SFGS 100% Loan fraud

The ICAC press release announced that 6 directors or proprietors were charged for false statement during SFGS 100% loan application. The loan amount was around HK$ 19m. The trial will be held in the district court.1

The maximum sentence of criminal case trial in the district court is 7-year imprisonment.

The consultant is not going to comment the case. Nevertheless, we observe that the recent prosecution cases taken place around 3 years ago during the early stage of COVID-19 pandemic. For instance, the competition commission cases of covering bids. We estimate that it may take about 3 years to prepare prosecution in most circumstances.

The economic impact of the pandemic in 2021 and 2022 was much stronger than that in 2020. Therefore we expect there are much more cases in the time. Prosecution will be at peak in 2024 and 2025 consequently.

Alert: Common TVP fraud

A lifelong stain

The consultant always advises not to defraud. It is illegal, and you can never hide it forever. Think about it, there is number of people knowing the crime. Your staff, misconducted agency’s staff and so on. You get a bid but never can you get rid of the stain. One day, enforcement may knock your door and arrest and charge and on.

For those masterminds such as agencies or vendors, they may gain thousands in one case and repeat it for hundred times. You may gain thousands at the same time, but both of you are conspirators.

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

  1. ICAC, 27-06-2023, “Six charged by ICAC over $19m SME guaranteed loan fraud revealed in graft probehttps://www.icac.org.hk/en/press/index_id_1643.html