Fake law firm scam: four Hong Kong men arrested after victims lose over HK$12 million

Con men lured unsuspecting loan applicants to bogus offices in Central and Mong Kok

PUBLISHED : Thursday, 04 August, 2016, 7:02pm
UPDATED : Thursday, 04 August, 2016, 10:59pm

Police have arrested four people who allegedly set up bogus law firms and financial intermediaries and scammed 17 people out of more than HK$12 million.

Two of the four Hongkongers, aged 30 to 48, were said to have posed as directors of two fake law companies in Central. It is understood police were still searching for two “directors” of two intermediaries in Mong Kok.

The four bogus companies allegedly lured victims into applying for low-interest loans. They were then asked to provide a payment to secure the deal, before the criminals fled with the cash. Police said the firms had now been closed after operating for several months.

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Senior Inspector Fan Chun-yip of Kowloon West regional crime unit said that establishing bogus law firms was a new tactic by conmen who “wanted to give a professional image to the victims” and win their trust.

Seven people were cheated out of HK$7.74 million after they were lured to the offices in Central and paid surety money to secure low-interest loans they never received, he said.

Chief Inspector Tsang Chun-kit of the commercial crime bureau said the conmen set up law firms to fool people into believing they were dealing with professionals and to “win the confidence of the victims”.

One person was tricked out of HK$2.9 million.

Fan said police were investigating whether the four companies were controlled by the same syndicate.

Police swooped into action on Wednesday night and arrested the four men on suspicion of conspiracy to defraud. The four suspects were still being questioned on Thursday night and had not been charged.

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Victims, including property owners and debtors, received calls from the scammers claiming to be financial intermediaries acting on behalf of banks or money lenders and were lured to apply for low-interest loans.

They were persuaded to get loans from money lenders and then asked to pay hefty administrative fees, consultation fees or a surety to secure low-interest loans they could use to pay off their debts.

Between August last year and June, police handled 241 reports of such fraud involving HK$226 million in total. Police had arrested 302 people from 43 “financial intermediaries” in connection with the cases.

In the largest single case, scammers cheated a retired bank worker out of HK$4.94 million last November after borrowing HK$5 million from a money lender in his name.

Tsang said that to elude detection and arrest, the scammers would quickly close their offices and flee after securing the money.