Dealing with property known or believed to represent proceeds of indictable offense

Being investigated or charged with money laundering in Hong Kong is a serious matter. A conviction can lead to substantial fines, lengthy imprisonment, frozen bank accounts, and confiscation of assets.

At our Hong Kong criminal defence practice, we advise and represent individuals facing allegations of money laundering under section 25(1) of the Organized and Serious Crimes Ordinance (Cap. 455) (“OSCO”). If you have been arrested, invited to attend a police interview, or discovered that your bank account has been frozen, it is important to obtain legal advice immediately.

Under section 25(1) of OSCO, it is an offence for a person to deal with property knowing or having reasonable grounds to believe that the property, in whole or in part, directly or indirectly, represents the proceeds of an indictable offence.

In practical terms, this means that a person may be charged with money laundering even if they were not involved in the original crime. The prosecution often focuses on the handling of suspicious funds or assets rather than the underlying offence itself.

In many cases, money laundering allegations arise from:

• receiving suspicious funds into a personal or company bank account;
• transferring money on behalf of another person;
• withdrawing funds shortly after receiving them;
• allowing a third party to use your bank account;
• acting as a “money mule”;
• moving fraud proceeds between accounts;
• dealing with suspicious cryptocurrency transactions; or
• participating in “easy money” or “commission-based” transfer schemes.

The term “dealing” is interpreted very broadly under Hong Kong law. It can include:

• receiving money;
• transferring or remitting funds;
• withdrawing cash;
• converting funds into other assets or cryptocurrency;
• concealing or disguising the source of funds;
• using property as security; or
• handling assets on behalf of another person.

This means that even individuals who believe they were “only helping” or “just following instructions” may still face prosecution.

Not necessarily.

One of the most important features of section 25(1) OSCO is that the prosecution does not always need to prove actual knowledge. It may be enough if they allege that you had reasonable grounds to believe the money or property was connected to crime.

This is why many people are charged even when they say:

• “I did not know where the money came from.”
• “A friend asked me to help.”
• “I only let someone use my bank account.”
• “I was told it was for business.”
• “I was just earning a commission.”

The court will look at the surrounding circumstances, including whether there were obvious warning signs.

Common red flags relied on by the prosecution include:

• large or unusual incoming transfers;
• payments from strangers;
• multiple transfers in a short period of time;
• instructions to move funds immediately;
• use of several bank accounts;
• lack of any genuine commercial explanation; and
• inconsistent explanations given to the police or the bank.

One of the most common ways clients first discover they are under investigation is when their bank account is suddenly frozen.

This often happens where the police or a bank suspect that funds in the account may be connected to:

• online fraud;
• scam proceeds;
• suspicious third-party transfers;
• account lending or account selling; or
• transactions that appear inconsistent with the account holder’s profile.

If your bank account has been frozen, do not assume it will resolve itself. A frozen account can affect your salary, rent, daily expenses, and business operations. Early legal advice can be critical in understanding:

• why the account was frozen;
• whether the police are investigating you;
• whether you are at risk of arrest;
• what documents or explanations may be needed; and
• whether there are grounds to challenge or respond to the freeze.

Our criminal defence lawyers regularly advise on allegations involving:

• money mule accounts;
• loaning or selling bank accounts;
• romance scam proceeds;
• employment scam or “part-time job” transfer schemes;
• company accounts used for suspicious transactions;
• fraud and deception proceeds;
• cross-border transfers; and
• cryptocurrency-related money laundering investigations.

Many clients are shocked to learn that what they thought was a favour, side job, or temporary arrangement can result in a serious criminal charge.

Every money laundering case depends on its facts. A proper defence requires close analysis of:

• bank statements and transaction records;
• WhatsApp, WeChat, Telegram, and email communications;
• police interview records;
• the prosecution’s evidence on the alleged source of funds;
• whether the funds can truly be shown to represent criminal proceeds; and
• whether the prosecution can prove knowledge or “reasonable grounds to believe”.

Defence issues may include:

• whether you genuinely believed the funds were legitimate;
• whether there was a lawful business or personal explanation;
• whether you were misled or manipulated by another person;
• whether the police interview was properly conducted;
• whether your account was used without your full understanding;
• whether the prosecution can properly link the funds to an indictable offence; and
• whether there are weaknesses in the circumstantial evidence.

A carefully prepared defence can make a significant difference to the outcome of the case.

If you are contacted by the police in relation to money laundering or suspicious transactions, you should seek legal advice before answering questions.

You should not:

• attend a police interview without legal advice;
• guess or speculate when giving explanations;
• delete messages or transaction records;
• contact other people involved without guidance; or
• assume that being “just an account holder” protects you.

What you say at an early stage can have a major impact on whether you are charged and how the prosecution views your case.

We provide strategic criminal defence advice in relation to money laundering allegations under section 25(1) of OSCO, including:

• urgent advice following arrest or detention;
• representation at police interviews;
• advice on frozen bank accounts;
• review of banking and digital evidence;
• defence strategy before charge and after charge;
• bail applications;
• magistrates’ court and District Court representation;
• mitigation and sentencing submissions; and
• advice on confiscation and restraint proceedings.

We understand that many money laundering cases involve ordinary individuals with no prior criminal record who became caught up in suspicious transactions without appreciating the legal consequences. Early intervention can be crucial.

If you have additional questions which are not addressed here or wish to schedule an appointment, please click link below, or contact us by telephone on +852 2176 4777, by WhatsApp (+852 9547 5353) or by email at enquiries@comtois.hk.