Device let fake card gang rip off $44m
Two businessmen yesterday admitted being part of Hong Kong's biggest and most sophisticated credit card scam, involving a potential loss of around $280 million.
An authorisation device issued by banks to shops was used by the gang, for the first time in Hong Kong, to guarantee that their fake cards would be accepted.
A laptop computer, an encoder, embossing machines and a cloned mobile telephone were also used in a production line which was smashed when two 'factories' in Tsuen Wan and Tuen Mun were raided by the police in October and December 1996.
Prosecutor Peter Callaghan said: 'The system in place was a unique and highly sophisticated method of testing the validity of false credit cards made at these premises.
'Such a system has never previously been uncovered in Hong Kong by Commercial Crime Bureau investigations into the vast number of credit card frauds detected here.' The Court of First Instance heard there was evidence that the bogus cards, created with the help of a database containing almost 40,000 account numbers, had been used to buy goods worth HK$44 million.
But the potential loss which the operation could have caused if it had not been halted ran to about HK$280 million, Mr Callaghan said.
Ng Swee Thiam, 32, director of a laser video company, and Ng Lea Seng, 33, who ran an imitation flower business, admitted possessing equipment for the making of false instruments. Both men come from Malaysia.
Mr Callaghan said Ng Swee Thiam was connected with both factories while Ng Lea Seng was only linked to the one in Tsuen Wan.
The operation was uncovered when the Standard Chartered Bank reported that it had detected 'significant abuse' of electronic terminals used to authorise cards for transactions.
Suspicions were raised because the card numbers used when seeking authorisation were often in sequence and no sales slips were later sent to the bank in relation to the purchases.
This was happening because the gang was obtaining authorisation for fictitious transactions to check whether newly manufactured fake cards would work when presented in shops.
Police seized point-of-sale terminals from the factories. These are the devices issued by banks to shops to check credit cards before purchases are made.
Deputy Judge Colin Jackson adjourned sentencing of the two men.
