Eighteen arrested in HK$193m subsidy scheme fraud case

The Hong Kong Police Force announced today that they arrested 18 people - 12 men and six women - in a crackdown on a syndicate accused of using bogus information to commit subsidy scheme fraud to the tune of HK$193 million.

The suspects were rounded up in a series of raids deployed by the force from July 19 to 27.

The government launched the 100 Percent Personal Loan Guarantee Scheme to provide financial assistance to companies under the fourth wave of the epidemic in 2020, said Senior Inspector Mak Wai-kwok of the Commercial Crime Bureau’s Fraud Division.

Under the scheme operated by Hong Kong Mortgage Corporation Limited, companies could qualify for loan facilities amounting to HK$9 million or a total amount of employee wages and rents for twenty-seven months.

Officers have received reports from different channels claiming the fraud syndicate sending bogus applications for loans under the scheme, according to Yip Wing-lam, Superintendent of the Fraud Division, and the force began an investigation after seizing the applications.

The fraud syndicate used mostly false documents with fake payroll records and the company’s financial reports or exaggerated the number of employees in the company under the name of shell companies to apply for the subsidy loan from banks.

Upon obtaining the money, the companies would transfer it into individual accounts, the police said.

One of the companies obtained a loan of HK$5 million, half of which was used to buy expensive luxury goods.

Four raids have been carried out since 2021 in a total of 11 fraud cases involving loans of more than HK$1.4 billion, said the police.

The police added the investigation was still underway for possible further arrests.

From the scheme in effect since April 2020, more than 53,000 loans were approved involving HK$99 billion, and 32,000 enterprises benefited from the scheme, according to the Hong Kong Mortgage Corporation Limited.