Case Law Database

Money laundering

Offences

• Concealment/disguise of nature/ source/ location/… of proceeds of crime

Keywords

• Proceeds of crime

HKSAR v Juraj [2016] HKCA 512 (27 October 2016)

Fact Summary

Jariabka Juraj met Victim 1 a freelance journalist in Slovakia through a third party. This introduction occurred as Mr Juraj planned to request that Victim 1 travel to Hong Kong to incorporate two companies and establish bank accounts for them. Following these actions he would then transfer ownership to the third party and be paid EUR 5,000. In order for plans to be established, further meetings took place during which Victim 1 was told that the businesses were illegal although not criminal. Victim 1 began to secretly record the meetings with a hidden camera following this occurrence. He planned to go along with the plans in order to report the criminal activity.

On 14 May 2013, Mr Juraj and Victim 1 arrived in Hong Kong in order for Victim 1 to carry out the activities that had been planned. Victim 1 went to Acorn Business Services, a consultancy business and commercial service provider, and requested that two companies, Vindex (HK) Ltd and East Ray (HK) Ltd, be incorporated. He was then supposed to open bank accounts for both companies. However, to avoid criminal liability, he provided excuses to Mr Juraj that the banks required proof of business. Upon returning to Slovakia under the guise of preparing documentation, Victim 1 reported the matter to the Slovakian police who declined to investigate. Victim 1 alternative plan was to return to Hong Kong where he would report the matter to the Hong Kong police. At a pre-arranged meeting at which Victim 1 identified Mr Juraj, he was arrested.

Commentary and Significant Features

This case involves the incitement of another to deal with property believed to represent the proceeds of an indictable offence. This act was perpetrated by Mr Jariabka Juraj who incited Victim 1 to travel to Hong Kong in order to conduct a number of actions to facilitate money laundering. During discussions between the men Mr Juraj informed Victim 1 of the illegality of the actions, not wanting to engage in crime Victim 1 informed authorities, being the Hong Kong Police.

Sentence Date:
2014-09-08

Cross-Cutting Issues

Liability

... for

• completed offence

... based on

• criminal intention

... as involves

• participant, facilitator, accessory

Procedural Information

Legal System:
Common Law
Latest Court Ruling:
Court of 1st Instance
Type of Proceeding:
Criminal
 
Proceeding #1:
  • Stage:
    first trial
  • Official Case Reference:
    HKSAR v Jariabka Juraj [2014] HKDC 1049 (8 September 2014)
  • Decision Date:
    08 September 2014

    Court

    Court Title

    District Court of Hong Kong

     

    Location

  • City/Town:
    Hong Kong SAR
  • Province:
    Hong Kong SAR
  • • Criminal

    Description

    Mr Juraj pleaded not guilty to a charge of incitement to deal with property known or believed to represent the proceeds of an indictable offence, contrary to section 25(1) and (3) of the Organised and Serious Crimes Ordinance. The basis of the prosecution’s case was Victim 1’s statement that he was told the business of the defendant was illegal, and that he was to hand over control of the companies and bank account to the defendant. He believed that the actions were to support embezzlement for which a payment of EUR 5,000 would be made. The prosecution argued that Mr Juraj had incited the offence of dealing with property associated with crime and the disguising the true identity of the person in control of that property. Furthermore the prosecution argued that there were reasonable grounds for Mr Juraj to believe that the finances passing through the account represented the proceeds of an indictable offence

    The defence argued that the businesses were legitimate and that the only reason he had been asked to open the accounts was because the third party  lacked a passport and, accordingly, was unable to travel to Hong Kong himself. Furthermore the defence argued that there was no intention to engage in money laundering in relation to the accounts.

    The trial judge took into consideration a number of aspects of the case when considering the verdict. First, he outlined how that the burden of proof was on the prosecution and that they had to prove beyond reasonable doubt that Mr Juraj was guilty. He outlined that it had to be proved that Mr Juraj had incited Victim 1 to deal with property, this being the actus reus of the offence. In regards to the mens rea, he stated that it had to be proved that Mr Juraj knew or had reasonable grounds to believe the property directly or indirectly represented the proceeds of an indictable offence.

    With regard to the general offence, the trial judge questioned why a legitimate business would require the involvement of a third party who was required to travel to Hong Kong to open the accounts. The justification for this was also unclear given that Mr Juraj had previously visited Hong Kong in order to incorporate companies and set up accounts with respect to other matters. Accordingly, Mr Juraj would have been familiar with the procedure and, thus, would have known that a third party wqs not required. The trial judge accepted Victim 1’s version of events, being that he had been acting on behalf of the third party whose conduct had been incited by Mr Juraj. Importantly he also accepted that Mr Juraj had advised Victim 1 of the illegality of the businesses indicating his awareness of the criminality. The trial judge stated that he had no hesitation in rejecting the defendant’s evidence as he did not find it credible. He found it improbable that if there were legitimate business interests. Victim 1would have been required to provide assistance.

    The trial judge considered that Mr Juraj had incited the offence of dealing with property. He considered the definition, as set out in Section 2 of the Organised and Serious Crime Ordinance, of concealing or disguising property (whether by concealing or disguising its nature, source, location, disposition, movement or ownership or any right with respect to it or otherwise). The trial judge stated that he considered the opening of bank accounts on behalf of another as facilitation of money laundering. Additionally, he considered that Victim 1 instruction to hand over the accounts to the third party was incitement to deal with property.

    As for the knowledge element of the offence, the trial judge was satisfied that Victim 1, on being told of the illegality of the business, knew that the bank accounts were to be used for money laundering. He also applied case law that showed what a normal person with common-sense would have believed in that situation.

    Overall the Trial judge was satisfied that the prosecution had proved beyond reasonable doubt that Mr Juraj was guilty of the offence of inciting another to deal with property known or believed to be associated with an indictable offence. Consequently the trial judge sentenced Mr Juraj to 4 years’ imprisonment.

     
    Proceeding #2:
  • Stage:
    appeal
  • Official Case Reference:
    HKSAR v Jariabka Juraj [2016] HKCA 512 (27 October 2016)
  • Court

    Court Title

    High Court of Hong Kong (Court of Appeal)

     
    • Criminal

    Description

    The defendant appealed against both the conviction and sentence. The defendant sought to argue on appeal, inter alia, that the subject offence was not capable of being incited since the chose in action particularized in the offence as the property in question, that is the monies owed to the two companies (acquired by Victim 1 at the instructions of the defendant) by the banks, had never existed nor would they ever exist since Victim 1 had never intended to open the accounts.

    The Court of Appeal ruled that the fact that no chose in action came into being was not an impediment to proof of the elements of the offence. Such chose in action was capable of being brought into being in the future. It could not be said that it was not possible for Victim 1 to commit the offence which the defendant incited him to commit. It was further ruled that it was not necessary, for the purpose of the charge, to prove that the person incited had the mens rea to commit the offence. The Court of Appeal was satisfied that the trial judge was entitled to draw the irresistible inference that Victim 1 knew that the chose in action that was intended to be created in the bank accounts would be the proceeds of an indictable offence, albeit of an unknown nature.

    The Court of Appeal, having taken into account the circumstances under which the offence was committed and the fact that the defendant, as a citizen of Slovakia, came all the way to Hong Kong to commit the offence, considered that the sentence of 4 years imprisonment was entirely appropriate

    The Court of Appeal dismissed the appeals against both conviction and sentence.

     

    Defendants / Respondents in the first instance

    Defendant:
    Jariabka Juraj
    Gender:
    Male
    Nationality:
    Slovak

    Charges / Claims / Decisions

    Defendant:
    Jariabka Juraj
    Legislation / Statute / Code:

    Organised and Serious Crimes Ordinance, Chapter 455, Section 25(1) and (3)

    Charge details:

    Incitement to deal with property known or believed to represent the proceeds of an indictable offence

    Verdict:
    Guilty
    Term of Imprisonment:
    4 years

    Court

    High Court of Hong Kong (Court of Appeal)