Integrity Focus
Recent ICAC Cases
Jan 2024Ex-chief operations officer of medical device firm charged as ICAC probe reveals $3.1m project payments fraud
A then chief operations officer of a medical device firm was charged by the ICAC yesterday (January 25) with fraud after a corruption investigation revealed that he allegedly defrauded the medical device firm payments of over $3.1 million for a research and development (R&D) and production project by making false representation that an international corporation was the buyer of the project.
Francis Fung Chung-hung, 73, former chief operations officer of Flussig Medtech Limited (Flussig), faces one count of fraud, contrary to Section 16A(1) of the Theft Ordinance. He was released on bail, pending his appearance at the Eastern Magistrates’ Courts next Tuesday (January 30) for mention, when the case will be transferred to the District Court for plea.
In 2018, the defendant invited an investor to invest in the R&D and production project of a medical device. The investor subsequently set up Flussig to run the project and employed the defendant as its chief operations officer. Due to the slow progress of the project, the defendant recommended the investor to invest in another R&D and production project of a coffee machine to make profit to fund the medical device project.
The investor agreed to invest in the coffee machine project through Flussig and accepted defendant’s recommendation to engage BM Technology Design Limited (BM Tech) and Wargames Factory Limited (Wargames Factory) for software development, manufacturing plastic parts and supplying prototype.
It is alleged that between October 2019 and April 2020, the defendant, with intent to defraud, induced Flussig to settle payments totalling over $3.1 million with BM Tech and Wargames Factory by falsely representing to Flussig that an international beverage corporation would purchase the coffee machine project from Flussig.
The ICAC investigation arose from a corruption complaint. Enquiries revealed that the international beverage corporation had never entered into any business negotiation or agreement with Flussig.
Flussig and the international beverage corporation concerned have rendered full assistance to the ICAC during its investigation into the case.