Commonwealth Director of Public Prosecutions (CDPP)

Kai Cheung LI

Money Laundering

Between 1997 and 2003, the defendant was the general manager of 2 government owned development and housing construction companies in southern China. The defendant had a close working relationship with the director and loans manager of a government owned finance company.

Between 1998 and 2000 the defendant used 3 private companies to obtain 28 loans. The loans, each for the specific purpose of constructing ‘low-cost housing’, were approved by the director. The loans totalled ¥82 million or approximately AUD$15 million.

No properties were constructed. Instead, ¥30 million was funnelled via a series of foreign currency conversions to a shell company in Hong Kong owned 50/50 by the defendant and the director. The defendant subsequently directed a total of AUD$2.8 million of the misappropriated funds to be transferred to Australia in 7 instalments.

The defendant came to reside in Australia in 2003, shortly after the misappropriation was detected by Chinese authorities. Between 2003 and 2007 the misappropriated funds were further dealt with as various investments. At the time of the defendant’s arrest in 2007, $70,000 of the capital in his residence and $120,000 in a term deposit in the defendant’s name could be traced to the misappropriated funds.

The defendant was charged with 1 count of dealing in proceeds of crime with a value of $100,000 or more pursuant to section 400.4(1) of the Criminal Code, 1 count of dealing in proceeds of crime with a value of $50,000 or more pursuant to section 400.5(1) of the Criminal Code and 7 counts of money laundering pursuant to section 81(2) of the POC Act 1987.

The defendant pleaded not guilty and after a trial before the Supreme Court in Brisbane he was found guilty by the jury on all counts. The defendant was sentenced on 14 September 2011 to 14 years imprisonment with a non-parole period of 9 years.

In sentencing, Daubney J made the following comments:

“It is relevant for me to note, however, that one of the factors that section 16A requires me to take into account is the degree to which you have shown contrition for having committed these offences, and I observe that you have not shown a skerrick of remorse. This offending entailed very serious aspects. You defrauded a public utility in China; you fostered illegal currency transactions. By any objective standards of propriety, your conduct in bringing this money into Australia and applying it in the way you have constituted serious anti-social behaviour.”

AUD $4,160,259.81 was also forfeited and returned to Chinese authorities on 18 November 2009 as a result of the equitable sharing provisions under the POC Act.