SEIZED CASH CAME FROM DRUGS: JUDGE

A blow was struck against international money-laundering yesterday when a
judge delivered an unprecedented ruling that police had been entitled to
confiscate almost $2 million in cash from a passenger at the airport.
It is the first time the Commissioner of Police has used laws introduced in
1995 to make it easier to forfeit drug-trafficking proceeds.

Lin Xin-nian, 39, a Canadian resident with a mainland passport, was
stopped at Chek Lap Kok in October 1998 and found to have C$380,060
(HK$1.9 million at the time), stuffed in his suitcase and trouser pockets.

He has not been charged with any crime, but Deputy Judge Michael
McMahon ruled the money could be confiscated under the Drug
Trafficking (Recovery of Proceeds) Ordinance.

The Court of First Instance had heard evidence, gathered in a joint
operation with Canadian police, of Mr Lin's links to members of a
heroin syndicate in the Canadian cities of Vancouver and Toronto.

"In my view, the high likelihood is that the monies did represent the
proceeds of drug trafficking rather than any other unlawful or lawful
activity," Judge McMahon said. "The evidence which I find convincing
in that regard includes the fact that a large part of that sum of
C$380,060 was made up of small denomination banknotes."

He said he took into account the evidence of a police witness that
drug deals at street level in Canada usually involved payment in small
denomination notes. "It is obvious that the associates of the
respondent were involved on a very large scale with drug trafficking,"
he said.

Many of the seized notes were contaminated by cocaine, another factor
the judge took into account, although he accepted that a large number
of notes in general circulation bore traces of illicit drugs.

The ruling comes at a time of concern over claims that Hong Kong has
become the money-laundering capital of the world.

After the hearing, Michael Blanchflower, representing the Commissioner
of Police, said the decision showed that the change to the law in 1995
was very important in helping to win the war against dealers in dirty
money.

"It is one more tool to deprive criminals and money-launderers of
their drug-trafficking proceeds," Mr Blanchflower said. "At the
present time this power is limited to cash connected with drug
trafficking."

Mr Lin had claimed that C$100,000 of the cash was his own and that the
rest had been borrowed from his sister. He said it was intended to be
given to his father on the mainland.

He had also brought about C$500,000 to Hong Kong the previous July. Mr
Lin said this was also meant for his father, but he had gambled most
of it away in Macau.

The judge rejected his evidence and said it amounted to a fabrication
to hide the true source of the money.

Mr Lin, who was employed by computer companies in Canada, had only
been earning a modest income and would not have been able to save the
sort of sums he had brought to Hong Kong, he said.

The money seized from Mr Lin weighed 15.5kg and included 14,000 C$20
notes. Documentary evidence had been provided by about 20 witnesses
from Vancouver and Toronto. There were three volumes of evidence
totalling about 400 pages.