Nine netted for graft-facilitated '$100m mortgage loan scam'
2000-5-24
The ICAC has uncovered a syndicate which allegedly defrauded mortgage loans totalling over $100 million from China and South Sea Bank (CSSB) by fraudulently inflating the prices of nine properties pledged to CSSB with the corrupt assistance of bank office rs and a surveyor.
In an operation mounted yesterday, six men and three women were arrested by ICAC officers for their alleged involvement in the mortgage loan fraud facilitated by corruption.
The nine arrestees were a former marketing officer and a former branch manager of CSSB, three directors and shareholders of five companies, a former director of a surveyors firm who is serving in the Rating and Valuation Department, and three other individuals.
The investigation originated from a referral from the management of CSSB, alleging that a marketing officer of CSSB's Kwun Tong Sub-branch might have accepted advantages for arranging banking facilities for an investment company and its shell companies.
ICAC enquiries revealed that between February 1996 and August 1997, a proprietor of the investment company, who was suspected to be the syndicate mastermind, and six shell companies allegedly under his control, purchased nine properties at a total market value of about $63 million.
Within 10 days to three months, the nine properties were sold to five other companies under the control of the investment company proprietor at prices which doubled or tripled the market prices.
It was suspected that the surveyor arrested might have accepted bribes for an over-valuation of the properties to support the mortgage loan applications.
The marketing officer had furnished all the reports on granting banking facilities to the investment company's proprietor, and the applications for banking facilities were recommended by the branch manager.
The three company directors and shareholders and three individuals were arrested for allegedly assisting in the loan scam.
During the search operation, ICAC officers found that nine valuable watches and jewellery worth about $400,000 were kept at the marketing officer's safe deposit box at a bank. It was also revealed that he had bank deposits totalling over $4 million in 19 97.
It was suspected that the watches, jewellery and cash were the bribes received by the former marketing officer in relation to the loan scam.
The ICAC also found a Rolex watch worth about $30,000 at former branch manager's home, which was allegedly given to him by a bank customer who had failed to repay mortgage loans to the bank.
CSSB has rendered full assistance and co-operation to the ICAC during its investigation.
All the nine arrestees, aged between 32 and 44, have been released on ICAC bail, pending further enquiries.
In an operation mounted yesterday, six men and three women were arrested by ICAC officers for their alleged involvement in the mortgage loan fraud facilitated by corruption.
The nine arrestees were a former marketing officer and a former branch manager of CSSB, three directors and shareholders of five companies, a former director of a surveyors firm who is serving in the Rating and Valuation Department, and three other individuals.
The investigation originated from a referral from the management of CSSB, alleging that a marketing officer of CSSB's Kwun Tong Sub-branch might have accepted advantages for arranging banking facilities for an investment company and its shell companies.
ICAC enquiries revealed that between February 1996 and August 1997, a proprietor of the investment company, who was suspected to be the syndicate mastermind, and six shell companies allegedly under his control, purchased nine properties at a total market value of about $63 million.
Within 10 days to three months, the nine properties were sold to five other companies under the control of the investment company proprietor at prices which doubled or tripled the market prices.
It was suspected that the surveyor arrested might have accepted bribes for an over-valuation of the properties to support the mortgage loan applications.
The marketing officer had furnished all the reports on granting banking facilities to the investment company's proprietor, and the applications for banking facilities were recommended by the branch manager.
The three company directors and shareholders and three individuals were arrested for allegedly assisting in the loan scam.
During the search operation, ICAC officers found that nine valuable watches and jewellery worth about $400,000 were kept at the marketing officer's safe deposit box at a bank. It was also revealed that he had bank deposits totalling over $4 million in 19 97.
It was suspected that the watches, jewellery and cash were the bribes received by the former marketing officer in relation to the loan scam.
The ICAC also found a Rolex watch worth about $30,000 at former branch manager's home, which was allegedly given to him by a bank customer who had failed to repay mortgage loans to the bank.
CSSB has rendered full assistance and co-operation to the ICAC during its investigation.
All the nine arrestees, aged between 32 and 44, have been released on ICAC bail, pending further enquiries.