Six arrested over HK$20m loan scam under Special 100% Loan Guarantee Scheme

The police have arrested six individuals linked to four companies for defrauding loans totaling over HK$20 million under the “Special 100% Loan Guarantee” scheme through false accounting.

The arrested individuals, three men and three women aged 29 to 45, include directors and workers from the relevant companies, with two of them being married.

The officers conducted an operation at the involved companies’ office and the suspects’ residences, seizing a large amount of bank documents, bank cards, checkbooks and electronic devices. 

In order to meet the scheme’s requirement of a 30 percent decrease in monthly revenue, two of the arrested directors, who applied for loans on behalf of their companies, transferred funds between their registered related companies and the loan-applying company for three months, creating the illusion of declining revenue.

Meanwhile, the other two directors were found to have falsified bank statements and transaction records during the loan application process. 

While the four companies successfully applied for the loans, investigations revealed  that all these transactions did not reflect actual business operations. 
After the loans were deposited, the suspects withdrew the funds in cash, with some being transferred to their personal accounts or other related companies.

The four involved companies operate in various sectors including media production, logistics, technology and engineering, with sources reported Artview Media Production, which runs the local online media Channel C, had defrauded up to HK$9 million. 

Channel C has reportedly faced financial difficulties in the past, calling readers for subscriptions and crowdfunding online in June 2023. Reports also indicated the company has delayed salary payments and laid off staff, with some operational funds being misappropriated for the management.

The arrestees are currently detained while investigation is ongoing and further arrests have not been ruled out. 

Authorities also reminded the public not to engage in risky behaviour for short-term gains as conspiracy to defraud, fraud and using false instruments are serious offences, which could result in 14 years imprisonment.