DCCC492/2024 HKSAR v. HUNG KAR YAN KARIN
DCCC 492/2024
[2026] HKDC 407
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CRIMINAL CASE NO 492 OF 2024
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HKSAR
v
HUNG KAR YAN KARIN 孔嘉殷
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Before:
His Honour Judge Tam in Court
Date:
4 March 2026
Present:
Mr Marray John,Counselonfiat,for HKSAR
MrWalsh Wayne Patrick, SC, leading Mr Tam Yat Fung Fergus, instructed by Messrs Lee Law Firm, for the defendant
Offences:
[1] – [6] Dealing with property known or believed to represent proceeds of an indictable offence （處理已知道或相信為代表從可公訴罪行的得益的財產）
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REASONS FOR VERDICT
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1. The defendant is charged before me with 6 charges of Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.
2. Particulars are that the defendant, between A and B, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of C Hong Kong currency in account numbered D held in the name of the defendant with E, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.
3. For Charge 1, A is 4 September 2010; B is 26 August 2017; C is $30,154,256.15; D is 384-210183-888; E is Hang Seng Bank Limited.
4. For Charge 2, A is 9 August 2011; B is 21 August 2017; C is $10,859,558.77; D is 384-210183-001; E is Hang Seng Bank Limited.
5. For Charge 3, A is 25 March 2011; B is 29 April 2017; C is $1,317,800.18; D is 384-242806-668; E is Hang Seng Bank Limited.
6. For Charge 4, A is 6 September 2010; B is 21 August 2017; C is $1,447,109.80; D is 012-7261016181-0; E is Bank of China (Hong Kong) Limited.
7. For Charge 5, A is 17 April 2013; B is 18 August 2014; C is $919,380.00; D is 432241-200; E is OCBC Wing Hang Bank Limited.
8. For Charge 6, A is 2 August 2010; B is 15 August 2017; C is $3,411,186.71; D is 205-219595-001; E is Hang Seng Bank Limited.
9. Defendant pleaded not guilty to the charges rendering a trial necessary.
Legal Principles
10. It is unnecessary for the Prosecution to prove as an element of the offence under s 25(1) that the proceeds had been dealt with were in fact the proceeds of an indictable offence. The question was whether the defendant knew or had reasonable grounds to believe (HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279). In HKSAR v Harjani (2019) 22 HKCFAR 446, the meaning of having reasonable grounds to believe was set out in headnotes (1) to (7): -
(1) The test propounded in Seng Yuet Fong v HKSAR correctly represented the law relating to the meaning of "having reasonable grounds to believe" in s.25(1) of OSCO. However, in the interests of clarity, the test was reformulated as follows:
(a) What facts or circumstances, including those personal to the defendant, were known to him that might have affected his belief as to whether the property was tainted? Where the defendant gave evidence of facts and matters that affected his belief about the nature of the property, the court had to decide whether he was, or might be, telling the truth about the existence of these facts and matters;
(b) Would any reasonable person who shared the defendant's knowledge be bound to believe that the property was tainted (the Question)? Where the court found that the defendant was, or might have been, telling the truth about the existence of facts and matters that he claimed affected his belief, the court must take those facts and matters into account when answering the Question; and
(c) If the answer to question (b) was "yes", the defendant was guilty. If it was "no", the defendant was not guilty (HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778, HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279, Seng Yuet Fong v HKSAR [1999] 2 HKC 833 applied). (See paras.25-28.)
(2) Where the defendant did not give or adduce evidence, the court had first to find what relevant facts or circumstances were known to the defendant and then answer the Question. If "yes", the defendant would be convicted, and likely sentenced on the basis that he must also have believed that the property was tainted. (See para.29.)
Relevance of D's actual belief in determining whether statutory test satisfied
(3) Where the defendant gave evidence that he did not believe the property was tainted, in answering the Question, the court must give due consideration to the evidence given by him as to what he believed and why. It was the facts and circumstances that the defendant asserted led him to a particular belief or perception that were significant rather than the subjective belief or perception itself. The court had to consider two interrelated questions: (a) was the defendant telling the truth when he said that he did not believe that the property was tainted; and (b) could a reasonable person in the defendant's position have failed to believe that the property was tainted? (See paras.27, 30, 41-42, 49.)
(4) Normally, the court would give the same answer to each question. However, a rare case might arise where the court concluded that any reasonable person in the defendant's position would have believed that the property was tainted but nonetheless accepted the defendant's evidence that he did not have this belief. This was only likely in circumstances where it was apparent that the defendant lacked the reasoning abilities of a normal person. In such circumstances, D should be convicted but his belief might well be a mitigating factor when he came to be sentenced. (See paras.31-33.)
(5) The court had to weigh the matters of which the defendant had personal knowledge, which would incline a reasonable person to believe that the transaction was clean, against the particulars of the impugned transaction itself, which would incline a reasonable man to believe that the transaction was tainted. The defendant's perception would not necessarily carry any weight, let alone determinative weight. If, on balancing all these matters any reasonable person would be bound to conclude that the transaction was tainted, the defendant would properly be convicted. If, on balance, a reasonable man might conclude that the transaction was clean, an acquittal must follow (HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778, HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279, Seng Yuet Fong v HKSAR [1999] 2 HKC 833, R v Lane [2018] 1 WLR 3647 applied; HKSAR v Yan Suiling (2012) 15 HKCFAR 146, HKSAR v Li Kwok Cheung George (2014) 17 HKCFAR 319 considered). (See paras.55, 58-59.)
Relevance of "wilful blindness" in determining whether statutory test satisfied
(6) In principle, the doctrine of "wilful blindness" might be applied as a basis from which to infer actual knowledge that the property was tainted, provided: (a) it was proved that the property was in fact tainted, since one could not know something to be so unless it was in fact so; (b) it was remembered that it was actual knowledge that must be proved; (c) it was remembered that it was not a question of whether the defendant should have made inquiries or whether the reasonable man would have made inquiries, although the latter issue might be relevant, though not conclusive, in deciding whether the defendant deliberately refrained from making inquiries; and (d) knowledge was the only reasonable inference to be drawn from the fact of wilful blindness and the other evidence in the case (The Queen v Crabbe (1985) 156 CLR 464, Pereira v Director of Public Prosecutions (1988) 82 ALR 217 applied). (See para.70.)
(7) However, given the statutory alternative basis of whether the defendant had "reasonable grounds to believe", the doctrine of "wilful blindness" would normally not be necessary or helpful to establish knowledge. Where a person had been "wilfully blind" to the existence of a fact or of particular circumstances, he would almost always have had reasonable grounds to believe that the fact or circumstances in question existed. (See para.71.)
Prosecution case in brief
11. The substantial number of transactions and large amounts of funds passing through the subject bank accounts are disproportionate and inconsistent with the defendant’s reported income. Defendant was the sole signatory to the accounts and had control of the accounts. Defendant dealt with the monies that passed through the accounts. Frequently the deposits and withdrawals were in cash, the cash transactions were relatively large and in close proximity of time. She purchased two properties in this period. There is nothing to suggest that the defendant or her husband had accumulated wealth in previous years. Indeed the defendant was a social welfare recipient between 1 December 2003 and 28 February 2009. Her husband did not file any tax returns. The tax returns of the defendant do not record profit of more than one million dollars in any year and between 2020/2011 and 2014/2015 can be described as modest profits and even a loss in 2011/2012. Defendant dealt with the funds transacted under the accounts whilst knowing or having reasonable grounds for believing that such funds in whole or in part directly or indirectly represented proceeds of an indictable offence.
Defence case in brief
12. Defendant (DW1) and her husband (DW3) and others gave evidence in support of the defence case. The defence case is that the sources of funds came from DW3’s businesses and his wealthy family in Pakistan. Because he was a Form 8 recognizance holder that could not hold an ATM card, he asked his wife the defendant for use of her A/Cs 1, 2 and 3.
Issues in the case
13. The issue in the case is squarely the credibility and reliability of the evidence of DW1 (the defendant) and DW3 her husband Safder Tehseen, bearing in mind at all times it is for the prosecution to prove their case beyond a reasonable doubt.
Procedural history
14. Prosecution called a total of 6 witnesses. They are PW1 Li Kam Man (CSSA Officer) , PW2 WSIP Luk Wing Linda (One-time OC Case), PW3 PC 25970 (Re-arresting and Caution Officer), PW4 DPC 6723 (Arresting, cautioning and interviewing officer), PW5 Sgt 4024 (Exhibit, Sketching Officer), and PW6 Chau Wing Ho (Treasury Accountant).
15. After close of the prosecution case, defence made no half-time submissions. After considering the relevant evidence, I ruled there was a prima-facie case on all charges.
16. Defendant (DW1) elected to give evidence and called 5 other witnesses: DW2 Jerome Michael McDonagh (Defence expert), DW3 Safder Tehseen (defendant’s husband), DW4 Javed Iqbal (Local businessman), DW5 Muhammad Ali Awan (Retired protocol officer), DW6 Hussain Niaz (one-time business partner of DW3). I will assess defence witnesses’ evidence objectively as I have with the evidence of the other witnesses, bearing in mind the burden of proof always rested with the prosecution.
17. After close of the defence case, parties made written submissions supplemented by oral submissions. I have duly considered them but shall not summarize them here.
Summary of prosecution evidence
18. A/C1 relates to Charge 1 etc.
19. The bulk of the prosecution case is contained in the set of Admitted Facts P41 and in PW6’s Treasury Accountant Report.
20. As the highlight of this case, as in almost all money laundering cases, lies in the defence case, I shall not summarize the prosecution evidence here but will concentrate on a summary of the salient defence evidence.
Summary of salient defence evidence
DW1 Defendant
21. Defendant was born in about 1984, educated to F7 in Hong Kong at the age of 18 (about 2002). She then worked as a clerk in Kwai Chung. She had a relationship with Atta Mohammed of Pakistan. She converted to Islam at age of 19.
22. She gave birth to daughter when she was 19 or 20 (about 2003-2004). She had a boy 3 years after that. She was living with Atta and children. Relationship with Atta turned bad. She was 23 (about 2007). She took daughter and son with her and left Atta.
23. There was a time she lived on CSSA but then social worker advised her to hunt for work. She became a clerk in Kwun Tong for 2 to 3 months before taking a job as a tutor in a Lok Fu tutorial centre. Social worker found a family home for the children while defendant paid for their expenses.
24. She is a practising Muslim. She was converted in the Mosque in Oi Kwan Road, Wanchai. She believes in Allah and practises Muharram and Ramadan. She learned to speak Urdu and Arabic. She could understand 85% of Urdu.
25. In July 2008, she met her eventual husband Safder Tehseen (DW3), from Punjabi Pakistan, who helped her to set up her own tutorial centre. So FEC was set up in 2009-2010.
26. There was a caste system in Pakistan. Safder’s family belonged to the top caste. Her understanding was Safder was born in 1982, came to Hong Kong when he was 15.
27. Shortly after she met Safder, she told him she had other children. After they formally married in 2012, they lived together, and with her children from former relationship.
28. With Safder, she had two other boys born respectively in 2016 (now 9) and 2018 (now 7).
29. Safder left Hong Kong in 2022 for Pakistan as a result of deportation order. The two boys are now with their father in Dubai attending school.
30. Safder is a Muslim religious man.
31. In Islam, there is a religious way to treat different members of the family including members of the extended family. If the wife works, she cannot use her earnings for family expenses. Husband makes money to support the family. Husband will not discuss his business dealings with wife. Defendant could only get information from Safder if he told her or she overheard it from a phone conversation. Safter would be angry if defendant asked him about it.
32. In the private tuition business she engaged in, she taught P1 to F4 students.
33. Safder has one elder brother Sajid Mehmood (previously in Hong Kong, now in Pakistan) and other siblings. Safder’s late father is Mohammed Khan who returned to Pakistan from Hong Kong in 2008 and passed away in 2014 (sic).
34. Sajid and Safder came to Hong Kong to join their late father.
35. Defendant met Safder’s family members in Pakistan many times.
36. At some point in time, Safder suggested she open her own tutorial centre. He helped her a lot in opening Fulfil Tutorial Centre (FEC) which she wholly owned. When there were more students, FEC moved to Chinachem 333 Plaza. FEC had 3 permanent teachers and some part-time teachers who consisted of fresh graduates, her own relatives including her mother.
37. Parents of students mostly came from the Mainland not many of them had cheque books. Most parents paid by cash others by cheque. Once she received cash, she would hand-write receipt and made her own record of who had paid.
38. She regarded the FEC income as her own money for her use. She put it in her accounts. Sometimes she deposited the money into A/C1 or its associated current account A/C2. Cheques would only be deposited into A/C6 because they were drawn in the company name.
39. She paid her permanent teachers by cheque and her part-time teachers by cash.
40. FEC closed in 2018 when she delivered her youngest boy.
41. Safder came to Hong Kong in 1997 joining his father and Sajid who were already permanent residents. Before 2005, Safder was entitled to apply for permanent residence. However, because of a criminal case in 2004, it affected his application. Safder became a Form 8 recognizance holder in 2005.
42. Safder’s family is quite well-off compared with normal people in Pakistan. They have a big villa in a place called “Sang” in Chakwal with 22 bedrooms and 14 toilets. Safder’s siblings have their own house nearby. They have inherited land from great-generations. Land included agricultural and commercial. She was told there were 30-40 ground floor shops in Chakwal and Islamabad. Their cars in Pakistan included Land Cruiser and Lexus.
43. Between 2012 (her formal marriage to Safder) and 2017, she had been to Pakistan 3 to 4 times.
44. Safder bought her things, took her to fine dining, always drove nice cars. His lifestyle was very attractive. He got everything he wanted. He wore nice clothes and good watches. Safder never asked her for her money nor did she give him her money.
45. He was the only one supporting their family: household expenses, mortgage, bills, food, kids’ school fees. Safder gave her “cash in hand”. Money from Pakistan was also sent to her account(s).
46. As far as she knew, money came from two sources. First, Safder had some business with his friends. Second, Sajid who was always travelling between Hong Kong and Pakistan brought cash to Hong Kong. Safder being the youngest son has privilege in Pakistan. Everyone gave him money.
47. Sometimes, Sajid gave cash directly to her. Other times, Sajid gave to Safder, and Safder gave to her.
48. Sometimes she would ask Safder for cash, other times he would give without her asking.
49. Between 2012 and 2014, she bought Lai Chi Kok residential property. Purchase price of the uncompleted unit was $6.5M. There was a mortgage. Safder gave down payment of $2M cash to defendant from his business. Down payment was made in 2012. Possession was taken in 2014. Before taking possession, they lived in Bayview Hotel (service apartment) in Ting Kau.
50. Safder paid for the mortgage instalments and credit card bills. After the first boy was born in 2016, Safder wanted a better living environment. They then bought the Tai Po house (where the defendant was arrested in 2017) for $19.8M. Defendant sold the Lai Chi Kok property and used some of the proceeds to pay for the Tai Po property. Down payment for the house was about $10M, the balance was under mortgage. Safder provided the funds and hired two domestic helpers to take care of the house.
51. Whilst living in Tai Po house, the second son was born in 2018. In 2021, the family moved from Tai Po house (1,100 square feet) to rent Tai Koon Place in Tai Po (more than 4,000 square feet). Safder hired one driver too. They kept Tai Po house and let it out.
52. While living in Tai Po, Safder drove Benz GLE; she drove Menz C200. Safder also had a Maserati SUV and a limited edition Range Rover before he was deported in 2022.
53. In Islamic culture, all businesses belonged to Sajid and Safder since their father’s death.
54. In Pakistan, the extended family owned agricultural land which grew and sold crops; it also owned shops to rent out.
55. In Hong Kong, Safder was involved in businesses. In the beginning, Safder had small business of selling kitchen ware. Later, he took the defendant to a garage/showroom in Yuen Long which sold cars and car parts and did car repairing, a business he partnered with one Pakistani Mohammed Yasir (John).
56. In 2012, Safder told her he started restaurant business with friends. Defendant visited two restaurants selling Turkish food. His business partner was Hussain Niaz (DW6).
57. Safder also had electronic solar panel business with Mainland China. This the defendant heard from his calls.
58. Dealing with the different accounts, A/C1 (HSB integrated savings) was opened on 29 April 2010. That time, she already had BOC account (A/C4). She opened A/C1 because of HSB gift promotion. She was already together with Safder but not yet married.
59. Safder did not have bank account. He did not have HKID card because he was a Form 8 holder since 2005 subject to deportation. She deposited money from her FEC business and also from money given to her by Safder’s family. She gave her ATM card to Safder so he could deposit money in and operate A/C1. This was so even before her formal marriage to Safder in 2012. Sometimes, Safder used A/C1 for his business use.
60. To the defendant, Safder was a responsible and amusing man since she met him in 2008. Safder planned for the future and they got married in 2012.
61. Looking at P36/2634 ie top 10 counterparties of A/C1, the defendant could recognize some of them as Safder’s business partners: Melwani, Muhammad Yasir (John), Taj International Traders.
62. In 2016, Safder planned to buy house in Tai Po, thus accounting for large influx of money into A/C1.
63. Only some of the times, Safder would tell her monies would be coming in. For the large cash deposits, some may be from his businesses, others were repayments from loans extended by Safder to friends. In the beginning, defendant did ask. But that did not go well with Safder because of Muslim culture.
64. In the photos at D8, defendant explained how she obtained from an ATM machine some of the names of account holders (though redacted) whose account numbers appeared as unknown counterparties in her subject accounts.
65. She identified some of them but not others. Those which she identified were D8/239 Hussain Niaz (DW6), D8/240 Alex Leung (designed FEC leaflets), D8/241 KLine Air Travel Limited, D8/242 Pannu Joe (paralegal of Francis Kong & Co), D8/243 Abdul Malik (Muslim), D8/244 ChinaChem Agency (FEC Landlord), D8/246 Tsui H S (part-time teacher FEC), D8/249 Tam C K (looks like part-time teacher FEC), D8/250 Li Tin Wai (cousin worked in FEC), D8/251 Dong Yu (part-time teacher FEC).
66. Defendant then went through D1/1-4 page by page (which were replicas of some pages of P36 with remarks in red added, where applicable, of redacted names copied from D8). The defendant sought to identify, where possible, who the various counterparties were of her A/C1.
67. The defendant identified A/C2 as the current account of her integrated account A/C1. On P36/2646, at para 50.4, she identified a transfer depositor of $213,000 on 7 January 2013 one Hussain Iltaf as a friend of Safder. She believed the money was Safder’s profit of their business. The timing fit the payment of initial deposit of the Lai Chi Kok property. As regards Ricacorp Properties Limited, this was the property agent she used for buying and selling of Lai Chi Kok property.
68. From D1/5-6, the defendant then identified, where she could, of the counterparties of her A/C2. She also said it was quite common to transfer funds from A/C1 to A/C2. She drew no distinction between A/C1 and A/C2 because they were both accounts of the same integrated account. She used A/C2 to buy books for FEC and the children.
69. On A/C3, on looking at P36/2648, defendant said that HSB manager asked her to set it up because it would be easier to report to IRD every year; it would also be more systematic to put her salary here as income proof to make it easier to apply for credit card and mortgage in the future. She later successfully obtained mortgage on Lai Chi Kok property. After the Lai Chi Kok property, there was not much activity in the account.
70. On looking at P36/2786 for A/C3, from items 169-184, ie from 7 October to 12 December 2016, defendant explained that the transactions were for the purpose of paying for the Tai Po house. Sources of funds were from Safder’s family and may be his businesses. Safder would not tell her so clearly.
71. Defendant said that all family members had her account numbers. Safder used her A/C1, A/C2, A/C3 and BOC A/C4 and has ATM cards for them. Safder seldom used her A/C6 (Fulfil integrated current). Safder did not use her Wing Hang Bank A/C5.
72. Defendant went through D1/7 to identify, where she could, the counterparties of A/C3.
73. On A/C4, this was the BOC account. This was the first account opened (on 24 February 2009) out of the 6 subject accounts. It was originally opened for receiving her salary during that time.
74. For the ATM cash deposits into A/C4 on P36/2795-2796 during July 2011 (items 40-45 and 57-62), they were either from Safder’s friends repaying debt to him or from her own source eg FEC. She added that there was a daily ATM cash deposit limit of $100,000.
75. As regards P36/2797, although she checked monthly statements of A/C4, she would not be able to tell the ins and outs of the funds between January 2012 and April 2013. Sometimes, she asked Safder but he didn’t like it. For the ATM cash deposits, it could be her own money or from Safder’s business partners. For the ATM cash withdrawals, Safder needed the money.
76. Mostly, defendant used her HSB accounts rather than BOC account (A/C4).
77. Defendant stated that she was willing to help her husband who had no bank accounts.
78. On A/C5, this was the Wing Hang Bank Savings account opened on 17 April 2013. Defendant got money from Safder to buy gold bars. Wing Hang was the only bank that sold 24K gold bars in units of tael. One had to buy in person. For some of the cash withdrawals on P36/2665, she was not sure whether it was for buying gold bars or simply a withdrawal.
79. The defendant had sold to Wing Hang some gold bars but she could not identify the transaction in P36/2810.
80. She had previously given some gold bars to Sajid. Later she stopped buying gold bars.
81. She also traded in London Gold margin with Glory Sky Precious Metals Limited (see P36/2781 re A/C2 counterparties).
82. Regarding A/C6 in name of FEC opened on 8 October 2009, this was the account primarily used by the defendant for running FEC. In relation to P36/2682-2683, paras 93.3 and 94, defendant explained that she mostly charged the parents monthly amount depending on class fees.
83. Regarding the counterparties chart on P36/2685, defendant explained the transfers from A/C1 and A/C3 may be for issuing cheques; that the cash withdrawals were for making purchases for her business; that she could not recall what the transfers to A/C1 were for; and that the transfers to A/C3 were for her salary.
84. Defendant then went through D1/10 (a replica of P36/2871 added with red remarks) and sought to identify the various counterparties to A/C6.
85. Defendant then gave evidence about the searches at the Tai Po house (including finding of some cash, jewelleries and watches which were not subject of any charge) and at FEC which are less important for trial purposes.
86. Defendant’s name in Islam is Ayesha.
87. Under cross-examination, defendant acknowledged that in her tax returns for 2012/2013, 2013/2014, 2014/2015, 2016/2017, it was declared that her spouse had no chargeable income to declare. She explained although she knew he had business, she did not know if she needed to fill in the details in Tax return for he did not have HKID card nor bank account. She disagreed she was trying to hide Safder’s income.
88. Defendant agreed she came from modest background and once collected CSSA.
89. Defendant knew a Form 8 holder was not allowed to work or conduct business (however, near the end of cross-examination, she expressed doubts about whether such a person could conduct business).
90. A few years before 2012, she and Safder had a family or religious marriage whereupon they lived together.
91. She could not remember where Safder lived when she first met him but he was living with his family in Kowloon before the two of them lived together.
92. Defendant did not know Safder’s late father’s occupation in Hong Kong nor Safder’s previous occupations.
93. Safder had previously used Sajid’s bank accounts but preferred using the defendant’s accounts.
94. Defendant was asked in detail about some large cash withdrawals she personally made at bank counter from A/C1 from February 2012 to February 2017. She gave answers such as “family use”, “cannot remember purpose”, “husband needs money to lend to others”, “near Chinese New Year”.
95. For the cash deposits to A/C1 appearing on P36/2746-2750 (September 2010 to July 2017), defendant did not know why they were mostly in neat round numbers. Sometimes, he asked Safder what they were for but she could not remember his answers.
96. In March 2012, Safer was planning to buy Lai Chi Kok property; that may be reason why there was large cash deposit of $500,000 on 27 March 2012. When Safder needed money, his family in Pakistan would give it to him.
97. Defendant could not remember the various cash deposits.
98. Defendant gave similar answers regarding cash deposits to A/C2 (P36/2780) and to A/C3 (P36/2791).
99. Regarding A/C5 (P35/2603-2607), the Wing Hang savings account for buying gold bars, defendant used it to buy one tael and 5 taels gold bars. Some of these she sold, others she gave to Sajid. The funds deposited into A/C5 came from FEC or Safder.
100. On 17 and 19 April 2013, defendant bought gold. On 20 May 2013, although she withdrew $300,000, she could not remember if she bought gold. She could not remember about the withdrawal of $25,000 on 29 May 2013 either. She could not remember the source of the $121,380 deposit on 18 August 2014 nor could she remember if she bought gold on the same day when $122,000 was withdrawn.
101. Defendant acknowledged on P36/2761 (A/C2) that there was a cheque withdrawal to Sky Precious Metals Ltd of $100,000 on 13 September 2012.
102. Defendant could not remember how much was spent to set up FEC but should be less than $100,000.
103. Defendant was asked about some of the explanations written on voucher when cash was either deposited to or withdrawn from A/C1 by reference to P36/2728A, 2730A, 2731A, 2732A, 2733A and 2734A. The answers generally did not go beyond what was written.
104. Defendant denied the prosecution’s suggestions which included she had reasonable grounds to believe property in the 6 subject accounts represented proceeds of indictable offence or that they were not obtained lawfully.
DW3 Safder Tehseen
105. DW 3 was born in 1982 in Sang Kalan, Chakwal, Pakistan. His late father is Mohammad Khan who came to Hong Kong in 1969 around age 30. After father retired, he returned to Pakistan in 2008. Father passed away in 2018.
106. When father was in Hong Kong, he worked as construction foreman and had a night job as security adviser.
107. DW3 grew up in Pakistan and came to Hong Kong in 1997. That time, father was worker in construction field. Before 1999, DW3 travelled between the two places. After study, DW3 came to Hong Kong in 1999 to live permanently. That time, he was about 18, he started working as office boy in Skyline Travel Agency in TST and stayed for less than 2 years. Then he became a security guard. He also worked together with father at a construction site.
108. In 2005, he was subject to a deportation proceedings. He applied for non-refoulement protection as a Form 8 recognizance holder. DW3 is the youngest of 4 brothers. One of his elder brothers is Sajid Mahmood who was a permanent Hong Kong resident.
109. Since 2008, Sajid has been mostly in Pakistan but still visited Hong Kong. Since father’s death, Sajid became head of family. In Pakistani culture, head of family takes all family’s decisions.
110. The family in Pakistan owns property, shops like plazas and agricultural land. Family owned 200 shops during that period 2010-2017, in Chakwal City, Hudial City and Rawalpindi City. They were leased out. The agricultural land was used for harvesting mostly cotton but also wheat. These landed property were inherited from forefathers.
111. Sajid also had solar plate shops selling electric batteries during the same period. He also traded in property.
112. The family owned about 30-35 residential houses in Pakistan some of which were rented. Some of the siblings lived separately. The Family Residence in the village of Sang Kalan has about 23 rooms. Other houses are not so big.
113. When he became a Form 8 holder in 2005, he was advised not to work. But he was not advised not to be involved in running a business.
114. In 2006, he started a small business in Sham Shui Po with two brothers Ali Hassan (later joined) and Al Taf Hussain (initially) selling second hand items. Later DW3 also did different businesses with Ali Hassan. He engaged in business of buy things (electronics, fridges, TV and VCR) in Hong Kong and sell in Pakistan, Ghana, and Afghanistan.
115. In the beginning, he sold old items. In 2009, he started selling brand new electric items from China for export.
116. Between 2006 and 2019, the business called “Hussain Tradings” was profitable. DW3 left the business in 2019. His monthly profit increased from a few thousand dollars monthly to $100,000. He received profits in cash because it was largely a cash business.
117. DW3 used to have bank accounts but they were closed after 2006. So he used Sajid’s bank account.
118. In 2010, DW3 together with Chan Wing Fat Ben started some work in construction business like repairing and renovation of houses. The company was called “Great Smart”. Profit depended on volume of work they got.
119. In 2012, DW3 started a restaurant business with Hussain Niaz (DW6). DW3 and DW6 each contributed $400,000 to start up the business. DW3’s contribution came from his electronic business and family support from Pakistan.
120. At the beginning, there was only one restaurant in Yuen Long serving Turkish and Indian food. In the second year, a second restaurant serving Chinese breakfast and Turkish and Indian lunch and dinner joined. In total, 6 restaurants had been established, though not the case that all 6 were running at the same time. The first and second restaurants were running between 2012 and 2016.
121. Four of the restaurants were named “Al Zaiqa”.
122. DW3’s monthly profit from these restaurants ranged from $100,000 to $150,000. DW3 was paid mostly in cash. DW3 sold the business in 2016. He sold because he needed money to buy Tai Po house, and profit was not the same as before. He obtained $2.1 million in cash for 2 restaurants.
123. DW3 deposited the cash profits and the sale proceeds into defendant’s account. In 2008 he got to know the defendant. After 3 to 4 months, he married her in Islam. He registered the marriage formally in 2012.
124. During 2010-2012, DW3 was also working with a friend Nadim (or Nadeem) on a government scheme to scrap old diesel vehicles. They would get a cheque from the government after 2 months payable to Nadim’s company. Nadim paid DW3 in cash his share of $6 to 7 million.
125. As for DW3’s brother Sajid, after 2008 (the year father left Hong Kong), most of the time, Sajid did not stay in Hong Kong. Sajid had property business in Pakistan. Since 2010, Sajid has been buying solar plates from China and selling them in Pakistan.
126. From 2007 to 2019, the family in Pakistan had been doing farming business of cotton crop and wheat crop. After father retired from Hong Kong in 2008, he returned to Pakistan to handle the farming business. After growing the cotton, father sold to factory boss Mohammad Javid and later to his son (DW4) for a long time.
127. DW3 received money from his family in the form of cash from Pakistan and from DW4 Javid in the form of cash cheques; from DW4 Javid because father was supplying them with cotton. The Javid DW3 was talking about was the son whose company JKN is located in Hankow Centre Hong Kong. The factory in Pakistan is Imperial Textile. DW3 referred to D18 an MOU between Imperial Textile and Khan Mohammad (DW3’s father).
128. DW3 received a total of around $12 million from DW4 Javid between 2011 and 2016.
129. DW3 also received money from Sajid and father whenever he needed money. These sums usually came in cash from Pakistan. He used some and placed some in the defendant’s HSB account(s). Since 2008, this had been going on.
130. DW3 is familiar with all 6 subject accounts. DW3 was using A/C1, A/C2 and A/C3. DW3 did not remember using BOC A/C4. DW3 did not use A/C5 and A/C6.
131. The ATM cards for A/C1 to A/C3 were kept by DW3. He used them. If defendant need to use the ATM card, she would take it from DW3.
132. DW3 deposited a lot of cash into A/C1. He made transfers among A/C1 to A/C3 from time to time.
133. Referring to the named deposits counterparties on P36/2634, para 41.5, Kilmorey Securities Ltd has money exchange function. DW3 used this Hong Kong company’s service for his business with someone in Mainland China.
134. DW3 helped someone to buy electronic goods and Hassan Tradings (with Ali Hassan) sent copper from Pakistan to sell. So $2.3 million (including cost of copper and profit) was due to him as his share.
135. Chan Mei Lin Kitty another counterparty is same as Kilmorey.
136. Mayfair Enterprises belonged to businessman Naresh with whom DW3 had business. DW3 was paid $900,000 for his share of the business (electronic goods).
137. Miss Melwani was the wife of Naresh who appeared at D7/225 BR of Mayfair Enterprises. DW3 was paid $850,000 for payment of electronic goods.
138. Vasandani J R was wife of DW3’s friend. DW3 had business with her. DW3 was paid $545,000 for payment of electronic goods.
139. Muhammad Yasir (John) owned a garage for sale and purchase of cars. DW3 did business with him of selling cars. DW3 was paid $500,100 as his share of profit.
140. So Chi Ming was not known directly. Vasandani introduced So to DW3. This payment of $500,000 to DW3 was for business of electronics.
141. Taj International Traders’ payment of $350,000 to DW3 was arranged by Vasandani for his electronics business.
142. DW3 then went through D1/1-3 (replicas of P36/2751-2753 with red remarks added) and explained the various transactions in A/C1 where he could.
143. Referring to P36/2644 (A/C2), DW3 admitted he made cash deposits; that he made transfer from A/C1 and A/C3 to A/C2.
144. Referring to P36/2646 at para 50.4 (A/C2), he identified the deposit counterparty Hussain Iltaf’s deposit of $231,000 to A/C2 as relating to his business.
145. DW3 then looked at D1/5-6 (replicas of P36/2781-2782 re A/C2 with red remarks added) to identify a number of counterparties.
146. Looking at P36/2648 (A/C3) at para 59, DW3 admitted he made cash deposits to A/C3; he also made transfers from A/C1 to A/C3; he also made cash withdrawals; he also made transfers to A/C1 and A/C2.
147. Referring to D1/7 (replica of P36/2794 re A/C3 with red remarks added), DW3 identified some of the “red” redacted names. DW3 made payments to them.
148. DW3 was arrested in connection with this case on 10 September 2017. When he was arrested he was in possession of the HSB ATM card for the integrated account A/C1 + A/C2.
149. After DW3 was deported from Hong Kong, he returned to Pakistan. He now resides in Dubai as a resident. He has set up his own company there for more than 2 years. He produced D10 his tax return in Pakistan for 2025 showing his net assets of about HK$16 million. DW3 added that some of the property listed in D10 were acquired after 2017 but he has been paying tax in Pakistan since 2013.
150. Under cross-examination, DW3 said that his leave to remain in Hong Kong was originally extended to 16 June 2005. However, on 16 March 2005, he was sentenced to 17 months’ imprisonment in the District Court for conspiracy to steal. As a result, a deportation was made against him in April 2005.
151. On 29 March 2005, DW3 made a torture claim to Immigration. Execution of deportation order was withheld pending determination. In January 2008, the claim was refused. Due to change in law, DW3 lodged a fresh claim which was again dismissed in February 2012.
152. On 22 November 2011, whilst on F8 recognizance, DW3 was fined for $5,000 for dealing with dutiable commodities.
153. On 14 June 2012, DW3 applied for leave for judicial review against the deportation order. On 19 July 2012, leave was refused. DW3 applied to Court of Appeal against decision not to grant leave for judicial review. On 6 June 2013, Court of Appeal dismissed the appeal. DW3 applied to the Court of Final Appeal against the decision of the Court of Appeal. On 10 October 2014, Court of Final Appeal refused his appeal.
154. Due to change in the law, on 7 March 2014, DW3 lodged another claim under Unified Screening mechanism. On 18 December 2018, that claim was dismissed. DW3 appealed against the refusal to Torture Claim Appeal Board.
155. Eventually DW3 left Hong Kong in September 2022. From time he began to appeal, DW3 had been on recognizance and was given a Form 8.
156. When he was given Form 8, he was told he was not permitted to take up employment. He was not told he could not do any business.
157. DW3 closed his BOC bank account in 2006/2007 because he was told he could no longer have an ATM card under his Form 8 holder status.
158. Before he was a Form 8 holder, he worked two jobs at the same time: construction worker during the day and security guard during the night. He was working to support the family. That time, he was living in an old building without lift in Tung Chau Street, Sham Shui Po.
159. DW3 was referred to the defendant’s tax returns over the years. DW3 knew that in some of them it was declared he had no income. During period he was Form 8 holder, he never declared income to IRD.
160. Since 2013, DW3 has been paying taxes in Pakistan and other places. When he was in Hong Kong doing restaurant and other businesses, the business was paying taxes. He received profits net tax.
161. In year 2003, there was an agreement between Hong Kong government and Pakistani government any person paying taxes in Pakistan doesn’t need to pay tax in Hong Kong.
162. DW3 disagreed he was not telling the truth about earning so much from businesses and about receiving so many cash deposits from his business dealings.
163. When asked about whether he has in his possession written agreements to support his business partnership with various people, DW3 had this to say. He and his wife were arrested in 2017. Bank accounts were frozen in 2018. Police investigation took 6-7 years to bring the case to court. If police had given DW3 all detailed documents in 2018, he could have contacted his partners and could have gotten the documents easily. Now when he asked them, they said Hong Kong law required them to keep records for only 7 years, so it was not easy to obtain them.
164. When DW3 was doing business, he used to keep all records at home. Although he was arrested in 2017, he was told he would not be charged when he left Hong Kong in 2022. His family left 1-2 days before his departure. As they were leaving Hong Kong, they decided to rent it out. He sent boys to clear out the house. The boys saw the bundle of documents and asked if he needed them. DW3 said he did not. By mistakes, in addition to these bundles, the boys discarded all documents including his children’s birth certificates.
165. In additional to relevant contracts, documents relating to container logistics were thrown away.
166. DW3 drew attention to the fact that not only was cash coming in during the short period of 2016 for buying house, the same was happening before 2016. DW3 also emphasized that until 2018, Hong Kong government allowed people to carry cash in and out of Hong Kong.
167. DW3 was asked if he was so rich, why did he come to Hong Kong in so humble conditions. DW3 said, “My father arrived in Hong Kong in 1969. My elder brother Sajid came to Hong Kong in 1989. My second brother … arrived in Hong Kong in 1990. I came to Hong Kong the first time in 1997. When father came in 1969, he worked round the clock; my other 2 brothers are also as hardworking. When I came to Hong Kong, I also tried to work as hard. Because I was the youngest, I was not able to be as hardworking as they were. All because of 40-50 years of hard work from 1969, we have all assets and property today. My father is a humble man. He instructed us to live the same way.”
168. DW3 disagreed that the large cash deposits into the bank account did not come from business dealings or from family in Pakistan. He disagreed that he was not the businessman as he claimed. He disagreed that much of the money coming into the account(s) did not come from legitimate sources.
169. In re-examination, DW3 said he put down $10 million including agency fee for the Tai Po house in October 2016 and the balance of $9 million was under mortgage.
170. DW3 also said the defendant hardly ever asked him about his business. He seldom discussed with her his business either. Muslim culture is such that the wife is in charge of the home and it is the husband’s job to make money and do outside work.
My considerations
171. I bear in mind the burden of proof rests on the prosecution, standard being beyond a reasonable doubt. Defence has to prove nothing least so the defendant’s innocence.
172. I will consider the charges separately: the verdict on one charge does not affect the verdict on the other charges. However, I shall be alert to the occurrences of inconsistent verdicts.
173. I bear in mind the defendant has a clear record. What that means is, as compared with someone with a criminal record, the defendant’s narratives in and out of court is more credible, and she has less propensity to have committed a criminal offence.
174. I will first of all assess the credibility and reliability of the most important witnesses in this case, namely DW1 (the defendant) and DW3 her husband.
175. In doing so, I bear firmly in mind 4 distinct features of the present case, namely (i) DW3 was a Muslim husband of the DW1; (ii) DW3 was a Form 8 recognizance holder; (iii) the relevant facts happened a long time ago; and (iv) the Pakistani culture.
DW1 (the defendant)
176. There are no doubts that a large amount of large deposits (many batches in cash) and a large amount of withdrawals had been made to and from A/C1. There are also little doubts that a large amount of large withdrawals (mainly by cheque) had been made from A/C2. It is important to remember that A/C1 and A/C2 forms part of an integrated account with A/C2 being the cheque account. It makes sense to look at them together.
177. The large number of large cash transactions no doubt trigger the suspicion of the authorities of whether the HSB integrated account in the name of DW1 had been used as an instrument of money laundering. The other 4 accounts are less visible as money laundering instruments because the overall amounts are far less over the periods involved. On their own, these 4 accounts would not have attracted the attention of the authorities.
178. It is also clear that the means of DW1, even counting her business of FEC, would not have accounted for the large number of large transactions in the HSB integrated account A/C1 and A/C2.
179. The sources of funds are therefore important, or more correctly, what DW1 thought or believed were the sources of funds.
180. The evidence of DW1 was, to her, DW3 had always been living an affluent lifestyle. To her, DW3 came from a wealthy Pakistani family. DW3 had businesses of his own in Hong Kong. However, DW3 had a problem. Since 2005, he had been a Form 8 recognizance holder. According to what DW1 understood, DW3 could not hold a bank account. This is the reason why DW1 lent her 3 to 4 accounts (AC1 to A/C4) to him for his use. In a normal case where a woman lent her accounts to her husband for use, without more, this would probably have been unacceptable in the eyes of the court. However, this case is different with the addition of the Form 8 element.
181. In a normal case, a wife would probably be expected to raise questions about large amounts going in and out of her accounts lent out to her husband for use. Here, the special feature of the Muslim culture comes in. The evidence of DW1 was she had previously asked but was met with displeasure of DW3. This is something of the Muslim culture, so she explained, where a wife does not discuss the business of the husband; that the husband makes a living, and the wife cares for the home.
182. DW1 has been trying to identify the counterparties involved with some success. She even went out of her way to try to get the redacted names of holders of bank accounts whose numbers appeared on the counterparties lists. It is clear she has done her best to identify as many counterparties as possible.
183. There are times when DW1 was not able to remember the exact source of funds and what the withdrawn cash was used for. But this has to be measured against the time that had elapsed since ie between 8 and 15 years.
184. As regards A/C5 the Wing Hang Savings account opened for the purpose of buying gold bars, although DW1 was not able to fully explain the neat rounded numbers in the bank statements, one has got to remember that the events happened more than10 years ago. One also needs to note that A/C5 is a savings account and not the Gold Passbook or Gold Statement account. It is at least possible that a neat rounded figure of cash was withdrawn to buy a lesser amount of gold equivalent.
185. All in all, I am of the view that that the evidence of DW1 is at least internally credible and reliable enough to the extent of being possibly true.
186. What is more, DW1’s evidence is largely supported by DW3’s evidence (more below).
DW3 Safder Tehseen
187. DW3 is and was the husband of DW1. When he gave evidence, he struck me as a person of strength and confidence. When he went on about what businesses he had been doing in Hong Kong, he talked as someone in the know and faced up strongly the challenges put to him under cross-examination.
188. He talked of how he started in Hong Kong humbly as an office boy and construction worker and security guard despite the fact that the family back in Pakistan had landed property inherited from forefathers. From what he was telling the court, his father’s teachings to his children about working hard seems to have a lot to do with it.
189. Once he made money in Hong Kong from his own businesses, he did improve his lifestyle such as owning more luxurious vehicles and living in larger space.
190. DW3 being the youngest son in the Pakistani culture seemed, according to him, the love of the extended family. It seems that whenever he needed extra money, he could always rely on his father and brother Sajid. This explains at least part of the sources of cash that was coming into the bank accounts.
191. For the lack of documentary proof of his businesses, DW3 at least provided a plausible explanation of how he came to lose the logistics papers and also how he was not able to obtain the relevant documents from previous partners because of the lapse of time.
192. DW3 has identified some of the counterparties to the account transactions, in one case, with support from a BR document.
193. The explanations of DW3 on not declaring tax in Hong Kong is at least believable. The claim that he was not told he could not conduct any business is at least compatible with the fact that no consequences happened to him other than a fine for his dutiable commodities offence in November 2011.
194. All in all, I am of the view that the evidence of DW3 is at least internally credible and reliable enough to the extent of being possibly true.
195. What is more, the evidence of DW3 is supported by the evidence of DW1, DW4[1] and DW6 to some extent or another.
196. I am aware that there are inconsistencies between the evidence of different defence witnesses but they are minor and do not lead me away from my conclusion about DW3’s evidence.
Application of legal principles
197. I have applied the applicable legal principles especially those enunciated in Harjani (supra). I am of the view that any reasonable person who shared the defendant’s knowledge would not be bound to believe that the property was tainted.
Conclusion
198. For the above reasons, I found the defendant not guilty of all charges.
( Isaac Tam )
District Judge
[1] DW4 stands out as a particularly impressive and trustworthy witness.
DCCC492/2024 HKSAR v. HUNG KAR YAN KARIN
DCCC 492/2024
[2026] HKDC 407
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CRIMINAL CASE NO 492 OF 2024
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HKSAR
v
HUNG KAR YAN KARIN 孔嘉殷
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Before:
His Honour Judge Tam in Court
Date:
4 March 2026
Present:
Mr Marray John,Counselonfiat,for HKSAR
MrWalsh Wayne Patrick, SC, leading Mr Tam Yat Fung Fergus, instructed by Messrs Lee Law Firm, for the defendant
Offences:
[1] – [6] Dealing with property known or believed to represent proceeds of an indictable offence （處理已知道或相信為代表從可公訴罪行的得益的財產）
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REASONS FOR VERDICT
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1. The defendant is charged before me with 6 charges of Dealing with property known or believed to represent proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455.
2. Particulars are that the defendant, between A and B, both dates inclusive, in Hong Kong, knowing or having reasonable grounds to believe that property, namely a total sum of C Hong Kong currency in account numbered D held in the name of the defendant with E, in whole or in part directly or indirectly represented any person’s proceeds of an indictable offence, dealt with the said property.
3. For Charge 1, A is 4 September 2010; B is 26 August 2017; C is $30,154,256.15; D is 384-210183-888; E is Hang Seng Bank Limited.
4. For Charge 2, A is 9 August 2011; B is 21 August 2017; C is $10,859,558.77; D is 384-210183-001; E is Hang Seng Bank Limited.
5. For Charge 3, A is 25 March 2011; B is 29 April 2017; C is $1,317,800.18; D is 384-242806-668; E is Hang Seng Bank Limited.
6. For Charge 4, A is 6 September 2010; B is 21 August 2017; C is $1,447,109.80; D is 012-7261016181-0; E is Bank of China (Hong Kong) Limited.
7. For Charge 5, A is 17 April 2013; B is 18 August 2014; C is $919,380.00; D is 432241-200; E is OCBC Wing Hang Bank Limited.
8. For Charge 6, A is 2 August 2010; B is 15 August 2017; C is $3,411,186.71; D is 205-219595-001; E is Hang Seng Bank Limited.
9. Defendant pleaded not guilty to the charges rendering a trial necessary.
Legal Principles
10. It is unnecessary for the Prosecution to prove as an element of the offence under s 25(1) that the proceeds had been dealt with were in fact the proceeds of an indictable offence. The question was whether the defendant knew or had reasonable grounds to believe (HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279). In HKSAR v Harjani (2019) 22 HKCFAR 446, the meaning of having reasonable grounds to believe was set out in headnotes (1) to (7): -
(1) The test propounded in Seng Yuet Fong v HKSAR correctly represented the law relating to the meaning of "having reasonable grounds to believe" in s.25(1) of OSCO. However, in the interests of clarity, the test was reformulated as follows:
(a) What facts or circumstances, including those personal to the defendant, were known to him that might have affected his belief as to whether the property was tainted? Where the defendant gave evidence of facts and matters that affected his belief about the nature of the property, the court had to decide whether he was, or might be, telling the truth about the existence of these facts and matters;
(b) Would any reasonable person who shared the defendant's knowledge be bound to believe that the property was tainted (the Question)? Where the court found that the defendant was, or might have been, telling the truth about the existence of facts and matters that he claimed affected his belief, the court must take those facts and matters into account when answering the Question; and
(c) If the answer to question (b) was "yes", the defendant was guilty. If it was "no", the defendant was not guilty (HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778, HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279, Seng Yuet Fong v HKSAR [1999] 2 HKC 833 applied). (See paras.25-28.)
(2) Where the defendant did not give or adduce evidence, the court had first to find what relevant facts or circumstances were known to the defendant and then answer the Question. If "yes", the defendant would be convicted, and likely sentenced on the basis that he must also have believed that the property was tainted. (See para.29.)
Relevance of D's actual belief in determining whether statutory test satisfied
(3) Where the defendant gave evidence that he did not believe the property was tainted, in answering the Question, the court must give due consideration to the evidence given by him as to what he believed and why. It was the facts and circumstances that the defendant asserted led him to a particular belief or perception that were significant rather than the subjective belief or perception itself. The court had to consider two interrelated questions: (a) was the defendant telling the truth when he said that he did not believe that the property was tainted; and (b) could a reasonable person in the defendant's position have failed to believe that the property was tainted? (See paras.27, 30, 41-42, 49.)
(4) Normally, the court would give the same answer to each question. However, a rare case might arise where the court concluded that any reasonable person in the defendant's position would have believed that the property was tainted but nonetheless accepted the defendant's evidence that he did not have this belief. This was only likely in circumstances where it was apparent that the defendant lacked the reasoning abilities of a normal person. In such circumstances, D should be convicted but his belief might well be a mitigating factor when he came to be sentenced. (See paras.31-33.)
(5) The court had to weigh the matters of which the defendant had personal knowledge, which would incline a reasonable person to believe that the transaction was clean, against the particulars of the impugned transaction itself, which would incline a reasonable man to believe that the transaction was tainted. The defendant's perception would not necessarily carry any weight, let alone determinative weight. If, on balancing all these matters any reasonable person would be bound to conclude that the transaction was tainted, the defendant would properly be convicted. If, on balance, a reasonable man might conclude that the transaction was clean, an acquittal must follow (HKSAR v Pang Hung Fai (2014) 17 HKCFAR 778, HKSAR v Yeung Ka Sing Carson (2016) 19 HKCFAR 279, Seng Yuet Fong v HKSAR [1999] 2 HKC 833, R v Lane [2018] 1 WLR 3647 applied; HKSAR v Yan Suiling (2012) 15 HKCFAR 146, HKSAR v Li Kwok Cheung George (2014) 17 HKCFAR 319 considered). (See paras.55, 58-59.)
Relevance of "wilful blindness" in determining whether statutory test satisfied
(6) In principle, the doctrine of "wilful blindness" might be applied as a basis from which to infer actual knowledge that the property was tainted, provided: (a) it was proved that the property was in fact tainted, since one could not know something to be so unless it was in fact so; (b) it was remembered that it was actual knowledge that must be proved; (c) it was remembered that it was not a question of whether the defendant should have made inquiries or whether the reasonable man would have made inquiries, although the latter issue might be relevant, though not conclusive, in deciding whether the defendant deliberately refrained from making inquiries; and (d) knowledge was the only reasonable inference to be drawn from the fact of wilful blindness and the other evidence in the case (The Queen v Crabbe (1985) 156 CLR 464, Pereira v Director of Public Prosecutions (1988) 82 ALR 217 applied). (See para.70.)
(7) However, given the statutory alternative basis of whether the defendant had "reasonable grounds to believe", the doctrine of "wilful blindness" would normally not be necessary or helpful to establish knowledge. Where a person had been "wilfully blind" to the existence of a fact or of particular circumstances, he would almost always have had reasonable grounds to believe that the fact or circumstances in question existed. (See para.71.)
Prosecution case in brief
11. The substantial number of transactions and large amounts of funds passing through the subject bank accounts are disproportionate and inconsistent with the defendant’s reported income. Defendant was the sole signatory to the accounts and had control of the accounts. Defendant dealt with the monies that passed through the accounts. Frequently the deposits and withdrawals were in cash, the cash transactions were relatively large and in close proximity of time. She purchased two properties in this period. There is nothing to suggest that the defendant or her husband had accumulated wealth in previous years. Indeed the defendant was a social welfare recipient between 1 December 2003 and 28 February 2009. Her husband did not file any tax returns. The tax returns of the defendant do not record profit of more than one million dollars in any year and between 2020/2011 and 2014/2015 can be described as modest profits and even a loss in 2011/2012. Defendant dealt with the funds transacted under the accounts whilst knowing or having reasonable grounds for believing that such funds in whole or in part directly or indirectly represented proceeds of an indictable offence.
Defence case in brief
12. Defendant (DW1) and her husband (DW3) and others gave evidence in support of the defence case. The defence case is that the sources of funds came from DW3’s businesses and his wealthy family in Pakistan. Because he was a Form 8 recognizance holder that could not hold an ATM card, he asked his wife the defendant for use of her A/Cs 1, 2 and 3.
Issues in the case
13. The issue in the case is squarely the credibility and reliability of the evidence of DW1 (the defendant) and DW3 her husband Safder Tehseen, bearing in mind at all times it is for the prosecution to prove their case beyond a reasonable doubt.
Procedural history
14. Prosecution called a total of 6 witnesses. They are PW1 Li Kam Man (CSSA Officer) , PW2 WSIP Luk Wing Linda (One-time OC Case), PW3 PC 25970 (Re-arresting and Caution Officer), PW4 DPC 6723 (Arresting, cautioning and interviewing officer), PW5 Sgt 4024 (Exhibit, Sketching Officer), and PW6 Chau Wing Ho (Treasury Accountant).
15. After close of the prosecution case, defence made no half-time submissions. After considering the relevant evidence, I ruled there was a prima-facie case on all charges.
16. Defendant (DW1) elected to give evidence and called 5 other witnesses: DW2 Jerome Michael McDonagh (Defence expert), DW3 Safder Tehseen (defendant’s husband), DW4 Javed Iqbal (Local businessman), DW5 Muhammad Ali Awan (Retired protocol officer), DW6 Hussain Niaz (one-time business partner of DW3). I will assess defence witnesses’ evidence objectively as I have with the evidence of the other witnesses, bearing in mind the burden of proof always rested with the prosecution.
17. After close of the defence case, parties made written submissions supplemented by oral submissions. I have duly considered them but shall not summarize them here.
Summary of prosecution evidence
18. A/C1 relates to Charge 1 etc.
19. The bulk of the prosecution case is contained in the set of Admitted Facts P41 and in PW6’s Treasury Accountant Report.
20. As the highlight of this case, as in almost all money laundering cases, lies in the defence case, I shall not summarize the prosecution evidence here but will concentrate on a summary of the salient defence evidence.
Summary of salient defence evidence
DW1 Defendant
21. Defendant was born in about 1984, educated to F7 in Hong Kong at the age of 18 (about 2002). She then worked as a clerk in Kwai Chung. She had a relationship with Atta Mohammed of Pakistan. She converted to Islam at age of 19.
22. She gave birth to daughter when she was 19 or 20 (about 2003-2004). She had a boy 3 years after that. She was living with Atta and children. Relationship with Atta turned bad. She was 23 (about 2007). She took daughter and son with her and left Atta.
23. There was a time she lived on CSSA but then social worker advised her to hunt for work. She became a clerk in Kwun Tong for 2 to 3 months before taking a job as a tutor in a Lok Fu tutorial centre. Social worker found a family home for the children while defendant paid for their expenses.
24. She is a practising Muslim. She was converted in the Mosque in Oi Kwan Road, Wanchai. She believes in Allah and practises Muharram and Ramadan. She learned to speak Urdu and Arabic. She could understand 85% of Urdu.
25. In July 2008, she met her eventual husband Safder Tehseen (DW3), from Punjabi Pakistan, who helped her to set up her own tutorial centre. So FEC was set up in 2009-2010.
26. There was a caste system in Pakistan. Safder’s family belonged to the top caste. Her understanding was Safder was born in 1982, came to Hong Kong when he was 15.
27. Shortly after she met Safder, she told him she had other children. After they formally married in 2012, they lived together, and with her children from former relationship.
28. With Safder, she had two other boys born respectively in 2016 (now 9) and 2018 (now 7).
29. Safder left Hong Kong in 2022 for Pakistan as a result of deportation order. The two boys are now with their father in Dubai attending school.
30. Safder is a Muslim religious man.
31. In Islam, there is a religious way to treat different members of the family including members of the extended family. If the wife works, she cannot use her earnings for family expenses. Husband makes money to support the family. Husband will not discuss his business dealings with wife. Defendant could only get information from Safder if he told her or she overheard it from a phone conversation. Safter would be angry if defendant asked him about it.
32. In the private tuition business she engaged in, she taught P1 to F4 students.
33. Safder has one elder brother Sajid Mehmood (previously in Hong Kong, now in Pakistan) and other siblings. Safder’s late father is Mohammed Khan who returned to Pakistan from Hong Kong in 2008 and passed away in 2014 (sic).
34. Sajid and Safder came to Hong Kong to join their late father.
35. Defendant met Safder’s family members in Pakistan many times.
36. At some point in time, Safder suggested she open her own tutorial centre. He helped her a lot in opening Fulfil Tutorial Centre (FEC) which she wholly owned. When there were more students, FEC moved to Chinachem 333 Plaza. FEC had 3 permanent teachers and some part-time teachers who consisted of fresh graduates, her own relatives including her mother.
37. Parents of students mostly came from the Mainland not many of them had cheque books. Most parents paid by cash others by cheque. Once she received cash, she would hand-write receipt and made her own record of who had paid.
38. She regarded the FEC income as her own money for her use. She put it in her accounts. Sometimes she deposited the money into A/C1 or its associated current account A/C2. Cheques would only be deposited into A/C6 because they were drawn in the company name.
39. She paid her permanent teachers by cheque and her part-time teachers by cash.
40. FEC closed in 2018 when she delivered her youngest boy.
41. Safder came to Hong Kong in 1997 joining his father and Sajid who were already permanent residents. Before 2005, Safder was entitled to apply for permanent residence. However, because of a criminal case in 2004, it affected his application. Safder became a Form 8 recognizance holder in 2005.
42. Safder’s family is quite well-off compared with normal people in Pakistan. They have a big villa in a place called “Sang” in Chakwal with 22 bedrooms and 14 toilets. Safder’s siblings have their own house nearby. They have inherited land from great-generations. Land included agricultural and commercial. She was told there were 30-40 ground floor shops in Chakwal and Islamabad. Their cars in Pakistan included Land Cruiser and Lexus.
43. Between 2012 (her formal marriage to Safder) and 2017, she had been to Pakistan 3 to 4 times.
44. Safder bought her things, took her to fine dining, always drove nice cars. His lifestyle was very attractive. He got everything he wanted. He wore nice clothes and good watches. Safder never asked her for her money nor did she give him her money.
45. He was the only one supporting their family: household expenses, mortgage, bills, food, kids’ school fees. Safder gave her “cash in hand”. Money from Pakistan was also sent to her account(s).
46. As far as she knew, money came from two sources. First, Safder had some business with his friends. Second, Sajid who was always travelling between Hong Kong and Pakistan brought cash to Hong Kong. Safder being the youngest son has privilege in Pakistan. Everyone gave him money.
47. Sometimes, Sajid gave cash directly to her. Other times, Sajid gave to Safder, and Safder gave to her.
48. Sometimes she would ask Safder for cash, other times he would give without her asking.
49. Between 2012 and 2014, she bought Lai Chi Kok residential property. Purchase price of the uncompleted unit was $6.5M. There was a mortgage. Safder gave down payment of $2M cash to defendant from his business. Down payment was made in 2012. Possession was taken in 2014. Before taking possession, they lived in Bayview Hotel (service apartment) in Ting Kau.
50. Safder paid for the mortgage instalments and credit card bills. After the first boy was born in 2016, Safder wanted a better living environment. They then bought the Tai Po house (where the defendant was arrested in 2017) for $19.8M. Defendant sold the Lai Chi Kok property and used some of the proceeds to pay for the Tai Po property. Down payment for the house was about $10M, the balance was under mortgage. Safder provided the funds and hired two domestic helpers to take care of the house.
51. Whilst living in Tai Po house, the second son was born in 2018. In 2021, the family moved from Tai Po house (1,100 square feet) to rent Tai Koon Place in Tai Po (more than 4,000 square feet). Safder hired one driver too. They kept Tai Po house and let it out.
52. While living in Tai Po, Safder drove Benz GLE; she drove Menz C200. Safder also had a Maserati SUV and a limited edition Range Rover before he was deported in 2022.
53. In Islamic culture, all businesses belonged to Sajid and Safder since their father’s death.
54. In Pakistan, the extended family owned agricultural land which grew and sold crops; it also owned shops to rent out.
55. In Hong Kong, Safder was involved in businesses. In the beginning, Safder had small business of selling kitchen ware. Later, he took the defendant to a garage/showroom in Yuen Long which sold cars and car parts and did car repairing, a business he partnered with one Pakistani Mohammed Yasir (John).
56. In 2012, Safder told her he started restaurant business with friends. Defendant visited two restaurants selling Turkish food. His business partner was Hussain Niaz (DW6).
57. Safder also had electronic solar panel business with Mainland China. This the defendant heard from his calls.
58. Dealing with the different accounts, A/C1 (HSB integrated savings) was opened on 29 April 2010. That time, she already had BOC account (A/C4). She opened A/C1 because of HSB gift promotion. She was already together with Safder but not yet married.
59. Safder did not have bank account. He did not have HKID card because he was a Form 8 holder since 2005 subject to deportation. She deposited money from her FEC business and also from money given to her by Safder’s family. She gave her ATM card to Safder so he could deposit money in and operate A/C1. This was so even before her formal marriage to Safder in 2012. Sometimes, Safder used A/C1 for his business use.
60. To the defendant, Safder was a responsible and amusing man since she met him in 2008. Safder planned for the future and they got married in 2012.
61. Looking at P36/2634 ie top 10 counterparties of A/C1, the defendant could recognize some of them as Safder’s business partners: Melwani, Muhammad Yasir (John), Taj International Traders.
62. In 2016, Safder planned to buy house in Tai Po, thus accounting for large influx of money into A/C1.
63. Only some of the times, Safder would tell her monies would be coming in. For the large cash deposits, some may be from his businesses, others were repayments from loans extended by Safder to friends. In the beginning, defendant did ask. But that did not go well with Safder because of Muslim culture.
64. In the photos at D8, defendant explained how she obtained from an ATM machine some of the names of account holders (though redacted) whose account numbers appeared as unknown counterparties in her subject accounts.
65. She identified some of them but not others. Those which she identified were D8/239 Hussain Niaz (DW6), D8/240 Alex Leung (designed FEC leaflets), D8/241 KLine Air Travel Limited, D8/242 Pannu Joe (paralegal of Francis Kong & Co), D8/243 Abdul Malik (Muslim), D8/244 ChinaChem Agency (FEC Landlord), D8/246 Tsui H S (part-time teacher FEC), D8/249 Tam C K (looks like part-time teacher FEC), D8/250 Li Tin Wai (cousin worked in FEC), D8/251 Dong Yu (part-time teacher FEC).
66. Defendant then went through D1/1-4 page by page (which were replicas of some pages of P36 with remarks in red added, where applicable, of redacted names copied from D8). The defendant sought to identify, where possible, who the various counterparties were of her A/C1.
67. The defendant identified A/C2 as the current account of her integrated account A/C1. On P36/2646, at para 50.4, she identified a transfer depositor of $213,000 on 7 January 2013 one Hussain Iltaf as a friend of Safder. She believed the money was Safder’s profit of their business. The timing fit the payment of initial deposit of the Lai Chi Kok property. As regards Ricacorp Properties Limited, this was the property agent she used for buying and selling of Lai Chi Kok property.
68. From D1/5-6, the defendant then identified, where she could, of the counterparties of her A/C2. She also said it was quite common to transfer funds from A/C1 to A/C2. She drew no distinction between A/C1 and A/C2 because they were both accounts of the same integrated account. She used A/C2 to buy books for FEC and the children.
69. On A/C3, on looking at P36/2648, defendant said that HSB manager asked her to set it up because it would be easier to report to IRD every year; it would also be more systematic to put her salary here as income proof to make it easier to apply for credit card and mortgage in the future. She later successfully obtained mortgage on Lai Chi Kok property. After the Lai Chi Kok property, there was not much activity in the account.
70. On looking at P36/2786 for A/C3, from items 169-184, ie from 7 October to 12 December 2016, defendant explained that the transactions were for the purpose of paying for the Tai Po house. Sources of funds were from Safder’s family and may be his businesses. Safder would not tell her so clearly.
71. Defendant said that all family members had her account numbers. Safder used her A/C1, A/C2, A/C3 and BOC A/C4 and has ATM cards for them. Safder seldom used her A/C6 (Fulfil integrated current). Safder did not use her Wing Hang Bank A/C5.
72. Defendant went through D1/7 to identify, where she could, the counterparties of A/C3.
73. On A/C4, this was the BOC account. This was the first account opened (on 24 February 2009) out of the 6 subject accounts. It was originally opened for receiving her salary during that time.
74. For the ATM cash deposits into A/C4 on P36/2795-2796 during July 2011 (items 40-45 and 57-62), they were either from Safder’s friends repaying debt to him or from her own source eg FEC. She added that there was a daily ATM cash deposit limit of $100,000.
75. As regards P36/2797, although she checked monthly statements of A/C4, she would not be able to tell the ins and outs of the funds between January 2012 and April 2013. Sometimes, she asked Safder but he didn’t like it. For the ATM cash deposits, it could be her own money or from Safder’s business partners. For the ATM cash withdrawals, Safder needed the money.
76. Mostly, defendant used her HSB accounts rather than BOC account (A/C4).
77. Defendant stated that she was willing to help her husband who had no bank accounts.
78. On A/C5, this was the Wing Hang Bank Savings account opened on 17 April 2013. Defendant got money from Safder to buy gold bars. Wing Hang was the only bank that sold 24K gold bars in units of tael. One had to buy in person. For some of the cash withdrawals on P36/2665, she was not sure whether it was for buying gold bars or simply a withdrawal.
79. The defendant had sold to Wing Hang some gold bars but she could not identify the transaction in P36/2810.
80. She had previously given some gold bars to Sajid. Later she stopped buying gold bars.
81. She also traded in London Gold margin with Glory Sky Precious Metals Limited (see P36/2781 re A/C2 counterparties).
82. Regarding A/C6 in name of FEC opened on 8 October 2009, this was the account primarily used by the defendant for running FEC. In relation to P36/2682-2683, paras 93.3 and 94, defendant explained that she mostly charged the parents monthly amount depending on class fees.
83. Regarding the counterparties chart on P36/2685, defendant explained the transfers from A/C1 and A/C3 may be for issuing cheques; that the cash withdrawals were for making purchases for her business; that she could not recall what the transfers to A/C1 were for; and that the transfers to A/C3 were for her salary.
84. Defendant then went through D1/10 (a replica of P36/2871 added with red remarks) and sought to identify the various counterparties to A/C6.
85. Defendant then gave evidence about the searches at the Tai Po house (including finding of some cash, jewelleries and watches which were not subject of any charge) and at FEC which are less important for trial purposes.
86. Defendant’s name in Islam is Ayesha.
87. Under cross-examination, defendant acknowledged that in her tax returns for 2012/2013, 2013/2014, 2014/2015, 2016/2017, it was declared that her spouse had no chargeable income to declare. She explained although she knew he had business, she did not know if she needed to fill in the details in Tax return for he did not have HKID card nor bank account. She disagreed she was trying to hide Safder’s income.
88. Defendant agreed she came from modest background and once collected CSSA.
89. Defendant knew a Form 8 holder was not allowed to work or conduct business (however, near the end of cross-examination, she expressed doubts about whether such a person could conduct business).
90. A few years before 2012, she and Safder had a family or religious marriage whereupon they lived together.
91. She could not remember where Safder lived when she first met him but he was living with his family in Kowloon before the two of them lived together.
92. Defendant did not know Safder’s late father’s occupation in Hong Kong nor Safder’s previous occupations.
93. Safder had previously used Sajid’s bank accounts but preferred using the defendant’s accounts.
94. Defendant was asked in detail about some large cash withdrawals she personally made at bank counter from A/C1 from February 2012 to February 2017. She gave answers such as “family use”, “cannot remember purpose”, “husband needs money to lend to others”, “near Chinese New Year”.
95. For the cash deposits to A/C1 appearing on P36/2746-2750 (September 2010 to July 2017), defendant did not know why they were mostly in neat round numbers. Sometimes, he asked Safder what they were for but she could not remember his answers.
96. In March 2012, Safer was planning to buy Lai Chi Kok property; that may be reason why there was large cash deposit of $500,000 on 27 March 2012. When Safder needed money, his family in Pakistan would give it to him.
97. Defendant could not remember the various cash deposits.
98. Defendant gave similar answers regarding cash deposits to A/C2 (P36/2780) and to A/C3 (P36/2791).
99. Regarding A/C5 (P35/2603-2607), the Wing Hang savings account for buying gold bars, defendant used it to buy one tael and 5 taels gold bars. Some of these she sold, others she gave to Sajid. The funds deposited into A/C5 came from FEC or Safder.
100. On 17 and 19 April 2013, defendant bought gold. On 20 May 2013, although she withdrew $300,000, she could not remember if she bought gold. She could not remember about the withdrawal of $25,000 on 29 May 2013 either. She could not remember the source of the $121,380 deposit on 18 August 2014 nor could she remember if she bought gold on the same day when $122,000 was withdrawn.
101. Defendant acknowledged on P36/2761 (A/C2) that there was a cheque withdrawal to Sky Precious Metals Ltd of $100,000 on 13 September 2012.
102. Defendant could not remember how much was spent to set up FEC but should be less than $100,000.
103. Defendant was asked about some of the explanations written on voucher when cash was either deposited to or withdrawn from A/C1 by reference to P36/2728A, 2730A, 2731A, 2732A, 2733A and 2734A. The answers generally did not go beyond what was written.
104. Defendant denied the prosecution’s suggestions which included she had reasonable grounds to believe property in the 6 subject accounts represented proceeds of indictable offence or that they were not obtained lawfully.
DW3 Safder Tehseen
105. DW 3 was born in 1982 in Sang Kalan, Chakwal, Pakistan. His late father is Mohammad Khan who came to Hong Kong in 1969 around age 30. After father retired, he returned to Pakistan in 2008. Father passed away in 2018.
106. When father was in Hong Kong, he worked as construction foreman and had a night job as security adviser.
107. DW3 grew up in Pakistan and came to Hong Kong in 1997. That time, father was worker in construction field. Before 1999, DW3 travelled between the two places. After study, DW3 came to Hong Kong in 1999 to live permanently. That time, he was about 18, he started working as office boy in Skyline Travel Agency in TST and stayed for less than 2 years. Then he became a security guard. He also worked together with father at a construction site.
108. In 2005, he was subject to a deportation proceedings. He applied for non-refoulement protection as a Form 8 recognizance holder. DW3 is the youngest of 4 brothers. One of his elder brothers is Sajid Mahmood who was a permanent Hong Kong resident.
109. Since 2008, Sajid has been mostly in Pakistan but still visited Hong Kong. Since father’s death, Sajid became head of family. In Pakistani culture, head of family takes all family’s decisions.
110. The family in Pakistan owns property, shops like plazas and agricultural land. Family owned 200 shops during that period 2010-2017, in Chakwal City, Hudial City and Rawalpindi City. They were leased out. The agricultural land was used for harvesting mostly cotton but also wheat. These landed property were inherited from forefathers.
111. Sajid also had solar plate shops selling electric batteries during the same period. He also traded in property.
112. The family owned about 30-35 residential houses in Pakistan some of which were rented. Some of the siblings lived separately. The Family Residence in the village of Sang Kalan has about 23 rooms. Other houses are not so big.
113. When he became a Form 8 holder in 2005, he was advised not to work. But he was not advised not to be involved in running a business.
114. In 2006, he started a small business in Sham Shui Po with two brothers Ali Hassan (later joined) and Al Taf Hussain (initially) selling second hand items. Later DW3 also did different businesses with Ali Hassan. He engaged in business of buy things (electronics, fridges, TV and VCR) in Hong Kong and sell in Pakistan, Ghana, and Afghanistan.
115. In the beginning, he sold old items. In 2009, he started selling brand new electric items from China for export.
116. Between 2006 and 2019, the business called “Hussain Tradings” was profitable. DW3 left the business in 2019. His monthly profit increased from a few thousand dollars monthly to $100,000. He received profits in cash because it was largely a cash business.
117. DW3 used to have bank accounts but they were closed after 2006. So he used Sajid’s bank account.
118. In 2010, DW3 together with Chan Wing Fat Ben started some work in construction business like repairing and renovation of houses. The company was called “Great Smart”. Profit depended on volume of work they got.
119. In 2012, DW3 started a restaurant business with Hussain Niaz (DW6). DW3 and DW6 each contributed $400,000 to start up the business. DW3’s contribution came from his electronic business and family support from Pakistan.
120. At the beginning, there was only one restaurant in Yuen Long serving Turkish and Indian food. In the second year, a second restaurant serving Chinese breakfast and Turkish and Indian lunch and dinner joined. In total, 6 restaurants had been established, though not the case that all 6 were running at the same time. The first and second restaurants were running between 2012 and 2016.
121. Four of the restaurants were named “Al Zaiqa”.
122. DW3’s monthly profit from these restaurants ranged from $100,000 to $150,000. DW3 was paid mostly in cash. DW3 sold the business in 2016. He sold because he needed money to buy Tai Po house, and profit was not the same as before. He obtained $2.1 million in cash for 2 restaurants.
123. DW3 deposited the cash profits and the sale proceeds into defendant’s account. In 2008 he got to know the defendant. After 3 to 4 months, he married her in Islam. He registered the marriage formally in 2012.
124. During 2010-2012, DW3 was also working with a friend Nadim (or Nadeem) on a government scheme to scrap old diesel vehicles. They would get a cheque from the government after 2 months payable to Nadim’s company. Nadim paid DW3 in cash his share of $6 to 7 million.
125. As for DW3’s brother Sajid, after 2008 (the year father left Hong Kong), most of the time, Sajid did not stay in Hong Kong. Sajid had property business in Pakistan. Since 2010, Sajid has been buying solar plates from China and selling them in Pakistan.
126. From 2007 to 2019, the family in Pakistan had been doing farming business of cotton crop and wheat crop. After father retired from Hong Kong in 2008, he returned to Pakistan to handle the farming business. After growing the cotton, father sold to factory boss Mohammad Javid and later to his son (DW4) for a long time.
127. DW3 received money from his family in the form of cash from Pakistan and from DW4 Javid in the form of cash cheques; from DW4 Javid because father was supplying them with cotton. The Javid DW3 was talking about was the son whose company JKN is located in Hankow Centre Hong Kong. The factory in Pakistan is Imperial Textile. DW3 referred to D18 an MOU between Imperial Textile and Khan Mohammad (DW3’s father).
128. DW3 received a total of around $12 million from DW4 Javid between 2011 and 2016.
129. DW3 also received money from Sajid and father whenever he needed money. These sums usually came in cash from Pakistan. He used some and placed some in the defendant’s HSB account(s). Since 2008, this had been going on.
130. DW3 is familiar with all 6 subject accounts. DW3 was using A/C1, A/C2 and A/C3. DW3 did not remember using BOC A/C4. DW3 did not use A/C5 and A/C6.
131. The ATM cards for A/C1 to A/C3 were kept by DW3. He used them. If defendant need to use the ATM card, she would take it from DW3.
132. DW3 deposited a lot of cash into A/C1. He made transfers among A/C1 to A/C3 from time to time.
133. Referring to the named deposits counterparties on P36/2634, para 41.5, Kilmorey Securities Ltd has money exchange function. DW3 used this Hong Kong company’s service for his business with someone in Mainland China.
134. DW3 helped someone to buy electronic goods and Hassan Tradings (with Ali Hassan) sent copper from Pakistan to sell. So $2.3 million (including cost of copper and profit) was due to him as his share.
135. Chan Mei Lin Kitty another counterparty is same as Kilmorey.
136. Mayfair Enterprises belonged to businessman Naresh with whom DW3 had business. DW3 was paid $900,000 for his share of the business (electronic goods).
137. Miss Melwani was the wife of Naresh who appeared at D7/225 BR of Mayfair Enterprises. DW3 was paid $850,000 for payment of electronic goods.
138. Vasandani J R was wife of DW3’s friend. DW3 had business with her. DW3 was paid $545,000 for payment of electronic goods.
139. Muhammad Yasir (John) owned a garage for sale and purchase of cars. DW3 did business with him of selling cars. DW3 was paid $500,100 as his share of profit.
140. So Chi Ming was not known directly. Vasandani introduced So to DW3. This payment of $500,000 to DW3 was for business of electronics.
141. Taj International Traders’ payment of $350,000 to DW3 was arranged by Vasandani for his electronics business.
142. DW3 then went through D1/1-3 (replicas of P36/2751-2753 with red remarks added) and explained the various transactions in A/C1 where he could.
143. Referring to P36/2644 (A/C2), DW3 admitted he made cash deposits; that he made transfer from A/C1 and A/C3 to A/C2.
144. Referring to P36/2646 at para 50.4 (A/C2), he identified the deposit counterparty Hussain Iltaf’s deposit of $231,000 to A/C2 as relating to his business.
145. DW3 then looked at D1/5-6 (replicas of P36/2781-2782 re A/C2 with red remarks added) to identify a number of counterparties.
146. Looking at P36/2648 (A/C3) at para 59, DW3 admitted he made cash deposits to A/C3; he also made transfers from A/C1 to A/C3; he also made cash withdrawals; he also made transfers to A/C1 and A/C2.
147. Referring to D1/7 (replica of P36/2794 re A/C3 with red remarks added), DW3 identified some of the “red” redacted names. DW3 made payments to them.
148. DW3 was arrested in connection with this case on 10 September 2017. When he was arrested he was in possession of the HSB ATM card for the integrated account A/C1 + A/C2.
149. After DW3 was deported from Hong Kong, he returned to Pakistan. He now resides in Dubai as a resident. He has set up his own company there for more than 2 years. He produced D10 his tax return in Pakistan for 2025 showing his net assets of about HK$16 million. DW3 added that some of the property listed in D10 were acquired after 2017 but he has been paying tax in Pakistan since 2013.
150. Under cross-examination, DW3 said that his leave to remain in Hong Kong was originally extended to 16 June 2005. However, on 16 March 2005, he was sentenced to 17 months’ imprisonment in the District Court for conspiracy to steal. As a result, a deportation was made against him in April 2005.
151. On 29 March 2005, DW3 made a torture claim to Immigration. Execution of deportation order was withheld pending determination. In January 2008, the claim was refused. Due to change in law, DW3 lodged a fresh claim which was again dismissed in February 2012.
152. On 22 November 2011, whilst on F8 recognizance, DW3 was fined for $5,000 for dealing with dutiable commodities.
153. On 14 June 2012, DW3 applied for leave for judicial review against the deportation order. On 19 July 2012, leave was refused. DW3 applied to Court of Appeal against decision not to grant leave for judicial review. On 6 June 2013, Court of Appeal dismissed the appeal. DW3 applied to the Court of Final Appeal against the decision of the Court of Appeal. On 10 October 2014, Court of Final Appeal refused his appeal.
154. Due to change in the law, on 7 March 2014, DW3 lodged another claim under Unified Screening mechanism. On 18 December 2018, that claim was dismissed. DW3 appealed against the refusal to Torture Claim Appeal Board.
155. Eventually DW3 left Hong Kong in September 2022. From time he began to appeal, DW3 had been on recognizance and was given a Form 8.
156. When he was given Form 8, he was told he was not permitted to take up employment. He was not told he could not do any business.
157. DW3 closed his BOC bank account in 2006/2007 because he was told he could no longer have an ATM card under his Form 8 holder status.
158. Before he was a Form 8 holder, he worked two jobs at the same time: construction worker during the day and security guard during the night. He was working to support the family. That time, he was living in an old building without lift in Tung Chau Street, Sham Shui Po.
159. DW3 was referred to the defendant’s tax returns over the years. DW3 knew that in some of them it was declared he had no income. During period he was Form 8 holder, he never declared income to IRD.
160. Since 2013, DW3 has been paying taxes in Pakistan and other places. When he was in Hong Kong doing restaurant and other businesses, the business was paying taxes. He received profits net tax.
161. In year 2003, there was an agreement between Hong Kong government and Pakistani government any person paying taxes in Pakistan doesn’t need to pay tax in Hong Kong.
162. DW3 disagreed he was not telling the truth about earning so much from businesses and about receiving so many cash deposits from his business dealings.
163. When asked about whether he has in his possession written agreements to support his business partnership with various people, DW3 had this to say. He and his wife were arrested in 2017. Bank accounts were frozen in 2018. Police investigation took 6-7 years to bring the case to court. If police had given DW3 all detailed documents in 2018, he could have contacted his partners and could have gotten the documents easily. Now when he asked them, they said Hong Kong law required them to keep records for only 7 years, so it was not easy to obtain them.
164. When DW3 was doing business, he used to keep all records at home. Although he was arrested in 2017, he was told he would not be charged when he left Hong Kong in 2022. His family left 1-2 days before his departure. As they were leaving Hong Kong, they decided to rent it out. He sent boys to clear out the house. The boys saw the bundle of documents and asked if he needed them. DW3 said he did not. By mistakes, in addition to these bundles, the boys discarded all documents including his children’s birth certificates.
165. In additional to relevant contracts, documents relating to container logistics were thrown away.
166. DW3 drew attention to the fact that not only was cash coming in during the short period of 2016 for buying house, the same was happening before 2016. DW3 also emphasized that until 2018, Hong Kong government allowed people to carry cash in and out of Hong Kong.
167. DW3 was asked if he was so rich, why did he come to Hong Kong in so humble conditions. DW3 said, “My father arrived in Hong Kong in 1969. My elder brother Sajid came to Hong Kong in 1989. My second brother … arrived in Hong Kong in 1990. I came to Hong Kong the first time in 1997. When father came in 1969, he worked round the clock; my other 2 brothers are also as hardworking. When I came to Hong Kong, I also tried to work as hard. Because I was the youngest, I was not able to be as hardworking as they were. All because of 40-50 years of hard work from 1969, we have all assets and property today. My father is a humble man. He instructed us to live the same way.”
168. DW3 disagreed that the large cash deposits into the bank account did not come from business dealings or from family in Pakistan. He disagreed that he was not the businessman as he claimed. He disagreed that much of the money coming into the account(s) did not come from legitimate sources.
169. In re-examination, DW3 said he put down $10 million including agency fee for the Tai Po house in October 2016 and the balance of $9 million was under mortgage.
170. DW3 also said the defendant hardly ever asked him about his business. He seldom discussed with her his business either. Muslim culture is such that the wife is in charge of the home and it is the husband’s job to make money and do outside work.
My considerations
171. I bear in mind the burden of proof rests on the prosecution, standard being beyond a reasonable doubt. Defence has to prove nothing least so the defendant’s innocence.
172. I will consider the charges separately: the verdict on one charge does not affect the verdict on the other charges. However, I shall be alert to the occurrences of inconsistent verdicts.
173. I bear in mind the defendant has a clear record. What that means is, as compared with someone with a criminal record, the defendant’s narratives in and out of court is more credible, and she has less propensity to have committed a criminal offence.
174. I will first of all assess the credibility and reliability of the most important witnesses in this case, namely DW1 (the defendant) and DW3 her husband.
175. In doing so, I bear firmly in mind 4 distinct features of the present case, namely (i) DW3 was a Muslim husband of the DW1; (ii) DW3 was a Form 8 recognizance holder; (iii) the relevant facts happened a long time ago; and (iv) the Pakistani culture.
DW1 (the defendant)
176. There are no doubts that a large amount of large deposits (many batches in cash) and a large amount of withdrawals had been made to and from A/C1. There are also little doubts that a large amount of large withdrawals (mainly by cheque) had been made from A/C2. It is important to remember that A/C1 and A/C2 forms part of an integrated account with A/C2 being the cheque account. It makes sense to look at them together.
177. The large number of large cash transactions no doubt trigger the suspicion of the authorities of whether the HSB integrated account in the name of DW1 had been used as an instrument of money laundering. The other 4 accounts are less visible as money laundering instruments because the overall amounts are far less over the periods involved. On their own, these 4 accounts would not have attracted the attention of the authorities.
178. It is also clear that the means of DW1, even counting her business of FEC, would not have accounted for the large number of large transactions in the HSB integrated account A/C1 and A/C2.
179. The sources of funds are therefore important, or more correctly, what DW1 thought or believed were the sources of funds.
180. The evidence of DW1 was, to her, DW3 had always been living an affluent lifestyle. To her, DW3 came from a wealthy Pakistani family. DW3 had businesses of his own in Hong Kong. However, DW3 had a problem. Since 2005, he had been a Form 8 recognizance holder. According to what DW1 understood, DW3 could not hold a bank account. This is the reason why DW1 lent her 3 to 4 accounts (AC1 to A/C4) to him for his use. In a normal case where a woman lent her accounts to her husband for use, without more, this would probably have been unacceptable in the eyes of the court. However, this case is different with the addition of the Form 8 element.
181. In a normal case, a wife would probably be expected to raise questions about large amounts going in and out of her accounts lent out to her husband for use. Here, the special feature of the Muslim culture comes in. The evidence of DW1 was she had previously asked but was met with displeasure of DW3. This is something of the Muslim culture, so she explained, where a wife does not discuss the business of the husband; that the husband makes a living, and the wife cares for the home.
182. DW1 has been trying to identify the counterparties involved with some success. She even went out of her way to try to get the redacted names of holders of bank accounts whose numbers appeared on the counterparties lists. It is clear she has done her best to identify as many counterparties as possible.
183. There are times when DW1 was not able to remember the exact source of funds and what the withdrawn cash was used for. But this has to be measured against the time that had elapsed since ie between 8 and 15 years.
184. As regards A/C5 the Wing Hang Savings account opened for the purpose of buying gold bars, although DW1 was not able to fully explain the neat rounded numbers in the bank statements, one has got to remember that the events happened more than10 years ago. One also needs to note that A/C5 is a savings account and not the Gold Passbook or Gold Statement account. It is at least possible that a neat rounded figure of cash was withdrawn to buy a lesser amount of gold equivalent.
185. All in all, I am of the view that that the evidence of DW1 is at least internally credible and reliable enough to the extent of being possibly true.
186. What is more, DW1’s evidence is largely supported by DW3’s evidence (more below).
DW3 Safder Tehseen
187. DW3 is and was the husband of DW1. When he gave evidence, he struck me as a person of strength and confidence. When he went on about what businesses he had been doing in Hong Kong, he talked as someone in the know and faced up strongly the challenges put to him under cross-examination.
188. He talked of how he started in Hong Kong humbly as an office boy and construction worker and security guard despite the fact that the family back in Pakistan had landed property inherited from forefathers. From what he was telling the court, his father’s teachings to his children about working hard seems to have a lot to do with it.
189. Once he made money in Hong Kong from his own businesses, he did improve his lifestyle such as owning more luxurious vehicles and living in larger space.
190. DW3 being the youngest son in the Pakistani culture seemed, according to him, the love of the extended family. It seems that whenever he needed extra money, he could always rely on his father and brother Sajid. This explains at least part of the sources of cash that was coming into the bank accounts.
191. For the lack of documentary proof of his businesses, DW3 at least provided a plausible explanation of how he came to lose the logistics papers and also how he was not able to obtain the relevant documents from previous partners because of the lapse of time.
192. DW3 has identified some of the counterparties to the account transactions, in one case, with support from a BR document.
193. The explanations of DW3 on not declaring tax in Hong Kong is at least believable. The claim that he was not told he could not conduct any business is at least compatible with the fact that no consequences happened to him other than a fine for his dutiable commodities offence in November 2011.
194. All in all, I am of the view that the evidence of DW3 is at least internally credible and reliable enough to the extent of being possibly true.
195. What is more, the evidence of DW3 is supported by the evidence of DW1, DW4[1] and DW6 to some extent or another.
196. I am aware that there are inconsistencies between the evidence of different defence witnesses but they are minor and do not lead me away from my conclusion about DW3’s evidence.
Application of legal principles
197. I have applied the applicable legal principles especially those enunciated in Harjani (supra). I am of the view that any reasonable person who shared the defendant’s knowledge would not be bound to believe that the property was tainted.
Conclusion
198. For the above reasons, I found the defendant not guilty of all charges.
( Isaac Tam )
District Judge
[1] DW4 stands out as a particularly impressive and trustworthy witness.