15 people arrested for attempting to defraud under the anti-epidemic fund amounting to HK$3.87m

Picture credit: Hong Kong Police

2nd September 2020 – (Hong Kong) The Hong Kong government has earlier launched anti-epidemic fund for many industries that have been hit by the epidemic. However, during the review and approval period, the Anti-epidemic Fund Secretariat found suspicious points in many applications and referred to the police for follow-up. After an in-depth investigation, the Commercial Crime Bureau of the Police arrested 13 men and 2 women (31 to 61 years old) suspected of “fraud” and “attempted fraud”. They were suspected of using different fraudulent methods and submitted 47 applications for subsidies, involving a total of HK$3.87 million.

The police launched operations in multiple districts across Hong Kong last Thursday (27th August) and yesterday (1st September), arresting the persons involved. They all reported that they were businessmen, contractors, security guards, retirees, unemployed, etc. 15 people submitted a total of 38 retail industry subsidy schemes and 9 subsidy applications for beauty salons, massage parlours and party rooms.

Three applications submitted by two of them have been approved, involving HK$240,000 and the relevant funds have been frozen. There are many fraudulent methods for related applications, including registering a new business at the Business Registration Office after the scheme is launched, or registering a new branch for the original business, and falsely claiming that the relevant business has been operating before the planned date, in order to exaggerate the relevant business scale to apply for more subsidies. A man surnamed Tang (48 years old) arrested in July applied for subsidies for 17 nail salons and 2 retail shops in April, falsely claiming that each branch hired five shop assistants, defrauding a total of HK$1.87 million. In addition, some of the applicants’ original business nature was not eligible for the funding scheme. Therefore, after the details of the scheme were announced, the applicants went to the Business Registration Office to try to change the nature of their business to falsely claim that their business was eligible for the scheme. There are also applicants who submitted false documents for application purposes, including using letters with altered address as proof of address, or using false MPF payment statements to exaggerate the number of employees in order to apply for subsidies for beauty salons and massage parlours.

Picture credit: Hong Kong Police

A woman surnamed Lee (31 years old) who reported to be a businessman was revealed to have forged proof of address with her family and the address of the property where she had rented using fake utility bills and a false MPF settlement statement. She applied subsidies for 1 retail industry and 8 beauty salon involving a total of HK$880,000.

In addition, scammers also subdivided the units and sublet them to different business holders, and named them with different room numbers on the lease, in order to mislead the Secretariat that the relevant addresses were separate units. In fact, since the Secretariat will not process applications for repeated addresses when approving applications, a criminal group involving 5 arrested persons sublet a unit to 9 shops in order to defraud. When applying for relevant industry funding, applicants are required to provide relevant business certificates, but some applicants provide false photos in the process to falsely claim that the relevant business has actual operations. These include downloading storefront photos online, and then processing them to change the name of the store or putting up one’s own signs on the facade of other people’s stores to take pictures. The stores involved include liquor stores, bookstores, and building materials shops.

Another man obtained the company information of others to apply for subsidy for his own company, the total involved 5 applications with an amount of HK$400,000. An arrested man applied for a subsidy of HK$880,000 for using addresses of 11 industrial and commercial buildings. He reported that he operated a retail business and submitted a photo with a sign posted outside the door of the unit. The investigation revealed that the unit was used for subletting business. During the arrest, the police seized a batch of documents, computers, mobile phones and a number of signboards. They emphasised that the investigation is still in progress and does not rule out more arrests. The police stated that the purpose of the relevant subsidy scheme is to reduce the burden on the industries affected by the epidemic and enable them to continue to operate. Police condemn these suspects for obtaining funding by defrauding.