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Hksar v Lam Hing Wan

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date14 November 2018
Neutral Citation[2018] HKCA 686
Year2018
Judgement NumberCACC387/2016
Subject MatterCriminal Appeal
CourtCourt of Appeal (Hong Kong)
CACC387A/2016 HKSAR v. LAM HING WAN

CACC 387/2016

[2018] HKCA 686

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 387 OF 2016

(ON APPEAL FROM DCCC NO 378 OF 2014)

_______________

BETWEEN
HKSAR Respondent
and
LAM Hing Wan Appellant

_______________

Before: Hon Macrae VP and Zervos JA in Court
Date of Hearing: 10 October 2018
Date of Judgment: 14 November 2018

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J U D G M E N T

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Hon Zervos JA (giving the Judgment of the Court):

1. The appellant stood trial in the District Court before Deputy District Judge Bina Chainrai (the judge) on three charges of dealing with property knowing or having reasonable grounds to believe represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organized and Serious Crimes Ordinance, Cap 455 (Charges 1 to 3). At the conclusion of the trial on 15 November 2016, the judge acquitted the appellant of Charge 1 and convicted him of Charges 2 and 3. On 1 December 2016, the judge sentenced the appellant to a total term of 5 years and 11 months’ imprisonment.

2. This offence is commonly referred to as “money laundering” but it is much broader than the description suggests for it is “dealing in the proceeds of crime”. We will use both descriptions for the offence in the judgment.

3. The appellant initially applied for leave to appeal against both conviction and sentence but he subsequently abandoned his application against conviction on 1 February 2018. At the hearing of the application for leave to appeal against sentence on 20 July 2018, McWalters JA considered the three grounds of appeal against sentence that were advanced by the appellant. He found the first two grounds were not reasonably arguable but granted leave on the third ground which is couched in general terms that in all the circumstances of the case the total sentence of 5 years and 11 months’ imprisonment was manifestly excessive. See HKSAR v Lam Hing Wan [2018] HKCA 456.

The case background

4. The appellant was one of three defendants who stood trial, variously charged with offences of dealing in the proceeds of crime. He was the 1st defendant who faced three charges of dealing in the proceeds of crime (Charges 1 to 3), whereas the 2nd and 3rd defendants each faced one charge of dealing in the proceeds of crime (Charges 4 and 5 respectively). It was alleged by the prosecution that the appellant operated an illegal gambling establishment in premises in Tsuen Wan and the proceeds therefrom of around $20 million cash were deposited into two bank accounts during the period from 1 October 2009 to 17 January 2013 (the day when the police raided the premises). It was alleged against the 2nd and 3rd defendants that they worked at the illegal gambling establishment and made certain cash deposits into the bank accounts on behalf of the appellant.

The case against the appellant

5. The case against the appellant stemmed from a police operation on 17 January 2013 into an unlicensed gambling establishment at a cockloft in Tsuen Wan operated by the appellant. The police arrested a total of 20 people, including the appellant and the other two defendants, in the establishment. The police observed that most of the people present were playing mahjong. In the premises, there were 6 electronic mahjong tables and 12 sets of mahjong tiles, together with gambling chips, $2550 cash and 10 business logbooks. There was also an extensive system of CCTV cameras, one at the entrance and ten inside the premises, which were connected to three screens inside the premises. When police arrested the appellant, they found in his possession a set of keys which opened the main door of the premises.

6. Charge 1 alleged that the appellant, on 17 January 2013, at the premises, dealt in the proceeds of crime, namely cash of HK$27,000 and RMB14,300, 6 wristwatches and 25 pieces of jewellery. The property related to items seized by the police during the operation.

7. Charges 2 and 3 of which the appellant was convicted related to the funds subsequently discovered to have been transacted in his two HSBC bank accounts. Charge 2 alleged that appellant had dealt in the proceeds of crime in the sum of $15,453,626.26 between 1 October 2009 and 17 January 2013 through the HSBC bank account numbered 075-3-099969 in his name. Charge 3 alleged that the appellant had dealt in the proceeds of crime in the sum of $4,773,353.60 between 3 September 2011 and 17 January 2013 through a HSBC bank account numbered 632-094777-888, also in his name.

The case for the appellant

8. The appellant gave evidence in his own defence but did not call any witnesses. He denied that the funds in Charges 2 and 3 were the proceeds from an illegal gambling operation at the premises. He claimed that the funds were earnings he derived as a subcontractor in the construction industry, winnings he received in gambling, and the repayment of loans from friends. He admitted that he rented the premises since 2011, for about one year and three months prior to the raid on 17 January 2013. He said he paid a rental of $12,000 a month. He said he set up the premises so that his friends could play mahjong. He admitted that a commission was paid to him from the players. He also admitted that he had not filed any tax returns or paid tax between February 2006 and January 2013. He said the items of property in Charge 1 were personal items of his and his wife that he had taken from home and kept at the premises in Tsuen Wan. He claimed that his wife had a serious gambling habit and he took the items to the premises so that she would not sell them. He denied that the items of property were security offered by players for the advance of funds in order to gamble at his establishment.

The judge’s reasons for verdict

9. The judge found that the appellant was in possession of these items, as specified under Charge 1, but she was unable to draw the inference that they were used as security to borrow money in order to gamble at the establishment as alleged by the prosecution. She acquitted the appellant of this charge.

10. The judge found that the appellant had operated the gambling establishment during the material times and that the funds transacted in the two bank accounts represented the profits of his illegal gambling establishment and therefore were the proceeds of crime. She convicted the appellant of Charges 2 and 3.

The appellant’s mitigation

11. In mitigation, it was noted that the appellant had been charged with operating a gambling establishment, contrary to section 5 of the Gambling Ordinance, Cap 148, in relation to the present offence. It had been dealt with in the Magistrate’s Court where the appellant had pleaded guilty to the offence for which he was fined $15,000 and sentenced to 3 months’ imprisonment, suspended for a period of 36 months. Defence counsel acknowledged that the sentence was very lenient, which he said may have been due to the court not having the relevant banking information about the sums of money generated during the alleged period of operation of the gambling establishment.

12. This is a matter of some concern because the case against the appellant in relation to operating an illegal gambling establishment was much more serious than the one prosecuted. It appears that in the Magistrate’s Court all that was alleged against him was that on 17 January 2013 he operated a gambling establishment consisting of 6 mahjong tables. This was a far cry from the illegal gambling operation alleged against him in relation to the offences of dealing in the proceeds of crime in the present case.

13. Defence counsel went on to urge the judge not to consider the entire sum that went through the two bank accounts as being the proceeds of the appellant’s illegal gambling operation but offered no reason why she should, other than there was no evidence that his only income was derived from his illegal gambling operation. However, defence counsel acknowledged that the appellant had admitted to operating the gambling establishment for a period of about 15 months.

14. It was noted that the appellant was in his 60s and not of good health, suffering from a heart condition and diabetes, and that his wife had committed suicide as a result of the case. However, it was revealed that the appellant’s relationship with his wife was strained and that she suffered with bouts of depression. The appellant’s criminal record was briefly referred to by defence counsel, who acknowledged that a term of imprisonment was bound to be imposed for the present offences for which he had been found guilty.

15. A background report had been obtained in relation to the appellant which was not favourable and depicted him in a bad light, noting his lack of cooperation during inquiries for the report, and lack of remorse for his past criminal misconduct. The appellant had a criminal record dating back to 1974, which included variously offences of robbery, possessing a dangerous drug and operating a gambling establishment.

The sentencing of the appellant

16. In sentencing the appellant, the judge, having briefly set out the facts of the case, noted his criminal record with his most recent conviction being his operation of the gambling establishment in Tsuen Wan. She noted that he did not have a previous conviction for dealing in the proceeds of crime, although he had a previous conviction in 1986 for operating a gambling establishment and also one in 2006 for assisting in operating a gambling establishment

17. The judge went on to refer to his personal circumstances, particularly his medical condition for which he was receiving treatment, and his family situation. She referred to the...

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