Using Anti-Money Laundering Law to Prosecute Telephone Scammers
Anti-money laundering law is used to prosecute telephone scammers in order to overcome jurisdictional and evidential issues pertaining to the charge of conspiracy to defraud.
Introduction In HKSAR v Chang Lufeng DCCC 333/2015, 335/2015, 6 men from Taiwan and mainland China (collectively referred as the “Defendants”), who helped cross-border phone scammers to launder more than HK$2.5 million in Hong Kong, were sentenced for 16 to 24 months imprisonment at the District Court on 9 September 2015. They admitted they took or attempted to handle money swindled from three Taiwanese women (the “Victims”), between 2013 and last year.
Background In September 2014, the Victims received phone calls from people who claimed to be nurses, prosecutors or police officers, who alleged that the Victims’ identities have been forged for committing criminal offences. The scam callers demanded the Victims to deposit money to various banks in Hong Kong, for the purpose of “remittance” and proving the Victims’ “innocence”.
Upon receiving the calls, the Victims followed the callers’ instructions and deposited money to designated bank accounts in Hong Kong on two occasions. The Defendants later received or attempted to receive the scammed funds. One of the Victims, Ms Wong, suffered a total loss of HK$2.5 million.
Charges against the Defendants On 24 September 2014, the Defendants were arrested in Hong Kong and charged with dealing with property known or believed to represent proceeds of an indictable offense, contrary to section 25 of the Organised and Serious Crimes Ordinance (Cap. 455) (“OSCO”).
On 26 August 2015, the Defendants pleaded guilty to their charges.
Some key points of s.25 OSCO Under s.25 OSCO, it is an offence for a person to deal with property (whether it to be cash, real estate, shares etc.) where the accused has reasonable grounds to believe that they are dealing with the proceeds of crime. It is a money laundering offence.
Sentence Deputy District Court Judge Chui found the Defendants played essential roles in money laundering as they:-
1. were actively involved with handling the swindled funds;
2. came to Hong Kong deliberately to open bank accounts and handle swindled funds; and
3. assisted to protect the masterminds from being arrested.
Why not conspiracy to defraud? Conspiracy to defraud is an offence constituted by an agreement between two or more people, to dishonestly bring about a state of affairs causing the Victim to act or fail to act, thereby leading the Victim to suffer financial loss or putting one’s economic interests at risks.
In HKSAR v Hung Yung Chun CACC 453/2009, the Court of Appeal pointed out that, “money-laundering”, in general, refers to cases where the prosecution preferred the charge of “dealing with property known or believed to represent proceeds of an indictable offence” against the defendants mainly because the prosecution might be unable to prove beyond reasonable doubt the defendants’ direct involvement in a conspiracy to defraud.
In Chang Lufeng, despite the Defendants admitting that they took or attempted to handle the scammed funds as requested by the mastermind, there was insufficient evidence to prove the Defendants knew the source of the scammed funds. That may be the reason for only charging the defendants with money-laundering instead of conspiracy to defraud.
For enquiries, please contact our Litigation & Dispute Resolution Department:
IMPORTANT: The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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