A A
B DCCC 785/2015 B
C C
IN THE DISTRICT COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
CRIMINAL CASE NO 785 OF 2015
E E
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F HKSAR F
v
G G
YUEN ZIRU
H ----------------- H
I I
Before: Deputy District Judge Joseph To in Court
J Date: 10 November 2015 at 10:01 am J
Present: Mr Simon Kwong, Public Prosecutor, for HKSAR/Director of
K K
Public Prosecutions
L Ms Liang Pui Saw Kian Susan, of Yip Tse & Tang, assigned L
by the Director of Legal Aid, for the defendant
M M
Offences: [1] Conspiracy to deal with property known or believed to
N represent proceeds of an indictable offence （串謀處理已知 N
O
道或相信為代表從可公訴罪行的得益的財產） O
[2] Resisting a police officer in the execution of his duty （ 抗
P P
拒執行職責的警務人員）
Q Q
R
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REASONS FOR SENTENCE
S S
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T T
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INTRODUCTION
C C
1. On 2 November 2015, the defendant pleaded guilty to one
D D
charge of conspiracy to deal with property known or believed to represent
E proceeds of an indictable offence, contrary to section 25(1) and (3) of the E
Organized and Serious Crimes Ordinance, Cap 455 (“the Ordinance”) and
F F
sections 159A and 159C of the Crimes Ordinance, Cap 200 (Charge 1).
G Upon the defendant’s conviction of Charge 1, the prosecution applied to G
have Charge 2 left on court file, the charge being one of resisting a police
H H
officer in the execution of his duty, contrary to section 63 of the Police
I Force Ordinance, Cap 232. The defence had no objection to that I
application; the court, accordingly, granted it.
J J
K FACTS OF THE CASE K
L L
2. On the morning of 20 July 2015, the defendant and another
M person Huang entered Hong Kong within minutes of each other via M
Shenzhen Bay Immigration Control Point. They took rooms, upon arrival
N N
in Hong Kong, and stayed at the Ocean Wifi Hotel, Mong Kok.
O O
3. At about 11:20 am on 22 July 2015, Mr Chan, aged 70,
P P
received at his residence in Tsuen Wan a telephone call from a male person
Q Q
pretending to be Mr Chan’s son. Screaming for help, the man said he had
R been kidnapped. Another male person took over the conversation, claimed R
to be the kidnapper, and demanded for a ransom in the sum of $100,000.
S S
After negotiation, this second male agreed to take $25,000 for the release
T of Mr Chan’s son. He told Mr Chan that his surname was “Chan” and T
asked him to contact him when he had the money to pay.
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C 4. Mr Chan ascertained quickly that his son was not in any sort C
of danger at all; a report was then made to the police. The police arranged
D D
for Mr Chan to take part in a controlled delivery of the ransom, using a
E stack of paper (instead of banknotes) in a brown envelope. As arranged, E
Mr Chan arrived at the vicinity of Exit C of the Tsuen Wan MTR Station at
F F
about 12:30 pm. The defendant and Huang were seen looking around
G nearby (they had earlier at about 12:19 pm left the Ocean Wifi Hotel G
together). Huang was seen following and talking with the defendant, while
H H
the defendant kept talking on the phone. At around 12:50 pm, Mr Chan
I was directed to go to an open area. The defendant approached him there I
and said words to the effect: “Mr Chan asked me to come.” Mr Chan
J J
handed over the brown envelope stuffed with paper, which the defendant
K put inside his own bag. The police took action to effect arrest on the K
defendant, in the course of which he put up a struggle.
L L
M MITIGATION M
N N
5. In his plea in mitigation, the defendant submitted, via his
O solicitor Ms Susan Liang, that he was the only son in the family, his father O
having passed away, his mother working as a part-time janitor, and his
P P
elder sister living away from home. The defendant said he had been to
Q Hong Kong as a visitor once before and submitted that he was not the Q
mastermind in the commission of the offence. He had not been told how
R R
much he would get as his reward for collecting the money from the victim.
S S
T T
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6. The defendant relied on the case of HKSAR v Cen Huakuo1, a
C case in which the victim was asked to pay $50,000 in circumstances similar C
to the defendant’s, and in that case, the Court of Appeal said:-
D D
E
“25. Taking into account all the circumstances of the case and E
the requirement that a sentence should have deterrent effect in
order to prevent mainlanders from taking part in such an
F abhorrent and despicable offence like “phone deception” in F
whatever manner, we are of the view that the appropriate
starting point is 3 years’ imprisonment, and the sentence should
G G
be enhanced by one-third pursuant to the Organized and Serious
Crimes Ordinance.”2
H H
7. The defendant argued that the starting point in his case should
I I
be no more than three years as the amount involved in his offending was
J $25,000 and that Mr Chan had suffered no loss. He further submitted that J
the enhancement of sentence should not be more than one-third of his
K K
sentence after mitigation3.
L L
INFORMATION FURNISHED PURSUANT TO SECTION 27(2) OF THE
M M
ORDINANCE
N N
8. The defendant confirmed, before arraignment, receipt of the
O O
prosecution’s notice of intention to furnish information to the court
P pursuant to section 27(2) of the Ordinance and indicated that the P
prosecution’s application for enhancement of sentence under section 27(11)
Q Q
of the Ordinance was unopposed.
R R
S S
1
HKSAR v Cen Huakuo [2015] 2 HKLRD 951
2
T HKSAR v Cen Huakuo [2015] 2 HKLRD 951 at pp.957-8 T
3
For the steps to be followed in imposing an enhanced sentence, see HKSAR v Tam
U Wai-pio [1984] 4 HKC 291 at p.298 U
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9. The prosecution tendered to court DCIP Lam Cheuk Ho’s
C witness statement dated 19 October 2015 in support of their application for C
enhancement of sentence. The defendant did not seek to dispute the
D D
information supplied in DCIP Lam’s statement.
E E
10. In essence, DCIP Lam’s evidence showed the following:-
F F
G (i) Between 2010 and 2014, the number of reported cases G
of telephone deception varied between about 2,000 to
H H
2,300 a year, and in cases where the culprits succeeded
I in their criminal ploys, the victims had suffered a I
yearly loss ranging between around $23m and $45.7m.
J J
K (ii) There had been a noticeable increase recently in the K
number of such reported cases: in the first three
L L
quarters up to 19 October 2015 alone, there were in
M excess of 2,600 such cases; and the accumulated loss in M
this 9-month period stood at a staggering $287.6m.
N N
O (iii) In the 3rd quarter of 2015 alone, there were a total of O
1,249 victims of telephone deception cases, almost all
P P
of whom were Hong Kong residents, most of them
Q students, housewives or retirees. Q
R R
(iv) Before 2011, there had been minimal reported cases in
S S
which an offender was involved or supposed to be
T
involved in the physical collection of the victims’ T
monies (“drop-off” cases).
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C (v) Between 2011 and 2014, the average daily number of C
reported drop-off cases ranged between 2.85 and 3.37
D D
cases a day; and the figure for the first three quarters up
E to 19 October 2015 alone had risen to 3.73 cases a day. E
F F
(vi) The losses occasioned by drop-off cases between 2008
G and 2014 rose from some $3m to about $13m yearly; G
and the losses in first three quarters in 2015 alone
H H
totalled $11.3m.
I I
(vii) There had been a steady increase in the number of
J J
“detected” drop-off cases being prosecuted as money
K laundering from 15 in 2011 to 52 in 2014; however, the K
first three quarters in 2015 alone had seen a rapid,
L L
significant rise in that figure to 74.
M M
(viii) With the exception of six cases, the 183 detected
N N
drop-off cases from 2012 up to and including
O September 2015 had all been prosecuted with offences O
of money laundering or of conspiracy to commit
P P
money laundering.
Q Q
R R
CONSIDERATION OF ENHANCEMENT OF SENTENCE
S S
11. There was no dispute that the offence in Charge 1, of which
T T
the defendant stands convicted, was a specified offence. The offence of
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“dealing with property known or believed to represent proceeds of an
C indictment offence” is included in Schedule 1 to the Ordinance4; and a C
5
specified offence includes a conspiracy to commit a Schedule 1 offence .
D D
E 12. Section 27(2) of the Ordinance provides:- E
F F
“(2) The prosecution may furnish information to the court
regarding any or all of the following–
G (a) the nature and extent of any harm caused, G
directly or indirectly, to any person by the act in
respect of which the person has been so
H convicted; H
…
I (c) the prevalence of that specified offence; I
(d) the nature and extent of any harm, whether direct
or indirect, caused to the community by recent
J occurrences of that specified offence; J
…”
K K
13. Section 27(11) provides:-
L L
“(11) Subject to subsections (12) and (13), where a court is
M M
satisfied beyond reasonable doubt–
…
N (b) as to any information furnished under subsection N
(2) … ,
or where any such matter is agreed by the person
O convicted, the court shall have regard to such matter O
when it passes a sentence on the person for the relevant
P specified offence and may, if it thinks fit, pass a sentence P
on the person for that offence that is more severe than the
sentence it would, in the absence of such matter, have
Q passed.” Q
R
14. In the present case, the prosecution relied on DCIP Lam’s R
S
evidence for the purpose of establishing the matters referred to in section S
4
T Item no.16 in Schedule 1 to the Ordinance T
5
Subparagraph (b) of the definition of “Specified offence” in section 2 of the
U
Ordinance U
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27(2)(c) and (d), namely prevalence of the specified offence and the nature
C and extent of the harm, direct and indirect, caused to the community by C
recent occurrences of that specified offence. Those were the two grounds
D D
on which an enhancement of sentence was sought.
E E
(1) Relevance of the predicate offence, namely telephone deception
F F
G (A) Section 27(2)(d) G
H H
(i) Section 27(2)(d) and the harm referred to in section 27(2)(a)
I I
15. There are no logical reasons why the harm alluded to in
J J
section 27(2)(a) must be ignored when the court is called upon to assess the
K nature and extent of the harm, direct and indirect, caused to the community K
by the recent occurrences of the specified offence under section 27(2)(d).
L L
Any contrary interpretation can be dismissed at once as being so plainly
M absurd that the legislature could never have intended it. M
N N
16. It is therefore essential to ascertain in the first place the scope
O of section 27(2)(a). O
P P
(ii) The expression “act in respect of which” in section 27(2)(a)
Q Q
17. When considering the direct and indirect harm caused to “any
R R
person” under section 27(2)(a), the court is to have regard to “the act in
S respect of which the person has been so convicted.” Three obvious S
observations can be made of this.
T T
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18. First, the focus is on the “act” – and not the specified offence
C – in respect of which the person has been convicted. Secondly, the C
offender’s guilty mind or his state of knowledge is prima facie irrelevant in
D D
the court’s consideration of the harm caused. Thirdly, section 27(2)(a)
E being a provision on assessment of the harm caused, “the act in respect of E
which the person has been so convicted” can and should, in appropriate
F F
cases, include a consideration of relevant aggravating factors so that the
G nature and extent of the direct and “indirect” harm caused can be G
accurately and adequately reflected.
H H
I 19. The offence of money laundering and its relationship with the I
underlying or predicate offence to which it relates provide a good example
J J
in support of these observations.
K K
20. An offender can be found guilty of money laundering when it
L L
is established that he has had reasonable grounds to believe (and therefore,
M did so believe) that the property he dealt with represented proceeds of an M
indictable offence. Proof of the offender’s knowledge of the illegal
N N
provenance of the proceeds is but an alternative way by which the offence
O can be prosecuted. O
P P
21. The person who suffers as a result of the predicate offence –
Q committed often by an offender other than the money launderer himself – Q
is the victim, the likes of whom the offence of money laundering is, to a
R R
large measure, designed to protect. The Court of Appeal in HKSAR v
S Boma6 said:- S
T T
6
U HKSAR v Boma [2012] 2 HKLRD 33, p.42 U
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B ‘ … It is to be remembered that “the criminality in laundering B
arises from the encouragement and nourishment it gives to
C crime in general. Without it many crimes would be rendered C
much less fruitful and perhaps more difficult to perpetrate”: R v
Basra [2002] 2 CR App R (S) 469, 472.’
D D
If the predicate offence that causes the harm to the victim is to be ignored
E E
in the court’s examination of “the act in respect of which the person has
F
been so convicted” under section 27(2)(a), the legislative intent in F
G
providing for enhancement of sentence on consideration of the harm to G
“any person” in money laundering cases would be substantially, if not
H H
wholly, frustrated.
I I
22. Seriousness of the predicate offence, if and when known, is an
J J
important consideration in sentencing 7 and can amount to significant
K aggravation. There are no plausible reasons whatsoever why the predicate K
offence (and with it, the harm suffered by the victim of that offence) must
L L
be ignored when the court considers “the act in respect of which the person
M has been so convicted” under section 27(2)(a). M
N N
(iii) The “harm” referred to in section 27(2)(d)
O O
23. Turning now to section 27(2)(d), according to DCIP Lam,
P P
whose evidence was unchallenged, drop-off cases involve an act of money
Q laundering: an offender is tasked to collect the money. The offence of Q
money laundering is therefore an integral part of the criminal design in
R R
those cases; in this circumstance, whether or not they can be prosecuted as
S fraud, conspiracy to defraud, obtaining property by deception, or any other S
T T
7
HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 at p.551 and HKSAR v Boma [2012] 2
HKLRD 33 at pp.42-44
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offending is neither here nor there. Further, it is clear from DCIP Lam’s
C evidence that there has been an established practice or prosecutorial C
preference since 2012, a practice that is continuing, to approach and
D D
prosecute drop-off cases on the basis of money laundering.
E E
24. In addition, the wording of section 27(2)(d) itself points
F F
strongly in favour of including the predicate offence in the court’s
G consideration of the direct and indirect harm caused to the community. G
Rather than simply “the harm caused to the community by the specified
H H
offence”, section 27(2)(d) requires an examination and assessment of the
I harm caused to the community by reference to the “recent occurrences” of I
the specified offence. In drop-off cases, the physical collection of the
J J
victim’s money is an integral and essential part of the criminal act which
K generates the crime proceeds in the first place. The phrase “the harm, K
whether direct or indirect, caused by the recent occurrences of the
L L
specified offence” as it appears in section 27(2)(d) must therefore
M encompass the harm suffered by the victim as a direct result of the M
commission of the predicate offence to which the specified offence,
N N
namely, money laundering, relates.
O O
25. Finally, from the point of view of a money launderer facing an
P P
application for enhancement of his sentence, his interest will be better
Q served if in its assessment of the harm caused to the community under Q
section 27(2)(d), the court is restricted specifically to the type of predicate
R R
offence – telephone deception in drop-off situations in the instant case –
S from which the crime proceeds originate, rather than to the harm S
occasioned by all money laundering offences, regardless of the various
T T
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types of predicate offences to which a given money laundering charge may
C relate. C
D D
(iv) Information on telephone deception in drop-off cases
E E
26. In light of the foregoing discussion, the court can and should,
F F
in drop-off cases, take into account information supplied by the
G prosecution concerning the underlying, predicate offence when G
determining and assessing under section 27(2)(d) the nature and extent of
H H
the harm, direct and indirect, “caused to the community by recent
I occurrences of that specified offence.” I
J J
(B) Section 27(2)(c)
K K
Prevalence of the specified offence
L L
M 27. As discussed above, collecting the money from the victim is M
an inherent and essential part of the criminal design in drop-off cases,
N N
without which or failing which the criminal plot would be incomplete and
O futile. In addition, there is in recent years an established, ongoing O
prosecutorial bias to deal with drop-off cases on the basis of money
P P
laundering. In these circumstances, there can be no objection for the court
Q to take into account information concerning telephone deception Q
committed in the drop-off mode, reported and detected, in its consideration
R R
under section 27(2)(c) of the issue of prevalence of money laundering
S offences arising from those drop-off cases. S
T T
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28. According to DCIP Lam, there have been more than three
C reported drop-off cases a day in recent times, and there is currently an C
upward swing in their occurrences.
D D
E (2) Ruling on the application for enhancement of sentence E
F F
29. The court attaches full weight to the undisputed evidence of
G DCIP Lam – in particular, to paragraph 10(iii) to (viii) above – and finds G
beyond all reasonable doubt, first, the specified offence in Charge 1 is
H H
prevalent within the meaning of section 27(2)(c) and secondly, under
I section 27(2)(d), the nature and extent of the direct and indirect harm I
caused to the community by recent occurrences of the specified offence in
J J
Charge 1 are such that an enhancement of sentence pursuant to section
K 27(11) is called for. K
L L
30. The prosecution’s application for enhancement of sentence is
M granted on both grounds. M
N N
REASONS FOR SENTENCE
O O
31. In money laundering cases, deterrence as a sentencing
P P
8
consideration is paramount. Other important considerations include the
Q maximum penalty; the amount involved; the nature and extent of the Q
defendant’s participation; the nature and seriousness of the predicate
R R
offence (if known); the defendant’s state of knowledge of the predicate
S offence; the degree of sophistication of the offence; international element, S
T T
8
HKSAR v Boma [2012] 2 HKLRD 33, p.42
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if any; and the duration of the offence.9 That said, the Court of Appeal in
C the case of HKSAR v Boma10 said:- C
D D
“39. We were at one stage of our deliberations minded to
provide a suggested starting point for a specified relatively low
E sum involved in an offence, leaving the courts to use that as a E
base for other sentences but we at once could conjure a myriad
of factual variations which might render even that single starting
F point unwise with the further risk that it might encourage a rigid F
mathematical approach and progression without proper regard
G to other individual relevant factors.” G
H 32. The maximum sentence for the offence of money laundering H
is one of 14 years’ imprisonment 11 ; a conspiracy to commit money
I I
laundering carries the same statutory maximum12.
J J
33. HKSAR v Wu Jianbing13 was a drop-off case committed by a
K K
mainland resident on four victims in Hong Kong. In that case, two victims
L suffered losses in the total sum of $50,000, while the other two were asked L
to pay a total of $260,000 but suffered no loss. The defendant was
M M
prosecuted with two charges of money laundering and two charges of
N conspiracy to commit money laundering; to those four charges he pleaded N
guilty.
O O
P 34. In allowing the defendant’s appeal against sentence in that P
case, the Court of Appeal adopted a starting point of three years’
Q Q
R 9 R
HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 at p.551 and HKSAR v Boma [2012] 2
HKLRD 33 at pp.41-44
S 10
HKSAR v Boma [2012] 2 HKLRD 33 S
11
see section 25(3)(a) of the Ordinance
T 12 T
see section 159C(1)(a) and (4) of the Crimes Ordinance, Cap.200
13
HKSAR v Wu Jianbing [2012] 1 HKLRD 781
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imprisonment for each of the charges, reduced it to 24 months’
C imprisonment for the defendant’s guilty pleas, enhanced the sentence by C
one-third, ie., eight months, pursuant to the Ordinance, and sentenced him
D D
to 32 months’ imprisonment. In addition, the Court ordered that six
E months of the defendant’s sentence in respect of the fourth charge be E
served consecutively with the sentence for the third charge, with the
F F
remainder to be served concurrently; the final sentence was therefore 38
G months’ imprisonment. G
H H
35. HKSAR v Cen Huakuo14, the authority cited and relied on by
I the defence in the instant case, was yet another drop-off case committed by I
an 18-year-old offender from the mainland. In that case, an elderly lady of
J J
78 was asked over the phone to make payment of $250,000 for the safe
K return of her son; the amount was in the end agreed at $50,000. The police K
later arrested the defendant at a pre-arranged meeting at a park, and the
L L
victim suffered no loss. The defendant pleaded not guilty to one charge of
M conspiracy to commit money laundering and was convicted after trial. M
N N
36. The Court of Appeal observed, in the defendant’s appeal
O against sentence, that there was insufficient evidence to show that the O
defendant knew the victim had been told that her son would be harmed,
P P
and that she had suffered a greater degree of fear and stress than those
Q experienced by victims in street deception cases. The Court adopted a Q
starting point of three years’ imprisonment and had the sentence enhanced
R R
pursuant to the Ordinance (likewise) by one-third, ie., one year; in
S consequence, the defendant was sentenced to four years’ imprisonment. S
T T
14
U HKSAR v Cen Huakuo [2015] 2 HKLRD 951 U
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B B
37. In the instant case, the amount involved – with which the
C prosecutor Mr Simon Kwong PP has fairly agreed – was $25,000. There C
was no evidence to suggest that the defendant was involved in the
D D
telephone deception on Mr Chan who suffered no loss and no evidence
E capable of supporting a finding of marked sophistication in the planning or E
execution of the criminal plot, in which the defendant played only the role
F F
of the collector of the money. As Ms Liang submitted, the defendant did
G not appear to be the mastermind. G
H H
38. There was an international aspect to the offence in that the
I defendant came to Hong Kong as a visitor from the mainland to commit a I
serious crime.
J J
K 39. The appropriate starting point in all the circumstances is one K
of 32 months’ imprisonment.
L L
M 40. The defendant, a resident on the mainland, is 24 years old and M
has had a clear record in Hong Kong prior to his current conviction. He has
N N
received education up to Form Six level. He used to work as a light bulb
O installation worker but was unemployed at the time of the offence. O
P P
41. Apart from his previous good character and guilty plea, little
Q in the defendant’s background constitutes valid or viable mitigation. The Q
defendant is entitled to the usual one-third discount for his guilty plea and
R R
previous clear record; his sentence is accordingly reduced to 21 months’
S S
imprisonment.
T T
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42. Having regard to the cases of HKSAR v Wu Jianbing15 and
C HKSAR v Cen Huakuo16, there are no compelling reasons why the court C
should not impose a one-third enhancement of the defendant’s sentence
D D
pursuant to section 27(11) of the Ordinance; the 21-month sentence is
E therefore enhanced by seven months. If the current trend in terms of E
prevalence of offence (averaging more than three reported cases a day) and
F F
of the degree of harm caused to the community is to continue unabated, it
G may well be that an enhancement in excess of one-third should be seriously G
considered.
H H
I CONCLUSION I
J J
43. For the offence in Charge 1, of which the defendant stands
K convicted, he is sentenced to 28 months’ imprisonment. K
L L
M M
N N
( Joseph To )
O
Deputy District Judge O
P P
Q Q
R R
S S
T 15 T
HKSAR v Wu Jianbing [2012] 1 HKLRD 781
16
HKSAR v Cen Huakuo [2015] 2 HKLRD 951
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B DCCC 785/2015 B
C C
IN THE DISTRICT COURT OF THE
D HONG KONG SPECIAL ADMINISTRATIVE REGION D
CRIMINAL CASE NO 785 OF 2015
E E
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F HKSAR F
v
G G
YUEN ZIRU
H ----------------- H
I I
Before: Deputy District Judge Joseph To in Court
J Date: 10 November 2015 at 10:01 am J
Present: Mr Simon Kwong, Public Prosecutor, for HKSAR/Director of
K K
Public Prosecutions
L Ms Liang Pui Saw Kian Susan, of Yip Tse & Tang, assigned L
by the Director of Legal Aid, for the defendant
M M
Offences: [1] Conspiracy to deal with property known or believed to
N represent proceeds of an indictable offence （串謀處理已知 N
O
道或相信為代表從可公訴罪行的得益的財產） O
[2] Resisting a police officer in the execution of his duty （ 抗
P P
拒執行職責的警務人員）
Q Q
R
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REASONS FOR SENTENCE
S S
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T T
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B B
INTRODUCTION
C C
1. On 2 November 2015, the defendant pleaded guilty to one
D D
charge of conspiracy to deal with property known or believed to represent
E proceeds of an indictable offence, contrary to section 25(1) and (3) of the E
Organized and Serious Crimes Ordinance, Cap 455 (“the Ordinance”) and
F F
sections 159A and 159C of the Crimes Ordinance, Cap 200 (Charge 1).
G Upon the defendant’s conviction of Charge 1, the prosecution applied to G
have Charge 2 left on court file, the charge being one of resisting a police
H H
officer in the execution of his duty, contrary to section 63 of the Police
I Force Ordinance, Cap 232. The defence had no objection to that I
application; the court, accordingly, granted it.
J J
K FACTS OF THE CASE K
L L
2. On the morning of 20 July 2015, the defendant and another
M person Huang entered Hong Kong within minutes of each other via M
Shenzhen Bay Immigration Control Point. They took rooms, upon arrival
N N
in Hong Kong, and stayed at the Ocean Wifi Hotel, Mong Kok.
O O
3. At about 11:20 am on 22 July 2015, Mr Chan, aged 70,
P P
received at his residence in Tsuen Wan a telephone call from a male person
Q Q
pretending to be Mr Chan’s son. Screaming for help, the man said he had
R been kidnapped. Another male person took over the conversation, claimed R
to be the kidnapper, and demanded for a ransom in the sum of $100,000.
S S
After negotiation, this second male agreed to take $25,000 for the release
T of Mr Chan’s son. He told Mr Chan that his surname was “Chan” and T
asked him to contact him when he had the money to pay.
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A A
B B
C 4. Mr Chan ascertained quickly that his son was not in any sort C
of danger at all; a report was then made to the police. The police arranged
D D
for Mr Chan to take part in a controlled delivery of the ransom, using a
E stack of paper (instead of banknotes) in a brown envelope. As arranged, E
Mr Chan arrived at the vicinity of Exit C of the Tsuen Wan MTR Station at
F F
about 12:30 pm. The defendant and Huang were seen looking around
G nearby (they had earlier at about 12:19 pm left the Ocean Wifi Hotel G
together). Huang was seen following and talking with the defendant, while
H H
the defendant kept talking on the phone. At around 12:50 pm, Mr Chan
I was directed to go to an open area. The defendant approached him there I
and said words to the effect: “Mr Chan asked me to come.” Mr Chan
J J
handed over the brown envelope stuffed with paper, which the defendant
K put inside his own bag. The police took action to effect arrest on the K
defendant, in the course of which he put up a struggle.
L L
M MITIGATION M
N N
5. In his plea in mitigation, the defendant submitted, via his
O solicitor Ms Susan Liang, that he was the only son in the family, his father O
having passed away, his mother working as a part-time janitor, and his
P P
elder sister living away from home. The defendant said he had been to
Q Hong Kong as a visitor once before and submitted that he was not the Q
mastermind in the commission of the offence. He had not been told how
R R
much he would get as his reward for collecting the money from the victim.
S S
T T
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A A
B B
6. The defendant relied on the case of HKSAR v Cen Huakuo1, a
C case in which the victim was asked to pay $50,000 in circumstances similar C
to the defendant’s, and in that case, the Court of Appeal said:-
D D
E
“25. Taking into account all the circumstances of the case and E
the requirement that a sentence should have deterrent effect in
order to prevent mainlanders from taking part in such an
F abhorrent and despicable offence like “phone deception” in F
whatever manner, we are of the view that the appropriate
starting point is 3 years’ imprisonment, and the sentence should
G G
be enhanced by one-third pursuant to the Organized and Serious
Crimes Ordinance.”2
H H
7. The defendant argued that the starting point in his case should
I I
be no more than three years as the amount involved in his offending was
J $25,000 and that Mr Chan had suffered no loss. He further submitted that J
the enhancement of sentence should not be more than one-third of his
K K
sentence after mitigation3.
L L
INFORMATION FURNISHED PURSUANT TO SECTION 27(2) OF THE
M M
ORDINANCE
N N
8. The defendant confirmed, before arraignment, receipt of the
O O
prosecution’s notice of intention to furnish information to the court
P pursuant to section 27(2) of the Ordinance and indicated that the P
prosecution’s application for enhancement of sentence under section 27(11)
Q Q
of the Ordinance was unopposed.
R R
S S
1
HKSAR v Cen Huakuo [2015] 2 HKLRD 951
2
T HKSAR v Cen Huakuo [2015] 2 HKLRD 951 at pp.957-8 T
3
For the steps to be followed in imposing an enhanced sentence, see HKSAR v Tam
U Wai-pio [1984] 4 HKC 291 at p.298 U
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A A
B B
9. The prosecution tendered to court DCIP Lam Cheuk Ho’s
C witness statement dated 19 October 2015 in support of their application for C
enhancement of sentence. The defendant did not seek to dispute the
D D
information supplied in DCIP Lam’s statement.
E E
10. In essence, DCIP Lam’s evidence showed the following:-
F F
G (i) Between 2010 and 2014, the number of reported cases G
of telephone deception varied between about 2,000 to
H H
2,300 a year, and in cases where the culprits succeeded
I in their criminal ploys, the victims had suffered a I
yearly loss ranging between around $23m and $45.7m.
J J
K (ii) There had been a noticeable increase recently in the K
number of such reported cases: in the first three
L L
quarters up to 19 October 2015 alone, there were in
M excess of 2,600 such cases; and the accumulated loss in M
this 9-month period stood at a staggering $287.6m.
N N
O (iii) In the 3rd quarter of 2015 alone, there were a total of O
1,249 victims of telephone deception cases, almost all
P P
of whom were Hong Kong residents, most of them
Q students, housewives or retirees. Q
R R
(iv) Before 2011, there had been minimal reported cases in
S S
which an offender was involved or supposed to be
T
involved in the physical collection of the victims’ T
monies (“drop-off” cases).
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A A
B B
C (v) Between 2011 and 2014, the average daily number of C
reported drop-off cases ranged between 2.85 and 3.37
D D
cases a day; and the figure for the first three quarters up
E to 19 October 2015 alone had risen to 3.73 cases a day. E
F F
(vi) The losses occasioned by drop-off cases between 2008
G and 2014 rose from some $3m to about $13m yearly; G
and the losses in first three quarters in 2015 alone
H H
totalled $11.3m.
I I
(vii) There had been a steady increase in the number of
J J
“detected” drop-off cases being prosecuted as money
K laundering from 15 in 2011 to 52 in 2014; however, the K
first three quarters in 2015 alone had seen a rapid,
L L
significant rise in that figure to 74.
M M
(viii) With the exception of six cases, the 183 detected
N N
drop-off cases from 2012 up to and including
O September 2015 had all been prosecuted with offences O
of money laundering or of conspiracy to commit
P P
money laundering.
Q Q
R R
CONSIDERATION OF ENHANCEMENT OF SENTENCE
S S
11. There was no dispute that the offence in Charge 1, of which
T T
the defendant stands convicted, was a specified offence. The offence of
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A A
B B
“dealing with property known or believed to represent proceeds of an
C indictment offence” is included in Schedule 1 to the Ordinance4; and a C
5
specified offence includes a conspiracy to commit a Schedule 1 offence .
D D
E 12. Section 27(2) of the Ordinance provides:- E
F F
“(2) The prosecution may furnish information to the court
regarding any or all of the following–
G (a) the nature and extent of any harm caused, G
directly or indirectly, to any person by the act in
respect of which the person has been so
H convicted; H
…
I (c) the prevalence of that specified offence; I
(d) the nature and extent of any harm, whether direct
or indirect, caused to the community by recent
J occurrences of that specified offence; J
…”
K K
13. Section 27(11) provides:-
L L
“(11) Subject to subsections (12) and (13), where a court is
M M
satisfied beyond reasonable doubt–
…
N (b) as to any information furnished under subsection N
(2) … ,
or where any such matter is agreed by the person
O convicted, the court shall have regard to such matter O
when it passes a sentence on the person for the relevant
P specified offence and may, if it thinks fit, pass a sentence P
on the person for that offence that is more severe than the
sentence it would, in the absence of such matter, have
Q passed.” Q
R
14. In the present case, the prosecution relied on DCIP Lam’s R
S
evidence for the purpose of establishing the matters referred to in section S
4
T Item no.16 in Schedule 1 to the Ordinance T
5
Subparagraph (b) of the definition of “Specified offence” in section 2 of the
U
Ordinance U
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A A
B B
27(2)(c) and (d), namely prevalence of the specified offence and the nature
C and extent of the harm, direct and indirect, caused to the community by C
recent occurrences of that specified offence. Those were the two grounds
D D
on which an enhancement of sentence was sought.
E E
(1) Relevance of the predicate offence, namely telephone deception
F F
G (A) Section 27(2)(d) G
H H
(i) Section 27(2)(d) and the harm referred to in section 27(2)(a)
I I
15. There are no logical reasons why the harm alluded to in
J J
section 27(2)(a) must be ignored when the court is called upon to assess the
K nature and extent of the harm, direct and indirect, caused to the community K
by the recent occurrences of the specified offence under section 27(2)(d).
L L
Any contrary interpretation can be dismissed at once as being so plainly
M absurd that the legislature could never have intended it. M
N N
16. It is therefore essential to ascertain in the first place the scope
O of section 27(2)(a). O
P P
(ii) The expression “act in respect of which” in section 27(2)(a)
Q Q
17. When considering the direct and indirect harm caused to “any
R R
person” under section 27(2)(a), the court is to have regard to “the act in
S respect of which the person has been so convicted.” Three obvious S
observations can be made of this.
T T
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A A
B B
18. First, the focus is on the “act” – and not the specified offence
C – in respect of which the person has been convicted. Secondly, the C
offender’s guilty mind or his state of knowledge is prima facie irrelevant in
D D
the court’s consideration of the harm caused. Thirdly, section 27(2)(a)
E being a provision on assessment of the harm caused, “the act in respect of E
which the person has been so convicted” can and should, in appropriate
F F
cases, include a consideration of relevant aggravating factors so that the
G nature and extent of the direct and “indirect” harm caused can be G
accurately and adequately reflected.
H H
I 19. The offence of money laundering and its relationship with the I
underlying or predicate offence to which it relates provide a good example
J J
in support of these observations.
K K
20. An offender can be found guilty of money laundering when it
L L
is established that he has had reasonable grounds to believe (and therefore,
M did so believe) that the property he dealt with represented proceeds of an M
indictable offence. Proof of the offender’s knowledge of the illegal
N N
provenance of the proceeds is but an alternative way by which the offence
O can be prosecuted. O
P P
21. The person who suffers as a result of the predicate offence –
Q committed often by an offender other than the money launderer himself – Q
is the victim, the likes of whom the offence of money laundering is, to a
R R
large measure, designed to protect. The Court of Appeal in HKSAR v
S Boma6 said:- S
T T
6
U HKSAR v Boma [2012] 2 HKLRD 33, p.42 U
CRT20/10.11.2015/ 9 DCCC 785/2015/Sentence
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A A
B ‘ … It is to be remembered that “the criminality in laundering B
arises from the encouragement and nourishment it gives to
C crime in general. Without it many crimes would be rendered C
much less fruitful and perhaps more difficult to perpetrate”: R v
Basra [2002] 2 CR App R (S) 469, 472.’
D D
If the predicate offence that causes the harm to the victim is to be ignored
E E
in the court’s examination of “the act in respect of which the person has
F
been so convicted” under section 27(2)(a), the legislative intent in F
G
providing for enhancement of sentence on consideration of the harm to G
“any person” in money laundering cases would be substantially, if not
H H
wholly, frustrated.
I I
22. Seriousness of the predicate offence, if and when known, is an
J J
important consideration in sentencing 7 and can amount to significant
K aggravation. There are no plausible reasons whatsoever why the predicate K
offence (and with it, the harm suffered by the victim of that offence) must
L L
be ignored when the court considers “the act in respect of which the person
M has been so convicted” under section 27(2)(a). M
N N
(iii) The “harm” referred to in section 27(2)(d)
O O
23. Turning now to section 27(2)(d), according to DCIP Lam,
P P
whose evidence was unchallenged, drop-off cases involve an act of money
Q laundering: an offender is tasked to collect the money. The offence of Q
money laundering is therefore an integral part of the criminal design in
R R
those cases; in this circumstance, whether or not they can be prosecuted as
S fraud, conspiracy to defraud, obtaining property by deception, or any other S
T T
7
HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 at p.551 and HKSAR v Boma [2012] 2
HKLRD 33 at pp.42-44
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A A
B B
offending is neither here nor there. Further, it is clear from DCIP Lam’s
C evidence that there has been an established practice or prosecutorial C
preference since 2012, a practice that is continuing, to approach and
D D
prosecute drop-off cases on the basis of money laundering.
E E
24. In addition, the wording of section 27(2)(d) itself points
F F
strongly in favour of including the predicate offence in the court’s
G consideration of the direct and indirect harm caused to the community. G
Rather than simply “the harm caused to the community by the specified
H H
offence”, section 27(2)(d) requires an examination and assessment of the
I harm caused to the community by reference to the “recent occurrences” of I
the specified offence. In drop-off cases, the physical collection of the
J J
victim’s money is an integral and essential part of the criminal act which
K generates the crime proceeds in the first place. The phrase “the harm, K
whether direct or indirect, caused by the recent occurrences of the
L L
specified offence” as it appears in section 27(2)(d) must therefore
M encompass the harm suffered by the victim as a direct result of the M
commission of the predicate offence to which the specified offence,
N N
namely, money laundering, relates.
O O
25. Finally, from the point of view of a money launderer facing an
P P
application for enhancement of his sentence, his interest will be better
Q served if in its assessment of the harm caused to the community under Q
section 27(2)(d), the court is restricted specifically to the type of predicate
R R
offence – telephone deception in drop-off situations in the instant case –
S from which the crime proceeds originate, rather than to the harm S
occasioned by all money laundering offences, regardless of the various
T T
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A A
B B
types of predicate offences to which a given money laundering charge may
C relate. C
D D
(iv) Information on telephone deception in drop-off cases
E E
26. In light of the foregoing discussion, the court can and should,
F F
in drop-off cases, take into account information supplied by the
G prosecution concerning the underlying, predicate offence when G
determining and assessing under section 27(2)(d) the nature and extent of
H H
the harm, direct and indirect, “caused to the community by recent
I occurrences of that specified offence.” I
J J
(B) Section 27(2)(c)
K K
Prevalence of the specified offence
L L
M 27. As discussed above, collecting the money from the victim is M
an inherent and essential part of the criminal design in drop-off cases,
N N
without which or failing which the criminal plot would be incomplete and
O futile. In addition, there is in recent years an established, ongoing O
prosecutorial bias to deal with drop-off cases on the basis of money
P P
laundering. In these circumstances, there can be no objection for the court
Q to take into account information concerning telephone deception Q
committed in the drop-off mode, reported and detected, in its consideration
R R
under section 27(2)(c) of the issue of prevalence of money laundering
S offences arising from those drop-off cases. S
T T
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A A
B B
28. According to DCIP Lam, there have been more than three
C reported drop-off cases a day in recent times, and there is currently an C
upward swing in their occurrences.
D D
E (2) Ruling on the application for enhancement of sentence E
F F
29. The court attaches full weight to the undisputed evidence of
G DCIP Lam – in particular, to paragraph 10(iii) to (viii) above – and finds G
beyond all reasonable doubt, first, the specified offence in Charge 1 is
H H
prevalent within the meaning of section 27(2)(c) and secondly, under
I section 27(2)(d), the nature and extent of the direct and indirect harm I
caused to the community by recent occurrences of the specified offence in
J J
Charge 1 are such that an enhancement of sentence pursuant to section
K 27(11) is called for. K
L L
30. The prosecution’s application for enhancement of sentence is
M granted on both grounds. M
N N
REASONS FOR SENTENCE
O O
31. In money laundering cases, deterrence as a sentencing
P P
8
consideration is paramount. Other important considerations include the
Q maximum penalty; the amount involved; the nature and extent of the Q
defendant’s participation; the nature and seriousness of the predicate
R R
offence (if known); the defendant’s state of knowledge of the predicate
S offence; the degree of sophistication of the offence; international element, S
T T
8
HKSAR v Boma [2012] 2 HKLRD 33, p.42
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A A
B B
if any; and the duration of the offence.9 That said, the Court of Appeal in
C the case of HKSAR v Boma10 said:- C
D D
“39. We were at one stage of our deliberations minded to
provide a suggested starting point for a specified relatively low
E sum involved in an offence, leaving the courts to use that as a E
base for other sentences but we at once could conjure a myriad
of factual variations which might render even that single starting
F point unwise with the further risk that it might encourage a rigid F
mathematical approach and progression without proper regard
G to other individual relevant factors.” G
H 32. The maximum sentence for the offence of money laundering H
is one of 14 years’ imprisonment 11 ; a conspiracy to commit money
I I
laundering carries the same statutory maximum12.
J J
33. HKSAR v Wu Jianbing13 was a drop-off case committed by a
K K
mainland resident on four victims in Hong Kong. In that case, two victims
L suffered losses in the total sum of $50,000, while the other two were asked L
to pay a total of $260,000 but suffered no loss. The defendant was
M M
prosecuted with two charges of money laundering and two charges of
N conspiracy to commit money laundering; to those four charges he pleaded N
guilty.
O O
P 34. In allowing the defendant’s appeal against sentence in that P
case, the Court of Appeal adopted a starting point of three years’
Q Q
R 9 R
HKSAR v Hsu Yu Yi [2010] 5 HKLRD 545 at p.551 and HKSAR v Boma [2012] 2
HKLRD 33 at pp.41-44
S 10
HKSAR v Boma [2012] 2 HKLRD 33 S
11
see section 25(3)(a) of the Ordinance
T 12 T
see section 159C(1)(a) and (4) of the Crimes Ordinance, Cap.200
13
HKSAR v Wu Jianbing [2012] 1 HKLRD 781
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A A
B B
imprisonment for each of the charges, reduced it to 24 months’
C imprisonment for the defendant’s guilty pleas, enhanced the sentence by C
one-third, ie., eight months, pursuant to the Ordinance, and sentenced him
D D
to 32 months’ imprisonment. In addition, the Court ordered that six
E months of the defendant’s sentence in respect of the fourth charge be E
served consecutively with the sentence for the third charge, with the
F F
remainder to be served concurrently; the final sentence was therefore 38
G months’ imprisonment. G
H H
35. HKSAR v Cen Huakuo14, the authority cited and relied on by
I the defence in the instant case, was yet another drop-off case committed by I
an 18-year-old offender from the mainland. In that case, an elderly lady of
J J
78 was asked over the phone to make payment of $250,000 for the safe
K return of her son; the amount was in the end agreed at $50,000. The police K
later arrested the defendant at a pre-arranged meeting at a park, and the
L L
victim suffered no loss. The defendant pleaded not guilty to one charge of
M conspiracy to commit money laundering and was convicted after trial. M
N N
36. The Court of Appeal observed, in the defendant’s appeal
O against sentence, that there was insufficient evidence to show that the O
defendant knew the victim had been told that her son would be harmed,
P P
and that she had suffered a greater degree of fear and stress than those
Q experienced by victims in street deception cases. The Court adopted a Q
starting point of three years’ imprisonment and had the sentence enhanced
R R
pursuant to the Ordinance (likewise) by one-third, ie., one year; in
S consequence, the defendant was sentenced to four years’ imprisonment. S
T T
14
U HKSAR v Cen Huakuo [2015] 2 HKLRD 951 U
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A A
B B
37. In the instant case, the amount involved – with which the
C prosecutor Mr Simon Kwong PP has fairly agreed – was $25,000. There C
was no evidence to suggest that the defendant was involved in the
D D
telephone deception on Mr Chan who suffered no loss and no evidence
E capable of supporting a finding of marked sophistication in the planning or E
execution of the criminal plot, in which the defendant played only the role
F F
of the collector of the money. As Ms Liang submitted, the defendant did
G not appear to be the mastermind. G
H H
38. There was an international aspect to the offence in that the
I defendant came to Hong Kong as a visitor from the mainland to commit a I
serious crime.
J J
K 39. The appropriate starting point in all the circumstances is one K
of 32 months’ imprisonment.
L L
M 40. The defendant, a resident on the mainland, is 24 years old and M
has had a clear record in Hong Kong prior to his current conviction. He has
N N
received education up to Form Six level. He used to work as a light bulb
O installation worker but was unemployed at the time of the offence. O
P P
41. Apart from his previous good character and guilty plea, little
Q in the defendant’s background constitutes valid or viable mitigation. The Q
defendant is entitled to the usual one-third discount for his guilty plea and
R R
previous clear record; his sentence is accordingly reduced to 21 months’
S S
imprisonment.
T T
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A A
B B
42. Having regard to the cases of HKSAR v Wu Jianbing15 and
C HKSAR v Cen Huakuo16, there are no compelling reasons why the court C
should not impose a one-third enhancement of the defendant’s sentence
D D
pursuant to section 27(11) of the Ordinance; the 21-month sentence is
E therefore enhanced by seven months. If the current trend in terms of E
prevalence of offence (averaging more than three reported cases a day) and
F F
of the degree of harm caused to the community is to continue unabated, it
G may well be that an enhancement in excess of one-third should be seriously G
considered.
H H
I CONCLUSION I
J J
43. For the offence in Charge 1, of which the defendant stands
K convicted, he is sentenced to 28 months’ imprisonment. K
L L
M M
N N
( Joseph To )
O
Deputy District Judge O
P P
Q Q
R R
S S
T 15 T
HKSAR v Wu Jianbing [2012] 1 HKLRD 781
16
HKSAR v Cen Huakuo [2015] 2 HKLRD 951
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