IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CRIMINAL CASE NO. 1381 OF 2011
REASONS FOR SENTENCE
1. The defendants are cohabitees. I convicted them after trial of three offences of money laundering and three offences of managingvice establishments.
2. Charge one alleged that D1 laundered HKD4,107,353.77 through three bank accounts held by him with the Hongkong and Shanghai BankingCorporation (HSBC) between 1 January 2004 and 4 June 2011.
3. The second charge alleged that between January 2004 and May 2011, D2 laundered HKD6,587,805.87 through 5 bank accounts held byher, three with HSBC and two with the Hang Seng Bank (HSB).
4. Charge 3 alleged that D1 and D2, between 29 April 2010 and 18 June 2011, laundered HKD10, 123,609.04 through 11 bank accounts heldby them in their joint names or in the names of companies controlled by them. Six of the bank accounts were with the Wing Lung Bank(WLB), two with the Standard Chartered Bank (SCB) , two with the Nanyang Commercial Bank (NCB) and one with the Dah Sing Bank (DSB).
5. Charges 4 to 6 related to three different premises.
6. A police operation was conducted in respect of the three premises referred to in charges 4-6. On 14 Septmeber 2011 a number of undercoverpolice officers visited each of the premises posing as customers. On each occasion the officers were offered sexual services. On14 September 2011 the police operation became overt and a number of mainland prostitutes were arrested at each of the premises.
7. Each of the premises were divided into rooms. Each room had its own doorbell and en-suite bathroom. A prostitute was available ineach of the rooms entered by the decoy offices. In each of the premises there was a CCTV system connected to a separate control roomwhere video equipment was found, stocks of condoms and underwear used by the prostitutes.
8. The premises referred to in charges 4 and 6 were jointly owned by D1 and D2. CCTV coverage showed the defendants visited all threepremises on a number of occasions in August and September 2011 . They were observed interacting with the prostitutes, handing themcertain boxes and intimate items of clothing and attending to such matters as cleaning and laundry.
9. The police discovered that there were 19 bank accounts controlled by D1 and/ or D2 or by companies controlled by them. The amountsreferred to in the charges includes amounts moving between the various bank accounts. The amount of cash paid into the accounts duringthe relevant periods was HKD17.7 million. Many of the payments into the accounts were by way of small cash payments many of whichwere in the sum of HKD3,000 deposited into the accounts at cash deposit transfer machines.
10. The defendants were arrested for offences of managing vice establishments and money laundering on 16 September 2011 and subsequentlyinterviewed under caution.
11. D1 has one previous conviction. In 2008 for trafficking in dangerous drugs he was sentenced to 6 months imprisonment.
12. He is 30 years of age and lives with D2. He was educated to Form 5 standard and works as a decorator.
13. D2 is 44 years of age and lives with D1. She was born on the mainland and came to Hong Kong to join her husband and daughter whois now aged 12. She is divorced from her husband and her daughter lives with her and D1. I was informed that she spends HKD10,000per month on her daughter’s education. She works as a prostitute and claims to earn HKD200,000 per month.
14. It was submitted on behalf of each defendant that in relation to the vice establishments they were convicted of managing the factswere unusual in that the prostitutes dealt directly with the clients with regard to payment and the set up was different from theusual type of vice establishment. It was submitted that there was no evidence of force, coercion or using underage girls. The periodsfor which the premises were managed as vice establishments were not lengthy.
15. With regard to the money laundering charges, it was submitted that all the monies were paid into accounts held by the defendants.They did not use other people. It was also submitted that the amount s paid into the bank accounts included monies earned by thedefendants from other sources. It was submitted that the income from vice establishments only dates back to the end of 2010.
16. I noted that all the prosecution evidence was unchallenged and most agreed under the provisions of s.65B or 65C of the Criminal Procedure Ordinance Cap 221.
Money Laundering – Charges 1 -3
17. Money laundering offences invariable attract substantial sentences of imprisonment. There is no tariff for such offences howeverthe amount of money laundered will inevitably be relevant to sentence. The underlying offence is not relevant to sentence unlessso serious as to amount to an aggravating factor. That does not apply in this case.
18. In arriving at appropriate sentences I have taken into account the matters urged upon the court in mitigation . Not all of the HKD17.7million cash paid into the bank accounts controlled by the defendants were the proceeds of the indictable offences and that the defendantdid not challenge the prosecution evidence.
19. In this regard I noted that the payments into the bank accounts increased considerably during the period covered by the vice charges.The monthly cash deposits as shown in Schedules 2 to 4 had increased respectively to HKD270,000 per month in April 2010 in respectof D1’s three accounts, HKD397,800 in January 2010 for the accounts held by D2 and and HKD1,722,220 by the end of the 15 monthperiod during which the joint and corporate accounts were open.
20. I have decided that the appropriate starting point in respect of charges 1 and 2 should be concurrent sentences of 3 years 6 monthsimprisonment and for charge 3, 5 years imprisonment. I have taken into account the mitigation urged upon the court and have decidedto reduced each of these sentences by 6 months and order that all the sentences should be served concurrently. The defendants willtherefore go to prison for 4 years and 6 months.
Managing Vice Establishments – Charges 4-6.
21. Those convicted of managing vice establishments should expect to receive custodial sentences. I note that all the prostitutes encounteredby the undercover police officers in this case were from the mainland. I have taken into account the matters urged upon the courtin mitigation and decided that in relation to the three charges concurrent sentences of 12 months imprisonment are appropriate.
22. I have considered the question of totality and order that the sentences on charges 4-6 should run concurrently with the sentenceson charges 1 to 3. Each defendant will therefore go to prison for 4 years and 6 months.