ICAC uncovers $42m credit scam in corruption investigation
2000-7-6
The ICAC has arrested 28 people in a territory wide operation commencing on Tuesday (July 4) in connection with a suspected $42 million credit scam allegedly facilitated by corruption.
These people, arrested in the operation “Shooting Star”, are proprietors and directors of 23 factories and printing companies, aged between 38 and 71.
They were alleged to have applied for credit facilities from various finance companies using false contracts or documents on bogus transactions provided by the owner of a second-hand printing machine company.
Thirty-seven others, including their partners and business associates, were interviewed. A total of 47 homes and office premises were searched under warrants, with evidential documents seized.
The ICAC investigation was triggered by a corruption complaint alleging that the printing machine company owner might have offered bribes to some finance company staff to help customers obtain credit facilities for purchasing machines based on contracts w ith inflated prices.
The 43-year-old proprietor of the second-hand printing machine company, who was the alleged mastermind of the credit scam, had been arrested by the ICAC earlier this year.
It was believed that in order to attract customers to purchase printing machines from his company, he had provided them with contracts exaggerating the value of transactions for the purpose of applying for credit facilities from finance companies.
The printing machine company owner had, on a few occasions, allegedly provided documents on bogus transactions as well and charged a 3% commission for this “special service”.
Investigations revealed that six finance companies were victimised by the scheme.
With the assistance of the senior management of these finance companies, the ICAC had examined a number of credit application files and identified 38 problematic transactions involving $54.85 million, which took place between 1994 and 1997.
It was found that the purchase prices quoted in most of these transactions had been substantially inflated by about $100,000 to $1,300,000 while some transactions were completely fake with a view to generating extra cash flow for the applicants.
Based on the misrepresented value of these transactions, the finance companies had granted leasing facilities totaling $42.65 million.
All arrestees have been released on ICAC bail. Enquiries are continuing.
These people, arrested in the operation “Shooting Star”, are proprietors and directors of 23 factories and printing companies, aged between 38 and 71.
They were alleged to have applied for credit facilities from various finance companies using false contracts or documents on bogus transactions provided by the owner of a second-hand printing machine company.
Thirty-seven others, including their partners and business associates, were interviewed. A total of 47 homes and office premises were searched under warrants, with evidential documents seized.
The ICAC investigation was triggered by a corruption complaint alleging that the printing machine company owner might have offered bribes to some finance company staff to help customers obtain credit facilities for purchasing machines based on contracts w ith inflated prices.
The 43-year-old proprietor of the second-hand printing machine company, who was the alleged mastermind of the credit scam, had been arrested by the ICAC earlier this year.
It was believed that in order to attract customers to purchase printing machines from his company, he had provided them with contracts exaggerating the value of transactions for the purpose of applying for credit facilities from finance companies.
The printing machine company owner had, on a few occasions, allegedly provided documents on bogus transactions as well and charged a 3% commission for this “special service”.
Investigations revealed that six finance companies were victimised by the scheme.
With the assistance of the senior management of these finance companies, the ICAC had examined a number of credit application files and identified 38 problematic transactions involving $54.85 million, which took place between 1994 and 1997.
It was found that the purchase prices quoted in most of these transactions had been substantially inflated by about $100,000 to $1,300,000 while some transactions were completely fake with a view to generating extra cash flow for the applicants.
Based on the misrepresented value of these transactions, the finance companies had granted leasing facilities totaling $42.65 million.
All arrestees have been released on ICAC bail. Enquiries are continuing.