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Jake's View
PUBLISHED : Thursday, 07 February, 2013, 12:00am
UPDATED : Thursday, 07 February, 2013, 5:16am

Proof needed to show a crime has been committed

Jailing of young mainlander over spate of bank deposits and transfers puzzling


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

A young mainlander was yesterday jailed for 10½ years for laundering a record HK$13.1 billion over just eight months.

SCMP, January 24

With dismembered bodies scattered all over the blood-spattered scene of this horrendous crime, it is no wonder that Madam Justice Jeffreys, in passing sentence, called for increased penalties in such cases.

But stop a moment. We shall not accuse 22-year-old Luo Juncheng of bomb-throwing. Just what is it then that he is said to have done? The most I could find is that he made 4,800 bank deposits and 3,500 transfers.

It certainly represents extraordinary activity. I mean, one bank deposit is bad enough and 4,800 of them must certainly add up to criminality. Can't have people freely making bank deposits, you know.

I hear you. Stop being facetious, you say. These deposits were not innocent placements such as you and I make with a bank. These were the proceeds of a crime and money-laundering laws are intended to stop people from profiting from crimes they commit.

Very well, here is the crucial question. What was the underlying crime?


Yes, indeed, I looked through all the reports of this case and was no wiser at the end than at the beginning of my search. Nowhere could I find any mention of the crimes of which these deposits were the proceeds. And this is rather puzzling. If the police have proof that a crime was committed, where was the prosecution for it?

To have proceeds of a crime, you must first have a crime, and we establish proof of crime in a court of law. In what court was it proved?

Don't be so pedantic, you say. The police know he did it, whatever it was he did. They just can't get him for it, that's all. Too many technicalities, you know.

Okay, but if the principle of The-Police-Know is sufficient proof of his guilt, why do we bother with courts of law? Let's just have the police seize offenders and bung them into jail. It would be so much cheaper and it would speed up justice. Who needs courts of law?

Assuming, however, that we do want courts of law, the question of their jurisdiction also arises. The puppeteers who manipulated Luo all seem to have been mainlanders. Perhaps the underlying crime took place on the mainland. Why does Hong Kong bother with it then?

Ah, you say, we should stand ready to stamp down on any crime that touches our shores and the money in this case certainly came through Hong Kong.

Very well, but should we not apply this even-handedly? Hong Kong launders about HK$3.4 trillion of re-exports every year, 257 times as much as Luo was found guilty of laundering. These goods are under-invoiced in the mainland to avoid profits tax there and the profit is then added on by a furtive paperwork shuffle in Hong Kong. Shall we set the police to work rounding up the criminals who do this?

Let's cut to the chase. I doubt there was any underlying crime at all. What we had here was our normal way of doing business in an environment in which Beijing sets up thousands of little trade barriers to ensure that mainland entities get the money and outsiders only the trouble.

To keep the wheels of the economy turning, money is split thousands of ways to trickle across the border and combine into a stream again on the other side.

I stand to be proven wrong. In fact, it's proof of crime that I want. It is our lawmakers who say they no longer want it and are content to impute crime from money flows alone.

But it surprises me that a craven judiciary has allowed them to trample on our rights so easily. Presumption of innocence has been thrown out the door to suit the convenience of regulators and policemen who want easy convictions to prove their worth. More than 10 years for a victimless transgression in which no real crime was proven? Astounding!

And here is the irony. On the same day we reported Luo's sentencing, the lead story on our front page featured Chief Justice Geoffrey Ma Tao-li making holy noises about the virtues of common law. Really, Sir?



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This article is now closed to comments

Jake is spot on again! He is one of my favorite columnists here.
Jake is spot on again! He is one of my favorite columnists here.
The money laundering laws were enacted by the legislature, not the judiciary. Hong Kong was pressured into falling in line with international law enforcement to stop the likes of drug lords, arms smugglers, fraudsters and the corrupt from keeping the proceeds of their crimes because Hong Kong was, as now, a centre for washing money, in the last few years particularly for corrupt mainlanders who want to park their cash in local property.
Some people actually believe that laissez faire economics does not mean that criminals should be able to keep their money even "to keep the wheels of the economy turning".
You slightly miss the point Jake, which surely lies in the choice of whom to prosecute. This 22 year old underling took the fall whilst it looks like the wealthy crooks for whom he worked got off Scot free. Why were there no bankers in the dock with him?
One law for the poor and another for the rich? That's today's Hong Kong.
VERY VERY good, as long as what is written are facts. I, too, was very interested in this case, but cannot find that "Crime" you mentioned !!!
I also have the same opinion as "ianson" insofar that this case - " turns the "innocent until proven guilty" principle on its head "; which again is very bad for Hong Kong.
I think HK should have given this young man a banking license instead of a jail sentence. Maybe the existing HK banks did not want the competition.
Common law, no. The offence is charged as dealing with property the accused knows or has reasonable grounds to believe represents the proceeds of an indictable offence (even if that offence did not occur in Hong Kong), contrary to s.25 of the Organised and Serious Crimes Ordinance, Cap.455. So the fault, if there be one, lies entirely with the legislature who enacted it in 1994. The judge must have found that Mr Luo had reasonable grounds to believe while, as no doubt every defendant in such cases would say, he did not actually know or believe he was dealing with proceeds of crime. If there is a huge number of transactions and big sums involved, a judge is going to say, "Hey, it can't be legal." End of story. This law turns the "innocent until proven guilty" principle on its head, an inexorable whittling away that has creeped into many aspects of our statute book over the years. Prosecuting authorities have come to rely heavily on provisions like this to fill in gaps in their sleuthing abilities and would say they'd be toothless without them.


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