Mainlander jailed for 10 years for laundering HK$13 billion in Hong Kong

Judge says maximum penalties should be reviewed after mainlander launders record amount in Hong Kong in just eight months

PUBLISHED : Thursday, 24 January, 2013, 12:00am
UPDATED : Thursday, 24 January, 2013, 4:34am

A young mainlander was yesterday jailed for 10-1/2 years for laundering a record HK$13.1 billion over just eight months.

Madam Justice Esther Toh Lye-ping said Luo Juncheng's crime was the most serious of its kind to have come before the courts and she could not find a case involving anywhere near such a large amount.

She said there was now an urgent need to review the maximum penalties for the offence, which was becoming more prevalent.

Luo, 22, from Guangdong, was convicted on Tuesday by a Court of First Instance jury. He had pleaded not guilty to one count of dealing with property known or reasonably believed to represent proceeds of an indictable offence.

An earlier hearing was told that before his arrest, Luo had rung police to ask why his bank account in Hong Kong had been frozen. He was arrested on January 28 while entering the city at Lok Ma Chau.

Toh agreed with defence counsel Joseph Tse Wah-yuen SC, who said in mitigation yesterday that Luo, who had set up a corporate account with Chiyu Banking Corp, a subsidiary of Bank of China's Hong Kong unit, was not the mastermind.

Luo, a middle school dropout, said he had been acting on behalf of a family friend, Uncle Pang. He said he was one of four brothers and worked as a delivery man for factories in Shenzhen until he quit to care for his ailing mother. His mother had introduced him to Uncle Pang, who had helped pay for his father's medical bills before he died in 2002. Uncle Pang approached Luo to go to Hong Kong to set up a company and accounts after Luo's mother died in 2010, Luo testified.

Outside court, Gloria Yu Yin-ching, of the narcotics bureau's financial investigation division, confirmed that it was the city's largest money-laundering case.

Prosecutor Thomas Iu told the court earlier that Luo made 4,800 deposits and 3,500 transfers through the Chiyu Bank account between August 2009 and April 2010, with most of the funds funnelled via internet transfers.

On July 30, 2009, Luo bought a company called Ace Creation Development from a secretarial company in Hong Kong. On August 3, he came to Hong Kong as a visitor to set up the account with Chiyu Bank in the name of the company. Ten days later, he came to Hong Kong again and set up a personal account with the same bank.

Toh said that on one occasion Luo transferred HK$2.6 million from his personal account to the company account. She said international elements were involved, as some of the proceeds had originated on the mainland and in Macau.

Toh quoted a previous judgment from Court of Appeal vice-president Mr Justice Frank Stock who said that "given the signal importance of preserving Hong Kong's reputation as an international financial centre of integrity", increased penalties "may merit some debate and consideration by policymakers". Toh said: "The words [of Stock] are even more urgent as larger and larger sums of money are laundered."

A police spokesman said the number of suspicious transactions reported to the Joint Financial Intelligence Unit in the year to September was 17,795, while the figure in 2011 was 20,287.

Additional reporting by Bloomberg