Graft probe reveals alleged fraud to boost electronic transactions with government
2003-12-18
The ICAC has arrested 17 persons for a suspected fraud to inflate the number of electronic transactions with government departments on a website to help the website operator fulfill a requirement of a contract awarded by the Information Technology and Bro adcasting Branch (ITBB) under the Commerce, Industry and Technology Bureau.
The arrestees included three serving and four former executives of the website operator; and a relative of one of the former executives.
Also arrested in last week's operation, code-named “ Grass Owl ”, were two directors, a manager, three employees and three part-time staff of a promotion agency.
The investigation arose from a corruption complaint, alleging that some executives of a website operator might have accepted advantages for awarding a promotion contract to a promotion agency.
Enquiries revealed that the operator was awarded a contract by ITBB to set up and maintain a website for the public to make electronic transactions with government departments.
A promotion agency was subcontracted by the operator to promote the service.
Under the contract, the website operator was required to meet a certain number of chargeable transactions in order to receive a monthly subscription fee and a unit transaction fee from ITBB.
Enquires alleged that the arrestees had conspired to boost the number of electronic transactions by recruiting a number of persons, whose particulars were used for registration on the website.
Investigations revealed that most of these transactions involved bookings for sports facilities with the Leisure and Cultural Services Department.
It was alleged that in the first nine months this year, 70 suspected bogus patrons had made more than 100,000 bookings through the internet website for sports facilities, involving total charges of over $700,000. None of these facilities were used.
The arrestees have been released on ICAC bail. Enquiries into the corruption allegation are continuing.
The arrestees included three serving and four former executives of the website operator; and a relative of one of the former executives.
Also arrested in last week's operation, code-named “ Grass Owl ”, were two directors, a manager, three employees and three part-time staff of a promotion agency.
The investigation arose from a corruption complaint, alleging that some executives of a website operator might have accepted advantages for awarding a promotion contract to a promotion agency.
Enquiries revealed that the operator was awarded a contract by ITBB to set up and maintain a website for the public to make electronic transactions with government departments.
A promotion agency was subcontracted by the operator to promote the service.
Under the contract, the website operator was required to meet a certain number of chargeable transactions in order to receive a monthly subscription fee and a unit transaction fee from ITBB.
Enquires alleged that the arrestees had conspired to boost the number of electronic transactions by recruiting a number of persons, whose particulars were used for registration on the website.
Investigations revealed that most of these transactions involved bookings for sports facilities with the Leisure and Cultural Services Department.
It was alleged that in the first nine months this year, 70 suspected bogus patrons had made more than 100,000 bookings through the internet website for sports facilities, involving total charges of over $700,000. None of these facilities were used.
The arrestees have been released on ICAC bail. Enquiries into the corruption allegation are continuing.