Yeung Ka Shing appeals after being sentenced to six years in prison for money laundering

Case Background

Last year, the court sentenced Yeung Ka Shing, the former owner of English Championship club Birmingham, to six years in prison for money laundering of more than HK$700 million. Yesterday, Yeung appealed against his conviction and sentence, saying the trial judge failed to adequately consider his state of mind and failed to prove that he knew the money involved was black money. He also pointed out that the case involved thousands of transactions of different natures, so each transaction should be charged separately rather than being convicted together.

After serving a year in prison, Yang Jiacheng had a lot more white hair on his head (see small picture), but his mental state was still good. His wife Wang Manli also went to the court yesterday to listen to the trial to show her support. British Queen's Counsel Clare Montgomery, representing Yeung Ka Shing, continued her statement in court, emphasizing that Yeung is an independent, successful and wealthy businessman. However, the trial judge refused to accept Yang's argument that the money involved was his legitimate investment income. The judge believed that Yang had dealings with the casino owner and therefore inferred that the relevant funds were proceeds of crime. Montgomery refuted this statement as false, pointing out that operating a gambling business in Macau is legal and that the connection with casino owners alone is not enough to prove that the source of funds is illegal. He claimed that the original trial judge did not fully examine his "subjective cognition" and the procedural flaws in the consolidation of charges. This case highlights the difficulty of proving the "knowledge requirement" in Hong Kong's anti-money laundering law and the technical disputes over the charge structure.

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I. Core Disputes in the Appeal

1. Whether the subjective cognition requirement is established

according to"Organized and Serious Crimes Ordinance》Section 25(1) requires the prosecution to prove that the accused "knew or had reasonable grounds to believe" that the property he handled was the proceeds of crime. Yang's defense team argued:

1. Transaction legality defense
   The defense emphasized that the financial transactions between Yang and Macau casino operators were legal business activities (Macau's gambling industry is regulated by Law No. 16/2001), and there was no direct evidence showing that Yang was aware that the source of the funds was illegal. The original trial judge inferred that he was aware of the incident based solely on his "association with casino personnel," which violated the principle of "presumption of innocence."
   
2. Hiding a transaction does not mean it is illegal
   The defense admitted that some transactions were not reported truthfully, but argued that this behavior may have been due to tax planning or business confidentiality needs and was not necessarily related to money laundering (refer to the Court of Final Appeal case FACC 5/2010).
   
3. This is purely the judge's personal speculation.
   Montgomery further stated that Yang Jiacheng had been involved in many transactions in the past, some of which were not completely transparent, but the reasons were unknown, which did not mean that these transactions were necessarily illegal. She criticized the original trial judge for making a guilty verdict without being able to determine whether Yang knew the source of the black money.

2. The legality of combining charges

The prosecution combined thousands of transactions into a single charge of "continuing offence". The defense questioned:

1. Heterogeneity of transaction nature
   If the source of funds involves multiple independent actions (such as casino revenue, real estate investment, cross-border remittances), they should be separated into different charges, otherwise the defendant will be deprived of the right to defend himself case by case (refer to Section 14A of the Hong Kong Criminal Procedure Ordinance).
2. Distorted sentencing standards
   The combined charges lead the judge to sentence based on the total amount, ignoring the possibility that individual transactions may be innocent, which violates the principle of "proportionality between crime and punishment" (reference case HCMA 123/2013).

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II. Proof Threshold in Judicial Practice

1. Limitations of inference from indirect evidence

Hong Kong courts often use "circumstantial evidence" (circumstantial evidence) can be inferred to be informed, but two criteria must be met:

1. The only reasonable inference(only reasonable inference)
   If the defendant cannot reasonably explain the abnormal flow of funds (such as multiple split deposits, fictitious transaction contracts), it can be inferred that he was aware of the situation (Court of Final Appeal FACC 3/2015).
2. Comparison of industry practices
   If the defendant is engaged in a high-risk industry such as finance or casinos, the court may raise the standard of duty of care (see paragraph 12.3 of the Guidelines on Combating Money Laundering and Terrorist Financing).

2. Analysis of sentencing factors

Is a six-year sentence proportional?

• According to the Hong Kong Sentencing CommitteeMoney Laundering Sentencing Guidelines”, if the amount involved exceeds 100 million yuan, there are cross-border factors or professionals are involved, the basic sentence is 5-8 years.
• The amount involved in Yang's case was huge and involved cross-jurisdictional operations. The original sentence was in the middle of the range, and it was difficult for the Court of Appeal to determine that it was "manifestly excessive."

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3. Prediction of Appeal Result

From a comprehensive legal and evidentiary perspective, the chances of success in this appeal depend on two factors:

1. If the Court of Appeal determines that the original trial judge incorrectly applied the "presumption of knowledge," it may revoke the conviction and return the case for retrial.
2. If only procedural flaws in the merger of charges are identified, or some transactions are required to be split up and re-examined, the overall sentence may not be adjusted significantly.
   Key Criteria: Can the defense provide specific evidence of "third-party legal source of funds" (such as casino profit statements, investment dividend agreements) to sever the connection between the funds and the crime?

Further reading:

• Macau casino king "Zhou Zhuohua" committed more than 100 crimes in Macau and was sentenced to 18 months imprisonment by the Macau court
• The Peak Billion Silver Main Disk
• Yeung Ka Shing's HK$720 million money laundering case

Case number: CACC101/14