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Police scooped up more than HK$1 million in cash during March 19 raids in which they arrested 10 people who are alleged to be involved in a scam to defraud holders of second mortgages. Photo: Xiaomei Chen

Hong Kong police arrest 10 over HK$30 million loan scam that preyed on second-mortgage holders

  • Victims with two mortgages on the same property were told they were in violation of bank rules, then directed to seek out lenders to pay them off
  • Thursday raids turned up more than HK$1 million in cash along with documents, computers and mobile phones
Crime

Police have arrested 10 people over their alleged involvement in a loan scam that conned 23 Hong Kong property owners out of HK$30 million (US$3.9 millon).

The 10 defendants – nine men and one woman, aged 20 to 61 – included one director as well as salespeople with ties to six financial consultancy firms located in Mong Kok, Kwun Tong and Wan Chai, none of which were still in business, according to police.

Other suspects among those rounded up included the holders of bank accounts used to collect money from the victims, Chief Inspector Wu Miu-yee of the commercial crime bureau said.

Chief inspector Wu Miu-yee (right) encouraged Hongkongers to call banks and verify if they receive calls from those claiming to represent the institutions. Photo: Xiaomei Chen

All 10 were arrested in a series of raids across the city on Thursday. During the raids, officers seized HK$1.1 million in cash along with documents, computers and mobile phones.

“We are investigating whether the suspects were from the same gang of fraudsters,” Wu said.

She said police began investigating the six companies — each of which was typically shut after just a few months in business — after receiving complaints, and that the alleged fraudsters had specifically targeted property owners with second mortgages.

According to police, the victims first received phone calls from scammers claiming to be bank representatives. During the conversations, they were accused of violating the conditions of their housing mortgages by securing a second mortgage on the same property.

Documents captured in a series of March 20 raids on individuals allegedly behind a HK$30 million loan scam. Photo: Handout

Police said they were then referred to money lenders and told to apply for loans to pay off the second mortgage in order to get in compliance.

“After getting money [from lenders], the fraudsters demanded surety, handling fees or other charges and asked the victims to hand over the money,” Wu said.

The victims then deposited money into designated bank accounts controlled by the scammers, she said.

The property owners realised they had been cheated when they lost contact with the salespeople and found the companies involved were no longer in business.

Between August 2018 and March of this year, 23 victims were duped out of HK$30 million with the same ruse.

Wu said one of the property owners was conned out of HK$3.2 million – the largest amount in any one case.

She said officers also managed to foil two cases in which property owners had been targeted by one of the firms, set up in Wan Chai only earlier this year. The cases involved more than HK$3 million.

The 10 suspects were arrested for conspiracy to defraud — an offence that carries a maximum penalty of 14 years in jail. On Friday evening, they were still being held for questioning and none had yet been charged.

Wu said the case should be a warning for the public.

“Do not believe callers easily,” she said. “Call to check and verify with the banks involved.”

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This article appeared in the South China Morning Post print edition as: Ten arrested after raids over HK$30m property loan scam
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