Property buyer jailed for conspiracy to defraud over stamp duty
2021-4-16
A property buyer, charged by the ICAC, was today (April 16) sentenced to an imprisonment of 2 months and 2 weeks at the Tuen Mun Magistrates’ Courts for conspiring with a property vendor and a property agent to deceive the Inland Revenue Department (IRD) into levying a lesser amount of stamp duty by understating the transaction price of a property by $500,000.
The ICAC investigation arose from a corruption complaint. Subsequent enquiries revealed the offence.
Chan Chung-ho, 76, merchant, earlier pleaded guilty to one count of conspiracy to defraud, contrary to Common Law.
In sentencing, Acting Principal Magistrate Ms Cheung Kit-yee said the case involved a serious offence of defrauding the IRD of stamp duty. The criminality of the defendant was equivalent to that of the property agent who instigated the premeditated scheme, and the imposition of a deterrent custodial sentence on the defendant was necessary to warn against the public.
Upon the application of the defendant, the principal magistrate granted him bail pending an appeal against sentence.
The court heard that on September 3, 2016, the defendant viewed a property in Yuen Long listed for sale at about $2.8 million. He was interested in purchasing it and instructed the property agent who lined up the viewing, to negotiate the selling price with the vendor.
On the same day, the defendant was told by the property agent that the vendor was in need of money. The vendor would sell the property at $2.5 million if the defendant agreed to put a purported transaction price of $2 million on the provisional agreement for sale and purchase, and pay the remaining $500,000 to him under the pretext of renovation fee before the completion of the transaction.
The defendant was also told by the property agent that he could pay less ad valorem stamp duty to the IRD if he falsely represented to the department that the transaction price of the property was $2 million. The defendant eventually acceded to the vendor’s request.
Upon the arrangement of the property agent, the defendant and the vendor signed a provisional agreement for sale and purchase which purportedly showed that the transaction price of property was $2 million.
The property agent further arranged the duo to sign an agreement purporting that $500,000 would be paid to the vendor by the defendant as renovation fee. However, ICAC enquiries revealed that no relevant renovation works had been conducted.
The court heard that on September 15, 2016, the defendant and the vendor entered into an agreement for sale and purchase in relation to the property at $2 million. The agreement was then submitted to the IRD for stamping and the defendant paid an ad valorem stamp duty of $30,000.
The defendant should pay an ad valorem stamp duty of $75,000 based on the genuine transaction price of $2.5 million. By understating the transaction price, the defendant had paid $45,000 less to the IRD.
On October 26, 2016, the defendant issued a cheque of $500,000 to the vendor for the purported renovation fee, the court also heard.
Ng Tsz-hin, the property agent concerned, 28, was also charged by the ICAC in another case for his role in the scam. He was sentenced to four months’ imprisonment last month after pleading guilty to one count of conspiracy to defraud.
The IRD had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by ICAC officer Peter Chow.
The ICAC investigation arose from a corruption complaint. Subsequent enquiries revealed the offence.
Chan Chung-ho, 76, merchant, earlier pleaded guilty to one count of conspiracy to defraud, contrary to Common Law.
In sentencing, Acting Principal Magistrate Ms Cheung Kit-yee said the case involved a serious offence of defrauding the IRD of stamp duty. The criminality of the defendant was equivalent to that of the property agent who instigated the premeditated scheme, and the imposition of a deterrent custodial sentence on the defendant was necessary to warn against the public.
Upon the application of the defendant, the principal magistrate granted him bail pending an appeal against sentence.
The court heard that on September 3, 2016, the defendant viewed a property in Yuen Long listed for sale at about $2.8 million. He was interested in purchasing it and instructed the property agent who lined up the viewing, to negotiate the selling price with the vendor.
On the same day, the defendant was told by the property agent that the vendor was in need of money. The vendor would sell the property at $2.5 million if the defendant agreed to put a purported transaction price of $2 million on the provisional agreement for sale and purchase, and pay the remaining $500,000 to him under the pretext of renovation fee before the completion of the transaction.
The defendant was also told by the property agent that he could pay less ad valorem stamp duty to the IRD if he falsely represented to the department that the transaction price of the property was $2 million. The defendant eventually acceded to the vendor’s request.
Upon the arrangement of the property agent, the defendant and the vendor signed a provisional agreement for sale and purchase which purportedly showed that the transaction price of property was $2 million.
The property agent further arranged the duo to sign an agreement purporting that $500,000 would be paid to the vendor by the defendant as renovation fee. However, ICAC enquiries revealed that no relevant renovation works had been conducted.
The court heard that on September 15, 2016, the defendant and the vendor entered into an agreement for sale and purchase in relation to the property at $2 million. The agreement was then submitted to the IRD for stamping and the defendant paid an ad valorem stamp duty of $30,000.
The defendant should pay an ad valorem stamp duty of $75,000 based on the genuine transaction price of $2.5 million. By understating the transaction price, the defendant had paid $45,000 less to the IRD.
On October 26, 2016, the defendant issued a cheque of $500,000 to the vendor for the purported renovation fee, the court also heard.
Ng Tsz-hin, the property agent concerned, 28, was also charged by the ICAC in another case for his role in the scam. He was sentenced to four months’ imprisonment last month after pleading guilty to one count of conspiracy to defraud.
The IRD had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by ICAC officer Peter Chow.