Integrity Focus

An intermediary, the operator and proprietor of a Small and Medium Enterprise (SME) engaging in jewellery business and two others were charged by the ICAC today (January 22) with conspiracy to defraud and conspiracy to launder crime proceeds, following a corruption investigation which revealed that the intermediary had allegedly advised the SME duo to submit false payroll records which induced a bank to grant two loans totalling $6 million under the Special 100% Loan Guarantee (SLG) scheme.

The five defendants, aged between 37 and 56, are Li Kei-wing, then director cum shareholder of Corporate Good Doctor Company Limited; Michelle Choi Wai-shan and her elder brother Choi Wai-hang, respectively proprietor and operator of Superl Jade & Jewels Company (Superl Jade & Jewels); and two associates of Li Kei-wing, namely Chik Yiu-hang and Loy Tsz-man. They face two counts of conspiracy to defraud, contrary to Common Law; one count of dealing with property known or believed to represent proceeds of an indictable offence (conspiracy to commit money laundering), contrary to section 25(1) of the Organized and Serious Crimes Ordinance and section 159A of the Crimes Ordinance; and five alternative charges of money laundering.

The five defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts on Friday (January 24) for mention. The prosecution will later make an application for transferring the case to the District Court for plea.

The ICAC investigation arose from a corruption complaint, which subsequently revealed the illicit SLG loans fraud in the present case. SLG scheme was launched by HKMC Insurance Limited (HKMCI) in April 2020 to ease SMEs’ cash flow pressure under the pandemic. Loans approved by lenders were fully guaranteed by the government. At the material time of the present case, the maximum facility amount was the total amount of wages paid by an SME to its employees and its rental payments for 18 months, or $6 million. Applicants were required to provide the lenders with the relevant proofs.

The Hongkong and Shanghai Banking Corporation Limited (HSBC) was one of the participating lenders under the scheme. After confirming an application received was legitimate, HSBC would forward the application to HKMCI for final review and approval to grant a guarantee.

It is alleged that between late March and mid-April 2021, Li, Michelle Choi, Choi Wai-hang and Chik had conspired together to defraud HSBC and HKMCI by submitting false payroll records of Superl Jade & Jewels in respect of its SLG loan application, and falsely representing to HKMCI that the loan granted would be used to pay wages or provide working capital for business operations of the company, causing HSBC and HKMCI to approve a loan of $5 million to Superl Jade & Jewels.

Between mid-April and late May 2021, Li, Michelle Choi and Choi Wai-hang had also allegedly conspired together to deceive HSBC and HKMCI into granting another loan of $1 million to Superl Jade & Jewels by similar fraudulent means.

It is also alleged that the five defendants had conspired together to launder crime proceeds in mid-April 2021, after Superl Jade & Jewels was granted the first loan of $5 million. They had allegedly dealt with the loan, knowing that it represented proceeds of an indictable offence. Each of them also faces an alternative charge of money laundering for allegedly transferring the loan granted to Superl Jade & Jewels to their personal bank accounts.

ICAC enquiries revealed that Michelle Choi was registered as the proprietor of Superl Jade & Jewels, but the company was operated and owned by her elder brother Choi Wai-hang and it had no employee. Investigation also revealed that in early 2021, Li allegedly suggested the Choi siblings to apply for SLG loans from HSBC with false employee information and Mandatory Provident Fund contribution records to secure a higher loan amount. He also assisted the duo in processing the relevant loan application documents.

The HKMCI and HSBC had rendered full assistance to the ICAC during its investigation into the case.