Three men involved in a suspected pyramid sales scam have been arrested after false documents were allegedly used to obtain loans to buy fragrance products.
Police from the commercial crime bureau arrested the three self-employed men at Digital Crown Holdings (Hong Kong) Limited (DCHL) in Causeway Bay yesterday. The men, aged 21 to 26, were arrested for conspiracy to defraud.
One of those arrested had allegedly induced the other two to use false employment records to obtain loans worth a total of HK$45,000 from three lenders - credit companies and banks - in July. Police said their investigation showed the loans were taken out to buy more fragrance products from DCHL.
The men were told they would be rewarded through sales commissions and their careers in the distribution business would advance.
Superintendent Francis Ho Ying-foo of the commercial crime bureau urged the public to be cautious if approached by people offering huge returns in a short period for distributing products.
Ho advised people involved in product distribution not to borrow large amounts of money to buy products for resale because they could have to file for bankruptcy if nobody bought their products.
A 19-year-old fresh out of school has filed for bankruptcy after borrowing a total of HK$110,000 from three credit companies in November to buy products from DCHL.