Six held after 20 conned of $95m in gold bar fraud

Twenty investors have been conned of HK$95 million in a gold bar scam for which six were arrested, while four other suspects, including a major shareholder of a listed company, are being sought.

The six suspected scammers, three men and three women aged between 26 and 51, were arrested for conspiracy to defraud following a police operation on Tuesday. As of last night, the six were still being questioned.

Police said the suspects were members of a syndicate that has been operating since 2018. They include management and sales representatives of a fraudulent investment company, A, and staff members of another company, C, which spent HK$51 million purchasing the victims' gold bars from company A.

No one from the listed company has been arrested yet.

The scams were committed between August 2018 and August 2019, during which 11 men and nine women - aged between 32 and 65, including one local and 19 mainlanders - were cheated.

One alleged victim claimed to have lost as much as HK$22 million.

Luk Chun-chung, senior inspector of Commercial Crime Bureau, said police received complaints mid-year on company A, which promoted an investment program in collaboration with a listed company that allegedly acted as its guarantor.

The complaints came as company A suddenly shut down earlier this year and victims were unable to get back their principal and guaranteed annual returns, Luk said.

He said throughout the program, company A persuaded the victims to purchase gold bars priced at HK$300,000 each, claiming that the bars could be "rented" to the listed company for guaranteed annual returns of 6.6 to 7.5 percent as interests.

"Apart from the annual returns, the victims were also told they would be able to get back their principal in full once the contract ended," Luk said.

"Company A also told them that during the purchase or renting of gold bars, lawyers will act as witnesses at the scene so as to reinforce confidence of victims in the program," he added.

The victims bought a total of 279 kilograms of gold bars.

"But once the victims allowed company A to take over the gold bars, none of them could get back their principal in full," Luk said.

He acknowledged that some victims were able to receive their guaranteed annual interests in the first few months after the program started.

The gold bars had not been leased to the listed company but held by company A, which had already sold 164 kilograms of the bullions to company C for HK$51 million in cash, without the victims' permission.

"The cash had been deposited into the bank account of company A and relevant individuals of the listed company," he said.

"Police are still investigating the whereabouts of the rest of the gold bars."

Chu Kin-wah, senior inspector of Commercial Crime Bureau, said that the victims were introduced to the investment program through real estate agents, insurance agents or immigration consultants.

Chu said CCB has frozen about HK$3.1 million in the scammers' bank accounts suspected to be the proceeds of crime and seized a pile of documents, including the victims' contracts of purchasing and renting gold bars, several computers and mobile phones in the listed company and company C.

They will carry out an asset search on two apartments owned by the scammers, worth HK$9.1 million.

erin.chan@singtaonewscorp.com