Police Arrest 38 Over Suspected Pandemic Loan Fraud

Police on Friday said they had arrested 38 people suspected of deceiving banks into providing loans totalling HK$280 million through a government scheme aimed at supporting businesses hit by the Covid-19 pandemic.

Twenty-two men and 16 women, aged between 27 and 74, were arrested between March 9 and 17 on suspicion of conspiracy to defraud.

Under the Special 100 percent Guarantee scheme launched last year, businesses can apply for low-interest, government-backed loans from banks if they meet certain requirements, such as having suffered at least a 30 percent decline in sales in any month, compared to the pre-pandemic period.

The police said those arrested are suspected of being linked to dozens of companies connected to two crime syndicates, and they allegedly used fake bank statements, financial statements and MPF accounts to take out the loans.

Senior inspector Law Yik-pan from the commercial crime bureau said they believe the companies involved did not have genuine business operations.

Officers said they suspect around HK$180 million in loans was obtained fraudulently as part of the scam.

Irene Mok, a vice president of the Hong Kong Mortgage Corporation, said lenders can recover money if they find that borrowers had provided false information, and the corporation can also take legal action where necessary.