HONG KONG, Dec. 13 (SCMP): A lawyer and 11 insurance agents were among 24 Hong Kong residents recently arrested in connection with an investment fraud that cost 263 HK $ 475 million (US $ 61.2 million) over five years . US $) were defrauded.
Police said they had frozen syndicate members’ bank accounts with a total balance of HK $ 50 million. They also considered filing a motion to freeze and confiscate 11 properties across the city valued at HKD 370 million that were believed to have been bought with criminal proceeds the thug pocketed.
On Wednesday, White Collar Crime Bureau Inspector Fong Hon-ho said police believed the lawyer was one of three alleged Syndicate ringleaders arrested in the operation, code-named “Steeppoint”.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
Online stock scammers use romantic, quick-getting-rich programs to trick victims
After an investigation that lasted 22 months, the arrests were made on Tuesday, December 8th, when more than 100 officers were used to raid 30 locations across the city, including the offices of a law firm and two investment companies, and 22 apartment buildings Apartments. HK $ 1.6 million in cash was seized during the operation along with a large amount of documents and many computers.
The gang set up a mutual fund in the Cayman Islands with their assets, including a HK $ 200 million trading bloc in Hong Kong. The fund was a high risk, investment-linked insurance product that was listed on a platform of an international insurance company.
The syndicate also controlled 11 insurance agents who were accused of inducing victims in Hong Kong and mainland China to invest in the fund since December 2013, alleging it was a product of the global insurance company.
All agents also worked for another insurance company.
The gang then formed another overseas company that issued convertible bonds or short-term debt with an estimated value of HKD 13 million, which they used to purchase assets from the fund.
The scam resolved when the fund’s price fell 93 percent in July 2018 and was liquidated in February 2019.
The office began investigating the syndicate after police received reports from the insurance company and victims beginning last January.
Fong said the victims, ages 24 to 77, included around 250 mainland residents, 10 Hong Kong residents and two Malaysians. Some were housewives and retirees, and the biggest casualty lost HKD 20 million.
He said the investigation found that the money the victims invested was not used to run the mutual fund but was bagged by the thug.
Quick get rich scammers watch in horror as stock prices rise and fall within hours
“The syndicate used the money to buy real estate, pay off mortgages, and offer financial rewards to those who helped find mainland destinations,” he said.
Police arrested the 24 people – 13 men and 11 women – on suspicion of conspiracy to commit fraud and money laundering. The suspects included two directors from a mutual fund management company.
Chief Inspector Fung Pui-kei from the White Collar Crime Bureau said, “This is a sophisticated crime syndicate. A number of foreign companies, nearly 100 bank accounts, and professionals including a lawyer and insurance agents were involved in its structure. “
He said he believed the gang’s operations were halted after three suspected masterminds were arrested.
Fung said the investigation is ongoing and further arrests are possible.
On Wednesday noon, all suspects were held for questioning and none of them had been charged. – South China morning post