Recent ICAC Cases

19
Oct 2021
Plumbing subcontractors charged by ICAC with $1m wage fraud

The ICAC yesterday (October 18) charged two third-tier subcontractors of the construction projects of the Hong Kong Children’s Hospital and a private residential estate in Ma On Shan with defrauding two second-tier subcontractors of wage payments totalling about $1 million by overstating daily wages of eight plumbers.

The ICAC investigation arose from a corruption complaint. Upon completion of the investigation, the ICAC sought legal advice from the Department of Justice, which advised charging the two third-tier plumbing subcontractors.

Sze Kin-chung, 48, and Chu Cheuk-wah, 58, jointly face two counts of conspiracy to defraud, contrary to Common Law. Sze alone further faces six counts of fraud, contrary to Section 16A of the Theft Ordinance. The offences took place between November 2016 and September 2018.

The defendants were released on ICAC bail, pending their court appearance in the Eastern Magistrates’ Courts tomorrow (October 20) for the case to be transferred to the District Court for plea.

At the material time, Kin Win Engineering Limited (Kin Win) and Onplus Plumbing Engineering Limited (Onplus) took part in two construction projects respectively involving the Hong Kong Children’s Hospital and a private residential estate in Ma On Shan as second-tier subcontractors. Operators of the two second-tier subcontractors subcontracted the plumbing work of the two projects to Sze and Chu.

According to the subcontracting agreements, Sze and Chu were required to supply plumbers to Kin Win and Onplus for the two projects and report the exact daily wages of the plumbers for wage calculation.

One of the charges alleges that Sze and Chu conspired together to defraud Kin Win and Onplus that a plumber had requested a daily wage of $1,500, thereby inducing Kin Win and Onplus to calculate and release wages to the plumber based on the requested daily wage.

Another charge alleges that the two defendants conspired together to defraud Kin Win that another plumber had requested a daily wage of $1,150 by similar fraudulent means.

Two other charges allege that Sze falsely represented to Kin Win and Onplus that another two plumbers had each requested a daily wage of $1,500 and with intent to defraud, induced Kin Win and Onplus to calculate and release wages to the two plumbers based on the requested daily wages which resulted in the benefit to Sze or in prejudice to Kin Win and Onplus.

The four remaining charges allege that Sze falsely represented to Kin Win that another four plumbers had requested a daily wage of $1,400 and $1,500 respectively by similar fraudulent means.

ICAC enquiries revealed that the actual daily wages requested by the eight plumbers in fact ranged from $750 to $1,100 but they were overstated by Sze and Chu to Kin Win and Onplus to a range from $1,150 to $1,500. The total wages were overstated by about $1 million.

The Hospital Authority, Kin Win and Onplus have rendered full assistance to the ICAC during its investigation into the case.

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