Welfare cheat's 'loan' to buy flat challenged

PUBLISHED : Wednesday, 27 February, 2008, 12:00am
UPDATED : Wednesday, 27 February, 2008, 12:00am

A magistrate cast doubt yesterday on claims by an elderly woman on welfare that she had used an unsecured loan to buy a flat.

He said he suspected she had other financial sources.

The defence lawyer of Lui Pui-yue, 74, told Eastern Court that she secured a personal loan from an American financial company at a 'very high interest rate' when she bought, and later rented out, the HK$180,000 apartment in Waterloo Road during the Sars outbreak.

But when Magistrate Abu Bakar bin Wahab asked her for documents about the loan, Lui, who is now homeless, said she did not have the papers and could not remember the company's name.

Mr Wahab found the loan arrangement peculiar. He suspected the down payment for the flat near Yau Ma Tei - which she resold for HK$360,000 this month - was made out of her 'savings' from welfare payouts or from her other assets.

Lui, who started living on Comprehensive Social Security Assistance in 1997, had earlier admitted cheating HK$93,350 in welfare after she failed to disclose four bank accounts that contained HK$44,936 in June 2003.

In numerous application reviews conducted until October 2005, Lui declared she had only one bank account. As a result, the Social Welfare Department had overpaid her HK$93,350.

Lui, who has pleaded guilty to fraud, will return to court on March 11 for sentencing.

In mitigation yesterday, defence counsel Chan Pak-kong said Lui bought the flat in December 2003 when the economy was hard hit by Sars. He argued that it was possible to get unsecured loans because the loan market was stale.

The loan repayments were HK$3,400 a month. Lui received a monthly rent of HK$2,700 from the flat on top of her monthly welfare allowance of HK$2,300. She said she planned to pay the outstanding loan and to repay the welfare payments.