HKSAR v. LAM KIT WAI AND OTHERS

CACC 107/2021, [2025] HKCA 429

On appeal from [2021] HKDC 278

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO 107 OF 2021

(ON APPEAL FROM DCCC NOS 873 OF 2018 and 757 of 2019)

__________________________

_________________________

______________

JUDGMENT

______________

A.  Introduction

1.  This is an application for leave to appeal against conviction by D1, D7, D8, D9 and D10. For various money laundering offences each was sentenced as follows:

D1:  60 months:

D7:  48 months;

D8:  45 months;

D9:  54 months;

D10:  57 months.

2.  D1, D7, D8 and D9’s original grounds of appeal settled by their previous legal team and used in previous applications for bail have now largely been amended and replaced by new grounds. One of the original grounds alleging flagrant incompetence of counsel was not pursued at the bail applications and now completely abandoned. By the time of the hearing of the leave application, all of them have served their sentences.

B.  Prosecution case

3.  A police raid at 7/F Si Toi Commercial Building, 62-63 Connaught Road West on 24 June 2012, and found D1, D7 and D8 on site. It was found that the premises were rented by a company owned by D1[1] in which large scale betting operations were carried out. Accounting and payment records relating to, inter alias, D1, D7 (D1’s uncle), D8 (D7’s accounting assistant) and D9 (D1’s aunt / D7’s sister) were found. Bank/betting account numbers of, inter alias, D1, D7 and D9 were also found. A total of 298 HKJC betting accounts deposits slip with a face value of HK$115,160,100 were seized, they showed deposits by some defendants into the HKJC betting accounts of other defendants.

4.  D1, D7 and D8 were arrested inside the premises. D9 was arrested in her home on the same day[2]. D10 was arrested at Lok Ma Chau Control Point on the 22 March 2019[3].

5.  Here are the relevant details of the charges:

	Account number	Period	Amount
Charge 1 (against D1)	030-555-1-033376-0 (Bank of China)	11 March 2011 – 6 May 2011	$29,543,799.33
Charge 2 (against D1)	024-220-0-0-92860 (Hang Seng Bank)	1 August 2010 – 19 March 2012	$329,046,173.39
Charge 3 (against D1)	024-390-198513-888 (Hang Seng Bank)	14 August 2010 – 20 March 2012	$61,674,744.86
Charge 4 (against D1)	043-474-1-087893-8 (Nanyang Commercial Bank)	1 April 2009 – 6 May 2011	$15,002,813.73
Charge 5 (against D1)	61938224 (Hong Kong Jockey Club) (“HKJC”)	5 September 2010 – 1 July 2011	$74,000,000[4]
Charge 20 (against D7)	265-10-100296-2 (Chong Hing Bank)	3 August 2009 – 1 August 2012	$78,299,970
Charge 21 (against D7)	024-281-0-090221 (Hang Seng Bank)	1 January 2009 – 29 May 2012	$44,075,885.94
Charge 22 (against D7)	3983841 (HKJC)	4 September 2010 – 19 May 2012	$18,060,100[5]
Charge 23 (against D8)	265-20-601709-8 (Chong Hing Bank)	6 September 2010 – 6 July 2012	$66,140,343.40
Charge 24 (against D8)	012-551-1-009469-8 (Bank of China)	7 March 2011 – 7 August 2012	$66,720,041.11
Charge 25 (against D1 and D9)	035-668376-101 (Wing Hang Bank)[6]	4 October 2009 – 26 March 2012	$89,523,441.45
Charge 26 (against D9)	012-551-1-006040-2 (Bank of China)	4 February 2009 – 23 March 2011	$896,592,585.63
Charge 27 (against D2 and D10)	012-666-1-021138-5 (Bank of China – savings)[7]	13 July 2011 – 31 May 2012	$54,310,316.85
Charge 28 (against D2 and D10)	012-666-004910-9 (Bank of China – current)	13 July 2011 – 31 May 2012	$28,741,010.34

6.  An expert witness Mr Borrelli (“PW5”) was called by the prosecution. He testified that after analyzing the defendants’ accounts and the HKJC accounts, that the accounts in question bore hallmarks of money laundering.[8] In addition, in the cases of D7, D8, D9 and D10:

(1)  None appeared to be employed or own any property[9]. It was opined that the bank accounts of D7, D8 and D9 were conduits for the flow of funds[10] and the transactions and/or fund flows therein were related to persons or companies which could not be identified[11];

(2)  Their accounts exhibited a pattern of layering[12].

7.  The prosecution adduced several sets of admitted facts, admitting various bankers’ affirmations into evidence, although each set of admitted facts was signed between the prosecution and one defendant.

C.  Defence case

8.  Ms Vinci Lam SC, with Mr Simon Kwong, who are both not trial counsel, submitted that the following defences which could be discerned from the evidence, which could have caused an innocent explanation to be inferred, was not fully taken into account by the trial judge:

(1)  The family pool of funds defence;

(2)  The betting business defence;

(3)  The legitimate loans defence.

(D1)

9.  D1 elected not to give evidence but called his elder sister Lam Kit Yu as a defence witness. His defence as evidenced by his sister or from the evidence of D8 was that the monies received came from legitimate source, that D1, a passive and simple person[13], acted in accordance with the instruction of his late father Lam Ching Tak (“the Father”) who was a dominant and unforgiving person with an extensive family business covering Hong Kong and Shanghai for which sizable loans were obtained[14], and the Father and D7 merely helped their Mainland friends place bets in Hong Kong[15]. She testified that she had entered in loan agreements on the Father’s behalf in respect of his substantial development business in Shanghai (called Newland)[16].

(D7 and D8)

10.  D7 did not give evidence but called three defence witnesses, and attempted to show through their evidence and D8’s evidence that the majority of the monies originated from loans for Newland but ended up in his betting business[17]. D8 testified about D7’s cash flow problems and that Newland experienced financial difficulty, D7 obtained extensive financing[18]. D7 also operated the betting business and a chit fund[19] (with HK$300,000 paid in every month by 30 people[20]). Bets were placed for “friends” in the Mainland by D1, D7 and the Father. The monies would arrive through remittance agents[21]. The bets were placed through various HKJC accounts (spreading the bets) to prevent detection[22]. D8 also gave evidence to advance the “family pool” defence[23].

11.  The three witnesses called testified as to the loans they made to D7. Madam Hiu Man Ying made loans to D7 secured on the Newland property. Chiu Chuk Hei (“Chiu”) advanced loan to D7 who had security margin trading/equity accounts in his Hung Sing Securities (“Hung Sing”) for borrowing money[24]. Chiu also extended loans to D8 (through Hung Sing)[25] and participated in D7’s chit fund.[26] D7’s cousin, Raymond Cheng Wai Man testified that he and his relatives Cheung Wai Kan, Cheung Yuk Ping and Cheung Yin Wan all lent monies to D7 for Newland[27].

12.  It was contended on behalf of D7 and D8 that, since the monies came from legitimate loans for business purpose and were received as part of, and used for, the betting business, there were no reasons to believe they were tainted proceeds[28].

(D9)

13.  D9 elected not to testify. Her case was that she kept ledgers for the family business only. She worked for D7 and took care of the family expenses[29]. She had deposited cashier orders into various HKJC accounts for the Father for a long time[30] although she was not involved in the betting business activities herself [31]. She held no belief that she was dealing in any tainted funds.

(D10)

14.  D10 elected not to testify but called two defence witnesses. His case was that he was a legitimate businessman and all transfers to Hong Kong were sourced from his own funds in China or from his business associates[32]. D2 testified to the effect that the whole family relied on D10’s wealth and have his HKJC account password to D10 for his access. His first defence witness Leung Sing Hon considered him as a wealthy person, and his second defence witness Li Kin Tat evidenced his substantial investment in a development project on Lamma Island. D10 had indirectly dealt with some HKJC accounts through his brother D2 [33].

D.  Reasons for Verdict

15.  The judge said that he considered each defendant’s case separately[34] (as he did at RV §293 et seq). He stated that the prosecution relied on the second limb of the mental element of the offence, i.e. that defendants had reasonable grounds to believe that the monies were tainted and the court has to draw inference of the existence of the proceeds of crime[35].

16.  In the cases of D1, D7, D8 and D9, the judge rejected D8’s evidence which he found to present a particular picture to exonerate all four applicants including herself[36]. The judge particularly disbelieved D8’s evidence of “betting by friends”, describing the betting as structured and purposeful albeit not evidence of bookmaking[37]. Insofar as the charges[38] related to the HKJC accounts, he noted that all winnings were wagered until exhaustion[39], resulting in a total loss of $2.4 billion[40]. The judge also noted that there was no independent documentary evidence to show the origin of the monies imported by remittance agents and in D7’s Hung Sing accounts[41], nor was there evidence of the source of the loans and chit funds being legitimate[42].

17.  In the case of D10, the judge noted that there was no documented source of the funds in his accounts[43] and that neither of his defence witnesses testified on their source[44].

18.  The judge found, an irresistible inference as to a reasonable ground to believe the monies were tainted stemmed from the very fact that they entered the accounts in a surreptitious manner or through “underground banking”.[45]

E.  Grounds of appeal

For D1, D7, D8 and D9

19.  The following grounds were advanced by Ms Lam:

(A.1)  The judge erred in drawing the inference that D1 had reasonable grounds to believe the properties in his accounts were tainted by:

(a)  failing to give due weight to relevant considerations, which include:

(i)  No ultimate step to retain the funds (D1, D7, D8, D9);

(ii)  No evidence of any predicate offence (D1, D7, D8, D9);

(iii)  Personal background and characteristics of D1(D1) and personal background and role of D9 in the family (D9) and legitimate sources of deposits (D7, D8);

(iv)  traceable and lawful expenses as contemporaneously recorded by D9 in the ledgers, even after her arrest (D9);

(b)  taking into account irrelevant considerations:

(i)  D1 and D8’s “lies” upon arrest (D1, D8), D7’s “questionable activity” at Si Toi premises (D7);

(ii)  use of cash, remittance agents (D1, D7, D8) and betting accounts (D1, D7, D9).

(A.2)  The judge failed to apply the test as per HKSAR v Harjani Haresh Murlidhar [46].

20.  Ms Lam also submitted that, since the judge did not reject the defence assertion that the Lam family shared a communal pool of funds via bank accounts of its members and that there was a betting business, there was a valid explanation as to the vast sums of inter-accounts transfers between the accounts of family members. Once the funds represent betting money being established, the unknown identity of the bettors (or Mainland friends) should not be a relevant factor in considering the question of reasonable belief. She submitted that D1’s accounts did not show a layering pattern. Ms Lam stressed that the high risk of the monies being completely extinguished in betting was a fact which would have affected the state of mind and knowledge of the individual defendants which is an element of the offence. She criticized the judge for simply making a finding that this “presents an unusual form of ‘money laundering’ ”[47] without resolving this issue in favour of the defendants. Another matter, it was submitted, could have affected the state of mind of the defendants but which had not been sufficiently taken into account was the affluency of the family.

21.  It was also complained that the judge failed to make findings as to whether the applicants were aware of the legitimate sources of funds with regard to the evidence of DW1, DW3, DW5 and DW6, or properly apply the Harjani test. By reason of the above matters, Ms Lam submitted that the judge came to an erroneous conclusion leading to an unsafe conviction in respect of each applicant.

For D10

22.  Mr James Tze, with Mr Tom Cheung, on behalf of D10, advanced the following grounds:

(1)  The trial judge erred in finding that the monies as stated in Charges 27 and 28 were proceeds of an indictable offence or illegal gambling when there was no qualified expert evidence to support the allegation that the monies were proceeds of illegitimate sources; especially in view of the evidence of the defence witnesses of D10’s legitimate business that the monies could have been from legitimate business of D10 and used to facilitate legitimate horse racing activities;

(2)  The trial judge erred in rejecting the testimony of D2 on the basis of a lack of documentary proof: thus (i) failing to place sufficient weight on the lapse of time between the offences and D10’s arrest which might have contributed to the loss of documents; (ii) wrongfully placing the burden on D10 to provide evidence or explanation to establish his innocence which encroached his right of silence. Mr Tze further submitted that even when D2’s evidence was rejected, there was independent evidence called by D10 which could show that the source of funds into his accounts were from a legitimate source. The fact that there were certain linkage between D10’s accounts and the HKJC accounts of other defendants in fact strengthen his case that he was using monies in betting for himself and his wealthy friends which, if properly taken into account by the judge, could have displaced his inference of knowledge;

(3)  The trial judge erred in his application of the test in Harjani.

F.  Respondent’s reply

23.  It was submitted by Mr Mitchell that the family pool, betting business and legitimate loan defences were all canvassed at length during the trial and in the closing speeches. The judge demonstrated in his Reasons for Verdict that he was well aware of these defences, but given the state of the evidence, especially the sheer volume of the transactions (which would only show the betting to be on an industrial level), inexplicable source, lack of documentations, he found the inference against the defendants overwhelming.

24.  Mr Mitchell further replied that not all money laundering are for the purpose of transforming the proceeds. One must not be tied to the concept that money laundering must involve purchase of property in changing black money into white. The suggestion that the monies were remitted by wealthy relatives or friends were unsupported by evidence. The fact that such wealthy relatives would continue to remit monies throughout the two years when those were eventually lost in betting on unfavourable horses simply defeats logic and common sense[48]. The judge found the fact that the monies were wagered and lost in horse betting was a piece of neutral evidence which did not prevent an adverse inference to be drawn. To consider why the arrangement was for the monies to be eventually lost in betting was to ask the court to enter into a realm of speculation. The judge did not consider the “betting on horses provides any assistance in drawing an inference as to a reasonable belief in the criminal origin of the monies used for that betting”[49]. The only evidence as to the state of mind was given by D8, which was rejected by the judge. Mr Mitchell took issue with the submission of Ms Lam on the affluency of the family. He contended that there was no evidence of any legitimate business or income consistent with the large amount flowing into the accounts and in fact D7 seemed to be constantly in debt. He found that the defendants were fed on the money laundering and the fact that the scheme in the present case took a different form from what were normally seen in money laundering cases does not preclude an inference to be drawn against the defendants.

25.  As to the submission that there was no evidence of any predicate offence, Mr Mitchell submitted that it is not disputed that the prosecution does not have to prove the nature of the predicate offence. Against D1, there were evidence of huge sums entering his accounts with no supporting documentation as to source and they were dissipated through various HKJC accounts within a very short period of time and eventually lost on unflavoured horses, which could only point to the inference of D1’s accounts being conduits for flow of the funds and further inference on D1’s belief that those funds were tainted.

26.  D1 and D9’s personal background was evidenced in DW1 and D8’s evidence. For D1, despite being portrayed as a timid and submissive character, there was evidence to show to the contrary: he was a shareholder in various companies, sole signatory to his bank accounts and a HKJC account in his own name. He also had signing rights on a joint account with D9. D9 was responsible for depositing many of the cashier orders into the various HKJC accounts. A total of $1 billion cash flow through her accounts, massive inflows and outflows within a very short period. The judge carefully considered her case[50] and found that instead of just being a bookkeeper she was a cog in the operation.

27.  D2, who was D10’s brother, gave evidence in his defence. Mr Mitchell pointed out that the deposits from D10 to other defendants’ account, cross flow of funds simply showed an indirect connection to the “betting business”. The evidence from a witness as to the Lamma project was silent as to the source of that funding. Given the large sums involved and disproportionate income unsupported by documents, the judge was entitled to find D10 had reasonable grounds to believe the deposits were monies tainted.

28.  The allegation of placing a positive burden on D10 is misconceived. The judge, having rejected the evidence given on his behalf by D2 and other witnesses, was entitled to draw inference against him. Mr Mitchell also adopted his submissions in relation to other defendants common to D10.

G.  Discussion

29.  It is trite that the prosecution is not required to prove the proceeds were actually sourced from an indictable offence and knowledge could be inferred from circumstantial evidence. A defendant’s knowledge and belief as to the characteristics of the money is an essential ingredient of money laundering, as opposed to the objective (or purpose) of the illicit dealing. Ms Lam relied on the case of HKSAR v Yan Suiling [51] to advance the argument that the present case lacks the distinctive feature that the proceeds are laundered by transforming into other types of property. Therefore, she submitted, the reasonable grounds for the defendants to believe that the monies were tainted was lacking. The Court of Final Appeal in HKSAR v Yan Suiling stated:

“47. Money laundering usually involves a scheme whereby the proceeds of crime are “laundered” by transforming them into other types of property so that they are clothed with legitimacy and their origin is concealed…”

(emphasis added)

30.  It must be remembered that Yan Suiling is a case very much on its facts. The basis of the money laundering charge was a cheque deposited into the appellant’s account which was traceable to a mortgage fraud. The appellant gave evidence that she had been engaging in underground currency arrangement for some years even before the cheque in question was received. Her evidence was supported by documents. The judge did not find any other transactions appearing in the appellant’s account to be illegitimate. The Court of Final Appeal held that the mere fact that a large sum of money was deposited into the appellant’s back account by someone unknown to her and she did not make enquiries only did not favour an irresistible inference that she must have had reasonable grounds to believe the money represented the proceeds of crime.

31.  The crux of the matter is whether the tainted status of the money was an irresistible inference to be drawn from all the evidence. Whilst in most of the money laundering cases, the monies laundered were transformed into other types of property, one must not lose sight of the ultimate consideration which is whether the proceeds of crime were clothed with legitimacy and their origin concealed.[52]

32.  Yan Suiling concerned a one-off deposit of the cheque into the appellant’s account amongst all other legitimate transactions of currency exchange arrangements. The Court of Final Appeal was of the view that, though unusual, the inaction of the appellant could be explained by other explanations and possible consequences[53] and therefore money laundering was not the only irresistible inference to be drawn from the circumstances of the case. The question remains, whether the circumstantial evidence admits the only irresistible inference that an accused must have had reasonable grounds to believe the money represented the proceeds of crime and so tainted.

33.  In the present case, the expert Mr Borrelli gave evidence that no bookmaking offence could be disclosed[54], that the defendants’ betting pattern is opaque[55], it was only speculation that the known betting activities could be of part of a larger picture but he could not divine what that picture was[56]. The prosecution’s focus in the present case is on the receipt of the money, although what was done subsequently with the monies was certainly something to be taken into account to draw the inference that the monies were tainted. As the judge put it:

“254. …despite HK$2.4 billion of this money being deposited and wagered no evidence was received from a single ‘friend’ from the mainland. I was therefore simply left with the fund receipts into the bank accounts, the spreading of the monies into the HKJC to conduct a structured and a purposeful betting operation which was conducted in secret. This clearly is evidence that is relevant to the belief a person involved in this operation would have in relation to monies received to fund this operation…”[57]

34.  Ms Lam stressed that the extinguishing of all the receipts by betting on unfavourable horse as inconsistent with the normal mode of money laundering. The judge did consider the betting business at length[58]. He found the circumstances of the arrest of D1, D7 and D8 at the Si Toi premises telling. They were found inside premises where betting was going on:

“227. …The shutter of the premises was rolled down. No one answered the door bell. Entry was forced, a sofa was placed against the front door and was tied to the door handle by a rope. This was clearly to delay entry to the premises.”[59]

35.  The judge noted that the vast majority of the monies paid into the defendants’ accounts originated from remittance agents and money changers, and then transferred into a number of HKJC accounts (spreading) to avoid detection by HKJC. All these manifested a degree of secrecy.

36.  He took into account that cashier orders were used to deposit sums to HKJC accounts: 3693 payments were made totally HK$2.48 billion of which HK$2.4 billion was lost.[60] Whilst Mr Borrelli was of the view that the peculiar arrangement in the present case did not present the entire picture of what was taking place[61], the judge fairly pointed out that “any view that it was only part of a wider betting operation was purely a matter of speculation”[62] and he did not consider the betting on horses “provide assistance in drawing an inference as to a reasonable belief in the criminal origin of the monies”[63]. However, although the “purpose” of such betting could not be identified, the judge found the arrangement “structure and purposeful”, and capable of revealing D8’s evidence as being untrue[64]. The judge noted the industrial scale of the transfer from the mainland was not supported by any evidence from any “friends”. He further took account of the use of remittance agents for transfer, the sheer volume and amount of the deposits, the spreading of monies paid by cashier orders into the HKJC accounts were all structured in such a way as to protect the anonymity of the depositors of the money. He found the whole structure unnecessarily complicated[65] and concluded that it was designed to make tracing and identifications of the funds more difficult. From these facts, the judge drew the irresistible inference that the monies were tainted.

37.  He then went on to consider whether an inference could be drawn against each defendant that they would have had a reasonable belief of the criminal origin of the monies after considering the personal and individual ground that exist for each defendant[66].

38.  He set out and analysed the Newland Project, Mr Borrelli’s evidence and the case of each defendant.

39.  The judge found that D1’s reply on arrest that he was eating and doing dishes and did not know what was going on untrue, as D1 was the tenant of the Si Toi premises[67]. Together with the evidence of him being the sole signatory to all the bank accounts and HKJC account in his name, the judge found that the claim of submission to parental authority and his timidity simply did not displace the inference as to his mens rea[68].

40.  D7’s case, advanced through the evidence of D8, placed emphasis on the Newland project. The judge found that evidence called on his behalf to advance his case of wider business activities “largely anecdotal”[69], with only general reference to friends and partners but without any documentary proof of any legitimate business activity outside Hong Kong. Whilst the judge accepted that there appeared to be margin financing of the inputs to the HKJC accounts and D7 did take out loans and participated in a chit fund, he found that D7’s accounts were placed within the structure of the betting syndicates money flow activities whereby high amounts of money were remitted via remittance agents into Hong Kong accounts including his. Amongst the 7 deposits into his HKJC account, 3 were from D9’s cashier orders, and others from unknown source. During the relevant period D7 did not receive any income for tax purposes.

41.  The judge found D8’s evidence scripted and unreliable[70] and had a rehearsed quality[71]. He noted that she denied involvement in bookmaking and said she did not know what was going on and claimed that she did not know what was going on when she was arrested at the premises, but subsequently testified to portray another picture in court[72]. Taking into account that vast amounts of money which flowed into and out of her accounts and her two charged accounts were reduced to a nil balance within 2 years after opened, the judge found D8’s evidence about the operation of a betting syndicate, the nature and type of funding, and the margin financing simply could not explain industrial scale of the monies flowing into and out of her accounts.

42.  The judge considered D9’s case that she was a family member with unique background and upbringing, and a bookkeeper who was the forerunner to obtain and deposit cashier orders into other HKJC accounts. He also considered the lengthy period of time that D9 had been in this role, and that she worked in the Si Toi office with others including D8. He found that the vast sums of monies paid into her account and joint account with D1 were simply incompatible with her own means and resources.

43.  D10’s case was advanced through D2’s evidence and a defence witness (Mr Lee), who testified about his wealth. Despite that, the judge noted that the movements of vast sums of money into his accounts the sources of which were undocumented and unidentified. The source of the allegedly funding of Lamma project was silent.

44.  Thus, the judge found that there was simply no evidence or circumstances to displace the irresistible inference that the defendants had reasonable grounds to believe the monies were tainted. Whilst he did remark that this was an “unusual form of ‘money laundering’”, it could not be said that the judge made no analysis and there was a quantum leap in concluding that as to this was an unusual form of money laundering.

45.  The finding that the evidence was “silent as to the source of the funding” and “no explanation given as to any legitimate source for the monies found in D10’s accounts”[73] simply means that there was no credible explanation coming from D10 when the evidence cries out for one. This is not the same as placing positive burden on D10 or encroaching his right of silence. In any event, the judge did recite the principle that no adverse inference could be drawn from a decision of a defendant’s election not to give evidence[74].

46.  The judge stated the Harjani principles in his Reasons for Verdict[75]. His analysis throughout showed that he had the Harjani principles at the forefront of his mind and has properly applied them and not just paid lip service. The Court of Final Appeal in Harjani stated that:

“31. Normally the court will give the same answer to each question. If the court concludes that no reasonable person in the position of the defendant could have failed to believe that the property was tainted the court is likely to reject the defendant’s assertion that he did not have this belief. Applying the statutory test the defendant will be convicted.

…

33. A rare case may arise where the court concludes that any reasonable person in the position of the defendant would have believed that the property was tainted but nonetheless accepts the evidence of the defendant when he says that he did not have this belief. This is only likely to arise in circumstances where it is apparent that the defendant lacks the reasoning abilities of the normal person. In such circumstances, applying the statutory test, the defendant should be convicted but the fact that he did not himself believe that the property was tainted may well be a mitigating factor when he is sentenced.”

(emphasis added)

47.  Whilst D1’s and D9’s defence was advanced by DW1 (D1’s sister) and D8 respectively, in an attempt to portray and highlight their naivety and simplicity, there was no evidence directly from either D1 or D9 about the facts or circumstances, including those personal to them, were known to them that might have affected their belief as to whether the monies entering their accounts were tainted.

48.  Since there was other evidence which contradicted he so-called characteristics peculiar to D1 and D9 as portrayed by the defence, the judge was entitled to find that those did not prevent him from drawing the inference that they were capable of forming their own beliefs and perceptions or the requisite mens rea.

49.  The submission that the judge wrongly used the “lies” of D1 and D8 upon arrest to convict them is misconceived. A careful reading of the Reasons for Verdict shows that in analyzing D1 and D8’s case, the judge never made use of their lies and this is certainly not a case where the prosecution relied on lies of the defendants to strengthen an inference of guilt. It was at the ‘conclusion’ parts that the judge made the comment that what they said at the arrest were lies[76]. No lies direction is necessary: HKSAR v Khan Asif Ali[77], quoting Chan PJ at Yuen Kwai Choi v HKSAR[78]. The comment by the judge on various evidence of a defendant as a lie is a process in his thinking to show how incredible that proposition was: any purported ignorance of what was taking place in the Si Toi premises was an obvious lie in light of other evidence and D8’s own evidence; whether D1 was washing dishes there was immaterial or of marginal relevance to the case; and D8’s denial of carrying bookmaking was only part of his untruthful story. No lies direction was necessary. The judge did not draw adverse inference against D7 on the questionable activity in the Si Toi premises alone or at all: the judge was only putting into context the circumstances of D7’s arrest.

50.  The use of cash or cashier orders (the prosecution focused on the withdrawals, not deposits) was one amongst other factors considered by the judge before concluding that there were clear indicia of money laundering. Although taken in isolation, the use of the underground banking system in the present case could be a neutral factor, the untraceable source of the large sums of funds on the Mainland which actually ended up in betting was an overriding consideration to find that the primary purpose was to avoid disclosing the source (and provide anonymity to the bettors[79]).

51.  This is a case which hinges on whether an irresistible inference could be drawn against each of the defendants. Having considered all the counter-arguments which were said to have the force of displacing the irresistible inference, the judge was entitled to come to the conclusion as he did that each applicant had reasonable ground to believe he/she was dealing in tainted monies.

52.  I find none of the grounds advanced for any of the defendants reasonably arguable. I refuse leave on all grounds. The defendants/applicants are reminded of their his right to renew their applications for leave to the Court of Appeal, but if anyone is minded to do so, he or she should bear in mind that he or she may face the consequences of an order for any loss of time spent in custody pending the appeal, if the Court were to come to the view that there was no justification for the renewal of his/her application.

Mr Neil Mitchell, Counsel on fiat, for the respondent

Ms Vinci Lam SC leading Mr Simon Kwong, instructed by Yuen & Partners, for D1, D7, D8 and D9

Mr James Tze and Mr Tom Cheung, instructed by Damien Shea & Co, for D10