DCCC001280 2005 by nLqKtG

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                                                                 DCCC1280/2005

B                              IN THE DISTRICT COURT OF THE                             B
                         HONG KONG SPECIAL ADMINISTRATIVE REGION
                              CRIMINAL CASE NO. 1280 OF 2005
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                                          HKSAR

E                                          v.                                           E

                                      Lau Hon-keung
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    Before:       H H Judge S. D’Almada Remedios
    Date:         21 September 2011 at 10.10 am
H   Present:      Mr Newman Wong, Counsel on fiat, for HKSAR                            H
                  Mr Daniel Marash SC, leading Mr Toby Jenkyn-Jones,
                  instructed by Messrs Haldanes, for the Defendant
I   Offence:      (1) & (2) Dealing with property known or reasonably                   I
                  believed to represent proceeds of an indictable
J                 offence (處理已知道或合理相信為代表從可公訴罪行的得益的財產)                                   J

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                                  Reasons for Sentence
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    1.            Defendant, I convicted you after trial of two offences
N   of dealing with the proceeds of an indictable offence, contrary                     N

    to section 25(1) and (3) of the Organised and Serious Crimes
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    Ordinance, Cap.455.

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    2.            In this case, unlike other money laundering cases, the
Q   proceeds of the indictable offence was known and that was money                     Q
    derived from massage or sauna establishments which were offering
R   sexual services to its customers.           These establishments are                R

    otherwise commonly known as vice establishments.
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    3.            The money, involved in Charge 1 was in relation to the
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    Temple Street Sauna which amounted to approximately HK$9.3

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    CRT33/21.9.2011/SR                      1                  DCCC1280/2011/Sentence
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    million.      The money in relation to the other establishment was
    the New Crystal Spa that amounted to approximately HK$8 million.
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C   4.            The offences were committed over a period of about nine              C
    months.     The sauna massage establishments were located in fairly
D   large elaborate premises in Jordan Road and Tsim Sha Tsui                          D

    respectively.         As evidenced from all the banking documents, you
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    alone had dealt with almost all the funds in the bank account of
    the two establishments, principally withdrawing about 90 per
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    cent of the funds which amounted to HK$9.8 million from the

G   account that was used by Temple Street Sauna, and HK$7.8 million                   G
    from the account that was used by New Crystal Spa.
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    5.            I found, as you were the person in charge of the vault
I   of the sauna’s revenue, you knew or had reasonable grounds to                      I

    believe that the income derived from the saunas were from
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    services which included sexual services.

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    6.            I have taken into account all that Mr Marash, SC, has
L   said for you on your behalf in his very full and thorough                          L
    mitigation.          You are 54 years of age and have a clear record.
M   You are married and have an adult daughter.         Prior to your arrest           M

    in June 2005, you were a manager of a Karaoke nightclub, a sole
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    proprietor and manager of a nightclub, and the manager of a foot
    massage sauna.         It has been submitted by Mr Marash that you were
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    given authority to deal with the bank accounts because the
P   owners of the saunas trusted you and treated you like family.                      P
    You, however, gained no profit from your dealing.
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    7.            It has been urged upon me that, due to no fault of
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    yours, you have suffered stress from the process of the trial
    since you were arrested in 2005 and have, as a result, suffered
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    major setbacks in your health.          Mr Marash has taken me carefully

T   through the numerous medical reports submitted which attest to                     T
    the fact that you had a stroke in 2006, 2007 and 2008 to which
U   has now left you partially blind in both eyes and deaf in your                     U


    CRT33/21.9.2011/SR                      2                 DCCC1280/2011/Sentence
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    right ear.       You have difficulty walking, thus, need to use
    crutches and suffer from a bad hip as well as a sore back.
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    Mr Marash has also asked me to take into account the delay in

C   the proceedings from the date of your arrest until the date of                  C
    your conviction today.
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    8.            As a general background, at your first trial in 2006,
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    that trial was aborted because you had a stroke.       At the second
    trial that lasted, I am informed and I believe about 150 days
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    before Deputy Judge Michael Jenkins, the judge there, found

G   there to be no case to answer and acquitted you on all charges.                 G
    The judge was then case stated by the prosecution and the Court
H   of Appeal upheld the acquittals on some of the charges against                  H
    you but remitted the present two charges back for trial.
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    9.            The trial for the two charges which the Court of Appeal
J   remitted back to Deputy Judge Jenkins however did not proceed                   J

    before him and thus there was a re-trial before myself.         It has,
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    therefore, taken from the time of your arrest until the date of
    conviction, approximately 6 years.
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M   10.           Mr Marash has rightly pointed out that there are no               M
    sentencing guidelines for the present offences because the facts
N   vary from case to case.      The following factors are to be taken              N

    into account when determining sentence.       The length of time the
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    laundering had subsisted.       The degree of sophistication of the
    laundering scheme, the number of people involved or affected,
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    and if there was an international element.

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    11.           In the case HKSAR v Siu Yu Yee, CACC159 of 2009, a
R   Chinese decision translated into English, the Court of Appeal                   R
    said:
S                 “The amount of money involved is a major consideration            S
                  and not the amount of benefit received by the defendant
T                 in any transaction. Further the culpability of the                T
                  offence lies in the assistance, support and
                  encouragement offered to the commission of the
U                 indictable offence so a defendant’s level of                      U
                  participation and the number of occasions on which he
    CRT33/21.9.2011/SR                   3                 DCCC1280/2011/Sentence
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                  is involved in the money laundering activities are
                  relevant factors to be considered.”
B                 It went on to say:                                                  B

                  “If the relevant indictable offence can be identified
C                 the court may take into account the sentence imposed on             C
                  the indictable offence per se when determining the
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                  sentence of the dealing offence.”                                   D

    12.           The present case does not involve any international
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    element.      The length of time to which the offences lasted were
F   approximately 9 months.        There was no degree of sophistication in           F
    this scheme. The indictable offence can be identified as one of
G   proceeds from a vice establishment.         The amount of money involved          G

    in the two charges totally amount to about $17 million.           This is
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    not an inconsequential amount and the defendant, despite being
    registered with another signatory with the bank, dealt with
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    almost all the proceeds in the bank accounts, which was money

J   generated by the sauna and massage establishment.        He was,                  J
    therefore, a key player in these money laundering activities.
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    13.           Taking all these factors into account and looking at
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    the principle of totality, I do consider the appropriate
    starting point for the present two offences to be one of 3
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    years’ imprisonment.         I, however, accept that the time lapse from

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    the defendant’s date of arrest to his conviction the defendant                    N
    has had to endure a long wait to the eventual end of these
O   proceedings.         This long wait has not been caused by the fault of           O
    the defendant.        It appears that the charges and the long wait for
P   the conclusion to this matter has caused physical and                             P

    conceivably mental suffering and stress to the defendant as
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    evidenced by his ailments.

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    14.           The effects of this delay is, in my view, a strong
S   mitigating factor that warrants a discount from the present                       S
    starting point.        I also note that the defendant has been a law
T   abiding citizen for all his life, at least until the age of                       T

    about 48, that is six years ago, when these offences were
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    committed.

    CRT33/21.9.2011/SR                     4                 DCCC1280/2011/Sentence
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    15.           On the special facts of this case, defendant I consider
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    one year to be an appropriate discount from the present starting

C   point.     In the circumstances, defendant you should be sentenced             C
    to 2 years’ imprisonment on each charge and both charges are to
D   run concurrent to each other.                                                  D


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G                                            (S. D’Almada Remedios)                G
                                                  District Judge

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    CRT33/21.9.2011/SR                  5                 DCCC1280/2011/Sentence
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