Eight serving and one former IRD officers arrested for tax bribery scams
2000-9-7
In an operation which commenced yesterday (Wednesday), the ICAC has arrested 32 persons, including eight serving officers and a former Assistant Assessor of the Inland Revenue Department (IRD), for alleged involvement in two separate taxation bribery scam s.
The eight IRD staff arrested were an Assistant Assessor, three Tax Inspectors, three Taxation Officers and an Assistant Taxation Officer.
The remaining 23 arrested were two Certified Public Accountants (CPAs), a bank manager and 20 other civilians.
The former IRD employee was believed to have helped various companies subject to IRD field audit or investigation to negotiate in order that a lenient penalty could be imposed with the assistance of other IRD officers.
Investigations revealed that while serving in IRD, he had allegedly helped a company accused of profit understatement to negotiate low penalty rate in return for monetary rewards.
The company, suspected to be heavily involved in smuggling activities, was a client of a CPA introduced to him through a bank manager.
The trio were said to have shared among themselves a reward of $250,000 for their assistance over taxation matters of the company involved.
The former IRD officer left the department in June last year and joined another CPA firm as a tax consultant.
Inquiries found that he, together with another CPA of the firm, continued to secure the corrupt assistance of the seven serving colleagues in IRD in relation to the tax cases of at least 50 companies.
The assistance involved the checking of information from the IRD computer system and providing copies of documents from IRD files.
In return, the IRD officers involved were allegedly offered monthly payments of $10,000, free trips to the Mainland or Macau for prostitution, loans or outside work including accounting jobs as rewards.
It was also revealed that the bank manager arrested was allegedly involved in other corrupt and illegal activities.
The bank manager had allegedly referred clients to the former IRD Assistant Assessor for bribes and accepted rebates for unlawful disclosure of bank customers' information. He was said to be involved in loansharking activities.
Meanwhile, the serving Assistant Taxation Officer (ATO) arrested in connection with a separate scam was suspected to have accepted about $80,000 in bribes for assisting at least nine companies and 12 individuals in avoiding penalty or prosecution for late submission of tax returns.
He was said to have used a forged official chop to purportedly show that their tax returns were filed to IRD prior to the due dates. In fact, the returns were submitted to the department months after the due dates.
It was revealed that the ATO had allegedly acted on behalf of some taxpayers to answer queries from IRD assessors.
He was also suspected to have helped his relatives retrieve confidential information in relation to tax matters from the IRD computer system, so as to assist them in negotiating with the IRD on tax disputes.
This case was referred to the ICAC by the senior management of IRD.
The IRD has been rendering full assistance to the ICAC throughout its investigation.
In relation to retrieval of relevant tax files, computer records and other documents, they are obtained by the ICAC under a Production Order issued by the Court of First Instance pursuant to Section 13A of the Prevention of Bribery Ordinance.
Among the 32 arrestees, aged between 28 and 49, 15 are being detained by the ICAC. The remaining 17 arrestees have been released on bail. Enquiries are continuing.
The eight IRD staff arrested were an Assistant Assessor, three Tax Inspectors, three Taxation Officers and an Assistant Taxation Officer.
The remaining 23 arrested were two Certified Public Accountants (CPAs), a bank manager and 20 other civilians.
The former IRD employee was believed to have helped various companies subject to IRD field audit or investigation to negotiate in order that a lenient penalty could be imposed with the assistance of other IRD officers.
Investigations revealed that while serving in IRD, he had allegedly helped a company accused of profit understatement to negotiate low penalty rate in return for monetary rewards.
The company, suspected to be heavily involved in smuggling activities, was a client of a CPA introduced to him through a bank manager.
The trio were said to have shared among themselves a reward of $250,000 for their assistance over taxation matters of the company involved.
The former IRD officer left the department in June last year and joined another CPA firm as a tax consultant.
Inquiries found that he, together with another CPA of the firm, continued to secure the corrupt assistance of the seven serving colleagues in IRD in relation to the tax cases of at least 50 companies.
The assistance involved the checking of information from the IRD computer system and providing copies of documents from IRD files.
In return, the IRD officers involved were allegedly offered monthly payments of $10,000, free trips to the Mainland or Macau for prostitution, loans or outside work including accounting jobs as rewards.
It was also revealed that the bank manager arrested was allegedly involved in other corrupt and illegal activities.
The bank manager had allegedly referred clients to the former IRD Assistant Assessor for bribes and accepted rebates for unlawful disclosure of bank customers' information. He was said to be involved in loansharking activities.
Meanwhile, the serving Assistant Taxation Officer (ATO) arrested in connection with a separate scam was suspected to have accepted about $80,000 in bribes for assisting at least nine companies and 12 individuals in avoiding penalty or prosecution for late submission of tax returns.
He was said to have used a forged official chop to purportedly show that their tax returns were filed to IRD prior to the due dates. In fact, the returns were submitted to the department months after the due dates.
It was revealed that the ATO had allegedly acted on behalf of some taxpayers to answer queries from IRD assessors.
He was also suspected to have helped his relatives retrieve confidential information in relation to tax matters from the IRD computer system, so as to assist them in negotiating with the IRD on tax disputes.
This case was referred to the ICAC by the senior management of IRD.
The IRD has been rendering full assistance to the ICAC throughout its investigation.
In relation to retrieval of relevant tax files, computer records and other documents, they are obtained by the ICAC under a Production Order issued by the Court of First Instance pursuant to Section 13A of the Prevention of Bribery Ordinance.
Among the 32 arrestees, aged between 28 and 49, 15 are being detained by the ICAC. The remaining 17 arrestees have been released on bail. Enquiries are continuing.