False statement for government fund defraud – maximum imprisonment of 14 years

Yesterday (2nd Sep) the Hong Kong Police Force arrested 15 persons, on suspicion of anti-epidemic fund fraud, seeking around HK$ 3.87 million.¹ Suspects accused of submitting false proof, such as MPF records, transaction records, or altered retail photos downloaded from the Internet, to seek more government funding grant. This is another commercial crime case about the anti-epidemic fund after the first one in July.²

BizMagnet always repeats that not to break the law by government fund fraud with false document. Making or using a false instrument, or government fraud are all criminal. The offense is liable on conviction on indictment to imprisonment for 14 years.³

Common crimes about government funding

Eventhough SMEs didn’t have a specific fraud planning to government funding, there exist many “TVP agent” or “TVP consultant” in the market. They claim “no win, no fee” to induce SME owners, that are not familiar with technology , to apply for unsuitable systems. Then, these agents or consultants will carve up the subsidy.⁴ Some agents may even induce client companies to make false instrument for more subsidy, that there is no related business nor system upgrade. Driven by greed, these business owners conspire to fraud.

Relevant reading: Government Fund Fraud – You will pay for it

Bid rigging leads no more government fund

Another common break of regulation is bid rigging. Bid rigging means the agreement between competitors not to compete for tenders. They may have already decided who the winner is. Bid rigging is in contrary of the Competition Ordinance, but makes no criminal consequence. Only the Competition Commission will give a fine to offenders. Another impact is an “adverse record” to the suppliers. According to the application guide of TVP and BUD Fund, a service provider should have no “adverse record”. Once a supplier is guilty of bid rigging, it is impossible to be a vendor anymore in a government-subsidized project. If the applicant is proved to know about the bid rigging, its application qualification may be affected as well.

BizMagnet provides government funding consultation services such as TVP consultation and BUD consultation. All procedures are appropriate, reasonable and legal. We have proper ways to make money, think twice before act.

1. Police arrest 15 people over bogus applications to Hong Kong’s Covid-19 relief fund for companies, SCMP, https://www.scmp.com/news/hong-kong/law-and-crime/article/3099931/police-arrest-15-people-over-filing-bogus-applications
2. Two Hong Kong men arrested for allegedly filing fake claims in bid to scam coronavirus relief fund out of HK$2.5 million, SCMP, https://www.scmp.com/news/hong-kong/law-and-crime/article/3092236/two-hong-kong-men-arrested-allegedly-filing-fake
3. Section 71-75, Cap 200 Crime Ordinance and Section 16A, Cap 210 Theft Ordinance, Hong Kong Law, https://www.elegislation.gov.hk/
4. 代申請抗疫基金 中介抽佣三成食水深,星島日報 , https://hd.stheadline.com/news/realtime/hk/1732017/ (Chinese only)