Integrity Focus

In late 2003, the ICAC smashed a fraud syndicate which recruited individuals to defraud the Housing Authority (HA) of interest-free home assistance loans totalling over $10 million and three banks of mortgage loans in a total sum of over $5 million by falsifying the occupations and incomes of dummy applicants, resulting in the prosecution of over 30 persons, including backbone members of the syndicate and dummy applicants. The head of the syndicate, who had been wanted by the ICAC since 2004 after jumping bail, was charged upon returning to Hong Kong. A court mention was conducted in the Eastern Magistrates’ Courts this afternoon (February 7).

Shiu Kwok-piu, 65, unemployed, was yesterday (February 6) charged with four counts of conspiracy to defraud, contrary to the Common Law. Principal Magistrate Mr Don So Man-lung adjourned the case to tomorrow morning (February 8) for mention.

The alleged offences took place between January 2001 and October 2003. At the material time, the HA introduced the Home Assistance Loan Scheme (the Scheme, formerly known as the Home Purchase Loan Scheme) to help eligible families or single persons to buy flats of their own. The Scheme was terminated in July 2024.

Applicants of the Scheme were required to submit their employment and income proofs to support their capability of repaying the loans and that their incomes did not exceed the upper limits. Under the Scheme, each single-person applicant could obtain an interest-free loan of up to $330,000 as down payment, while the maximum amount of the interest-free loan released to each family-based applicant was $660,000. Apart from applying for an interest-free loan from the HA, an applicant could also apply for a mortgage loan from a bank.

One of the charges alleges that Shiu had conspired with the syndicate members and 36 dummy applicants to defraud the HA to approve the applications made by the dummy applicants under the Scheme and to release interest-free loans to them. Interest-free loans in relation to the 36 applications amounted to over $10 million.

Three other charges allege that Shiu had conspired with the syndicate members and 10 of the dummy applicants to defraud The Bank of East Asia, Limited, Standard Chartered Bank (Hong Kong) Limited and Shanghai Commercial Bank Limited to approve and release mortgage loans totallling over $5 million.

In the course of making applications with the HA and the three banks, Shiu and the co-conspirators had allegedly submitted false employment contracts and monthly income proofs to falsify the employment and incomes of the applicants.

At that time, the ICAC had received a corruption complaint, alleging that a syndicate had conspired together to offer advantages to individuals including property and insurance agents in obtaining HA loans by deception. Investigation revealed that persons implicated in the scam had falsely stated that the dummy applicants were employed by various companies made up by them and falsified their incomes to facilitate their applications for loans from the HA and various banks.

Over 30 individuals, including backbone members of the syndicate, dummy applicants, property vendors and agents, etc. were subsequently charged by the ICAC. The defendants, convicted of fraud, using false instruments and other related offences, received sentences up to 27 months in jail. The ICAC also administered formal caution to various individuals implicated in the scam.

The HA and the three banks concerned rendered full assistance to the ICAC during its investigation.

The prosecution was today represented by ICAC officer Tim Lam.