Twelve months’ jail for $3.9m works orders fraud

2017-10-18


A former quantity surveyor of a term contractor of the Architectural Services Department (ArchSD), charged by the ICAC, was today (October 18) sentenced to 12 months’ imprisonment at the Kowloon City Magistracy for conspiracy to defraud the ArchSD of about $3.9 million worth of works orders in relation to two projects – Kai Tak Development Area and New Central Harbourfront.

The defendant, 48, former quantity surveyor of Company A, earlier pleaded guilty to two charges of conspiracy to defraud, contrary to common law.

In sentencing, Magistrate Ms Veronica Heung Shuk-han said she reduced the starting point of 18 months in jail by one-third to 12 months after taking into account the defendant’s guilty plea.

The case arose from a corruption complaint. Subsequent ICAC enquiries revealed the above offences.

The court heard that at the material time, the defendant was employed by Company A, a term contractor of the ArchSD, as a quantity surveyor responsible for handling the term contract and dealing with the ArchSD. Company A subcontracted its works orders to an engineering company.

In December 2012, the ArchSD issued a works order to Company A to build a temporary toilet and four roadside seats in Kai Tak Development Area at Shing Fung Road, Kowloon City. The works order included building four pavilions and a hardwood chair.

Between June 2013 and August 2014, the defendant conspired with the operator of the engineering company to falsely represent that a sum of $1,600,000 was the genuine quotation price chargeable by the engineering company for the supply and installation of the four pavilions; and the quotation of the engineering company and that of two other engineering firms were genuinely competitive ones prepared separately and independently.

They also falsely represented that $98,000 was the genuine quotation price chargeable by the engineering company for the supply and installation of the hardwood chair; and the quotation of the engineering company and that of two other engineering firms were genuinely competitive ones prepared separately and independently.

As a result, officers of the ArchSD were caused and induced to approve the bogus quotations of the engineering company relating to the supply and installation of those pavilions and hardwood chair at a total sum of $1,698,000.

In fact, the engineering company only charged Company A $1,200,000 and $72,000 for building the pavilions and the hardwood chair respectively. The quotations of the engineering company were inflated by $426,000 and the ArchSD would also be overcharged $63,900 in administration fee.

The court also heard that in January 2013, the ArchSD issued two other works orders to Company A to build a pet garden and a public open space at New Central Harbourfront in Central. Company A was required to build four pavilions for each works order.

Between May 2013 and August 2014, the defendant conspired with the operator of the engineering company to falsely represent that a sum of $2,192,000 was the genuine quotation price chargeable by the engineering company for the supply and installation of the eight pavilions; and the quotation of the engineering company and that of two other engineering firms were genuinely competitive ones prepared separately and independently.

As a result, officers of the ArchSD were caused and induced to approve the bogus quotation of the engineering company at the sum of $2,192,000.

In fact, the engineering company only charged Company A $1,040,000 for building those pavilions. The quotation of the engineering company was inflated by $1,152,000, and the ArchSD would also be overcharged $172,800 in administration fee.

The ArchSD had rendered full assistance to the ICAC during its investigation.

The prosecution was today represented by Acting Senior Public Prosecutor Kasmine Hui, assisted by ICAC officer Benjamin Ho.
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