Ex-Superintendent of Police charged by ICAC jailed for fraud over $6m housing and mortgage loans
2021-11-29
A then Superintendent of Police, charged by the ICAC, was today (November 29) sentenced to 18 months’ imprisonment at the District Court for deceiving the Government and a bank into granting him housing and mortgage loans totalling about $6 million by falsely representing that a flat he purchased was used by his family while in fact it was let to others.
Lung Siu-chuen, 55, was earlier found guilty of two counts of fraud, contrary to Section 16A of the Theft Ordinance.
In sentencing, Judge Mr Fred Sham Siu-man said the defendant had obtained the loans by deceit and made false declarations, which were serious criminal offences. As a law enforcement officer, the defendant should know well that he should not break the law. The gravity of the offences increased as the defendant gained over $1 million rents through his criminal acts.
The judge said he took a starting point of 24 months’ imprisonment and reduced the jail term to 18 months having considered that the defendant had no criminal record, his willingness to return the crime proceeds and other mitigating factors.
The judge also ordered the defendant to make a restitution of around $1.16 million, being the amount of rents he obtained by leasing out the flat concerned, to the Government.
The ICAC investigation arose from a corruption complaint referred by the Treasury. Subsequent enquiries revealed the offences.
The court heard that the defendant joined the Police Force in 1986 and was promoted to the rank of Superintendent in May 2019. He was entitled to apply for a Government housing loan under the Housing Loan Scheme (the Scheme).
The live-in requirement under the Scheme is waived if an application is submitted within 10 years of his statutory age of retirement. But the property acquired with the aid of the Scheme could only be occupied by the applicant and/or the applicant’s family. Letting and subletting of the property is prohibited.
On September 28, 2016, the defendant signed a provisional agreement for sale and purchase regarding a property with an existing tenant in Discovery Bay. On the following day, the defendant applied to the Treasury for a loan under the Scheme and also made a mortgage loan application to The Hongkong and Shanghai Banking Corporation Limited (HSBC) for 60 per cent of the value of the property. He was due to retire within 10 years when the applications were made.
The court heard that the defendant separately represented to the Treasury and HSBC that vacant possession of the property would be delivered on November 30, 2016, and the property would be used by his parents. But ICAC enquiries revealed that the defendant renewed the tenancy with the existing tenant of the property on November 27, 2016, and failed to comply with the requirements of the Scheme and HSBC by reporting the tenancy.
Relying on the information provided by the defendant in his applications, the Government and HSBC respectively granted a housing loan of about $2.1 million and a mortgage loan of $3.9 million to the defendant on November 30, 2016.
The Treasury would not have approved the defendant’s application should the department know that vacant possession of the property would not be delivered or that it would be let to others.
At that time, the ceiling of the mortgage loan in respect of residential property purchased for self-use and investment was respectively fixed at 60 per cent and 50 per cent of the value of the property. Should HSBC know the property was not for self-use, the bank would not have approved the defendant’s application for a mortgage loan of $3.9 million, which amounted to 60 per cent of the value of the property.
ICAC enquiries revealed that between December 2016 and August 2020, the defendant had leased out the property, generating an aggregated rental income of around $1.16 million.
The Police Force, the Treasury and HSBC had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by prosecuting counsel Bernard Chung, assisted by ICAC officer Jenny Chan.
Lung Siu-chuen, 55, was earlier found guilty of two counts of fraud, contrary to Section 16A of the Theft Ordinance.
In sentencing, Judge Mr Fred Sham Siu-man said the defendant had obtained the loans by deceit and made false declarations, which were serious criminal offences. As a law enforcement officer, the defendant should know well that he should not break the law. The gravity of the offences increased as the defendant gained over $1 million rents through his criminal acts.
The judge said he took a starting point of 24 months’ imprisonment and reduced the jail term to 18 months having considered that the defendant had no criminal record, his willingness to return the crime proceeds and other mitigating factors.
The judge also ordered the defendant to make a restitution of around $1.16 million, being the amount of rents he obtained by leasing out the flat concerned, to the Government.
The ICAC investigation arose from a corruption complaint referred by the Treasury. Subsequent enquiries revealed the offences.
The court heard that the defendant joined the Police Force in 1986 and was promoted to the rank of Superintendent in May 2019. He was entitled to apply for a Government housing loan under the Housing Loan Scheme (the Scheme).
The live-in requirement under the Scheme is waived if an application is submitted within 10 years of his statutory age of retirement. But the property acquired with the aid of the Scheme could only be occupied by the applicant and/or the applicant’s family. Letting and subletting of the property is prohibited.
On September 28, 2016, the defendant signed a provisional agreement for sale and purchase regarding a property with an existing tenant in Discovery Bay. On the following day, the defendant applied to the Treasury for a loan under the Scheme and also made a mortgage loan application to The Hongkong and Shanghai Banking Corporation Limited (HSBC) for 60 per cent of the value of the property. He was due to retire within 10 years when the applications were made.
The court heard that the defendant separately represented to the Treasury and HSBC that vacant possession of the property would be delivered on November 30, 2016, and the property would be used by his parents. But ICAC enquiries revealed that the defendant renewed the tenancy with the existing tenant of the property on November 27, 2016, and failed to comply with the requirements of the Scheme and HSBC by reporting the tenancy.
Relying on the information provided by the defendant in his applications, the Government and HSBC respectively granted a housing loan of about $2.1 million and a mortgage loan of $3.9 million to the defendant on November 30, 2016.
The Treasury would not have approved the defendant’s application should the department know that vacant possession of the property would not be delivered or that it would be let to others.
At that time, the ceiling of the mortgage loan in respect of residential property purchased for self-use and investment was respectively fixed at 60 per cent and 50 per cent of the value of the property. Should HSBC know the property was not for self-use, the bank would not have approved the defendant’s application for a mortgage loan of $3.9 million, which amounted to 60 per cent of the value of the property.
ICAC enquiries revealed that between December 2016 and August 2020, the defendant had leased out the property, generating an aggregated rental income of around $1.16 million.
The Police Force, the Treasury and HSBC had rendered full assistance to the ICAC during its investigation into the case.
The prosecution was today represented by prosecuting counsel Bernard Chung, assisted by ICAC officer Jenny Chan.