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May 2023Subcontractor of private residential project charged as ICAC probe reveals $9.6m wage fraudThe ICAC charged five people last Friday (May 19) after it was revealed in the course of a corruption investigation that the company secretary and the director of a subcontractor of a construction project allegedly conspired with others to defraud a contractor of about $9.6 million by falsifying wages information of workers.The five defendants, aged between 35 and 61, are Hon Sang, company secretary of Honsang Company Limited (Honsang); his wife Ada Law Yin-nei and younger brother Hon Kai-keung, respectively the sole director-cum-shareholder and worker of Honsang; and two other workers of Honsang, Leung Wing-chak and So Yiu-keung.They face two counts of conspiracy to defraud, contrary to Common Law. All defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 23) for mention. The prosecution will apply for transferring the case to the District Court for plea.At the material time, Honsang was a subcontractor of aluminium and glass related works of a private residential construction project on Borrett Road in Mid-Levels. Honsang was required to submit to CR Construction Company Limited (CR Construction), a contractor of the project, documents in relation to wage payments, including copies of cheques issued to workers and the relevant receipts, to reimburse expenses on an accountable basis.It is alleged that between September 2018 and April 2019, the Hon couple, Hon Kai-keung and Leung conspired together to defraud CR Construction by falsely representing to CR Construction that designated sums would be used for the purpose of paying wages to workers, causing CR Construction to issue cheques to Honsang to settle the payment.The ICAC investigation arose from a corruption complaint. It was revealed that during the abovementioned period, CR Construction received from Honsang photocopies of over 1,200 cheques totalling about $30 million purporting that wages were paid to workers. Enquiries also found that over 500 cheques were not encashed. Moreover, 43 cheques in which the names of the payees and the amount being falsified were deposited into bank accounts of the Hon couple, Hon Kai-keung and Leung, involving totalling about $9.3 million.It is also alleged that between May and August 2019, the Hon couple, Leung and So conspired together with another worker of Honsang to defraud CR Construction, causing it to overpay those workers about $300,000.ICAC investigation revealed that during the aforesaid period, CR Construction changed to pay Honsang’s workers directly. The Hon couple and others allegedly overstated workers’ wages and instructed workers to return the wages overpaid by CR Construction to Honsang.CR Construction has rendered full assistance to the ICAC during its investigation into the case. 19
May 2023Duo charged by ICAC with money laundering for allegedly conspiring with dummy insurance agent to handle $270,000 commissionsIn the course of a corruption investigation by the ICAC, it was revealed that two insurance agents allegedly recruited a person to pose as dummy insurance agent to obtain commissions and bonuses totalling over $270,000 by making false representations that three insurance policies were handled by the latter, and collected most of the sum from the dummy insurance agent. The duo were charged with conspiracy to launder crime proceeds yesterday (May 18).Cheng Yik-lut, 30, and Jovi Leung Kin-fung, 29, both insurance agents, jointly face one count of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance and Section 159A of the Crimes Ordinance.The defendants were released on ICAC bail, pending their appearance in the Eastern Magistrates’ Courts next Monday (May 22) for plea.It is alleged that in 2019, the defendants arranged Cheng’s cousin to pose as a dummy insurance agent at Chubb Life Insurance Company Limited (Chubb). Chubb subsequently received three insurance policy applications of Cheng. Cheng’s cousin was named as the handling agent and received commissions and bonuses of over $270,000 from Chubb.The ICAC investigation arose from a corruption complaint. Enquiries revealed that the cousin was not actually the handling agent of the three insurance policies. Upon the defendants’ request, the cousin transferred over $240,000 to designated bank accounts and retained about $27,000 as his rewards.It is alleged that between May 2019 and June 2020, Cheng and Leung conspired together with Cheng’s cousin and other persons to deal with the aforementioned commissions and bonuses of over $270,000, knowing or having reasonable grounds to believe that it in whole or in part directly or indirectly represented the proceeds of an indictable offence.Cheng’s cousin, Cheng Tsz-sing, 28, was earlier charged with one count of conspiracy to launder crime proceeds. He pleaded guilty to the charge and his case was adjourned to June 6 for mention.Chubb has rendered full assistance to the ICAC during its investigation into the case. 18
May 2023Intermediary charged by ICAC for bribing bank manager over account openingA director of an intermediary company was charged by the ICAC yesterday (May 17) for allegedly offering bribes totalling $20,000 to a bank manager for assisting two non-domestic clients to open corporate accounts with the bank.Tam Wing-kin, 35, sole shareholder-cum-director of Minerva Services Limited (Minerva), faces one count of conspiracy for an agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance.The defendant was released on ICAC bail, pending his appearance at the Eastern Magistrates’ Courts tomorrow (May 19) for plea.The defendant was the sole shareholder-cum-director of Minerva, an intermediary company proving secretarial services to clients.It is alleged that between September and October 2020, the defendant offered bribes of $20,000 to a then senior relationship manager of The Bank of East Asia, Limited (BEA) for opening bank accounts at BEA for clients referred by the defendant.BEA required corporate account applicants to attend its branches in person and to provide identification documents for verification for due diligence purpose. The bank would not accept application to open a corporate bank account if an applicant could not meet those requirements.ICAC investigation revealed that the defendant had allegedly provided information of two clients to the bank manager, and the applicants did not meet with the bank manager.The aforesaid bank manager Lai Chee-wai, 39, was earlier charged with offences including bribery. He pleaded guilty to the charges and his case was adjourned to January 10 next year for mitigation and sentence.BEA has rendered full assistance to the ICAC during its investigation into the cases.The ICAC has recently launched the “Corruption Prevention Guide for Banks” to enhance the corruption prevention capabilities of banks and assist banks in managing corruption risks in core operations including account opening and referral of client through case scenarios and corruption prevention safeguards. To promote probity culture in the banking sector, an Ethics Promotion Programme for the Banking Industry was also launched, under which a self-learning animation series “Unveil the Secret: Integrity Myths in the Banking Industry” was produced to help frontline bank staff understand common corruption loopholes. 16
May 2023Ex-property agent jailed for 16 months and assets over $1m confiscated for $4.9m mortgage loan fraud revealed in graft probeIn the course of a corruption investigation by the ICAC, it was revealed that a former property agent deceived a bank, the Hong Kong Mortgage Corporation Limited (HKMC) and its subsidiary into maintaining to grant a mortgage loan of about $4.9 million to him by making false representations that a residential property was for self-use. The defendant was today (May 16) sentenced to 16 months’ imprisonment and the District Court also ordered to confiscate over $1 million from the defendant.Chiu Ka-wai, 39, earlier pleaded guilty to two counts of fraud, contrary to Section 16A(1) of the Theft Ordinance.In sentencing, Judge Mrs Adriana Noelle Tse Ching said the defendant requested other to assist in committing the offences which was serious in nature, warranting a deterrent sentence.The judge also approved the prosecution’s application and ordered to confiscate crime proceeds of over $1.07 million from the defendant, who is required to satisfy the confiscation order within 6 months, failing which he will have to serve an additional term of imprisonment of 25 months.The court heard that banks in Hong Kong were required to comply with the guideline of the Hong Kong Monetary Authority on loan-to-value ratio requirement when granting a property mortgage loan. Under the Mortgage Insurance Programme (MIP) launched by the HKMC in 1999, participating banks could provide a maximum 80 per cent loan-to-value ratio to a self-occupancy residential property valued at $6 million and below.Since May 2018, the MIP was carried out by the HKMC Insurance Limited (HKMCI), a subsidiary of the HKMC. The Hongkong and Shanghai Banking Corporation Limited (HSBC) is a participating bank of the programme.In January 2016, the defendant signed a provisional agreement for purchasing a residential property at $6 million and applied for a mortgage loan under the MIP with HSBC. He declared in the relevant documents that the property was for self-occupancy. The application was approved by the HKMC and the defendant was offered a mortgage loan of about $4.9 million from HSBC. The loan was released to him in March 2016.In May 2017 and January 2020, HSBC sent letters requesting the defendant to confirm his self-occupancy of the property. The defendant made confirmations and further submitted his bank statements and a water bill of the property as supporting documents upon the request of HSBC. The bank, the HKMC and the HKMCI were satisfied that the defendant had complied with the self-occupancy requirement and maintained the mortgage loan granted to him.The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendant leased out the property to two tenants during the above period. He had requested one of the tenants to transfer the account of the property held with the Water Supplies Department to him so as to facilitate his submission of water bill as supporting document. Had HSBC, the HKMC and the HKMCI known that the information provided by the defendant was false, they would not have maintained the mortgage loan granted to him.HSBC, the HKMC and the HKMCI had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutors Steven Liu and Lucas Lai, assisted by ICAC officers Sudhir Gidwani, Elva Wong and Gary Li. 15
May 2023Ex-manager of developer and five from subcontractors charged by ICAC with bribery over construction projects’ tenderingA then construction manager of a developer and five directors and staff of four subcontractors were charged with bribery by the ICAC today (May 15). The manager allegedly accepted advantages worth about $180,000, including cash, gifts, etc., provided by the co-defendants for disclosing internal documents and information to assist the latter in the tendering exercises for various work packages of 10 construction projects.The defendants are Constant So Shun-ching, 55, then senior construction manager of Henderson Land Development Company Limited (Henderson Land); Mak Hung-cho, 66, shareholder-cum-director of Lee Shing Masonry Engineering Limited (Lee Shing); Zheng Weicheng, 40, shareholder-cum-director of King Fung Development & Construction Company Limited (King Fung); Chung Yiu-hon, 34, staff member of King Fung; Chow Kit, 47, director of Trigon Building Materials Limited (Trigon); and Chan Lok-kau, 67, consultant of Kinway Engineering Limited (Kinway).The six defendants face a total of four counts of conspiracy for agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance (POBO) and section 159A of the Crimes Ordinance. They were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 16) for mention.At the material time, So was a senior construction manager of Henderson Land. He was responsible for overseeing the works conducted by subcontractors, and providing assistance in tendering exercises of work packages. Lee Shing, King Fung, Trigon and Kinway were registered subcontractors of Henderson Land. They were respectively responsible for plastering, concrete formwork and structure, false ceiling and miscellaneous works.It is alleged that between December 2018 and July 2021, So conspired with the five co-defendants to accept various advantages worth totalling about $180,000 for assisting the four subcontractors – Lee Shing, King Fung, Trigon and Kinway – in the tendering exercises of Henderson Land or its subsidiaries.The advantages were $100,000 in cash, four smartphones worth totalling over $46,000, a banquet worth over $9,000 celebrating the birthday of So’s father, hotel accommodation in Macao worth about $5,700 for So’s son, furniture worth $18,000, and over 10 massage services.ICAC investigation revealed that So allegedly disclosed to the five co-defendants the internal tender documents of Henderson Land and information of the tenderers which submitted the lowest bids in relation to various work packages of 10 construction projects, namely nine new residential development projects and an industrial and commercial building completed earlier.Henderson Land has rendered full assistance to the ICAC during its investigation into the case.The ICAC has been actively promoting anti-corruption messages in the construction industry, reminding practitioners to adhere strictly to the POBO and not to use their official capacity for personal gains, thus undermining the integrity of the tendering system and clean business environment.
May 2023Subcontractor of private residential project charged as ICAC probe reveals $9.6m wage fraudThe ICAC charged five people last Friday (May 19) after it was revealed in the course of a corruption investigation that the company secretary and the director of a subcontractor of a construction project allegedly conspired with others to defraud a contractor of about $9.6 million by falsifying wages information of workers.The five defendants, aged between 35 and 61, are Hon Sang, company secretary of Honsang Company Limited (Honsang); his wife Ada Law Yin-nei and younger brother Hon Kai-keung, respectively the sole director-cum-shareholder and worker of Honsang; and two other workers of Honsang, Leung Wing-chak and So Yiu-keung.They face two counts of conspiracy to defraud, contrary to Common Law. All defendants were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 23) for mention. The prosecution will apply for transferring the case to the District Court for plea.At the material time, Honsang was a subcontractor of aluminium and glass related works of a private residential construction project on Borrett Road in Mid-Levels. Honsang was required to submit to CR Construction Company Limited (CR Construction), a contractor of the project, documents in relation to wage payments, including copies of cheques issued to workers and the relevant receipts, to reimburse expenses on an accountable basis.It is alleged that between September 2018 and April 2019, the Hon couple, Hon Kai-keung and Leung conspired together to defraud CR Construction by falsely representing to CR Construction that designated sums would be used for the purpose of paying wages to workers, causing CR Construction to issue cheques to Honsang to settle the payment.The ICAC investigation arose from a corruption complaint. It was revealed that during the abovementioned period, CR Construction received from Honsang photocopies of over 1,200 cheques totalling about $30 million purporting that wages were paid to workers. Enquiries also found that over 500 cheques were not encashed. Moreover, 43 cheques in which the names of the payees and the amount being falsified were deposited into bank accounts of the Hon couple, Hon Kai-keung and Leung, involving totalling about $9.3 million.It is also alleged that between May and August 2019, the Hon couple, Leung and So conspired together with another worker of Honsang to defraud CR Construction, causing it to overpay those workers about $300,000.ICAC investigation revealed that during the aforesaid period, CR Construction changed to pay Honsang’s workers directly. The Hon couple and others allegedly overstated workers’ wages and instructed workers to return the wages overpaid by CR Construction to Honsang.CR Construction has rendered full assistance to the ICAC during its investigation into the case. 19
May 2023Duo charged by ICAC with money laundering for allegedly conspiring with dummy insurance agent to handle $270,000 commissionsIn the course of a corruption investigation by the ICAC, it was revealed that two insurance agents allegedly recruited a person to pose as dummy insurance agent to obtain commissions and bonuses totalling over $270,000 by making false representations that three insurance policies were handled by the latter, and collected most of the sum from the dummy insurance agent. The duo were charged with conspiracy to launder crime proceeds yesterday (May 18).Cheng Yik-lut, 30, and Jovi Leung Kin-fung, 29, both insurance agents, jointly face one count of conspiracy to deal with property known or believed to represent proceeds of an indictable offence, contrary to Section 25(1) of the Organized and Serious Crimes Ordinance and Section 159A of the Crimes Ordinance.The defendants were released on ICAC bail, pending their appearance in the Eastern Magistrates’ Courts next Monday (May 22) for plea.It is alleged that in 2019, the defendants arranged Cheng’s cousin to pose as a dummy insurance agent at Chubb Life Insurance Company Limited (Chubb). Chubb subsequently received three insurance policy applications of Cheng. Cheng’s cousin was named as the handling agent and received commissions and bonuses of over $270,000 from Chubb.The ICAC investigation arose from a corruption complaint. Enquiries revealed that the cousin was not actually the handling agent of the three insurance policies. Upon the defendants’ request, the cousin transferred over $240,000 to designated bank accounts and retained about $27,000 as his rewards.It is alleged that between May 2019 and June 2020, Cheng and Leung conspired together with Cheng’s cousin and other persons to deal with the aforementioned commissions and bonuses of over $270,000, knowing or having reasonable grounds to believe that it in whole or in part directly or indirectly represented the proceeds of an indictable offence.Cheng’s cousin, Cheng Tsz-sing, 28, was earlier charged with one count of conspiracy to launder crime proceeds. He pleaded guilty to the charge and his case was adjourned to June 6 for mention.Chubb has rendered full assistance to the ICAC during its investigation into the case. 18
May 2023Intermediary charged by ICAC for bribing bank manager over account openingA director of an intermediary company was charged by the ICAC yesterday (May 17) for allegedly offering bribes totalling $20,000 to a bank manager for assisting two non-domestic clients to open corporate accounts with the bank.Tam Wing-kin, 35, sole shareholder-cum-director of Minerva Services Limited (Minerva), faces one count of conspiracy for an agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance and section 159A of the Crimes Ordinance.The defendant was released on ICAC bail, pending his appearance at the Eastern Magistrates’ Courts tomorrow (May 19) for plea.The defendant was the sole shareholder-cum-director of Minerva, an intermediary company proving secretarial services to clients.It is alleged that between September and October 2020, the defendant offered bribes of $20,000 to a then senior relationship manager of The Bank of East Asia, Limited (BEA) for opening bank accounts at BEA for clients referred by the defendant.BEA required corporate account applicants to attend its branches in person and to provide identification documents for verification for due diligence purpose. The bank would not accept application to open a corporate bank account if an applicant could not meet those requirements.ICAC investigation revealed that the defendant had allegedly provided information of two clients to the bank manager, and the applicants did not meet with the bank manager.The aforesaid bank manager Lai Chee-wai, 39, was earlier charged with offences including bribery. He pleaded guilty to the charges and his case was adjourned to January 10 next year for mitigation and sentence.BEA has rendered full assistance to the ICAC during its investigation into the cases.The ICAC has recently launched the “Corruption Prevention Guide for Banks” to enhance the corruption prevention capabilities of banks and assist banks in managing corruption risks in core operations including account opening and referral of client through case scenarios and corruption prevention safeguards. To promote probity culture in the banking sector, an Ethics Promotion Programme for the Banking Industry was also launched, under which a self-learning animation series “Unveil the Secret: Integrity Myths in the Banking Industry” was produced to help frontline bank staff understand common corruption loopholes. 16
May 2023Ex-property agent jailed for 16 months and assets over $1m confiscated for $4.9m mortgage loan fraud revealed in graft probeIn the course of a corruption investigation by the ICAC, it was revealed that a former property agent deceived a bank, the Hong Kong Mortgage Corporation Limited (HKMC) and its subsidiary into maintaining to grant a mortgage loan of about $4.9 million to him by making false representations that a residential property was for self-use. The defendant was today (May 16) sentenced to 16 months’ imprisonment and the District Court also ordered to confiscate over $1 million from the defendant.Chiu Ka-wai, 39, earlier pleaded guilty to two counts of fraud, contrary to Section 16A(1) of the Theft Ordinance.In sentencing, Judge Mrs Adriana Noelle Tse Ching said the defendant requested other to assist in committing the offences which was serious in nature, warranting a deterrent sentence.The judge also approved the prosecution’s application and ordered to confiscate crime proceeds of over $1.07 million from the defendant, who is required to satisfy the confiscation order within 6 months, failing which he will have to serve an additional term of imprisonment of 25 months.The court heard that banks in Hong Kong were required to comply with the guideline of the Hong Kong Monetary Authority on loan-to-value ratio requirement when granting a property mortgage loan. Under the Mortgage Insurance Programme (MIP) launched by the HKMC in 1999, participating banks could provide a maximum 80 per cent loan-to-value ratio to a self-occupancy residential property valued at $6 million and below.Since May 2018, the MIP was carried out by the HKMC Insurance Limited (HKMCI), a subsidiary of the HKMC. The Hongkong and Shanghai Banking Corporation Limited (HSBC) is a participating bank of the programme.In January 2016, the defendant signed a provisional agreement for purchasing a residential property at $6 million and applied for a mortgage loan under the MIP with HSBC. He declared in the relevant documents that the property was for self-occupancy. The application was approved by the HKMC and the defendant was offered a mortgage loan of about $4.9 million from HSBC. The loan was released to him in March 2016.In May 2017 and January 2020, HSBC sent letters requesting the defendant to confirm his self-occupancy of the property. The defendant made confirmations and further submitted his bank statements and a water bill of the property as supporting documents upon the request of HSBC. The bank, the HKMC and the HKMCI were satisfied that the defendant had complied with the self-occupancy requirement and maintained the mortgage loan granted to him.The ICAC investigation arose from a corruption complaint. Enquiries revealed that the defendant leased out the property to two tenants during the above period. He had requested one of the tenants to transfer the account of the property held with the Water Supplies Department to him so as to facilitate his submission of water bill as supporting document. Had HSBC, the HKMC and the HKMCI known that the information provided by the defendant was false, they would not have maintained the mortgage loan granted to him.HSBC, the HKMC and the HKMCI had rendered full assistance to the ICAC during its investigation into the case.The prosecution was today represented by Senior Public Prosecutors Steven Liu and Lucas Lai, assisted by ICAC officers Sudhir Gidwani, Elva Wong and Gary Li. 15
May 2023Ex-manager of developer and five from subcontractors charged by ICAC with bribery over construction projects’ tenderingA then construction manager of a developer and five directors and staff of four subcontractors were charged with bribery by the ICAC today (May 15). The manager allegedly accepted advantages worth about $180,000, including cash, gifts, etc., provided by the co-defendants for disclosing internal documents and information to assist the latter in the tendering exercises for various work packages of 10 construction projects.The defendants are Constant So Shun-ching, 55, then senior construction manager of Henderson Land Development Company Limited (Henderson Land); Mak Hung-cho, 66, shareholder-cum-director of Lee Shing Masonry Engineering Limited (Lee Shing); Zheng Weicheng, 40, shareholder-cum-director of King Fung Development & Construction Company Limited (King Fung); Chung Yiu-hon, 34, staff member of King Fung; Chow Kit, 47, director of Trigon Building Materials Limited (Trigon); and Chan Lok-kau, 67, consultant of Kinway Engineering Limited (Kinway).The six defendants face a total of four counts of conspiracy for agent to accept advantages, contrary to section 9(1)(a) of the Prevention of Bribery Ordinance (POBO) and section 159A of the Crimes Ordinance. They were released on ICAC bail, pending their appearance at the Eastern Magistrates’ Courts tomorrow (May 16) for mention.At the material time, So was a senior construction manager of Henderson Land. He was responsible for overseeing the works conducted by subcontractors, and providing assistance in tendering exercises of work packages. Lee Shing, King Fung, Trigon and Kinway were registered subcontractors of Henderson Land. They were respectively responsible for plastering, concrete formwork and structure, false ceiling and miscellaneous works.It is alleged that between December 2018 and July 2021, So conspired with the five co-defendants to accept various advantages worth totalling about $180,000 for assisting the four subcontractors – Lee Shing, King Fung, Trigon and Kinway – in the tendering exercises of Henderson Land or its subsidiaries.The advantages were $100,000 in cash, four smartphones worth totalling over $46,000, a banquet worth over $9,000 celebrating the birthday of So’s father, hotel accommodation in Macao worth about $5,700 for So’s son, furniture worth $18,000, and over 10 massage services.ICAC investigation revealed that So allegedly disclosed to the five co-defendants the internal tender documents of Henderson Land and information of the tenderers which submitted the lowest bids in relation to various work packages of 10 construction projects, namely nine new residential development projects and an industrial and commercial building completed earlier.Henderson Land has rendered full assistance to the ICAC during its investigation into the case.The ICAC has been actively promoting anti-corruption messages in the construction industry, reminding practitioners to adhere strictly to the POBO and not to use their official capacity for personal gains, thus undermining the integrity of the tendering system and clean business environment.