The alleged scams involved 50 applications to the programme.

“[The syndicates] provided one-stop technology voucher application services, preparing all necessary documents for the applicants and submitting false operation proofs and payment records in an attempt to defraud the government funding,” Kung said.

Police began investigating the syndicates after receiving complaints of suspicious applications from last July.

According to the force, the three local fraud syndicates allegedly set up intermediary companies to recruit merchants to apply for the cash subsidy, splitting the proceeds with the partnering enterprises.

After gathering evidence, police rounded up 21 men and 14 women in a series of raids on Tuesday and Wednesday.

Kung said the investigation showed the funding sought in the 50 suspicious applications amounted to about HK$10.36 million.

Chief Inspector Ng Kei-chun of the same bureau said the unscrupulous intermediary companies used methods such as social media or cold calls to recruit small and medium-sized enterprises or shop operators.

“They were lured into applying for the funding with the promise of ‘no fees if unsuccessful’ and the applicants and the intermediary companies split the money if the funding was granted,” he said.

The intermediary companies handled everything from fictitious technology service proposals, filling out applications and submitting documents, as well as creating email addresses to impersonate the applicants to communicate with the TVP secretariat, he added.

Ng said the syndicates also recruited family members and friends to set up multiple companies as technology service providers to provide quotations for the desired upgrades and fulfil the application requirements.

“The investigation revealed that some of the persons in charge of these service providers have occupations such as housewife, a worker at a petrol station, a sailor and a warehouse attendant,” he said.

“They have no relevant background or qualifications in technology, and their companies had no actual business operations.”

Ng said the cash subsidies were then paid out to the recruited applicants, who split the money 70:30 or 60:40 with the intermediary companies.

According to police, the applicants included those in the catering industry and retail store owners.

The chief inspector said the fraud syndicates had also set up shell companies to apply for funding by providing fake business documents such as invoices and sales records.

The suspects, aged from 24 to 62, included eight directors and company secretaries for technology service providers allegedly controlled by the syndicates, 23 store owners and four heads of the intermediary companies.

The group were detained on suspicion of conspiracy to defraud, fraud and attempted fraud.

Officers raided the premises of the companies involved and the suspects’ homes, seizing HK$360,000 and a large quantity of documents.

Police also froze HK$950,000 in two bank accounts linked to the intermediary companies.

The force said the investigation was still under way and further arrests were possible.

Kung strongly condemned any criminals who intended to deceive government subsidy schemes, stressing that the force would do everything possible to bring them to justice.

Assistant Commissioner for Innovation and Technology Wong Man-chung said the subsidy scheme had a robust monitoring mechanism for applications and that most of the alleged fraudsters had their handout requests stopped during vetting stages.

Wong added that the scheme had received about 36,000 applications between its launch and the end of December last year.

Among the more than 30,000 successful applicants, about 95 per cent are small and medium-sized enterprises. The total funding disbursed since launch stands at about HK$5.3 billion.