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Two principal money launderers of a trans-national drug trafficking and money laundering syndicate active in Canada, China and Hong Kong pleaded guilty to a charge of 'Conspiracy to deal with property known or believed to represent the proceeds of an indictable offence' (drug trafficking) in the Court of First Instance on November 7. They were respectively sentenced to 80 months' and 60 months' imprisonment. Restrained assets of the syndicate to the value of HK$10.5 million was also confiscated by the Court.

Between 1997 and 1999, the two convicts conspired with other syndicate members in Hong Kong to 'launder' HK$173 million, representing the proceeds of drug trafficking. This is the most serious money laundering conviction, in terms of the value of the drug proceeds, that has ever been obtained in HK since the enactment of Drug Trafficking (Recovery of Proceeds) Ordinance in 1989.

It is also a demonstration of effective and efficient co-operation between Hong Kong Police and overseas law enforcement agencies in the global fight against drug trafficking and money laundering. It also highlights the importance of co-operation and intelligence exchange between the Hong Kong Police and law enforcement agencies all over the world in targeting trans-national criminal enterprises.

There is no boundary for money launderers. Nowadays, a trans-national criminal enterprise takes advantage of banking and financial systems world-wide to launder the proceeds of their criminal activities in different jurisdictions, with a view to covering up the illegal proceeds. The successful convictions of these two key members of such a notorious criminal enterprise has sent a very clear message to every single member of any criminal enterprise, that the Hong Kong Police is determined to target trans-national organised crime and that we are fully equipped and capable to do so.

The officer-in-charge of the case, Detective Senior Inspector, Mr Wong Chi-kwong, told OffBeat that the main difficulties in the investigation were caused by the involvement of a number of jurisdictions, including Canada, USA, Thailand, Australia and China, and the fact that the drug trafficking activities did not actually take place in Hong Kong. It was very difficult for the prosecution to prove that the accused did know or believe that the proceeds were from drug trafficking or an indictable offence and even more difficult to prepare overseas sourced evidence into a form admissible in Hong Kong court proceedings. These difficulties were compounded by a total lack of co-operation from the suspects and the fact that some 'leading sources' were missing or untraceable.

The only available form of evidence throughout was circumstantial. A senior counsel, commenting on the investigation and prosecution said "the case was immensely complex and complicated".

Some colleagues may wonder why it took four years to complete this investigation. According to Detective Mr Marco Chan, this case actually involved over 10 suspects including a number of overseas citizens. Each of them operated several bank accounts - some of them more than 10! The overall transactions involved amounted to several billion HK dollars. The bank documents, which included opening mandates, bank statements and transfer vouchers, formed a stack taller than the detective himself.

The financial aspect was only part of the investigation. It would be easy for the prosecution to prove that the criminals had dealt with the proceeds from an indictable offences and drug trafficking. The difficulty of the investigations lay mainly in proving that they knew the assets were actually the proceeds of indictable offences and drug trafficking. To ensure a successful prosecution in court, the investigators built up a significant body of circumstantial evidence. Such evidence included over one hundred witness statements and extensive background analysis on each suspect with information referred to us from overseas law enforcement agencies.

The requirement to gather evidence with over 40 witnesses in Canada and USA, were contributing factors to the time it took to complete, Mr Wong added.

In October 1998, one of the convicted, a cash courier for the syndicate, attempted to bring CAD 380,060 into Hong Kong for laundering. Upon intelligence exchange with the Royal Canadian Mounted Police (RCMP), he was intercepted at Chek Lap Kok Airport upon his arrival from Canada. Hong Kong Police successfully intercepted the defendant and invoked the power under Section 24B of the Drug Trafficking Ordinance (Recovery of Proceeds) to seize and detain the money. The seized cash was subsequently forfeited by Court under Section 24D of the same Ordinance. This is also the first case that the provision "Detention of Certain Seized Property" of Drug Trafficking Ordinance (Recovery of Proceeds) has ever been invoked since its introduction on September 1, 1995. An appeal was subsequently lodged against the forfeiture in the Court of Appeal but this was dismissed in May 2001.

Given that the evidence from Canada and USA was crucial for the prosecution case in Hong Kong, a team of four officers from the Narcotics Bureau Financial Investigations Section, had to fly to Vancouver, Toronto and New York in the course of the investigation. One of the team members, Detective Benny Chan, revealed that they had to fight against time in meeting all the assignments that were required to facilitate enquiries in Canada - it was particularly difficult to schedule interviews with such a large number of RCMP officers, officers of the Canadian Customs and other law enforcement agencies, as well as a host of civilians.

When they arrived in Canada, they had to start work forthwith and round-the-clock. Team members went through a period of sleepless nights during the enquiries in Canada. Nonetheless, he added, the success of the enquiries was attributed to the tremendous support and assistance from our RCMP fellow counterparts and the FBI in New York. Apart from assisting team members to deal with ad hoc incidents, RCMP specifically designated a spacious office to accommodate the team members.

Team member, Detective Mr Lam Ho-yin, revealed that the team not only had to struggle with the freezing temperature (under -10 degree Celsius) to complete the assignments, they had to work nearly round the clock with a view to examining their evidence acquired during office hours and decide whether further course of actions was required. It is therefore not surprising that none of the team members had a problem with the time difference. Given all the accused were remanded in jail, the fight against time was also crucial in turning the overseas evidence into an admissible form when the team returned to Hong Kong.

The officer overseeing this investigation, Chief Inspector Cheng Yiu-mo, stressed that interdicting money laundering activities denies criminals' access to wealth. Money laundering investigation and prosecution are important in the global fight against drugs. There is no boundary for syndicated money launderers. The neutralisation of the syndicate's money laundering activities in Hong Kong is attributable to the co-operation with overseas law enforcement agencies, in particular the RCMP. It is evident that strengthening international co-operation is the way forward in the fight against money laundering. Hong Kong Police will continue to work in partnership with overseas law enforcement agencies in the fight against such activities.

The Hong Kong Canadian Consulate RCMP Assistant Liaison Officer, Mr Gary Halverson, added that this project is an excellent example of how foreign law enforcement agencies, working together, can produce very successful outcomes in major investigations. In this case a significant amount of heroin was seized, assets of offenders were confiscated and suspects were brought to justice. The RCMP is very grateful to the Hong Kong Police for their excellent co-operation and assistance in this case. "We are also very pleased to assist the Force in their part of this investigation," he said. On behalf of the RCMP, he would like to pass on his appreciation to every member of the Force.

Police Report No.5

Issued by PPRB

End/1235 hrs, Wednesday, November 20, 2002 (PT)

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