N passport Jozef Drlicka obtained would be a ‘fresh’ passport. The O O defendant explained that he had been told by firms that are involved in P incorporating companies that it would be more difficult to establish the P firm and the bank account with a brand new passport. At the end of Q Q evidence-in-chief the defendant identified a copy of a passport (marked R exhibit PD7 for identification) which was issued to Jozef Drlicka in May R of this year. S S 142. Considering the incorporation of the two companies and the T T opening of the bank accounts would take two or three months entailing U U V V  - 41 - A A B B several trips to Hong Kong and that he had a small baby Jozef Drlicka C considered sending a substitute to incorporate the companies and set up C the bank accounts for him. Jozef Drlicka told the defendant he had a D D friend (Mr Papaleo) who spoke fluent English; knew how to use a E computer; had travelled a lot and can be helpful when preparing business E plans, web sites and other administrative steps. F F 143. In cross-examination after saying that there would be no G G transactions in the bank accounts until they were transferred to Jozef H Drlicka the defendant was asked why he did not wait until Jozef Drlicka H could open the accounts. The defendant replied that because he had I I already arranged a business trip to Hong Kong he wished to save his own J J expenses and because he understood the local conditions for establishing K firms he wanted to use this opportunity for Mr Papaleo to join in with his K journey. The defendant also explained he wanted to establish these L L companies as soon as possible because he wanted to reduce his flying so M he could look after his mother. M N 144. Near the end of cross-examination after saying there was to N be no urgent transactions the defendant was again asked why he did not O O wait for Jozef Drlicka to obtain his “fresh” passport before opening the P bank accounts. The defendant replied that he wanted to urgently P incorporate the firms and then open a bank account because if there was Q Q any business to occur a bank account number would need to be stated in R the contract. R S S 145. In re-examination the defendant said that he anticipated that T Jozef Drlicka would have to wait at least three weeks for a “fresh” T passport from Austria. The defendant said he did not wait the three U U V V  - 42 - A A B B weeks because at that time they were just about to sign prior to contract a C preliminary agreement for the exchange of neon lights for LED lights. C No actual contract was made because the firms remained in the hands of D D Mr Papaleo. E E Goblin pub F F 146. Jozef Drlicka introduced the defendant to Mr Papaleo in the G G Goblin pub. The defendant did not have a very good first impression of H Mr Papaleo, who arrived late to the meeting and drank unnecessarily. H Further references were made in the defendant’s evidence to heavy I I drinking by Mr Papaleo in both Hong Kong and Slovakia and to the J taking of marijuana in Slovakia. The defendant said Mr Papaleo was not J acting and that his alcohol and marijuana consumption were real. K K L 147. Jozef Drlicka however convinced the defendant that he did L not have to be worried about Mr Papaleo who he had known for five M M years and said had experience as an owner of his own business. The N defendant also knew this was a good opportunity for Jozef Drlicka and N therefore had no reason to doubt his decision to send Mr Papaleo on his O O behalf. In the end the defendant said that it was up to Jozef Drlicka to P agree with Mr Papaleo the terms of their co-operation and that he P accepted the decision as it was Jozef Drlicka who would be responsible Q Q for the companies. R R 148. Mr Papaleo was made aware that Jozef Drlicka would be S responsible for the companies’ activities in the future. Mr Papaleo was S also well aware that his role was only temporary and that it was up to T T U U V V  - 43 - A A B B Jozef Drlicka to decide whether their co-operation would continue in the C future or whether it would be terminated. C D 149. Having been told by Mr Papaleo that he was penniless the D defendant promised Mr Papaleo a reward of €5,000 if everything ended E E up how it was meant to be. This would cover Mr Papaleo’s work time; F willingness to travel; experience; language skills; preparation of business F plans; web designs; incorporating the companies and opening the bank G G accounts. The defendant also paid the expenses of the first trip to Hong H Kong including the air fare and hotel accommodation. H I I 150. In cross-examination the defendant said Jozef Drlicka was to J be 100% owner of the LED business. Asked why then he paid all the J expenses the defendant replied that his first intention was for Jozef K K Drlicka to go and that he would share the cost with Jozef Drlicka. Jozef L Drlicka however did not have enough means to realise the start-up of the L company therefore the defendant would pay and Jozef Drlicka would M M reimburse him later. N N 151. Later in cross-examination when asked why he did not open O O the bank accounts himself as he was in Hong Kong and save €5,000 the P defendant replied that the firms were meant to be for Jozef Drlicka who P sent Mr Papaleo on his behalf. Q Q 152. Mr Papaleo was made aware the nature of the businesses was R R publishing and LED products save that the defendant did not tell Mr S Papaleo some facts and some trade business secrets, such as market price S because he did not trust Mr Papaleo 100%. The defendant thought he T T U U V V  - 44 - A A B B told this to Mr Papaleo after the flight tickets had been purchased and C whilst they were still in Bratislava. C D 153. At the end of his evidence-in-chief the defendant agreed that D in the Goblin pub he mentioned to Mr Papaleo that there could be 10% E E risk. The defendant explained that this was, as in life, the unknown risk F and that he was talking about risk in general terms. In cross-examination F the defendant clarified that the risk referred to business risk and that if Mr G G Papaleo continued to work with Jozef Drlicka this risk would then relate H to him as well. H I I Hong Kong J J 154. The defendant arrived in Hong Kong on the same day as Mr K K Papaleo. The movement record, exhibit P11 shows the defendant arriving L at the airport at 14:30:45 on the 14 May 2013. The defendant could not L remember when he first met Mr Papaleo after arriving in Hong Kong but M M believed this was the same afternoon or early in the evening of the same N day but definitely the following morning. N O 155. The first meeting was in the IFC mall. Mr Papaleo’s clothes O were described by the defendant as strange Mr Papaleo wearing long P P trousers which required shortening by the use of bulldog clips. The Q defendant was therefore forced to go shopping with Mr Papaleo to buy Q him some suitable clothing. R R S 156. At the meeting the next morning the defendant instructed Mr S Papaleo to first purchase the two companies. The defendant asked Mr T T Papaleo to search on the internet to find companies that sell other U U V V  - 45 - A A B B companies or help in incorporating companies. Mr Papaleo could then C choose which company to use. Initially the defendant did not make any C recommendations however as the display screen of Mr Papaleo’s D D telephone was not working properly the defendant used his telephone. E E 157. One company was found but because the cost was too high F their services were not used. The defendant then asked Mr Papaleo to go F to Acorn, with whose services the defendant had previously been satisfied G G with. The defendant pointed out to Mr Papaleo that he might be asked H some specific information such as address verification therefore it was H important to have some proof of address with him. Two companies East I I Ray (HK) Limited and Vindex (HK) Limited were set up by Acorn. The J J defendant paid the costs of Acorn in incorporating the two companies. K K 158. The defendant did not go with Mr Papaleo to Acorn because L he had other duties to attend to. In cross-examination the defendant said L he had to manage his own matters including emails and that he needed M M Mr Papaleo to learn. N N 159. The defendant agreed with Mr Papaleo’s evidence that he did O O not want to be seen together with Mr Papaleo by Acorn staff. Referring P to the shortened trousers incident the defendant explained this was P because the way Mr Papaleo behaved was not according to what he Q Q expected. Also because Mr Papaleo had borrowed money from Jakub R Planka the defendant did not have a good feeling to be seen together with R him. Further as the firms were to be transferred to Jozef Drlicka there S S was no need to be seen together with Mr Papaleo. T T U U V V  - 46 - A A B B 160. The names of the two companies East Ray (HK) Limited and C Vindex (HK) Limited were similar to two other companies in Hong Kong C namely East Ray and Vindex (i.e. without HK in the name). The D D defendant explained the names were chosen for branding purposes E whereby the name was used and thereby the costs such as printing were E lowered. The defendant drew comparison with Coca-Cola and the Virgin F F group of companies. G G Elitecon Inc Limited H H 161. The defendant controlled another company in Hong Kong, I I Elitecon Inc Limited (“Elitecon”) (see banker’s affirmation, exhibit P13). J The defendant explained he did not use Elitecon, whereby he would save J the expenses of incorporating two new companies, because he did not K K want to mix the businesses up. Further Elitecon had nothing to do with L Jozef Drlicka and the defendant did not want other people involved in L Elitecon. M M N Bank accounts N O 162. After incorporating the two companies the next step was for O Mr Papaleo to open the bank accounts for these companies. Again P P because of other duties and the fact the bank accounts were to be for Q Jozef Drlicka the defendant did not go with Mr Papaleo to open the bank Q accounts. Mr Papaleo was unsuccessful in opening the bank accounts R R because he did not meet all the requirements of the bank including S address proof and verification of the businesses. S T T U U V V  - 47 - A A B B 163. In cross-examination when asked why he did not go to any C bank with Mr Papaleo the defendant repeated that he was doing his own C work saying that he had things to discuss with Jakub Planka. The D D defendant also explained Mr Papaleo was there because he did not want E to spend two, three, four hours waiting in a bank. E F Slovakia F G G 164. One of the banks suggested preparing business plans and H therefore the first trip to Hong Kong was concluded with Mr Papaleo H returning to Slovakia to prepare the business plans with Jozef Drlicka. I I However no business plans were prepared. The defendant therefore told J Mr Papaleo that due to his attitude and irresponsibility his co-operation in J the future was not welcome and that he was not entitled to his reward of K K €5,000. Mr Papaleo begged the defendant and promised he would L prepare the business plans. Still no business plans were prepared Mr L Papaleo just pretending he was working on the business plans. M M N 165. One day Mr Papaleo had a black eye and scratches on his N face. Mr Papaleo told the defendant he had been at a social event when O O he was under the influence of alcohol and was smoking marijuana with a P friend following which he did not remember what actually happened. P The defendant believed Mr Papaleo had been in a fight and reminded him Q Q to look after his health because once the business plans were ready he R would need to return to Hong Kong. R S 166. Mr Papaleo used his injuries as another excuse not to work S on the business plans. Also because Mr Papaleo was using a friend’s T T mobile phone the defendant and Jozef Drlicka were unable to get in touch U U V V  - 48 - A A B B with him for a few days. Eventually they traced Mr Papaleo and met him C in a hostel. Mr Papaleo said he had started working on the business plans C but as the hostel did not have a computer he could not continue with the D D work. E E 167. Later Mr Papaleo informed the defendant that it was possible F to continue with opening the bank accounts and that he would show the F defendant the business plans after his arrival in Hong Kong. The second G G trip to Hong Kong was therefore arranged the expenses of which were H again paid by the defendant. Jozef Drlicka instructed the defendant that H after transferring the companies and bank accounts to him the co- I I operation with Mr Papaleo would be terminated. J J 168. The defendant arrived in Hong Kong on the 14 June and was K K arrested the same day when he met Mr Papaleo at the IFC mall. At no L time did the defendant seek control of the two companies or intend to L take control of any bank accounts that would be opened. The defendant M M did not incite Mr Papaleo as particularised in the charge. N N Consideration of the evidence O O 169. In reaching my verdict I remind myself of the burden and P P standard of proof and that the burden is on the prosecution throughout. Q The defendant has to prove nothing. I direct myself that I must be sure of Q the guilt of the defendant before I can convict. On the other hand if the R R court thinks that the defence evidence pointing to innocence is true or S may be true, it would follow that the defence has raised sufficient doubt S in the prosecution case and the defendant entitled to be acquitted. T T U U V V  - 49 - A A B B 170. I remind myself that when drawing inferences from the C evidence the inference must be a compelling one and the only one that no C reasonable man could fail to draw from the direct facts proved. D D 171. There is a material conflict in the evidence as to why Mr E E Papaleo needed to go to Hong Kong to incorporate two companies and F open bank accounts for these companies. In summary Mr Papaleo says F he was recruited by Jozef Drlicka who said the defendant needed urgent G G help in his business in Hong Kong, which was described as illegal but not H criminal. Mr Papaleo was to hand over control of the companies and the H bank accounts to the defendant. I I J 172. The defendant on the other hand says that he had reached a J business agreement with Jozef Drlicka whereby Jozef Drlicka would run K K the companies in Hong Kong. As Jozef Drlicka did not have a passport L Mr Papaleo went to Hong Kong as a substitute for Jozef Drlicka. The L control of the companies and bank accounts were to be handed over to M M Jozef Drlicka. N N 173. I have carefully considered all the evidence and the written O O and oral submissions of Mr Wong and Mr Ross. Unless otherwise stated P I accept the evidence of Mr Papaleo. At times Mr Papaleo gave his P opinion as to what he thought the evidence meant for example that during Q Q the meeting in the Goblin pub the defendant was describing a scheme of R embezzlement (see transcript exhibit P1A, counter 96). In reaching my R verdict I have disregarded the opinions of Mr Papaleo. S S T T U U V V  - 50 - A A B B 174. I have no hesitation in rejecting the defendant’s evidence. I C do not find his evidence credible. I do not find credible the defendant’s C evidence as to why he did not himself set up the two companies and open D D the bank accounts. I find inherently improbable that if there was a E legitimate business agreement between the defendant and Jozef Drlicka E that Mr Papaleo would be required to go to Hong Kong to incorporate the F F two companies and open the bank accounts only to then transfer G ownership to Jozef Drlicka, in particular considering the defendant had G already arranged a business trip to Hong Kong. H H 175. The defendant was familiar with the procedure involved in I I incorporating companies and setting up bank accounts in Hong Kong. On J J the 21 August 2012 (some nine months earlier) the defendant had K incorporated Elitecon. In cross-examination the defendant agreed he set K up Elitecon at Acorn. Six days later on the 27 August the defendant L L opened a business integrated bank account for Elitecon with HSBC (see M paragraphs 15 & 16 together with exhibits TWP-1(1) – (39) of the M bankers’ affirmation, exhibit P13). The defendant could therefore quite N N easily have incorporated the companies and set up the bank accounts O himself without the need of sending Mr Papaleo to Hong Kong thereby O saving paying Mr Papaleo a reward of €5,000 and incurring relatively P P substantial expenses sending him to Hong Kong. Q Q 176. I do not find credible the defendant’s evidence that R notwithstanding he formed an adverse impression of Mr Papaleo in R Bratislava he nevertheless still agreed to Mr Papaleo going to Hong Kong S S to incorporate the companies and open the bank accounts. Similarly I do T not find credible the defendant’s evidence that notwithstanding the way T U U V V  - 51 - A A B B Mr Papaleo was dressed when they met in Hong Kong and his heavy C consumption of alcohol while in Hong Kong that he still wished Mr C Papaleo to incorporate the companies and open the bank accounts. D D 177. When asked by the court why having such an unfavourable E E impression of Mr Papaleo did he want him to set up the companies and F open the bank accounts the defendant replied; “Me, personally, honestly, F I really didn’t want that”. Asked why then he did not stop Mr Papaleo the G G defendant replied he would have done had he not been arrested and H because Jozef Drlicka kept begging him he gave Mr Papaleo a chance. H I I 178. I find inherently improbable that the defendant would accept J Mr Papaleo having formed an adverse impression of him from the very J beginning. I find inherently improbable that if there was a legitimate K K business agreement between the defendant and Jozef Drlicka that the L defendant would be willing to allow someone, who he described on one L morning in Hong Kong of being unsteady on his feet and smelling of M M alcohol, which was not a fresh smell of alcohol but was like a smell after N drinking all night long, to help him incorporate the companies and open N the bank accounts. O O P 179. I do not find credible the defendant’s evidence in cross- P examination that he relied on Jozef Drlicka because he trusted him. In Q Q answer to the court when asked why he needed to approve Mr Papaleo to R go to Hong Kong if he trusted Jozef Drlicka and Jozef Drlicka was to R make all the decisions the defendant replied because he was paying for S S the costs of establishing the companies; he wanted to make sure this was T done diligently so that the companies could operate properly; and that T U U V V  - 52 - A A B B Jozef Drlicka was a trigger happy person who needed to be directed and C given boundaries. C D 180. I find inherently improbable that in these circumstances the D defendant would accept Jozef Drlicka’s recommendation and approve Mr E E Papaleo to go to Hong Kong, in particular having from the very F beginning formed an adverse impression of Mr Papaleo. F G G 181. I do not find credible the defendant’s evidence that the first H intention was for Jozef Drlicka to go to Hong Kong to set up the H companies and open the bank accounts and only because Jozef Drlicka I I did not have a passport was Mr Papaleo recruited. Whether or not Jozef J Drlicka in fact had a passport I am satisfied this was only an excuse given J to Mr Papaleo during the meeting in the Goblin pub, in particular K K considering that according to the defendant Jozef Drlicka’s English was L very poor. L M M 182. In evidence-in-chief the defendant said Jozef Drlicka only N knew five words of English. From viewing Video A it would appear that N Jozef Drlicka could speak more than five words of English. During the O O meeting Jozef Drlicka said he could not speak English. At the end of the P first day of evidence when video A was played to Mr Papaleo the court P interpreter translated the Slovakian spoken at counter 174 which included Q Q Jozef Drlicka saying he did not speak English. When the court clarified R about the spoken English of Jozef Drlicka the defendant said Jozef R Drlicka’s English was very poor. S S 183. At the end of re-examination when asked how Jozef Drlicka T T would do the job once he is in Hong Kong and everything was working if U U V V  - 53 - A A B B his English was poor the defendant replied he would have to find C someone to help him with this. The original plan being that Jozef Drlicka C would go to Hong Kong to incorporate the companies and open the bank D D accounts I clarified with the defendant how he would do this if he could E not speak English. The defendant replied that this would have been very E difficult but at first he would have been at the meetings with Jozef F F Drlicka. G G 184. I do not find this answer credible, in particular H notwithstanding the unfavourable impression the defendant had with Mr H Papaleo he said he was too busy to go with Mr Papaleo yet he would have I I gone with Jozef Drlicka. I find inherently improbable that someone J J whose English was very poor would be entrusted to open bank accounts; K incorporate companies and operate the business in Hong Kong. In K addition I find inherently improbable that if Jozef Drlicka was to run the L L businesses the meeting in the Goblin pub would have been largely M conducted in English. M N 185. I do not find credible the defendant’s evidence that he N wanted to keep the businesses separate i.e. one company for LED lighting O O and one for publishing. P P 186. In cross-examination the defendant said Elitecon had nothing Q Q to do with LED lighting and that the business of Elitecon was some R marketing activities and providing short-term capital support for start-up R companies, an example of which was produced in re-examination (exhibit S S D8). Yet when applying for the business account of Elitecon the T defendant stated the business was “LIGHTING PRODUCTS e.g. LED” T (see exhibit TWP-1(1) to the bankers’ affirmation, exhibit P13). U U V V  - 54 - A A B B 187. Towards the end of cross-examination on being shown TWP C – 1(1) the defendant said this showed he had been interested in LED C business since 2012 and that when establishing Elitecon he intended to D D trade in LED lights. In re-examination the defendant explained at that E time he had made some analysis and was looking for a partner but the E project did not materialise. In answer to the court the defendant said that F F the LED business with Jozef Drlicka was a fresh start and not a G continuation of the business started when Elitecon was set up. G H 188. In cross-examination the defendant admitted he lied to Mr H Papaleo with regard to the turnover of the business. This occurred when I I Mr Wong cross-examined the defendant on the reference to €1 million J J during the meeting in the Goblin pub (see transcript exhibit P1A, counter K 214). The defendant explained that because Mr Papaleo was asking about K the procedure during the incorporation of the firm this was more or less L L said for the purpose of incorporating a firm and that he lied about this M because he could not really tell what the estimate would be and so he M thought it was a quick solution to tell Mr Papaleo something as he had no N N intention of discussing this with him further. O O 189. As noted earlier (see paragraph 104) in video B the P defendant can be heard instructing Mr Papaleo what to say about the P business of the two companies, namely to say something that you will be Q Q a publisher or something like that and that you will be buying and selling R products, LED lights (see transcript exhibit P1B, counter 50). The R defendant goes on to say the turnover of the business could be €1 million S S (see counter 52). T T U U V V  - 55 - A A B B 190. Having lied about this to Mr Papaleo earlier in the Goblin C pub I am satisfied that the defendant was simply making things up for Mr C Papaleo to tell the “company house.” I am equally satisfied that when D D telling HSBC the business of Elitecon was “LIGHTING PRODUCTS e.g. E LED” the defendant was again making this up. E F 191. In video B the defendant is also heard telling Mr Papaleo not F to go to HSBC (see transcript exhibit P1B, counter 48). In cross- G G examination after agreeing that it was possible he said this to Mr Papaleo H the defendant explained he said this because HSBC had complicated rules H for opening accounts for newly founded companies and that he believed it I I was necessary to have a partner in the company who came from Hong J J Kong. K K 192. The defendant however as sole director and shareholder of L Elitecon was able to open an integrated business account for Elitecon L with HSBC within 6 days of Elitecon’s incorporation (see paragraph 175). M M The banking documents show the day after opening the account a case N deposit of $3000 was made into the account (see paragraph 17 of the N bankers’ affirmation, exhibit P13). The defendant appeared therefore to O O have no difficulty in opening a bank account with HSBC. P P 193. When the court drew this to the defendant’s attention the Q Q defendant replied that it was not easy to open the account for Elitecon R explaining that he believed there had been three meetings that lasted R several hours and that in the first meeting approval to open an account S S was not given. Asked by the court why he did not try HSBC before T deciding to return to Slovakia the defendant replied that the conditions in T banks change quite quickly and that in May prior to meeting with Jozef U U V V  - 56 - A A B B Drlicka he telephoned HSBC from Slovakia and was told that it was not C very easy to open an account for a new firm. C D 194. I did not find this evidence credible. I accept Mr Papaleo’s D evidence that he was told not to go to HSBC because of their anti money E E laundering views. F F 195. In cross-examination the defendant said he had G G acquaintances that had companies with the names of East Ray and H Vindex. When asked if they had any connection with his companies the H defendant replied, “No, more or less no.” Asked by Mr Wong what kind I I of branding purposes could be served if there was no connection between J the companies the defendant explained that at first his companies would J do their independent activities as would the other companies and that it K K would look good to say that the companies presented themselves as one L brand name. L M M 196. When the court sought clarification whether the defendant N was saying he was using another company’s name without permission the N defendant said that if his companies were able to build up the brand name O O the owner of the brand name would be rewarded. P P 197. I do not find credible the defendant’s evidence that he chose Q the names East Ray (HK) Ltd and Vindex (HK) Ltd for branding Q purposes, what Mr Ross described in his oral submission as trying to R R piggy back the reputation of another company, which Mr Ross said may S not be a legitimate business practice but that people do that kind of thing. S T T U U V V  - 57 - A A B B 198. I remind myself that the rejection of the defendant’s C evidence is not determinative of the issues in the case. The defendant has C to prove nothing. A case in which defence evidence is called and is not D D believed is no different from one in which no evidence is called. In either E case the burden is on the prosecution to prove the defendant’s guilt E beyond reasonable doubt. F F Why was Mr Papaleo asked to go to Hong Kong to incorporate a G G company and open a related bank account? H H 199. The issue to be determined is why was Mr Papaleo asked to I I go to Hong Kong to incorporate a company and open a related bank J account? In determining this issue I have carefully considered the J submission of Mr Ross that Mr Papaleo’s evidence is neither credible nor K K reliable. L L “Illegal but not criminal” M M 200. As noted earlier Mr Papaleo testified that prior to meeting N N the defendant Jozef Drlicka told him the business was illegal but not O criminal, meaning not involving guns or drugs (see paragraph 87). O During the playing of video A when explaining what was said at counter P P 239 Mr Papaleo said the defendant confirmed to him the business was not Q a legal business. Q R R 201. Mr Ross submits this evidence is not supported by any of the S video files produced to court (see paragraph 6 of the written submission S of Mr Ross). After video A was played in court Mr Papaleo was asked by T T the court if he could hear the defendant say “illegal” or “not legal”. Mr U U V V  - 58 - A A B B Papaleo replied that because of the poor quality of the sound recording he C could not hear that said. Mr Papaleo then went on to say that it was very C clear in his memory that during the meeting in the Goblin pub Jozef D D Drlicka used the term “illegal” twice and the defendant “not legal” once. E E 202. In cross-examination Mr Papaleo said the defendant also told F him this before he went to Hong Kong but could not remember whether F this was in the meeting in the Goblin pub or the day after. Mr Ross then G G referred Mr Papaleo to paragraph 2 of his witness statement (marked “A” H for identification) in which he states that when he met the defendant in a H specific pub the defendant told him that “this financial operation was not I I legal but not such not dangerous”. J J 203. Mr Ross then put to Mr Papaleo that from the statement it K K was clear this was said in the Goblin pub. Mr Papaleo confirmed this is L what he was told by the defendant but could not remember whether he L was told in the Goblin pub or the day after that the financial operation M M was illegal but that he was told in the Goblin pub that it was not N dangerous. N O O 204. Whilst one can hear in video A the defendant make reference P to financial operation, tax, offshore companies and just business (as P particularised by Mr Ross in paragraph 6 of his submission) due to the Q Q background noise in the pub the full conversation and therefore the R context these words were spoken simply cannot be heard. No reliance R can be therefore placed on this part of the video. S S 205. I note the reference to financial operation at counter 241 is T T preceded by the defendant saying at the end of counter 239, “…no drugs, U U V V  - 59 - A A B B no taxes”. Although Mr Papaleo said in evidence this was when the C defendant was explaining the impossibility of investigators finding out C anything and what he should do if there was any investigation, again D D without being able to hear the full conversation and therefore the context E in which no drugs was mentioned no reliance can be placed on this part of E the video. F F 206. Due to the difficulty in hearing what exactly was said during G G the meeting I find that video A neither supports nor contradicts the H evidence of Mr Papaleo. However in video C after the defendant sends H the names of the two companies East Ray and Vindex to Mr Papaleo by I I SMS the defendant is heard saying “And listen, there’s no risk there. It’s J no guns, nothing, yeah?” The defendant then continues to tell Mr Papaleo J K that he cannot be complained about (see transcript P1C, counter 5). K L 207. I am satisfied this supports Mr Papaleo’s evidence that he L had been told no guns were involved. I accept the evidence of Mr M M Papaleo that he was told by the defendant the business was not legal. N N Control of the bank accounts to be given to the defendant O O 208. Similarly Mr Ross submits the evidence of Mr Papaleo that P P the control of the bank accounts was to be handed over to the defendant is Q also not supported by any of the video tapes produced to court (see Q paragraph 8 of the written submission of Mr Ross). R R S 209. The defendant can be heard saying to Mr Papaleo “…one S company…. open bank account” (see video A, transcript P1A, counter T T 76). Although the full passage at counter 76 is very difficult to hear I U U V V  - 60 - A A B B note nowhere in video A can the defendant be heard telling Mr Papaleo to C hand over control of the bank accounts. C D 210. After video A was played in court Mr Wong asked Mr D Papaleo to explain why no mention was made in the meeting of giving E E the defendant control of the bank accounts. Mr Papaleo explained that F because he had been told this by Jozef Drlicka prior to the meeting he F tried to elicit other information during the meeting in the Goblin pub. G G H 211. I accept the explanation of Mr Papaleo as to why there was H no mention of giving the defendant control of the bank accounts in the I I meeting in the Goblin pub. Notwithstanding there is no mention in any of J the videos to the words “illegal” or “not legal” or reference to handing J over the bank accounts to the defendant I find this does not cause me to K K doubt the evidence of Mr Papaleo. L L 212. Although not referred to by Mr Ross I have also considered M M the evidence of Mr Papaleo that at one stage he was told by the defendant N to bribe the bank officers to speed up the process. This was said in N examination-in-chief when video E was played in court. Mr Papaleo O O continued by saying he was sure that there must be a later video in which P he is lying to the defendant saying that he followed his instructions and P offered something to bank officials to speed up the procedure. When Q Q cross-examined about this Mr Papaleo said he believed this was captured R on video but was not sure. The fact no video has been produced in which R this is heard does not cause me to doubt Mr Papaleo’s evidence. S S 213. I have also considered the evidence of Mr Papaleo that the T T defendant mentioned the anti-money laundering views of HSBC (see U U V V  - 61 - A A B B paragraph 106). This also is not heard on any video produced in court. C On video B the defendant tells Mr Papaleo that if he is asked to use C HSBC to say he had a bad experience with HSBC (see transcript P1B, D D counter 48). Clearly the defendant was making up something for Mr E Papaleo to say which was not true. I accept Mr Papaleo’s evidence of E what he was told. The fact no video has been produced in which this is F F heard does not cause me to doubt Mr Papaleo’s evidence. G G Control of the companies to be given to the defendant H H 214. In court copies of the company documents of East Ray (HK) I I Ltd and Vindex (HK) Ltd were produced (exhibits P4-P7). When asked J where the originals were Mr Papaleo explained that he handed the J documents given to him by Acorn to the Hong Kong police. The Hong K K Kong police returned the documents to him which are now kept with his L papers in Europe. Mr Papaleo also explained that other company L documents such as the memorandum and articles of association and the M M company chops were retained by Acorn. N N 215. Mr Ross submits that as Mr Papaleo retained the company O O documents this is inconsistent with the defendant taking control of the P companies as alleged by Mr Papaleo (see paragraph 9(2) of the written P submission of Mr Ross). Q Q 216. I have no hesitation in rejecting this submission. I accept Mr R R Papaleo’s evidence-in-chief that he kept the originals as these would be S needed to show to the banks. This was also the reply given to the court at S the end of Mr Papaleo’s evidence when clarifying whether there was any T T reason why he did not hand over to the defendant the documents given to U U V V  - 62 - A A B B him by Acorn. Although Mr Papaleo was never going to open a bank C account he would need to keep the documents so as to continue the C pretence he was opening a bank account. D D Proof of business E E F 217. Mr Papaleo testified that he lied to the defendant that the F Standard Chartered Bank required proof of business (see paragraph 111). G G Mr Ross submits that Mr Papaleo’s evidence that the defendant asked H him to prepare business documents with false information is not credible H because this was not mentioned in any of seven witness statements made I I by Mr Papaleo. Further Mr Ross submits that Mr Papaleo’s explanation J given in cross-examination that he regarded this as a minor matter is J equally not credible (see paragraph 9(5) of the written submission of Mr K K Ross). L L 218. This arose when Mr Ross put to Mr Papaleo that after he M M returned to Slovakia the defendant asked him to prepare business plans in N connection with the two companies. Mr Papaleo replied that the N defendant asked him to prepare the false confirmation of business O O activities together with Jozef Drlicka. Asked whether it was his opinion P that the defendant was asking him to falsify documents Mr Papaleo P replied, “No, he actually instructed me and my informant how to do it.” Q Q 219. After Mr Papaleo explained that although these meetings had R R been video recorded they had not been transferred to the external hard S disc due to a lack of memory Mr Ross asked Mr Papaleo whether he had S enough memory to remember whether he told the police that the T T defendant instructed him to falsify documents. U U V V  - 63 - A A B B 220. Mr Papaleo replied that he had surely told the police but did C not recall if this was in any of his statements. Mr Papaleo explained that C he had checked his statements to see that there was nothing false in the D D statements and said that he was comfortable that a total of 20 pages could E not cover every single specific fact of the story. Asked by Mr Ross if he E thought this was an important part of the story Mr Papaleo replied that he F F thought it was a minor offence and that he highlighted more important G things in his statements. G H 221. Mr Papaleo was then referred to his first witness statement H (marked “A”) and confirmed there was no mention in the statement that I I the defendant instructed him to falsify documents and further confirmed J J this was also not mentioned in the following six statements. K K 222. Whilst the falsifying of documents is clearly not a minor L matter having carefully considered all the evidence I accept the L explanation given by Mr Papaleo for this omission. The fact Mr Papaleo M M did not include this in any witness statement does not cause me to doubt N his evidence. N O O Correction of evidence by Mr Papaleo P P 223. In his oral submission Mr Ross submits Mr Papaleo is Q unreliable because many times he corrected his evidence the following Q morning. This occurred twice during the six days that Mr Papaleo gave R R evidence, once in chief and once in cross-examination. S S 224. On the fourth day of giving evidence (23 May) Mr Papaleo T T sought to correct which bank was introduced by Acorn and on which day U U V V  - 64 - A A B B he went to that bank. The day before Mr Papaleo had said the bank C introduced by Acorn was Hang Seng Bank but that he was not sure about C this. As for the date Mr Papaleo had initially said the 17 May but D D corrected this to the 16 May after seeing more of video D. E E 225. The next day Mr Papaleo corrected this by saying that Acorn F was only able to arrange an appointment with the Standard Chartered F Bank on the 18 May as there was a public holiday on Friday the 17 May. G G This last correction would appear to be incorrect because video D makes H reference to the defendant saying, “Tomorrow is free day. Saturday they H work” (see transcript P1D, counter 71). I I J 226. I find nothing at all surprising about the correction of dates J and names of banks, in particular when describing events almost one year K K later. This does not cause me to doubt Mr Papaleo’s evidence. L L 227. On the fifth day of giving evidence (26 May) Mr Papaleo M M sought to add the definition of a journalist specified in official documents N by the General Assembly of the United Nations. This arose from the N cross-examination by Mr Ross the day before as to the credentials of Mr O O Papaleo as a journalist including that in video A Mr Papaleo had shown a P false press card to the defendant. P Q 228. Mr Papaleo also added his understanding of why he was Q asked about this explaining he showed two absolutely original and R R genuine authentic press cards (exhibits P12A and P12B) and that it was S Jozef Drlicka who had asked him to obtain a false press card for his use. S T T U U V V  - 65 - A A B B 229. As Mr Papaleo continued to add matters which appeared C unrelated to the charge I advised Mr Papaleo to wait for further C questioning from Mr Ross. The fact Mr Papaleo wished to add these D D matters does not cause me to doubt his evidence. E E Whether Mr Papaleo is a journalist F F 230. Mr Ross also makes further submissions as to whether Mr G G Papaleo is in fact a journalist or professional journalist concluding with H the submission that he is a person who wishes to be a famous journalist H and is prepared to lie in order to advance himself (see paragraph 10 of the I I written submission of Mr Ross). J J 231. In cross-examination Mr Papaleo confirmed to Mr Ross that K K the name of his informant was Jozef Drlicka. Mr Ross orally submitted L that a professional journalist does not readily reveal the name of his L informant or the source of his information and that Mr Papaleo was M M simply pretending to be a journalist. Further Mr Ross submitted this was N inconsistent with what Mr Papaleo had told the police in his first witness N statement (marked “A”), namely that “As a professional journalist my O O duty is to protect my source of information.” P P 232. In evidence-in-chief Mr Papaleo had not revealed the name Q although when referring to his informer at the beginning of his evidence Q he said he would, if asked, give his name and surname. The name was R R revealed when Mr Ross asked Mr Papaleo whether the name of his S informer was Jozef. Mr Papaleo agreed and went on to explain that S although he called him his informant he did not recognise his status as an T T informant because he was not consciously helping him. Mr Papaleo then U U V V  - 66 - A A B B agreed with Mr Ross that the full name of his informant was Jozef C Drlicka. C D 233. Mr Ross then asked Mr Papaleo why he told the police, “As D a professional journalist my duty is to protect my source of information.” E E Mr Papaleo repeating that Jozef Drlicka did not consciously help him in F his investigation explained that he reconsidered the matter. No longer F regarding Jozef Drlicka as an informer Mr Papaleo made a further G G statement two days later giving the details of Jozef Drlicka to the police H (in fact according to further questions from Mr Ross this statement was H made four days later). I I J 234. This is consistent with Mr Papaleo’s evidence-in-chief when J he first referred to his “informer” he said, “I had the chance through a K K person which I used to name ‘my informer’ to meet Juraj Jariabka…” I L accept the explanations of Mr Papaleo. The fact Mr Papaleo confirmed to L Mr Ross that the name of the person he referred to as his informer was M M Jozef Drlicka does not cause me to doubt his evidence or that he is a N journalist. N O O “Podvodnik” P P 235. Mr Ross cross-examined Mr Papaleo whether in the Goblin Q pub Jozef Drlicka accused him of being a fraudster by having a false Q press card. This arose from the use of the Slovakian word “podvodnik” R R which the Slovakian court interpreter translated as meaning “fraudster”. S This is heard in the 57 seconds of non-English spoken at counter 252 of S the transcript P1A. T T U U V V  - 67 - A A B B 236. Mr Ross first put to Mr Papaleo that Jozef Drlicka had tried C to get him a press card from the Slovak Syndicate of Journalists and had C approached the Slovak Minister of Culture to get the press card for him D D but they had declined to assist because Mr Papaleo’s publications were E not acceptable. Mr Papaleo disagreed saying this was all nonsense giving E his reasons why including that the Ministry of Culture do not issue press F F cards. G G 237. Shortly after Mr Ross referred to the part of the meeting in H the Goblin pub where Mr Papaleo is seen handing a card to the defendant. H Mr Ross puts that at that stage Jozef Drlicka said Mr Papaleo was a I I fraudster. Mr Papaleo said he could not recall anything like that but if J J that was said he did not understand. K K 238. Further Mr Papaleo said that the cards were with him now L and that they were absolutely regular and real issued to him for regular L reason. Subsequently these were produced at the end of Mr Papaleo’s M M evidence (exhibits P12A & P12B). N N 239. Video A was then played to Mr Papaleo. Prior to playing the O O Slovakian court interpreter translated the parts of the passage which Mr P Ross wished to cross-examine upon (see exhibit P1F). Between 41:44 P and 42:00 minutes of video A Mr Papaleo is seen holding some cards, Q Q one of which he hands to the defendant after which the defendant is heard R saying “But this card you don’t show in the airport” (see transcript P1A, R counter 253). S S 240. The showing of the card is during the 57 seconds of non- T T English spoken during which the Slovakian word “podvodnik” is used. U U V V  - 68 - A A B B Mr Papaleo said he did not understand most of what Jozef Drlicka said in C Slovakian and so replied in Italian, “I don’t know.” At the end of C evidence in answer to the court Mr Papaleo said that he did repeat the D D word “podvodnik” when saying in Italian that he did not understand what E was said. E F 241. Mr Papaleo went on to explain whilst he understood F Slovakian this did not mean he understood 100% and that he understood G G what people said if they were speaking on specific subjects. Asked by H Mr Ross if he understood the word “podvodnik” Mr Papaleo said “No, H honestly, first time” but said he could not exclude that he had heard the I I word before. Mr Papaleo said the word he used for false or fake was J “falošný”. The Slovakian court interpreter agreed this means false or J K fake. K L 242. Mr Ross submits the evidence of Mr Papaleo that he does not L know the Slovakian word “podvodnik” means fraudster is not credible M M (see paragraph 9(3) of the written submission of Mr Ross). I have no N hesitation in rejecting this submission. I accept the evidence of Mr N Papaleo that whilst he understood Slovakian he did not know the word O O “podvodnik”. The fact Jozef Drlicka used this word in the meeting at the P Goblin pub does not cause me to doubt that Mr Papaleo is a journalist. P Nor does this cause me to doubt Mr Papaleo’s evidence. Q Q R 243. Although not referred to by Mr Ross in his final submission I R should add that in cross-examination Mr Ross asked Mr Papaleo whether S S he was a member of the Syndicate of Slovak Journalists. Mr Papaleo T replied that he was but had not collected his syndicate card because he T was not able to pay the membership fee of €40. Asked by Mr Ross if he U U V V  - 69 - A A B B knew the name of the head of the syndicate Mr Papaleo replied Tamara C Valkova. Asked to spell the name Mr Papaleo could spell the given name C but was not sure about the surname. D D 244. Mr Ross then asked Mr Papaleo whether his date of birth E E was 20 June 1970. Mr Papaleo replied his birthday was 20 April 1970. F Mr Ross then showed a letter (marked PD1 for identification) signed by F Tamara Valkova stating that “Mr Antonio Aldo Papaleo, born on June G G th 20 , 1970 has never been a member of the Slovak Syndicate of H Journalists”. Asked why the letter says he has never been a member Mr H Papaleo repeated that he had not paid his membership fee and therefore I I had not collected his card. J J 245. I accept the evidence of Mr Papaleo that he was a journalist. K K The fact he did not pay his membership fee for joining the Syndicate of L Slovak Journalists, the participation in which Mr Papaleo described as L voluntary, does not cause me to doubt his evidence. M M N Whether Jozef Drlicka had been to Hong Kong N O 246. When cross-examined on the subject of Jozef Drlicka having O a fresh passport in one answer Mr Papaleo said that the fresh passport P P was the same passport Jozef Drlicka used to go to Hong Kong in August Q 2013. When the court clarified whether he was saying that Jozef Drlicka Q came to Hong Kong in August 2013 Mr Papaleo explained that he had R R been informed of this. S S T T U U V V  - 70 - A A B B 247. Put by Mr Ross that Jozef Drlicka had never been in Hong C Kong Mr Papaleo replied he was sure he had been in August 2013 C because he started to show around Bratislava the witness statement D D (marked “A”) and was telling people he was to go to Hong Kong to help E the defendant. E F 248. Mr Ross submits that Mr Papaleo’s evidence that Jozef F Drlicka had been to Hong Kong in August 2013 is not credible (see G G paragraph 9(1) of the written submission of Mr Ross). H H 249. Admitted in evidence is that Jozef Drlicka had never been to I I Hong Kong (see the admitted facts, exhibit P10A). Whilst the admitted J facts contradict what Mr Papaleo said taking into account this was not J based on the personal knowledge of Mr Papaleo I am satisfied this K K contradiction does not cause me to doubt his evidence. Further I note the L passport of Jozef Drlicka shown to the defendant at the end of his L evidence-in-chief (see exhibit PD7) was issued in May this year and M M therefore on that passport he could not have travelled to Hong Kong in N August 2013. N O O Alcohol and drugs P P 250. Mr Ross further submits by reason of his alcohol and drug Q habits Mr Papaleo is neither a credible nor reliable witness (see paragraph Q 9(4) of the written submission of Mr Ross). R R S 251. Clearly Mr Papaleo drank alcohol as can be seen in the S meeting in the Goblin pub. Further Mr Papaleo accepted while in Hong T T U U V V  - 71 - A A B B Kong he had been drinking and in Slovakia he got very drunk at a party at C the Italian Embassy. C D 252. In cross-examination when Mr Ross asked Mr Papaleo if he D had around five beers in the Goblin pub, Mr Papaleo replied, “Obviously, E E and I wash my mouth with whisky every morning before I meet the F defendant.” I am satisfied Mr Papaleo was not saying he washed his F mouth with whisky every morning rather only before he met the G G defendant no doubt as part of posing as a corrupt journalist with serious H drug and alcohol problems. H I I 253. The fact Mr Papaleo consumed alcohol does not cause me to J doubt his evidence. J K K Drugs L L 254. In cross-examination Mr Papaleo denied he had ever taken M any drugs. At the beginning of cross-examination Mr Ross put that on M the 3 June at the party at the Italian Embassy in Bratislava Mr Papaleo N N took cannabis. O O 255. In a very long answer Mr Papaleo explained how he P P introduced himself to the defendant as a person with very serious problem Q of alcohol and drugs. Mr Papaleo said as he could not show visible Q symptoms of drug taking such as marks left from injecting drugs he told R R the defendant he drunk methamphetamine. Mr Papaleo concluded the S answer by saying that on the 3 June Jozef Drlicka offered him to smoke S marijuana from his pipe. Quoting Bill Clinton Mr Papaleo said he took a T T puff but did not inhale. U U V V  - 72 - A A B B 256. Later in cross-examination when Mr Ross put to Mr Papaleo C he had been smoking marijuana almost every day for five years Mr C Papaleo replied absolutely not and disagreed that he was under the D D influence of any dangerous drugs when filming any of the meetings with E the defendant. E F 257. I accept the evidence of Mr Papaleo that he posed as a F corrupt journalist with serious drug and alcohol problems in order to try G G investigate financial crime. I accept his evidence that he never took drugs. H H Exaggeration of evidence I I 258. I have also considered the submission of Mr Ross that Mr J J Papaleo exaggerated his evidence when saying that a member of the K K public gallery behaved aggressively towards him (see paragraph 9(6) of L the written submission of Mr Ross). L M 259. This occurred shortly before lunch on the first day Mr M Papaleo gave evidence. Mr Papaleo asked to go to the washroom. When N N he returned Mr Papaleo told the court that when leaving for the washroom O he was approached by a man who made contact with him very O aggressively for 10 seconds. This made Mr Papaleo feel very intimidated. P P I stopped Mr Papaleo from continuing and said that no doubt the police Q will make appropriate enquiries. The case was then adjourned for lunch. Q R R 260. Mr Ross cross-examined Mr Papaleo about this incident S asking how the man behaved aggressively towards him. Mr Papaleo S replied that he stared at him in a very aggressive manner for more than 10 T T seconds. Asked if he knew this person was the Deputy Head of the U U V V  - 73 - A A B B Slovakian Diplomatic Mission to China based in Beijing Mr Papaleo C replied, “I had no idea who was that man. I assumed that he was, by the C way he look at me and by his aggressive behaviour, I was assuming he D D was related with the defendant. Now that I know who he was, I better E understand why.” Mr Ross then asked Mr Papaleo whether he was trying E to give the impression that the Slovakian Government is involved in F F money laundering. Mr Papaleo replied, “No, I am not trying to give an G impression to anyone about anything.” G H 261. I reject the submission that Mr Papaleo was exaggerating his H evidence. Mr Papaleo very properly mentioned this incident to court I I before continuing with his evidence. This incident does not cause me to J doubt Mr Papaleo’s credibility or reliability. J K K 262. In his oral submission Mr Ross submits the evidence of Mr L Papaleo is unreliable because he was unable to say how long he had L known Jozef Drlicka. In cross-examination when Mr Ross asked Mr M M Papaleo how long he had known Jozef Drlicka Mr Papaleo replied he was N not sure probably three years, maybe two and a half years. When Mr N Ross suggested he had known Jozef Drlicka for five years Mr Papaleo O O replied he did not know but that he had known him for some time before P he was introduced to the defendant. P Q Q 263. It is not at all surprising someone cannot remember exactly R how long they have known someone. This does not cause me doubt Mr R Papaleo’s reliability. Nor does the fact Mr Papaleo may have got the S S definition of money laundering wrong as submitted by Mr Ross at T paragraph 9(7) of his written submission. T U U V V  - 74 - A A B B 264. Notwithstanding a probing cross-examination conducted C over three days I find Mr Papaleo to be a credible and reliable witness, C who gave cogent and compelling evidence. Having carefully considered D D all the evidence I find as a fact, inter alia, the following: E E (a) Mr Papaleo was a freelance journalist who was interested F in investigating financial crime; F G G (b) Mr Papaleo posed as a corrupt journalist who had serious H drug and alcohol problems so he could make contact with H the underworld in Bratislava and Prague in order to “fish” I I for a good story; J J (c) posing in this way Mr Papaleo met the defendant through K K the introduction of Jozef Drlicka; L L (d) prior to the first meeting with the defendant on the 10 M May 2013 in the Goblin pub in Bratislava Jozef Drlicka M told Mr Papaleo that he had a Slovakian friend working N N in Hong Kong who needed urgent help in order to do his O business in Hong Kong; O P P (e) Jozef Drlicka said the business was illegal but not Q criminal in that it did not involve guns or drugs; Q R (f) Mr Papaleo secretly recorded all the meetings with the R defendant; S S T T U U V V  - 75 - A A B B (g) Mr Papaleo was asked to go to Hong Kong to incorporate C a company and open a related bank account for the C company; D D (h) after incorporating the companies and opening the bank E E accounts the control of the companies and the bank F accounts would be given to the defendant; F G G (i) after Mr Papaleo handed over to the defendant control of H the companies and the bank accounts the defendant H would pay Mr Papaleo a €5,000 reward; I I (j) the defendant paid all the expenses of going to Hong J J Kong and incorporating the companies; K K (k) Mr Papaleo and the defendant went to Hong Kong both L L arriving in Hong Kong at different times on the 14 May M 2013; M N N (l) in Hong Kong the defendant instructed Mr Papaleo to O incorporate two companies giving him the names of the O two companies East Ray (HK) Ltd and Vindex (HK) Ltd; P P (m) the defendant instructed Mr Papaleo to go to Acorn for Q Q assistance in incorporating the two companies and to ask R for bank introduction telling Mr Papaleo what to say R about the business of the companies and to use the S S Standard Charted Bank and not HSBC; T T U U V V  - 76 - A A B B (n) East Ray (HK) Ltd and Vindex (HK) Ltd were C incorporated on the 15 May 2013; C D (o) the defendant then instructed Mr Papaleo to open bank D accounts for these two companies; E E F (p) Mr Papaleo went to various banks but did not open any F accounts giving various excuses to the defendant why G G accounts could not be opened including making up the H bank required proof of business; H I (q) Mr Papaleo returned to Slovakia where he was asked by I both the defendant and Jozef Drlicka to prepare the proof J J of business supposedly requested by the bank; K K (r) the defendant instructed Mr Papaleo and Jozef Drlicka L L how to falsify the documents; and M M (s) Mr Papaleo prepared four or five letters from companies N N who did not know of his existence saying they had O business transactions with him. O P Why was Mr Papaleo asked to incorporate East Ray (HK) Ltd and Vindex P (HK) Ltd and open related bank accounts? Q Q R 265. Having carefully considered all the evidence and R submissions I am satisfied so I am sure the only inference to draw is that S S Mr Papaleo was asked to go to Hong Kong and incorporate East Ray (HK) T Ltd and Vindex (HK) Ltd and open related bank accounts so that: T U U V V  - 77 - A A B B (1) the true holder and user of the bank accounts would be C unknown; and C D (2) the subsequent use of the bank accounts could not be D traced to the defendant. E E F 266. I am satisfied so I am sure the only inference to draw is that F the disguising of the true holder and user of the bank accounts was G G because the bank accounts would be used to launder proceeds of an H indictable offence. H I 267. I find inherently improbable that if the business of the I companies and the use of the bank accounts was for legal business that J J Mr Papaleo would at some considerable cost have been required to come K K to Hong Kong to incorporate the companies and open the bank accounts, L in particular considering that the defendant was not only in Hong Kong at L the very same time he also had experience in Hong Kong of incorporating M M a company and opening a bank account for that company. The defendant N could therefore have quite easily incorporated the companies and opened N the bank accounts himself without any involvement of Mr Papaleo. O O Inciting Mr Papaleo to deal with property P P Q 268. By asking Mr Papaleo to go to Hong Kong and incorporate Q the two companies and open the bank accounts I am satisfied so I am sure R R that the defendant incited Mr Papaleo to deal with property, Mr Papaleo S knowing or having reasonable grounds to believe that the property, in S whole or in part, directly or indirectly represented the proceeds of an T T indictable offence. U U V V  - 78 - A A B B 269. Dealing in relation to property is defined in section 2 of the C Organized and Serious Crimes Ordinance and includes: C D (b) concealing or disguising the property (whether by concealing or D disguising its nature, source, location, disposition, movement or E E ownership or any right with respect to it or otherwise). F F 270. I am satisfied so I am sure that opening bank accounts on G behalf of someone else facilitates money laundering by disguising the G actual holder and user of the bank accounts and thereby the true owner of H H the monies which would be passing through the accounts. I am satisfied I so I am sure that by asking Mr Papaleo to incorporate the two companies I and open the company bank accounts, the control of which were to be J J given to the defendant, the defendant incited Mr Papaleo to deal with K property. K L L Knowing or having reasonable grounds to believe M M 271. The mens rea of dealing has two parts “know” or “having N reasonable grounds to believe”. The prosecution submit Mr Papaleo had N actual knowledge and in the alternative that there existed reasonable O O grounds for Mr Papaleo to believe the monies which would be passing P through the accounts in whole or in part, directly or indirectly, P represented the proceeds of an indictable offence. Q Q R Knowledge R S S 272. Mr Papaleo having been told the business was illegal but not T criminal I am satisfied so I am sure that Mr Papaleo knew that the bank T accounts would be used to launder proceeds of an indictable offence. U U V V  - 79 - A A B B Reasonable grounds to believe C C 273. In HKSAR v Shing Siu Ming & Others [1999] 2 HKC 818, a D case under the former Drug Trafficking (Recovery of Proceeds) D Ordinance, Chapter 405, the Court of Appeal considered the expression E E “having reasonable grounds to believe”. The court said, F F “This phrase, we are satisfied, contains subjective and objective G elements. In our view it requires proof that there were grounds G that a commonsense, right-thinking member of the community H H would consider were sufficient to lead a person to believe that I the person being assisted was a drug trafficker or had benefited I there from. This is the objective element. It must also be J proved that those grounds were known to the defendant. That is J the subjective element.” K K 274. On appeal to the Court of Final Appeal in Seng Yuet Fong v L L HKSAR [1999] 2 HKC 833 Mr Justice Litton giving the judgment of the M court said, M N N “To convict, the jury had to find that the accused had grounds for believing; and there was the additional requirement that the O O grounds must be reasonable: That is, that anyone looking at P those grounds objectively would so believe.” P Q 275. The objective and subjective elements were considered in Q HKSAR v Pang Hung Fai CACC 34/2012 where the court held that the R R meaning of having reasonable grounds to believe as set out in Shing Siu S Ming was correct. The court went on to say that the order in which the S T two stage test has come to be applied did not unfairly prejudice a T defendant however the more logical approach was first to ask the U U V V  - 80 - A A B B question: what were the facts known to the defendant and the objective C factual circumstances in which he found himself and of which he was C aware at the time at which he dealt with the property which is the subject D D of the charge? The second question to ask then is: do those facts and E circumstances provide reasonable grounds to believe that that property in E whole or in part represented the proceeds of an indictable offence? F F 276. I am satisfied so I am sure that being asked to go to Hong G G Kong to set up two companies and then open bank accounts for those H companies for which he was to be paid a reward of €5,000 upon handing H over control of the companies and the bank accounts to the defendant, Mr I I Papaleo had reasonable grounds to believe that the bank accounts would J J be used to launder proceeds of an indictable offence. K K 277. As the Court of Appeal observed in HKSAR v Wong Chor L Wo & another CACC 314/2006 at para 108: L M “In the normal course of events, if a man allows another person M to use his bank accounts to deposit and withdraw funds, in the N N absence of evidence to the contrary, the inevitable inference will O arise that the holder of the bank account has reasonable grounds O to believe that the funds passing through the account represent P the proceeds of an indictable offence.” P Q Q Intending or believing that if Mr Papaleo so acted Mr Papaleo shall or R will do so with the fault required for the offence R S 278. The defendant having instructed Mr Papaleo to set up the S companies and open the bank accounts for which the defendant would T T pay Mr Papaleo €5,000 upon control of the companies and bank accounts U U V V  - 81 - A A B B being handed over to him, I am satisfied so I am sure that the defendant C incited Mr Papaleo to deal with property intending Mr Papaleo to act as C incited with Mr Papaleo knowing or having reasonable grounds to believe D D that the monies to pass through the accounts, in whole or in part, directly E or indirectly represented the proceeds of an indictable offence. E F 279. I have carefully considered everything said by Mr Ross both F individually and collectively. Nothing said by Mr Ross causes me to G G doubt the findings I have made. H H 280. I am satisfied so I am sure there are no material and I I significant discrepancies, improbabilities or omissions in the evidence, J which cause me to doubt the findings I have made. I am satisfied so I am J sure the prosecution have proved all the elements of the charge beyond K K reasonable doubt. The defendant is convicted as charged. L L M M N N O O (D. J. DUFTON) P District Judge P Q Q R R S S T T U U V V A A B B DCCC 54/2014 C IN THE DISTRICT COURT OF THE C HONG KONG SPECIAL ADMINISTRATIVE REGION D CRIMINAL CASE NO. 54 OF 2014 D ____________ E E HKSAR F v F JARIABKA JURAJ G G ____________ H H Before: HH Judge Dufton Date: 14 May 2014 I I Present: Mr Derek Wong, SPP, of the Department of Justice, for HKSAR J J Mr Phillip Ross instructed by Betty Chan & Co, for the defendant K K Offence: Incitement to deal with property known or believed to represent proceeds of an indictable offence (煽惑處理已知道 L L 或相信為代表從可公訴罪行的得益的財產) M M RULING N N 1. The defendant pleads not guilty to one charge of incitement to deal O O with property known or believed to represent the proceeds of an P indictable offence. The prosecution case principally relies on a series of P meetings between the defendant and Mr Papaleo Antonio Aldo, an Italian Q Q journalist living in Slovakia. The initial meeting was set up in Slovakia R on the 10 May 2013 by an informant of Mr Papaleo with further meetings R taking place in Hong Kong. In summary the prosecution allege that at S S these meetings the defendant incited Mr Papaleo as particularised in the T charge. T U U V V  - 83 - A A B B 2. Mr Papaleo secretly recorded the meetings with a pinhole camera. C The prosecution will call Mr Papaleo to give evidence and produce the C tapes of five meetings. Although not objecting to the admissibility of the D D tapes Mr Ross does object to the admissibility of the transcripts of three E of the tapes. E F 3. In summary the basis of this objection is that there are a number of F passages in three of the tapes which have not been translated. Without a G G full translation Mr Ross submits the transcripts are inadmissible. Further H the court being deprived of knowing everything that was said at the H meetings the production of partial transcripts is unfair. I I J 4. The language used by the defendant and Mr Papaleo was English. J Mr Wong says that 95% of the first meeting was in English and almost all K K of the remaining meetings were in English. The passages which are not L translated are in the main referred to in the transcripts as “non-English L spoken”. There are also some passages in Chinese and Italian which have M M also not been translated. N N 5. The parties have agreed that in the first meeting there are 72 “non- O O English spoken” passages and two Italian passages which are not P translated. 61 of the “non-English” passages occur during the meeting of P which 55 are a three-way conversation in Slovak between the defendant, Q Q Mr Papaleo and his informant. The other six are by passers-by. The R other “non-English” passages are either before or after the meeting. One R of the two Italian conversations was during the meeting when Mr Papaleo S S answered his telephone. The other Italian passage is before the meeting T when Mr Papaleo went to the toilet. T U U V V  - 84 - A A B B 6. In the fourth meeting there are 9 “non-English spoken” passages. C Five passages are spoken by the defendant and two by a male called C Jakub Planka (alleged to be the accomplice of the defendant). The D D remaining two passages are by passers-by. In the fifth meeting there are E 2 Chinese passages spoken by a taxi driver prior to the meeting and 5 E passages between the defendant and Jakub Planka during the meeting. F F There is also one Italian passage spoken by Mr Papaleo after the meeting. G G 7. The prosecution having been unable to transcribe what was said in H Slovakian, there apparently being nobody in Hong Kong who does such H translation service, rely only on what was said in English between Mr I I Papaleo and the defendant. J J 8. Mr Ross relies on the general principle that all documents to be K K admissible must be in a language the court is able to understand. This L submission with respect misunderstands the purpose of a transcript. The L use of a transcript is only an aid to the understanding of the recording and M M that the recording is the evidence not the transcript. N N 9. I have considered whether there is any unfairness to the defendant O O arising from the absence of a full transcript of these three meetings. I am P satisfied there is no unfairness. The majority of the conversations that P have not been transcribed are spoken by or to the defendant in Slovakian. Q Q 10. Subject to the parties agreeing the accuracy of the English R R transcripts I therefore rule the prosecution may produce at trial the S transcripts as an aid to the understanding of the recordings. If the S defendant wishes to transcribe those parts in Slovakian he is free to do so T T U U V V  - 85 - A A B B and make what use of them he wishes. If time is required to prepare such C transcripts I will allow a reasonable time to do so. C D 11. Mr Ross also submits the charge is duplicitous. In summary the D basis of this submission is that the offence of incitement is not a E E continuous offence. Referring to the date of the charge which covers a F period of just over one month and to the prosecution opening Mr Ross F submits different incitements are alleged. Further submission is made G G that by virtue of section 4(4) of the Criminal Jurisdiction Ordinance, H Chapter 461 the first meeting being a separate incitement and taking H place in Slovakia is not indictable in Hong Kong. I I J 12. I do not agree the charge is duplicitous. Duplicity is a matter of J form and not a matter relating to the evidence called in support of the K K charge (see R v Greenfield (1973) 57 Cr App R 849). The charge does L not allege the commission of more than one offence. Further in my view L the opening clearly alleges a continuous course of conduct which could M M fairly be regarded as forming part of the same criminal enterprise. N N 13. I am also of the view that the Common Law position that O O incitement outside the jurisdiction to do something within the jurisdiction P is indictable in Hong Kong is not affected by the Criminal Jurisdiction P Ordinance. Q Q R R (D. J. DUFTON) District Judge S S T T U U V V